Legal Services Bill [Lords]

To be fair to the hon. Gentleman, I have already answered that question with regard to the different role that trade unions play in our society. In Committee I set out the limitations to the amendments. First, they apply only where a union is providing services to its members and others with similar rights. If it expands into more commercial work, it will be regulated as an entity and it will have to be licensed. In other words, the clause 15 exemption would not apply. Secondly, all reserved services still have to be provided by qualified lawyers, subject to the regulation of bodies such as the Law Society, and my hon. Friends have already made that clear. Regulators will be able to change their rules if problems arise so that lawyers could effectively be prevented from working within bodies that are not regulated, or they could be limited in the services that they provide. Such rules could not force trade unions to become ABS bodies in order to get round the problem. Clause 15 means that they are not carrying out reserved legal activities, which means that they do not need to be licensed under part 5 of the Bill. A regulator's rules cannot change that. There is, none the less, some scope for regulators to constrain lawyers working in environments where they have cause for concern. If the amendments are passed today, they will not guarantee that trade unions will be regulated as entities and licensed as ABSs. The amendments would only remove a clause that confirms an exemption to which trade unions already have access in certain circumstances. To explain, clause 15 contains a general rule about employed lawyers. It provides that, where an employed lawyer is carrying out reserved activities, the employer is not considered to be carrying out such activities for the purposes of regulation under the Bill as long as the provision of reserved services to the public or to a section of the public is not part of the employer's business. In other words, if a body can establish that its employed lawyers are carrying out a reserved legal activity for a restricted group, such as its membership, and that that service is not part of the body's business, the body will not be considered under the Bill to be carrying out a reserved legal activity. Consequently, it will not need to be regulated, although the individual lawyer will. As my hon. Friend the Member for Stafford (Mr. Kidney) pointed out, individual lawyers will be regulated by the Law Society, or another appropriate professional body. I hope that the Opposition are content with that in principle, since they have not tabled amendments about it. The purpose of the provisions is to enable employed lawyers to continue to do the work that they currently do for restricted groups in limited circumstances. It allows them, for example, to work for companies connected with their employers, and it allows in-house lawyers to offer pro bono services without their employers needing to be regulated, providing, of course, that the company employing them is not actually in the business of legal services. A telecommunications company, for example, might want to allow its in-house lawyers to provide a pro bono service from time to time. That in-house lawyer would be fully regulated, but the company would not have to be regulated as an ABS by virtue of the limited service provided by the in-house lawyer. The same provision can apply to trade unions. A union that is providing services only to its members could fit into that definition. If there is any doubt about whether its membership counts as a section of the public, subsection (7) has a route for the Lord Chancellor to make an order clarifying it, on the board's recommendation. Subsection (6), which we introduced in Committee, makes the position of unions clear from the start. It provides that persons receiving services by virtue of union membership do not constitute a section of the public. That ensures that unions do not have to be regulated as entities, which in turn ensures that the activities of lay advisers within unions are not regulated, in line with the policy we set out in the other place. Taking out subsection (6) would not necessarily prevent that from happening. Unions could fall under subsection (4), and in cases of uncertainty they would be able to seek an order under subsection (7). The board would be able to recommend an order for a specific union or for classes of activities by unions. If the Opposition believe that the amendments can force unions to be regulated as entities, they are wrong. The Government have considered the position carefully and think that it is right to put trade unions outside the scope of regulation. The safeguards I have outlined will ensure that trade union members are protected. I understand that the Opposition want to reverse all of the changes agreed in Committee. That includes the restrictions that we added that are available only to independent trade unions as defined in the Trade Union and Labour Relations (Consolidation) Act 1992. We did that because we wanted to match the Bill's provisions to the current claims management regime, in which only independent unions are able to benefit from the exemption. Reversing those amendments has an effect that goes beyond clause 15. It will allow any trade union, independent or otherwise, to benefit from the exemptions and modifications in part 5, and I cannot believe that the Opposition want to do that. Finally, there was concern in Committee that we were trying to solve a problem that does not exist: that no unions provide legal services directly to their members. I assure the House that that is not the case. A small number of unions do work for their members. Some of them are quite specialised—in the media professions, for example, and education—and we want to ensure that they are still able to provide those services. However, we also need to look at the underlying principles and our desire to make legal services more widely available. Even if only a few unions currently provide services directly, we want to set up an environment where others can do so if they feel that it is the most cost-effective way to help their membership. Clause 15 enables that, and I urge the House to support it and reject the amendments.