Legal Services Bill [Lords]

In moving new clause 6, I initially note that there is no doubt that the alternative business structure regime will provide a huge set of possibilities for the future provision of legal services and those that provide them. However, in Committee concerns were raised that we were not quite there yet. On the one hand, lawyers will be able to work together almost immediately, and yet the full ABS provisions were unlikely to come into place before 2011. There was a need for a halfway house, so I fully support Government amendments that will enable early consumer benefits by providing new powers and related provisions for the Law Society to regulate bodies with low levels of non-lawyer management during a transitional period before part 5 comes into force. For instance, in-house accountants and managers could now become partners of the law firm. I am glad that the Minister took note of the views of the several bodies whose opinions I highlighted in Committee, and has understood the consumer benefits of not delaying the possibility of practices with limited non-lawyer managers being regulated until the full implementation of part 5. The Law Society has expressed its views as follows:"““in one important respect, the Bill will be an improvement on the version which left the House of Lords. In the House of Lords, Ministers resisted the amendments which””" Lord Kingsland"““and Lord Hunt tabled which would have enabled the Law Society to regulate LDPs under our existing regulatory regime, rather than having to wait until about 2011 when the Legal Service Board will be in place. However, Ministers have now accepted that it is anomalous for the Council of Licensed Conveyancers (for example) to be able to regulate such firms, whilst the Law Society cannot, and so they have made appropriate amendments to Schedule 16 to cover the point. We think that will enable real benefits for both the public and the profession to be achieved earlier than would have otherwise been the case. It also has the practical effect of ensuring that the incremental approach to the introduction of ABSs—which both Sir David Clementi and the Joint Committee chaired by Lord Hunt favoured—will be followed.””" My party colleagues and I are extremely pleased that the Government came round on this issue, and that the hard work of many in addressing this issue has led to such a satisfactory result. I would like to express my appreciation to the Minister for conceding on this point, as I believe that this is the type of change that will help ensure that Britain maintains its position as the foremost provider of legal services in the world. I also thank the Minister for listening to the views of the Opposition in Committee and for tabling amendment No. 85, which will take us back to the position under amendments made to the then clause 83 in the other place by my noble Friends, the Liberal Democrats and Cross-Bench peers to ensure that licensing rules contain provisions requiring the consideration of the impact on access to justice. The arguments set out in the other place and by my hon. Friends and myself in Committee have obviously proved compelling. I do not propose to repeat them at length, but I would just like to highlight the importance of this Government concession as it will deal with the particular risk to access to justice posed by alternative business structures. We have maintained that whilst the timetable for low risk alternative business structures should be brought forward, access to justice should not be reduced as a consequence. Lord Woolf expressed his concern when, in a report of earlier this year, he stated:"““There is no doubt that large businesses could provide legal services in a novel and interesting way. But that could—unintentionally, perhaps—have a devastating effect on those who have traditionally provided services in rural areas in particular. Great care has to be exercised to see that damage does not occur””." The Law Society was worried that despite the fact that, as they put it:"““New entrants into the market may bring about some benefits…there is a risk that there may be long-term structural effects that destroy service provision and the fabric of small communities. Put bluntly, new entrants might cherry pick more profitable and less complex areas of work, driving down the profitability of established local firms who offer a full range of services at the heart of their communities. If that happened, where would consumers go for advice on complex matters?””"