Legal Services Bill [Lords]

Given the significant time period from the inspirational and far-thinking Clementi process and report, and the process of the Bill through Parliament, including the summer recess, it seems as though we have been dealing with this legislation for a very long time. The Commons Committee that considered the Bill was one of the most productive on which I have had the opportunity to serve, not least with regard to the level of participation shown by Members of all parties. As a result, the Bill was given the thorough detailed analysis that it deserved in Committee, but today's Report has been something of a rush. The Bill has come a long way since it was first introduced, which is a direct result of the hard work of this place, and of the improvements made to it by Conservative, Liberal Democrat and Cross-Bench peers, led frequently by my noble Friends, Lord Kingsland and Lord Hunt of Wirral. On Second Reading, I stated that I was understandably not pleased to hear from the Minister how most of the many improvements made to the Bill in the other place were to be reversed by the Government in Committee. Indeed, the Minister was true to her word, and the Government embarked on a mission to reverse much of the good work in the improvements made to the Bill. However, the Minister listened to many of the arguments put forward in Committee and, thankfully, after the summer recess came forward with a broad range of concessionary amendments for today's Report, which have led to improvements. Having moved the Bill slightly away from the Clementi recommendations, it is now being returned closer to them, which we welcome. This is a first-class piece of legislation that should maintain the highest standards of legal practice in Britain in regulation, complaints and the structure of the provision of legal services. The consumer will have a single point of contact, instead of the current confusing situation, and the process will also be a smoother one for the legal profession. The Bill provides the regulatory structure that will enable British legal services—we should keep in mind that they now constitute 2 per cent. of gross domestic product—to move forward in a modern and adaptable way. The benefits will be felt by consumers and legal practitioners alike. I particularly recognise the good work that has been done to ensure that the consumer benefits of legal disciplinary practices can be felt before the full ABS licensing regime comes into force, probably in about 2011. Following enactment, a lot of effort will still be required to put in place rules to allow ABS, but the framework will be there. Following consistent pressure from my party, the Law Society, and input from the hon. Member for Stafford (Mr. Kidney), the Bill will enable the Law Society to regulate firms, including a minority of non-lawyer partners within the Law Society's existing regulatory regime. That will benefit the public and the legal profession, as non-lawyers will be able to take a direct interest in the running of law firms. Sir David Clementi and the Joint Committee that considered the draft Legal Services Bill recommended an incremental approach to the introduction of alternative business structures. The Bill will enable that to be the case. We fully support the concept of the ABS regime, believing that more flexibility in the market will be good for consumers and the profession itself. We believe that in time the provisions will provide for accountants and other professionals to work with lawyers and provide one-stop shops that benefit the high street, while enabling our international firms to compete at the highest global levels, as my hon. Friend the Member for Cities of London and Westminster (Mr. Field) set out in his earlier remarks. However, we fully expect no resulting compromise on the quality of standards and the integrity of service provision. The Bill has safeguards to ensure that the quality of legal services for consumers will not be jeopardised by alternative business structures, and the effectiveness of that will need to be kept under review. The Opposition parties pushed hard for proper provision to ensure that the possible negative impacts on access to justice of granting ABS licences were taken into account. I am pleased to acknowledge that the Government have listened to us on that point too. The Bill goes a long way towards achieving the objectives that resulted from Sir David Clementi's visionary report on legal services and the Joint Committee's recommendations. I am pleased to have played a part in its passage. However, as became clear on Report, several issues remain to be tackled in the other place to ensure that we have genuinely seized a once-in-a-generation chance to reform thoroughly and effectively the legal services industry, for the benefit of consumers and legal professionals. The independence of the legal profession and its regulation from Government is a key constitutional principle, which underpins the rule of law. The independence of the legal services board from Government is crucial to maintaining the profession's independence in this country. The Government have come a long way, but I question whether they have yet come far enough. When the Bill was introduced, the Lord Chief Justice had no statutory role and appointments were to be made by the Secretary of State rather than the Lord Chancellor. The Government's initial agreement to transfer responsibility to the Lord Chancellor, with his specific responsibility for upholding the rule of law, and to entrench that in the Bill, was a welcome but inadequate development. After Report, we still have not got what we wanted on the role that the Lord Chief Justice should play in appointing members of the legal services board. Although I acknowledge the Government's movement on the subject in the summer, as matters stand, the Lord Chief Justice is only to be consulted. At the very least, we require clear guidance about what such consultation will involve, and the Lord Chief Justice's views must be publishable. It remains our ideal position that appointments to the LSB should be made by the Lord Chancellor with the concurrence of the Lord Chief Justice. Such a provision would ensure that the most suitable checks on the Lord Chancellor were in place to guarantee the LSB's independence. As I said on Report, we must never take the judiciary's independence for granted. The deep concern that the German regulators showed about the provisions' potential to erode the independence of the legal profession in this country were telling. Perhaps Germany's history has made them aware of the importance of an independent judiciary. I hope that the Government can explain their position more fully in another place, but I have still to be convinced of the reasons for going for second best. I remain confused about the reasons for the Government's continued insistence on exempting the provision of legal services by trade unions to their members from the ABS licensing regime under part 5. The Bill is designed to protect consumers and ensure that they are consistently provided with an exemplary legal service. Trade union members should be granted the same protection as other consumers. It is especially wrong that the exemption in the Bill applies to any legal services that a trade union may care to provide to its members. There is not even an exemption restricted to legal work, which is ancillary to the trade union's main purpose of representing its members in relation to their employers. It will thus be possible under the Bill for a trade union to provide a conveyancing service or representation in divorce proceedings while remaining outside the regulatory structure that applies to all lawyers and most other bodies. I will be interested to hear their lordships' comments on the matter. After all, they have not yet been afforded the opportunity to examine the provision on trade unions, because the amendments were tabled just before the Commons Committee stage. That will make for an interesting debate in the other place. It is unfortunate that the Government timetable allowed for the provisions that cover the office for legal complaints to be tackled in little detail on Report. However, we are concerned to ensure that the OLC is genuinely new, not simply a rebranding of the system, with staff transferring to new offices but no accompanying new ethos. We will keep an eye on that. Despite those important issues, I believe that we are close to producing a highly effective Bill, which will benefit consumers and legal professionals. Again, I commend the hard work done in the other place, and the work done by all the members of the Commons Committee in particular. The Minister has been consistently courteous and helpful, as have her Bill team and the Clerks, and that has made the Bill's progress a positive, productive and, dare I say, enjoyable experience. I echo the Minister's thanks to all the organisations whose invaluable help has been received during the Bill's passage. The result of that hard work by so many people is a Bill that has been significantly improved since its introduction. I am afraid that there is still a small amount of work to be done, but I have every confidence in my noble Friends' ability to iron out the remaining issues, and every confidence that we shall be left with a first-class regulatory system that will ensure that Britain maintains its place as the foremost provider of legal services in the world.