Clause 71
Legal Services Bill [Lords]
8:10 pm
Simon Hughes (Party President, Cross-Portfolio and Non-Portfolio Responsibilities; North Southwark and Bermondsey, Liberal Democrat)
I might have to revise my tacticsand sign up to more amendments in the name of the hon. Member for Bassetlaw, who did not move his amendment No. 282. I shall treat them with more interest for fear that we get such surprising timidity in proposing yet more good ideas. The idea in the amendment was a good one, but, if I remember the rules correctly, the fact that it has gone will not prevent me from discussing the wider issue to which it referred.
We now move to part 5, of which clause 71 is the first clause. It is fair to say that part 5 was the most controversial part in the House of Lords. Right up to the very end, up to the debate on Third Reading, when amendments can be considered in the Lords, there were amendments concerning the issues before us. Clause 71 is the first clause of a significant part, which goes up to clause 111 and deals with the alternative business structures—a substantially new concept.
Every member of the Committee and many people following our proceedings will know about the alternative business structures, so I shall not extend the explanation at length. However, in lay terms, the basic proposition is that, in addition to the simple and traditional legal organisations, such as solicitors firms, it will be possible in England and Wales to create bodies that have the rather mundane title of alternative business structures. They will either be multidisciplinary or involve different groups in the legal profession coming together to offer services.
Alternative business structures were described in a clichÃ(c)d way as the sort of business that might be promoted by one of our larger high street supermarkets. It is certainly true that large high street supermarkets sell not just food and drink, as they originally did. Indeed, they sell not just food, drink and clothes; not just food, drink, clothes and children’s toys; not just food, drink, clothes, children’s toys and electrics—the list could go on. If one queues for any length of time at a checkout, one will see various leaflets offering all sorts of other services, such as travel insurance and holiday insurance.
The concerns are that, if part 5 is enacted andit becomes possible to licence ABSs, which is what clause 71, the introductory clause that permits the
“Carrying on of activities by licensed bodies”,
is about, the new species of bodies—multidisciplinary bodies—might be sufficiently well resourced and supplied in capital and financial terms to go into the traditional legal providers’ market and, because of the macro-economic cost-benefits, offer their services at a lower price, thus undercutting existing services, not just competing on price but causing difficulties, and forcing some of them out of business. It is a bit like the debate about the supermarket and the corner shop.