Schedule 11
Legal Services Bill [Lords]
9:45 am
Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)
I beg to move amendment No. 211, in schedule 11, page 183, line 8, at end insert—
‘( ) Licensing rules may provide for fees to cover the whole cost to the licensing authority of dealing with the application, whether the application is granted or not.’.
The amendment was suggested by the Law Society. It is required to make it clear that licensing rules can put the whole cost of dealing with an application on the individual applicant, rather than leaving part to be borne by the licensing authority itself and thereby by other firms regulated by that authority.
It is an important general principle of the bill that the costs of regulation should, as far as possible, be borne by those whose activities give rise to the cost, rather than by the regulated sector as a whole. That is particularly important in respect of ABSs, where some applications could give rise to complex issues. It would be quite unsatisfactory for there to be a single flat fee applied to all applications, whether from a comparatively small applicant filling a gap in legal services or from a megastore supermarket seeking to set up the sort of service that might give rise to particular concerns about the possible impact on access to justice. We have just debated that.
If a single fee were set to meet all the costs of dealing with ABS applications, the result could be grossly unfair to the small applicant. However, a single fee at the level appropriate for the small applicant would involve an unacceptable cross-subsidy from the rest of the regulated sector—in this case, non-ABS firms—towards the cost of ABS regulation. The solution is to enable different fees to be fixed for different categories of applicants. That is dealt with to some extent in the provisions concerning not-for-profit bodies in clause 106, but it is also important to be able to vary fees, even among commercial applicants for ABS licences. There is no reason why an applicant whose application gives rise to no significant concerns about access to justice should pay the same fee as one that does.
If licensing authorities were unable to match the fee to the cost of dealing with the application, they might be inhibited from investigating applications as thoroughly as they should, particularly where access to justice considerations arise. The amendment is designed to stop that problem and ensure that the costs of dealing with applications can be placed on the applicants concerned.