Schedule 13
Legal Services Bill [Lords]
1:00 pm
Simon Hughes (Party President, Cross-Portfolio and Non-Portfolio Responsibilities; North Southwark and Bermondsey, Liberal Democrat)
I wish to ask a general question about the operation of the schedule, for which clause 89 is the trigger clause. The schedule sets out the possibility of non-authorised people holding interests in licensed bodies and it is about the activities of non-legal people and professionals in the new business structures.
My question is consumerist, so I hope that it will be attractive to the Minister. Putting aside the concerns about this part of the Bill, it is important that the public, as well as other interested people, know what is happening because of the Bill. When a person applies for a licence to enable them to work in a particular way, information on who is involved with or owns a company, and who has what percentage of the shares or interests and so on, is crucial. The people who grant licences will have plenty of opportunity to satisfy themselves about such information: they will ask for and receive it, they will check and approve it, and ask further questions about it, in the way that any regulatory or licensing body would.
Consumers would be interested in commenting on a prospective application, as with a planning application. The Minister will know as well as any of us that when there is a controversial planning application, public interest might arise because people have been watching a particular site like hawks. Anyone with an interest knows as soon as a planning application is submitted to a council and they will be geared up to make their representations. Interest might also arise from a local authority-led consultation in which people participate, or simply because they hear a rumour—often, the interest arises because there is a rumour that something is about to happen.
Let me take an example given on Second Reading by the hon. Member for Banbury (Tony Baldry). He said that Banbury is a town with a couple of solicitors firms whose work is well regarded and respected. A licence application for an alternative business structure that could affect provisional legal services might be made. Let us imagine, for example, that one of the large insurance companies has an office in Oxford and decides to provide services around the country, but that it particularly wants to start in Oxfordshire. The head office could be in Oxford or elsewhere. I am thinking of a company such as Axa or another large claims company that does a great deal of work. Such a company would obviously be able to offer certain services at a low price because of the volume of work that it does. What is the process by which the public would come to know who was applying for a licence and about their other interests, and at what stage?
For my second example, I shall draw on the evidence given yesterday to the Treasury Committee about private equity companies, which was widely reported. Some of the new organisations are not well known by their private equity name, but are instead known if one discovers what businesses they run. I discovered yesterday that one such company runs the AA. Who owns those organisations is relevant to local consumers, citizens advice bureaux, consumer councils, consumers’ associations, town or parish councils and all sorts of other people who have an interest in knowing. If there was a share buy-out of such an organisation, how would people be brought up to date with the relevant information? My question is a general one about how the public and those with an interest would come to know who was really behind an application. There may be a name on a plate, but people might not know who is behind the organisation.