Clause 95
Legal Services Bill [Lords]
1:30 pm
Simon Hughes (Party President, Cross-Portfolio and Non-Portfolio Responsibilities; North Southwark and Bermondsey, Liberal Democrat)
It would be helpful if I may make points that significantly and substantially belong here and, although they touch on the information provision that we dealt with, I did not want, as it were, to make overlapping points on two separate provisions.
The financial penalties provision is really important. It allows a licensing authority to
“impose on a licensed body, or a manager or employee of a licensed body, a penalty of such amount as it considers appropriate.”
It then, quite reasonably, says that there will be
“rules prescribing the maximum of a penalty which may be imposed under this section”,
and that those rules will need the consent of the relevant Minister, the Lord Chancellor. That is entirely proper, in so far as it is set out as a structure for action, and the money would go to the licensing authority. What nobody has yet said as far as I can see, and notes on clauses do not say it, is how much we are talking about in terms of the maximum penalties that are in the minds of Ministers. I appreciate that we must have further debate, but want to know that we are talking about a maximum that is pretty high, and that the fines, from the beginning, will be sufficiently stiff to be a real deterrent and threat to people who do not do their job properly and competently—whether as a firm or as an individual—and to ensure that they are going to bear a relationship to the turnover and profit of the company in question.
I represent in my constituency the headquarters of the Health and Safety Executive, which has been given powers in legislation by Parliament to police health and safety. If there are breaches of health and safety regulations——something with which the hon. Member for Beaconsfield (Mr. Grieve) is familiar because he has done much work in this area——there is a power to fine a company for breaching them. I am absolutely not somebody who argues for overly regulated businesses, but I am very clear that if we are regulating building in Canary Wharf or the City, or in my own borough around London bridge, we need very tough penalties for people who breach the health and safety regulations and put lives at risk. We know how dangerous those jobs can be, and how people are still killed and injured. There has been a long debate, but health and safety powers are not sufficient. We are debating corporate manslaughter elsewhere in this building. Why are we having that debate? Because there was not thought to be sufficient liability in respect of companies running cross-channel ferries or, potentially, boats on the Thames, when they were negligent, and insufficient penalty if they were in breach.
My question here is again a consumerist point. If the public are to be really protected, the people going into that market must know that they will only breach the regulations, or fail in that respect, at their peril. I want some clear indication of the top-level thoughts in the minds of Ministers for individuals and for companies. In relation to those issues, the one thing that most frequently comes up as an area where things can go wrong and people can fiddle the system, is in finances. There is always concern about the accounts of firms, and law firms, and many of the firms complained about, have been complained about because they put their money in the wrong account, and then moved money around to the wrong places in the solicitors’ firm.
Are the systems are intended to make life as easy and transparent for people, both the firms and the customer, as possible? For example, at the moment, a company would need to have an annual audit. Rather than having two different processes for providing the financial information to show that the company is behaving itself—which would be absolutely necessary if there were no threat of an investigation with a view to saying something that something improper had happened—is there a way of ensuring that one bit of work is done rather than two? In other words, the money would be collected for the audit and, at the same time, for the purpose of satisfying the licensing authority, so that the company had to produce only one set of figures every year, with one lot of people overseeing it and one occasion on when it was inspected. It would all be done in a way that gave a clean bill of health both in accountancy terms and in licensing terms.
It is no good having a licensing regime or a regulatory regime unless it has teeth, and the teeth are the financial penalties, which need to be large enough. As far as I know, the figures have not been made public, and I should therefore be grateful if the Minister would tell the Committee what the Government envisage will be their advice when the Legal Services Board is set up.