Clause 194
Legal Services Bill [Lords]
9:00 pm

Solicitors to public departments and the city of london

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Simon Hughes (Party President, Cross-Portfolio and Non-Portfolio Responsibilities; North Southwark and Bermondsey, Liberal Democrat)

I beg to move amendment No. 243, in clause 194, page 106, line 41, leave out subsection (2).

Colleagues will no doubt be glad to know that this is our last amendment. However, it is a slightly heavy and serious point that does not have the levity of some of the other issues. The clause as it stands means that solicitors who are employed in the Government service are not required to comply with the same regulatory system as other solicitors. In the interests of fairness and equity, I want to put the case made by the Law Society, which is that that exemption is no longer justified. The amendment would take away the exemption that allows solicitors in the Government service to operate without a practising certificate, which is a strange anomaly.

It is a core principle that all those who are subject to regulation should contribute to the cost of regulation. Ministers have said that before. In response to the Joint Committee, the Government said that the basic  principle is that those being regulated should bear the cost. As far as the cost of regulating solicitors is concerned, the present position is that all solicitors providing legal services in private practice in England and Wales are required to hold and pay for a practising certificate and thus contribute towards the cost. Solicitors also have to qualify to get that certificate.

Solicitors in commerce and in industry and in local government are required to have practising certificates if they undertake reserved activities, or if they are held out as solicitors. For example, if Southwark council’s legal department sent someone to negotiate a contract with a private developer as a solicitor, they would require a practising certificate. Government solicitors, however, are wholly exempt from the need to hold a practising certificate in England and Wales, even if they do the same job as local government solicitors. Scottish solicitors must comply with the same rules as those in private practice or local government. The anomaly applies to England and Wales and dates from the 19th century.

It is unclear why the exemption was originally provided. No logical and persuasive reason has been given, either in the other place or earlier, why the exemption should continue to exist. Given that we are performing a portmanteau tidying-up of the professions—we have just agreed to a schedule dealing with such things—and putting the legal services into a new structure, it seems entirely anomalous that one little reserved, rather self-interested pocket of people in Government will be protected from the same modernisation and streamlining affecting everyone else.

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David Burrowes (Enfield, Southgate, Conservative)

I support the hon. Gentleman’s view. Does he share my concern that it is important for the Government to take an appropriate lead in tidying up old anomalies? Is he aware of the rebuttal that the Government may well give—that Government lawyers do not hold client money? There is a way to deal with that—by having an amount proportionate to the amount for a practising certificate. It could be less, as in other sectors, rather than being completely thrown away on principle.

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Simon Hughes (Party President, Cross-Portfolio and Non-Portfolio Responsibilities; North Southwark and Bermondsey, Liberal Democrat)

I am grateful. As the Committee knows, the hon. Gentleman is a solicitor. That is the only argument that has been advanced—that Government lawyers do not take client money as private practice solicitors do. He is absolutely right. Nobody is saying that there should be one flat fee for every solicitor doing every job in England and Wales. There is absolutely an argument for a differential charge.

Photo of Simon Hughes

Simon Hughes (Party President, Cross-Portfolio and Non-Portfolio Responsibilities; North Southwark and Bermondsey, Liberal Democrat)

Yes. There is a sliding scale, and Government solicitors could be incorporated within it. I understand that the Government have already recognised implicitly in other contexts the indefensibility of the present exemption. When the CPS was created in the 1980s, prosecuting solicitors who had worked in local government and held a practising certificate there transferred to the CPS, a central Department. The Government recognised that it was unjustifiable that that change of  employer should mean that those solicitors did not have to hold practising certificates, so the Prosecution of Offences Act 1985 specifically required CPS solicitors to hold a practising certificate. That remains unaltered today.

Similarly, when the Bar Council’s practising certificate fees came into force as a result of the Access to Justice Act 1999, no provision was made to exclude Government barristers from the need to hold a practising certificate. Both recent changes have integrated practitioners working in the Government service, so there is a discriminatory anomaly relating to solicitors in the general Government service, who are clearly benefiting from something unjustifiable that involves other anomalies, too. Barristers who work for the Government must pay; solicitors who work for Government need not.

It could be regarded as justifiable, I suppose, if the Government claimed—they would have a mini-riot on their hands if they did—that the solicitors who work for them are second-class solicitors. However, those people are not employed as second-class solicitors. They are employed as solicitors, and if one speaks to them or inquires who is in the Department, one is told that they are Government solicitors—solicitors for the Department. They are subject to the same professional discipline as others and to the same rules in other respects.

The Minister will know that the matter arose in the House of Lords. She replied to the point made by the hon. Member for Enfield, Southgate by saying, “They don’t hold client money; therefore, there isn’t a regulatory risk.” However, we are not arguing about the risk factor. We are arguing about the fairness factor and the need for equal treatment of everybody who contributes to the great new edifice of this regulatory regime. The issue is about ensuring that people pay in to fund the process of qualifying to be a solicitor and continue their professional education, which all solicitors are expected to do to advance their careers. It is also about ensuring that the people who administer and enforce the rules of conduct are paid fairly and covering the cost of monitoring and enforcing compliance with the rules of conduct, which is a service that all other solicitors pay for. Government solicitors are governed by those rules, so they are getting the service and paying nothing, which cannot be right.

Government solicitors have regularly to advise on the lawfulness of particular actions, when they want to achieve the objectives of their political masters, which is entirely understandable. To all those to whom I have spoken, to the Law Society and to me, it seems important that those solicitors are subject to the same professional duties—including duties to the court, because they could appear in court—to help to ensure that they give independent legal advice, rather than just the advice that their bosses wish them to give. That is to say that the courts would expect a Government solicitor to be just as honest as any other solicitor when it comes to matters such as duties to the court or conflicts of interest. The courts would not give them any special dispensation because they are in the Government service.

In the other place, the Attorney-General argued that there would be no public benefit from removing the exemption for Government solicitors and that it would only put up the Government’s costs. If Government solicitors are effectively regulated, as they should be, and are subject to the same professional responsibilities as their colleagues in private practice and in commerce and industry, the fact that the Government provide proper training does not negate the point that the basis of employment should be the same. Most firms provide in-house training for their solicitors during their employment. The blunt truth is that the Government are getting solicitors on the cheap, or solicitors in Government service are getting their opportunity to be solicitors on the cheap ahead of everybody else, which cannot be good or fair. The rest of the profession thinks that some protectionism is going on, which is not good. Let us bear in mind also that people from other walks of life come in to and go out of Government service.

I shall now address the hon. Gentleman’s second point. The Law Society has said to the Government that it is inappropriate for the same practising fees to be applied to all sectors, given that there are significant differences between the ways in which different sectors regard the use of regulatory resources. In the case of Government lawyers, the cost of practising certificate fees arguably should be less, for the reasons given by the hon. Gentleman. There are certain activities in which there is no risk at all, but that does not mean that they should be wholly exempt.

The present law does not allow the Law Society to charge differential fees, so the Law Society cannot charge Government lawyers less. The amendments to the Solicitors Act 1974 that we have been discussing would give the Law Society that power. The requirement to hold a practising certificate would not lead to an unfair burden being put on Government lawyers of the future or on Departments, which in practice pay for that certificate. That would mean that there would be no anomalous, unfair exemption.

I am sorry that this is a heavy point for the last evening of the Blair Government, but it is important, because there is a sense of injustice. I am grateful for the hon. Gentleman’s support and hope that I can bring other members of the Committee with me. I also hope that the Minister understands that this is not a matter that I, or others, feel can be left to lie. This is the Bill in which we need to correct this problem.

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Henry Bellingham (Shadow Minister, Constitutional Affairs; North West Norfolk, Conservative)

I shall be brief. I had a lengthy speech to make, but every point that I was going to make has been made by the hon. Member for North Southwark and Bermondsey, so I will just endorse his comments. We in the official Opposition support the amendment and look forward to the Minister giving a proper response and, hopefully, accepting the amendment.

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Bridget Prentice (Parliamentary Under-Secretary, Ministry of Justice; Lewisham East, Labour)

As the hon. Member for North Southwark and Bermondsey said, this is the last evening of the fantastically wonderful Blair Government.

I was a wee bit surprised when the amendment turned up here, because the matter was debated at some  length in the other place and even went to a vote, which the Government won. I am sure that much of the reason for that was the fact that the arguments were put so cogently by my noble Friend the Attorney-General. Not only did he put forward the arguments on this provision, but those in the other place were persuaded by them.

As we are being pleasant and friendly on the last evening of the fantastic Blair Government—[Interruption.] Perhaps I am being too friendly; I must stop. The hon. Member for North Southwark and Bermondsey put his case exceptionally well and cogently. However, I wish to explain why the Government won the argument in the other place. As my noble Friend the Attorney-General said, unlike lawyers operating outside, the Government solicitors do not provide services direct to the public, because the Government are their clients.

Government solicitors must have many of the attributes of other solicitors, such as a law degree, completing the academic stage of professional training, being enrolled by the Law Society and so on. They are also bound by the civil service code, which ensures that appointments are made on merit on the basis of a fair and open competition, and that roles are carried out with integrity, honesty, objectivity and impartiality. They are also subject to the employment conditions applicable to their individual Departments.

9:15 pm
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Bob Neill (Bromley and Chislehurst, Conservative)

The fact that the Government’s solicitors do not provide services to the general public could apply to solicitors in the not-for-profit sector. They are regulated and have to pay a fee, so why should those in the civil service be in a privileged position? It does not make sense. Surely the employment regulations do not have anything to do with regulation as members of a profession.

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Bridget Prentice (Parliamentary Under-Secretary, Ministry of Justice; Lewisham East, Labour)

I should have thought that the not-for-profit sector, almost more than any other, would be dealing directly with the public.

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Bob Neill (Bromley and Chislehurst, Conservative)

It could be an in-house solicitor.

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Bridget Prentice (Parliamentary Under-Secretary, Ministry of Justice; Lewisham East, Labour)

Nevertheless, the argument is that the solicitors do not deal directly with the public. They are subject to the employment conditions applicable to their individual Departments. I am not aware of evidence of any serious failure in the Government’s legal services, although no doubt some hon. Members could think of some. The head of that service is diligent in performing his duty to ensure that a strong and proportionate system of regulation is in place to ensure that high standards are met at all times.

I mentioned earlier the annual turnover of some £20-plus billion in the legal sector. I know that, despite what some newspapers would have us believe, not every lawyer is a fat cat, but many of them are fairly comfortable cats—I do not see many signs of poverty in Chancery lane—so I do not see the justification for paying something in the region of £850,000 of public money to the Law Society to cover a charge for issuing practising certificates.

The hon. Gentleman made a cogent argument, but I must resist the amendment. As my noble Friend the Attorney-General was so clearly able to persuade his colleagues in the other place, I hope that I shall similarly persuade him to withdraw the amendment.

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Simon Hughes (Party President, Cross-Portfolio and Non-Portfolio Responsibilities; North Southwark and Bermondsey, Liberal Democrat)

The Minister is as charming as ever, but on this occasion her arguments do not rise to the level of her charm. I have not tried to hide the fact that there would be a cost. The Government have two ways to deal with that. They either meet the cost of the things that are needed for an employee, as an employer normally does, or they say, “You can only be employed if you have a practising certificate.” That could, therefore, not put the burden on the taxpayer but be like saying, “We will employ you, put in the adverts, have a word with the Government, but you have to come with a practising certificate.” Many people do their jobs and pay their annual fee to remain qualified—whether that is tax deductible is a different matter.

I think that the Minister knows that there is an anomaly and I think that the very estimable Lord Goldsmith, the Attorney-General—for the time being—knows that, too. He will not have to defend that anomaly after tomorrow, but the Minster will—[Laughter.] Well, I hope that she will. The Attorney-General has said that he is going and the Minister has not said that she is. If we report faithfully what she has said tonight and feed it into the system, no doubt that will boost her chances of promotion, which my hon. Friend and I both want her to benefit from.

I am afraid that I do not accept the argument and will, just to make sure that we never lose the opportunity to practise, press the amendment to a vote.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 9.

Question accordingly negatived.

Clause 194 ordered to stand part of the Bill.