Legal Services Bill [HL]

– in the House of Lords at 8:04 pm on 18th April 2007.

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Votes in this debate

Further consideration of amendments on Report resumed.

Clause 71 ["Licensable body"]:

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

moved Amendment No. 204:

Clause 71, page 40, line 38, at end insert—

"( ) A body is not a "licensable body" if it is regulated under section 9(A) of the Administration of Justice Act 1985."

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, the purpose of the amendment is to enable legal disciplinary practices that have a substantial majority of lawyers but which do not have external ownership and provide only the services that an ordinary solicitors' firm can provide to be regulated under the Law Society's mainstream regulatory amendments.

As the Minister will know well, I have on several occasions referred back to the excellent report by Sir David Clementi issued in December 2004. His review of the regulatory framework for legal services in England and Wales favoured a step-by-step approach, to which we have referred in previous debates. He ended up, in the final paragraph of his review—paragraph 104—by saying:

"The proposal of this Review is that attention should focus on the setting up of a new regulatory system for lawyers with the LSB at its centre, and the authorisation of LDPs".

He continued:

"This would represent a major step towards MDPs, if at some subsequent juncture the regulatory authorities consider that sufficient safeguards could be put in place".

That approach won the unanimous support of the Joint Committee, which I had the honour to chair. Legal disciplinary practices, as envisaged by Sir David Clementi, are practices that permit lawyers from different professional bodies to practise together as equals. He concluded in paragraph 1 that, so far as LDPs were concerned,

"non-lawyers should be permitted to be Managers of such practices, subject to the principle that lawyers should be in a majority by number in the management group. The non-lawyers would be there to enhance the services of the law practice, not to provide other services to the public".

The amendments in the group are designed to simplify the operation of legal disciplinary practices. That is the whole purpose behind Amendment No. 204. Noble Lords will see that Amendments Nos. 498, 501 and 505 are grouped with this amendment. Amendment No. 498 inserts the provision that,

"at least three-quarters of the partners are authorised persons or are registered foreign lawyers".

That is similar in terms to Amendments Nos. 501 and 505. Therefore, we very much follow Sir David Clementi's views.

The amendments do not refer to multidisciplinary practices or to firms that have external ownership. We are just dealing with the idea that there could be a legal disciplinary practice. In fact, the Law Society has supported legal disciplinary practice for many years. It is known in its terminology as "legal practice plus". It is a means of ensuring that those who play a significant part in the running of a legal practice—for instance, a finance director—can be recognised with the status of a partner even if they are not a qualified lawyer.

Noble Lords will be aware of my registration of interest, in that I am a partner in the national commercial law firm of Beachcroft LLP, and next year I will have been a partner in that firm for 40 years.

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, I hope that Hansard will record that comment.

Throughout that time, I have been aware that the status of a partner in a solicitor's firm is something greatly to be envied by those who are not partners. It is a significant status symbol. It is tied up in the shadows of history that someone who is highly competent, who is an accountant and who is running the legal practice is not allowed to be a partner. Sir David Clementi saw that straightaway, and he thought, "Let us now recognise the status of these individuals as partners, even if they are not qualified lawyers". Under the provisions in the Bill—the Government are to be commended for this, although I did not vote in the last Division—there is certainly scope for trying to evolve a system that will work.

It will now become possible for firms to make non-lawyers partners. But if that is to happen, suddenly the whole panoply of alternative business structures and their licensing regime comes into play. Therefore, the only way in which it will be possible for the finance director, or someone allied to that finance director, to become a partner is if the whole panoply, the separate ABS licensing regime, comes into force.

I have contended on several occasions, as the Minister will know, that we should not really have this enormous unnecessary, administrative, regulatory burden coming into effect for legal disciplinary practices. I can just see what will happen. The finance director will become a partner; immediately the firm has to become an alternative business structure, and one day the finance director will leave and immediately the poor firm, if it then has a lawyer taking on that position, will cease to qualify as an alternative business structure, when all that will have happened is that the finance director has been replaced by someone who does not fulfil the requirements of the ABS.

Sir David Clementi's analysis of the issues involved with the various forms of alternative business structures identified that significant additional considerations would arise with, for instance, external ownership. Also, if services were provided that could not be provided by an ordinary law firm, we would have to move step by step in the direction of alternative business structures. However, regarding LDPs that do not have external ownership, he made no sharp distinction between firms in which all the partners were qualified lawyers and firms in which a minority of the partners were non-lawyers.

I quote again from Sir David's report. He said:

"LDPs are law practices which permit lawyers from different professional bodies, for example solicitors and barristers, to work together on an equal footing to provide legal services to third parties. They may permit others (e.g. HR professionals, accountants) to be Managers, but these others are there to enhance the services of the law practice, not to provide other services to the public".

Sir David did, however, argue that lawyers should be a majority by numbers on the management group. These amendments are designed to reinforce that by requiring at least three-quarters of the managers to be lawyers.

In Committee, the Minister—and I have read and re-read her contribution—expressed concern that the non-lawyers would not be regulated and that that would create a risk to the public and to the public interest. That is emphatically not the intention, nor was it the intention of Sir David Clementi.

Under the approach of these amendments, the Law Society would need power to establish a register of permitted non-lawyer partner-managers of firms and to set requirements for eligibility to the register. The requirements would be likely to include a character and suitability test, so that individuals who could not by virtue of previous convictions or other misconduct become solicitors would not be permitted to become non-lawyer partner-managers. There might also be a requirement to demonstrate familiarity with the Law Society's principles of professional conduct, since all managers of a firm share responsibility for ensuring that the firm complies with its regulatory responsibilities.

I concede to the Minister that consequential amendments are likely to be needed to ensure that the Law Society has the necessary powers and to make it clear that partners or managers who are not authorised persons will be fully subject to the Law Society's regulatory regime, including prosecution before the Solicitors Disciplinary Tribunal.

Finally, the Government have already said that LDPs will be able to operate very soon after Royal Assent. Under the Bill as currently drafted, that is only partly correct, because it will apply only to LDPs where the management group consists entirely of lawyers. These amendments would enable true LDPs, as envisaged by Sir David Clementi, to operate promptly.

Lastly, I refer to the Joint Committee's recommendation that ABSs should be introduced on an incremental basis. That, in turn, maximises the likelihood that any unanticipated difficulties can be resolved well before the more challenging regulatory issue, such as that on externally owned law firms, needs to be tackled. I beg to move.

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs) 8:30 pm, 18th April 2007

My Lords, perhaps I may make it absolutely clear at the outset that the comment that I made while the noble Lord was speaking was that he could not possibly be old enough to have been a partner for 40 years. Did the noble Lord say that? I do not accuse him of telling porkies, if I may use that terminology, but it is impossible.

Photo of Lord Carlile of Berriew Lord Carlile of Berriew Liberal Democrat

My Lords, that is the end of the flattery.

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

My Lords, exactly. As the noble Lord, Lord Carlile, said, that is the end of the flattery—but it was, none the less, heartfelt.

The noble Lord, Lord Hunt, eloquently returned to an issue that we looked at in Committee. The question is the Law Society's ability to regulate practices with up to 25 per cent non-lawyer control without the need for those practices to be licensed under Part 5, and he has set out why he thinks that this is important. Amendments Nos. 311A, 311B, 311C and 632A, tabled with the support of the Institute of Chartered Accountants in England and Wales, would make similar provision for bodies with 25 per cent non-lawyer professionals, albeit that they would be low-risk bodies under the alternative business structure framework, rather than exempt from the framework.

The amendments would also provide that firms with non-lawyer partners or members who do not provide services to clients should not require those licences. I hope that by this stage in our deliberations noble Lords will accept that I support the creation of practices that have non-lawyers as managers, or which combine the expertise of different professionals in the provision of services. I welcome very much both the Law Society and the Institute of Chartered Accountants facilitating and regulating such practices. I have said on many occasions that increased opportunities to leverage non-lawyer expertise into the legal services market is certain to create advantages both for consumers and for providers.

What I cannot accept is exemption from Part 5 altogether for regulated practices within the proposed boundaries, which would go against a key principle of the Legal Services Bill and our proposals for alternative business structures. Our policy is to create, as far as is possible, a level playing field between regulators, offering all the potential to become licensing authorities. We could risk the opposite outcome. I know that that is not the intention of the noble Lord, but I do not wish to endorse a provision that gives one regulator a potential competitive advantage, first, by virtue of reaching part of the alternative business structure market before other regulators and, secondly, by avoiding the additional statutory requirements that would otherwise apply to these practices.

I also do not want to endorse a proposal that gives a competitive advantage to non-lawyers who are regulated professionals, particularly given the concern that conflicts between professional rules may be one of the most complex challenges for those involved in alternative business structures. So I am opposed in principle to exemptions and carve-outs from the Part 5 regime. Certain forms of exemption may, arguably, facilitate an incremental approach in the short term; in the longer term, however, we run the risk of creating loopholes and possible confusion.

We have tried in the Bill to make a clear, principled distinction between two types of practice. A body either has non-lawyers in positions of control or it does not. Consequently, it is either a licensable body or it is not. As I have stated, in the framework we have already provided for flexibility as far as low-risk bodies and other special bodies are concerned, but we have set 10 per cent as a maximum level on the basis that we think that control above that level becomes too significant to benefit from lesser scrutiny.

In principle, the Government's policy is that bodies with non-lawyer ownership or management should be subject to the safeguards of Part 5. Therefore, if we were to make an exception for Law Society practices, such practices could emerge without any need for the Legal Services Board to designate the Law Society as a licensing authority. It would not be required to fulfil the relevant obligations. That is not to say that the Law Society would or could not create similar safeguards, but we would have no guarantees in statute. We would run the risk of exposing consumers to inconsistent levels of regulatory protection and we would not have, at least for several years, any board of supervision. I have similar objections to any exemption for bodies with non-lawyer partners, client-facing or otherwise.

I hope that the noble Lords will agree that it is crucial that we get this right from the outset. The incremental approach suggested by the noble Lord, Lord Hunt of Wirral, would be of little value if it could not be monitored and supervised by the board and if it proceeded with none of the safeguards that we have identified as essential to support alternative business structures. With the greatest respect to the noble Lord, I do not think that what he suggests quite fulfils the objectives set out by Sir David Clementi.

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, on that point, the Government have said that legal disciplinary practices can come into place soon after Royal Assent. Perhaps the Minister could clarify exactly what the Government mean by that, because I do not think that the LDPs, as defined by Sir David Clementi—for example, where just one person, perhaps the finance or human resource director, is allowed to become part of the management structure and a partner in the firm—can happen until at least 2010, or even 2011. That point causes me some concern. Would the Minister be prepared to have a look at the sorts of examples that Sir David has given, just to ensure that we can have some fast-track procedure to allow that to happen without the great panoply and delay involved in awaiting the full structure?

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

My Lords, I could not agree more with the sentiment behind what the noble Lord is saying. It is important, not least in the debate on how alternative business structures will evolve and develop, to enable LDPs, as we have learnt to call them, to come into being as soon as possible. I need to get advice on the exact timetable as soon as possible to be sure about that, but I agree with the noble Lord wholeheartedly.

I want to ensure that noble Lords recognise that I do not disagree with Sir David Clementi's judgment. He supported, as I do, the development of the types of practices that the Law Society is seeking to regulate, but he recommended that we put in safeguards around these practices. In particular, he talked about the head of legal practice and the fitness-to-own tests. He also recommended that those should be subject to oversight by the board under the B+ model.

We believe that, in Part 5, we are guaranteeing that we have these safeguards in statute and that they can be relied on across the regulatory framework, while making it clear precisely to whom they should apply. Taking on board the noble Lord's point about wishing to move forward with this, which I endorse completely, I hope that he will feel able to withdraw his amendment.

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, this has been a very helpful debate, because I sense that the Minister and many of us are ad idem and want to achieve the same objective. I hope that, if there is time before the Third Reading, the Minister will look again at Sir David Clementi's report, as he spoke about the first step, which would facilitate the emergence of MDPs or alternative business structures at a subsequent date. I suppose that I am just talking about that first step, but, in the light of the comforting words that the Minister has uttered and the comments that she made at the outset of her speech, I shall be quixotically chivalrous and acknowledge how grateful I am to her for all that she has said tonight. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 205 not moved.]

Clause 72 [Licensing authorities and relevant licensing authorities]:

[Amendment No. 206 not moved.]

Clause 73 [Designation of approved regulator as licensing authority]:

[Amendment No. 207 not moved.]

Clause 74 [Automatic cancellation of designation as licensing authority]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendment No. 208:

Clause 74, page 42, line 6, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendment agreed to.

[Amendment No. 209 not moved.]

Clause 75 [Cancellation of designation as licensing authority by order]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 210 to 215:

Clause 75, page 42, line 12, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 75, page 42, line 18, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 75, page 42, line 34, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 75, page 43, line 5, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 75, page 43, line 6, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 75, page 43, line 8, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

[Amendment No. 216 not moved.]

Schedule 10 [Designation of approved regulators as licensing authorities]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 217 to 232:

Schedule 10, page 164, line 2, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 164, line 12, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 164, line 23, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 3, leave out "Secretary of State's" and insert "Lord Chancellor's"

Schedule 10, page 168, line 10, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 15, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 22, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 23, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 27, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 30, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 31, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 34, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 39, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 168, line 42, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 169, line 2, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 10, page 172, line 28, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

Clause 76 [Cancellation of designation: further provision]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 233 to 236:

Clause 76, page 43, line 15, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 76, page 43, line 20, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 76, page 43, line 22, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 76, page 43, line 44, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

[Amendment No. 237 not moved.]

Clause 77 [The Board's power to recommend orders made under section 76]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendment No. 238:

Clause 77, page 44, line 21, leave out "Secretary of State that the Secretary of State" and insert "Lord Chancellor that the Lord Chancellor"

On Question, amendment agreed to.

[Amendment No. 239 not moved.]

Clause 78 [Cancellation of designation: powers of entry etc]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 240 to 242:

Clause 78, page 45, line 12, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 78, page 45, line 24, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 78, page 45, line 28, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

[Amendment No. 243 not moved.]

Clause 79 [Functions of appellate bodies]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 244 and 245:

Clause 79, page 45, line 40, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 79, page 46, line 9, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

[Amendment No. 246 not moved.]

Clause 80 [Procedural requirements relating to recommendations under section 79]:

[Amendment No. 247 not moved.]

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs) 8:45 pm, 18th April 2007

moved Amendment No. 248:

After Clause 80, insert the following new Clause—

"Licensing authority policy statement

(1) Each licensing authority must prepare and issue a statement of policy as to how, in exercising its functions under this Part, it will comply with the requirements of section 27 (or, in the case of the Board, section 3) (duties to promote regulatory objectives etc).

(2) A licensing authority may issue a statement under subsection (1) only with the approval of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator).

(3) A licensing authority may, with the approval of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator), alter or replace a statement issued under this section.

(4) If it does so, it must issue the altered or replacement statement.

(5) In exercising its functions under this Part, a licensing authority must have regard to the statement issued by it under this section.

(6) A licensing authority must publish a statement issued by it under this section."

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

My Lords, noble Lords will recall that there was considerable debate in Committee over licensing authorities' duties and whether and how we might reinforce them. There was also concern about the effects on access to justice of ABS firms, and what the licensing authorities should be obliged to do about it. I said then that the Government broadly agreed with noble Lords that improving access to justice was of course important.

It is possible that some noble Lords believe that to impose a duty specifically about access to justice might be a more appropriate way to handle this, but we have sought to look at the interaction between access to justice and the other regulatory objectives in play. I make it clear that we do not wish to sideline access to justice issues. Licensing authorities will have to consider that interaction as part of their obligation, but we want them to do so in terms of and alongside its interaction with the other regulatory objectives; and to consider how they address it when considering applications for licences and special body modifications, the imposition of conditions and all other licensing functions. The fact that the duty does not single out access to justice means that authorities will have to consider the interaction of access to justice with other objectives, as I have indicated. The amendment also places policy statements, approval before their use and oversight of their use under the board's supervision. I beg to move.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, the amendment runs into my own Amendment No. 252. I shall address my remarks specifically to this amendment, and hold my fire on the more general question for the later debate. However, I very much appreciate the fact that the Minister has tabled an amendment as a result of the discussions in Committee, which she rightly says were most constructive.

The amendment requires licensing authorities to prepare statements of policy as to how they will comply with their obligation to promote the regulatory objectives when exercising their functions. However, this simply does not deal with the issue. It fails to direct licensing authorities' attention to the particular risks to access to justice posed by alternative business structures. The Bill provides comprehensive provision in the requirements of Schedule 13 about the ownership of licensed bodies to tackle the risk that persons who are not "fit and proper" might gain control over law firms. It is quite bizarre that the Bill should contain nothing to deal with the other main risk: that to access to justice posed by ABSs.

On Question, amendment agreed to.

Clause 81 [Licensing rules]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

My Lords, in moving the amendment, I shall speak to Amendments Nos. 250, 251, 257 and 276. I am extremely grateful to the noble Lord, Lord Kingsland, for raising the point in Committee on 6 February about the role that the LSB would play as a licensing authority. I agreed to look at the drafting of Clause 81, and said that I would explore further possible amendments to emphasise the Government's policy intentions in this area more clearly.

After further consideration, I concluded that the general obligation in Clause 81(1), which provides that the board is required to make licensing rules within 12 months of a date set by the Secretary of State—now the Lord Chancellor—should be amended, and that the board will have to make licensing rules only when there is evidence and a decision made under Schedule 12 that the board needs to act. That is when there is no other licensing authority with suitable arrangements in place for a particular type of body, or in the case of non-commercial bodies, there is no licensing authority able to offer appropriate terms.

That approach reinforces the role that the Bill sets for the board as a licensing authority of last resort and avoids requiring the board to automatically make licensing rules. This would have required it to formulate different sets of licensing rules for categories of bodies that it may never have needed to license. The amendment provides that the board writes licensing rules only when there is a clear need for it to do so, which allows the board to focus on its primary role of oversight regulator during the crucial time of implementation, while assuring existing regulators that it will not be competing with them to formulate licensing rules.

I am confident that this amendment reinforces our intention that the board should act only as a licensing authority as a last resort and should not compete with other approved regulators. Again, with grateful thanks to the noble Lord, Lord Kingsland, for raising the matter, I beg to move.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, I rise simply to say that it gives me great pleasure to thank the noble Baroness for taking this initiative.

On Question, amendment agreed to.

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 250 to 251:

Clause 81 , page 47, line 5, leave out from "day" to end of line 6 and insert "on which a licensable body first becomes entitled to make an application to it for a licence by virtue of a decision of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator) under Schedule 12;"

Clause 81 , page 47, line 9, at end insert—

"( ) In subsection (1)(a), "suitable licensing rules" means licensing rules which constitute suitable regulatory arrangements (within the meaning of Schedule 12) in respect of licensable bodies entitled by virtue of a decision under that Schedule to make an application to the Board for a licence."

On Question, amendments agreed to.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

moved Amendment No. 252:

Clause 81 , page 47, line 25, at end insert—

"( ) appropriate provision requiring the licensing authority to consider the likely impact of a proposed application on access to justice when determining the application,"

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, we had a good debate on this amendment in Committee. Since then we have given the matter further thought and tabled Amendments Nos. 253 and 254 in addition to Amendment No. 252. All these amendments would require that the impact on access to justice is fully considered when decisions on licensing prospective alternative business structures are taken.

For all the benefits of the new regime, the Government cannot hide from the fact that there are clear risks that external ownership of law firms by bodies such as supermarkets or insurance companies could harm access to justice. It is evident that some of the less attractive legal services could get left behind and, as the Joint Committee noted, the new rules could well reduce the geographical availability of legal services. It is essential that the potential impact on access to justice, particularly in rural areas, is taken into account before any licensing decisions which could do permanent damage are taken.

That point is worthy of development, but I do not need to do so on this occasion because your Lordships had the benefit of the trenchant and forthright views of the noble Lord, Lord Carlile of Berriew, on these dangers, which were expressed, too, in the debate that flowed from his introduction.

I have already thanked the noble Baroness for tabling her Amendment No. 248, but she will have concluded from what I said that we do not believe that the Government's amendment to require licensing authorities to prepare statements of policy is sufficient. It fails to point authorities explicitly to the particular risks to access to justice posed by alternative business structures.

I recall that, in Committee, the noble Baroness was concerned that,

"there may be unintended problems if we say access to justice is the overarching objective".—[Hansard, 6/2/07; col. 634.]

However, Amendment No. 252 does not intend to create such an overarching objective. It is merely intended to ensure that the licensing authorities consider the possible effect of access to justice and give the issue full weight when determining applications. It would be desirable for licensing rules to contain provisions requiring consideration of the impact of access to justice on a continuing basis; that is to say, in renewal decisions as well.

We on these Benches still prefer our original amendment in Committee, which is now Amendment No. 252, but our new wording in Amendments Nos. 253 and 254 is designed to allay the Government's fears that the change might require access to justice considerations automatically to trump all other regulatory objectives. These amendments also highlight that the particular concern is for comparatively disadvantaged consumers, whose circumstances require particular protection. These amendments are absolutely essential to ensure that Part 5 of the Bill will operate in the public interest. I beg to move.

Photo of Lord Carlile of Berriew Lord Carlile of Berriew Liberal Democrat

My Lords, given my comments on Amendment No. 202, it will be no surprise to the House to know that I support these amendments. We regard specificity about access to justice as essential as we fear that otherwise there will be a real diminution of access to quality justice in Wales, the West Country and parts of the north-east and north-west, a reduction in the number of firms of solicitors and a risk of law by call centre. We support these amendments.

Photo of Baroness Butler-Sloss Baroness Butler-Sloss Crossbench

My Lords, I support what the noble Lord, Lord Carlile, said, particularly with regard to the west of England, where I live for part of the year. It is important that one recognises that the noble Lord, Lord Whitty, who undoubtedly supports a large proportion of consumers, does not support all consumers. There are small consumers who have real needs. Whether it is to be seen under Amendment No. 252, 253 or 254, there are small people who need help from local firms of solicitors and those local firms may not survive this grand new scheme that the Government have produced. I am speaking on behalf of some rural communities, but it is equally appropriate to speak on behalf of small areas on the outskirts of big cities. One has to say that what is suggested in Amendments Nos. 252 to 254 has real merit. They should be seriously considered by the Government. I support the amendment moved by the noble Lord, Lord Kingsland.

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs) 9:00 pm, 18th April 2007

My Lords, I start by saying that I could not agree more on the importance of access to justice; it is vital. I have approached it by seeking to recognise that when licensing authorities are operating they must balance access to justice correctly against other objectives and ensure that it is achieved. In that respect there is nothing between us.

I have sought to put access to justice in the context of enabling it to be balanced so that it can be achieved taking into account the other regulatory objectives. The interaction of those objectives is important. I appreciate what the noble Lord, Lord Kingsland, said about Amendment No. 248, but I want that to be seen as reinforcing that as effectively as possible. We must make sure that we not only get a balance but also that the other objectives are not lost or forgotten, or, indeed, that the holistic approach of the regulatory objectives, working together, means access to justice is suitably protected.

What I am trying to demonstrate is that we have taken all the regulatory objectives and said, "These are critical"; access to justice certainly is. But all of them need to be considered effectively and properly. That is my difficulty with Amendment No. 252. I do not in any way differ from the requirement about access to justice issues—the noble and learned Baroness indicated that in the examples she gave; the noble Lord, Lord Carlile, gave examples in the context of the Part 5. We must make certain that access to justice is protected. But I want it to be done with the other objectives. All I am saying is that they are all important; they all have to be dealt with properly; and they all have to be, within the context of the amendments I am moving, seen to be important—an issue we will come on to in terms of reporting and so on. It does not mean that I am in any way suggesting that access to justice is less than very important; I am simply saying that actually all the objectives are and that it needs to be considered as critical alongside the other objectives.

I have problems with two of the amendments within the group. Amendment No. 253 in a sense seeks to give priority to access to justice by imposing a requirement that it is not quite the same as a regulatory objective. There is a risk in that. A similar obligation that is not quite the same could cast doubt on what we mean by access to justice, and I do not want anything in the legislation that could create confusion about how you interpret the objectives and over what the licensing authorities' duties are.

Amendment No. 254 has the list of groups of consumers. Noble Lords will know—I indicated this in Committee—from my previous existence in education and all the way through my existence as a DCA Minister that I really do not like lists in legislation. The use of different phrases can cause confusion. If we single out four groups of consumers we fail to recognise other consumer interests as well. We have had much debate, as I have already indicated, about the effect of alternative business structures on rural communities and those who are poor and their use of legal services. I absolutely agree that they must not be disadvantaged. Equally, I do not want other consumers to be disadvantaged. Everyone's access to justice is important. The general duty to consider the interests of all consumers avoids trying to put some consumer interests behind the interests of other people. I think that that can be achieved without Amendment No. 254.

As I tried to indicate in debate on Amendment No. 248, we need to make sure that the regulatory objectives are protected. Access to justice is very important. I do not think that the amendments before us make the position any better and they risk creating problems I would rather see avoided. But I support the contention of making sure that access to justice is very important and hope that the noble Lord will withdraw the amendment.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, I am most grateful, as always, for the intervention of the noble Baroness, but I am in some difficulty about it. The noble Baroness seems extremely keen to protect the integrity of the eight objectives and not to favour any one in the Bill but at the same time supports the intention that lies behind our amendments. It is plain that the intention behind our amendments is to pick out one of the eight objectives and invite the Government to give it significant weight in the Bill.

Let me draw a parallel from an unlikely source. In the law of town and country planning, it is traditional for legislation not to interfere with the discretion of the inspector in applying weight to all the relevant factors that he must consider. However, recently, in the context of wind farm proposals, the Government have broken with that tradition. Government policy on wind farm development means that the inspector now must give significant weight to the environmental advantages of the building of wind farms. One consequence of that is that an awful lot of wind farms are being built. So there is a clear precedent for the Government breaking ranks with what I accept as having been a tradition of public authorities exercising discretionary powers. I simply do not understand how, on the one hand, one can meet the problem that, the Government accept, is posed by Part 5 and, at the same time, not confront it in the Bill.

I shall not press the noble Baroness on this tonight, but I hope that she will think about the issue again. She must be in no doubt that, on Third Reading, we will come back to the issue in the hope that she will come back to us, too, so that there is a pleasing meeting of minds. If not, I find it difficult to see what we can do other than seek the opinion of the House. I shall be sad to do that, because I felt that this was one of the few areas in the Bill where we had been building consensus, but the crucial component of the consensus is that, in some way or other, access to justice must have an enhanced value in this part.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 253 to 255 not moved.]

Schedule 11 [Licensing rules]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 256 to 273:

Schedule 11 , page 173, line 7, after "fee" insert "(if any)"

Schedule 11 , page 173, line 21, at end insert "in accordance with its licensing rules"

Schedule 11 , page 174, line 6, after "fee" insert "(if any)"

Schedule 11 , page 174, line 23, after "fee" insert "(if any)"

Schedule 11 , page 174, line 34, after "fee" insert "(if any)"

Schedule 11 , page 175, line 19, leave out "an individual" and insert "a person (other than a licensed body)"

Schedule 11 , page 176, line 9, leave out "about"

Schedule 11 , page 176, line 10, at beginning insert "about"

Schedule 11 , page 176, line 12, at end insert—

"( ) for a review by the licensing authority of a determination under that paragraph that an individual is not a fit and proper person;"

Schedule 11 , page 176, line 13, at beginning insert "about"

Schedule 11 , page 176, line 15, at end insert—

"( ) for a review by the licensing authority of a determination under that paragraph to withdraw its approval;"

Schedule 11 , page 176, line 16, at beginning insert "about"

Schedule 11 , page 176, line 41, leave out "about"

Schedule 11 , page 176, line 42, at beginning insert "about"

Schedule 11 , page 176, line 44, at end insert—

"( ) for a review by the licensing authority of a determination under that paragraph that an individual is not a fit and proper person;"

Schedule 11 , page 177, line 1, at beginning insert "about"

Schedule 11 , page 177, line 3, at end insert—

"( ) for a review by the licensing authority of a determination under that paragraph to withdraw its approval;"

Schedule 11 , page 177, line 4, at beginning insert "about"

On Question, amendments agreed to.

Clause 82 [Application for licence]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendment No. 274:

Clause 82 , page 48, line 19, at end insert "(if any)"

On Question, amendment agreed to.

[Amendment No. 275 not moved.]

Schedule 12 [Entitlement to make an application for a licence to the Board]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendments Nos. 276 to 278:

Schedule 12 , page 181, line 9, at end insert ", having regard to the matters in section 104(5)(a) to (c) and any other matter specified in rules made by the Board for the purposes of this sub-paragraph."

Schedule 12 , page 182, line 34, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 12 , page 182, line 39, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

Clause 83 [Terms of licence]:

[Amendment No. 279 not moved.]

Clause 84 [Modification of licence]:

[Amendment No. 280 not moved.]

Clause 85 [Registers of licensed bodies]:

[Amendment No. 281 not moved.]

Clause 86 [Evidence of status]:

[Amendment No. 282 not moved.]

Clause 87 [Ownership of licensed bodies]:

[Amendment No. 283 not moved.]

Schedule 13 [Ownership of licensed bodies]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendments Nos. 284 to 290:

Schedule 13 , page 187, line 14, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 13 , page 187, line 35, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 13 , page 188, line 10, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 13 , page 191, line 21, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 13 , page 192, line 3, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 13 , page 198, line 30, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 13 , page 199, line 3, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

Clause 88 [Duties of non-authorised persons]:

[Amendment No. 291 not moved.]

Clause 89 [Duties of Head of Legal Practice]:

[Amendment No. 292 not moved.]

Clause 90 [Duties of Head of Finance and Administration]:

[Amendment No. 293 not moved.]

Clause 91 [Information]:

[Amendment No. 294 not moved.]

Clause 92 [Enforcement of notices under section 91]:

[Amendment No. 295 not moved.]

Clause 93 [Financial penalties]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendment No. 296:

Clause 93 , page 52, line 17, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendment agreed to.

[Amendment No. 297 not moved.]

Clause 94 [Appeals against financial penalties]:

[Amendment No. 298 not moved.]

Clause 95 [Recovery of financial penalties]:

[Amendment No. 299 not moved.]

Clause 96 [Referral of employees etc to appropriate regulator]:

[Amendment No. 300 not moved.]

Clause 97 [Disqualification]:

[Amendment No. 301 not moved.]

Clause 98 [Lists of disqualified persons]:

[Amendment No. 302 not moved.]

Clause 99 [Suspension and revocation of licence]:

[Amendment No. 303 not moved.]

Clause 100 [Intervention]:

[Amendment No. 304 not moved.]

Schedule 14 [Licensing authority's powers of intervention]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendment No. 305:

Schedule 14 , page 207, line 36, after "authority" insert ", having taken such steps to do so as are reasonable in all the circumstances of the case,"

On Question, amendment agreed to.

Clause 101 [Regulatory conduct and the Board as licensing authority]:

[Amendment No. 306 not moved.]

Clause 102 [Prevention of regulatory conflict: accounts rules]:

[Amendment No. 307 not moved.]

Clause 103 [Trade union exemptions]:

[Amendment No. 308 not moved.]

Clause 104 [Power to modify application of licensing rules etc to special bodies]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendment No. 309:

Clause 104 , page 56, line 15, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendment agreed to.

[Amendment No. 310 not moved.]

Clause 105 [Modifications under section 104: supplementary]:

[Amendment No. 311 not moved.]

Clause 106 ["Low risk body"]:

[Amendments Nos. 311A, 311B, 311C and 312 not moved.]

Clause 107 [Foreign bodies]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendment No. 313:

Clause 107, page 58, line 17, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendment agreed to.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendment No. 314:

Clause 107, page 58, line 19, leave out "the United Kingdom" and insert "England and Wales"

On Question, amendment agreed to.

[Amendment No. 315 not moved.]

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

moved Amendment No. 316:

After Clause 107, insert the following new Clause—

"Monitoring and research

(1) The Lord Chancellor shall, in accordance with the provisions of this section, provide for the carrying out of a study into the operation of this Part.

(2) The Lord Chancellor shall make such preparations for the study to begin as soon as regulations bringing this Part into force are produced, and such preparations may relate to the instruction of a research team and formation of a Research Advisor Group to assist in the direction of the study.

(3) Within three years of the date on which this Part comes into force, the Lord Chancellor shall lay before Parliament a report on the results of the study."

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, I am very grateful to the Ministers for sharing their thoughts behind Amendment No. 317. It might be convenient for the House if we considered Amendments Nos. 316 and 317 together, because undoubtedly the noble Lord, Lord Evans of Temple Guiting, sees Amendment No. 317 as a better alternative to Amendment No. 316. I concede that Amendment No. 317 sets it out clearly that the board's annual report will have to deal with the activities of licensing authorities and licensed bodies and the way in which those activities have affected the regulatory objectives. It applies, of course, not to the first annual report but to subsequent reports.

The noble Lord, Lord Evans of Temple Guiting, may recall that I gave an example in Committee of the whole procedure of personal injury compensation to which the noble Lord, Lord Carlile of Berriew, referred. The Government introduced the conditional fee agreements, which became known as "no win, no fee", against a background of no real research. It soon became clear that things were beginning to go wrong. We saw that with the television advertisements that suggested, "Where there is blame, there is a claim, and it will not cost you a penny", and with the rise of Claims Direct, the Accident Group and Tag. I told the previous Lord Chancellor, the noble and learned Lord, Lord Irvine of Lairg, on several occasions that some careful studies should have been made before the step into the unknown was taken. I understood at the time that it was because of Treasury pressure on budgets. The budget was no longer there, so civil legal aid had to be dramatically cut, and the subsequently named Department for Constitutional Affairs thought that "no win, no fee" agreements were the only way forward.

I give that as an example because it is very similar to the situation now. The whole procedure involved in setting into being this new structure is, to some extent, a step into the unknown. I well understand the noble Lord, Lord Carlile, saying that we should take it all out of the Bill, because there is no doubt that there are fears and concerns about what this new system will do, particularly in certain respects.

My argument, however, is linked much more to Sir David Clementi's report, because the review set out a procedure that envisaged a step-by-step approach towards LDPs, and rather rejected the idea of multi-disciplinary practices as a necessary concomitant, further progression of the notion of these new structures. We are therefore going between Sir David Clementi and the unknown, and we do not know what will happen. This is why the noble and learned Lord the Lord Chancellor, who is introducing this policy, rather than the board should make preparations for the study to be commenced as soon as regulations bringing this part into force are produced. Then let us have a proper debate about it before we move to the next stage.

I realise that this falls foul of the Government's intention to move with one bound to free the structures in a dramatic way. Their alternative may deal with the problem in subsequent years, but I would like at the outset to have a careful study into what will happen. I beg to move.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip 9:15 pm, 18th April 2007

My Lords, we listened very carefully to what was said in Committee. In our amendment, we thought not only that we had encapsulated the spirit of what was said but that our amendment had gone a little further. I have listened carefully to the noble Lord, Lord Hunt, but I am not sure whether he likes the government amendment or feels that it does not go far enough. Therefore, I will present the government amendment and, if there are further things to think about before Third Reading, we will be more than happy to consider them.

When we debated Amendment No. 248, my noble friend said that the Government had tabled an amendment of their own about monitoring ABS. We have come to the conclusion that we should place the board under a specific duty to report on the development of ABS. This amendment fulfils the commitment we gave in Committee. It integrates reporting into the board's annual report. The board will have a permanent duty to include ABS. The report is, of course, laid before Parliament, so this will reinforce parliamentary scrutiny of ABS as provided for in Amendment No. 248. Placing the monitoring duty on the board keeps all oversight of ABS in one place, which gives a more joined-up approach to checking how the regulatory objectives are being met. The reporting duty covers licensing authorities and licensed bodies. This means that the board will be monitoring not only the decisions of licensing authorities, which it would anyway in its oversight role, but also the practical effects of those decisions.

Amendment No. 317 places responsibility for monitoring and reporting on the board rather than on the Lord Chancellor, a point with which the noble Lord, Lord Hunt, disagrees, or on a separate research body, as in Amendment No. 316. This ensures that all oversight responsibilities are kept in one place and thus guarantees a consistent approach. The reporting duty is focused. It is not merely about the development of ABS, but specifically about the effects of ABS activity on the regulatory objectives. This allows all the objectives to be considered, including, of course, access to justice. But it remains consistent with Amendment No. 248 in that it does not single out any one objective. As my noble friend pointed out, all the objectives need to be considered together to capture the interactions between them. This amendment carries that through into reporting on Part 5.

I am grateful to the noble Lords, Lord Kingsland and Lord Hunt, for raising this point in Committee. I hope that our amendment slightly improves on that tabled by the noble Lord, Lord Hunt, although that may be a rather arrogant statement. Rather than being covered after a fixed period, Part 5 will always feature in the board's report. The board will be able to report on initial steps and will continue to report as ABS develops and reaches a steady state. Of course, the board, Ministers and Parliament will all remain free to recommend change if reports or events reveal that it is necessary.

Before I formally move our amendment, I wish to repeat that we would be very happy to discuss with the noble Lord, Lord Hunt, any improvement he feels that we may achieve to this government amendment before Third Reading.

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, I am much persuaded by the noble Lord, and his offer to improve government Amendment No. 317 is readily accepted. But having listened to his detailed explanation, I am now absolutely convinced that these two amendments stand side by side, Amendment No. 316 to cover the immediate position and Amendment No. 317 to provide a way into the future whereby the study under Amendment No. 316 can be followed up time and again through the mechanism of the annual report. I am grateful to the Minister, but I am still persuaded that Amendment No. 316 can sit alongside Amendment No. 317, so I would like to test the opinion of the House.

On Question, Whether the said amendment (No. 316) shall be agreed to?

Their Lordships divided: Contents, 36; Not-Contents, 38.

Division number 4 Private Parking: Ports and Trading Estates — Legal Services Bill [HL]

Aye: 34 Members of the House of Lords

No: 36 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Resolved in the negative, and amendment disagreed to accordingly.

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs) 9:31 pm, 18th April 2007

moved Amendment No. 317:

Before Clause 108 , insert the following new Clause—

"Reporting requirements relating to Part 5

(1) The Board's annual report must deal with how, in the Board's opinion, the activities of licensing authorities and licensed bodies have affected the regulatory objectives.

(2) This section does not apply to an annual report for a financial year before the first financial year in which a licence is issued under this Part.

(3) In this section "annual report" and "financial year" have the same meaning as in section 6."

On Question, amendment agreed to.

Clause 108 [Interpretation of Part 5]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 318 and 319:

Clause 108 , page 58, line 28, leave out from "not" to end of line 31 and insert "within subsection (2);"

Clause 108 , page 58, line 37, at end insert—

"(2) The following persons are within this subsection—

(a) an authorised person in relation to an activity which constitutes a reserved legal activity, (b) a registered foreign lawyer (within the meaning of section 89 of the Courts and Legal Services Act 1990 (c. 41)), (c) a person entitled to pursue professional activities under a professional title to which the Directive applies in a state to which the Directive applies (other than the title of barrister or solicitor in England and Wales), (d) a body which provides professional services such as are provided by persons within paragraph (a) or lawyers of other jurisdictions, and all the managers of which and all the persons with an interest in shares in which— (i) are within paragraphs (a) to (c), or (ii) are within this paragraph by virtue of sub-paragraph (i).

(3) In subsection (2)(c) "the Directive" means Directive 98/5/EC of the European Parliament and the Council, to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained."

On Question, amendments agreed to.

[Amendment No. 320 not moved.]

Schedule 15 [The Office for Legal Complaints]:

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

moved Amendment No. 322:

Schedule 15 , page 212, line 16, leave out sub-paragraph (2)

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, I shall speak to Amendment No. 325 as well. Both amendments address the relationship between the Lord Chancellor and the Office for Legal Complaints. They were debated at some length on 21 February, as reported at columns 1088 to 1094 of Hansard. Your Lordships will be relieved to hear that I have no intention of rehearsing the arguments advanced at that time. I will simply summarise our submissions on the matter.

Amendment No. 322 would take away from the noble and learned Lord the Lord Chancellor the power to alter the number of members of the Office for Legal Complaints. We do not agree with the Minister's analysis in Committee when she said:

"The Secretary of State ... is best placed to do that".—[Hansard, 21 February 2007; col. 1090.]

This function should really be undertaken by the board. The Office for Legal Complaints is directly answerable to the board, not to the noble and learned Lord.

The vote on Monday, protecting the independence of the board, adds a great deal of weight to my case. It should be an independent board that takes administrative decisions over the Office for Legal Complaints. I agree with the analysis in Committee of my noble and learned friend Lord Lyell of Markyate that the principle raised by Amendment No. 325, which relates to the removal of the chairman of the Office for Legal Complaints, is, if anything, the more fundamental of the two in this group.

Both amendments would reduce the Lord Chancellor's inappropriate influence over the Office for Legal Complaints in the Bill. As I indicated in Committee, if the noble and learned Lord the Lord Chancellor were to disagree with the Legal Services Board on either the chairmanship or the number of members of the Office for Legal Complaints, it would be appropriate for him to take up the issue with the board, not to have the power to act on his own behalf. I beg to move.

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

My Lords, I am concerned that the amendments stem from a worry that the Lord Chancellor would have undue influence over the Office for Legal Complaints and I genuinely do not believe that that is the case. The role of the Lord Chancellor in setting the size of the board or in consenting to the removal of the chairman of the OLC is non-interventionist. He will not change the size of the OLC of his own volition nor can he remove the chairman of the OLC. The OLC is a non-departmental body and as such is ultimately accountable to Parliament. It therefore must be right that the Lord Chancellor have the minimum of involvement in how the OLC is constituted. But when I say "minimum", I mean exactly that. The Lord Chancellor has no role in approving any of the rules that the OLC makes in setting out how complaints can be handled, with only one exception: the rules on case-handling fees. He certainly has no role in appointing ombudsmen to determine complaints or in handling individual complaints. Therefore, any concern that he would have undue influence over the OLC is not substantiated. I hope that the noble Lord will withdraw the amendment.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, I am most grateful to the Minister. I am quite sure that the noble and learned Lord would not exercise his discretionary power in a prejudicial way. My concern is about the structure of the relationship between the board and the OLC. The OLC is subject to the board's jurisdiction. The right person to take decisions about the size of the OLC and its composition is surely the Legal Services Board, not the noble and learned Lord. That is the purpose of these amendments. I have listened very carefully to the Minister's reply; there is no meeting of minds on this matter therefore I wish to ask the opinion of the House.

On Question, Whether the said amendment (No. 322) shall be agreed to?

Their Lordships divided: Contents, 33; Not-Contents, 40.

Division number 5 Private Parking: Ports and Trading Estates — Legal Services Bill [HL]

Aye: 31 Members of the House of Lords

No: 38 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Resolved in the negative, and amendment disagreed to accordingly.

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs) 9:47 pm, 18th April 2007

moved Amendments Nos. 323 and 324:

Schedule 15 , page 212, line 16, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 15 , page 214, line 2, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

[Amendment No. 325 not moved.]

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 326 to 330:

Schedule 15 , page 216, line 5, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 15 , page 216, line 15, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 15 , page 216, line 22, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 15 , page 216, line 34, leave out "Secretary of State" and insert "Lord Chancellor"

Schedule 15 , page 216, line 39, leave out paragraph (b) and insert—

"(b) give a copy of the Comptroller and Auditor General's report to the Lord Chancellor.

(5A) In respect of each financial year, the Lord Chancellor must lay before Parliament a document consisting of—

(a) a copy of the statement of accounts for that year, and (b) a copy of the Comptroller and Auditor General's report on that statement."

On Question, amendments agreed to.

Clause 113 [General obligations]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendment No. 331:

Clause 113 , page 60, line 31, leave out from "schemes," to end of line 32

On Question, amendment agreed to.

Clause 115 [Annual report]:

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland Parliamentary Under-Secretary, Department for Constitutional Affairs, Parliamentary Under-Secretary (Department for Constitutional Affairs)

moved Amendments Nos. 332 and 333:

Clause 115 , page 61, line 12, leave out "Secretary of State" and insert "Lord Chancellor"

Clause 115 , page 61, line 13, leave out "Secretary of State" and insert "Lord Chancellor"

On Question, amendments agreed to.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

My Lords, I beg to move that further consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.