Clause 8

Legal Services Bill [Lords] – in a Public Bill Committee at 12:00 pm on 14th June 2007.

Alert me about debates like this

The Consumer Panel

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General 9:15 am, 14th June 2007

I beg to move amendment No. 221, in clause 8, page 3, line 31, at end insert—

‘( ) The approval of the Lord Chancellor is required for the appointment of a person to be the chairman or to be another member of the Panel.’.

We now move on to the consumer panel, whichwas debated at some length in the other place. On reflection, we think that several items need to be considered again or in a slightly different way. The amendment was proposed to us by the Law Society, and we tabled it as a probing amendment. It would make the Lord Chancellor responsible for approving appointments to the consumer panel, to safeguardthe panel’s independence. We need to ensure that appointments to the consumer panel are made andare seen to be made objectively. That is why we need someone—the amendment suggests the Lord Chancellor —to oversee the appointments process.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

The amendment has been tabled under our names, too. The process is similar to the way in which Ofcom operates, and we are going back to that usual word “independence” and the idea of what is independent of what. The amendment would give the consumer panel some independence of the body that it challenged, in theory. Unusually, we see additional powers in the amendment for the Government.

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

I was a little concerned when the hon. Member for Huntingdon said that this was a probing amendment, because I want to be very positive about it. I accept his arguments and those of the consumer groups. Although I cannot say that I will  accept the amendment, I shall take it away and consider it, and I hope to be able to say something more positive about it in the future. I can see the logic of what both hon. Gentlemen have said.

Photo of Simon Hughes Simon Hughes Shadow Attorney General, Party Chair, Liberal Democrats

I just love the gradualist way that Ministers give in—they never do so at stage one, for fear that something is wrong, but only after a little careful consideration. It is welcome, none the less.

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

Just to clarify for some membersof the Committee, there is collective responsibility in Government and we have to ensure that we bring everyone with us in the course of such matters.

Photo of Frank Cook Frank Cook Labour, Stockton North

Mr. Djanogly, put an end to this banter.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

I shall do my best, Mr. Cook. We are happy with the Minister’s response, accept that shewill come back with a suitable amendment and look forward to seeing it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

I beg to move amendment No. 208, in clause 8, page 4, line 3, at end insert—

‘(c) corporate users of such services.’.

Photo of Frank Cook Frank Cook Labour, Stockton North

With this it will be convenient to discuss the following amendments: No. 219, in clause 8, page 4, line 3, at end insert ‘, and

(c) qualified but non-practising solicitors who, in their professional capacity, use or purchase services provided by persons who are authorised persons in relation to activities which are reserved legal activities.’.

No. 209, in clause 8, page 4, line 11, after ‘(d)’ insert

‘save in respect of a person appointed to represent corporate users of reserved legal activities.’.

No. 220, in clause 8, page 4, line 12, at end insert

‘, except for those authorised persons referred to under subsection 4(c).’.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

Amendments Nos. 209 and 220 are complementary to amendments Nos. 208 and 219. Clause 8 will require the Legal Services Board to set up and maintain a consumer panel—a panel of persons whose task will be to represent consumers’ interests, as defined by clause 208. Appointments to the panel will be made by the Legal Services Board and one of the members of the panel will be appointed its chairman by the board.

Clause 8 sets out the categories of person who may not sit on the panel. Subsection (4) will require the board to ensure that the membership of the consumer panel gives a fair degree of representation to:

“those who are using (or are or may be contemplating using), in connection with businesses carried on by them, services provided by persons who are authorised persons in relation to activities which are reserved legal activities, and...those who are using (or are or may be contemplating using) such services otherwise than in connection with businesses carried on by them.”

However, we believe that it is also necessary that the consumer panel should include representatives of the corporate users of legal services and qualified but non-practising solicitors who use or purchase services in their professional capacity, as well as individual and small business representatives. To enable that, it is necessary to remove the prohibition on authorised persons serving as members of the consumer panel, as far as any representative of corporate users of legal services is concerned.

One of the great purposes of the Bill is to increase consumer protection, so the Minister needs to explain why certain consumers are to be disadvantaged and not given the same protection as others. We thought that the idea of the consumer panel was that it should represent all, not just some, consumers of legal services. The Government agreed on the need to ensure that a range of voices should be heard on the consumer panel.

Only by ensuring that the Legal Services Boardgives membership to a fair and proportionate number of corporate users and qualified but non-practising solicitors can the consumer panel truly call itself representative of consumers. The thousands of in-house lawyers are a growing and important part of the consumer body of legal services; they are possibly the largest such consumers outside the Government. It seems unfair that they should be excluded from representation on the so-called consumer panel.

On 12 June, the General Counsel 100 group wrote to the City of London Law Society expressing its concerns. I have been passed a copy of the letter:

“As you know, GCl00 is the representative body for in-house counsel and company secretaries of the top...FTSE companies. Legal services from external law firms are necessary to the efficient running of the organisations for which our members work and it is our members who are responsible for arranging the purchase of these services.

We would welcome an amendment to the Bill in the terms you have suggested allowing for representation of in-house counsel on the Consumer Panel. Without this, we are concerned that the new regulatory regime for legal services will not be suited to our needs and those of the law firms we use. If this is the case regulation may well impact on the global competitiveness of UK City law firms and our companies will look to other jurisdictions for their legal advisers.”

Our concern is that, if those consumers continued to be excluded, the consumer panel could lose its legitimacy and therefore much of its ability to be productive.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

We are also inclined to support this group of amendments, because the concept of the consumer panel should be to include those consumers who are not regulated by the process. As it stands, if they are not practising solicitors or whatever, they are not regulated but they are consumers.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

I should put the hon. Gentleman right on that point: such people will not necessarily be practising solicitors, but they may well be.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

We remember the phrase “qualified but non-practising solicitors” from Conservative amendment No. 219; that is all. The principle that consumers of services should be represented on the consumer panel is important.

Photo of John Mann John Mann PPS (Rt Hon Richard Caborn, Minister of State), Department for Culture, Media & Sport

Conservative Members cannot help themselves. The profession requires regulation, but they want to water it down to protect vested interests, despite the fact that, under Standing Order 150(2)(c), advice will be required from the Parliamentary Commissioner for Standards on whether the amendments can be moved. I await his correspondence on that. I am sure that hon. Members have read the 2002 speech of the Chairman of the Committee on Standards and Privileges on what it is and is not entitled to do.

Leaving aside the inherent and extraordinary vested interest, to suggest stuffing the consumer panel with lawyers and finding a guise in which to do so shows a lack of understanding of what the real world feels about the problems of the legal profession. I hope that the Minister will outline the sort of people who should serve on the panel. First, there should be someone who has suffered industrial deafness, so that the absurd practices in the legal profession that have taken place for decades can be properly addressed by a decent, sensible consumer voice that says, “Run your profession properly and fairly, and then have the respect that you are due.”

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

Sadly, I cannot view this amendment with the same positive attitude with which I viewed the previous one. I have listened carefully to the arguments about corporate consumers of legal services and whether lawyers and non-practising solicitors generally should be represented on the consumer panel. Clearly, there is a role for the corporate consumer on the panel, but I cannot agree that the prohibition on authorised persons sitting on it should be waived.

First, the establishment of the consumer panel has a distinct purpose: to ensure that the voice of consumers is clearly heard in the regulation of legal services. We have striven to shift the balance, as my hon. Friend constantly encourages me to do, from the interestsof the profession to the interests of consumers. Thatis the principle behind the Bill. To allow the panel’s independence from the legal profession to be compromised—the amendments would do that by allowing authorised persons to be members—would undermine that aim.

Secondly, I am not persuaded by the suggestion that authorised persons need to be on the panel, so that the representations of large corporations as consumers can be heard. If large corporations cannot find someone other than an authorised person to represent themon the panel, they are in a very bad way. I want to encourage large and small corporations to be represented, but I want them to be represented by people who are not authorised persons. In fact, under clause 8(4)(a), the board will be required to ensure that membership of the panel includes fair representationof business consumers, but they cannot be represented by a practising lawyer. That will not prevent representatives from the Federation of Small Businesses, which has representatives on our own consumer panel, or large industry that uses legal services regularly from being represented.

Photo of Kevan Jones Kevan Jones Labour, North Durham

Does the Minister agree that it is important to have trade union representation on the consumer panel? Trade unions are large users of legal services.

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

Trade unions will have an equal opportunity to present people to be members of the consumer panel, but they cannot put authorised persons on the panel. Providers of reserved legal services cannot be part of the body that is specifically set up to consider the needs of legal services consumers. Creating a body that voices consumer interests is important for those on the high street who have not had their concerns or opinions adequately heard in the past. I find this group of amendments wholly unpalatable.

On amendment No. 219, there is nothing to prevent “non-practising solicitors” sitting on the panel, as long as they are not authorised persons. “Non-practising solicitors” fall outside the definition of an authorised person, and therefore outside the prohibition inclause 8.

Talk of the principle of the independence of the legal profession has been heard loud and clear, not only in the Committee, but during six months of debate in the other place. We have heard the concerns about the principle very clearly indeed, but it must apply equally to the role of the consumer panel. If we in this House are the first to make that argument, so be it. The consumer panel must be independent of the influence of the legal profession. On that basis, I shall not accept the amendments.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General 9:30 am, 14th June 2007

In response to the hon. Member for Bassetlaw, I am not and never have been an in-house lawyer. However, I recognise their rights as consumers, whereas the Bill does not. I shall put the hon. Gentleman right by saying that I did not suggest stuffing—I believe that that was the word he used—the panel with in-house lawyers; I simply said that they should be represented.

It might be that, generally speaking, corporate and qualified non-practising solicitors who are users of legal services are more business-savvy and so do not fall into some of the pitfalls that individuals and small businesses do, but the fact that the former group generally have more resources at their disposal does not mean that they do not have similar problems and issues that need to be resolved. Simply put, there are different types of consumer problems. Granted, corporate and non-practising solicitors might not face the same issues as those faced by individual users and small businesses, but that is exactly why they need fair representation on the consumer panel.

The whole idea of the panel is to give a voice to the users of legal services, whoever they might be. The panel must thus be adequately representative of all users. I fail to see how the Minister can justify the exclusion of corporate and qualified but non-practising solicitors, because they, too, are users of legal services. She is in danger of damaging the credibility and legitimacy of the consumer panel by taking such a negative position on the amendments. That would be a shame. She should think again, which is why we shall not be pressing the amendments to a Division. We will reserve our position for a later stage, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of David Burrowes David Burrowes Conservative, Enfield, Southgate

On a point of order, Mr. Cook. Reference has been made in the debate to proper standards and there are concerns about vested interests. Given the contribution on union representation, would it not be appropriate for hon. Members properly to declare their interests as regards union membership?

Photo of Frank Cook Frank Cook Labour, Stockton North

I hear what is being said, but it is a matter not for the Chairman but for each individual Member. I suggest that the hon. Gentleman look at the Register of Members’ Interests.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

I beg to move amendment No. 218, in clause 8, page 4, line 21, after ‘appointed’ insert—

‘(a) by the Board following public advertisement and selection by the prevailing standards for selection of members of public bodies and’.

The amendment would mean that the chairman and other members of the consumer panel would not be appointed only on terms and conditions determined by the board, but would be appointed by the board

“following public advertisement and selection public advertisement and selection by the prevailing standards for selection of members of public bodies”.

The additional wording is intended to ensure that appointments to the consumer panel are made and seen to be made objectively. It is important that all positions on the consumer panel be advertised publicly, so as to inform a wide and varied group of people about their existence. That will give all applicants a fair opportunity to apply for the panel. As a consumer body, the panel needs to represent the consumer. A public advertisement will therefore be the best means of ensuring that that is the case.

Additionally, it is important that the current criteria for selecting members of a public body be applied, so that all applicants are given, and are seen to be given, an equal opportunity to be selected. That is vital, as the consumer panel is the voice of the public and it ensures that consumers are given adequate representation. Any suggestion of favouritism in selecting members could only damage the panel’s integrity and cause people to lose faith in the efficacy of the Bill.

Finally, it should be noted that the amendment would enable the whole process of selection for the consumer panel to become more transparent. That is important if we wish to improve confidence in lawyers among consumers. The Government support the Nolan principles, so will the Minister confirm that they will apply to appointments to the consumer panel?

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

As the question of declaring membership of a trade union as an interest has been raised, I declare that I am a member of a trade union and that I have a vote in the Labour party’s deputy leadership elections. However, that is obviously not the question under discussion. The amendment raises an interesting point, which, as somebody with a track record in computer programming, I view as a problem within statute.

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

Whom are you going to vote for, then?

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I am not going to comment—[Hon. Members: “Ooh!”] To be fair, I have considered the question at great length, but I do not think that any of the candidates warrant my vote. However, that is not really in order. What is in order is to point out that many things in statute are similar, in terms of how matters are processed. We have a spaghetti systemof statute that has developed piecemeal. There isa substantial argument for simplifying it, so that reference is made to a standard form in the appointing of boards, for instance. We support the principles argued for in the amendment, but over time it would be better for the Government to consider developing statute in a more structured manner.

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

The hon. Gentleman will have to tick the box, in that he upholds the principles of the Labour party if he decides to use that ballot paper. So I should be careful if I were him.

I have considered the amendment in some detail. In fact, an identical amendment was tabled in another place, so there is little between us on the issue of independence. I like to think that the Committee and consumer groups know that the Bill’s raison d’être is to put consumers at the heart of the legal system. The prevailing standards of appointments to public bodies are well known to members of the Committeeand, to answer the question that the hon. Memberfor Huntingdon asked, will be applicable to the appointment of the panel.

For that reason, there would be little to gain by including a more specific provision in the Bill to the effect that those standards must be followed. However, given that the appointments are to be made by the board and not by Ministers, there would, strictly speaking, be no compulsion to follow the Commissioner for Public Appointments’ code of practice. I can see why setting out those requirements in the Bill would give an assurance that the appropriate appointment practice would be followed, however, and for that reason I should like to take the amendment away for further consideration, because I agree with what the hon. Gentleman has said on the matter.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

The Minister said that Nolan would not apply in this case. We thank her for her constructive approach and look forward to hearing from the Government later. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I am a bit confused by the complications of statute. Will the consumer panel be a bit like the House of Lords—will people be appointed to it but never removed? What will be the process for removing people from the consumer panel?

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

When people are appointed to the consumer panel, they can be removed, and of course they can stand down. Clause 10 contains a procedure to deal with, for example, situations where representations of the consumer panel are being considered by the board, but it does not give any  specific indication whether members of the panel can be removed. If that is a gap in the legislation, I shall have to consider it again to see whether we need to make the situation absolutely clear. I am grateful to the hon. Gentleman for raising the question.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I thank the Minister for sharing my confusion and I hope that we will achieve some clarity.

Question put and agreed to.

Clause 8 ordered to stand part of the Bill.

Clause 9 ordered to stand part of the Bill.