Clause 10

Legal Services Bill [Lords] – in a Public Bill Committee at 9:30 am on 14th June 2007.

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Representations by the Consumer Panel

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

Photo of Frank Cook Frank Cook Labour, Stockton North

With this it will be convenient to discuss new clause 3—Professional representations—

‘Section 10 shall apply mutatis mutandis to representations by approved regulators whether in their regulatory or representive capacity.’.

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

Clause 10 deals with the proposal that the board should be able to make representations to the consumer panel. My decision not to move new clauses 1, 4, 5 and 6 was tied to our proposal in new clause 3, which will hopefully be clearer now than if we had gone through all the other new clauses as well.

The new clause would cause section 10 to apply mutatis mutandis, or with required changes, to

“representations by approved regulators whether in their regulatory or representive capacity.”

I note that we have received a strong representation relating to the clause from the patent and trade mark institutes. Apparently, they met the Minister on 21 May at her request to discuss the changes made in the Lords and to bring any concerns before Committee. They discussed with her their disappointment at Baroness Ashton’s refusal, as they see it, to honour a commitment to accept this amendment in the other place.

On Report in the Lords, Baroness Ashton stated that she accepted the principle but not the wording of the amendment in Committee, and that on discussion with ministerial colleagues, she had been advised that the Bill provided a variety of means for consultation, and that no amendment was therefore necessary. The institutes felt that the Minister had simply reneged on her commitment. Apparently, they ran through the arguments again with her, explaining why they felt that professional representation was so vital. They argued that if the Government accepted the amendment in principle, they should table a Government amendment to make that explicit in the Bill.

My understanding is that the Minister refused their request, saying that the Bill already contained a number of obligations on the board to consult approved regulators. As something of a compromise, she committed to writing to the patent and trade mark institutes with a list of all the instances in the Bill requiring the Legal Services Board to consult approved regulators, in order to demonstrate that significant  consultation was already explicit. My understanding, although I have to say that it is a few days old, is that the patent and trade mark institutes have as yet received no correspondence. Does the Minister intend to provide that information, and will she agree to present it to the Committee if she does?

The institutes welcome new clause 3, on professional representations. Lord Kingsland pursued the issue on their behalf at length in the Lords. The institutes have concerns about the lack of a requirement on the board to receive representations from approved regulators. The Minister has argued that all the regulators are free to make representations to the board, and that it would be expected to work in close partnership with them, consulting them and listening to their views.

The institutes believe that their position as regulators of a niche part of the legal services market, and their limited resources and membership, differentiates them from the likes of the Law Society or the Bar Council, which have larger resources. They also have grave concerns that their voice will be lost and their considerations overlooked by the board unless the Bill contains a direction or other positive statement that the board should have regard to representations made by legal services providers.

We have listened to the Government’s previous arguments against the establishment of a practitioner panel and understand their concerns that such a panel might jeopardise the role of the consumer panel, that it would be bound to be appointed by the board and that it is difficult to understand what provision could be made to ensure that any panel that the board appointed was representative of the regulated sector, rather than comprising people whom the board was happy to consult.

That position is supported by the Law Society and other regulators, so, accordingly, we did not move new clauses 1, 4, 5 and 6. Instead, we proposed a simple addition to the Bill to ensure that the Legal Services Board has a duty to consider any representationsmade by the regulatory or representative bodies of the professions. That approach mirrors the provisions in clause 10.

We were disappointed by Baroness Ashton’s response when the issue was raised on Report and on Third Reading in the other place and by the subsequent feedback that the institutes received in their later discussions with the Minister and her team in the Ministry of Justice. The institutes feel that Baroness Ashton backed out of a commitment that she made in Committee in the other place when she acceptedthe amendment in principle. On the back of that acceptance, she persuaded other peers to drop their later amendments, because the Government had accepted amendment No. 38.

We agree on that point and therefore propose that the Bill should explicitly state that representations to the board by the professions must be considered. The Government appear to have made a U-turn. We urge them to accept the amendment or, at least, to agree to return with another amendment to meet this important point.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley 9:45 am, 14th June 2007

We are inclined to support new clause 3, the argument being that we are asking that the board consider any point made to it and to respond with reasons why it disagrees. That is entirely reasonable. There is an interesting legal question about whether it would have to do that anyway, but it is far better explicitly to include such a provision in the Bill. It is only reasonable that the board should respond in writing to representations made to it, giving reasons for disagreeing with them.

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

I should like to add a couple points to the excellent argument put forward by my hon. Friend the Member for Huntingdon. First, the Committee will be aware that the patent and trade mark institutes are small professional bodies and thus will be small niche regulators. I stress that their future could be put at risk, because they are not closed professional bodies in the sense that one could still practise as a patent or trade mark attorney if one were not a member of the relevant institute.

Such people join their institute to give themselves added credibility, clout and professional recognition. However, if they feel that the institutes are being cast to one side, not listened to and perhaps undermined over time, they will have every incentive not to pay their levy or fee to their professional association and to go it alone. Those two important institutes have been to see the Minister and the Department and have lobbied members of the Committee. The institutes feel strongly that if they lose their critical mass—we are only talking about 2,000 members in total—they could wither on the vine. That is why it is important that they are given extra standing and credibility under the new clause. My hon. Friend’s arguments are spot on.

I also agree with what the hon. Member for Birmingham, Yardley has just said. Looking at things in the round, I do not understand how anyone could disagree with the proposed new clause being added. If anything, it would add weight and muscle to the consumer panel. It would not, in any way, dissipatethe consumer panel’s impact; it would complement the work being done by it. I urge the Minister to consider the new clause sympathetically.

Photo of Bob Neill Bob Neill Conservative, Bromley and Chislehurst

I should like briefly to support the observations that have already been made by my hon. Friend the Member for North-West Norfolk. First, it is important to bear in mind that, if we are going to make the consumer panels system work, there must be a maximum buy-in from the organisations that responsibly seek to represent various elements of the profession. The trade mark and patent attorneys, with whom I have had no professional connection, dealwith a small but important area of work. Even large representative organisations, such as the Bar Council, find it difficult to ensure that people think there is value in joining and belonging to them. In fact, they can, within the structure of the Bill, do a valuable job, at a certain level, in self-policing.

It is much better that people in the trade mark field have an incentive to be members of an associationthat provides a pretty cost-effective, useful means of bringing together representative views. All the professional organisations in the legal sphere carry out a degree of  valuable self-policing as well, which is sometimes not recognised. It is much better to give people an incentive to belong to such organisations than their being tempted to freelance. We should remember—others will—that, on the liberalisation of the conveyancing rules some years ago, there was concern that some people were attempting to operate outside any of the professional frameworks, which was for the worst. That has been dealt with. It is right that we should build in the incentive now, for the same reason.

Secondly, it is important and desirable to place an explicit obligation on the panel to state why it disagrees with representations from the professional bodies, as it may, for good reason. That point was fairly made by the hon. Member for Birmingham, Yardley. It struck me that the same principle was involved, albeit in a different context, in dealing with the Greater London Authority Bill. The Government have sought to strengthen the transparency of the relationship between the Mayor and the assembly, by placing a duty on the Mayor and the functional bodies in greater London to state why, having consulted and disagreed with the assembly, they disagree with it. That makes the whole process more robust from the point of view of the consumer, the professional bodies making the representations and the public at large.

The Minister and her colleagues have talked a lot about the importance of transparency, and the new clause would underscore that. I hope that the Government feel that the new clause is not trying to wreck or undermine the thrust of what they are trying to do, but that it is trying to make things better.

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

The new clause would place approved regulators on an equal footing with consumers in relation to any representations to the board. I do not consider it to be necessary, because, as I have already said, there are many provisions in the Bill under which the board and the Office for Legal Complaints might consult and consider representations made by approved regulators. However, before I come to that, I endorse the comments made about the patent and trade mark institutes—those small but important bodies—and the niche market that they represent. I have met them and discussed their concerns. In relation my writing to them, they wrote to me on 4 June setting our their concerns, and I understand that I shall reply to them this evening.

Let me list some of the provisions in accordancewith which the board or the OLC must consider representations: clauses 31, 35, 46, 47, 50, 58 and 66, schedules 7, 8 and 9, clauses 78 and 81, a raft of provisions in schedule 10, clauses 143 and 145, clauses 127, 132, 133, 136, 141, 139 and 206, clause 179, schedule 4, clause 180, schedule 7, and so on. It is therefore a myth that the OLC and the Legal Services Board will not listen to representations from the legal profession, and I hope that by reading out that list of provisions that are already in the Bill I have squashed the myth.

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

Is the Minister therefore confirming that, if there were a disagreement, the OLC and the Legal Services Board would have to respond with reasons?

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

Certainly, if the OLC was making directions, it would have to give reasons. In the general course of things, it would be good practice for the board also to give reasons for rejecting certain representations if representations had been made. I am confident that the position is already covered.

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

It is not currently my intention to issue guidance. The Bill is not designed to fetter the way in which the Legal Services Board will conduct its operations, and I do not want to impose any fetters, but I might consider whether it is appropriate to issue guidance.

Photo of Bob Neill Bob Neill Conservative, Bromley and Chislehurst

On that point, the Minister has said that she hopes that reasons will be given as a matter of course if there is a disagreement—I think that thatis the right view—but can she really envisage a circumstance in which it would be appropriate for the board or the panel not to give reasons? Given that it is almost inconceivable that they would not, will she—in the same constructive way that she indicated she would think again on a previous issue—reconsider whether an explicit requirement could be made, in guidance or in a short amendment to the Bill, to give comfort to all the political parties that good practice will be entrenched? Surely no harm would be done to the Bill’s purpose by making it explicit that reasons for disagreement should be given.

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

In considering whether guidance should be given, I shall certainly look at the issue in the round and consider whether the hon. Gentleman’s suggestion would be an appropriate way to proceed.

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

Before the Minister goes too far, willshe consider also that there might be extenuating circumstances? Let us take the examples of an inquiry by the Serious Fraud Office into certain practices or investigations that have not yet reached that stage but in which malpractice—perhaps routine malpractice—is suspected. There might well be a wish for pre-emptive action in such cases, but there might be reluctance to give precise reasons for a decision on the basis that providing too much detail of other activities could prejudice other regulatory action—for example, bythe SFO.

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

My hon. Friend makes a good point, and that is exactly why I cannot commit todayto imposing a requirement on the board that it give reasons or to issuing guidance. As he has rightly pointed out, there are instances in which it might be appropriate for other action to be taken.

Before I move on, I have one other comment on the issue concerning patent and trade mark institutions that was mentioned by the hon. Member for Bromley and Chislehurst. If people opted out of those institutes, they could not exercise reserved services and they would not have rights of audience to conduct litigation associated with patent and trade mark work.  They would be diminishing their own ability to do that work if they chose to opt out of the institute. That is an important point to make.

There is a general statutory right for the approved regulators, of which I have listed some already, to have their representations heard, and there will be an obligation on the board to provide a notice setting out its reasons when it disagrees with the regulators. To go further would be to create a system that is too heavily tilted towards the profession.

I have said in previous sittings that it is well established and clear that authorised persons have well organised and well funded bodies to represent their interest. They have extensive experience of making representations to other regulatory bodies, and we need only to consider the way in which their representations were taken up successfully in the other place to know just how influential they are. Consumers need a general right of representation to balance that situation out, and the Bill creates that balance.

If the LSB fails to account of the authorised persons’ views in reaching a decision, they will be able to go to judicial review. They know how to. I do not have any fear that the authorised persons will not use all the powers that are available to them to ensure that their voices are heard.

Photo of David Burrowes David Burrowes Conservative, Enfield, Southgate 10:00 am, 14th June 2007

On the substance of the issue, however, is it not important that the Government continue to reflect on the clear-cut undertaking given in the other place to accept the amendment that has now been moved in this Committee? Not to do so would be ironic, given that we are dealing with regulatory objectives that include upholding the rule of law and the constitutional principle and convention in the other place, whereby such an undertaking should be properly followed through. It has not been followed through, and Lord Kingsland’s words still apply: the Government should be ashamed of themselves.

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

When I conceded some of the arguments that were made earlier, I said that I could not accept them directly, because I had to take on board the views of others in the form of collective responsibility. The amendments would undermine the consumer’s voice, which is at the heart of the Bill. The legal professions are more experienced than anyone else in making their views heard, as they have done so clearly and successfully in the other place. It is time to redress the balance.

I draw hon. Members’ attention to clause 3, inwhich the board is required to be accountable and transparent. It must publish an annual report under clause 6, and use that opportunity to demonstrate that it has given proper consideration to the representations made by consumers and practitioners. Practitioners already have a strong voice in the system, and if Iwere to accept the amendment, I would undermine consumers’ weak voice and the Bill’s attempt to strengthen it. I therefore reject the amendment.

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

I thank the Minister for confirming that she will write to the patent and trademark agents later today. It would have been helpful to have had that  information for the debate today, but there we are. The hon. Member for Birmingham, Yardley and my hon. Friends the Members for North-West Norfolk and for Bromley and Chislehurst all made excellent cases, saying that the amendment is reasonable and straightforward. My hon. Friend the Member for Bromley and Chislehurst made the important point that it would improve transparency, and I agree with everything that they said. My hon. Friend the Member for Enfield, Southgate was right to make the point about the promise that was made by the Minister in the Lords, which has been broken.

The arguments have been put, and I do not want to go around the houses again. We do not consider that the Minister is right in her arguments, and I simply cannot see how the balance could be tipped in favourof regulators, as she put it, by what we see as a straightforward amendment. I thank her for agreeing to consider whether guidance will be published, but at this stage of the proceedings, I shall seek to press the new clause to a vote.

Photo of Frank Cook Frank Cook Labour, Stockton North

Any decision on new clause 3 will occur later in our proceedings.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.