Clause 11

Legal Services Bill [Lords] – in a Public Bill Committee at 10:00 am on 14th June 2007.

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Advice and research functions of the Consumer Panel

Photo of Frank Cook Frank Cook Labour, Stockton North

With this it will be convenientto discuss amendment No. 223, in clause 11, page 5, line 16, at end add—

‘(4) In acting on its own initiative under subsection (1), the Consumer Panel shall not impose any costs on any of the approved regulators.’.

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

We propose to insert the words “onits own initiative” on a probing basis. The proposal comes from current consumer bodies. The wording of clause 11 will permit the consumer panel to carry out research for the Legal Services Board and provide it with advice when it so requests. The amendment would enable the consumer panel also to carry out research and give advice to the board on its own initiative.

The amendment aims to ensure that the consumer panel has an active and real purpose. It suggests that the panel should be given some independence and the opportunity to investigate matters and pass on relevant findings and associated advice without having to wait to be asked by the Legal Services Board. That would enable the system to become far more dynamic and less static.

We are, of course, aware that such increased freedom on the part of the consumer panel will lead to further costs. As we have indicated in earlier amendments, the Conservatives are keen to ensure that such additional costs are not passed on to the regulators. It would be  unjust to make them pay for research carried out by the consumer panel on its own initiative on consumers’ behalf. Therefore, we suggest that an additional amendment be made—amendment No. 223, which is self-explanatory.

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

My hon. Friend the Member for Birmingham, Yardley and I have added our names to the amendment. We are strongly persuaded that it should be introduced. It is consistent with practice in other regulatory bodies with a consumer panel. I gather that Ofcom’s consumer panel has the power to carry out research into any relevant area that it sees fit.

If we are to get good people to serve on the consumer panel, one of the things that they will want to know is that they are free to set their own agenda rather than having it set for them. The hon. Member for Huntingdon and his friends realised that there is a cost implication, and I thought that where that might fall would be left for the discussion. There is a potential cost implication, although the consumer panel will have a support system. It will take additional time if the panel decides that it must assess what it ought to do as well as what it is asked to do and work through the programme, so it is appropriate to debate where the additional cost will fall. Perhaps amendment No. 223 is the right proposal; it may be something else, but my hon. Friend the Member for Birmingham, Yardley and I are clear that the panel ought to have the power to take initiatives. I hope that the Minister is entirely signed up to this pro-consumerist amendment.

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

I also endorse what has been said. As my hon. Friend the Member for Huntingdon pointed out a moment ago, the consumer panel must have direction and focus. It would be wrong for it to be purely a reactive panel. It must be proactive. Let us consider the various disasters that have taken place in respect of how the consumer is affected by a legal action—indeed, the hon. Members for Bassetlaw and for North Durham know well that it would have been useful if the consumer panel had been in place when case of the miners’ compensation scheme was going on, as it could have taken up the cudgels on behalf of the people who were afflicted by that appalling, ghastly saga.

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

The hon. Gentleman is quite wrong.The last thing that I wanted was a body into which complaints could have been palmed off. I wanted—and want—effective regulation. Is he not in danger of going down the track of beefing up the consumer panel to such an extent that it can handle all the consumer issues and the Legal Services Board can wash its hands of them?

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

I very much disagree with the hon. Gentleman, because they can work in tandem. Of course, we want tougher, better regulation of the solicitors, but that is separate from giving consumers a greater voice. If consumers feel that they have suffered a serious grievance, whatever action the consumer panel might take might well prompt the Legal Services  Board to take regulatory action against particular solicitors. The two can work in tandem.

As far as commissioning research is concerned, I, too, considered the case of Ofcom. If one widens the remit of the consumer panel in such way, it will attract a higher calibre of members and will build up a body of research opinion that will build credibility over the years. The Bill is about improving the way in which legal services are run, and they are run for consumers—our constituents. What would happen if outside consumer bodies wanted to help the consumer panel with research programmes? For example, if the National Consumer Council or Which? decided that it would be sensible for the consumer panel to consider research programmes and wanted to work with it and, perhaps, to help sponsor research, would that be in order?

My hon. Friend the Member for Huntingdon andI are concerned about the cost implication. If the consumer panel builds up a huge amount of momentum and wants to take on many new challenges, there will be a cost implication and that is why we have had to qualify matters. We did not want the provision to become an open-ended commitment. We are conscious that the Minister and her colleagues are in a Department that faces financial constraints. We do not want to put too much financial pressure on her Department, but we also want the job to be done. I urge her to consider the possibility of using some outside resources if particular projects have merit and if the panel is proactive in a campaign. I hope that she will consider that and support our amendments.

Photo of Kevan Jones Kevan Jones Labour, North Durham

I find it very strange that on the second day of our consideration, Conservative Front Benchers are talking about the rights of the consumer. Up to now, they have been trying to protect their vested interests, and the amendments are another attemptto do that. Like my hon. Friend the Member for Bassetlaw, I am concerned that if we are not careful the consumer panel will end up in competition or rivalry with the board. That would be a dangerous step, because it would weaken the role of the board. Such an approach is not inconsistent with Conservative policy these days, under which policies are put forward with no attempt to explain how they will be paid for. If we accept amendments Nos. 222 and 223, it is not clear who will pay for the research—as long as it is not the poor solicitors or the legal profession, who, poor as they are, could not be asked to contribute anything to such research. I resist the amendments. They have been portrayed as an attempt to help the consumer, but they are actually part of a cynical guise around an attempt to protect the vested interests of the legal profession.

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

The hon. Gentleman has not thought this through at all. The Government propose in the Bill that there should be a consumer panel; the hon. Gentleman seems to be arguing against not only the amendment, but the idea of a consumer panel—[Interruption.] Well, that was the clear implication; if I am wrong, what he said was not very clear.

It is fundamentally important that there shouldbe a consumer panel and that its representatives donot sit—with formal status, as it were—as a non-departmental public body such as the Legal Services  Board. Those representatives should be able to make sure that there is an access point and response base for consumer issues. The amendment is consistent with the idea that there should be a consumer panel. If there is to be one, we should let it do its job, not hold it back.

Photo of Bob Neill Bob Neill Conservative, Bromley and Chislehurst 10:15 am, 14th June 2007

I often find myself agreeing withthe hon. Member for North Durham—on local government issues, for example. However, I am sorry to say that he is absolutely wrong on this issue. There seems to be an extraordinary illogicality to his position.

I rather resent the suggestion that the Conservatives have ever objected to the notion that the consumer is at the heart of the Bill. Perhaps the hon. Gentleman has spent so many years in the Labour party and trade unions that he has become an inveterate conspiracy theorist. We are talking about not a conspiracy todo down the consumer interest, but a proposal to advance it.

I am sorry to use an analogy from another piece of legislation, but it is apposite. During the passage of the Local Government and Public Involvement in Health Bill, we debated how we would make local involvement networks, or LINks, effective—how we would give them teeth and attract people of the right calibrewho would be an effective voice for patients. The Government seemed to accept that there was a need to empower LINks. That is what we are trying to do for consumers in this context: to empower the consumer panel. That is consistent with the Government’s own philosophy of the Bill. We accept that point, so I find it bizarre that Labour Members should try, by using rich lawyers as a smokescreen, to limit the scope for consumer panels to carry out research on their own initiative.

I know lawyers who do legal aid work, and they have seen not an increase, but a real-terms cut in their fees over the years. They do not necessarily come into the “rich lawyer” category. It would be very sad if, of all people, Labour Members started to stereotype. That would get us away from the real issue of trying to geta balanced regulatory framework, which, I accept, involves enhancing the position of consumers. It also involves respecting the position of the professionals. Enabling the consumer panel to take the initiative is to go in absolutely the right direction, not the wrong one.

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

I have some sympathy with the arguments that have been advanced in so far as I agree that representations from the consumer panel will be hugely important in informing the board.

To ensure that the panel is equipped to do its job, we have provided that it must be consulted by the board in respect of certain key regulatory activities. The panel may also make representations to the board about any other matter. When it does so, the board must consider them and give the panel notice if it disagrees. Any such notice must state the board’s reasons for disagreeing with the representations. If it wishes, the consumer panel can publish any information relating to the provision of its advice.

I turn to how that might work. If the panel considers that there is evidence of a clear detriment to the consumer interest, it may make a representation to the  board that it request that the panel carry out research into the matter. Such a representation could also specify that the board should receive and consider advice from the panel. If the board elected to disagree with such a representation, the panel would have to be provided with a justification for that disagreement, and it could then go ahead and publish that exchange.

Amendment No. 222 would allow the panel to conduct research of its own volition. A number of hon. Members have prayed in aid other consumer panels, but they are labouring under a misunderstanding of the role and powers of some of those other panels. Ofcom’s consumer panel can provide advice of its own volition, but only in very specific circumstances under section 16(3) of the Communications Act 2003. As far as I am aware, neither the Financial Services Authority nor Ofcom consumer panel have the power to undertake research of their own volition. I do not know of any other statutorily provided consumer panel having that ability.

In the Bill, we have given the consumer panel more powers than those available to others. In fact, I would argue that Ofcom’s consumer panel is more restricted in its ability to carry out research than the panel of the Legal Services Board.

Amendment No. 223 states that the cost must not fall on the approved regulators. In that case, on whom must it fall? If the implication is that it would fall on the Government, in effect, that means the consumer. In fact, the Bill states that, after the transitional period in which the Government contribute to the cost, the Government will play no further part. It is for the legal profession, which is to be regulated, to bear the burden of that cost. Therefore, even if the amendments are accepted, it is inevitable that the cost will fall on the legal profession.

Amendment No. 223 is problematic because it does not indicate who should bear the costs. I understand what it seeks to do, but the amendment is flawed in itself and in its principle because the implication is that the cost will fall on the consumer. In fact, once the board is up and running, the costs will fall on those who are being regulated.

When the board identifies an area that needs regulatory scrutiny—or a representation has been made by the panel that identifies such a need—it is important that the panel is available to undertake that research and to advise the board on the potential impact on consumers. There would be a real danger that the panel might be unable to honour that request if it is dedicating time, manpower and other resources to research projects of its own.

Finally, there are no safeguards in the amendments to ensure fairness or to prevent misuse of power. Nothing in the amendments would stop the panel from conducting irrelevant research, incurring exorbitant costs, or providing that the board need not act on the advice. The amendments contain no clear lines of accountability. They are flawed in themselves and in the principle that they are trying to express. On that basis, I ask the Committee to reject them.

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

The hon. Member for Huntingdon will make his own decision but, unless I am mistaken, I detect a bit of resistance from the Minister. Some of  her arguments are good, although some facts need checking. I am not persuaded by her arguments, but I am happy to consider them further. If the amendments contain flaws, I am sure that that we can improve them.

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

As the hon. Member for North Southwark and Bermondsey says, we are not convinced by the Minister’s argument. My hon. Friend the Member for Bromley and Chislehurst was right to say that the Conservative party is concerned about the rights of the consumer. I echo that remark. Many amendments tabled by Conservative Members that we have discussed so far have been in the interests of the consumer. Sometimes they have questioned who the consumer is and sometimes they have examined how  the existing Bill has been adapted, but they have certainly considered the rights of the consumer from the consumer’s point of view.

Once the hon. Member for North Durham had got over his fixation with vested interests, he suggested that the board and the panel would come into conflict. I thought that my hon. Friend the Member for North-West Norfolk answered—

Photo of Frank Cook Frank Cook Labour, Stockton North

Order. I make a further plea for forgiveness for my misunderstanding of the starting time of our proceedings this morning.

It being twenty-five minutes past Ten o’clock, The Chairmanadjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at One o’clock.