Clause 11

Legal Services Bill [Lords] – in a Public Bill Committee on 14th June 2007.

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Advice and research functions of the Consumer Panel

Amendment proposed [this day]: No. 222, in clause 11, page 5, line 10, after ‘Board’, insert ‘or on its own initiative’.—[Mr. Djanogly.]

Question again proposed, That the amendment be made.

Photo of Frank Cook Frank Cook Labour, Stockton North

I remind the Committee that with this we are discussing the following 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

My hon. Friend the Member for North-West Norfolk made the valid point that the commitment set out in the amendment should not become open-ended. I totally agree with that, and it is a point that we tried to address in the second of our amendments in the group. The Minister also picked up on that point, in a rather dismissive way, I thought. She dismissed our efforts to reduce the exposure, by saying, “Well, even if you put that in place it still wouldn’t work”. To be frank, it is true that the amendment might not be enough, but we were trying to make the point that just because the original amendment would need to be limited, that does not mean that the thought behind it was wrong. We simply need to look at the issue in a more constructive way.

The hon. Member for North Southwark and Bermondsey said the measure was standard practice in other bodies, and the Minister disputed that. I think that she gave the example of Ofcom. Having the advantage of the break, I thought that I would have a quick look at the provisions for Ofcom, which are quite interesting. Section 16(6) of the CommunicationsAct 2003 states:

“The arrangements made by OFCOM under this section must also secure that the Consumer Panel are able, in addition to giving advice on the matters mentioned in subsection (3), to do each of the following—

(a) at the request of OFCOM, to carry out research for OFCOM in relation to any of the matters in relation to which OFCOM have functions under section 14”.

That obviously is similar to what is in the Bill. However, section 16(6)(b) says

“to make arrangements for the carrying out of research into such other matters appearing to the Panel to be relevant to the carrying out of the Panel’s functions as they think fit”.

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

I absolutely agree with the hon. Gentleman. I, too, have had some research done during the break, and he is quite right. I inadvertently misled the Committee by quoting section 16(3) of the 2003 Act, when in fact, as he rightly points out, section 16(6)(b) allows the Ofcom consumer panel to carry out research into matters that it perceives as relevant to its work. Of course, the consumer panel also has a memorandum of understanding with Ofcom regarding the scope of the panel’s research, which it set out at the beginning of its year. On that basis, I am happy to put the record straight on that aspect of the debate.

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 that clarification, but it means that we have established that there is precedence in other regulatory systems for the amendment that we are suggesting. The hon. Member for North Southwark and Bermondsey was rightto bring the matter up. What is suggested by the amendment is not unusual and it exists elsewhere. The amendment is rational and makes sense, but we have concerns about cost and the other issues that the Minister mentioned.

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

On cost, the same briefing from the National Consumer Council makes the point that Ofcom has a budget for the consumer panel to handle matters, so its costs are to that extent controlled. That makes amendmentNo. 223 potentially otiose.

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

That is not necessarily the case, because the money would otherwise come from practitioners in such circumstances. However, I appreciate the hon. Gentleman’s point, in so far as the issue would need to be looked at again, and there is existing precedence for the process working in other scenarios. As a way of going forward, therefore, the measure should be looked at instead of simply being dismissed, as the Minister did earlier.

On that basis, we would like the Minister to look at the issue again. She has come back to it once, and perhaps she will return to it again when she has more time. Therefore, in order to allow it to be looked at again, 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. 224, in clause 11, page 5, line 16, at end add—

‘(4) It shall be the duty of the Board (subject to subsection (5))—

(a) to provide the Consumer Panel with all such information as, having regard, in particular to the need to preserve commercial confidentiality, the Board considers appropriate to disclose to the Panel for the purpose of enabling the Panel to carry out their functions; and

(b) to provide the Panel with all such further information as the Panel may require.

(5) The Board is not required to provide information by virtue of subsection (4)(b) if, having regard to—

(a) the need to preserve commercial confidentiality, and

(b) any other matters that appear to the Board to be relevant, it is reasonable for the Board to refuse to disclose it to the Panel.’

This amendment again comes from the National Consumer Council, and we have tabled it on a probing basis. It would work alongside amendment No. 222 by ensuring that the consumer panel has access to the information that it needs to carry out its functions—information held by the board, subject to appropriate restrictions. Just as an individual needs the appropriate resources in order to do their work, so the consumer panel requires access to certain information in orderto carry out its work to the highest possible level. However, the amendment also recognises that there may be some instances in which it may not be appropriate for the consumer panel to receive such information. Therefore, the amendment would give the Legal Services Board the discretion to decide on such cases.

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

“Commercial confidentiality” is a term that I have heard quoted a lot in the context of this Bill, and it has been quoted to me in numerous cases. One of the big issues is that individual members of the public, who, for example, wonder whether to make complaints against solicitors, often struggle to get hold of their files from the solicitors. Another example could be that of a coal miner—someone who knows nothing about the law, has never had to deal with the law and is not an expert on compensation schemes, but who nevertheless wants to know whether their case has been handled properly. He might like his Member of Parliament to take a look at his file to see whether the services aspect of the claim has been put in.

The services aspect of the claim can be three, four or five times the amount of the rest of the claim, so this is not a small issue. However, only someone with the relevant knowledge would be able to identify whether or not the case contained a potential services claim that had not been applied for. That information can only be found by looking at the file. However, certain solicitors refuse to hand over those files, and at the moment, self-regulation appears powerless to do much about that. Where is access to justice in relation to that?

Some paperwork has been refused on the basis of client confidentiality. Let us take the example of a contractual arrangement between a claims handling company and a solicitor that the individual concerned does not know about it. How can that individual make a rational decision about whether they have a justified complaint, if “commercial confidentiality” is cited as a reason not to give copies of the information?

Let us take a more generic case, because this is exactly the kind of issue that the panel should look at. Let us say that an industrial injury claim is given to a legal executive who has no great experience and no precise knowledge of the law, and who routinely gives that work to a barrister, who examines it in the same way that a member of the Committee might and writes a short report in 10 minutes, spelling out what is a straightforward case. The barrister sends it back and charges the solicitor’s company, which passes it on to the individual. The individual can do nothing about that, but how does he know what transactions took place, to enable him to make a complaint and say that  he had been hoodwinked because the issue did not require a barrister? A barrister was used only because, unbeknown to the individual, the solicitor had passed the papers to an executive, not a solicitor. The paper trail required can therefore be deemed to be commercially confidential.

For the consumer panel or the Legal Services Board to know whether the transaction had been done routinely, it would need access to what clearly could be described as commercially confidential documents, such as those relating to the financial relationship between the solicitor and the barrister or, say, a solicitor and a medical handling company. The solicitor might have just happened to set up such a company, passed the medical case through it and taken a cut of the money. Moreover, as we have seen inmany cases, such a relationship might be with a loans company that is giving out large loans for legal expenses and receiving good commission. The case might be shared around. Many such issues might be deemed worthy of examination by the consumer panel or the board.

The restriction of confidentiality in such matters is absurd. It means that the very issues that need exploring will not be explored. While it is a slight point, given some of the amendment’s aims, it masks a greater sin, which is the ability of the consumer or the individual to receive redress. More important is the consistent ability to look at the overall system and advise the board—and perhaps Ministers—of the law and weaknesses within the system that have been legally but, in some eyes, immorally exploited by those in the legal profession. Hiding behind commercial confidentiality has been the precise tactic used by particularly wealthy solicitors who have benefited from their interpretation of the rules in such claims.

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

My hon. Friend the Member for Birmingham, Yardley and I both support the amendment because it has merit. I had not intended to say much more than that, but I have now been prompted to do so because the hon. Member for Bassetlaw has made a good point. I completely understand the concern that, if the conventional phrase is put into legislation that states that it shall be the duty of the board

“to provide the Consumer Panel with all such information as, having regard, in particular to the need to preserve commercial confidentiality”,

it will bring about an undefined and potentially broad exemption.

I spend much of my time wondering why so much local government information is secret. The most common reason given is that something is commercially confidential. We could be talking about the largest piece of publicly owned land in our constituencies and the generally held view that members of the public, their councillors and their Member of Parliament should know what is going on, but then be told that it was not something for whichwe could see the paperwork. I agree with the hon. Gentleman in that, if we were to have such a good proposal and if there were to be limits, there would have to be a clear definition of the limits.

The Minister might be able to answer, either now or later, a question asked in that regard. I am not sure whether this is dealt with later in the Bill, because I  have not checked. Does the Bill addresses the question of commercial confidentiality? The convention exists that when you, Mr. Cook, the Minister or I employor engage a solicitor’s firm, the relationship is confidential, unless it comes out into the open because we take action against another party or because the matter goes to court. That is right and proper.

The proposal is a good one. I understand the point about not wanting to make it effectively useless by making the exemptions so big. Perhaps the Minister could help us by deliberating on that. The hon. Member for Huntingdon and his colleagues, and my colleagues and I, could deal with any issues that need addressing.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley 1:15 pm, 14th June 2007

I rise to support what the hon. Member for Bassetlaw has said. There is an issue about the transparency of payments, but, in practice, the amendment would start by giving a duty to provide some information to the consumer panel. Without such a provision, there would be no duty to provide it with any information. The transparency of payments is clearly an important point, but it is not necessarily part of this.

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

The amendment would place a duty on the Legal Services Board to provide information. Surely that would be a great deal better than the clause, as drafted. As the hon. Member for Birmingham, Yardley pointed out, there is no obligation or duty on the board to provide any information. That is why clause 11 is deficient. It states:

“The Consumer Panel may, at the request of the Board”.

It continues:

“The Board must consider any advice given... The Consumer Panel may publish such information as it thinks fit about advice it gives”.

There is no duty on the board to provide information.

I take on board the point made by the hon. Member for Bassetlaw. In our enthusiasm to widen the scope of the clause and to ensure that provision was made for such a duty, we decided that we would be cautious, which is why we included the qualification about preserving commercial confidentiality. Surely he would agree that amendment No. 224 would improve the clause, despite his concerns about the commercial confidentiality qualification. I notice that he did not table an amendment to improve the clause further, in a way that he would find more powerful and effective than our proposal.

We are trying to sing from the same hymn sheet, because we are trying to give the consumer panel much more power, influence, focus and direction. We hope that it will therefore attract large numbers of high-calibre people to serve on it. In the light of the Committee’s debate, I hope that the Minister will look sympathetically at our proposal.

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

Being the magnanimous person that I am, I agree that the consumer panel should have all the information that it needs to carry out its  functions. The amendment clearly seeks to allow it to make requests in that regard. It is important to recognise that clause 10 already enables it to do so, simply by making representations to the board, which would be obliged to consider them. It is likely thatthe board and the consumer panel could agree a framework, not unlike the memorandum of understanding between Ofcom and its panel. I have made reference to that arrangement.

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

Looking particularly at clause 10, it seems that the Legal Services Board will be more likely to know what information may be necessary for the consumer panel. If the consumer panel does not know that some information is necessary, it cannot ask forit. That is why the duty to provide information is stronger than a situation where the panel can ask for information and be told that it cannot have it.

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

I understand the hon. Gentleman and take that point, which is why I shall be quite positive in my response to the amendment. I wish to put on record that it should be clear from the very fact that we are establishing a consumer panel that we want it to be furnished with the information that it needs.It is fundamental that the organisation that makes representations to, and consults with, the board conducts research, gives advice as requested and receives the information that it requires. How else could it achieve the aims that we have set out? However,I have a couple of niggling concerns about the amendment; I am not entirely convinced that it will achieve what hon. Members want. I ask the hon. Member for Huntingdon to withdraw the amendment on the basis that I will positively consider the matter to find out whether we can come to some arrangement.

My hon. Friend the Member for Bassetlaw rightly highlights at every opportunity some of the scandalous practices that have taken place as regards some of our constituents. On access to information, a client should be entitled to the file that relates to their case. Under the Bill, if they are not satisfied with the service provided by a lawyer, they can go to the Office for Legal Complaints. The ombudsman will have the power to require a party to a complaint to provide all the documents and information necessary to consider it, which is a wide-ranging power. I shall discuss the amendment further with consumer groups and other stakeholders to ensure that we achieve exactly the hon. Members’ aims.

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

The Minister’s response has been heartening, and we understand her wish to consult further on the final product, not least in light of the valid comments made by the hon. Members for Bassetlaw and for North Southwark and Bermondsey on the definitions and breadth of the exceptions, the transparency of payments and the need to define clear limitations. I hope that those points will be teased out in the days to come. 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 Henry Bellingham Henry Bellingham Shadow Minister (Justice)

I remind the Minister that, during the discussion on amendment No. 222, I suggested that various outside organisations and consumer bodies, such as Which? and the NCC, might possibly provide research material to the consumer panel. The panel will carry out a number of major projects, and we want it to have a wide range. A consumer group might be involved already in a major campaign that involves informing its membership, with articles in a publication or surveys and questionnaires.

Such campaigns might be on all fours with a consumer panel initiative, and it would be sensible if the two initiatives could be brought together. Will the Minister tell the Committee whether she sees any merit in such an approach and whether she is attracted to my suggestions? The clause stand part debate is the time to look into the matter in more detail. I should be most grateful to the Minister if she gave me some indication of her views.

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

I am very sympathetic with the hon. Gentleman’s suggestion. The clause will enable the consumer panel to carry out research and give advice to the board, following a board request, and any opportunity for the panel to pick up on good research should be welcomed. I am not in favour of reinventing the wheel. If certain consumer organisations were doing research, therefore, it would be foolish for the consumer panel not to be able to access it. I shall consider whether there are ways in which we can provide encouragement for the hon. Gentleman’s suggestion.

Question put and agreed to.

Clause 11 ordered to stand part of the Bill.