Schedule 4

Legal Services Bill [Lords] – in a Public Bill Committee on 19th June 2007.

Alert me about debates like this

Approved Regulators

Amendment moved [this day]:No. 255, in schedule 4, page 142, line 14, leave out sub-paragraph (3) and insert—

‘(3) Alterations are exempt unless the Board has directed that they are not to be treated as exempt for the purposes of this paragraph.’.—[ Robert Neill.]

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield 12:00 pm, 19th June 2007

I first come to one or two little domestic matters. I am delighted to be back from the Falkland Islands, where I was in the company of other Members of Parliament, not least the Minister of State responsible for the armed services, as well as Lord Parkinson and his wife, representing Baroness Thatcher, my wife and the shadow Defence Secretary. We attended ceremonies, with hundreds of veterans and the families of those who lost their lives in that conflict 25 years ago. It was a wonderful experience, and the ceremonies in various parts of the islands where memorials were dedicated by the Earl of Wessex, Prince Edward, were very moving occasions. They were much appreciated by all present: service personnel, islanders and politicians who were down there as guests of the Falkland Islands Government and the Ministry of Defence.

I am back here, however, to ensure that we make a little more progress than I understand we have been making, and I am pretty tough. However, it is warm and humid, and although I am not normally known for taking off my jacket—I may be forced to do so later on—I am happy that those who wish to may do so.

I would also like to ask colleagues—at some stage, perhaps towards the end of this Committee stage—to indicate to myself and to Mr. Cook their satisfaction with the new process of the explanatory statements. Are they helping to ensure more informed debate? It would be helpful to the Chairmen’s Panel—to myself and to my co-Chairmen—to hear from hon. Members to hear how efficiently and effectively they believe that the new process is. It puts our Clerks Department under quite a lot of extra pressure, but if the new system helps the Committee and the House, I believe that we should stick with it. I hope that it is helpful.

When the Committee rose, I understand that the hon. Member for Bromley and Chislehurst was on his feet moving the amendment. I ask him to resume his speech.

Photo of Bob Neill Bob Neill Conservative, Bromley and Chislehurst

I welcome you, Sir Nicholas, back from the Falklands. I am sure that the Argentine Government will not regard  your return from the Falklands as their having dropped their guard, or reduced our level of deterrence in any way. I welcome you to the Committee. We are delighted to be serving under your chairmanship.

You will be glad to know, Sir Nicholas, that I have effectively concluded the essence of my speech. I hope that the proposals, which are supported by the Law Society, will commend themselves to the Government, because we think that there is a constructive way forward here to improve the Bill. Without more ado, I move amendment No. 255.

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

It is a pleasure to serve under your chairmanship, Sir Nicholas, and I welcome you back from the Falklands.

There is an interesting point about schedule 4, and particularly this amendment. The amendment would make things far more efficient. Rather than trapping everything in a bureaucratic muddle, it would allow the Legal Services Board to identify those things with which the board must get involved. To that extent, if we are looking for an efficient and effective way of regulating the legal profession, this would be a good starting point. It would be worth making the same point on schedule 4 itself given that it is interesting how the Lord Chief Justice is important here, but not important in terms of appointing the Legal Services Board. However, the amendment would provide a more effective approach; it is very good.

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

May I also express my delight that you, Sir Nicholas, you have returned well and full of enthusiasm from the Falklands? We all know how firm and fair you will be throughout our proceedings and look forward to continuing our debates under your wise chairmanship.

I understand that there is anxiety over the need to ensure that the board operates in a proportionate fashion. I agree that it should operate that way and that it would go against that principle if we were to create a system that encourages micromanagement by the board. Equally, we do not want to add unnecessary delay or inefficiency to the day-to-day operation of the regulatory regime, but I do not consider that the current arrangements under schedule 4 will have either of those effects.

I come to what has been slightly lost in the amendment. First, the hon. Member for Bromley and Chislehurst touched on the fact that, under schedule 4, the board will have wide discretion to exempt certain classes of rules. It is appropriate that it should be possible to exempt minor alterations to regulatory arrangements or those alterations that are not particularly relevant. Secondly, the proposed change would not necessarily make the board’s relationship with the approved regulators more efficient, despite what the hon. Member for Birmingham, Yardley said. In fact, I would go so far as to say that it might have the opposite effect.

Even if the presumption were that the regulatory arrangements are to be exempt unless otherwise directed, the board would not be doing its job properly if it did not know what it was exempting. It could not be expected to relinquish oversight unless it was confident that   in each case the regulatory arrangements in question required no input from the board in order to achieve the regulatory objectives. The outcome would be increased regulatory burdens on both the board and the approved regulators. The board would have to monitor regularly and assiduously all regulatory arrangements, and approach constantly each of the eight—so far—approved regulators to assess the ever-changing scope of the exemption and evaluate whether it needed to create further exceptions.

The frequent and unpredictable demands created by that system would increase rather than reduce the burden on approved regulators. A system whereby approved regulators are free to submit proposals for exemptions seems to be more straightforward rather than less. Apart from my reservations about the procedure and inefficiency, I believe that the change would compromise our primary objective of accountability and consumer protection through the regulatory framework.

If the board is to be strong and effective as an oversight regulator, acting in the interests of the consumer, it is vital that it is aware of the regulatory environment. That does not mean that it has to take an interventionist approach. Indeed, I hope that it does not. However, to avoid doing so, it needs to have full information in order to make its judgment.

The hon. Member for Bromley and Chislehurst referred to the present position and what the Bill will, in effect, achieve in terms of streamlining the system. At the moment, under the procedure set out in part II of schedule 4 to the Courts and Legal Services Act 1990, any alteration to the rules relating to the conduct of persons exercising a right of audience or a right to conduct litigation, any alteration to the qualification regulations of the authorised body or the alteration of any rights granted by those bodies must be approved by the Secretary of State. Before doing so, the Secretaryof State must follow the procedures set out under schedule 4 to the Act, which usually involves obtaining the advice of the legal services consultative panel and the Office of Fair Trading, each of which gives its advice separately.

The Secretary of State then sends the advice to the authorised body for its observation and consults the designated judges for their views before making a final decision. There is no limit to how long the process can take and, as the hon. Member for Bromley and Chislehurst rightly pointed out, at times it has taken many months, if not years. It can take even longer if the rule is complicated or if the authorised body is unwilling to amend the rule to take into account the worries of the legal services consultative panel. That was the position with the Law Society’s conflict and confidentiality rules.

Under the Bill, the board will have sole responsibility for approving the rules. Under the procedures setout in part 3 of schedule 4, alterations to regulatory arrangements will be approved either automatically, if the board considers them to be exempt, or after an initial determination. They will also be subject to the warning notice procedures in paragraphs 21 to 35, under which the board might consider advice from appropriate persons and representations made bythe approved regulator making the application. The process is subject to a time limit to ensure that applications do not become drawn out. For example, the approved regulator must make representations within 28 days, and alterations will be approved  automatically after 12 months unless the board refuses the application or applies to extend the consideration period.

The three-stage process will ensure that the regulatory arrangements for different levels of risk are given appropriate consideration. It will certainly streamline the current situation. On that basis, although I understand the concerns about complication and length of time, I think that the hon. Member for Bromley and Chislehurst might find that the situation outlined in schedule 4 makes for a better system. I hope that he will therefore withdraw his amendment.

Photo of Bob Neill Bob Neill Conservative, Bromley and Chislehurst

I am grateful for the Minister’s response. I take on board a number of her points, and I am grateful for movement and a degree of reassurance on time limits. We are still concerned, as are a number of professional bodies. In practice, regulatory bodies of this kind have a tendency towards mission creep. It is important that we are vigilant to ensure that that does not become the case, because it is then, however good the intentions, that the administrative burden and expense can grow. We hope that the Government will continue to keep an open mind in the light of experience. We shall see how the rest of these matters develop, but for the time being, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 4 agreed to.

Clauses 21 and 22 ordered to stand part of the Bill.

Schedule 5 agreed to.