Clause 113

Legal Services Bill [Lords] – in a Public Bill Committee at 2:30 pm on 21st June 2007.

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

I beg to move amendment No. 283, in clause 113, page 61, line 35, at end add—

‘(6) Nothing in this Part is intended to prevent an application to the Solicitors’ Compensation Fund for redress in respect of a determination by an ombudsman with which a solicitor respondent is unable or unwilling to comply.’.

As the lawyer’s friend, may I immediately correct the official record of the statements that the Opposition made? I have nothing but the highest regard for the profession, and all my intentions are deliberate ones to ensure that business goes to those of the highest regard and repute, rather than the minority who bring the profession into such great disrepute. It has been my pleasure in the past 12 months to work with some of the finest people. Mishcon de Reya, Bindman and Partners, Russell, Jones and Walker and Clifford Chance are all excellent proponents of the profession.

It is important that the record is put straight, following those previous comments, because again the vested interests are trying to categorise their attempts to hold down the regulation of their profession and somehow to counterpose those people outwith the  profession as opposed to those within it. Quite the opposite: the whole point of self-regulation is that it is made to work effectively, so I propose this modest little amendment to allow the Minister the opportunity to strengthen further the Bill. She may or may not say that it is required, or she may say that it could be covered in other ways, and I wait with eager anticipation.

However, there are situations in which the course of regulation goes in one direction, but there are circumstances in which such power would be important in making the consumer, who has been done over financially, certain of redress, if redress were felt appropriate. I could cite cases to which the amendment would be relevant, but I do not want to detail them, not because of time, but because the cases are ongoing and I should not want to prejudice them. So I offer this modest little improvement to the Minister for her delectation.

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice 2:45 pm, 21st June 2007

My hon. Friend always looks to the centre of the issue. One of our main objectives is to ensure that the consumer gets the proper redress and gets it quickly. I commend my hon. Friend’s assiduous way of going about this—he will sense that there is a “but” coming—but the amendments are not necessarily the right approach. They are ineffective in the sense that there is nothing in the Bill to prevent application for payment under the compensation fund.

Clause 141 is designed to deal with instances where the solicitor, the barrister, or whoever the authorised person might be fails to pay redress awarded against him to a complainant. Under that clause either the complainant or the ombudsman can go to court to have that determination enforced. It is right that the determination should be enforced by court. A lawyer who has done something wrong should pay redress. If the complainant has to make an application to the compensation fund, that might send the wrong message that it is all right for a solicitor to refuse to comply with an ombudsman’s determination because everyone else will have to cough up on his behalf. That cannot be right.

The compensation fund is a discretionary fund. Only the Law Society and the CLC have compensation funds. It is a fund of last resort, operated by the SRA, where no other avenues are available. If a complainant were awarded £5,000 by the ombudsman as redress and the solicitor refused to pay, clause 141 would allow either the complainant themselves, or the OLC if necessary, to have that enforced through the courts.

If a situation arose where the solicitor genuinely could not pay, it might be possible to make the application for payment from the compensation fund. There is no absolute guarantee of success, but nothing in the Bill prevents that from happening. To that extent the amendment is unnecessary. My other concern is that it applies only if the solicitor is unwilling or unable to pay. What happens if a barrister, legal executive, notary or someone else who is an authorised person does not pay under the Bill? I gently suggest to my hon. Friend that singling out one group—solicitors or complaints about solicitors—goes against this part of the Bill. I do not want to see different systems for different complainants.

The idea is that the OLC is the single portal for complaints and I think it should also be the single portal for ensuring that those complaints are dealt with and treated consistently and transparently right across the board. That is why I prefer what we have said in clause 141 to these amendments. My hon. Friend is right to say that complainants do not like having to go to court. It can be a daunting and frightening prospect. That is why we tabled amendments in the other place that allow the OLC to bring those court proceedings on behalf of the complainant. If the lawyer does not comply with that determination and the complainant is intimidated, the ombudsman is there as a form of protection and can go to court on the complainant’s behalf.

I hope that my hon. Friend will know that there are no circumstances in which I would want to see any type of lawyer thinking that they might get away with refusing to pay or to comply with an ombudsman’s determination. If redress is awarded against them, they will have to pay it; either immediately or because they will be taken to court to ensure that they pay.

I hope that I have given a sufficiently strong response on behalf of the consumers whom I know my hon. Friend wants to see getting the best out of the Bill, and that he will feel able to withdraw the amendment.

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

I thank the Minister for her response and I note her suggestion that this amendment is not strong enough; I certainly would not wish to have barristers excluded from any provisions in the Bill that they should not be excluded from.

So, I hear what the Minister is saying in relation to the amendment. However, I shall leave it to her to contemplate that there is potentially a loophole here. Although the Minister says that there is nothing that prevents this situation from happening, there is nothing that would make it automatic. A solicitor may go bankrupt—possibly by choice—or do a runner, perhaps because the volume of potential new complaints, which are comparable to the first one heard, can be added up and counted. That is certainly a possibility, and not just a theoretical one but a real one. If the rest of the country were to follow the example of my constituents, large numbers of people might choose to come forward—for example, miners and textile workers. That would create an interesting paradox. This question of positive powers needs some further reflection.

I hear what the Minister says, that the wording of the amendment may not be strong enough to deal with that situation. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 113 ordered to stand part of the Bill.