Legal Services Act 2007 (Appeals from Licensing Authority Decisions) Order 2011

Lord Bach Excerpts

Monday 27th June 2011 Grand Committee

These are the two points on which I would welcome an assurance. First, I look to my noble friend the Minister for a commitment that the necessary modification to the Rehabilitation of Offenders Act will be made. I understand that he may be pressed to say, “We’ll deal with that in a couple of weeks’ time”, but it would be wonderful if he was able to be more specific. Secondly, I seek an assurance that the provisions of the Legal Services Act allowing the external ownership of law firms will not be implemented until the necessary revision has been made.

[Lord Bach]

My Lords, I served under the noble Lord, Lord Hunt of Wirral, on a Joint Committee looking at the draft Bill. I was not a Minister at the time that the Bill went through, although I took some part in it from the Back Benches, so while I have some form on this, I do not have as much the noble Lord. I thought at the time, and I think even more strongly now, that the Bill was a very significant piece of legislation indeed, one that is already beginning to have genuinely profound effects on all three branches of the legal profession.

I congratulate the board on what it is doing. It has done a fine job until now, but as with all changes, and some of these are fairly revolutionary, it is important that the details are right and particularly important that they must be introduced sensitively. That is why I strongly support what has been said by the noble Lords, Lord Thomas of Gresford and Lord Hunt of Wirral, about the point of the Rehabilitation of Offenders Act. I, too, will ask the question because it really is essential that the order is brought forward as soon as possible, and therefore before alternative business structure firms become a reality. Indeed, I am not going to be as shy as the noble Lord, Lord Hunt, about quoting the Minister’s colleague, who was an opposition spokesman when the Bill passed through the House of Commons. He said this:

“The effectiveness of fitness-to-own provisions is a crucial element of the public protections that need to be in place before external ownership of ABS firms can safely be permitted. It is essential to avoid the spectre of law firms being owned by criminal elements”.—[Official Report, Commons, Legal Services Bill Committee, 22/6/07; col. 300.]

If that was true then, it is certainly true now, and he is in a position, as is the noble Lord, to do something about it. It is important that the order amending the exceptions to the Rehabilitation of Offenders Act is brought forward, and we look forward to the noble Lord telling us, when he replies to the debate, precisely when it will happen. We do not oppose either of the orders, and—again, rather late in the day—I thank the noble Lord for introducing them so clearly.

I want to say a little more before sitting down. On the statutory instrument concerning appeals, as I understand it the Law Society’s concerns were around the point that appeals from ABS firms, which were regulated by the Solicitors Regulation Authority, would go to the First-tier Chamber, whereas appeals and decisions from other law firms would go to the Solicitors Disciplinary Tribunal, the SDT. Now the SRA has agreed to use the SDT for appeals to do with alternative business structure firms. That was apparently agreed in March this year, but there is some surprise that no statutory instrument has yet appeared to put that decision into effect. Finally—as I am sure the Minister will be relived to hear—when will that statutory instrument be brought forward, and why has there been a delay? I congratulate the Minister on bringing the orders forward.

[Lord McNally]

My Lords, I have said before that, as a non-lawyer there is nothing more daunting than facing the noble Lord, Lord Bach, who, as he confessed, was the Minister responsible when the key legislation was—

[Lord Bach]

I am sorry to interrupt. The noble Lord was not listening with his usual attention, or else I was particularly inarticulate. I served on the Joint Committee under the noble Lord’s chairmanship as a Back-Bencher, and was indeed a Back-Bencher when the legislation went through, so I cannot be held to blame or praise for the legislation itself.

[Lord McNally]

I now fully understand. I will have to look at the noble Lord’s CV: I had always assumed that he had ministerial responsibility going back well over a decade.

[Lord Bach]

I am delighted that the noble Lord assumed that, but he was wrong. There was a gap in the middle.

[Lord McNally]

In any case, both the noble Lord, and the noble Lord, Lord Hunt, fill me with fear on this.

I am sorry about presenting these matters as separate orders; I was only following orders, as they say. I am pleased that the contributions have been, in the main, supportive and that it is agreed that the initial legislation and what we are trying to do now take us forward into a new era of legal service provision. In that respect, I was particularly reassured by the fact that the noble Baroness, Lady Hayter, from her position as spokesperson or defender of consumers in these areas, found them useful.

My heart, too, sank when I saw that, despite all the consultation and so on, we had ended up with two lines of solutions, whereas one would be much more preferable. We will continue to use our good offices to encourage regulation and lines of appeal in this area to be as simple and clear as possible. I share with the Committee that, the other day, I had the great honour of meeting the Vice-Minister of Justice for the People’s Republic of China. In a matter of general discussion, he asked me quite out of the blue if I could explain to him the regulatory system for our barristers and solicitors. The brief mentioned about nine different organisations, with any multiple of them having lines of appeal. I ended up by assuring the Vice-Minister of the absolute integrity and independence of the various branches of our legal profession and that I would write to him.

[Lord Bach]

That was the question I was going to ask. I thought the noble Lord would say that he would write to him.

[Lord McNally]

Yes, in Mandarin and with a suitable chart. We hope that the orders go some way along the line of trying to get some order into these things.

On the matter of the missing orders, they are being drafted. We are undertaking further consultation. At this stage, the draft standing order relating to the society is not finalised. Until it is, it cannot be approved to be laid before Parliament. As the order is subject to the affirmative resolution procedure, it will require parliamentary debate and approval before the order can be made. We will be back, folks.

Quickly, on the Rehabilitation of Offenders Act, that again is under review. The point that was made is being taken on board. The Law Society Council will have arrangements in place to consider fitness of owners. They are set out in its licensing rules. The Law Society Council has asked for the Rehabilitation of Offenders Act to be extended. An order has been laid before the House adding the head of legal practices and head of financial administration to be covered by the law. Again, I note what has been said here. These are serious matters and areas that need to be tidied up as we go through the process of bringing the ABSs on board and getting the right lines of appeal.

I am just seeing if there is anything else that I have either not understood or not covered. A draft order will be debated in the House next week. We are aware of the additional requirements sought for owners and managers. The matter is being discussed at the moment so, again, watch this space. I thank the contributors to the debate. I hope that this has been enough clarification. If I have missed things I will write to noble Lords.

My noble friend Lord Thomas raised the point about what the solicitors did not like. The Law Society did not sign up because of a principal concern that changes were needed to the First-tier Tribunal general regulatory chamber rules to allow a general power to award costs. The LSB has asked the tribunal procedures committee to consider changes to its costs rules but, on 1 March 2011, the committee came to the preliminary view that the rules in their current form were adequate to determine whether one party or another should pay costs. The Law Society has not consented to this order. As was said, it has made provision in its proposed licensing rules for the Solicitors Disciplinary Tribunal to be the appellate body for its licensing appeals.