Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (No. 2) Order 2011

Lord Bach Excerpts

Tuesday 15th November 2011 Grand Committee

[Lord Dholakia]

My Lords, I welcome both orders. The Minister will recollect that when the matter was first discussed here, we raised our concern and he was good enough to say that he would take the matter back, examine it and see what appropriate action was necessary. I endorse what the noble Baroness, Lady Hayter, has said. The Minister and his staff have worked very hard to effect those changes, which are certainly welcome.

The order sets out an independent appeal mechanism against a range of ABS decisions, which is right; for example, refusing an application for a licence, imposing a conditional licence, disqualifying a person from working in the ABS or imposing a financial penalty. The most interesting part is that appeals on these matters are to go to the Solicitors Disciplinary Tribunal. I am told that this helps the SRA to license alternative business structures from the new year onwards. I am also told that the SRA has found significant interest from organisations seeking to become ABSs. It has received over 500 inquiries. Examples of such organisations include private equity investors, claims management companies, the expansion of in-house legal departments, major retailers, accountancy firms and partnerships between non-lawyers and insurers.

I particularly welcome the second order as I am involved in promoting a Private Member’s Bill on the rehabilitation of offenders. The noble Baroness, Lady Hayter, hit the nail on the head in regard to this. In the end this is about consumer protection and looking at what information is available. I am delighted to support the measure because it sets out an interesting aspect in simple terms. This is a significant step in that not only will the SRA be able to issue licences, but also the Government have agreed to include non-lawyer owners and, in certain circumstances, the managers of ABSs in the exclusions of the Rehabilitation of Offenders Act 1974. That is right, and we very much appreciate the Minister’s support. Over a period of time this will ensure that all owners of ABSs will have to disclose all their previous convictions and cautions, which ultimately helps the consumer to understand what happens in this legal process.

Again, I thank the Minister for the action that he and his staff have taken on this, and we certainly support the orders.

[Lord Bach]

My Lords, I start by thanking the Minister very warmly for his clear and thorough opening remarks and description of these orders. I have little to say about them except to express the support of the Opposition for them both. There is no doubt that the Legal Services Act 2007 will have a major, if not profound, influence in the years to come on how legal services are delivered in this country. That was clear when the draft Bill was debated and discussed by a Joint Committee of both Houses under the chairmanship of the noble Lord, Lord Hunt of Wirral, and when the Bill went through your Lordships’ House some time afterwards. I think we can see the importance of that Act in the orders before us. Alongside it there are many sensitivities that surround the bringing into force of various parts of this Act, whether large or small. I hope—indeed I am sure—that the Government and the ministry are aware of and alive to those sensitivities in deciding which way to go.

I shall say a word about the first order, which deals particularly with appeals bodies. On the face of it, it is a shame that there is not to be a single appeals body—I agree with my noble friend Lady Hayter on that—but I suppose that this is one of the sensitivities that I am talking about. It is interesting to see in the Explanatory Memorandum the consultation outcome in relation to this order. For a consultation outcome, this has a dramatic and rather more exciting history than is normally the case in such consultations and it is quite clear that there has been toing and froing before the Government came forward with this order allowing the Law Society its way in this instance. I do not for a moment suggest that that was the wrong decision. However, a single appeals body is an attractive proposition, and I wonder whether over a period of time events might lead to it.

As for the Rehabilitation of Offenders Act 1974, I start by wishing the Private Member’s Bill under the charge of the noble Lord, Lord Dholakia, well. It is relevant because, with a senior government Minister present, maybe the Government themselves will have to play a role at some stage in making sure that his Bill, which is much delayed—this came up under the Government I was proud to serve in—gets on to the statute book in one way or another. It may be in the form of a Private Member’s Bill with all the difficulties that that involves both in this House and in another place, or with a little help from Her Majesty’s Government. Certainly, if the Government were to put their weight behind the Bill of the noble Lord, Lord Dholakia, we would support it too.

However, as far as this order is concerned I am most grateful—particularly to the Minister—for describing in detail why the universal opinion of the various groups that were consulted about this was not met in terms of a slightly wider group being subject to the exemption to the existing Act. He described it very adequately. Is there any concern that by leaving out that group of people there will be some difficulties down the road? It would be unfortunate if people who should be exempted from this Act were not exempted at this stage, and if the Government had to do it on a “first today and then tomorrow” basis.

These are important issues even though they are in orders that are going through this Committee pretty quickly. I have no doubt there will be others that involve the ABS and the other important results of the Legal Services Act 2007. Bearing in mind that the Act was passed under a different Government, we will do all we can to ensure that Act comes into fruition successfully.

[Lord McNally]

My Lords, I thank the noble Lord, Lord Bach, for that response. He is always very kind about how clear and thorough I am in explaining statutory instruments. He knows as well as I do that it is only because of the hard work of the people who sit behind me. I am very pleased that the noble Baroness, Lady Hayter, and my noble friend Lord Dholakia thanked the Ministry of Justice and the LSB for their work on this. It is exciting. I pay tribute to the previous Government. The alternative business structures will produce changes which, I suspect, will be mainly to the benefit of the consumer in the provision of legal services. What we are trying to do with these orders is to put the last pieces in place to allow them to function.

The noble Lord, Lord Bach, and the noble Baroness, Lady Hayter, both expressed the concerns that were reflected during the last debate—that we have not got a single route here, in that the solicitors have decided to have their separate body. Whether it will cause the problems of a lack of consistency, we will have to see. What I can assure noble Lords is that the LSB will be carrying out further work, and looking at appeal arrangements, and the MoJ will be working closely with the LSB in relation to this. I also understand the question put by the noble Lord, Lord Bach: have we gone too narrow in this extension? As I explained, I do not think we have. However, let us see. The concern expressed last time was that the alternative business structures may allow criminal elements in that would corrupt the new structures. We listened in this Committee and have brought forward extensions, and now think that we have got things right. Again, the LSB will follow the new structures as they go in. So far, only one new alternative business structure has been announced. The Co-op has beaten Tesco; perhaps it should now be called Co-op law rather than Tesco law.

This is an exciting development for which the previous Administration can take credit and which we have been pleased to help bring into being. We will discuss legal services in general in more detail when we get to the Legal Aid, Sentencing and Punishment of Offenders Bill in a short while. However, as the noble Lord, Lord Bach, and I have discussed before, legal services in general are in flux. The ABSs will provide an exciting new dimension to them.

On the question asked by the noble Lord, Lord Jones, I can only draw his attention to the fact that the consultations were carried out by the Legal Services Board for England and Wales and the Law Society of England and Wales. I am sure that both bodies carried out their consultations across the geographic areas of their responsibility. If he can draw to my attention the case for them not doing that, I will be happy to follow it up. However, since they are both bodies that have an England and Wales dimension and were both charged with wide consultation, my understanding is that they will have consulted in Wales.