Legal Services Act 2007 (Approved Regulator) (No. 2) Order 2014

Lord Clement-Jones Excerpts

Thursday 23rd October 2014 Grand Committee

[Lord Phillips of Sudbury (LD)]

My Lords, I declare an interest as an honorary vice-president of CILEx and as someone who started working with what used to be called managing clerks as long ago as 1957. I think I learnt most of my law from managing clerks of the old variety, who learnt on the job and did not have a CILEx qualification because there were not any then. I am strongly in favour of this statutory instrument for all the reasons that the Minister has set out.

I have a slight divergence of view from CILEx—although I suspect one could sort it out if it was here—over the idea that competition in these matters is always in the public interest. It certainly is not. Some of us are fearful that the changes in the legal services market in the past decade will prove to deliver some disastrous consequences in the next. I have no hesitation on that score relating to this statutory instrument, though, because the Legal Services Board is a proper, well staffed body that has made a thorough investigation of the fitness of CILEx and its subsidiary company to undertake the task allowed them by this change in the law. For those reasons, I am entirely in favour of the order. The Lord Chief Justice was absolutely right to raise the impact on standards of the competition that will be unleashed by this change in the law but, as I say, a very proper investigation has been undertaken. I strongly hope that it will be in the public interest.

I will mention a point that has not yet been mentioned. Reserved instrument activities, which form the subject of paragraph 2(a) of the order, are defined in paragraph 5 of Schedule 2 to the 2007 Act as:

“preparing any instrument of transfer or charge for the purposes of the Land Registration Act 2002”.

There is then some detail relating to that. This is not a massive breach in the status quo but still a very important one, for the reasons just mentioned. I have no doubt that many frustrated buyers and sellers of property in this land will be greatly helped by what is happening today, because I have no doubt that legal executives will set up their own firms to do just this sort of work. They will do it well, swiftly and at a very fair price, and they will be overseen by CILEx, which is an excellent body with high standards. It is driven not by the profit motive but by public interest concerns. That is all I wish to say.

[Lord Clement-Jones (LD)]

My Lords, both my noble friends have been extremely eloquent in their support for the order. I will be extremely brief because I agree with every word that they have said, with some qualification regarding my noble friend Lord Phillips’ comments. I declare an interest as a member of the Law Society and as a partner in a major law firm. I have never been an advocate or supporter of a closed solicitors’ shop. I very much favour diversity and competition, particularly in the case of chartered legal executives. I welcome their ability to carry out a wider degree of work, as envisaged by the order. This is very consistent with the continued opening up of the legal market that I have generally supported. I did not hear the words “alternative business structures” in what my noble friend had to say at the outset, but I assume that this is consistent with the alternative business structures, which, again, I have always supported since their introduction because I believe that they are for the benefit of both business and consumers. I think, and my noble friend Lady Buscombe made this point extremely well, that in terms of both probate and conveyancing this will make a major difference to the competitiveness of that market.

[Lord Kennedy of Southwark (Lab)]

My Lords, I do not intend to detain the Grand Committee for very long. I agree with many of the comments that noble Lords have made so far in the debate. The Opposition fully support the proposal and endorse the reasons outlined by the Minister why it is necessary and welcome.

The Chartered Institute of Legal Executives provided me with a very helpful briefing that makes clear the benefits of the proposal, and I am grateful to them for that. I agree with the comments by the noble Lord, Lord Phillips of Sudbury, about what a good organisation CILEx is. It has done excellent work on a variety of areas, particularly on broadening the diversity of the legal profession, and I pay tribute to it for that.

Allowing CILEx to become a regulatory body in the areas of conveyancing and probate is welcome. It will help to cut bureaucracy and red tape and help to make things simple for everyone. However, it would help if the Minister could comment on the remarks made by the former Lord Chief Justice, the noble and learned Lord, Lord Judge, as referred to by the noble Lord, Lord Phillips. He expressed concern that regulatory competition would have a detrimental effect on standards, that the variation in standards between regulators was inappropriate in principle and that a variation on standards may bring about a drive to the bottom.

I also noted that the former Lord Chief Justice had one matter of concern across the board—parity of standards when one has a proliferation of regulators—and he had further concerns as to whether the instrument deals with contentious or non-contentious probate. It would be helpful if the Minister could give us his views on those points as well. Having said that, this measure helps to encourage an independent, strong, diverse and effective legal profession, and consumers will have much greater choice. That is very welcome and I am very happy to agree the order.