Legal Village

Interpreting Clementi's vision

Posted 27/06/2007 by Jonathan Djanogly

Emerging from the 10th session of the Legal Services Bill committee it is clear that this Bill is not yet in its final form. That is not to say that any of the parties involved are disagreeing with the basic Clementi vision. Rather, they have different interpretations of that vision; some of which we (the Conservatives) believe are of great importance to get right.

Considering the Bill has had a thorough going-over in the Lords – I initially thought that this would be a somewhat stale committee, with lots of set-piece debates aping the Lords debates – the quality of debate has been high, with many new issues raised. To maintain this positive spirit, I hope the Minister will come back with some helpful suggestions before we enter the report stage.

Perhaps the most material issue to us – one of constitutional importance – has focused on appointments to the Legal Services Board (LSB). The LSB will supervise front-line regulators that will, in turn, be responsible for the day-to-day regulation of legal services.

The Bill, as originally presented in the Lords, gave the Lord Chancellor the sole power to appoint and sack LSB members. This was amended by Conservatives, Liberal Democrats and cross-benchers in the Lords so appointments are made “with the concurrence of the Lord Chief Justice”. However, a Government amendment in Commons Committee has just reversed this. We fear the regulation of the legal profession is now in danger of no longer being transparently independent of Government control.

An independent legal profession provides the ultimate safeguard for the rights of the individual against abuse of power by the state. It has therefore been somewhat embarrassing to me and I hope also to the Government to have read out reports from the German, Belgian and French legal authorities reminding us of this fact in their opposition to the Government stance.

We can easily take our liberties for granted in this country. But appointments to the LSB, chosen (even if on Nolan principles) by a politically-appointed Lord Chancellor, who could now be in the Commons, is simply not good enough for me and certainly will not be acceptable to my noble friends when it returns to the Lords.

The provisions on alternative business structures (ABS) have also been heavily debated. Again, the Government has scrapped our Lords amendments, which aimed to ensure that ‘access to justice’ informs the ABS decision-making process. The danger is that the Government’s approach could lead to the cherry-picking of services – such that ‘advice deserts’ spring up around the country. This could, we believe, exacerbate the existing problems we have with shrinking civil and criminal legal aid networks.

On the other hand, while we accept there needs to be a step-by-step approach on ABS, the Government’s approach is too cautious given the fast-moving legal services marketplace. Barriers to ABS need to be proportionate to risk. Where the risks are low, we should go further than the Bill currently provides. 

In the current Bill, outside investment in law firms, multidisciplinary professional practices and even allowing ABSs with more than 10% non-lawyer managers will not be permitted until 2011, at the earliest. This over-cautious approach will hinder English lawyers at the forefront of international legal service provision. We were pleased the Minister agreed to reconsider our amendments aimed at enabling low-risk ABS to come into play on a faster timetable than the relatively high-risk external ownership proposals.

The sneakiest Government manoeuvre came two weeks ago when it introduced amendments exempting trade unions from the ABS provisions. Other non-profit organisations, including friendly societies and CABs will still be caught. Coming after the recent miners’ health compensation scheme scandal, this is unacceptable.

Next the Government removed the ‘polluter pays’ levy in relation to the funding of legal complaints-handling. I am incredulous that the Government wants the lawyer respondent to be charged for the handling complaints, regardless of whether the complaint is upheld or not. The Minister seemed to take our point and said she would come back on this at Report stage. We shall see.

The basic idea is that the Office of Legal Complaints (OLC) should deal with all lawyers’ complaints. The Law Society is relaxed on this but the Bar Council – which handles its complaints rather well and certainly very cheaply – is not.

Accordingly, in the Lords we pushed through amendments allowing for complaints to be delegated by the OLC back to the regulators. Despite a spirited defence of delegation by my colleague Henry Bellingham MP, the Government has just reversed these amendments and Minister seemed pretty resolute.

One quirk that has come up is that the Government has decided to locate the new OLC in the West Midlands, meaning that 80% of the current (solicitors’) Legal Complaints Service employees are to be TUPE’d over en masse to the new OLC.

One cannot help but wonder how effective the supposedly ‘new and improved’ body is likely to be… plus ca change, plus c’est la meme chose.