I am most grateful for the opportunity to raise some very important issues concerning the Solicitors Regulation Authority, known as the SRA. I am pleased to see the Under-Secretary of State for Justice, my hon. Friend the Member for Lewisham, East (Bridget Prentice), on the Front Bench this evening—I say evening; of course I mean this morning, at such a very early time. I wish to make a declaration of my interests. I am a non-practising barrister and I am married to a solicitor who is also a part-time judge. My wife also formerly served on the Law Society Council.

The SRA was established two years ago last month and operates with a budget of £55 million each year. It is therefore timely that we should explore its work so far, and assess its achievements. I also want to raise some concerns regarding the issue of race and ethnicity. Previously, the regulation of solicitors was dealt with by the Law Society itself, which is the trade union for solicitors. It was rightly suggested in the Clementi report that the Law Society lacked the independence, and therefore the necessary legitimacy, to regulate properly. It found fault with the principle of one lawyer examining the work of another, and so the SRA was born. The SRA remains part of the Law Society but operates completely separately from it.

There are 16 members of the board, nine of whom are solicitors. I have serious concerns about the representative nature of the board’s membership, while not casting any aspersions on those appointed. Only one is from an ethnic minority background; the rest, I have to say, consist of the great and the good. However, I am worried that in this day and age, with a board so recently created, it is no way near a representation of the race and gender of the legal profession today, and I understand that it cannot be changed until December 2009.

The SRA should act in the public interest as both a regulatory and preventive body, examining accusations of fault, writing regulations and ensuring resolutions. It should be fair to both the public and solicitors, and should ensure that all firms are treated equally and in the same way. A number of issues have been brought to my attention concerning the cases that the SRA intervened in. In such circumstances, an intervention essentially means that firms are closed down.

An independent consultant, funded by the SRA, prepared a detailed report as long ago as July 2006, which concluded that a disproportionate number of black minority ethnic firms were investigated by the SRA. In 2006, 62.8 per cent. of the 59 interventions made by the SRA were against subjects who were Asian, Asian British, black or black British, mixed or unknown, whereas only 37.3 per cent. were made against white or white European solicitors, despite the fact that that group makes up 78.6 per cent. of the solicitor population. The SRA has accepted that there is a serious problem; it has also accepted that it has not done enough to address it. I congratulate it on that candid admission.

In a letter to me on 28 September last year, Andrew Garbutt, a quality consultant at the SRA said that

“you will note from these reports that Black and Minority Ethnic solicitors are disproportionably represented in regulatory decisions compared to their overall representation in the profession, and the SRA is exploring the reasons for this disparity.”

Firms contacted me asking why they found themselves constantly under lengthy investigations with no end in sight. The figures are quite stark. I wrote to the SRA on a number of occasions but was unable to receive a satisfactory explanation for the figures that I had been given. On 10 October 2007, I was told by Antony Townsend, the chief executive of the SRA:

“We share your concern about the disproportionate representation of BME solicitors in regulatory matters over several years…It is for that very reason that the SRA is addressing the matters as one of its early priorities.”

I worried about what it deemed to be a priority when it became clear to me that the SRA produced report after report stating that there was a problem without taking any action.

As the Under-Secretary will no doubt know, I called a meeting on 16 October 2007 in the House. It was attended by Mr. Townsend, several different and well regarded groups, from the Black Lawyers Association to the Society of Asian Lawyers, and several solicitors’ firms, that had concerns about the way in which the SRA disproportionately affected the work of BME firms. Although the meeting was useful in showing the SRA the extent of concern that many organisations and firms felt, I was unimpressed with what Mr. Townsend promised. It was clear that, although the issue was brought to the SRA’s attention in July, nothing of substance had been done to try to tackle that serious problem by October 2007, when we held the meeting. The idea of a working group, to be chaired by the president of the National Black Police Association, was proposed by those attending the meeting but not acted upon.

I wrote to the Lord Chancellor and Secretary of State for Justice, requesting a round table discussion with the Department and the SRA to take the matter further. Subsequently, the Under-Secretary chaired a meeting during which SRA board chairman Peter Williamson accepted that the SRA had failed to do enough to deal with that major concern. His admission was most welcome. I also want to thank the Under-Secretary for attending the meeting. She did not interfere with the proceedings, but acted as an honest and effective broker. She chaired the meeting with skill and a clear understanding of the issue of race and ethnicity, doubtless drawn from her experience and the concerns expressed about other issues by her constituents. The SRA’s previous hesitation in the matter may have unwittingly contributed to racism and discrimination towards BME solicitors.

Since the meeting with the Under-Secretary, we have made some progress, which is very positive. The working group met for the first time on 17 January 2008. At that meeting, it was agreed that Anesta Weekes QC, one of the country’s few black silks, should be invited to be the independent chair of the working group for future meetings, and that Ali Dizaei, a distinguished police officer from London and president of the National Black Police Association, would be the vice-chair. In addition, it was agreed that Lord Herman Ouseley, whose record of achievement on race is second to none, would be invited to act as an independent reviewer of the group’s work.

Among other things, the working group will be responsible for drawing up and agreeing terms of reference for an independent review, which will carry out statistical analysis; re-examining the details of SRA interventions into BME firms or cold casing; examining the composition of the SRA board, which currently has only one BME member; considering the composition and training given to SRA casework staff, and trying to build trust between the SRA and BME solicitors.

I propose tonight that we go a step further. In my view, the Under-Secretary should appoint an independent monitor to oversee the work of the SRA, so that if any discrimination is found, it is acted upon immediately. It cannot be right that investigations continue into firms if racism or discrimination is found. Let us be clear. There was an important step forward: a clear recognition by the SRA that there was a need to tackle that serious problem.

There are other issues of concern that go beyond race. I have been told by those who have dealt with the SRA that it is slow to deal with correspondence and cases. I can tell the House from my experiences that, until the Under-Secretary’s intervention, I had tremendous difficulty in obtaining responses to my letters, and I expect the correspondence of an MP to be a high priority for any organisation and confidentiality to be maintained.

After writing to the SRA about a specific firm, the confidentiality of the letter was breached as it became clear that caseworkers other than those involved in the case were aware of the details. When a firm is being investigated, it clearly impedes their work and costs a huge amount of money. It is only fair that a solution is found as quickly and simply as possible.

Decisions must be swift, and the actions and advice must be consistent and professional. Some firms have been advised that they have no right of appeal after an SRA adjudicator has made a decision. However, it appears that others have been told differently and that consumers have also been told a different story. I should be grateful if the Minister could confirm whether solicitors or consumers have a right of appeal after SRA adjudication. The livelihoods of solicitors can be at stake in such matters, and the questions raised by the public must be answered.

The SRA feels that one of the reasons BME firms experience a higher number of interventions than white European firms—its classification, not mine—is that they are in general smaller and that smaller firms are investigated more. That cannot be viewed as a satisfactory explanation. Why should small firms be at a higher risk of being shut down than big firms? In this context small is not beautiful, if small firms as opposed to large firms are immediately put at risk and small BME firms face a double whammy.

Legal Week published an article examining the work of the SRA one year after its creation, in which Chris Carroll, a managing partner of the large City firm Travers Smith, commented:

“although I think separating the bodies is important, it has not had much impact other than having to announce to our clients that we are now regulated by the SRA. I just do not come across them, and I certainly do not regard them as any more fearsome.”

It is obvious from that statement that large City firms do not feel the bite of the SRA; and yet smaller BME firms have told me that they feel hounded by it, with investigations continuing for years.

It should be incumbent upon the regulatory body to investigate all accusations and all firms to the same extent, and not to ignore the work of large City firms because they are too powerful and difficult to get results from. The SRA has accepted that it does not approach the “magic circle” firms in the same way, but has said that that is because it does not have the budget necessary to do the job. Yet surely it is just as costly to investigate a BME firm, sometimes for up to four years, as it would be to investigate a City firm for a couple of months.

It seems that the only explanation for the situation is the one that was given to me during a meeting in my office in December with Peter Williamson, the chairman of the SRA board, who told me honestly that the reason large firms do not get investigated in the same way is that they will often give in to complainants in order to keep them as clients, which is something that smaller firms are less likely to do. In other words, money talks. If the issue is also one of resources, I ask the Minister to look into it and provide more funds if necessary; if it is not, there are more serious questions that must be asked.

Finally, I want to mention diversity in judicial appointments. It is clear that the issue is no longer that BMEs are not entering the profession; rather, there is an issue of progression. The Government set up the Judicial Appointments Commission in 2006 to reform the system for choosing judges. Yet since those reforms, all the judges who have been appointed have been white, male and, on the whole, privately educated. The situation was in fact much better under the Lord Chancellors Irving and Falconer.

The Society of Asian Lawyers has passed me a report that claims that in many of the recent appointments the winning candidate still fits the establishment profile, and in one case does not fit the guidelines issued for that position. If that is the case, how can that person be said to be appointed on merit? In this day and age, I am surprised that only 10 of the 108 High Court judges are women and that only one is from an ethnic minority. Why has the Ministry of Justice not dealt with the issue, which has been raised year after year and which it recognises to be important? After all it is dealt with in statute, in provisions under part 4 of the Constitutional Reform Act 2005—I know that to be the case, because I and others put them in there.

We are posed with the age old question: quis custodiet ipsos custodes, or who guards the guardians themselves? I know that the Minister will be keenly watching the progress of the SRA over the coming months. I sincerely hope that it will not be necessary for her to intervene again. It is surely right that we ensure that the public and solicitors get the regulation body that they deserve. For that body to work, the solicitors and the consumers have to trust it. This trust must now be earned.

I congratulate my right hon. Friend the Member for Leicester, East (Keith Vaz) on securing this important debate. He is, and has been, assiduous in pursuing his concerns about black and ethnic minorities both in and outside the legal profession, and his measured approach tonight reflected that.

As my right hon. Friend said, the SRA was established by the Law Society as an independent body to regulate solicitors in England and Wales in preparation for the new regime that we will introduce under the Legal Services Act 2007. As he said, the Act built on the recommendations of Sir David Clementi, including the requirement for legal regulators to separate their regulatory and representative functions. That is a central principle of the new framework. It is vital to both consumers and the professions that it is clear when a body is acting as a trade union and when it is acting as a regulator, when it should be seen to be separate and independent of that function.

We are encouraged by the fact that both the Law Society and the Bar have taken steps to establish independent regulatory bodies before the Act comes into force. The Law Society has delegated all its regulatory powers to the SRA apart from rule-making, which it cannot lawfully delegate at present. It has also ensured that it retains no concurrent jurisdiction on regulatory issues. The Law Society has no power to direct the SRA’s board to take a particular approach, either in individual cases or in respect of policies and procedures.

The ethos behind the Legal Services Act was to put the consumer first, and to improve the way in which legal services are provided for the public. I am pleased that the SRA is embracing that ethos by giving the public information to help them make better decisions when choosing solicitors. However, I also recognise that, as my right hon. Friend said, the SRA has a real responsibility to the professions that it regulates to ensure that it acts effectively and fairly. As my right hon. Friend acknowledged, it is a relatively young body, and part of its future role will be to review the current procedures and identify areas in need of improvement. I am sure that it will be interested in the views of the solicitors whom it regulates, and will engage with them fully.

The Law Society requires the SRA to respect the principles of good regulation—of consistency, transparency, proportionality, targeting and accountability—but those principles must also be translated into the way in which the SRA regulates on a day-to-day basis.

Let me now deal with the issue of race and the SRA. I am well aware of my right hon. Friend’s anxiety about the way in which the SRA has handled the concerns of black and minority ethnic solicitors in regulatory matters, and I was pleased to be able to facilitate the discussions shortly before Christmas to which my right hon. Friend referred.

Although the SRA has taken some action following the 2006 report, I agree with my right hon. Friend that it has taken far longer than anyone would want for it to draw up a structured plan with clear objectives and deadlines. However, I am glad that the work has begun to gather some impetus, and that the working group given the task of dealing with it has met and agreed on a way forward. I am also glad that the independent review will examine many of the issues raised by BME stakeholders at the meeting before Christmas, including membership of the SRA board. As my right hon. Friend will know, the board was appointed after open competition in accordance with the Nolan principles.

I believe that the working group will make real progress. It is important for BME stakeholders who feel strongly about the way in which the SRA has handled investigations to play an active role, and for everyone to work together to ensure that conduct matters are investigated in an open and transparent way. Going forward, this work will ensure that the SRA is trusted by solicitors and consumers alike. As my right hon. Friend knows, I cannot comment on individual cases or alleged breaches of confidentiality, but I know that he has written to Antony Townsend, the chief executive, about the length of time it has taken to receive replies to correspondence and I hope that he is getting a better service as a result.

The time taken to resolve intervention cases and to respond to queries are issues the review might want to consider. In particular, it might want to examine the types of firms that are investigated and whether there is a link to the resources available to the SRA. The resourcing of the SRA is, however, a matter for the Law Society not the Government, because those bodies are funded by the profession itself.

As my right hon. Friend has stated, the actions of the SRA should be consistent. He has raised the issue of conflicting advice given to firms on appeals. I have also raised that issue with the SRA, and there is no yes or no answer. Whether there is an appeal depends on the circumstances. For example, the SRA has told me that there is no internal right of appeal against a decision to refer a solicitor’s conduct to the Solicitors Disciplinary Tribunal because those decisions are not adjudications, but decisions to prosecute. The SDT must itself decide whether there is a prima facie case before a prosecution proceeds. Findings and orders of the SDT are subject to appeal to the High Court, of course. Nor is there an internal right of appeal against a decision to exercise statutory powers of intervention into a solicitor’s practice. Challenges to intervention decisions must be brought in the High Court in accordance with the provisions of the Solicitors Act 1974. However, there is an internal right of appeal against a decision to impose a condition on a solicitor’s practising certificate and there is also a statutory right of appeal to the Master of the Rolls. I know that my right hon. Friend has written to the Lord Chancellor on this issue and he will respond to him more fully as soon as possible.

I do not think that it is necessary for an independent monitor to be appointed to oversee the work of the SRA. The chair and vice-chair of the working group—two splendid people, as my right hon. Friend said—will be independent and they will be able to review the processes. That will also be carried out by the independent reviewer, Sir Herman Ouseley—an excellent advocate in this area, as my right hon. Friend said. I will, of course, monitor progress and outcomes of the work being undertaken by the SRA because I believe that that work is essential, and I will look with interest at the conclusions of the review, and at how the SRA tackles the issues that come out of that.

My right hon. Friend has raised the point that investigations should be suspended, particularly if the review finds evidence of discrimination. I believe that doing so would raise serious consumer protection issues, and we would need to consider that very carefully. In the longer term, oversight will pass to the legal services board and I will ensure that the new board, once it is established, is aware of the progress and outcomes of the review.

I wish to turn briefly to legal diversity, an area that I consider to be of great importance as my right hon. Friend is aware. The key to a diverse judiciary is a diverse legal profession. There are still huge barriers, as my right hon. Friend pointed out. We are committed to working with, and challenging, the professions where we can to deliver improvements in diversity. That is why I wrote to the top 100 law firms and top 30 chambers in November 2005, and then to the next 100 firms and next 30 chambers in April 2006, asking them to publish their diversity policies and statistics on their websites. I was not hugely impressed by the response. Changes take time and they will not be achieved overnight. The fact that there was some reluctance will not prevent us from continuing to press on these measures.

Has either the Minister or the Lord Chancellor called in the chair of the Judicial Appointments Commission to register disappointment at the first tranche of appointments that has been made? Those appointments do not seem to be in keeping with the vision set out by the previous and present Lord Chancellors and by the Government.

We have not called in the chair of the JAC on that issue, but I had a meeting with her about two weeks ago and she is aware of my concerns. She, too, is very committed to ensuring that the judiciary is more diverse. She suggests that we examine other ideas of how we might make progress. I shall keep my right hon. Friend informed as to how we hope to make real progress in ensuring that we have a judiciary who reflect the community that they serve.

Progress has been made on a number of projects as part of the trilateral judicial diversity strategy published jointly by the Lord Chancellor, the Lord Chief Justice and the JAC in 2006. Those include eligibility changes under the Tribunals, Courts and Enforcement Act 2007, which for the first time will allow members of a wider range of legal professionals, including fellows of the Institute of Legal Executives, registered patent agents and registered trademark attorneys, to apply for judicial appointment.

We are also undertaking a solicitors’ initiative. The Department is working with a number of regional and London-based law firms that have signed up to a five-point action plan designed to encourage and promote judicial service within their firms. A solicitors forum has also been established. The Ministry of Justice, the JAC, the Law Society and the Judicial Office meet quarterly to identify and address real and perceived barriers to judicial office.

We are also doing promotional and outreach work with the JAC, the Judicial Office and the professional legal bodies aimed at promoting judicial office and raising awareness among under-represented eligible groups. Further wide-ranging publicity is planned to coincide with the widening of eligibility this year.

Diversity and community relations judges are working with the Department and the judiciary on ways to enhance and support that network. Those judges act as an interface between courts and local communities, with a view to increasing communities’ confidence in the justice system and improving judges’ understanding of local issues. A conference will take place in May, when the new best practice guidance will be launched.

I can tell my right hon. Friend that this is a work in progress. I sympathise with and understand his frustration at the lack of speed of some of these successes. I hope that he will realise that we have put in place a number of things that I hope will start to bear fruit in the coming months and years. I can promise him that I shall keep a very close eye on the work of the working group and the SRA. I hope that before long, he and I, the black and ethnic minority communities, the profession and consumers can have confidence that the judiciary are as diverse as the country that they serve.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes to One o’clock.