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Legal Profession

Volume 489: debated on Tuesday 10 March 2009

Motion made, and Question proposed, That this House do now adjourn.—(Ian Lucas.)

I am delighted to have secured the debate and grateful for the opportunity to raise this subject, particularly given the present economic climate. I am sure that many other Members have seen, as I have, an increase in the number of visitors to their surgeries who are experiencing both financial problems and problems in gaining access to help via the legal sector.

I believe that the solicitor’s profession may be one that stands to do very well as a result of the economic downturn. However, when my constituents experience financial difficulties, either in relation to their businesses or on a personal level, the first place many of them tend to go for help is the citizens advice bureau. Sadly, my local CAB provides no legal help, because it is deemed to be rural and thus not required to make such assistance available. Many people who go there are advised to instruct a solicitor. A number of them may already be in extreme financial difficulties, but fall outside the current legal aid threshold. As some are quite desperate, they proceed to instruct a solicitor anyway, thereby possibly incurring further debt.

Against that background, I want to say a little about the Legal Services Act 2007. When the Act was first debated in the House, the economic situation was much better, but it is about to come fully into force in a different climate. The Act liberalises and frees up the legal market. It will encourage much greater competition between legal services and, it is to be hoped, a climate of greater consumer focus on the basis of that greater market competitiveness. That is welcome and long overdue. It is welcome not least because it removes the self-regulating process that was previously in place; it could never have been a good situation to have solicitors regulating solicitors. The new route for dealing with complaints will be the Legal Complaints Service.

The Legal Services Act will also enable the formation of new types of multidisciplinary practices involving lawyers of different disciplines. We will even see, organisations such as “Tesco Legal” or “Sainsbury Legal”, as large businesses that are not currently involved in the legal profession will be able to enter it through the alternative business structure and the Legal Services Act.

I have a concern, however. In my constituency, there are lots of high street-type solicitors—small firms and practices. The majority of complaints that my constituents bring to me regarding solicitors are about the larger firms. I can only think that that is the case because the smaller firms fight harder for their business; perhaps they build up a reputation on the high street, and then work hard to keep it. As small solicitors do not have access to large advertising budgets, their business is spread mainly by local advertising and word of mouth. I always imagine that if a solicitor in a small market town, for example, is a bad solicitor and does not serve the local population well, people will get to know about that pretty quickly. The larger practices seem to have a gung-ho and more conveyer-belt attitude towards their consumers. Certainly all the cases that have been brought to my surgery have involved larger firms.

More people are now needing to access legal help, and to do so in a cost-effective way, but I am worried that in the current economic climate the Legal Services Act may inadvertently lead to some of these high street solicitors being forced out of business. They have already suffered with regard to changes in legal aid over the years, and they might no longer be viable or in a position to practise and offer services to local people. That worries me because of some of the stories of incompetence that I have heard recently. I am aware that, when having dealings with a law firm, some people may not like the answers they receive because of a legal point or because a solicitor has not been able to reach the solution they wanted them to reach. However, I have also lately heard of a number of cases that are just down to sheer incompetence.

I am aware of the principle of sub judice, so I will not talk about specifics, but I would like to outline one case that is causing particular hardship at present. It is a divorce case involving a single mother. She contacted a legal firm, which understood that she would be chasing a large financial settlement from her ex-husband, and it welcomed her with open arms. However, when its representatives discussed the case with her and realised that that was not going to be possible, and that what she wanted was just to secure a monthly maintenance payment for her children, she was dropped like a hot brick and ended up having to represent herself. She therefore did not get an adequate settlement for her children. Almost by agreement, the solicitors did not pursue payment because they had been negligent; they had failed in terms of parts 1 and 2 of the solicitors’ code of conduct.

As the solicitors had failed in that, one assumes that they would have felt embarrassed to chase their bill. Unfortunately, two years later, they have decided to pursue the bill. I have made inquiries as to whether we could go through the complaints procedure as it stands at the moment, but unfortunately things have been left too late. The solicitors have chased a single parent living on minimum maintenance payments two years later for a bill of more than £1,000—she is not going to be able to pay it, but she is being chased via the courts and a county court judgment. As she is being pursued two years later—by the way, she even received a letter from the solicitors saying that they were perusing past files and had just found the bill—we cannot do anything about it, despite the fact that she is being pursued through the courts, because the time frame has elapsed.

That is indicative of the old self-regulating culture, which was not consumer-focused. Can the Minister reassure us that in a concerted effort to eradicate the old culture, which was far more concerned with protecting and regulating the profession from within, when the new legal complaints office comes into force via the physical move into the new building, it will bring about a change in the old culture? We do not see that happening at the moment; although we have had the 2007 Act and it has been debated in this place, and although much has been said about the old culture and about how it needed to change and was not consumer-focused—I have looked at the debates that have taken place—my experience and that of my constituents suggests that it does not seem to be happening. Can he provide some assurance that the ombudsman is aware of the old culture and that a new broom will be sweeping through?

I have looked at the legal ombudsman’s annual report, and I have concerns because it sounds an almost triumphant note in stating that 60 per cent. of complaints are dealt with within three months. That is still indicative of the old culture, because dealing with things in three months is not good enough—it is just too slow. When someone in a difficult financial situation finds that 12 weeks down the line their complaint is barely being looked at, never mind closed, they are put in a stressful situation, as they will be looking to the Legal Complaints Service to provide them with a solution either to a dispute with solicitors or to another difficult situation. The annual report should not be triumphant about that figure; it is something to be concerned about, because that time frame is not quick enough. My experience and that of my constituents suggests that solicitors move at an incredibly slow rate, and I would like the legal ombudsman to be pushing this along.

I began by talking about citizens advice bureaux, and I wish to raise one further point with the Minister. Given the economic circumstances, does he think it possible that central funding could be made available to all citizens advice bureaux to provide legal assistance in the form of paralegals or in some other way? That would mean that rather than being advised to instruct a solicitor and thus incur further problems, some people could receive more useful and much less expensive assistance at their citizens advice bureau, which might help them to resolve the situation there and then, without going on to secure further debt. A halfway house solution of that kind may be useful to some people.

I do not wish to make it sound as though I have a vendetta against the legal service, because I certainly do not. Like MPs, the majority of lawyers and solicitors are all very honourable people who are trying to serve their customers and clients in the best way that they can. However, the new Legal Complaints Service needs to be robust, tough and consumer-focused. It is much more important for that to be the case now in this economic environment, because that service is dealing with consumers who often have nowhere else to go.

It is an honour to respond to the debate in your presence, Mr. Speaker, and I thank the hon. Member for Mid-Bedfordshire (Nadine Dorries) for highlighting this important issue.

The Government take the regulation of the legal profession very seriously. These are challenging times, which is why the Government have taken decisive action to deliver real help to families and businesses and to provide a shot in the arm for the economy. It is worth reminding ourselves of some of the Government’s action in this regard. We have cut taxes—the 2.5 per cent. VAT cut put £12.4 billion into the economy. We have increased personal tax allowances, child benefit, tax credits and pensions. We have helped home owners facing repossession with a package of measures that could prevent up to 16,000 repossessions. We have provided real help for thousands of businesses, helping firms with cash-flow difficulties, protecting jobs and improving liquidity and business planning for small and medium-sized companies. We have ensured that investment continues and protected and created jobs by bringing forward £3 billion of capital projects on housing repairs and insulation, school extensions, GP refurbishments and transport improvements and by lending up to £13 billion to support private finance initiative projects.

The Government recognise that access to high quality legal services is vital for vulnerable consumers affected by the economic conditions. It is essential that consumers have confidence in their lawyers and the advice that they give. A robust and well-functioning complaints handling process is an important part of maintaining consumer confidence in the legal profession. The public need to know that when things go wrong complaints will be dealt with independently, quickly and fairly.

The hon. Lady raised her concerns about the impact of the economic climate on access to justice in rural areas. That was the subject of passionate debate during the passage of the Legal Services Act 2007, so we were considering that impact long before the current climate evolved. I thank the hon. Lady for rightly bringing it back to the attention of the House. I note in particular her concerns about larger providers being able to cherry-pick the most profitable areas of work, creating what have been commonly called “legal deserts”. Although I do not intend to detail all the regulatory powers and obligations available to the Legal Services Board, I stress that the board, as well as the approved regulators, has a statutory duty to promote the improvement of access to justice.

The Government are committed to ensuring that people have access to quality legal help and advice when it is needed, particularly in the current economic climate when the number of people seeking debt advice and related advice is increasing, as the hon. Lady rightly said. I recognise the crucial role that Citizens Advice and other advice organisations play in that regard. Last year, the Legal Services Commission spent £80 million on legal services delivered by the not-for-profit advice sector. A further £13 million has recently been made available to fund 50,000 extra debt cases and 20,000 housing cases in response to the current economic downturn.

In addition, the Department for Business, Enterprise and Regulatory Reform has recently made a further £10 million available until March 2010 through Citizens Advice to expand local face-to-face advice capacity in England and Wales. That could assist a further 335,000 people each year. The Legal Services Commission also funds housing possession court duty schemes. The schemes mean that anyone in danger of eviction or of having property repossessed can get free legal advice and representation on the day of the hearing, regardless of their financial circumstances. Since the scheme began in 2005, the number of people who have been helped has more than doubled to around 30,000 a year. About 24,500 people were helped between April and December 2008.

In December, my noble Friend Lord Bach, the Minister responsible for legal aid, announced a study on local advice. It will look at the impact of the recession on the demand for advice, the impact of recent reforms on advice provision and changes in trends in the funding of advice.

The study is due to report at the end of April 2009. It will enable us to develop a more complete picture of the wider issues affecting the advice sector, and of how to address them effectively. That should give us the evidence base to make future decisions with the advice sector and other stakeholders to ensure the sustainability of local advice services.

The hon. Member for Mid-Bedfordshire focused on the Legal Services Act. I can confirm that recent reforms introduced by the Act aim to improve the funding available for, for example, pro-bono advice—advice given for free. The Act enables courts to make orders for the payment of legal costs when the successful party is represented wholly or partly pro bono. Such costs are paid not to the lawyers involved but to the Access to Justice Foundation, a charity that distributes the funds strategically to where resources are needed the most. I know that the hon. Lady will welcome that.

On solicitor complaints, I should make it clear that, although I am obviously sympathetic to the problems that constituents have encountered, it would not be appropriate for me to comment on individual cases—although I hasten to add that the hon. Lady’s constituent is fortunate to have an MP willing to advocate so effectively on her behalf. Individual cases are properly matters for the Law Society, the Solicitors Regulation Authority and the Legal Complaints Service, as the profession is independent and self-regulating. Under the current system, anyone unhappy with the service provided by their solicitor, or with how their complaint has been dealt with, can approach the LCS. Its complaints guidance suggests that a reasonable time for a solicitor to respond to a client’s initial complaint is 28 days. I noted the three-month example that the hon. Member for Mid-Bedfordshire gave, which is out of kilter with that guidance.

The LCS aims to resolve quickly all complaints referred to it. About three quarters of the complaints it receives are resolved within six months, as the hon. Lady mentioned, although complicated cases may, of course, take longer to resolve. The LCS does not publish details of the complaints records of solicitors. It has recently consulted on the possibility of the publication of complaints records but, following the consultation, it concluded that more work needed to be done. However, the principle is one to which the LCS is committed.

When the LCS receives complaints about a solicitor’s conduct, it will refer the matter to the Solicitors Regulation Authority. The SRA is making more information available to the public: for example, decisions to impose conditions on how solicitors practise are now displayed on the regulator’s website, thus empowering individuals.

As for public awareness of complaints mechanisms, we agree that there is a need for awareness-raising activities. Coal health complaints are a good example of how the LCS is seeking to make sure that consumers are aware of their right to redress. The LCS is proactively seeking to make sure that miners know how to complain if they have received poor service from their solicitor. Part of the aim is to raise awareness of how consumers can work more effectively with their solicitors to raise their concerns at an early stage, without the need to make a formal complaint.

The LCS is also taking steps to reach out to traditionally “hard-to-reach” groups, or groups considered to be more vulnerable or disadvantaged. As part of this work, LCS staff attend conferences organised by the National Association of Citizens Advice Bureaux. They engage with a range of key stakeholders to try to make sure that consumers are aware of the services that the LCS offers.

I am aware of increasing concern about the tactics that some solicitors employ when pursuing costs. I think that we would all agree that court action should be the last step in pursuing payment. Where a matter is referred to the Legal Complaints Service, it will discourage use of the courts until the complaint is resolved. Solicitors are also subject to the duties set out in the solicitors’ code of conduct. Rule 2 of the code includes a requirement to advise the client of the basis and terms of charges, and to discuss with the client how the client will pay. Failure to comply with the code could amount to misconduct, and the Solicitors Regulation Authority would be within its rights to take action over non-compliance.

I commend the actions taken by regulators to improve complaints handling, but the system had needed significant reform for a long time. The Legal Services Act provided that reform by establishing a single entry point complaints body, the Office for Legal Complaints. The OLC will be under a duty to increase the public’s understanding of their rights and duties, which may include consumer rights in respect of complaints. The OLC will administer an ombudsman scheme and will be able to award redress of up to £30,000. Conduct matters will be referred to the relevant regulator for appropriate disciplinary action.

The recently established Legal Services Board has already set out its priorities in relation to complaints. The board’s business plan, which is currently subject to consultation, sets out key deliverables for the coming financial year. They include appointing the OLC, approving its scheme rules, and setting out the requirements for in-house complaints handling. Some of those deliverables have already been achieved, and the key personnel have been identified. Elizabeth France, the chair, has been in place since autumn 2008. Her board, the chief ombudsman and the chief executive have also been recruited. They will now work to ensure that the OLC is implemented effectively before the ombudsman services are fully operational; that is expected to be in 2010.

Once again, I thank the hon. Member for Mid-Bedfordshire for highlighting such an important issue at a crucial time for many people. It is vital that people have access to good quality legal advice, especially in difficult times, and that they have somewhere to go if things go wrong. There is still much to do, but I hope that the examples that I have given show how the system is improving.

Question put and agreed to.

House adjourned.