House again in Committee.
Clause 110 [Overview of the scheme]:
moved Amendment No. 109:
109: Clause 110, page 60, line 1, at beginning insert “Subject to certain exceptions,”
The noble Lord said: I shall speak also to Amendments Nos. 137 to 139. Amendments Nos. 114A and 129A in the group have been tabled by the noble Lord, Lord Whitty.
Amendments Nos. 109, 137 and 139, in sum, provide for the delegation of complaints handling to an approved regulator by direction of the Legal Services Board. When such a direction is given, the approved regulator would be empowered to award redress to the complainant, which is currently prohibited by Clause 154. The Legal Services Board would continue to have power to vary or withdraw a direction although, in deciding whether to give, vary or withdraw, it would be bound to act compatibly with the regulatory objectives of the Bill.
The intended system is described in Part 6, which sets out provisions for the establishment of a new independent complaints-handling body, the Office for Legal Complaints—the OLC. The OLC is not the first port of call. All legal service providers will be required to establish an in-house system for dealing with complaints. If that system responds to the complainant satisfactorily, matters will end there. If not, the second stage is activated, and that is the stage that involves the OLC. It will consider complaints that have not been satisfactorily dealt with by the in-house arrangement. Under Part 6, it is intended that the OLC will investigate consumer service complaints, but will refer complaints about misconduct to the approved regulator. However, as the Bill is presently drafted, the approved regulator will no longer have the power to award redress, even in respect of complaints about conduct. This structure is of particular concern to the Bar, which considers it inappropriate.
The vast majority of complaints against lawyers concern solicitors. That is not really surprising since there are about 115,000 solicitors, but only 14,000 practising barristers, and solicitors are most intimately involved with clients; so one would expect the volume of complaints to be higher. However, the proportions are startling: something like 85 per cent of complaints are about the conduct of solicitors. The number of complaints against barristers is typically well under 1,000 a year, and the total cost to the Bar for dealing with them is little more than £500,000 a year. The Bar estimates that, in future, complaints will account for no more than about 3 per cent of the work of the OLC.
The principal difficulty about complaints against members of the Bar is that in about three-quarters of cases it is extremely difficult to distinguish between complaints that involve inadequate professional service and complaints that involve misconduct. We share the Bar’s view that the approved regulators should be in a position to deal with both aspects at the same time. There are a number of reasons for that. It is inconvenient for consumers to have to deal with two different bodies regarding different aspects of a single complaint. It would also be confusing, as the noble and learned Baroness, Lady Butler-Sloss, pointed out at Second Reading, if one body accepts the facts to which the complaint related but the other did not. In any case, there is bound to be duplication of work and the potential for inconsistency of treatment.
There can be no question about the high standards that the Bar has met so far in dealing with complaints. That has been endorsed on more than one occasion by the Legal Services Ombudsman. She was reported, for example, in the Lawyer of 20 March 2006 at page 18 as saying:
“There are substantial delays in the way the Law Society handles its casework. The Bar Council is better at it. I think the Bar Council continually tries and reviews and improves on its processes. Invariably I find it does what it has said”.
The Legal Services Ombudsman in her annual report for 2005 said that the Bar Council achieves a very high rating from her office,
“one that is substantially higher than that of other professional bodies”.
“The Bar Council seeks to ensure not only that it is complying with its own procedures, but that it offers a fair, consistent and good-quality service generally to the consumers who use its services”.
Those findings were again echoed in her most recent annual report, when she commented that:
“The Bar Council continues to deliver good results in respect of speed of service”
and that the number of investigations with which she is satisfied has risen to 88 per cent.
Apart from the high quality of the disciplinary service that the Legal Services Ombudsman finds the Bar disciplinary authority attains, there is the distinct, though linked, question of cost. At the moment, a very substantial input into the Bar’s investigation is made by well established qualified barristers at no cost to the investigation. By contrast, if the investigations are undertaken otherwise, it will often be by persons who are not legally qualified, and who may not be able to distinguish issues which a qualified person would. I believe that the noble Lord, Lord Borrie, addressed that matter at Second Reading. In the absence of the delegation recommended by the amendment, it is clear that the Bar would be involved in a great deal of extra expense. So, in addition to the high quality of the approved regulator in the Bar’s case, it will also be a much more economical system to operate.
Amendment No. 109 is a paving amendment for Amendment No. 137, which will insert a new clause after Clause 139 providing for the delegation of complaints handling to an approved regulator by the direction of the Legal Services Board. Amendment No. 138 will amend Clause 154 to protect the position of consumers whose complaints are outside the jurisdiction of the legal ombudsman’s scheme. That is inserted because the Bill excludes any corporate or quasi-corporate complainant from the scheme, which seems to us unjust. Amendment No. 139 complements Amendment No. 137, amending Clause 154(1) to enable an approved regulator to award redress to a complainant, which Part 6 otherwise prohibits.
In conclusion, I ought to remind the Committee, although I am sure that it already has it in mind, that the Joint Committee recommended that the OLC should have the power to refer service as well as conduct complaints to an approved regulator where it considered it appropriate. I beg to move.
I support the noble Lord, Lord Kingsland. He rather stole the words that I might have used, which I used previously. Of course, I declare an interest as having been at the Bar and a judge. He made the point that there is no question about the high standards of the Bar.
I am very concerned about the hybrid nature of the complaints that will come to the OLC. Some will be on discipline; some will be seeking redress. It is extremely difficult to differentiate between them. Indeed, I am told that about 70 per cent of the complaints have been hybrid. We have the great problem that there will be the same facts, possibly two bites at the same cherry with two different organisations—the approved regulator and the OLC—dealing with the same case. There is always the possibility of different conclusions.
I am not for one moment suggesting that the OLC is or should be obliged to delegate, but it seems entirely appropriate that, as the amendments suggest, the OLC should have the power to delegate as and when it chooses. Not to have that power seems to me to constrain the OLC quite unnecessarily. Clause 154 has that specific effect.
As the noble Lord, Lord Kingsland, said, there are real cost implications to that. The OLC has a vast task. I hope that solicitors in the Committee will accept that the vast task largely relates to the very much larger body of lawyers who are solicitors. It will be sensible from time to time to delegate, rather than bringing the extra cost of buying in the expertise of the Bar under Schedule 15, paragraph 15, which states:
“The OLC may make arrangements for such persons as it considers appropriate for assistance to be provided to it or to an ombudsman”.
If I may say so to the Minister, the crunch words are:
“Arrangements may include the paying of fees to such persons”.
As I understand it, the noble work done by the Bar on the regulation of its members is done either without cost or at a relatively low cost. It will not be a low cost if the lawyers are bought in. That is a power that the OLC, dealing, as it will have to, with solicitors, might find an extremely valuable adjunct. I respectfully say that Schedule 15, paragraph 15, will not meet the case, so I strongly support the amendments.
I too support the amendments, other than those tabled by the noble Lord, Lord Whitty, which as I see it are inconsistent with those to which the noble Lord, Lord Kingsland, and the noble and learned Baroness, Lady Butler-Sloss, have spoken. In addressing this issue, I shall compare the disciplinary procedures of the Bar with those of the medical profession and those for solicitors. I should say in that context that, on two occasions, which I shall mention in a few moments, I have represented barristers who were the subject of significant disciplinary procedures. I spent 10 years as a lay member of the General Medical Council between 1989 and 1999, and sat throughout those 10 years on one or both of the professional conduct committee and the health committee, which has procedures analogous to the professional conduct committee. I have also represented solicitors on several occasions by advising them when they have faced proceedings before the solicitors’ disciplinary system.
I shall talk about those two latter bodies first. My experience of the General Medical Council was that, although it was thorough, it was extremely legalistic. It operates its disciplinary procedures just like a criminal court. There are paid advocates on both sides. There is also a huge legal back-up system that includes in-house lawyers and out-of-house lawyers, whom the General Medical Council in effect employs—it certainly pays for them. Every case is fought as though it were a Crown Court criminal trial. Delays are endemic in the system, which is cumbersome, and despite the GMC’s efforts to reform that system, it has become ever more legalistic.
I have not appeared before the solicitors’ disciplinary system but, as I said earlier, I have in a number of cases advised solicitors who were before it. Again, my experience of giving advice to those in trouble as solicitors is that it, too, is legalistic. It involves quasi-criminal procedures and a huge paper trail that can be very time-consuming. Of course, there is a very much larger number of solicitors than barristers. Nevertheless, the delays in the solicitors’ system are disproportionate to the sort of delays that occur in the barristers’ system.
For the past five years or so, I have been the head of a large set of mainly criminal barristers’ chambers, which has about 80 barristers. The nature of such a set of chambers is that it deals with a very fast and large turnover of work involving a huge number of cases. The nature of the kind of work that is done in my chambers means that it is inevitable that complaints are made from time to time against barristers, particularly in criminal cases. People tend to protest their innocence in criminal cases, even when they have been convicted, because it provides a better explanation for the relations, if your Lordships see what I mean. It is sometimes much more satisfactory at home to claim that the noble and learned Baroness—or, indeed, the rest of us; we all have interests here, and many of us sit as recorders—might have got it wrong than to accept the result of the court proceedings.
I have appeared twice as an advocate before the Bar disciplinary system. I hope that these are useful examples for informing the Minister of how the system works. On one occasion, I appeared for a barrister from a set of chambers other than my own with which I am associated—it is outside London. It was not a major complaint, but it was justified. He pleaded guilty, as it were. He appeared before the tribunal; a minimum amount of paper was involved; there was a delay amounting only to weeks; and there was a satisfactory outcome for all concerned. The case was “prosecuted” by someone who appeared pro bono, and it was defended by me, appearing pro bono, although I think I later received a single bottle of wine, very good though it was, for my trouble.
The other occasion was an extremely substantial case, in which I had to appear for another Queen’s Counsel who was accused of potentially extremely serious disciplinary offences that raised huge issues of law and principle. The case was dealt with as quickly as it could be, given the amount of paper involved. It eventually came before an interlocutory procedure. The nature of the system is that the Bar Council was able to obtain the services of Mr Justice McKinnon, the senior Queen’s Bench judge, to sit and judge this interlocutory procedure. He gave a judgment of magnificent cogency and great detail, upon which he worked extremely hard. I note that my noble friend Lord Thomas of Gresford is appearing before the same judge at the moment, which I suspect produced the mutterings in front of me just now. I hope he does as well next week.
I am grateful to my noble friend for telling everyone that; it is true. The point of this story, which is direct experience, is that what was provided, at very low cost to the public, was a satisfactory procedure for the complainant—who was treated better than any complainant I ever came across in the General Medical Council—a judgment of superb quality and a fair procedure, all again at minimal cost compared with proceedings before the General Medical Council. So I say to the Minister: it ain’t broke, so why on earth is she trying to fix it in this cumbersome, bureaucratic, paper-creating and unecological way, both intellectually and in the most literal terms?
Of course the Bar Council, and I think everyone at the Bar, accepts that we cannot have a different rule because we happen to be rather good at these things. That recognition is in subsection (2) in Amendment No. 137. By this amendment, we seek to ensure that the public have the sort of service which they are receiving currently from the changed Bar arrangements, which now have the independent injection of the Bar Standards Board. But of course we recognise that we cannot be made an exception, although these procedures have been running as it happens—this is an accurate figure—for the past 399 years. We recognise that we have to accept that the board should have the power to withdraw or vary a direction that these proceedings should be determined by the approved regulator—here, the Bar disciplinary procedure.
But we invite the Government to recognise that they should accept the best of what is available. I argue that the Bar’s procedures could well be replicated elsewhere, save that it is difficult to create afresh when new professions—for example, the osteopaths, whose disciplinary procedures I have some knowledge of—seek to create their own disciplinary procedures. To turn history into regulations or a statutory form is very difficult. The point I seek to make is that these procedures are well tested and work. It seems to me to be completely pointless to introduce this huge edifice to replace something that is perfectly functional.
I, too, have appeared on behalf of a barrister before the Bar Council’s disciplinary proceedings. He was charged with having failed to manage his diary to such an effect that he was in two courts at once. On the other side of things, I declare that I have advised people who have been in trouble with the Law Society. The price of referring to the noble Lord, Lord Whitty, as the sole voice of the consumer in previous debates means that I have been asked by him and others to speak to his amendments, which are contrary to everything I said at Second Reading—it has been said much more fluently by my noble friend Lord Carlile. It is necessary to look at the larger picture in this part of the Bill.
The current position is that the Law Society and the Bar Council have their own disciplinary procedures. A Legal Services Ombudsman was set up under the Courts and Legal Services Act 1990 to accept individual complaints. The Legal Services Ombudsman reviews individual complaints that are handled by all six regulators. I will refer only to the Bar Council and the Law Society because setting out the whole list every time will no doubt weary noble Lords. Complainants can go to the existing Legal Services Ombudsman.
The Legal Services Complaints Commissioner was established under the Access to Justice Act 1999 because the Law Society was failing to handle its complaints, and the current Legal Services Ombudsman, Zahida Manzoor, was appointed Legal Services Complaints Commissioner as well. It has been her function to review the systems and processes in relation to complaints—not individual cases but the way in which the Law Society deals with its complaints. She sets targets, makes recommendations, and last year fined the Law Society for failing to provide an appropriate plan for improving complaints handling. She found that the Law Society had failed in five out of seven targets she had set, so undoubtedly the Law Society’s complaints system has not been functioning at all well.
On the other hand, as my noble friend Lord Carlile and the noble Lord, Lord Kingsland, have both pointed out, Zahida Manzoor stated in her report that the performance of the Bar Council complaints system was extremely good and that she was satisfied with 88 per cent of the small number of investigations she had to carry out in relation to the Bar. We therefore have a complete imbalance: the Law Society system is failing and the Bar Council system is succeeding in the terms mentioned by my noble friend.
Now we are to introduce a new system through this Bill. The positions of Legal Services Ombudsman and Legal Services Complaints Commissioner are to be abolished. The monitoring done by Zahida Manzoor and her office will be thrown out of the window, and that is an end to that. Instead we are to have the Office for Legal Complaints, which is to control both the Law Society and the Bar Council and to monitor what they do. That sounds good, but the Law Society’s failing system was based in Leamington Spa. It has already been announced that the new Office for Legal Complaints will be set up in the West Midlands, and the people who now work for the failed system, whose activities have been criticised so heavily, have been given an assurance that the TUPE regulations will apply to them. That means that they are entitled to a job in the new organisation that will replace the failed one.
Noble Lords can appreciate how the Bar feels about that. Its system is low in cost and has highly qualified people always acting de bono. It is successful, but now it is to be lumped in not only with the Law Society but also with the bones of the failed organisation. Obviously that is the motivation behind the amendment moved by the noble Lord, Lord Kingsland: why should the Bar Council system be ruined by being thrown in with a failed organisation? That is likely to happen, and I shall make more criticisms of that in later amendments.
The noble Lord, Lord Whitty—I speak as an advocate here because I want to put forward his point of view, and I am under a duty to do so—has spotted the flaw in the Government’s position: if they allow the amendment of the noble Lord, Lord Kingsland, and the OLC can devolve its disciplinary procedures and complaints system back to the Bar, and if they allow that to happen with the patent agents, who have a very successful system, the trademark people and so on, what will they be left with? They will be left with the OLC and probably a rebadged Law Society complaints system. They will have abolished the Legal Services Ombudsman and the Legal Services Complaints Commissioner, who monitored what that failed organisation did and imposed discipline upon it. I have already said that Miss Manzoor has fined the Law Society and has made severe criticisms of what it does.
The noble Lord, Lord Whitty, spotted this problem, and his amendments are designed to prevent any delegation of the powers of the OLC back to either the Bar Council or the other organisations that are operating well. If that does not happen, the whole system will be a complete waste of money. Rebadge the Law Society complaints system, call it something else, delegate the powers back to the Bar Council’s Bar Standards Board, which is doing a very good job, and so on, and you have spent £35 million only to have achieved the abolition of the ombudsman and the services commissioner, who exercised some discipline over the Law Society. That is why the noble Lord, Lord Whitty, has put forward his amendment.
I have endeavoured to advance the case that the noble Lord would have advanced and to explain to the Committee what he would have said, although he might have put it slightly differently. Putting on a different hat and speaking from the Front Bench of the Liberal Democrats, we wholly support the amendment of the noble Lord, Lord Kingsland.
I, too, support the paving amendment of the noble Lord, Lord Kingsland, and particularly his Amendment No. 137, which seeks to introduce a new clause allowing for the possible—I put it no higher than that—delegation to an approved regulator of the power to give redress, which is otherwise with the Office for Legal Complaints.
Dealing with the point that under Clause 154 it is prohibited for any redress to be given by approved regulators in the Bill as it stands, we have—I cast no aspersion on the noble Lord, Lord Kingsland, let alone the noble and learned Baroness, Lady Butler-Sloss—loosely talked about delegation by the OLC. Amendment No. 137 stresses that the whole basis of any grant to the Bar of responsibility for handling complaints is in the hands of the Legal Services Board (LSB). I am happy to talk also about delegation in the loose sense because, if the amendment is carried, as long as the LSB so directs, the Bar—no doubt it will be the new Bar Standards Board, with its mixture of lay people and lawyers—will handle complaints.
The value of delegation has been put extremely clearly by all those who have spoken so far. The value lies in the knowledge of those who will deal with the complaints, in the expertise and in the thorough high standards, which have been praised throughout by independent people—including Miss Abraham and Miss Manzoor, as the noble Lord, Lord Thomas, has described—as well as the monetary value of having this enormous amount of important work done pro bono by members of the Bar acting free of charge. To the value of the Bar handling the complaints I would add, finally, expedition. That came out particularly in the exposition of the noble Lord, Lord Carlile. It is difficult to imagine another, more bureaucratic body being able to deal so expeditiously with these cases, combining expedition with fairness, natural justice and so on, and handling them in a way that is efficient and effective.
One of the pieces of briefing that I received recently, about which I was most glad, was from the Law Society. It said that it accepted that its handling procedures for complaints over the years had been abysmal; it accepted the criticism. If this delegation amendment is passed into the Bill, the Law Society will not seek to attract delegation to itself. It knows—if I may put it this way; these are not the society’s words—that it is not yet fit for that. I was therefore very pleased that the Law Society has supported the Bar in the view that there should be a delegation power, as is proposed in Amendment No. 137, but it has no intention, thank goodness, to attempt to get the delegation itself. I feel that there is a great deal to be said for this amendment, and I support it.
This has been an interesting debate, eloquently put forward by noble Lords who have a great deal of experience, to which I do not seek for one second to do anything other than pay tribute. I am grateful to the noble Lord, Lord Thomas of Gresford. He was indeed persuaded by my noble friend Lord Whitty, with a bit of pressure from me, to speak to the amendments on behalf of my noble friend, because that helps me to talk about the debate in a more rounded way than I might otherwise have been able to. I thought that he put them forward very eloquently, and I am sure that my noble friend will be extremely pleased with the way in which he did so. I accept that my noble friend would have done it differently, but none the less it was forcefully done.
The purpose of this legislation is to set out a new structure for how we regulate and deal with issues concerning the legal professions. I feel a bit sorry for the Law Society, actually, after the comments that have been made. I accept everything that the ombudsman said about the Bar Council—there is no doubt that some issues could perhaps be better dealt with—but I also have no doubt that the council done extremely well. I have no doubt that the Law Society accepts that there are real issues to be dealt with, and, having met the trade mark and patent representatives yesterday, that they, too, would like to see an element of delegation. So I sit within the context of recognising the genuine concerns that different parts of the legal professions have about how this would work in practice. I have had the privilege of talking to the Bar Council about this, and will seek to do so again.
The point about trying to set up a framework and a process is to ensure that it applies equally and appropriately to everyone. That is not a substitute for trying to criticise the way in which things have been done before. In a way, that is almost irrelevant. I am not suggesting that the Bar Council has not done a good job, and neither is the legislation. It does not seek to say that the council has not handled things well; it seeks to say that we wish to do things for the legal professions differently. Without falling into the trap that I will be accused of—of representing the consumer alone—I should say that that is based on consumer concerns, which are important and which noble Lords in all parts of the Committee have recognised as being an important element of what we are seeking to do. A different weight and emphasis have been put on that, but it is very important. The idea that we could simply have a system that is then delegated back does not work for me. I say this as neither a lawyer nor a consumer of legal services. If you are going to set up a system, you have to make sure that it applies equally to all to give the greatest confidence in that system.
The issue that the Bar Council raised with me and is particularly concerned with—and this brings me to the amendments tabled by my noble friend Lord Whitty—is to ensure that the quality of the work done by the Office for Legal Complaints is as good as the quality of work that is currently on offer. The noble Lord, Lord Carlile, said, “If it ain’t broke, don’t fix it”, as his shorthand way of describing a system that works well and which he sees no reason to alter. Because it works well, there is a concern that the emphasis on the work done by the Office for Legal Complaints will not be on ensuring that there are high-quality people able to deal with these matters appropriately. That brings us to paragraph 15 of Schedule 15, which is an important part of how this might operate, and to my noble friend’s amendments.
We are trying to recognise expertise and experience and to enable the Office for Legal Complaints to buy in that expertise so that the quality of how complaints are dealt with does not suffer. We are trying not to do that in a way that fails to recognise the genuine concerns expressed by the noble Lord, Lord Thomas of Gresford, on behalf of my noble friend, that this is not a delegation by the back door. Part of the conversations that we will continue to have with the Bar Council and others is to ensure that the Office for Legal Complaints is high quality and able to tackle issues appropriately by buying in and building on experience and expertise currently in existence in a cost-effective way.
The noble Lord, Lord Thomas of Gresford, was particularly concerned about the fact that the West Midlands decision would be a replication of the Leamington Spa experience in a different location. First, no guarantee has been given that 100 per cent of the staff will transfer; TUPE’s application does not guarantee that. A number of factors will come into play with regard to how that works, including whether there are roles for staff to transfer to. We want to make sure that the Office for Legal Complaints is built from the ground up, so it will be an entirely new organisation. It would be a foolish Government who, when looking at how to deal with a new organisation, did not look at what had happened before. Almost inevitably there will be high-quality staff who are able to perform functions in the new organisation.
The reason behind the West Midlands proposal is to recognise that there will be people—and I am sure that they exist and are doing a good job—in the current operation who could transfer across and continue to offer a high-quality service. That does not suggest anything other than that we buy in appropriate expertise from those individuals; it does not suggest that we do not need to think structurally very differently about the new organisation in management and process terms and so on. But the idea that nobody should be made available from the previous organisation would be wrong. Given the cost-benefit analysis that has to be done, it is appropriate to consider the West Midlands as a location, but that does not mean that we are simply replicating an organisation that is not seen to be successful in a new one.
Did the cost-benefit analysis take into account redundancy at the current office? After all, it is not government money that is being spent but the profession’s money and, ultimately, the consumer’s. On what criteria is the cost-benefit analysis done? Does redundancy come into it? Let us suppose that you sacked the lot of them, or gave them redundancy terms—has that been considered?
I am very happy to give the noble Lord more detail on the cost-benefit analysis and I shall do so. He is right that this is not government money, but in a sense that makes it even more important that the Government think very carefully about it. But certainly one of the factors that one has to consider is what would need to be available if you moved the whole operation to another location and thereby made it impossible for anybody to transfer across. One would have to consider what the redundancy costs would be but also take into account the loss of some expertise. I have never met anyone working in the Leamington Spa operation, but I am convinced that, as in any organisation that I have ever dealt with, it will have high-quality people who could carry out specific roles in the new organisation. We should not lose that. That is really the point that I am making.
Can the noble Baroness tell the Committee whether the Government have made any cost comparison between the cost per case under the current system of complaints against barristers and the cost per case under the proposed new system for dealing with complaints against barristers? I suspect that there is probably a multiplier of 10 between the current and the future cost per case.
I am not sure that I can give the noble Lord that specific information now but, of course, I shall do so if I can. However, I stress the importance of considering the finances of the matter. I completely appreciate that that is an important part of it.
We looked at the proposition that the OLC would become a postbox, as it were—that it would be the place where complaints were received but then were delegated back. I am discussing it in that context although I accept what the noble Lord says about what is proposed in the amendment. We discovered that the costs are about £12.3 million more than having a single complaints-handling body. I believe that paragraph 6.36 of the regulatory impact assessment that comes with the draft Bill goes through the costings in this context. It would not cost an additional £12.3 million if the OLC was able only to delegate complaints handling to, say, the Bar, but if it decided to delegate to other regulators—it would be completely consistent with the amendments to consider other regulators as well—we think that there would be greater inconsistency in approach and a greater cost. The more that you exempt regulatory bodies from this, the closer we come to the situation that we have at present. So there are cost implications.
The noble Lord reasonably says that much pro bono work goes on at present. I completely accept that. But we need to make sure that we develop a system for dealing with complaints that goes across the professions. We recognise that there is a variation in quality—I have never suggested otherwise—but not to the extent that everybody can say that they are perfect. We have to consider how we develop the greatest confidence in the new system. We need to build on what has gone before to some degree but recognise that we are trying to set up something brand new. The regulatory impact assessment has cost elements. I am very happy to talk to the noble Lord further about additional information that I do not have with me now.
The issue of principle is that we are creating an Office for Legal Complaints which will handle all the complaints. It will be able to buy in best-quality expertise from those who have experience of dealing with complaints. It will do so in a way that does not involve the delegation of its decision-making. It will accept responsibility for that decision-making. We believe that that is the right way to go forward. I hope that noble Lords will feel able not to press their amendments.
That is not how I see it from my perspective, if I may say so to the noble and learned Baroness. It is also about the service that you are providing to the consumer—we spent some time discussing the definition of “consumer”—in terms of the credibility of the organisation and of what we have sought to do. If all we do is say, “Actually, what we are really doing is regulating the Law Society”, and we are dealing with complaints regarding the Law Society—in what noble Lords have indicated this evening is a system that might be considered to have been less than successful or possibly a failure, depending on where one sits on this—we have not done what we set out to do. We set out to think about complaints across the legal professions. There is no suggestion in what we are doing of saying, “Everyone is a failure; therefore we need to do this in this way”. If you are going to have legal complaints dealt with by the Office for Legal Complaints, it needs to deal with all of them. From the consumer or client perspective, that is very important.
Noble Lords may have been in discussion with members of the Bar who disagree with that, and I, too, have had the pleasure of conversations with members of the Bar who disagree with it. But from the Government’s perspective, it is very clear. If you want to have a system that builds confidence, you have a system that deals with complaints across the legal professions. Within that, we have made it clear that the expertise and experience can be bought in; but the decision-maker is the OLC. The difficulty that we would have relates to the delegation of the decision-making. I take on what noble Lords have said about the way in which the amendments have been framed, but as far as we are concerned it is important to have it crystal clear that the Office for Legal Complaints makes the decision.
I thank the noble Baroness for her reply, and I thank all noble Lords who have spoken. I was pleased to hear from the noble Baroness that she is talking to the Bar Council; because it suggests that, whatever the outcome of the amendment this evening, she will continue to reflect on what she has said to your Lordships tonight.
The noble Baroness raised a number of issues in response to the speeches that have been made. First, there was the issue of consumer concerns. I must say that I find that the least convincing of the arguments that the noble Baroness has advanced tonight. It is clear from the evidence of the Legal Services Ombudsman that the performance of the Bar in exercising its disciplinary powers has been outstanding. I see that the noble Baroness has no quarrel with that observation. In that case, how can consumer concerns be a possible issue in determining whether it would be safe to delegate? It is clear that consumer concerns are not an issue.
Then the noble Baroness raised the question of equality. I suggest to the noble Baroness that the position of the Bar and the position of the Law Society are quite different. The noble Lord, Lord Borrie, pointed out that the Law Society accepts, absolutely, that a form of delegation to the approved regulator for solicitors would not, at least in the foreseeable future, be appropriate. By contrast, the Bar, through its disciplinary procedures, has established that it is completely competent to do the work that it has been doing already. The Bar is, on the whole, a profession to which solicitors refer difficult legal problems, or problems that require someone who has audience in the High Court. The Bar performs a completely different function from solicitors. It is not difficult, therefore, to make that distinction to consumer organisations; we are not talking about professions that do the same thing. So why is the issue of equality relevant? The two professions are in very different situations.
Although it is the widespread view of all noble Lords who have spoken that the Bar’s disciplinary procedures are a combination of high-quality and low cost, the noble Baroness says that the OLC will recruit people who have qualifications equivalent to those that the Bar discipline authorities have at the moment. I suggest to her that that will substitute the existing low-cost, high-standard regulation with high-cost regulation that might well be low standard. We do not know how that will turn out—that would be speculation—and in any case, good or bad, it will be inordinately expensive. The noble Lord, Lord Carlile, suggested that it might be 10 times more; I do not know whether that would be true; but it will certainly cost substantially more than it does at the moment.
The noble and learned Baroness, Lady Butler-Sloss, made the same point in a different way. If you can delegate safely and satisfactorily, why buy in—especially as the individuals who will ultimately bear the financial burden of all of this are the consumers? Yet they are precisely the people in whose interests this legislation is about to feature on the statute book.
Finally, the noble Baroness did not address what many noble Lords consider to be one of the most important features of the amendment, which is that inadequacies in service and misconduct will be dealt with by the same authority. Some three-quarters of all allegations against the Bar involve a mixture of those two matters. It will be extremely difficult for the complainant to understand why his or her complaint has to be dealt with by two authorities. It will also be extremely confusing. It will be much more expensive. It might lead to a conflict of view between the OLC on the service matter and the Bar Council that will deal with the misconduct dimension. I am anxious to hear what the noble Baroness has to say in response to those observations.
The noble Lord is correct; we are not making a distinction, because the Bill makes no distinction between service and conduct complaints handling. Complainants will be able, in a sense, to have a one-stop shop for their complaints. Often, if you are complaining about service, regardless of what that service is, you have a complaint about how things were handled, about the way you were treated, or whatever, and you may not, as a consumer, as an ordinary member of the public, necessarily know whether that is about the conduct of the individual or whether it is just a matter of poor service. Frankly, why should you? You write or make contact to say that you have a problem that needs to be addressed. The distinction, as the noble Lord says, is who provides redress and who can deal with disciplinary matters. I do not think that there is a huge difficulty between the wits of the organisations concerned to deal with consumers effectively in relation those two issues. So I am less worried about that—the Financial Services Ombudsman operates in the same way and it seems to work well. We do not have a difficulty here.
The noble Baroness made the point about the OLC being the initial recipient of a complaint; but I would put it to her that that does not alter the fact that misconduct will be considered by the approved regulator, and all the observations that noble Lords have made about confusion and expense—not only between decisions made by the two organisations but in the minds of complainants—still stand.
For all the reasons given by noble Lords, and especially in view of what I regard as—I hope that the noble Baroness will not mind my saying this—the inadequacy of her response, I continue to believe that this amendment should be made to the Bill. Obviously we will not press it tonight; but at the moment it is difficult for me to foresee circumstances in which we will not press it on Report. It is one of the central issues for us—perhaps one of the five or six central issues in the Bill. It is a case of granting a power to the Legal Services Board. It is not obliged to exercise it but it has it up its sleeve, to put the point colloquially. We consider that not to grant this power to the LSB would be to impose a system which was not only confusing and capable of generating conflict but also one which was hugely expensive and, ultimately, to the detriment of precisely the people that the noble Baroness says she is trying to protect. Nevertheless, at this juncture, I have to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
moved Amendment No. 110:
110: Clause 110, page 60, line 9, at end insert—
“( ) Nothing in this Part is intended to prevent an application to the Solicitors’ Compensation Fund for redress in respect of a determination by an ombudsman with which a solicitor respondent is unable or unwilling to comply.”
The noble Lord said: I can be much more terse in introducing this amendment. It would protect an important right of redress for consumers via the solicitors’ compensation fund. Currently, a complainant, in whose favour a direction for compensation for poor service has been made, can apply for payment to the solicitors’ compensation fund in circumstances of default. This is often used in cases where the provider is, for example, bankrupt or in prison. This right should be enshrined within the legislation and perhaps should be applicable across all the approved regulators.
We would even favour the OLC having a direct power to enforce such a claim to the solicitors’ compensation fund on behalf of its consumers, rather than leaving it to the consumer to enforce the award. It is essential to have an effective and reliable system in place; and that depends, not least, on whether the consumer receives compensation. After the negative experiences that the consumer will already have had, it would only add to his misery then to expect him to enforce the payment on default. Such a measure might also discourage any solicitors who believe that they can escape paying compensation because the consumer might not know of his right to the compensation fund. I beg to move.
I agree with the noble Lord that a complainant should not be prevented from making a claim on the Law Society’s compensation fund or, for that matter, the compensation fund of the Council for Licensed Conveyancers. Indeed, these compensation funds can make payments where the OLC would not be able to act. A clear example might be where a solicitor had improperly taken money from a client account and absconded. In such a case, a determination by the OLC would do little to ensure that a client who had suffered loss as a result received redress. The only recourse would be to make an application to the solicitors’ compensation fund, which is a “fund of last resort” administered by the Law Society. That is why the Bill specifically excludes compensation fund arrangements from the provisions in the Part 6 redress scheme.
Clause 20, concerning regulatory arrangements, defines compensation arrangements in terms which clearly encompass compensation fund arrangements such as those of the Law Society and the Council for Licensed Conveyancers. Subsection (5)(b) of Clause 154, which is entitled “Approved regulators not to make provision for redress”, excludes compensation arrangements so that the bar on making provision for redress does not apply to such a compensation fund and payments from it. I hope I have reassured the noble Lord that the Bill already provides for what this amendment seeks to achieve and that, on reflection, he will feel able to withdraw his amendment.
I am most grateful to the noble Baroness for her reply. I shall look at all the provisions to which she has drawn my attention. I had reached the contrary conclusion; but I shall look at them again in the hope that her advocacy, combined with the drafting, makes my amendment otiose. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 110 agreed to.
Clause 111 agreed to.
moved Amendment No. 110A:
110A: After Clause 111, insert the following new Clause—
“Regulatory objectives of the Office of Legal Complaints
In this Part a reference to the “regulatory objectives” is a reference to the objectives of protecting and promoting the interests of consumers, having regard to the public interest.”
The noble Lord said: The noble Baroness may recall that, on the first day in Committee, I suggested that a better approach to the structure of the Bill would be to have a separate set of regulatory objectives for each of the three regulatory bodies: the Legal Services Board, the Office for Legal Complaints and the various approved regulators. The principle for this series of amendments is to remove problems caused by drawing an artificially wide set of objectives to encompass each of the bodies. I refer to Clause 1(1), which contains the seven objectives. At an earlier stage in Committee, I think I said that they were too loosely defined to give specific guidance to each individual regulator and that in some cases the objectives were clearly inappropriate.
Part 6 deals with the Office for Legal Complaints (OLC). The amendment is designed to invite the Government to consider very carefully what regulatory objectives they should give to the OLC. We believe that the main, if not the only, purpose of the OLC should be to protect the interests of consumers. Its task must be complaints handling and seeking the best result for individual clients. Of course, attention should be paid to the wider public interest in the exercise of its powers, so that has been included in the drafting of the amendment; but the interest of the consumer must be paramount in its case.
We simply do not understand why the OLC should be concerned with promoting competition. What does access to justice have to do with the OLC? It should be a complaints-handling body. Why give it the power to promote the independence or diversity of the legal profession? Those are matters for the board or the approved regulators. Giving the OLC unnecessary regulatory objectives will give it a licence to act beyond its remit. As well as allowing it to interfere where it should not have any right to interfere, it could jeopardise the exercise of its proper functions. As Members of the Committee identified in earlier debates, the regulatory objectives can conflict with each other in certain cases. If the OLC has to have regard to all seven objectives in reaching a decision, it could end up overlooking or even going against the one objective that has any justified relevance, which is the interests of consumers through the effective handling of complaints. I beg to move.
I disagree with the noble Lord, Lord Kingsland. He seems to base his proposition on the unstated assumption that all complaints brought to the complaints body will be brought by rational and fair-minded consumers with a strong case. I have had some experience in dealing with legal complaints as a head of chambers. I assure him that, if he believes that about complaining consumers, he is widely mistaken.
Many complaints—and I do not wish to defame complaining consumers as a class—have no basis whatever in fact or in law. The complainants have simply lost a case. The nature of the legal profession is that one side tends to lose. It is a common experience that the losing side is embittered and looks around for a target. It is difficult to get at or criticise a judge or tribunal, but sitting before them is an easy target: the professional representative for their day or month in court. He missed point after point, he did not call the witness they wanted him to call; I could elaborate, but noble Lords’ imaginations will provide what I spare them from listening to.
It is therefore extremely important that some of the objectives stated in Clause 1(1) should have their play, such as,
“the constitutional principle of the rule of law”,
and, in particular,
“(g) promoting and maintaining adherence to the professional principles”.
Those principles are in Clause 1(3). A few are,
“(a) that authorised persons should act with independence and integrity,
(b) that authorised persons should maintain proper standards of work,
(c) that authorised persons should act in the best interests of their clients”.
All those are entirely relevant considerations to be taken into account by the complaints body when it considers a complaint. I therefore disagree with the noble Lord, Lord Kingsland, although I do not often do that on what I have heard of the Bill.
Briefly, I support what the noble Lord, Lord Neill of Bladen, has said. The impression given by the amendment is that the complainant is always right. That cannot be so, as he suggested. In any case, I have read Clause 1, dealing with the variety of objectives and different regulatory bodies, as meaning that the relevant board must follow those objectives relevant to its function; I hope that that is the correct reading. The objectives are set out in extenso, and I see no need for an elaborate and undesirable limitation exercise such as the amendment.
I am grateful for all the contributions. The noble Lord, Lord Kingsland, reasonably refers us back to day one in Committee when we had some interesting discussions about the regulatory objectives. I know that he is thinking about what he will bring forward for us to consider in future.
We begin, of course, with Sir David Clementi’s report. He said that we need to set out the regulatory framework principles that all the bodies concerned will adhere to. I know that the noble Lord, Lord Kingsland, takes a different view, but that is the founding principle from our perspective: the principles apply to all partners involved in the regulatory framework. That is critical.
We have also said—and, again, we discussed this on day one of the Committee—that the regulatory objectives may not always apply in the same way to all regulatory partners. I envisage that, once the board is established, we shall further clarify the different way the objectives apply to each of the regulatory bodies. That is perhaps something the noble Lord, Lord Kingsland, and I could discuss; it takes us to where his thinking was on day one—whether we need different objectives or the same objectives with different emphases, and so on. There is certainly room for discussion on that.
I said on Clause 48 that the board can make policy statements. That may indeed be an appropriate medium where the board could define how the objectives might apply to each partner. Trying to set out separate objectives would be very difficult—in practical terms, impossible—because we want the cohesion and consistency that one set of objectives would give us.
Like the noble Lord, Lord Neill, and my noble friend Lord Borrie, I would be concerned about limiting the OLC to a single objective as defined in the noble Lord’s amendment. Protecting and promoting the interests of consumers will be a fundamental principle for the OLC, but there will be times when other objectives need to be weighed against it. I shall give a different example: when the OLC is setting the charges payable by respondents under Clause 133, it will need to weigh up a broad range of considerations, not just the interests of consumers and the public. It will need to consider specifically the need to encourage an independent, strong, diverse and effective legal profession, the need to promote competition in the provision of services and the importance of access to justice. Each of those objectives could be undermined if the OLC were acting solely in the interests of consumers, even if in doing so it had regard to the wider public interest. The same conflict could arise in relation to the desirability of the OLC assisting approved regulators to carry out their regulatory functions through information-sharing, as spelt out in Clause 141.
Those issues, and the issues raised today, start to unravel as we begin to think about how to implement the amendment in practice. My view remains what it was on day one of Committee stage: the OLC should share the same overall regulatory objectives as the LSB, albeit with the ability to attach different weights to different objectives depending on the circumstances. On that basis, I hope that the noble Lord will be able to withdraw the amendment.
Never let it be said that the Committee proceedings on this Bill have been engineered by a conspiracy of lawyers; if they have, I am clearly not a part of it, at least with respect to this amendment.
I place great weight on anything the noble Lords, Lord Neill of Bladen and Lord Borrie, say. Two issues lie behind this amendment. The first is whether there should be separate objectives for each regulator or whether we should rely on one list, as in the Bill. I take the view that there should be three, but noble Lords have expressed a variety of views about this question of principle.
The second issue is, if we are to have three sets of objectives, whether I am right in limiting the objectives for the OLC to those relating to the consumer interest. The noble Lord, Lord Neill of Bladen, did an effective and trenchant job in undermining my approach to this amendment. I am trying to constrain the OLC from trespassing into areas that are not its responsibility. It should be kept on a very tight rein by the Legal Services Board and should perform only the single function outlined in the Bill. If the OLC is given scope to stray beyond that to take on the Legal Services Board, it will be costly and the areas into which it trespasses will confuse the way in which the Act is applied.
When the noble Lord is thinking about this matter before Report, will he consider the possibility that having one set of regulatory objectives, as Sir David Clementi recommended, with the capacity, through policy statements, to think about different applications and weights in different regulatory parts of the legislation and the different circumstances that will emerge, could be the way forward?
I accept that that could well be the way forward. Before the proceedings finish in this Chamber, I would like to have some notion of what these policy statements might contain. I would find that extremely helpful. As with most amendments throughout the day, the noble Baroness has responded in a way which, to some extent, lifts one’s spirits. I shall therefore not give her an opportunity of intervening again but very quietly beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.