My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move that the Bill be now further considered on Report.
Moved accordingly, and, on Question, Motion agreed to.
334: After Clause 118, insert the following new Clause—
“Board’s functions in relation to complaints
(1) If it appears to the Board that complaints about any authorised person are not being handled effectively and efficiently by the OLC, the Board may exercise in relation to the OLC such of the powers in subsection (2) as it considers necessary.
(2) Those powers are—
(a) to investigate the handling of complaints about authorised persons;(b) to make recommendations in relation to the handling of complaints about authorised persons; and(c) to require the OLC to submit to the Board a plan for the handling of complaints about authorised persons.(3) Where the Board requires the OLC to submit to it a plan for the handling of complaints about authorised persons but the OLC—
(a) fails to submit to the Board a plan which it considers adequate for securing that such complaints are handled effectively and efficiently, or(b) submits to the Board such a plan but fails to handle complaints in accordance with it,the Board may give directions to the OLC.”
The noble Lord said: My Lords, the subject matter of the amendment was given consideration at an earlier stage of the Bill. As so often during that time, the noble Baroness expressed the view that the language of the Bill was already sufficient to ensure that the failure of the Office for Legal Complaints in the eyes of the Legal Services Board would not render a stalemate and that it would be possible to bring about changes. However, on further reflection, it has appeared to my noble friends that the position is not entirely satisfactory and that the Legal Services Board has no adequate powers to investigate the Office for Legal Complaints.
There is no direct provision for the board to intervene if it believes that the Office for Legal Complaints is not handling complaints properly. The amendment would transfer to the Legal Services Board the current powers enjoyed by the Legal Services Complaints Commissioner. The powers would allow the board to look strategically at how the Office for Legal Complaints is operating and to intervene if it appears to the board that the OLC is not handling complaints efficiently and effectively. That would help to ensure that information on complaints can be used to improve the whole system of legal services delivery for consumers. It seems clear that if the OLC fails to deliver an efficient and effective service, appropriate sanctions should be available.
Even at this stage of consideration of the Bill—it has been thoroughly trawled—it is not entirely obvious who would deal with the OLC and how. Clause 118 allows the Legal Services Board to set performance targets for and to monitor the OLC, which is welcome. But there are no further direct powers over the OLC, particularly in the event of its failure, other than the power and ability to remove the OLC chair and board, which might be thought to be a sledgehammer to crack a nut. The inclusion of the power to investigate concerns would allow for sensible and reasonable target setting if this became necessary. It is also desirable to consider how to stiffen the Legal Services Board’s ability to ensure the OLC’s compliance with its directions. I hope that these amendments will commend themselves at this stage to the Government. I beg to move.
My Lords, I am grateful to the noble Lord who, as he has indicated, returns to an issue that we debated in Committee. The amendments would produce a hybrid between the present Legal Services Complaints Commissioner and the proposal in the Bill in relation to the LSB and the improved regulators. Having looked again at the provisions in the Bill, as I said I would do, I believe that we have satisfactory arrangements to make sure that the board has the appropriate range of controls over the OLC.
I will demonstrate this in six key ways. First are the overall arrangements in Part 6 which provide for the OLC to operate through a series of rules which, in Clause 152, must receive the consent of the LSB before they can take effect. The LSB will have complete oversight of the way in which the OLC’s rules are framed and, provided they are adhered to, how the OLC operates. Additionally, in Clause 153, the board may amend or modify any of those rules if it considers that they are deficient.
Secondly, in Clause 115, the OLC is accountable through its annual report to the LSB, which must deal with any matter that the board has directed. For example, they may have to show how they have dealt with the speed with which complaints are resolved. Of course, the OLC has a separate annual report to the LSB because it has a distinct function and its status is as a distinct non-departmental public body. The LSB will present both its annual report and the OLC’s annual report to the Secretary of State, who will lay them before Parliament. This will reflect the fact that the OLC reports to the LSB.
Thirdly, Clause 117 allows the board to require the Office for Legal Complaints to prepare a report on any matter relating to its functions. This might include, for example, a strategic plan for how it proposes to remedy a particular failure to meet a performance target. Fourthly, the power to set performance targets in Clause 118 allows the board to impose conditions on how those targets are met and, crucially, to monitor performance against targets. This will allow the LSB to monitor systematically how complaints are being handled.
Fifthly, the LSB’s ultimate power in relation to the Office for Legal Complaints is at Schedule 15(8)(b). As the noble Lord has said, this allows the board the power to remove members of the OLC. The noble Lord described this as, perhaps, a “sledgehammer to crack a nut”, but it is important as the ultimate power, only to be used on members of the OLC where there is obviously a significant failure in the discharge of their duties. Finally, in addition to the above statutory powers, as a non-departmental public body, the Office for Legal Complaints will be accountable to Parliament for the efficient use of resources and the discharge of its statutory responsibilities in a way that the current complaints-handling and regulatory bodies are not.
We consider that, taken together, these six key points provide an appropriate and effective control over the Office for Legal Complaints and the way it operates, intentionally different from those the board has in relation to approved regulators, designed specifically to govern the relationship between two distinct non-departmental public bodies with different functions, but with the OLC being subordinate to the LSB. On that basis, I hope the noble Lord can withdraw his amendment.
My Lords, I express my gratitude to the Minister for giving further thought to the issue. It was dealt with at some length at an earlier stage and she has canvassed powerful arguments for the point of view she has been expressing. As she has described, there are powers. I acknowledged this in my opening remarks, but begged leave to doubt whether they were sufficiently targeted to the problem of complaints. In the circumstances I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 335 and 336 not moved.]
Clause 122 [Jurisdiction of the ombudsman scheme]:
[Amendment No. 337 not moved.]
Clause 125 [Parties]:
[Amendment No. 338 not moved.]
339: Clause 125, page 64, line 13, leave out “Secretary of State” and insert “Lord Chancellor”
340: Clause 125, page 64, line 27, leave out “Secretary of State” and insert “Lord Chancellor”
341: Clause 125, page 64, line 36, leave out “Secretary of State” and insert “Lord Chancellor”
On Question, amendments agreed to.
Clause 126 [Pre-commencement acts and omissions]:
342: Clause 126, page 65, line 9, after “mark” insert “attorney”
343: Clause 126, page 65, line 17, after “mark” insert “attorney”
On Question, amendments agreed to.
Clause 127 [Orders under Section 125]:
344: Clause 127, page 65, line 20, leave out “Secretary of State” and insert “Lord Chancellor”
345: Clause 127, page 65, line 21, leave out “Secretary of State” and insert “Lord Chancellor”
346: Clause 127, page 65, line 22, leave out “Secretary of State” and insert “Lord Chancellor”
347: Clause 127, page 65, line 30, leave out “Secretary of State” and insert “Lord Chancellor”
348: Clause 127, page 65, line 31, leave out “Secretary of State” and insert “Lord Chancellor”
349: Clause 127, page 65, line 32, leave out “Secretary of State” and insert “Lord Chancellor”
350: Clause 127, page 65, line 33, leave out “Secretary of State” and insert “Lord Chancellor”
351: Clause 127, page 65, line 34, leave out “Secretary of State’s” and insert “Lord Chancellor’s”
On Question, amendments agreed to.
Clause 129 [Continuity of complaints]:
352: Clause 129, page 66, line 21, leave out from “rules” to “specified” and insert “must make provision permitting such persons as may be”
The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 353, 355, 357 to 360, 379 and 380, 382, 394 and 395, 402 to 404, 427, 434 and 446. This group of amendments, aimed at further protecting the consumers of legal services, responds to amendments debated in Committee which I agreed to take away and consider. While some are minor and clarificatory, I hope noble Lords will agree that others are of real substance and will improve the Bill.
Amendments Nos. 352 and 353 respond to amendments helpfully moved by the noble Lord, Lord Kingsland, in Committee. They will require scheme rules to make provision permitting specified persons to continue a complaint following the death or incapacitation of the original complainant. This means that the Office for Legal Complaints must give proper consideration to, and consult on, which persons should be allowed to continue a complaint. Complainants and their relatives or representatives will be certain whether and when they are eligible to continue a complaint.
Amendment No. 355 arises out of helpful points made in Committee by my noble friend Lord Whitty clarifying the limits on the power of the Office for Legal Complaints to award costs against a party in favour of the OLC. As I said in Committee, it is important to strike a balance between allowing the Office for Legal Complaints to call to account complainants who, although they may have a genuine complaint, add disproportionately to the costs of determining it by utterly unreasonable behaviour, and preventing members of the legal profession from abusing this provision by deterring well founded complaints by suggesting that the complainant might have to contribute to the costs. We think that the wording of this amendment will produce the right balance. Noble Lords agreed in Committee that it is enormously important that the ombudsman scheme should not deter in any way genuine complainants from complaining, and therefore this amendment sets a high threshold for the award of costs against a complainant.
Amendments Nos. 357, 358, 359 and 360 make it clear who can exercise the power of summary dismissal of a complaint. I agreed with the noble Lord, Lord Kingsland, on the fifth day in Committee that this should be a power exercisable only by an ombudsman, and the wording has been reconsidered with a view to making it entirely clear.
Amendments Nos. 379, 380 and 382 have been drafted in response to amendments tabled earlier by the noble Lord, Lord Kingsland, and my noble friend Lord Whitty. In those circumstances, which we expect to be rare, where a respondent fails or refuses to comply with an ombudsman’s determination, these amendments will give ombudsmen the power to take enforcement action in relation to that determination on a complainant’s behalf, and we will set out the exact details in the scheme rules. These amendments therefore provide additional protection for vulnerable people who might not wish or know how to seek a court order themselves. Individuals may of course take action themselves, if they so wish, without the ombudsman’s assistance.
Amendments Nos. 394, 395 and 446 address concerns expressed in Committee by my noble friend Lady Henig, who is not in her place today. They enable approved regulators to respond quickly and effectively in cases of widespread wrongdoing, where potentially large numbers of consumers may be affected, but they may not know that they have a complaint or, indeed, the procedure for complaining. In circumstances where an approved regulator suspects widespread wrongdoing, these amendments will ensure that approved regulators can require authorised persons to investigate their files, and if they find signs of potential wrongdoing, alert the consumer and initiate the internal complaints process. Because of the importance of maintaining a clear role for the Office for Legal Complaints in providing redress, the amendments I have tabled do not allow approved regulators to award redress or require authorised persons to pay redress.
Amendments Nos. 402 to 404, 427 and 434 again are tabled in response to persuasive arguments made in Committee by my noble friend Lord Whitty and others who have rightly identified that it is important for the OLC to have the power to administer a voluntary complaints handling scheme. The amendments will therefore give the Office for Legal Complaints the necessary powers to establish a voluntary scheme, subject to and within such boundaries as may be set by an enabling order made by the Lord Chancellor on the recommendation of the OLC or the LSB. I beg to move.
My Lords, I am most grateful to the Minister for addressing the point made in Committee about the continuity of complaints. Although this is only a minor concession, I appreciate that it will now be a requirement for the OLC to set out in its scheme rules the circumstances in which complaints may be continued on behalf of a person who has died or is otherwise unable to act. That removes what was certainly an inequitable lacuna in the Bill’s coverage.
On Question, amendment agreed to.
Clause 130 [Operation of the ombudsman scheme]:
moved Amendment No. 354:
354: Clause 130, page 67, line 12, at end insert—
“(ha) for an ombudsman to award costs against the respondent in favour of the OLC for the purpose of providing a contribution to resources deployed in dealing with the complaint if—(i) the complaint against the respondent is determined or otherwise resolved substantially in favour of the complainant, or(ii) in the ombudsman’s opinion the respondent failed to deal with the complaint in accordance with the regulatory arrangements which the relevant approved regulator has made under section 109.”
The noble Lord said: My Lords, I will speak also to the remaining amendments in the group. The most important reason for supporting the amendment, and those that flow from it, is one of principle. Those exonerated following investigation or litigation should not be penalised for being found blameless. Accordingly, to require an authorised person under the Bill to pay the Office of Legal Complaints for the costs of handling a complaint when the complaint is unfounded and the person has handled the matter properly in house would be wholly unjust.
It would also deter practitioners from acting in those fields of law where unjustified complaints are disproportionately likely such as in the areas of criminal and family law. In any case, since it will not be the Government or the OLC but the authorised persons in general who will have to pay instead through the general levy, neither the Government nor the OLC have any financial interest in sustaining the scheme set out in the Bill.
The Bill’s provisions are founded on the approach adopted by the financial ombudsman scheme. There, financial service providers are required to pay charges in respect of the handling of a complaint whatever its outcome. The Government believe that the OLC should be free to adopt the same approach; but the circumstances of the provision of legal services are different from the provision of financial services. Unfounded complaints, for example, from those who have lost a court case or whose house purchase has fallen through, are far more likely than in financial services. Furthermore, some practitioners are disproportionately likely, as I have indicated, to be the subject of such complaints. We think it is imperative that the administrative convenience of the OLC is not allowed to cause the clear injustice to lawyers of having to pay costs even where a complaint is not upheld and where their in-house handling of the complaint has been exemplary.
Yet if the OLC has an unrestricted power to charge, it is likely to opt for a case-handling fee in all circumstances simply because that would be administratively more convenient to operate. I would add parenthetically and, I hope, reassuringly that of course we accept that the power to order authorised persons to pay charges cannot sensibly be confined only to cases where the complaint is upheld after a determination by an ombudsman. The likelihood is that the great majority of complaints will be conciliated in one way or another. It would not be satisfactory if authorised persons could avoid any liability to pay simply by settling the matter shortly before a determination would have to be made.
Our amendment would also have the added attraction of encouraging practitioners to operate proper in-house complaints resolution systems. Failure to operate proper in-house procedures damages one of the Bill’s key objectives; namely, ensuring that complaints can be resolved as rapidly as possible. Leaving all matters to be sorted out by the OLC is unsatisfactory from the perspective of complainants and involves putting an additional burden on the OLC. There is no reason why the profession collectively, rather than the practitioner who has failed to deal properly with the matter in-house, should bear the cost of that.
In conclusion, it is important for the Bill to set out the limits of the OLC’s discretion to impose charges. It would be quite wrong to put administrative simplicity ahead of the need to avoid causing injustice to those authorised persons who are the subject of unfounded complaints. I need add nothing to what I have said about the Minister’s proposition that complaints that have got as far as the OLC must be partially justified. That assertion was effectively demolished in Committee. I beg to move.
My Lords, I support the amendments as being of principle, for the reasons given by my noble friend. There is not, and never has been, any entitlement to costs. An award of costs is entirely a question of discretion. In this case, with the ombudsman or the OLC, it is an exercise of quasi-judicial discretion. There is no entitlement; there never has been. The exercise of quasi-judicial discretion imposed by a mandatory costs order under primary legislation is anathema; it is ill-conceived and outrageously unfair.
The exercise of such discretion, whether judicial or quasi-judicial, takes due and fair account of factors relevant to the case. I never cite cases here, but there was one in which I won in the Privy Council against my erstwhile noble friend, the late Lord Ripon, in which I did not get my costs. There was another in your Lordships’ Appellate Committee, in which I lost and I did not have to pay any costs. The details do not matter—they are all recorded in the law reports—but what matters is the principle on which the court or the tribunal makes a fair decision.
Is it really the business of Government to impose a costs order upon a lawyer who has committed no misconduct because he or she happens to have rendered legal services? How on earth did this happen? Well, you start off by calling the lawyer a “polluter”. You take a spin for a placebo to feather, perhaps, the legacy nest. You conjure up in your mind a puppet show on the seaside in the old days: consumer with a truncheon clobbers bewigged polluter, and everyone screams with enjoyment. Why on earth were the recommendations of the Joint Committee, on which I had the privilege to serve, rejected? I would like that question to be answered.
Why cannot the Clementi soft touch be found in the Bill? My noble and learned friend Lord Mackay of Clashfern mentioned this the other day, albeit in another context. Why was it ignored?
I have another question which is relevant for answer. Is it the business of government to usurp this quasi judicial function as to costs? For the reasons given by my noble friend, which I have sought to supplement, I suggest that there is no justification for that whatever.
My Lords, I appeal to my noble friend to respond affirmatively to these amendments. I have not entirely made up my mind about this; I remain to be convinced. Prima facie, I do not think that the Government’s approach can be justified. I find it mysterious that they have moved in this direction. For that reason I remain to be convinced about the arguments.
I share the view of the noble Lord, Lord Campbell of Alloway, that there ought to be discretion here, as there is at the moment. Why does my noble friend depart from that view? I also share the view that in exercising that discretion—which the Government purport to avoid—the court should not be deprived of being able to listen to the arguments conveyed and make up its own mind. As I say, I find this whole thing very mysterious. I hope that it will be possible for the Government to change their mind.
My Lords, I, too, support these amendments tabled by the noble Lord, Lord Kingsland. I am particularly concerned about Clause 133 and the requirement that the respondent who is in receipt of complaints by the applicant should be required to pay charges to the OLC. As a retired judge, I put a slightly different perspective on this. In some cases, judges force an agreement, settlement or, indeed, outcome over which the lawyer may have no control. They may be situations in which, for a number of very good reasons, there is absolutely no point in going to appeal but that is the basis of the complaint to the OLC. You cannot put the judge in the dock and it is extraordinarily unfair to put the lawyer in the dock for a situation over which he had no control. An absolute obligation that the respondent should pay charges would be manifestly unjust, like many other circumstances that have been referred to. I should not like to think that this Government acted unjustly in this sort of circumstance.
My Lords, I am the only non-lawyer pleading for more money in lawyers’ pockets, but on this occasion I think that they are right. Will the noble Baroness take it from a non-lawyer that on this occasion we must say, “Poor pathetic lawyers, they need looking after”?
My Lords, I make two points in support of the noble Lord, Lord Kingsland. First, the comparison with financial institutions really is not right. In so far as the buyer is concerned, this burden will fall primarily on those who practise in the less well remunerated fields such as criminal law and family law and primarily on the younger members of the profession who have to deal with the more difficult and unreasonable clients. They are sole practitioners and would have to find those costs out of their own pockets.
Secondly, there is the very important difference that if a nasty client who may cause trouble comes along, a financial institution can say, “I am sorry, I do not want to do your work”. The poor unfortunate barrister, according to the cab-rank rule, has to take on the work even if he knows that the previous six people who acted for this client have all had complaints made against them, and that he is absolutely doomed to a complaint unless by very remarkable chance he happens to win. There he is, he takes it on because the rules say that he has to, and then he is landed with a bill for costs as a thank you for doing so.
My Lords, I have spoken on previous occasions on this issue, and I have made clear my view that this is a thoroughly unjust provision and that the amendment is right. I have a specific question for the Minister. There is the usual certificate on the back of the Bill that all its provisions are in accordance with the Human Rights Act. Has some Minister actually considered that, if there are proceedings in which the accused is acquitted, it is in accordance with the human rights convention that what amounts to a financial fine can be imposed on him?
My Lords, may I ask one further specific question? If this provision is incorporated into the Bill, can the Minister think of a single more enticing invitation to make a malicious complaint against someone who may have given you uncongenial advice than this one? If she can, will she specify it?
My Lords, I venture to say that no provision in the Bill has aroused stronger or more carefully argued opposition than this one. At this stage, since the arguments have been deployed extensively, I sense that the House is anxious to hear the views of the Minister and to reach a conclusion.
My Lords,I do not think that I said that I demolished her; Isaid that her argument had been demolished in Committee.
Indeed, my Lords, but I like to give the noble Lord credit where credit is due for at least some denting.
I looked very carefully at these issues, because I hope that noble Lords accept that it is my wont, certainly in Committee, to listen very carefully to what is being said. The only issue that divides us on the amendment is whether we define in the Bill at this point how a charging regime might operate, or whether we leave that to the Office for Legal Complaints, which must do it in consultation with the approved regulators, with the consent of the Legal Services Board and of the Lord Chancellor and in line with the regulatory objectives.
The Government’s position is that the latter route is more appropriate in seeking to set out in the Bill how it would happen, not least because it allows for flexibility and it ensures that the charging system can change and adapt over time on the basis of the sort of experience and good practice that noble Lords would wish to see the OLC consider. I know that noble Lords are worried and concerned about how the Office for Legal Complaints would exercise that flexibility, but I emphasise that the flexibility does not happen in an unconstrained way. In drawing up its rules, the Office for Legal Complaints must have regard to the regulatory objectives, including the public interest, and to the ombudsman scheme best practice, which is in Clause 113. It is also under a duty to consult on the content of the rules, which is in Clause 195.
The Legal Services Board will have to give its consent to the rules under Clause 152 and, in doing so, must have regard to the regulatory objectives we have debated at length. The consent of the Lord Chancellor is required under Clause 152 and, taken together, we expect the oversight of both the Legal Services Board and the Lord Chancellor to be an important check, if needed, on how the Office for Legal Complaints drafts the rules to ensure that they are fair and proportionate.
I could add that the Office for Legal Complaints and, indeed, the Legal Services Board are responsible to Parliament for the operation of the scheme, including the system of case fees. They will have to produce the annual report and, if need be, appear before—
My Lords, if the noble Lord will let me continue, I will deal with that point.
As I was saying, the OLC can also be required to appear before a parliamentary Select Committee to give evidence on the operation of the scheme. Ultimately, the decision of both bodies which set out the rules is judicially reviewable on the usual grounds. So my first proposition is that the constraints ensuring that the system of case fees operates fairly are in place.
We come to the proposition, which I have seen in briefing material for today’s debate, that Clause 133 is manifestly unfair. I could not disagree more. Nowhere does Clause 133 say that a flat fee will apply for every complaint the OLC receives. Nowhere does it say that every lawyer will have to pay the same rate of charge. Nowhere does it say that the lawyers will pay the charge even if the complainant is vexatious or frivolous. It says that the scheme rules will set out how charges against lawyers are to operate. I have been through this in great detail because I was much taken with our debate in Committee. The implication of many speeches in your Lordships’ House has been that we were setting out a system under which every lawyer has to pay regardless. Nowhere does Clause 133 say that. It says that the scheme rules will have to set this out. As to whether it is human-rights compliant, I am the human rights Minister: it is my job to ensure, certainly within my own department, that it is compliant. It is.
The critical point is that the clause does not say what has been implied, and there is therefore an unfounded concern in your Lordships’ House. It is possible that the OLC, having considered representations made and having read the deliberations of your Lordships’ House will decide that it would be unfair to charge a fee for complaints that are not upheld. There are other circumstances, as noble Lords have indicated at Second Reading and in Committee, and repeated today, where it might also be deemed unfair to charge a fee. My argument is simple: the Office for Legal Complaints should take a view on the circumstances in which fees should and should not apply, based on appropriate oversight and the consultation required under the clauses I have indicated.
We cannot argue that the rules are unfair, because they have not been made. Nothing in the Bill suggests that there must be a blanket charge for any lawyer, whether or not they have fulfilled their obligations under an in-house complaints system, or have been taken to the Office for Legal Complaints in a vexatious way. Quite the opposite: the Office for Legal Complaints must draw up rules and, in doing so, consult the professions and the Legal Services Board, and consult and deal with the Lord Chancellor. There are currently no rules, and it is important that we let the Office for Legal Complaints design the rules within the process and constraints I have identified.
On the case-handling fee being disproportionately high, nowhere in Parts 6 or 7 does the Bill say what the split will be between the levy and charges. Nowhere does it indicate how that will be calculated. Parts 6 and 7 say that the Legal Services Board and the Office for Legal Complaints should decide what the split should be between the levy and the charges under Clause 133. In the absence of their having made that decision, we cannot speculate on what the case-handling fee would be. The truth is that until they have decided we will not know what the split will be. Until the OLC has had its rules approved we will not know what the case-handling fee is.
In conclusion, I am arguing for flexibility; let the Office for Legal Complaints make the decisions within its constraints. It will take into account not only your Lordships’ words, but also its consultation with the professions. On that basis and with my assurances, noble Lords will see that there is nothing in Clause 133 that says that any lawyer has to pay regardless. It says that there should be rules that set out the circumstances in which lawyers should pay or not pay.
My Lords, will the Minister accept that the failure that we are concerned with is not that there is no statement giving the power that might be abused, but that there is a total silence with regard to a priceless principle—a person who has discharged him or herself of services in a proper professional way should be condemned in costs? Is it impossible to include such a statement of principle which would deal with the problem simply?
My Lords, throughout this legislation we have debated fairness, proportionality and the regulatory objectives. I completely understand the concerns that have been raised. Having looked at the Bill, it is my view that those issues with which noble Lords are concerned are inherent within it in the context of people behaving in a proportionate and fair manner. That is an important part of the way that the OLC would operate.
There is nothing in the Bill that does what noble Lords fear. There is everything in the Bill that says that the OLC must make rules and identify those who should pay and not pay. I understand noble Lords’ concerns that those that have been brought in a vexatious way should have that recognised by the OLC and I agree with them.
My Lords, your Lordships have asked the Government to enshrine in the Bill the principle that an authorised person should not be penalised for being found blameless. The Government have been unable to do that. In the circumstances I wish to test the opinion of the House.
355: Clause 130, page 67, line 16, leave out from “opinion” to end of line 19 and insert “that person acted so unreasonably in relation to the complaint that it is appropriate in all the circumstances of the case to make such an award;”
On Question, amendment agreed to.
moved Amendment No. 356:
356: Clause 130, page 67, line 47, after “(3)(h)” insert “, (ha)”
On Question, amendment agreed to.
Clause 131 [Delegation of an ombudsman's functions]:
357: Clause 131, page 68, line 15, leave out “(but not determination)”
358: Clause 131, page 68, line 17, leave out from “Part” to end of line 18
359: Clause 131, page 68, leave out line 19 and insert—
“(2) Nothing in subsection (1) applies to the following functions—
( ) the function of determining a complaint;( ) the function of deciding that a complaint should be dismissed by virtue of rules under section 130(3)(a));”
360: Clause 131, page 68, line 21, leave out “and”
On Question, amendments agreed to.
Clause 133 [Charges payable by respondents]:
moved Amendments Nos. 361 to 364:
361: Clause 133, page 68, line 41, at end insert—
“(1A) The rules must provide for the OLC to reduce or waive a charge in circumstances where—
(a) the complaint relates to activity undertaken otherwise than for reward, or(b) it appears to the OLC that the amount of a charge, unless reduced or waived, would be disproportionate having regard to the gravity or nature of the complaint, the value (if any) of the subject matter of the activity to which it relates, or the consideration payable for the services used by the complainant which consist of or include that activity, or(c) it appears to the OLC that the amount of a charge, unless reduced or waived, would cause the respondent undue hardship.(1B) The rules must also provide for the refund of the whole or part of a charge where circumstances coming to the OLC’s attention since the charge was paid are such that it appears to the OLC that the amount of the charge, unless wholly or partly refunded—
(a) is disproportionate having regard to the gravity or nature of the complaint, the value (if any) of the subject matter of the activity to which it relates, or the consideration payable for the services used by the complainant which consist of or include that activity, or(b) causes the respondent undue hardship.”
362: Clause 133, page 68, line 41, at end insert—
“( ) Scheme rules must provide that any charge in relation to a complaint shall not become payable by a respondent unless the complaint is determined or otherwise resolved substantially in favour of the complainant.”
363: Clause 133, page 68, line 43, at end insert “(other than one to which rules pursuant to subsection (1A) apply)”
364: Clause 133, page 69, line 3, at end insert “(other than circumstances in which rules pursuant to subsection (1B) apply)”
On Question, amendments agreed to.
Clause 134 [Determination of complaints]:
[Amendments Nos. 365 and 366 not moved.]
Clause 136 [Alteration of limit]:
367: Clause 136, page 70, line 23, leave out “Secretary of State” and insert “Lord Chancellor”
On Question, amendment agreed to.
[Amendment No. 368 not moved.]
369: Clause 136, page 70, line 25, leave out “Secretary of State” and insert “Lord Chancellor”
370: Clause 136, page 70, line 29, leave out “Secretary of State” and insert “Lord Chancellor”
371: Clause 136, page 70, line 37, leave out “Secretary of State” and insert “Lord Chancellor”
372: Clause 136, page 70, line 38, leave out “Secretary of State” and insert “Lord Chancellor”
373: Clause 136, page 70, line 39, leave out “Secretary of State” and insert “Lord Chancellor”
374: Clause 136, page 70, line 40, leave out “Secretary of State” and insert “Lord Chancellor”
375: Clause 136, page 70, line 41, leave out “Secretary of State’s” and insert “Lord Chancellor’s”
On Question, amendments agreed to.
Clause 137 [Acceptance or rejection of determination]:
[Amendments Nos. 376 to 378 not moved.]
Clause 138 [Enforcement by complainant of directions under section 134]:
379: Clause 138, page 72, line 13, after “complainant” insert “or an ombudsman”
380: Clause 138, page 72, line 16, after “complainant” insert “or an ombudsman”
On Question, amendments agreed to.
[Amendment No. 381 not moved.]
382: Clause 138, page 72, line 20, at end insert—
“( ) An ombudsman may make an application under subsection (2) or (3) only in such circumstances as may be specified in scheme rules, and with the complainant’s consent.
( ) If the court makes an order under subsection (2) on the application of an ombudsman, the ombudsman may in such circumstances as may be specified in scheme rules and with the complainant’s consent recover the amount mentioned in that subsection on behalf of the complainant.”
On Question, amendment agreed to.
moved Amendment No. 383:
383: After Clause 139, insert the following new Clause—
“Handling of complaints by approved regulator
(1) The Board may direct that complaints within the jurisdiction of the ombudsman scheme and of such description as are specified in the direction shall be determined by an approved regulator instead of an ombudsman.
(2) The Board may by further direction vary or withdraw a direction given under subsection (1).
(3) Before giving a direction under this section the Board must consult—
(a) the OLC,(b) the approved regulator concerned, and(c) such other persons as the Board considers it reasonable to consult.(4) If the Board gives a direction under this section, it must—
(a) give a copy to the OLC, the Lord Chancellor, the approved regulator concerned, and any person consulted under subsection (3)(c), and(b) publish the direction in the way it thinks fit.(5) A direction under this section may include—
(a) transitional provision in relation to complaints already being dealt with under the ombudsman scheme or by an approved regulator, and(b) incidental, supplemental or consequential provision, including provision applying a provision of or made under this Part, with or without modifications, to the determination of a complaint by an approved regulator.”
The noble Lord said: My Lords, Amendments Nos. 383, 392 and 393 provide for the delegation of complaints handling to an approved regulator by a direction of the Legal Services Board. Where such a direction is given, the approved regulator would be empowered to award redress to the complainant, which Clause 154 currently prohibits. The Legal Services Board would have power subsequently to vary or withdraw a direction. In deciding whether to give, vary or withdraw a direction, the Legal Services Board would be bound by Clause 3 to act compatibly with the regulatory objectives and the other regulatory principles of the Bill.
Part 6 establishes the OLC, the resolution body, for those who consider that their complaints have not satisfactorily been dealt with by the in-house arrangements of the relevant legal service provider. Under the Bill, the OLC will investigate service complaints itself but will refer complaints about misconduct to an approved regulator for resolution. However, approved regulators will no longer have the power to award redress to complainants.
The Law Society, representing 116,000 solicitors, received more than 17,000 new complaints against it in 2004-05, accounting for about 86 per cent of the total costs of legal complaints handling. By contrast, the Bar Standards Board, the regulatory arm of the Bar Council—the governing body for 14,000 barristers—deals with fewer than 1,000 complaints each year. The Bar Standards Board estimates that about 3 per cent of cases referred to the OLC will derive from the Bar.
As we saw in Committee, about 70 per cent of complaints against barristers involve allegations that, if true, would require both compensation for inadequate professional service and proceedings for misconduct. The approved regulator, where appropriate, should be in a position to deal with both aspects. It is both inconvenient and confusing for consumers to have to deal with two different bodies about different aspects of their complaints, especially if one body accepts the facts to which the complaint relates but the other does not. There is also likely to be duplication of work and therefore unnecessary expense. Moreover, the approved regulator has a range of powers, including powers to award redress, which are far wider than those proposed for the OLC. This enables it to ensure that the most appropriate remedy or sanction is provided through a single procedure.
By contrast, the proposed new complaints-handling system will involve decision making by salaried non-lawyers who are unlikely to be able to supply the analysis and expertise currently provided free of charge. It is one of the,
“many advantages that have been provided by the Bar’s handling of complaints”.—[Official Report, 6/12/06; col. 1186.]
That should not be lost by the Bill, as the noble Lord, Lord Borrie, a former director of the Office of Fair Trading, warned us at Second Reading.
As we saw in Committee, the Bar Council has established a body of expertise and maintained a complaints-handling service that is widely acknowledged to be of an extremely high standard. As we saw in Committee, the Legal Services Ombudsman has consistently given high marks to the Bar Standards Board for the speed and quality of its complaints service. Robert Behrens, the Bar Standards Board’s independent complaints commissioner, has said that there is a strong case for the Bar Standards Board to have delegated jurisdiction over complaints about poor service.
Clause 154 creates inflexibility in complaints handling and adds massively to its costs. We have concluded that the Bill as drafted is certain to offer a poorer service to consumers at vastly greater cost—at least as far as the Bar is concerned. The Bar Standards Board, the approved regulator for the Bar, is an independent, ring-fenced, regulatory authority. It already deals with both service and conduct complaints. It already has a significant lay element, and its decisions are subject to a lay veto. This is emphatically not a case of lawyers deciding on complaints against lawyers. The independent Legal Services Ombudsman has repeatedly said that the Bar Standards Board does outstanding work.
We had hoped that the experience and expertise that barristers and lay members bring to providing a professional, cost-effective approach to complaints handling would, in the interests of consumers, be recognised in the Bill. Instead, the Government are persisting with a scheme which will provide a sub-optimal service to consumers at a colossal cost to the service providers.
The Government’s proposals for amending complaints handling, and in particular the new clause inserted after Clause 154 by Amendment No. 395 and the new clauses after Clause 159 by Amendments Nos. 403 to 405, involve a voluntary scheme as an add-on to the main statutory one. However, the amendments do not address the problems that we have identified in the legislation. Nor do they answer our objections to the complete exclusion of approved regulators, with all their expertise from the ombudsman process. I beg to move.
My Lords, I support the amendments, but I could not do so in only a few words unless I had listened to my noble friend Lord Kingsland, who put the whole scene to the House so much better than I could ever have done. Therefore, accepting everything that my noble friend said, and his argument, I shall make a short point. This is a matter of principle. These are enabling amendments, which in no way break the structure of the Bill or the board’s control under it. If the amendments were accepted, there could be no requirement on the board to direct any approved regulator in any complaint that lies within the jurisdiction of the ombudsman, and, indeed, after consultation with the OLC, the approved regulator and any other person. This essence of consultation is highly commendable, as is the essence of partnership, to which my noble friend Lord Kingsland referred in another context. The ombudsman has approved the complaints procedure, as it stands, in relation to the Bar, but that does not mean that the procedure cannot be amended in consultation from time to time or that the directions in proposed new subsection (1) of the amendment would not be wholly justified. We are not in a static situation, and the amendment takes due account of that. It would comply wholly with the Clementi soft-touch approach. I cannot speak for any branch of the legal profession—probably not even for my own now—but surely it is right in principle that the amendment should be supported.
My Lords, for many years now, there have been independent reviews of the complaints system run in respect of solicitors and the complaints system run in respect of the Bar. Up to now, independent reviews, especially those conducted by the ombudsman, have, year in and year out, unanimously condemned the Law Society’s complaints schemes as defective, deficient and inadequate, whereas the system run by the Bar up to now has been praised as modest in charges and in price—taking advantage of the barristers’ willingness to do this kind of work free of charge—and has received a tremendous amount of praise. In the Bill as it stands, complaints about both solicitors and barristers are wrapped up together and given to a new statutory body, which will of course be quite expensive. The new system does not take into account the difference between the complaints systems of the two branches of the profession, which I have just mentioned.
The Bar Standards Board, to which the noble Lord, Lord Kingsland, referred, has a lay chairman and other lay members, as well as lawyers and barristers. Both kinds of people are helpful to one another, as I understand it. The Bar Standards Board can hardly be regarded as simply a lawyer’s charade. The only case the Government have for wrapping up together the complaints systems for both solicitors and barristers is that it is “tidy” and, as it were, fair to both branches of the profession.
The Law Society, in its briefing to me—and, no doubt, to other noble Lords—has admitted that its own schemes have been deficient. It does not pretend that its history is as good as the Bar’s in handling complaints. This amendment—or something like it, if I may put it that way to the noble Lord, Lord Kingsland—is surely desirable to modify the Government’s approach, to allow some flexibility which the history of complaints against the legal profession surely justifies.
My Lords, the speech we have just heard from the noble Lord, Lord Borrie, came as music to my ears; his arguments were extremely compelling. Uniformity does not necessarily mean that we will have a more efficient or effective scheme. The underlying concern about the basic thrust of the Government’s proposals is that they risk creating a rather bureaucratic monster which is not apt to deal any better with complaints that would previously have been handled by the Bar Council.
The issue of cost remains extremely important. It is clear that the Bar Council’s existing arrangements for handling complaints have been of great benefit to the consumer. We have not heard anything in the discussion of costs that has led us to believe that this problem will go away under the Government’s new legislation. It is time to draw a line and say firmly to the representatives of the consumer lobby, who have expressed a preference for uniformity of treatment, that this does not necessarily work to the advantage of those whom they represent.
I have found it increasingly distasteful in the course of these debates to hear opinions which almost suggest that lawyers are the enemy of consumers. That is a complete travesty of the truth. Lawyers are very often necessary to ensure that remedies are obtained. Their skills as advocates, and in some cases their selfless preparedness to investigate allegations, are worthy of commendation.
A brief from Which? which was passed to some Members of this House said:
“Consumers will not trust a regulatory system that allows lawyers to judge their own”.
That is simply a misrepresentation of the position of the Bar Council. Significantly, its conduct committee has 10 lay members whose decisions are subject to a lay veto, as the noble Lord, Lord Kingsland, stated. If that is the best argument that can be produced in favour of this inflexibility, it is a bad argument which ought to be roundly rejected by the Government.
My Lords, I shall speak briefly because the points have been strongly put by my noble friend Lord Kingsland and the noble Lord, Lord Borrie. I may be disappointed, but the noble Baroness may be about to stand up to tell us what good sense has been spoken. I sincerely hope so. It seems to me to be quite compelling to be able to save costs, to do justice better and to have less complexity, which would trump uniformity for the sake of uniformity every time. I very much hope that the noble Baroness will be able to give us more confidence than her recent headshake suggested.
My Lords, the noble Lord is very gracious in the way in which he puts forward his comments. Noble Lords have made strong arguments about the role of the Bar and I hope that they will agree that at no point in our deliberations have I indicated anything other than the highest regard for the way in which the Bar handles complaints. On the work going on with the Law Society and its regulatory body, I read out its latest report on its quality and success in handling complaints. Although I do not have the figures with me, I think that noble Lords will agree that it is being done in a better way than previously. I do not begin for one second to suggest that we are bringing it together to suggest in any way the wrapping-up of all the regulators or that they are failing, or that taking complaints away is a form of punishment. That is absolutely not the objective.
We have approached this issue from a different perspective. We know that there is an issue of public confidence. It may be more perception than reality in the context of the Bar. I did not know how the Bar handled its complaints procedure until I was involved in this job. It is not really surprising if the public do not know about the way in which the Bar handles complaints. None the less, whether it is right or wrong, there is an issue about perception in public confidence and the way in which complaints generally are handled.
Inevitably, there is an inconsistency in the way that the various complaint-handling arrangements work. Among some people who wish to bring forward complaints, there is some confusion about where to take them. That is probably particularly important where, for example, a solicitor may have instructed a barrister and the consumer has to try to determine where the fault lies and to whom to complain. Noble Lords may not like it, but there is an issue about independence—real or perceived—of complaints about lawyers being handled by their own professional bodies.
The noble Lord, Lord Maclennan, read out part of a letter, which I think that noble Lords have received. The letter is addressed to me, dated 4 May, from the National Consumer Council, Citizens Advice and Which?. The noble Lord may argue that they do not necessarily represent appropriately the people whom they seek to, but they are the most prestigious bodies we have for consumer affairs. Therefore, noble Lords would expect me to take note of what they said. As the noble Lord said, the letter states:
“Consumers will not trust a regulatory system that allows lawyers to judge their own”.
“Independence is the single most critical principle in any redress system. Separating the regulatory and representative functions of the professional bodies will be insufficient to command consumer confidence in this respect, especially given the relevant governance and complaint committees will continue to have professional majorities”.
That may be inaccurate in the context of the Bar, but that is what they say. They go on:
“The Bar can be reassured that the Office of Legal Complaints will be, and must be, an entirely new body. The emergence of alternative business structures will further blur the boundaries between the legal professions. In this new world, consumers should not be left to navigate a regulatory maze to resolve their disputes”.
Noble Lords will have seen the letter. I shall make sure there is a copy in the Library of your Lordships’ House.
As I have said, because we are also introducing alternative business structures, there will be opportunities for solicitors and barristers to work together in other ways. As the letter points out, this will add to the potential confusion for those who seek to complain. We believe it is more sensible in creating a new system to have one body that handles complaints about all legal professionals. That is clearer and more consistent; the system is straightforward, people know where to go and it can be dealt with properly. The most clear and consistent message since Sir David Clementi’s report, and before that, is to make sure that we deal with any perceived or real loss of confidence in the way that legal professional bodies have dealt with consumer complaints about their members.
I have had the privilege of talking to the Bar Council and to Geoffrey Vos, who has passionately and straightforwardly put the concerns of the Bar. One issue has been to make sure that the expertise and experience that could be available to the Office for Legal Complaints is not lost. I have indicated to Geoffrey Vos that we have looked carefully at Schedule 15(15), because that allows the OLC to enter into arrangements with regulators to provide it with assistance as it sees fit. There is no question that the ultimate decision-making must rest with the ombudsman—it must be an independent process. Yet I would expect the OLC to be in discussion with the regulators, and to think about what expertise might be available that it could usefully use while retaining the independent system. The Bar and other regulators may well assist under the new arrangements.
The key difference between this and what the noble Lord, Lord Kingsland, proposed is that, in line with Sir David’s philosophy, the OLC can make the best of existing arrangements by drawing on the Bar’s or any other bodies’ expertise, rather than completely delegating the responsibility it has to the public to ensure quick and fair redress. Within that context, I hope the noble Lord will feel able to withdraw his amendment.
My Lords, it really pains me to stand up at the Opposition Dispatch Box and once again take issue with what the noble Baroness says, especially as she has spoken in such measured and conciliatory tones. Yet she must know by now, having had these exchanges not only at Second Reading but also in Committee, that what she has said simply will not wash.
I find it difficult to understand how the noble Baroness can in one breath say that she absolutely accepts everything that has been said about the high quality of the Bar Standards Board and the way the Bar deals with complaints, and yet, in another breath, say that, even if in reality these standards are high, the public have doubts—that there is a public perception that somehow these standards, which she knows are met, are not being met. Where does this perception come from? What evidence does the noble Baroness have that there is a public perception that, despite all the evidence, the Bar Standards Board falls below requirements that have been tested over a long period? There is no such perception.
Then the noble Baroness says that there is concern that it is lawyers judging lawyers. The noble Lord, Lord Maclennan, had the complete answer to that: there are 10 lay members on the Bar Standards Board. The ultimate say on whether a Bar Standards Board decision stands is made by a lay person.
Why does the noble Baroness think that the Legal Services Board has nothing to do with the law? There will be lawyers on the board. Further, why is she so convinced that the Legal Services Board is independent, whereas the Bar Standards Board is not? Did not your Lordships pass an amendment requiring the Lord Chancellor to have concurrent advice from the Lord Chief Justice precisely because the House does not believe that, as presently structured under this Bill, the Legal Services Board is independent?
I know how hard the noble Baroness has striven to resolve this particular problem in the Bill; but I have to say to her, most disappointingly, that I cannot accept her arguments as a satisfactory substitute for these amendments, and therefore again I wish to test the opinion of the House.