Considered in Grand Committee
That the Grand Committee do consider the Legal Services Act 2007 (Chartered Institute of Legal Executives) (Appeals from Licensing Authority Decisions) Order 2020.
My Lords, I venture that this is also a straightforward and, I hope, uncontroversial measure. The order relates to the functions of the Chartered Institute of Legal Executives which, for ease, I will refer to as CILEx. In summary, the order—if approved—enables the First-tier Tribunal to hear and determine appeals against CILEx in its role as a licensing authority.
As the Committee is aware, the Legal Services Act 2007 defines six reserved legal activities that only individuals and firms regulated by one of the approved regulators can provide to the public. CILEx is an experienced regulator under the 2007 Act and authorises and regulates individuals and firms in respect of five of the six reserved legal activities: the conduct of litigation, rights of audience, reserved instrument activities, probate activities and the administration of oaths. In February last year, an order designated CILEx as a licensing authority as well as an approved regulator. This meant that, as well as regulating individuals and firms, it can now license alternative business structures. ABSs are legal firms that are partly or wholly owned or controlled by non-lawyers. They were introduced by the 2007 Act to encourage competition by allowing, for the first time, lawyers to join with non-lawyers, for example accountants, to raise external capital. Notable ABSs include Co-op Legal Services and the big four accountancy firms.
ABSs have been permitted by the Legal Services Act 2007 since October 2011, and there are now over 1,300 in England and Wales. Most of the other legal services regulators, including the Law Society and the Bar Council, are already licensing authorities. The 2007 Act stipulates that there must be an independent body to determine appeals against decisions of licensing authorities, and this order enables the General Regulatory Chamber of the First-tier Tribunal to fulfil this role.
Over the last 12 months, since CILEx became a licensing authority, there has been an interim appeals procedure—agreed by the Legal Services Board—in place. However, it is more appropriate that the First-tier Tribunal determines any appeals against CILEx in its role as a licensing authority. The First-tier Tribunal has judges with experience in considering regulatory appeals.
Furthermore, similar orders have been made in the past in respect of appeals against decisions of the Bar Standards Board, the Council for Licensed Conveyancers, the Chartered Institute of Patent Attorneys, the Chartered Institute of Trade Mark Attorneys and the Institute of Chartered Accountants in England and Wales, when they are each designated as licensing authorities.
I assure the Committee that, although Her Majesty’s Courts & Tribunals Service will face additional costs associated with the potential increase in cases to be determined by the First-tier Tribunal, CILEx will meet the set-up and operating costs, so there will be no net financial impact on the public sector.
In conclusion, this statutory instrument is necessary to regulate better in the consumer and public interest. I commend the draft order to the Committee.
My Lords, I support the order. I declare an interest in that a close family member is a judge in the First-tier Tribunal—but not, I believe, in the General Regulatory Chamber.
I have been a strong supporter of CILEx from its inception. Indeed, I addressed some of its early conferences due to, as I mentioned in relation to the previous order, my experience 50 years ago of the integrity and probity of legal executives who needed a body to represent their interests in the way that that has happened. I am delighted to see that it has been given this particular power. The strange thing is that there was a temporary appeals provision with a panel set up by CILEx itself; clearly that was unsatisfactory. Far better that it should go through the tribunals system. What are the fees of the tribunal likely to be? Will they be more expensive than the present appeals system, unsatisfactory as it is?
My Lords, again I will be completely uncontroversial, and I can be very succinct: the First-tier Tribunal is undoubtedly more appropriate than the interim arrangement.
I thank noble Lords for their contributions. I agree with the observations of the noble Lord as to the importance of CILEx as an institution. I recently met with its representatives, as I do on a regular basis; they bring to regulation a degree of innovation and forward thinking that is to be welcomed.
On the potential cost, fees will be set by the Courts Service. Generally, there are only about 10 of these appeals each year. I do not anticipate the level of fees being an inhibitor to the discharge of these functions.