Probate Services (Approved Bodies) Order 2008

Lord Bach
rose to move, That the Grand Committee do report to the House that it has considered the Probate Services (Approved Bodies) Order 2008.

The noble Lord said: This order is presented under Section 55 of, and Schedule 9 to, the Courts and Legal Services Act 1990. It will enable the Institute of Chartered Accountants of Scotland and the Council for Licensed Conveyancers to become approved bodies which can authorise their members to provide probate services for a fee, gain or reward. By probate services, I mean the preparation of any papers on which to found or oppose a grant of probate or a grant of letters of administration.

At the moment, Section 23 of the Solicitors Act 1974 restricts the provision of probate services for a fee, gain or reward to specified legal practitioners; namely, solicitors, barristers and notaries. However, Section 55 of the Courts and Legal Services Act provides an exception for members of an approved body. The ICAS and the CLC are the first applicants seeking to provide probate services under the Courts and Legal Services Act approval mechanism since the provision was commenced in December 2004.

The applications have passed through the required statutory approval procedure set out in Schedule 9 to the Courts and Legal Services Act. In doing so, they have been considered and approved by the legal services consultative panel and the president of the Family Division and, as a result, have our full support.

Briefly, the ICAS is a professional body of accountants which received its royal charter in 1854 and has more than 17,000 individual members and 200 member firms. Members are required to meet the academic and post-qualification requirements of the ICAS before being eligible for membership and obtaining accountancy-practising certificates. Its members routinely have long-standing relationships with clients, giving them tax and financial planning advice. Under the terms of the application, probate practising rights will be granted  only to members who currently hold practising certificates in accountancy and who wish to provide probate services in England and Wales only.

Before members of the ICAS are granted practising rights, they will need to show that they can satisfy the requirements set out in Section 55 if they wish to provide probate services. These include being suitably trained and ensuring that their employees are suitably trained, including meeting the continuing professional development requirements set by the ICAS; having satisfactory insurance and compensation arrangements in place to cover adequately the risk of any claim made against them and to protect the client in the event of them ceasing to provide probate services; and having a complaints scheme in place, including a route of appeal to the Legal Services Ombudsman.

As with members of the ICAS, members of the CLC will need to demonstrate they have the similar arrangements in place before being granted probate rights. The CLC was established in 1987 by the Administration of Justice Act 1985 to regulate licensed conveyancers in the provision of conveyancing services. It currently has around 1,043 licence holders and 42 recognised bodies. Members are required to have undertaken the qualification and practical training requirements set by the CLC before being granted a licence to practise. Only those members who hold licences will be eligible to apply for a probate-practising certificate.

In order to meet the full requirements set out in Section 55 of the Courts and Legal Services Act, the CLC requested approval to extend its existing compensation fund to cover probate matters. An order to this effect came into force earlier this year. This will ensure that clients of licensed conveyancers will be protected against fraud, negligence or dishonesty on the part of the licensed conveyancer. Consumer protection is something that both the ICAS and the CLC have demonstrated they take seriously in their applications. As established professional bodies in their fields of expertise, they already have in place effective systems of monitoring and enforcement. They have made sure that they and their members have, or will have, in place suitable arrangements for the provision of probate services.

The potential benefits to the consumer of these bodies being approved include: more choice of provider; more competitive prices; and, in the case of organisations such as the ICAS which have an existing customer base, the opportunity to provide them with a more cost-effective and efficient service. This is precisely what Section 55 is intended to do and is in keeping with the principle, which is central to our policy, of providing new or better ways of providing legal services and a wider choice of persons providing them at more competitive prices. If consumers are unhappy about the way in which the ICAS or the CLC has dealt with a complaint about one of its members providing probate services, they can refer the case to the Legal Services Ombudsman. The ombudsman’s jurisdiction was extended to cover bodies authorised under Section 55 in October 2004, shortly before the Section 55 provisions were commenced. She has been approached by both organisations and has agreed to accept complaints from both bodies relating to the probate services provided by their members. It is not anticipated that the LSO will receive a high number of additional complaints per year if this order is approved.

In the longer term, complaints about these two bodies’ members will be dealt with by the new Office of Legal Complaints in line with complaints about members of other legal professional bodies. If this order is approved, a subsequent order will need to be laid. This will amend the Legal Services Act to bring both bodies under the jurisdiction of the Legal Services Board and ensure that they retain their probate rights in the future regulatory regime. I commend the order to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Probate Services (Approved Bodies) Order 2008. 22nd report from the Joint Committee on Statutory Instruments.—(Lord Bach.)

Lord Henley
I thank the noble Lord for explaining the order. I do not think that it is controversial and I suspect that we can happily agree to it. However, I have a couple of short questions. The first concerns consultation. The order states:

“The Secretary of State has considered the advice given to him by the Legal Services Consultative Panel and the President of the Family Division”.
 

Who else was consulted? What is the process of consultation on these matters?

I ask my second question with some embarrassment. Why is the affirmative procedure being used? I notice that the order is being passed under the Courts and Legal Services Act 1990, which was enacted when my party was in government. I believe that the noble Lord referred to a slightly later Act, which may have consolidated the earlier Act. It seems to me that some of the affirmative orders which come before us might be better dealt with by the negative resolution procedure. I am not clear why we need to deal with this order by the affirmative procedure, but no doubt the Minister will explain.

Lord Thomas of Gresford
I have reservations about this order. Probate is a difficult and challenging area of the law. It can be successful if it is simple, but it can lead to long delays, particularly if it involves the administration of trusts under a will or matters of that sort. It is a much more complicated area than conveyancing, and indeed quite a long way removed from accountancy. It is right, therefore, that the Government should have made necessary inquiries before bringing this order forward. What is not apparent is, for example, the track record of the Council for Licensed Conveyancers. Have there been complaints, and has its compensation fund been used in relation to conveyancing?

Another matter to which I draw the Committee’s attention is that the Legal Services Consultative Panel did not immediately give a clean bill of health to the Council for Licensed Conveyancers and thought it desirable that it should have a separate fund to deal with compensation for probate matters as opposed to the existing conveyancing fund. However, since that recommendation was made, the Government have for some reason agreed, and by order enacted, that the existing conveyancing compensation scheme should be extended to cover the new area of responsibility. If the organisation’s record—nothing in the Legal Services Consultative Panel’s advice makes it clear—is that there have been few complaints and no significant attacks on the compensation fund, then well and good. However, I should like to know the position.

The other matter that causes me some disquiet is why the Institute of Chartered Accountants of Scotland should be seeking powers to deal with probate in England and Wales. There are quite different and separate jurisdictions in Scotland and Wales, and the area of the law covering probate and trust is quite different in Scotland from the system in England and Wales. As I said, accountants are fairly well removed from this area anyway, so why do they want to extend their business into England and Wales? What training will they have in these aspects of English and Welsh law which will be satisfactory?

In the long term, all may prove to be fine. On behalf of my party, however, I wish to put down a marker that these extensions of business should not be accepted without the most rigorous consideration of the standing and record of the one fairly new organisation, the Council for Licensed Conveyancers, and the longstanding record of the Institute of Chartered Accountants of Scotland whose members are coming across the border to take the business of practitioners in England and Wales without, so far as I can see, any reason appearing on the papers which have been put before us.

I voice these reservations in the hope that if the Minister cannot respond to them today, he will be able to do so before this draft statutory instrument is brought before the whole Chamber and its implementation is sought.

16:00:00

Lord Bach
I am grateful to both noble Lords for their responses. I shall deal first with the question of why this is an affirmative resolution, in answer to the noble Lord, Lord Henley. The comments made by the noble Lord, Lord Thomas of Gresford, give the answer to that. It is always an important step when the law is changed to enable bodies to take part in legal practice when they have not been able to do so before. There are always a number of doubts and concerns surrounding such a change and it is important that Parliament should have the right to deal with orders that make such changes in a positive, affirmative way. I hope I do not embarrass the noble Lord, Lord Henley, too much if I commend his Government for having made these orders affirmative; it would have been a subject of potential criticism if they had been merely negative orders.

The obligation is that consultation must be with the two bodies I have mentioned. The statutory approval process means that the Secretary of State has to seek the advice of the Legal Services Consultative Panel and the president of the Family Division, but no one else is consulted in the process. That is for these particular applications, but, before Section 55 itself was commenced, I am advised that a full consultation took place. I hope that deals with the queries that the noble Lord rightly raised.

I take on board the doubts that the noble Lord, Lord Thomas, has expressed. I want to reassure him as best I can that, given the status of the LSCP and of the president of the division, all the matters he was concerned about have been taken fully into account. Indeed, so far as the conveyancers were concerned, he is right that there was initial concern over the lack of compensation arrangements, and the LSCP recommended that that application should be approved only if adequate compensation arrangements were put in place. It further recommended that the Secretary of State give consideration to legislation to amend the Administration of Justice Act to allow the CLC to extend its existing compensation fund to cover probate work.

The endorsement from the president of the Family Division for that recommendation was received in February 2008, and ministerial agreement was given in the same month. In March the Courts and Legal Service Act 1990 (Modification of Power to Make Rules about Licensed Conveyancers) Order 2008 was laid. The order gave the power to the CLC to extend its existing compensation funds to cover probate work. That has allowed that body to make rules about paying compensation to people who had suffered loss, as I told the Committee a moment or two ago, as a result of negligence, fraud or dishonesty. The system, if I may say so, seems to work. The body that, by statute, has to be consulted on this made a recommendation. That recommendation was taken on board by the Government, and has now been put into force. There is confidence all round that that is a suitable body to get this right.

The noble Lord, Lord Thomas, asked the obvious question—although I do not mean “obvious” in any derogatory sense—about why an organisation with “Scotland” in its title should want to do this work and why it should be entitled to. The name may be slightly misleading in that, as I understand it, a number of members of that body already do considerable work in England, even though the name of the organisation has “Scotland” in it. That is true also for banks whose names include the word “Scotland” but that have an important function in England too.

The noble Lord may come back to me and say, “Well, the Scottish legal system is rather different from the English legal system but that may not be so true about the banking system”. The fact remains, however, that some ICAS members already work in England as accountants. The ICAS plans to provide training, which is what the noble Lord was concerned about, through a variety of methods, including compulsory training courses at its examination centres and using solicitors who practise in England and Wales to assist with courses. The ICAS has also approached the Society of Trust and Estate Practitioners about the possibility of members attending STEP training courses and, if that application is successful, would enter into a formal agreement.

I mention those factors because the Government are satisfied that both bodies are eminently suitable for the work that they have applied to take on. While the noble Lord is of course right to express doubts, and while this is an important step, we are satisfied, as are the consultative bodies and the president, that this is a good move which will pay off.

On Question, Motion agreed to.