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Compensation Bill [HL]

I am grateful to all three noble Lords for raising an important part of our discussions: how best to deal with exemptions. One thing that we have sought to do with this Bill is to create the flexibility to enable us to expand regulation in particular areas should that be necessary in the future. We could then capture a problem such as endowment mis-selling, which, had we had this legislation in place, we could have dealt with in a different way. At Second Reading, I made clear our intention to exempt legal professionals by order. The criterion for that is that they are already regulated by their own professional body in the provisions of claims management services. We will not impose double regulation on those who are already regulated. We intended to exempt other bodies by order, such as the Financial Services Authority to which the noble Lord, Lord Hunt, has already referred. I am resisting the amendment because it is important that we recognise what we discussed in the previous group of amendments; that is, that we have an ever-changing market. It is conceivable that we would want regulation to cover certain bodies in relation to some type of claim in future. Therefore, I am reluctant to take anybody out of the overall scope of the primary legislation. I cannot envisage such a situation and I cannot give noble Lords an example, but I am mindful of the White Paper on the future of legal services and the opportunities in it for major reform of regulation and delivery of legal services over the next few years. Indeed, the Law Society is beginning to think about these issues as it thinks about its future role and the way in which it wants to organise itself. There is no question but that those who are already regulated will be exempt or that that is the right and proper thing to do. As the noble Lord, Lord Goodhart, indicated, the Law Society, the General Council of the Bar and ILEX are those that we would wish to see. In addition, as we move towards setting up the regulations we will be looking for the standards that noble Lords would expect. I know we will discuss standards later in our deliberations and I see their importance in whether we exempt someone. They will be in the areas that we have discussed in Committee: transparency of fees, the skill set, and the way in which the arrangements are set up. These will all be part and parcel of that. As we begin to move towards regulation, I shall ensure that I inform the Committee of how I approach that. I have been encouraged by the way in which noble Lords have sought to ensure that we have the criteria right. Those that I have specifically mentioned are those where regulation is already in place and where we are seeking to avoid double regulation. I raise them because of the context. I can reassure the Law Society through the noble Lord, Lord Goodhart, that we will not deviate from what we have said we will do. That is what we will do. We will look at the question of trade unions in future amendments. We will be exempting those who appear on the certification officers list, in particular, and we can talk about the value and importance of the list, although why it is important will be well known to the noble Lord, Lord Hunt, from his previous work. We have also said that we want to exempt organisations that offer advice on a not-for-profit basis, provided that they are registered charities. We are trying to be very clear about the organisations that we will exempt initially and if we exempt any others we will make sure that they fit the standards that we will discuss. The noble Lord, Lord Goodhart, raised an interesting point about foreign lawyers. I shall have to look at that matter when we are drafting the order, but it is a good point. I cannot say that I have had any discussion about it. That may not surprise the noble Lord at all. I shall look at the matter and come back to him. Obviously, we will consider it when we are drafting the order. When we talk about a person providing regulated claims management services, we are referring in regulation to the service not the person. It is anybody, whether he has been authorised or not, who is providing the type of services that are regulated; that is, those that are specified in the Bill in Clause 2(2)(e). The fact that the services are regulated is not meant to imply anything about the person, but about the service. The individual or the company is not being regulated, but the service. We can talk further about that in later amendments because it is an important point. Amendment No. 53, which was tabled by the noble Lord, Lord Hunt, leads to a slight change of emphasis. The noble Lord was keen to make sure that we have everything in the right place. It changes Clause 4(1) from,"““a member of a specified body””," to those,"““authorised or regulated by a specified body””." That would allow those regulated by the FSA to be exempted under Clause 4(1), which is where I suspect the noble Lord is going. There is an intention to exempt general insurers to the extent that their activity— [The Sitting was suspended for a Division in the House from 5.45 pm to 5.55 pm]