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Legal Services Bill [HL]

moved Amendment No. 33: 33: Clause 3, page 2, line 35, at end insert— ““(4) In assessing what is proportionate in the regulation of approved regulators the Board shall have regard, inter alia, to— (a) the regulator’s resources (including voluntary resources) and the effect on them of the Board’s acts; (b) the effect on regulatory fees; (c) the extent to which the Board’s acts might discourage entry to or retention in the regulated sector; (d) the extent to which the number of persons regulated by a regulator might be reduced in consequence of the Board’s acts; (e) the extent to which the regulator might be disadvantaged and another regulator might derive an advantage, in particular through the movement between regulators of regulated persons as a consequence of the Board’s acts.”” The noble Lord said: This amendment has been inspired by the patent and trademark attorneys, who are a much smaller body than most of the other regulators affected by the Bill. Their resources, premises and personnel, for example, are more limited than those of the Law Society or the Bar Council. The wording of the amendment requires the Legal Services Board to act proportionately in respect of these smaller regulators in discharging its functions. What is appropriate for some of the regulators is certainly not appropriate for others. In particular, the board should consider the resources and viability of the regulators that will be affected by its decisions and actions. Such regulators are, I suggest to the Committee, low-risk, non-consumer-focused professionals with excellent conduct records, and they should be recognised as such in the new regulatory regime. The regulatory costs to the associations, as well as to their members, are low, and they place a very low burden on the wider regulatory system. One characteristic of trademark and patent attorneys is of particular importance: they are in the unusual position of being able to opt out of their associations. These associations anticipate a real risk that over-regulation of those who have the freedom to opt out could well reduce or restrict entry to their professions. It is not currently mandatory to be a member of either of the two main professional associations connected with these activities in order to practise or represent clients. The members can leave the regulated system at any time they wish. The costs could clearly increase after the Bill has been enacted if members leave the system and, in those circumstances, the position of both the main regulators could, in time, become untenable. The purpose of the Bill is to ensure more effective regulation of the legal profession. That is of course well understood, but one unwelcome side effect is to reduce the effectiveness of regulation in the more specialised or technical areas of the law. That is the background to the amendment. I beg to move.