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Legal Services Bill [HL]

I found that an interesting debate. I have to confess that I did not know where the amendment came from, although I could see that noble Lords would want to have this debate not only at this point, as noble Lords said, but throughout the Bill’s passage. Perhaps I may say through the good auspices of noble Lords and through Hansard that I would be very keen to meet the trademark and patent agents’ representatives, whom I have not seen, to discuss this further. They have been in touch with the department, but thereis nothing quite like having the conversation oneself to seek to reduce concerns. I take the point madeby the noble Lord, Lord Maclennan of Rogart. My nice comfortable little words may be all well and dandy but he would like something that goes a bit further. At this stage in our deliberations perhaps I may say a little more about ““proportionate”” and take up the point about the ““jigsaw effect”” raised by the noble Lord, Lord Campbell of Alloway—who discussed the subject with me earlier today. I think that that is a good way of describing some of the themes running through the Bill. When we eventually end this Committee stage perhaps he will reflect on whether we have covered all the elements of the jigsaw and on the possible discussions on that. I would expect the board to have regard to much of what has been set out by the noble Lord, Lord Kingsland: the regulator’s resources, the effect on regulatory fees and the extent to which entry to or retention in the regulated sector applies. I agree with the organisations that are concerned about a ““one size fits all”” approach that the regulations should not attempt to provide such an approach . We have sought to define a way of dealing with that in Clause 3 by saying that the board should be proportionate. It very specifically looks at how to ensure that the regulation is appropriate for the bodies that are to be regulated. We have not defined it in the Bill specifically because we want ““proportionate”” to be considered on a case-by-case basis. That is a very well-trodden path not only in legislation but, more importantly, in how we try to deal with it in practice. I am not sure that we could find a definition that would not lead us in some ways to an arrangement that could have a detrimental effect on consumers or the legal professions themselves. Perhaps I may give an example. The board could find itself under a lot of pressure, where one regulator might be disadvantaged and another might derive an advantage because people moved between one regulator and another, to ensure that its actions did not lead to one regulator losing members. However, that might be a natural and even—dare I say it?—desirable consequence when there is a regulator that might be damaging the regulatory objectives. The board’s decision could lead, if you follow the principle, to restricting competition in the provision of those activities. That would be inconsistent with the regulatory objectives to promote competition—which we have already discussed—in the provision of reserved legal services. We could end up unable to tackle the issues underpinning the regulatory objectives as effectively as we might. I absolutely take the point that if we are to use these words, we need to be clear what we are trying to do. Perhaps I may say a little more about that. As noble Lords will know, the Hampton review on regulatory inspections and enforcement looked at this question. In Section 2(3) of the Legislative and Regulatory Reform Act we established that, "““regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent””" and that, "““regulatory activities should be targeted only at cases in which action is needed””." Looking across legislation and good practice, we believe that—rather than setting out a definition of proportionality, which I think would move us into a ““one size fits all”” arrangement—the term has a natural meaning which is widely accepted. In Clause 48 we have enabled the board to issue policy statements about the work that it will be doing. That may be a way of addressing the specific point—by including in the policy statement the issue of further work on defining what we mean by ““proportionality””. Those being regulated might find a policy statement a better place to consider the issue. It would be very clear, and everyone would be absolutely sure about what was being looked at. It would also have the benefit of enabling additional information or changes to be effected appropriately. It is important that the board, the Office for Legal Complaints and the regulators consider what is meant by ““proportionate””, but that could be done on a case-by-case basis. We should not try to constrain them with definitions that will not be appropriate in every case and that would result in the board having to think about a ““one size fits all”” approach. Finally, the noble Lord, Lord Hunt of Wirral, returned us to the issue of the Legal Services Board and the regulated bodies working together in close partnership. The whole thrust of the legislation is underpinned by achieving clarity about the roles of the different bodies and about the nature of the relationship between them. Again, we will return to this theme as we work through the Bill. It is essential that they collaborate and work together co-operatively to address these issues. I therefore resist a definition for the reasons I have given. I do, however, accept that proportionality is essential for resolving the problems mentioned by those who have helped to draft the amendment, and I am grateful to the noble Lord, Lord Kingsland, for tabling it. I hope I have assured noble Lords that we accept that clarity is essential and that it is essential that the bodies behave in that manner. In that spirit, I hope noble Lords will feel that we have at least begun to address the issue and that they can take some comfort from my words to the Committee.