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Legal Services Bill [HL]

I support the amendment. Although I shall listen with great interest to the views of the Minister, this power is undoubtedly draconian. It could be invoked if there is objective evidence of harm flowing from what is described in Clause 36(1)(a) as an ““adverse impact”” on the regulatory objectives of the approved regulator. It is very much an objective test whether or not there is harm. Nothing is imported into the clause to suggest that that harm might have been reasonably foreseeable, that the action taken was deliberate and reckless, or that there was any kind of mens rea involved; the only test is whether or not there was harm. If harm is considered in all the circumstances to have flowed from the approved regulator’s action then, at the discretion of the LSB, a fine may be imposed. There has to be some sort of consideration of the morality of the clause. This is a powerful discretion to give in the absence of deliberation or awareness of the consequences. It may be argued by the Government that it is the duty of the approved regulator to give such consideration that adverse out-turns would not happen. I am bound to say, however, that it seems possible that with the very best of intentions the approved regulator could take a decision that had an effect that had not been anticipated. It would be wholly inappropriate to allow a discretion to fine the regulator in those circumstances. An altogether more gentle approach would be appropriate in second-guessing the sometimes difficult judgments that have to be made by approved regulators.