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Legal Services Bill [HL]

moved Amendment No. 106: 106: Clause 50, page 27, line 18, at end insert— ““( ) Practising fee income shall be kept separate from the other assets of a Regulator.”” The noble Lord said: Amendments Nos. 106 and 148 derive from concerns raised with the Opposition by the trade mark and patent attorneys. These amendments seek to keep practising fees separate from a regulator’s other assets. As I understand it, the logic is that, while there are severe restrictions on the positive use of fee income or enjoyment of profit, the liability for the levy to the Legal Services Board appears to extend to all a regulator’s assets, including its non-regulatory business. The view of the trade mark and patent attorneys is that it is inequitable that a regulator and its owners should bear the burden, but not the benefit, of regulatory activity. Thus, Amendment No. 106 proposes that a regulator’s income should be ring-fenced, while Amendment No. 148 suggests that recovery of the board’s levy as a debt should be limited to the regulatory income of the regulator. The Institute of Trade Mark Attorneys provides an illustration of the problems that could arise in recovering the levy. It is a private body limited by guarantee that performs regulatory and non-regulatory functions. If the levy can be recovered against all its assets, that would mean that the assets of the business, including income and capital assets derived from non-regulatory and representative sources, are vulnerable, even though, as a regulator, the institute and its members are precluded by Clause 50(2) from realising any financial benefit from any regulatory activity. The result is that private persons or businesses are expected to guarantee a levy to the state with no possibility of a corresponding benefit in return. Therefore, it is argued that it is only reasonable that the recovery of the levy should be limited to funds ring-fenced by the proposed subsection in Amendment No. 148. I beg to move.