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Legal Services Bill [HL]

moved Amendment No. 108: 108: Clause 70 , page 40, line 32, at end insert— ““( ) Without prejudice to the powers vested in the Board by this Part of this Act, the Board must seek to ensure that, as far as is practicable, licenses to permit alternative business structures for the provision of legal services are issued on an incremental basis in order to reduce the risk of a disruption of the market for legal services.”” The noble Lord said: We now—and at last, some of your Lordships might say—reach Part 5 of the Bill, which deals with alternative business structures. Amendment No. 108 is the first amendment to that part of the Bill. It is a probing amendment. The approach of the amendment is motivated by timing, the key words in the amendment being, ““on an incremental basis””. This follows from the recommendation of the Joint Committee, chaired by my noble friend Lord Hunt, that there should not be a sudden explosion of ABSs on to the market. They should be introduced gradually. At this stage we therefore urge the Minister to address the concerns that we, and many of those who have taken an interest in this matter, have over-perceived potential problems. There is a general uncertainty about what effect these new structures will have on the market. In particular, there is widespread concern about their impact on access to justice. This concern is expressed, most generally, by a fear that the new ABS organisations will cherry pick the most financially attractive areas of law, leaving those that are often subsidised by more attractive work to be either abandoned by high street solicitors or simply dealt with in a perfunctory manner. There is also worry about the headline that one has seen more than once in the last few months of one-stop shops or Tesco law. These are portrayed as providing significant benefits to consumers; but we have no idea how that might affect the quality of legal advice given in the one-stop shop. What views do the Government have about that? Then there is the international dimension. We are one of the most successful countries in the world at exporting legal services. I have no statistical evidence which would prove the case, but I suspect that we are probably the most successful country in the world at exporting legal services. What effect are the new ABSs going to have on our international reputation? It is very important that whatever we do, it does not damage our ability to sell our services abroad. There is another distinct issue about our international outreach. Certain ABS structures might be regarded in other countries as being unethical or indeed be illegal in other territories or jurisdictions. How will we grapple with that problem? There are a range of issues, about which it is still unclear as to the effect that ABSs might have. This is a probing amendment. We are probing to ascertain whether the Government have any plans for assessing or monitoring the impact of ABSs once they begin to be licensed and whether they will have any safeguards in place against any of these potential concerns. The amendment is not in itself the answer. We have put forward two or three amendments of our own—more detailed amendments which we hope your Lordships will discuss later. They are different ways of achieving the same objective but our philosophy towards ABSs is an incremental one. We believe that the Government and the Legal Services Board should begin slowly and deliberately and, as a result of accumulating experience should then, if that experience is positive, become more ambitious. But we would be wholly opposed to any immediate licensing system which did not take account of the experience of the first few ABSs that were launched. We believe that the Joint Committee said some very wise things about the ABSs and I want to conclude my remarks with a quotation from its report: "““The true impact of ABS is not clear to us. Evidence has suggested that there may be an impact on both vulnerable consumers and those in particular geographical locations (for example, rural or isolated areas). Indeed, it may be that there are different impacts on those two areas. We have received no concrete evidence that access to justice will either be improved or reduced under ABS arrangements, but we are persuaded by some of the evidence suggesting that the reforms may reduce geographical availability. We consider that ABSs may reduce the number of access points for legal services and we see this as a potential problem. There is clearly an issue here and the only conclusion we are able to draw is that no-one can be sure how it will work out. We recognise that there may be a trade-off between the quality and accessibility of advice—for example a small, high-street solicitor in a rural area may not be able to provide the specialist advice a client requires. We recommend that the Government amends the draft Bill to ensure that the impact of ABSs on access to justice, particularly in rural areas, informs the decision-making process that licensing an ABS firm””." On one particular, issue the Joint Committee has gone rather further than the incremental approach that I was outlining and has said, in terms, that it has real concerns about the impact of ABSs on the geographical disposition of legal services in England and Wales. I beg to move.