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Legal Services Bill [HL]

There are two amendments in this group: Amendments Nos. 137ZZZA and 137XA. Amendment No. 137ZZZA deals with the independent reviewer point and Amendment No. 137XA deals with allowing an ombudsman with a report of potential misconduct issued to an approved regulator to require a report back. I say that only for clarification of the groupings. I shall respond to both amendments because they raise distinct issues—although they are clearly suitably grouped together. I shall start with the independent reviewer question, which my noble friend rightly raised. We do not think that it is necessary that an ““independent reviewer”” be established to decide whether an ombudsman has made the right decision in not making a report to an approved regulator. The ombudsman does not have the discretion to decide, even though it appears that there may have been professional misconduct, not to report it to the relevant approved regulator: there is a duty on the ombudsman to make such a report whenever the ombudsman is of the opinion that there is, has been or may have been such misconduct. The reviewer would not be able to review a decision not to make such a report but would be reviewing whether the ombudsman could reasonably be of the opinion, on the information available, that there was nothing to suggest misconduct. The purpose would be to secure reconsideration of that opinion, and potentially the making of a report. But there is, by design, nothing in the Bill to prevent an individual complainant who feels that there has been misconduct of which the relevant regulator should be aware from raising the issue with the approved regulator directly or drawing this specifically to the attention of an ombudsman. The problem of an independent reviewer is that we would be adding an expensive and potentially cumbersome way of achieving much the same result. I hope that noble Lords are reassured that, because of the importance of reporting misconduct issues to approved regulators, there are various safeguards in place to ensure that ombudsmen honour their statutory duty. First, there is provision for a co-operative relationship with approved regulators in Clause 141. Secondly, it is envisaged that the OLC will follow the best practice recommended by the British and Irish Ombudsman Association of having mechanisms for internal quality assurance in place to deal with complaints about the service provided by the OLC. Thirdly, the operation of the ombudsmen scheme will be monitored by the OLC, through information and statistics collected through those internal quality assurance mechanisms. Ultimately, the OLC is accountable to the LSB, which will monitor the performance of the OLC. We think that we have captured what my noble friend seeks to achieve with an independent reviewer within a duty and responsibility that will fall to the ombudsman. On that basis, he may feel able to withdraw his amendment. On Amendment No. 137XA, Clause 140 allows an ombudsman, where he has reported a potential misconduct issue to an approved regulator, to require a report back on the action that has been taken. In certain circumstances, it will be very important that approved regulators report back to the OLC on that action. My noble friend’s amendment would require approved regulators to report back, with reasons for any action taken, in every case. I do not accept that that is necessary. The OLC is not intended to undertake a general oversight role in relation to approved regulators, although it will be able to report to the LSB any serious or persistent failures on the part of approved regulators. Oversight of the approved regulators and any necessary action will be provided by the LSB. As the clause stands, whether a report is necessary is a matter that is left to the ombudsman’s discretion. I think that this is right. To require a report in every case would be onerous and expensive and would increase the cost of the OLC and the administration of approved regulators, and those additional costs would ultimately increase the cost of legal services to consumers. So, while we accept that it is important that ombudsmen have the power to require a report, and the additional power to report to the LSB any serious or persistent failures, for the reasons that I have given I do not think that the amendment is necessary and I hope that it will be withdrawn.