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Legal Services Bill [HL]

I know that my noble friend is not planning to introduce a stand part debate on Clause 154, but the clause is critical to the entire scheme in Part 6. It underlines the distinction in the new system between the role of the approved regulators and the role of the Office for Legal Complaints and its ombudsman scheme. Under the new system, the imposition of disciplinary sanctions remains with the approved regulators; the awarding of redress is for the OLC. Without the clause, that distinction could not be maintained. We cannot create exceptions to Clause 154 lightly. We do not want to undermine the role of the Office for Legal Complaints and we have to consider very carefully whether any exception that might be made would do so. I know that Amendment No. 149ZA was tabled on behalf of the Law Society, which feels that it needs a broad rule-making power to provide in its conduct rules that in certain circumstances solicitors will have to review their files and, where appropriate, provide proactive restitution or even compensation to consumers. The intention is that in situations of widespread wrongdoing the clients affected, as my noble friend said, can be identified as early as possible and restitution made by the solicitor in question. The Government appreciate the intention behind the proposals to give the Law Society, in particular, the tools to respond quickly and effectively to situations where wrongdoing has been discovered that may have impacted on a large number of clients. We want to do what we can to enable the Law Society and other approved regulators to take a more proactive approach where appropriate when consumers are being adversely affected. In our view, however, Amendment No. 149ZF is drafted very widely, and we would not be able to accept such a wide rule-making power. The amendment as drafted would allow an approved regulator—the Law Society, in this case—to award redress, despite the provisions in the Bill preventing approved regulators from doing so. That would not be acceptable; it would undermine the role of the new OLC. That said, we are willing to consider what powers less than awarding redress might be acceptable—for example, the power to order authorised persons to go through solicitors’ files, identify the names of clients who have been treated wrongly and pay back any money improperly being held if appropriate. Before the detail of any exception to Clause 154 could be agreed, it is necessary to agree exactly what sort of exception is being sought and considered. We are looking at this issue and I am hopeful that we can bring something back on it. We will obviously need to talk to the Law Society, to my noble friend and to others who are interested, but I believe that, short of redress, and therefore short of interfering with the role of the OLC, we will be able to achieve something that will deal with the issue. I agree with my noble friend that that is very important, and I agree with what my noble friend Lord Lofthouse said at Second Reading. I hope that we can do that to everyone’s satisfaction, and that on that basis my noble friend feels able to withdraw her amendment.