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Legal Services Bill [HL]

moved Amendment No. 148A: 148A:Clause 169 , page 88, line 20, at end insert— ““( ) The duty to comply with regulatory arrangements overrides any obligations which a person may have, including to shareholders (otherwise than under criminal law), if those obligations are inconsistent with the duty to comply with the regulatory arrangements.”” The noble Lord said: The purpose of this amendment is to make it explicit that, for all those within the regulatory sector, the duty to comply with regulatory arrangements overrides any other obligations that might arise other than those imposed by the criminal law. That, of course, is accepted by the overwhelming proportion of lawyers, who are accustomed to the paramount importance of regulation. However, this amendment becomes important because of the introduction under the Bill of widespread external ownership of legal firms by non-legal commercial bodies. Future alternative business structures may often include managers who enter from business backgrounds and who have no expertise in the legal field. The amendment is designed to put it beyond doubt that the duty to comply with regulatory arrangements is paramount particularly in comparison with duties to shareholders. It would be wholly unacceptable for anyone involved in an ABS firm to tailor the advice given to a client or adjust the handling of a client’s case in any way in the purported interest of shareholders if to do so were to involve a failure to comply with regulatory arrangements. The Government may consider that the amendment is unnecessary because the effect is already achieved in the Bill. Nevertheless, it is highly desirable that it should be stated explicitly in the Bill so that there is no possible room for doubt about Parliament’s intention and so that all those operating under the new arrangements are fully aware of where their primary responsibilities lie. I beg to move.