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Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (No. 2) Order 2011

My Lords, for the convenience of the Committee I intend to speak to the two orders together. On the appeals order, noble Lords may be aware that the licensing regime for alternative business structures contained in the Legal Services Act 2007 became operational on 6 October. In relation to that regime, the Law Society has had its application to become a licensing authority approved by the Legal Services Board. In accordance with the 2007 Act, before the Law Society can be designated as a licensing authority by order of the Lord Chancellor, it is necessary for there to be an appellate body with the power to hear appeals against its decisions made in relation to alternative business structures. The purpose of this order is to modify the functions of the Solicitors Disciplinary Tribunal—known as the SDT—so that it can perform that function, subject to its designation as a licensing authority. As required by the 2007 Act, this order is made on the recommendation of the Legal Services Board following wide consultation and with the consent of the SDT and the Law Society. In summary, the order makes provision for the SDT to hear and determine: decisions which are appealable under Part 5 of the 2007 Act and under the Law Society’s own licensing rules; the orders which the SDT may make, where that is not already provided by the Act itself; the orders for costs in relation to those appeals; and onward appeals from the SDT to the High Court. The set-up and operating costs of this SDT appeal mechanism will be funded by the Law Society and met by the licence fee payable by licensed bodies. The Law Society has elected to use the SDT rather than the First-tier Tribunal as its appellate body because it wanted a consistent approach to appeals by all the firms which it regulates—both alternative business structures and traditional firms—and because the SDT has a wider discretion than the First-tier Tribunal to award costs. During a previous debate in the summer, noble Lords expressed concern about different licensing authorities using different appellate bodies to determine appeals from their licensing decisions. I think that point was made by the noble Baroness, Lady Hayter. I can see merit in using one appellate body for all appeals relating to alternative business structures, and that has also been the Legal Services Board’s preference. However, the structure of the 2007 Act means that the Legal Services Board can only recommend appeal routes to which the prospective licensing authority and the proposed appeal body consent. Therefore, licensing authorities cannot be forced to use a particular appeal route. The Legal Services Board made its recommendation on the Law Society’s appeal route to the Lord Chancellor in August, and this order has been brought before the Committee at the earliest opportunity. As I have already said, the Legal Services Board originally consulted on a proposal that there should be a single appellate body to hear decisions of all licensing authorities and proposed the First-tier Tribunal for that role. However, the Law Society did not consent to that proposal and elected to use the SDT as its appeal body. The consequences of this decision impacted on the timing of the Law Society’s designation as a licensing authority and were explained to the parties concerned at the time. Following the Law Society’s decision a new draft order was prepared and, in accordance with the statutory requirement, the consultation on the order was undertaken by the Legal Services Board. That consultation was completed in June and the order was finalised shortly after, but not in time for consideration by this House before the Summer Recess. Without the appeal arrangements being in place, it was not possible to designate the Law Society before the commencement of the alternative business structures regime in October. If approved, the order will provide the individuals and businesses affected by the Law Society’s licensing decisions with an opportunity to challenge these decisions through an independent and impartial appellate body. I will now turn to the exceptions order. This is the second exceptions order to be laid this year. The purpose of this amendment is to extend the exceptions to the Rehabilitation of Offenders Act 1974 to include non-authorised persons with a restricted interest in alternative business structures—a point originally raised when we last discussed this by—