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

My Lords, I would like to speak on the first of the two orders. I no longer have to formally declare an interest as I no longer chair the Legal Services Consumer Panel, but it was in that guise that I had such an interest in the implementation of this part of the Legal Services Act and the availability of the alternative business structure—a sort of one-stop-shop—which has been very strongly supported by consumers of legal services. As the Minister said, this order is part of the architecture for setting up the alternative business structure licensing system, and it will allow the SRA to become a licensing authority by the end of this year—sadly, not by 6 October as was originally hoped, but nevertheless within 2011. As has been outlined, the order deals with appeals by applicants who want to be an ABS against the granting of a licence, which is effectively the permit to act as a recognised ABS, by the SRA’s licensing arm. Similar appeals about, for example, whether an individual is fit and proper to own an ABS, or to be the head of legal practice or a head of finance administration, and decisions to impose licensing conditions or the imposition of a financial penalty would also be heard. Under the system being put into place by this order, as the noble Lord, Lord McNally, has said, the existing SDT, although slightly adapted, will hear such cases rather than the First-tier Tribunal, which will be used by the other licensing authority, the Council of Licensed Conveyancers. As has been mentioned at an earlier stage, we regret perhaps that there is not a single body dealing with all such appeals in order that a real body of expertise and precedent can be built up, which would give certainty and consistency to this aspect of the new delivery service. As regards the new service, I know that we do not often congratulate civil servants but the MoJ and the Legal Services Board have worked immensely hard to get all this quite complicated machinery into place. They should be congratulated. As part of that, it is disappointing that the only reason—I know that the Minister gave two—that the Law Society via its SRA arm has insisted on a separate route rather than the First-tier Tribunal is because of the tribunal’s own rules about awarding costs. At the moment the SDT, when considering solicitor conduct cases, has the power to award costs to be paid by the losing to the winning side. Therefore, the SRA’s costs are always met. Under the new process, having gone to the tribunal, the tribunal would hear not the case brought by the SRA but an appeal against the SRA decision. Thus, as the tribunals do not generally have the power to award costs unless it is a case with absolutely no merit, the SRA would have to meet its own costs. I fear that not using the First-tier Tribunal is the reason for this separate order today. I do not think that it is in the interests of business or consumers to understand the rules as they develop. It is also probably not in the interests of the Government or the LSB, which needs to watch carefully over this new system. It is quite a risk to set up something like alternative business structures. The MoJ and the LSB will need to look over the new system of legal service provision and how it is bedding down. It would have helped to have a single appeals body regardless of which front-line regulator was handling the case. However, the rules that the SDT will apply are to be welcomed. They are virtually the same as those in place for the First-tier Tribunal, which will help with consistency in the short term and perhaps allow for adjudications to be combined at a later date. With those comments, I certainly support the order.