HL Deb 30 April 1974 vol 351 cc18-33

3.10 p.m.

THE LORD CHANCELLOR

My Lords, I beg to move that this Bill be now read a second time. It has become something of a hardy perennial in your Lordships' House. Two previous versions of the Bill introduced on behalf of the Law Society were welcomed and passed by this House. The third version, introduced by the last Administration, was read a second time in another place. Its further passage was interrupted by the recent Dissolution. This Bill is, in substance, the same as that introduced by the previous Administration but it contains important changes to which I will refer in a moment. I believe that the changes improve the Bill, and I hope that once again the Bill will commend itself to the House.

My Lords, in the circumstances I do not propose to traverse at length ground which is already familiar to you, but I think it right to stress the particular importance of certain of the Bill's provisions. Foremost of these are provisions in Clauses 6 and 9. These remove the statutory maximum on the practising certificate fee payable by solicitors and on the annual contribution paid by them to the Compensation Fund. The fee has for some years stood at the maximum of £20 and the contribution at the maximum of £10. So long as these existing limits on the fee and contribution cannot be exceeded, the interests of the public may well be jeopardised.

The House will be familiar with the many services which the Law Society provides, directly and indirectly, to the public: directly, in making grants out of the Compensation Fund, in examining and certifying bills of costs, in dealing with all manner of questions and complaints about solicitors and in helping to ensure that the client is professionally advised; indirectly, in providing for the education and training for the profession, in making proposals for law reform and in enforcing and improving professional standards of conduct. In all these ways the Law Society's services benefit the public. Of course, the Society provides many services to the profession itself, and it is only right to recognise that the practising certificate fee is not wholly used directly for the public benefit and plays no part in financing the important services performed by the Law Society in the administration of legal aid. But if the revenue needed for the Society's services is not increased in the near future those services will be seriously affected, and it is not only the profession but the public itself which would suffer.

My Lords, I also commend Clause 8, Schedule 1 and Clause 10, which greatly strengthen the protection given to that, happily small, section of the public which suffers from the conduct of the occasional dishonest or defaulting solicitor. Clause 8 and Schedule 1 extend the Society's powers to take over and reorganise the practices of solicitors who, for some reason or another, cannot be relied upon to continue to handle clients' affairs; and Clause 10 confers wide powers upon the Society and the Master of the Rolls to regulate the insurance of solicitors against claims for professional negligence and other civil claims, and to ensure that in the interests of the public and of the profession solicitors are, so far as possible, adequately protected by insurance. Where the solicitor has caused loss by fraud or dishonesty, no insurance policy will cover him. But that kind of situation is covered by the Compensation Fund and by the provisions of Clause 9, and grants can be made from the Compensation Fund by the Society. Clauses 8, 9 and 10 together will, therefore, provide a sound protective system for the benefit of the lay client.

My Lords, in highlighting these few clauses I do not seek to minimise the value and importance of many other provisions of the Bill, to which the House has on previous occasions given its approval. I propose now to turn to those clauses which have not previously been before the House. Clause 2 contains provisions which will permit a scheme for the training of solicitors after their admission to the roll. It is likely that this will involve a vocational course, post-admission training under the supervision of a solicitor, and restrictions on practice during the period of post-admission training. The scheme could supplement or even replace the present system of service under articles. The Law Society proposed such a scheme in their evidence to the Ormrod Committee on Legal Education, and the Report of that Committee recommended its adoption.

The relative merits of a scheme of vocational training as against the existing system of service under articles are discussed in the Ormrod Report and are at present the subject of consultation within the profession itself, and I shall not deal with them here. The clause is an enabling one. I think it right that the Society should be given the opportunity to introduce something on the lines of this scheme, which would be made by way of regulations requiring my approval and that of the Lord Chief Justice and the Master of the Rolls.

My Lords, I come now to the important innovating Clauses 7 and 11, which are concerned with the machinery for dealing with complaints against solicitors. These clauses, which complement each other, both introduce lay membership into the complaints system. While Clause 11 introduces a lay element into the "adjudicatory" stage, Clause 7 introduces it at the investigatory stage as well. It is an important change.

Let me say at once that I do not question the integrity and thoroughness with which the Society handle the thousands of complaints which they receive every year; and I hope I may be forgiven for pointing out that a complaint is not the same as a justified complaint. But it is right to recognise, as the Law Society itself does, that there is some dissatisfaction with a system in which solicitors' conduct is investigated solely by solicitors and judged solely by solicitors. The previous Government announced in another place some positive proposals for introducing a lay element at the stage at which a complaint is investigated. This Government are in broad agreement with those proposals but we think it preferable that they should be given statutory recognition, and this is done by Clause 7.

Clause 7 enables me to appoint one or more non-lawyers, called "lay-observers". Their task will be to examine allegations by members of the public concerning the Law Society's treatment of complaints against solicitors. The purpose of the clause is to ensure that the Law Society's decisions can be examined by an authorised person independent both of the legal profession and of the complainant. The observer's independence of the Law Society and of the complainant will be assured by the fact that the power to appoint him will be mine, and his remuneration will come from public funds. The clause also enables me to give general directions about the lay observer's functions.

I think three matters are of particular importance in this context. First, the observer's task is to decide not the merits of the complaint against the solicitor, but the merits of the Law Society's treatment of it, and to ensure that justice is seen to be done and that the Society does not act as judge in its own cause. Secondly, I believe that a lay observer should be free to make recommendations to the Law Society; for example, that it should reconsider certain aspects of a case or obtain further information. Thirdly, I am minded to direct that the observer should make an annual report to me of his activities, and that this report should be published. I believe that the Law Society itself and the Government are at one in thinking that this clause will do much to create confidence in the machinery for dealing with complaints. Noble Lords will notice that the power of appointment in the Bill is discretionary, but I can give the House the assurance that I propose to launch what I hope will be an interesting and valuable initiative in lay participation.

My Lords, while Clause 7 concerns investigation of complaints, Clause 11 concerns their adjudication. This is done by the disciplinary committee which is an independent statutory tribunal appointed by the Master of the Rolls. Clause 11 recognises the fact and renames this body the "Solicitors Disciplinary Tribunal". But the real importance of this clause is in the provisions which alter the tribunal's composition, notably by the introduction of lay members.

The clause in its present form was introduced by the previous Government and has the full approval of the Law Society itself. Matters of professional conduct, of clients' accounts and so on, are in my view primarily for the profession to regulate and to decide, but I think it will be of great value to have the fresh approach of a layman on the tribunal which adjudicates on these questions. The solicitor members will form the majority—and I believe that that is sensible and right—but I am sure that the layman's presence will be a valuable and stimulating influence and a further reassurance to the public, particularly those who accept George Bernard Shaw's view that every profession is but a conspiracy against the laity. It is of course possible that sometimes the lay member may influence his solicitor colleagues towards leniency in a given case. The clause also extends the solicitor membership to include solicitors of ten years' standing: they need no longer be members or former members of the Law Society's Council.

The Bill does not apply to Scotland, but I have been asked by my right honourable friend the Secretary of State for Scotland to mention that when a suitable legislative opportunity arises he proposes to introduce arrangements similar to those which I have just outlined to your Lordships for lay participation in the consideration of complaints against solicitors in Scotland. This will be done by widening the membership of the statutory Solicitors Discipline (Scotland) Committee to include non-lawyers and to provide that a quorum of the Committee must include a lay member. The Lord President of the Court of Session has indicated his willingness to make these lay appointments. In addition, it is intended to appoint a complaints commissioner, who will also be a non-lawyer, to receive and consider complaints from any members of the public who may be dissatisfied with the way in which the Law Society of Scotland has dealt with their complaints. This appointment the Lord President is also willing to make. The cost of the new arrangements will be a charge on public funds. These proposals for Scotland have been framed following discussions with the Law Society of Scotland and they have the Society's full backing and approval.

My Lords, Clause 13 of the Bill puts it beyond doubt that the Law Society may disclose to the Director of Public Prosecutions information which they have obtained under their statutory powers to investigate a solicitor's accounts. The clause is a revised version of one which your Lordships have seen before. It is changed in one significant respect: it enables the relevant information to be passed to the Director for use in investigating the possible commission of an offence by the solicitor, not merely for use in connection with prosecution which the Director already contemplates. I believe that in its new form the clause confers additional protection to the public by removing any inhibitions which the Law Society may have in passing on information which might bring a criminal to justice.

My Lords, this Bill is in many respects complex. The draftsman had the formidable task of operating on legislation which derives very largely from the 19th century. It is not necessarily the worse for that, but it certainly adds to the complexity. In paving the way for the consolidation which I hope will follow hard on the heels of this Bill, he has found it necessary to rearrange and clarify many obscure provisions. This work will, I am sure, be of benefit when it comes to fruition in the Consolidation Bill in due course. My Lords, I beg to move.

Moved, That the Bill be now read 2a.—(The Lord Chancellor.)

3.25 p.m.

LORD HAILSHAM OF SAINT MARYLEBONE

My Lords, I do not propose to take up the time of the House discussing this Bill at any length because the noble and learned Lord who has now taken up the task which I demitted some months ago has explained the Bill very fully to the House, and because he began by saying that it is virtually the same Bill as the Master of the Rolls introduced twice before and I once. The noble and learned Lord on the Woolsack referred to it for that reason as a hardy perennial. Botanically, I should hardly think he was correct. It is more like a half hardy annual, but I hope it will now finally blossom and seed and that it will produce in the next generation a consolidated Bill in which the highly complicated law as it affects the solicitors' profession is finally reduced to a single and intelligible code. I wish the noble and learned Lord, in the task which I left behind for him to complete, better luck than I had in getting it on the Statute Book.

My Lords, I do not think the changes are of very great importance. I have forgotten the exact detail of where we had got to by the time the General Election took place, but my recollection is that I should have done exactly the same as the noble and learned Lord has done. The only difference that I can detect is that whereas I thought it was not particularly necessary or useful to introduce lay observers as part of the Bill but promised to do so by means of a scheme, the noble and learned Lord has put it in the Bill. I have nothing against that. Both the provisions, I am sorry to say, as regards the lay observers at the investigatory stage and at the adjudicatory stage I think are very largely cosmetic in their effect and in their value. Not that I am against cosmetics for those who like to use them, but the fact is that if the solicitors' profession were, to borrow a quotation from George Bernard Shaw which has already been made, "a conspiracy against the laity" then a couple of lay observers appointed by the Lord Chancellor would not defeat the conspiracy. But if it makes people happier to have it that way, by all means let us have it that way. The fact is that solicitors in that respect have nothing to hide and the presence of the laity on the two stages of the investigation will only go to demonstrate the fact that there is nothing to hide.

My Lords, looking back on the history of this Bill, I note that, apart from a number of essential but highly technical clauses which have been explained to the House more than once and which I shall not go into again, by far the most important innovation from the point of view of the general public is not in the machinery for investigating complaints but in the provision which provides for compulsory insurance against negligence.

There is a very great confusion on the part of the public as to what complaints against solicitors really involve. After very nearly four years as Lord Chancellor, I think I know what they involve. Many of them are either trivial or unfounded but the only ones which really go unsatisfied by the machinery are the very difficult cases of professional negligence. Complaints about solicitors from the public as a whole, when they reach the Lord Chancellor either directly or through Members of the House of Commons or this House, are mostly, so far as they are not illfounded, complaints about negligence. Alleged negligence is not a matter for the disciplinary machinery of any profession. This is a matter for the ordinary courts of laws and the remedy for negligence is damages, not striking a solicitor off the roll, warning him or fining him. The remedy for negligence, whether a doctor, a solicitor or a member of any other profession is involved, is damages; and those can be awarded only by a court and not by a disciplinary tribunal.

The great provision which I hope this Bill will introduce, and which was proposed when the Bill was introduced last as a Government Bill, is a scheme—and I hope that the noble and learned Lord will tell us within what time-scale it is likely to be available to the public—by which solicitors are in effect insured against negligence so that if there is an award of damages against them the client who has lost money by reason of professional negligence can be fully compensated. All the best solicitors' firms now insure against negligence despite the doubt, which I think is probably well founded, as to whether barristers can be made liable for negligence. My own professional chambers at the Bar are insured with a reputable concern against that possibility and I think that all professional people should insure in this way. The fact that this Bill will make it universal provides an important additional safeguard for the public.

The rest of the Bill is purely technical. Although much of it is necessary, for the reasons which I explained when speaking from another part of this Chamber, I do not think that there is much throbbing human interest about any of it. However, I congratulate the noble and learned Lord and, in so far as I can, I shall help him to get the Bill through—mainly by holding my peace!

3.32 p.m.

LORD DENNING

My Lords, I should like to thank the noble and learned Lord the Lord Chancellor for giving this Bill such immediate priority. I only hope, without wishing the Government too long a life, that at least they will remain long enough to see this Bill through to fruition. There is not much more that needs to be said upon the Bill, but I should like to mention just one small point concerning the computerisation of the roll of solicitors. When the Master of the Rolls started keeping it one hundred years ago it was in a long parchment roll with all the names inscribed upon it. Latterly the names have been kept in a big bound book, all in copper-plate handwriting, and it has been difficult to keep the 25,000 to 30,000 names in order, with all the interleaving that has to be done. Now, instead of being the Master of the Rolls, I am to be the "Keeper of the Computer". There is to a computer somewhere and a button has to be pressed somewhere in the Law Society. This will retrieve a page for a particular solicitor immediately it is required.

That perhaps is a small matter, but there is another matter which I think is of vital importance and very urgent: the increase in the practising fee payable by a solicitor on a practising certificate. It is on this fee that the existence and work of the Law Society depend. It has been limited for some years now. It is under my control, as Master of the Rolls, with the concurrence of the Lord Chancellor, and it has been limited to £20. But in these days of inflation that seemed to be far too small. We have not been able to keep pace with inflation in this, as in other matters. In this Bill that limit is to be removed I hope we shall be able to keep a check on it so that it is not too much; but it is vital that the fee should be increased so that the Society should be able to do all its important work concerning the discipline, education, training and the like of solicitors.

May I pass now to the particular point with which, as Master of the Rolls, I am concerned; that is, the discipline of solicitors. Hitherto we have had what is called the Discipline Committee, which the Master of the Rolls appoints from among the Council of the Law Society. People have thought the Discipline Committee was just a sub-committee of the Law Society itself, with the solicitors simply supporting one another. That was a misconception: the Committee has always been independent of the Law Society itself. To make that perfectly clear, the new provision is that it should be called the Solicitors Disciplinary Tribunal. But, further than that, there has been a feeling that in some way the solicitors, sitting in judgment on themselves, were inclined to favour their own profession. That again was a misconception. I have appeared before them and considered many of their cases. They are perhaps stricter than any others in attending to the discipline of solicitors, but as there has perhaps been some feeling that they have not been strict enough, this proposal, whereby there should be lay members of the tribunal, will, I hope, help to remove any fear of that. Indeed the lay member—incidentally, like the others, to be appointed by the Master of the Rolls—will be able to play his part and perhaps bring some common sense (though there is plenty there already) to bear on their deliberations. In addition, I shall be able to appoint such members from all ranks of solicitors instead of from the 50 or 60 members of the Council.

Then there is the innovation of the lay observer. As Master of the Rolls, I get a large number of complaints by individuals to the effect that the solicitor has not done this or that. Very often it is said, "I put this before the Law Society and still can get no satisfaction." This Bill provides machinery for the lay observer, independent of the Society, to be appointed by the Lord Chancellor, who can look into complaints where it is felt that the Society have not looked into them properly. That again, I hope, will give rise to more public confidence.

May I now touch on the point made by my noble and learned friend Lord Hailsham. So far as the general public is concerned, the anxiety often is not so much about dishonesty and matters of that kind with which the Discipline Committee deal, but with the negligence of a solicitor, which is not a matter of discipline at all. These cases, I am sorry to say, have increased mainly because the profession has been overworked and understaffed. Let me give your Lordships an illustration of a large group of cases which we have had in the last few years since a recent decision. They concern cases where a person has been injured or killed in a personal injury case or an accident. Lawyers are instructed, but unfortunately either the negotiations last for a long time or, because they are overworked, the case drags on. Three years may go by and they issue a writ; another year is taken to serve it. Then it may go to sleep. We have had many a case where people have been injured or killed in accidents and there is all this delay on the part of solicitors. We have struck out those actions; we have dismissed them for want of prosecution. You may think that that is unfair to the injured person, but in all those cases we say that we feel bound to strike them out in justice to the defendants. The injured plaintiff has his remedy against the solicitor who has been guilty of inexcusable and inordinate delay. It is those cases in which one wants to see the individuals compensated; and there are many cases of that kind. Most solicitors, I am glad to say, are insured; but some are not.

Therefore I welcome provisions of this Bill, whereby insurance will be provided for all against claims for civil negligence of such a kind or others such as I have described. The actual scheme has not been settled, but the Law Society will arrange things, as my noble and learned friend has said, in quite a short time, though there should be cover for the public not only for dishonesty but also for negligence.

I should like to mention two small matters. There is the question of occasions when the Law Society, in the course of investigating accounts, finds matters which suggest a criminal offence by a solicitor. Hitherto, there has been question as to whether these matters can be reported to the Director of Public Prosecutions because of the privilege which exists between a solicitor and his client. The Bill enables the Law Society to make a report whereby these cases can be taken up.

There is one other small matter. Hitherto, we have had to have special applications for people to be installed as commissioners of oaths. When solicitors were appointed there had to be a procedure, certificate, fees and so on. Under the Bill every solicitor will automatically be a commissioner for oaths without having to go through those procedures. That is only a small part of the range of matters dealt with by the Bill. I hope that the House will give it a Second Reading and will help it through as speedily as may be.

3.42 p.m.

LORD JANNER

My Lords, perhaps I ought to make the House aware of my personal interest in this matter, in that I happen to be a solicitor and one who believes that the profession, in view of the enormous trust which is placed in it and the vast volume of funds which pass through its hands, has really not only justified its existence but, in spite of some past defaulters, has rendered a service to the community which I feel that the public may not fully appreciate. I hope that the House will forgive me for putting it in that way, but I think very few people understand what happens in a solicitor's office. There persons expose their innermost thoughts to the solicitor and place in his hands funds the aggregate of which is so great that I doubt whether it can be calculated. Probably the solicitors' profession is entrusted with greater funds than any other organisation. In the circumstances, I hope the House will agree that the Law Society has for very many years given remarkable service to the community by keeping a very careful watch to ensure that the confidence of the public in the profession shall be maintained and that the profession shall render a service which I suggest is not only of value but is respected throughout the country.

I need hardly say that, having heard the noble and learned Lord the Lord Chancellor, his learned immediate predecessor and the Master of the Rolls, so fully agreeing on a measure, I doubt whether I or anybody else would have the audacity to attempt to disagree; certainly on this occasion, in a humble way, I add my few words of commendation to those expressed by them. There is one exception I wish to make, and I know that the noble and learned Lord, Lord Denning, will forgive me for doing so. I disagreed with him in his hope that the life of this Government will last just sufficiently long, and I gathered no longer, to enable the Bill to be passed. I hope, on the contrary, that we shall make our endeavour in quite another way and that we shall, as a Government, have a very long and healthy existence, and that the Bill will go through at the commencement of that existence to show that this is a reasonable Government and one which understands what is necessary for the country.

I think it important that people should know that the Law Society originally made these proposals. This is a measure which comes from the Law Society itself and, if it is carefully studied, it will be seen that it leans over backwards to protect the public. Apart from some items which have been introduced in the course of the discussions, the Law Society is suggesting greater discipline for solicitors, stronger controls, and reforms so that the keeping of strict accounts should be ensured as far as possible—that is to an even greater extent than previously, because they have been quite exacting in the past—and it even introduces new measures relating to compensation for clients when solicitors have been negligent.

As a practising solicitor, I know that it is not very easy, nor is it always possible, for those practising the profession to keep as close a watch as they should on what is happening in an office; it may be that a clerk will overlook a date, with the result that damage is sustained by the client. I doubt whether in the vast majority of cases alleging negligence the solicitors concerned were themselves aware that matter was being neglected in their office. Of course they want to protect their clients: none of them wants any client to suffer damage in consequence of neglect which has taken place in the office. However, in a busy office it is easy for some matters to be overlooked, and I would ask the public to understand that there is involved an enormous amount of detailed work, some of which, if it is not done, involves the possibility of a solicitor being called upon to pay damages.

So the Law Society has from time to time sought legislation which, one might say from the point of view of the practising solicitor, places on him greater hardship or more onerous duties than before. In the main that is the type of legislation which has been asked for by the Law Society. Sometimes lawyers are not very happy that they are called upon to do more by their own Society than they think necessary for the purpose of protecting the client. Be that as it may, the Society regards its duty to be one not only to the solicitor himself but to the public. I want to say this because so often the layman accuses the profession, not knowing that the accusation is unfounded.

Some of us who have been Members of the other place know how people used to go to the Society. A person felt that he lost his case because the lawyer had been negligent. If a person wins he does not mind, but if he believes he has a good case and loses—and, sometimes, even if he does not believe it—he blames the lawyer. He says that the lawyer has been negligent or has not done the right thing. A large number of people have submitted their complaints to the Law Society, and a practising lawyer like myself realises at once that most of the complaints are not really justifiable. The Law Society did its best, and I believe still does its best, to investigate all these cases. A part of this Bill was not in the original Bill.

Clauses Nos. 7 and 11 are welcomed by the Law Society. I personally do not think that they will have much effect, and the noble and learned Lord, Lord Hailsham of Saint Marylebone, took the same view. Their only possible effect is to make people feel that lay people who have joined the tribunals have really done a good job. But I doubt very much whether people who are disgruntled, and whom the new tribunal finds are not entitled to be disgruntled, will be over-happy about them. However, the public as a whole will understand the situation. I think that this is a good thing in order to assuage any anxieties on the part of the public.

My Lords, I do not want to detain the House any longer. We have had this kind of Bill before us in somewhat different forms and now the terms have been varied but not to a great extent. There was an unjustifiable obstruction which was easily brought into effect in our Parliament because of our democratic views. This can delay important legislation. A lot of this legislation is imminently necessary and should have been brought in when the first Bill was introduced. But of course we have some people who have the happy knack of knowing how to obstruct to gain their point. They effectively obstructed the Bill, and have got something important out of it—Clauses Nos. 7 and 11—and I hope they will now be perfectly satisfied. In my view, and in the view of the majority of the profession and, I hope, of laymen, this is a good Bill and it should be brought to fruition at an early stage.

3.54 p.m.

THE LORD CHANCELLOR

My Lords, I am grateful to the three noble Lords who have spoken in support of this Bill. I am grateful, if I may say so, to the Master of the Rolls for his somewhat qualified wishes of longevity to the present Government. It is reassuring that the Bill in its present form has the support of a former Lord Chancellor, the Master of the Rolls and of a distinguished solicitor who has been in practice for so many years. I am particularly pleased with the welcome that has been given to the introduction of the lay element in the investigating and adjudicatory work of the Law Society and the Disciplinary Committee. To describe it as merely cosmetic is doing less than justice to a provision which many articulate members of the public certainly asked for. Many who have had difficulties with the Law Society have demanded this, and this is a provision which certainly has been asked for very eloquently in another place, I hope and believe that the contribution of the layman in these proceedings will add something to the public confidence in the provisions that are available for the protection of the public, which depends to a very large degree upon the integrity and competence of solicitors and barristers in regard to critical experiences and moments in their affairs and lives. With regard to the actual functions of the lay observer, it is misleading to suggest that he will be reexamining and looking into the complaint itself upon which the Law Society will have conducted its investigation. Rather his task is to be the watchdog over the way in which the Law Society has done the job. It is not contemplated that he should take over the Society's functions of investigation. Subject to that, as I say, I am glad that the proposal has survived the critical examination that it has received.

So far as the important insurance provisions of the Bill are concerned, I agree with the noble and learned Lord, Lord Hailsham of Saint Marylebone, that this is the most important aspect of protection of the public as to whether, when things go wrong, they can hope for monetary protection and some safeguard which will make up for their losses. The Law Society have not given any indication to me as to when they can introduce compulsory insurance. They certainly are hoping to be able to produce a master plan to cover the field generally. I know that they appreciate the importance of the matter, as indeed I do, and I will certainly communicate the views that have been expressed in the House of the importance of speed if and when this Bill takes its course through Parliament.

There has been a reference to the provisions in the Bill for computerisation, and I was delighted to hear the Master of the Rolls describing himself now as the Master of Computers which will transfer the association of his title from the bakery to the engineering business, if I may say so. The clause itself has no mischief or danger in it. It is obviously a sensible means of keeping the rolls and I am glad that it has been accepted. I will certainly see that we will do our utmost as a Government to hasten the course of the Bill through Parliament, though I can give no undertakings from this place of control over what may happen in another place.

On Question, Bill read 2a, and committed to a Committee of the whole House.