HC Deb 22 May 1974 vol 874 cc545-56

Order for Second Reading read.

11.31 p.m.

The Solicitor-General (Mr. Peter Archer)

I beg to move, That the Bill be now read a Second time.

I propose to make this a brief contribution, the House may be relieved to hear, because former editions of the Bill have been debated once in this House and twice in another place. The Bill was itself explained last month in another place by my right hon. and noble Friend the Lord Chancellor, and it was debated there.

But I hope that brevity on my part will not be taken as a reflection on the importance of the Bill. It is a Bill about the relationship between the solicitors' profession and the public, a subject which is increasing in importance not only for solicitors, but for ordinary people, our constituents, not given to reading parliamentary proceedings, who do not always have access to knowledgeable friends and relations and who are not always skilled in arguing their case. Unless we establish not only the right of access to solicitors, but a readiness on the part of the public to avail themselves of that access, any rights which Parliament may confer on the little guy will not be effective, because he will be unable to assert his rights.

I believe that the standard of service which the public receives from solicitors is in general very high. I doubt whether there is any country where the standard is higher. What is needed is to persuade ordinary people to approach solicitors with a high degree of confidence—and the legal profession, like every other, from the Twelve Apostles onwards, has its regrettable exceptions. Unless it can be seen to deal with them effectively, any degree of confidence will be destroyed for the good along with the bad.

The Bill relates to a number of matters which I shall not seek to itemise. Two groups of provisions are concerned with consumer protection. The first concerns redress to the public for shortcomings of solicitors arising from deliberate misconduct or dishonesty or something of that kind, and, secondly, those arising from negligence. It is necessary to differentiate very clearly between them, and I turn first to misconduct and dishonesty.

The solicitors' profession has long been concerned that in the small number of cases where that arises, there should be adequate protection and, where necessary, adequate redress and compensation. Clause 11 is concerned with adjudication on disciplinary matters. Until now, this has been conducted by the Disciplinary Committee, established under Section 46 of the Solicitors Act 1957. Its members are appointed by the Master of the Rolls from members of the Council of the Law Society and such former members of the Council as are practising solicitors.

The noble Lord the Master of the Rolls recently said in another place that the Committee has been mistakenly thought of as a sub-committee of the Law Society. Clause 11 provides that it shall be replaced by a tribunal which is seen to be independent of the Law Society and whose solicitor members may be drawn from outside the Council of the Law Society, and it provides that lay members may be included in its composition.

Clause 7 relates to the manner in which the Law Society handles complaints by members of the public against solicitors. One step which they may ultimately take is to refer complaints to the Disciplinary Committee, which, if the Bill is passed, will be the Disciplinary Tribunal, or advise the complainant of his right to do so. First, however, the Law Society must investigate the complaint through its Professional Purposes Committee, and it is thought important that the public should have some right to examine the investigatory procedure.

Clause 7 provides that the Lord Chancellor may appoint one or more lay members to examine, not the substance of the complaint, but the manner in which the Law Society investigates it. This is not a reflection on the way in which complaints have been handled. Indeed, the Law Society has judged its members with a jealous regard for professional standards. It is simply a recognition that the public are entitled to satisfy themselves about it.

Clause 8 and Schedule 1 substantially extend the powers of the Law Society to take over and reorganise the practice of any solicitor who cannot safely be relied upon to continue the handling of his clients' affairs.

Clause 9 extends the existing powers of the Law Society to make grants to anyone who sustains loss in consequence of dishonesty on the part of a solicitor or his employee. Happily it is not often that the occasion arises, but when it does the victim might suffer quite substantial loss unless this provision existed. The grants are made from the Law Society's compensation fund, which is maintained by an annual contribution paid to the society by practising solicitors. At present the annual contribution is subject to a ceiling of £10. Clause 9 removes that ceiling and it does so to protect the fund from the danger of falling short of the calls upon it.

All these provisions, therefore, relate to difficulties encountered by the public in consequence of misconduct, dishonesty or something similar. In many cases, in addition to the disciplinary procedures, the injured party will have a civil claim against the solicitor for damages, but the majority of complaints giving rise to civil liability arise from negligence. The question whether a solicitor has on a particular occasion fallen short of the standard of care which the law requires, and which the public are entitled to expect, is one for the courts.

Quite properly, a solicitor is responsible in law for lapses in care by members of his staff. There are instances when a solicitor whose normal standards are of the highest has on a particular occasion overlooked a specific matter or failed adequately to supervise a member of his staff. Anyone may make an isolated mistake, and we may all have sympathy for the solicitor concerned, but equally it is right between him and the client who suffers that the client should have redress in the courts.

The courts have shown that they are competent to decide what are the appropriate standards but the problem sometimes arises when a solicitor is unable to satisfy a judgment for damages and he is not adequately insured. In those circumstances members of the public are liable to suffer. Clause 10 therefore con- fers on the Law Society wider powers, by selection from a number of possible methods, to regulate the provision for insurance made by solicitors against such claims. All these provisions taken together form an improved protection for the public against the occasional failings of solicitors.

There is one other matter which I should mention. Section 1 of the Solicitors Act 1957 provides that a person shall not be qualified to act as a solicitor until, among other things, he has in force a practising certificate issued by the Law Society. Section 11 of that Act provides that an annual fee shall be payable to the Law Society for the issue of that certificate. It requires the money received to be used for the Law Society's purposes. Those purposes are sanctioned by the Society's charter and by statute. They include education, discipline, the examination of accounts, suggestions for law reform and similar activities. Section 11, as amended, limits the fee for a practising certificate to £20. Clause 6 of the Bill removes that maximum. It seeks to do so because the Law Society is subject no less than the rest of us to the effects of inflation and it cannot discharge its obligations unless these fees can be increased. The clause continues the requirement that the fee should be determined by the Master of the Rolls with the concurrence of the Lord Chancellor and the Lord Chief Justice.

There may be other matters which hon. Members wish to raise. For the moment it should suffice to say that this is an important stage in the dialogue between the legal profession and the public. Some of my hon. Friends, particularly my hon. Friend the Member for Nottingham, West (Mr. English), participated in that dialogue during earlier versions of the Bill and certain of its provisions are a consequence of their suggestions. I believe that a discussion of this kind is to be welcomed. I do not believe that the legal profession has anything to gain by concealing its conduct from the public, and I am quite sure that it has no wish to do so. In that belief I commend the Bill to the House.

Sir Michael Havers (Wimbledon)

The Bill is familiar ground for me, since I moved the Second Reading of the previous edition of it which was similar to the measure now before us. It is the fourth time the Bill has come before the House in the last two years. It appeared twice as a Private Member's Bill, being blocked on each occasion on Second Reading. It was taken over by the last Government but fell with the Dissolution. We wish it will this time and hope it will have a speedy conclusion because we understand that the Law Society's funds are rapidly running out, and with its responsibilities it is important for the Bill to become law so that the Society may increase its fees.

In another place the Lord Chancellor said that on Clause 7 he had it in mind that the lay observer should make an annual report of his activities to the Lord Chancellor, and that the report should be published. The Opposition welcome that because it will enable everybody to see that justice is being done under this entirely new provision about the lay observer.

11.42 p.m.

Mr. Geoffrey Pattie (Chertsey and Walton)

I am a barrister of the non-practising variety. When I was being trained in the law with the prospect of becoming a barrister I was told to keep a great distance from solicitors. I therefore have a probably greater than usual tendency to avoid interfering with any limits or proceedings that a body like the Law Society might wish to make. I have, however, received several representations from members of the legal profession as a result of which I have been reading certain publications like the Solicitors' Journal. These representations have questioned the desirability of having a limit as set out in Clause 6.

The body of opinion to which I have referred suggests that the Law Society no longer exists to look after the interests of its members, as it was originally set up to do, but that it has become something of a quasi-Governmental body spawning committees on all sorts of matters, many of which many solicitors feel it is not worth the society considering. Also, unlike any other society it does not depend totally on subscriptions or donations but on what some describe as the forced levy which is exacted from solicitors for the practising certificate. According to the Solicitors' Journal of 3rd May this certificate is one of the requirements of Section 1 of the Solicitors Act 1957 which says: No person shall be qualified to act as a solicitor unless—

  1. (a) he has been admitted as a solicitor; and
  2. (b) his name is for the time being on the roll; and
  3. (c) he has in force a certificate issued by the Society … (in this Act referred to as a "practising certificate") …".
The problem about the certificate is that it would appear to be vital to a solicitor. On closer examination, however, it seems that all the solicitor has to do is fill in the appropriate form, send £20 and receive the certificate for a further year. The people who have made representations to me claim that the certificate serves no useful purpose. In 1972-73, however, it produced £548,000 for the Law Society, a year in which there was a £90,000 surplus which was transferred to the accumulated fund to raise that fund to more than £1 million.

The levy goes back to the last century. It is therefore decently venerable. There was a time when the Law Society was reckoned to be responsible for legal training and education. It can now be argued that it no longer has that as a prime requirement, because the State is now meeting many of those costs.

In 1932 the levy was £1. It is now £20, which is quite a difference, even allowing for the ravages of inflation, and it is proposed in Clause 6 that there should be no further limit. We are told in the clause that the Master of the Rolls, the Lord Chancellor and the Lord Chief Justice will in future determine the figure. When I was called to the Bar those extremely distinguished and illustrious gentlemen were all members of the Bar, and I do not think things have changed in the 10 intervening years. I do not immediately see what locus they have, what jurisdiction they have over the affairs of solicitors.

It has always been a practice in the legal profession to maintain a decent separation. When I went to my Inn of Court first, I was told that I could bring people in as guests at lunchtime, provided they were decently attired and were not women or solicitors. They were obviously a rather low form of life. Therefore, I wonder why those three legal luminaries are to decide the limit.

Obviously, the Law Society is not exempt from inflation, as none of us are, but would not it be possible to institute a fresh limit, of £50 or whatever it may be, rather than have no limit? It is this question that is worrying those people who are writing articles in the Solicitors' Journal. Alternatively, would not it be possible for the Law Society to arrive at its new limit in, say, a general meeting rather than leaving it to the three gentlemen I have mentioned?

11.47 p.m.

Mr. Edward Lyons (Bradford, West)

There is an institution known as the commissioner for oaths. Under Clause 17 we shall see the demise of the commissioner for oaths as we have known him. That is a useful, if small, reform. It was always an irritation that solicitors who required another solicitor to witness an oath had to find someone of at least five years' standing as a solicitor. Sometimes that was a time-consuming operation.

It seems odd that a man is not fit to do the job in his fourth year after call but is perfectly fit a year or so later. Clause 17 says that in future all solicitors will have the powers conferred on a commissioner for oaths from the moment they qualify. That helps to make the law more sensible and to make the business of solicitors seem more logical.

The Bill contains a number of useful, if small, amendments to the existing practice and law, which have the effect of making solicitors a little more accountable to the public and making their work more intelligible to the public.

Therefore, I welcome the Bill and hope that before the next Dissolution it will be passed.

11.50 p.m.

Mr. Michael English (Nottingham, West)

Oddly enough I, too, welcome the Bill. Perhaps that is a little strange in the sense that my hon. Friends the Members for Erith and Crayford (Mr. Well-beloved) and Southampton, Itchen (Mr. Mitchell) and I have had a rather more than average measure of success in preventing this measure's predecessors being passed through the House. Some harsh words were said about us in another place by those who were Ministers in a previous Government. That is all the more unjustifiable when the result of our action has been substantially to alter previous measures so as to protect the consumer. The client who believes that he does not have a crooked solicitor but a solicitor who, as all humanity is prone to do on occasions, has made a mistake which has cost the client money now has some protection.

We are grateful to the Government for finally including in the relevant clause the lay observer. The principle of the lay observer was agreed at the time of the Bill's immediate predecessor but it is much better in statutory form, especially if this provision is to be financed by the Exchequer. Lay observers cannot merely be tucked into the Lord Chancellor's staff. If that were done somebody might come along with the pruning mechanism of the Treasury and ask, "Why are thess people here?" and then take them away. If lay observers are entrenched permanently in statute form that cannot happen.

I have some Committee points to make with which I shall not burden the House now. After three years and four Bills I am glad that we have finally arrived at a measure of agreement between the profession and its clients.

11.53 p.m.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

I think that I am the only solicitor who has spoken so far in this debate. I join in welcoming the Bill. I congratulate my hon. Friends the Members for Nottingham, West (Mr. English) and Erith and Crayford (Mr. Wellbeloved) on their actions which have resulted in a substantial improvement to the Bill.

In introducing the Bill I think that my hon. and learned Friend the Solicitor-General was over-kind to my profession. I do not accept that it is a profession which is much above the ordinary standards of commercial organisations. Most solicitors are in business for the money. The vast majority make their money honourably, but an excessive amount of pretension is put forward by the profession when it is protecting its interests. I was ashamed to hear a representative of the Executive of the British Legal Association at its conference last week purportedly seeking to advance the interest of the profession by attacking the work that is done by the neighbourhood law centres. Such centres serve the public in a way which I regret to say that most of my colleagues in the profession do not match.

The Bill is useful in most respects. My only reservation is that I am not very happy about the provision which extends the Law Society's power over the training and education of solicitors. The Law Society has always exercised such power but I am disturbed by the fact that it is likely that in future a law degree will be required before a person will be allowed to practise in the legal profession. I think that it would be more desirable if more lawyers had training, for example, in sociology, psychology, criminology or other subjects and not only in law.

With that qualification, and bearing in mind the changes that have been achieved, I welcome the Bill. I take up the point made by the hon. Member for Chertsey and Walton (Mr. Pattie). He seems to be concerned that the Law Society is acting rather more as a department of Government than as a trade association. I do not wish the Law Society to act as a trade association. I certainly do not complain that I am paying £20 a year as a contribution towards the Law Society fund to protect the public against defaulting solicitors if this is the amount needed to give adequate cover to those who place their trust in the profession.

During the previous debate I was surprised at the suggestion by the hon. and learned Member for Wimbledon (Sir M. Havers) that it should be up to individuals to decide whether a pecuniary interest of a Member was of a kind that it ought to be registered. That should be decided by an objective test. Equally, it is undesirable that solicitors should decide how much they should lay aside in case they or their colleagues defraud their clients. That is for another body to determine, and the Bill makes provision for that.

No doubt as one of the Secretaries of the Solicitors' Group in the House, I shall be extremely unpopular for making the remarks I have made. It is desirable that a little more candour should be used when speaking about the profession. For the most part, we are in business for commercial purposes. We do a useful and honourable job and make a decent living out of it. Some make a better living than others, and some do a more useful job than others, but we do not advance the interests of the profession by pretending to be doing more than we are doing.

The Bill is useful. It is very much better as a consequence of what has been achieved in previous debates. I do, however, find it a little odd that the Solicitor-General, who is a barrister, should introduce the Bill, and that the response should come from a former Solicitor-General who is also a barrister. There are certain matters of which my profession has unique experience, and dealing with solocitors is one of them.

Mr. English

The Leader of the House and I are the only two people with a law degree who are neither solicitors nor barristers.

Mr. Douglas-Mann

I am not sure whether to commiserate with or congratulate my hon. Friend.

For all the denigration I may have expressed of the solicitor's profession, it is regrettable that my side of the legal profession is not represented among the Law Officers. Our experience of direct contact with clients and their problems gives us some insight which is not available to barristers, and the legal work of government might benefit from drawing more on that experience.

The Bill will be a help both to the profession and to the public and I join with others in welcoming it.

11.58 p.m.

The Solicitor-General

With the leave of the House, I will briefly reply to the points which have been made in the debate, the importance and interest of which is certainly not reflected in its brevity. I plead guilty to not being a solicitor. The House may think that to that extent I do not require to declare an interest.

To reply to the matter raised by the hon. Member for Chertsey and Walton (Mr. Pattie), it is true that a short time ago there was a surplus showing on the Law Society's accounts. Unhappily, that surplus is rapidly running out, and the Law Society would shortly be in serious financial difficulties unless there were an increase in fees. The possibility of an increase to a specified figure has been considered, but the history of the Bill provides the answer to that argument. If when the time came to increase that figure, we considered the possibility of introducing a Bill which might require four attempts before it reached the statute book, we would be in difficulty.

In times of inevitable inflation perhaps it is best to rely upon the common sense of those concerned within the profession, and of the judges.

In relation to the division of the obligations of the Law Society between the two sources of income, it is true that income from fees for practising certificates was running at about £548,000 a year, and income from membership contributions at about £200,000 a year. The Law Society has tried as honestly as it can appropriately to apportion its expenditure from those two sources. Obviously, club facilities at Law Society premises should be discharged out of income from membership subscriptions, and that the Law Society attempts to do. Matters of professional conduct and discipline ought to be paid for by the profession as a whole, and this is largely discharged from the fees for practising certificates.

There are other matters of debate, as to the source from which a particular item of expenditure should be discharged, and no doubt the Law Society would be open to representations. It is a fair point to make on its behalf that the administration of obligations which should properly fall on the profession as a whole is carried out geographically from the Society's hall, which is thus a charge on the members and no one else, so to that extent they are subsidising the remainder of the profession.

In considering whether the level of fees should be left to the Society itself, or whether there should be some control from outside professions, my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) was honest enough to say that there is argument in the profession whether, in the interest of the public, there should be some control of the level of contributions which the profession makes from outside the profession itself. I have not heard it suggested that the three distinguished judges who exercise that control have been in any way negligent in the past. I am sure that that was not being suggested

.My hon. and learned Friend the Member for Bradford, West (Mr. Lyons) pointed out what, in the interests of brevity, I had not mentioned—that the provisions for the appointment of commissioners for oaths will no longer apply, so that the unhappy member of the public who had to call at one solicitor's office after another until he could find one who was a commissioner for oaths will no longer have to do so. Most of us will applaud that.

My hon. Friend the Member for Nottingham, West (Mr. English) raised the question whether the cost of the lay members both of the tribunal and of those who are supervising the disciplinary functions of the Society would be discharged out of public funds. The answer is, "Yes"—and to a great extent this is an achievement for which he and others can take credit.

My hon. Friend the Member for Mitcham and Morden will forgive me if I do not enter into statistical arguments as to the amount of default in the solicitors' profession. No one would suggest that the whole of the activities of solicitors are altruistic. Like the rest of us, they have an eye to their income. But, equally, I am sure my hon. Friend was not suggesting that there is a higher proportion either of negligent or dishonest solicitors than among the practitioners of other professions.

Mr. Douglas-Mann


Mr. Graham Page (Crosby)

Of course, they are still officers of the court, and to that extent owe a debt to the public which I think they discharge very well. As officers of the court, they are carrying out certain Government duties as well as duty to their clients.

The Solicitor-General

Certainly. I am sure we would all agree with the way the right hon. Gentleman has expressed it. For that reason they are liable to discipline both by the courts in that capacity and by their own professional body, and of course the normal redress which any member of the public has through the courts by civil action. It is a matter of keeping in proportion the degree of the problem which the public suffers. I hope that this Bill endeavours to do that.

If there is any point on which we have the proportion wrong, we shall be able to air it when the matter is considered in Committee.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).