HC Deb 27 October 1995 vol 264 cc1283-90

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ottaway.]

2.30 pm
Mr. Simon Hughes (Southwark and Bermondsey)

I welcome the Parliamentary Secretary, Lord Chancellor's Department to his position and am grateful for his attendance. I have had a brief conversation with him on this subject so that, I hope, his Department is not taken by surprise by the matters that I wish to raise.

In summary, this is what I might call an everyday tale of dissatisfaction with solicitors. It raises, however, important issues, of which the central one is how people should be able to have effective, efficient and speedy remedy against professional inadequacy.

I am conscious of two preliminary matters. First, I have an interest to declare—I am a barrister. I do not practise, although I am a member of chambers, but this matter is not an inter-professional dispute, and has arisen entirely since I ceased to practise regularly, and through my constituency work.

Secondly, all professionals—they include us—are at risk of not doing everything exactly as they should. The question is: where is the accountability, especially of those professionals who are paid money by clients or by the state, in this case, through the legal aid budget, to do a job, and then fail? This case is a good example of a bad case and it comes against the background of increasing dissatisfaction with the way in which complaints against solicitors are dealt with.

I have a constituent called Michael Sullivan who lives in Rotherhithe and who will be listening to this debate. He came to see me earlier this year. In summary, his case is as follows. In 1991, Mr. Sullivan employed solicitors to assist him with an application for a betting shop licence in Enfield. In the event, he did not succeed in obtaining the licence. As a result of instructing solicitors in that matter, he received a bill for £12,500, for what he was generally advised and from his experience believed to be a £2,000 job. He was also told by those solicitors that he had lost the deposit that he had put on the shop.

Mr. Sullivan was advised by those solicitors to take advice when they sued him for the £12,500, and so he went to another firm of solicitors to gain its assistance. It was instructed to represent him in defending the action from the first firm—a St. Albans firm called Brethertons—and was so employed for a couple of years on his behalf. The second firm—the relevant firm for this debate—is called Fraser MacDonald, a Sevenoaks firm.

Fraser MacDonald eventually recovered the £5,000 and costs that were the subject of the deposit. There are other matters that relate to the other solicitors' competence and therefore there is a whole web of issues, but I am concentrating on the one that is most current and relevant. Fraser MacDonald led Mr. Sullivan to believe that it would pass the £5,000 on to him, subject to appropriate deductions. The firm said that it would put £2,000 aside for those deductions and that, therefore, £3,000 was left. That was at the beginning of 1994. Later last year Mr. Sullivan was told, "No. Sorry. You won't get any of that money. It has all been used up."

So, for the second time, Mr. Sullivan changed solicitors and instructed a firm called Needleman Knowles, which has acted for him and, from my reading of the papers, appears to have done a perfectly competent job. Needleman Knowles needed the file held by the previous solicitors and wanted them also, on Mr. Sullivan's behalf, to account for the money that they had received. The evidence from the file is that it had been received—there is no dispute about that.

The story of Mr. Sullivan's complaint is the saga of the time that it has taken to make any progress in getting the file or the money and, therefore, any legal satisfaction. Of course, people can use a range of procedures in such a case and further procedures are open to Mr. Sullivan. He knows that, the Minister knows it and I know it. My complaint is not that he has exhausted his remedies and not been dealt with satisfactorily, but that we have reached this date and still have got only this far. To be honest, the case is one of justice delayed meaning justice denied.

As a Member of Parliament and from my time at the Bar, I know that one sometimes gets litigious and vexatious litigants—all my colleagues know it well, including you, Madam Deputy Speaker. Some constituents are not easy to handle and nor were some clients when I was a practising barrister. I can inform the Minister that I have no reason to believe that Mr. Sullivan is such a person. He has a good case and has sought to conduct it, and have it conducted, perfectly properly. He acted on advice as regards the solicitors he instructed and took advice that those solicitors could deal competently with the matter.

As a result of this saga, Mr. Sullivan has become ill through the mental stress and has effectively suffered a family breakdown, although that is not something that he has asked me expressly to reveal. He has also been out of work. All those problems are not unrelated. If a person becomes embroiled in a huge battle about money with lawyers, they can drain him dry and leave him in a very bad state indeed. It is to his credit that Mr. Sullivan has managed to pick himself up; he now has some work and, I hope, will be much better again if and when this matter is out of the way.

I will be selective about the chronology, but it is important. I shall quote from the letter sent by Needleman Knowles to Mr. Sullivan on 13 April. It sets out the chronology as follows:

  • "8–10–94 Letter from Fraser MacDonald stating that 'in the next day or so I shall be preparing my legal aid bill, whereupon I shall let you have the same, together with all of the papers …'
  • 12–10–94 Legal Aid Certificate showing transfer of legal aid to ourselves
  • 18–10–94 Letter to Fraser MacDonald requesting the delivery up of the file
  • 20–10–94 Letter chasing up Fraser MacDonald for the file
  • 28–10–94 Second chase up letter to Fraser MacDonald for the file
  • 15–11–94 Third chase up letter to Fraser MacDonald for the file
  • 28–11–94 Fourth chase up letter to Fraser MacDonald and putting them on notice that we will be writing to the Solicitors Complaints Bureau
  • 28–11–94 Letter to Solicitors Complaints Bureau
  • 05–12–94 Fifth chase up letter to Fraser MacDonald
  • 05–12–94 Letter from Solicitors Complaints Bureau stating that they have written to Fraser MacDonald requesting that they deliver up the papers to us within seven days
  • 14–12–94"—
two days past the seven days—
  • "Letter to Solicitors Complaints Bureau from us stating that we have not received the papers and asking them what is the next step
  • 18–12–94 Sixth chase up letter to Fraser MacDonald
  • 06–01–95 Letter to Legal Aid Board requesting an extension of the legal aid certificate to sue Fraser MacDonald
  • 09–01–95 Letter from Legal Aid Board stating that our letter has been registered as a Stage One Complaint
  • 09–01–95 Letter from Solicitors Complaints Bureau enclosing letter they sent to Fraser MacDonald stating that if he does not deliver up the papers within 7 days they shall consider referring the matter to the Conduct Unit of the Bureau
  • 13–01–95 Letter from Legal Aid Board stating that they have written to Fraser MacDonald for a report …
  • 25–01–95 Letter to Solicitors Complaints Bureau stating that no papers have been forthcoming
  • 25–01–95 Letter to Legal Aid Board stating that nothing has been heard from Fraser MacDonald
  • 31–01–95 Letter from Legal Aid Board stating that they have written to Fraser MacDonald again requesting that they respond to the LAB within 14 days".
I remind the House that initially a response had been asked for within seven days some two months before.

The letter continues:

  • "15–02–95 Letter to Legal Aid Board stating that no papers have been forthcoming
  • 27–02–95 Letter to Legal Aid Board stating that still no papers have been forthcoming
  • 02–03–95 Letter from Legal Aid Board stating that they are referring the matter to the Solicitors Complaints Bureau."
At this stage, I made an attempt to find out what was going on, but the Solicitors Complaints Bureau said that it could not find the file. That may have been because of a change of address; for this I am not blaming the bureau.

To its credit, the Legal Aid Board then made its attitude clear. The manager of its office in Brighton, David Keegan, wrote on 20 April to the director of the Solicitors Complaints Bureau. He said: I write to report to you the unsatisfactory service provided by Messrs. Fraser MacDonald in relation to the transfer of Mr. Sullivan's legal aid certificate in that,

  1. (a) They have to date failed to transfer the case file of Mr. Sullivan, delaying his defence against claim. The delay so far has been 26 weeks —
  2. (b) They have failed to respond to the five letters sent by the Legal Aid Board over the past three months.
  3. (c) Mr. MacDonald has declined to accept numerous telephone calls from the Board.
  4. (d) On 8th March 1995, Mr. MacDonald left a telephone message stating that 'the problem has been solved' and that he would ring the Area Manager the next day. This did not happen, neither was the problem solved.
The appalling performance of Messrs. Fraser MacDonald must be considered as unsatisfactory professional conduct and may lead to a professional negligence claim if the client is disadvantaged. In my time as Area Manager I have not come across such a flagrant disregard for the needs of the client and the duty of a solicitor under legal aid. May I suggest that if Mr. MacDonald does not comply with the requirements promptly he should be struck off to protect clients and the legal aid fund. The Solicitors Complaints Bureau sent a letter to Fraser MacDonald dated 13 May, asking for an explanation within eight days and setting out a series of complaints and its advice as to what he should do. Mr. Sullivan then wrote a letter to the Solicitors Complaints Bureau dated 19 June effectively making a series of allegations which I shall not repeat but which reveal his complete dissatisfaction with the system. His letter ends: I have been comprehensively raped by the Legal System in this country, suffering an assault spanning seven years and am asked to accept that this is a glorious establishment envied the world over by an unnamed person at your bureau. I am outraged that I have had to fight against such a corrupt establishment alone, suffering financially, mentally and physically, as confirmed by a letter enclosed from my consultant at Guy's Hospital. I am sending a copy of this to my M.P. … who is carrying my fight to the House of Commons. The SCB's proposed remedy was the draft report by the adjudication and appeals committee stating that Mr. Fraser MacDonald should be rebuked. Indeed, the committee decided on 30 August, via its conduct committee To rebuke Mr. F. MacDonald … severely for his delay in failing to transfer Mr. Sullivan's file of papers and stated that it expected him to reply to Mr. Sullivan's outstanding queries regarding monies paid within 21 days … of the decision". Twenty-one days passed. Nothing had been heard within 28 days, which was the period for appeal. Then, the SCB recently said to my constituent that it would "send a reminder". That is the saga so far. It is entirely unsatisfactory.

The SCB is one of three legs of complaint, the disciplinary tribunal and the ombudsman being the other two. The SCB says in its advertising material, entitled "100 Facts at a Glance": This is how the profession's money is spent on a service in which both the public and the solicitors' profession may have confidence. Well, I say to the Minister, the public do not. The Solicitors Complaints Bureau advertises, in a further leaflet headed, "What To Do If You Are Dissatisfied With Your Solicitor", that it is an organisation set up by the Law Society to investigate impartially complaints". I do not think that that can be true either, given that it is run by solicitors.

As set out in the leaflet, what the bureau can do, and the maximum power that it has, is, where appropriate, to Reduce a solicitor's bill in whole or in part. Order compensation of up to"— wait for it— £1000"— there are qualifications on that—and Order a solicitor to correct a mistake at his/her own expense. You can go to the solicitors disciplinary tribunal eventually, Madam Deputy Speaker, if you believe that there has been unfitting conduct and breaches of the rules of negligence, and if, at the end of your Solicitors Complaints Bureau pursuit—which in Mr. Sullivan's case has now taken about a year so far and has got as far as a rebuke—you are dissatisfied, you can go to the ombudsman.

The ombudsman can make quite strong recommendations, but he cannot make anyone do anything. The ombudsman is—wait for it—a lawyer.

The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor)

indicated dissent.

Mr. Hughes

In that case, I beg his pardon. The ombudsman is not a lawyer. Nevertheless, he cannot make anybody do anything. He can make recommendations and publicise the fact that people have not acted on them, but he cannot take action personally.

I have described a specific case. However, in the past few weeks there has been the publication of a controversial Consumers Association report dated 2 October, entitled "Solicitors—advice you can't trust". It sets out a litany of complaints about solicitors and suggests that the present complaints procedure is entirely unsatisfactory.

Then, on 10 October, there was a very effective article in the law section of The Times, headed "Shoddy firms and a cranky complaints system ruin clients, says Gary Slapper". Dr. Slapper is principal lecturer at the law school at the university of Staffordshire. He says about the 600 complaints a week that land on the desk of the Solicitors Complaints Bureau: This level of dissatisfaction is quite alarming, especially as complaints can go to the SCB only if the complaints procedure at the firm … has been exhausted. Dr. Slapper goes on to show how our legal system still appears entirely like a system in which, in any legal quarrel, whoever loses, the lawyers always win. I commend anyone who reads Hansard to read Dr. Slapper's article, which tells another unhappy tale.

We need to tackle those issues. Given that the Government and the profession are considering a better complaints system, we need to come up with a far better system of speedy and effective complaint, and to do so soon. We need to end self-regulation and ensure that solicitors are not seen to be dealing with solicitors. We need to correct the ombudsman's lack of power to act and give him or her that power.

We need a much speedier system of complaint and redress. We must have objective criteria for showing that it works. We must ensure that we have a professional, one-step—or at most, two-step—process, which everyone can understand and which works.

If reform were a matter of funding, let us fund it. However, I believe that it is more than that. Lady Thatcher said that she was going to take on the professions. We still need to take on the solicitors profession, because it often ruins people's lives, and that is unacceptable.

2.48 pm
The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor)

First, I express my sympathy to Mr. Sullivan and I commend the hon. Member for Southwark and Bermondsey (Mr. Hughes) on securing the debate, which gives us an opportunity to discuss the important subject of the conduct and regulation of the solicitors profession. It is an important subject, not least because it is often in times of distress and difficulty that people turn to solicitors for help and it is only right that citizens of this country should be able to expect a lawyer to provide a service worthy of his or her professional standing. I commend the hon. Gentleman for the cogency and fairness of his presentation and for the good that he had to say about the Legal Aid Board.

I am a solicitor, although I have not practised professionally since 1988—when some of my friends were unkind enough to say that I had gone straight—and I hope that it will be helpful to the House if I outline the Government's position on the regulation of solicitors. The Government look to self-regulation as the most effective way of maintaining standards in business life in general. It is especially important that citizens with disputes against other citizens, against institutions or even against the state or the Government, should be able to turn to a completely independent legal profession. That is why the Government are committed to the principle that in the first instance the maintenance of professional standards among lawyers should be one of the responsibilities of the professional body concerned.

As a result, therefore, neither my right hon. and noble Friend the Lord Chancellor nor I have the power to intervene in or comment upon individual cases, or to respond directly to criticisms about the profession's disciplinary and complaints machinery. The professional practice, conduct and discipline of solicitors are regulated by statute. I do not, therefore, intend to comment upon the details of the hon. Gentleman's constituent's case.

As the hon. Gentleman has said, the Law Society has delegated its powers to deal with complaints of misconduct and inadequate professional service to the Solicitors Complaints Bureau. Allegations of misconduct and inadequate professional service are dealt with by the bureau in different ways, and it has different sanctions in respect of each.

In cases involving inadequate professional service, the Law Society is empowered to provide redress for clients. It can order a solicitor to reduce a bill—if it has not been taxed—waive the right to recover any fee whatever, refund money already paid, correct any mistakes, or take any other necessary action. The Courts and Legal Services Act 1990 increased the sanctions available to the Law Society by allowing it to direct a solicitor to pay compensation of up to £1,000 to the client. That maximum is under review.

Allegations of misconduct—for example, breaches of the solicitors' practice rules—are dealt with separately, and if misconduct is revealed, the case may be referred to the bureau's conduct committee. That committee can rebuke the solicitor, institute disciplinary proceedings or order intervention in a solicitor's practice. However, it does not have the power to fine, although that arrangement is currently under review. It is important to recognise that the Law Society's powers, as exercised by the bureau, to deal with misconduct are disciplinary in nature. Serious breaches of the rules of professional conduct may lead to disciplinary proceedings against the solicitor concerned. Such proceedings are dealt with by the solicitors disciplinary tribunal, which is wholly independent of the Law Society and was established under the Solicitors Act 1974.

The Government responded to growing public disquiet about the effectiveness of the profession's procedures for dealing swiftly and effectively with alleged failures in professional competence by creating, in the Courts and Legal Services Act 1990, the office of the legal services ombudsman. The ombudsman provides an independent check on the complaint-handling procedures of the General Council of the Bar and the Council for Licensed Conveyancers, as well as the Law Society.

It may be helpful if I explain to the House the terms and conditions under which the legal services ombudsman operates. His office, which came into being on 1 January 1991, was established to be independent of both the legal profession and the Government. He is uniquely placed to compare systems and standards across the profession and his knowledge, experience and independence lend a strong weight to his judgment.

Once the ombudsman has completed his investigation, he can make recommendations. Here again, I restrict reference to solicitors, with the bureau exercising the powers on behalf of the Law Society. The recommendations are: that the complaint be reconsidered by the bureau; that the solicitor complained of—or the bureau—pay compensation of an amount specified by the ombudsman to the complainant for loss, inconvenience or distress caused to him as a result of the matter complained of; and that the bureau pay compensation of an amount specified by the ombudsman to the complainant for loss, inconvenience or distress caused to him as a result of the way in which the bureau handled that complaint.

It seems to me that Mr. Sullivan has suffered loss, inconvenience and distress. As the hon. Gentleman concedes, in this case the available avenues have not yet been exhausted. The hon. Gentleman's constituent is still in time to take his complaint to the ombudsman. If he seeks further redress, I can only recommend that he contact the ombudsman's office as soon as possible.

It is not open to me or to the Lord Chancellor to intervene in a decision of the ombudsman or to comment on its merits any more than it would be proper for us to do in relation to a case before a court of law. I have described the existing procedures and, as the House will appreciate, they have been strengthened considerably in recent years. I do not believe that they can fairly be described as toothless. However, it is important that the regulatory framework should adapt to changing times and secure the confidence of both public and profession.

It is true that there has been much recent criticism of the bureau by the profession, the public and bodies such as the National Consumer Council. In December 1994, the NCC published a report, "The Solicitors Complaints Bureau: a consumer view". The report proposed the abolition of the bureau and suggested that the Law Society's complaints-handling function should be transferred to an independent legal services complaints council.

At the press conference to launch his annual report in June of this year, the ombudsman commented: I believe it is premature to talk of abandoning self-regulation at the present time. A great deal of experience and money has been invested by the Law Society on behalf of solicitors and the public in the Solicitors Complaints Bureau. It would be foolish to throw it all out and go over to a completely different system without a good deal more information about complainant satisfaction levels, and without first seeking to strengthen the Bureau's operation by giving it a greater degree of independence. In the nature of things, it is perhaps unlikely that a body dealing with thousands of complaints a year will get bouquets rather than brickbats, but the Law Society in general and the bureau in particular have nevertheless been considering the future direction of complaints in respect of solicitors for several months now. In July, the Law Society issued a consultation paper, "Supervision of Solicitors: The Next Decade", which proposed significant changes to the way in which complaints are handled.

The deadline for responses to the consultation paper has been extended until Tuesday next, 31 October. The responses will then be analysed and collated and a final paper suggesting the way forward will be considered by the Law Society Council in either December this year or January next year. As well as in this debate today, therefore, the issue is being actively addressed both inside and outside the profession.

At the same time as a replacement for the bureau is being considered, my officials are in discussion with the Law Society and others about a Solicitors (Amendment) Bill. While that covers the whole range of the statutory framework of solicitors, it is nevertheless expected that the Law Society will be putting forward proposals, once the future of the bureau has been settled, which will deal with those matters. I have said that the consultation period expires on Tuesday, but if the hon. Gentleman wishes to write to the president of the Law Society with his proposals I am sure that they will be given full consideration.

This is, then, an opportune moment for the hon. Gentleman to raise the issue. In any regulatory system, there is bound to be a difficult balance between championing the rights of the consumer and not overburdening the service provider. The Government see an effective and approachable complaints system as the best way to ensure that a client's grievances can be dealt with without 'causing the profession unnecessary burden or unnecessary interference from the public sector.

It is difficult to strike the right balance. Although we do not yet know the outcome of the Law Society proposals, the Government will consider carefully any proposals requiring legislation and will support such proposals as strike the right balance. While it is now for the Law Society to get it right, I agree with the ombudsman that proposals to abandon self-regulation are, at best, premature.

Question put and agreed to.

Adjourned accordingly at Three o'clock.