§ 3.16 p.m.
§ The Lord Chancellor (Lord Hailsham of Saint Marylebone)My Lords, I rise to move that this Bill be now read a second time. When I last rose to move the Second Reading of an Administration of Justice Bill, it was 1982. I then described the task as an exercise intended to carry out a very large number of relatively small reforms, as it were, of good legal housekeeping. This Bill, with its 61 clauses and 8 schedules, has the same Short Title and something of the same character. It, too, is intended, among other things, to carry out a number of relatively small but, I trust, helpful and uncontroversial changes. But the more important part consists in provisions extending the Law Society's disciplinary powers over solicitors, in provisions which will enable licensed conveyancers who are not solicitors to undertake conveyancing for reward and in provisions amending the machinery for dealing with legal aid complaints. This Bill therefore covers a wide range of disparate subjects. Like Mr. Churchill's blancmange, it has no central theme, and I shall 779 therefore proceed directly to describe each part separately.
Part I deals with solicitors and makes various amendments to the Solicitors Act 1974. Clauses 1 to 4 and Clause 6, together with Schedule 1, extend the Law Society's powers over professional discipline and the handling of complaints. I should perhaps explain why these provisions are to be found in a Government Bill, since in the past proposals for legislation of this kind have generally been put forward by Bills introduced by Private Members. It is my own view, deeply held, and also the view of the Government, that the existence, strength and vitality of the independent legal profession and public confidence in it are fundamental to the freedom under the law on which our parliamentary democracy depends. The Government therefore do not and should not seek ministerial control over the domestic concerns of the professions. These are matters which should lie with the professions themselves, and such matters are essential to their duties to the public to maintain the high levels of conduct, the standards of service and the collective discipline that we all expect from them. I should explain, therefore, that the proposals in this part of the Bill come from the Law Society—and form only part of a number of other improvements that it intends to make.
It is, however, a matter of public interest that the profession should be able to ensure with due speed that its powers and procedures properly satisfy our legitimate expectations and requirements. It is therefore right that the Government—and the Lord Chancellor in particular—should assist the Law Society whenever it is convenient. So I have accepted responsibility for promoting this legislation and I hope to be prepared to justify it in the House.
Before I turn to the actual provisions, it might be helpful if I were to comment on other initiatives not requiring legislation which have been embarked on by the Law Society with the aim of enhancing the efficiency of present procedures for disciplinary matters and complaints. Your Lordships will recall a recent case in which serious complaints were made by a dissatisfied client and resulted in the solicitor's bill being substantially reduced on taxation, and later by the solicitor himself being struck off the roll. That case produced two inquiries into the way in which the Law Society had initially handled the complaint. Both the inquiries found that a substantial part of the trouble stemmed from the pressure of work under which the staff of the society worked, and that the general procedures for handling all complaints had substantially improved since the relevant time. Indeed, at the time of the publication of the two reports, the Professional Purposes Committee of the Law Society was examining its procedure in detail, and has now approved proposals for substantial changes in structure and methods within the department.
More staff are employed, working procedures and management responsibilities have been strengthened, and a computer has been installed. Communications with the public are being improved, notably by new interview panels with which members of the public will be able to talk through difficult or complex complaints. In addition, the society will no longer 780 regard the existence of separate legal proceedings as a complete bar to the consideration of disciplinary complaints but will consider each case on its merits. Other administrative improvements have, I understand, been set in hand.
All these are helpful developments and will assist the Law Society to discharge its responsibilities. I am sure that they are to be welcomed as a positive and responsible initiative by the society. But the society also feels that the time has come to improve significantly its service to the public by an extension of the existing regulatory powers and by the introduction of a new power which will enable the society where work has been inadequate to give a remedy to the client as well as impose a sanction on the solicitor. It is also conducting a more general review in the light of public discussion since the report of the Benson Commission on Legal Services, to which much in these proposals may be seen as a response. The results of part of this endeavour have now come before your Lordships' House.
Clause 1 introduces a new Section 44A into the Solicitors Act 1974. This section makes a major addition to the range of available remedies. Although a client may already have his bill reduced on taxation, and although matters of professional misconduct may be considered by the Solicitors' Disciplinary Tribunal, these remedies do not necessarily provide a complete remedy to the client. There is a gap at present where the quality of service has been inadequate but the client has not suffered a financial loss sufficiently serious to justify proceedings for negligence, or perhaps where inadequate service would not have given rise to a cause of action at all. Clause 1 gives the Council of the Law Society power to order a solicitor to remit or repay part or the whole of his costs or to take specified action in the client's interests where it is considered that the solicitor has provided inadequate professional service. Clause 2 of the Bill inserts a further new section into the principal Act, by which the society may compel a solicitor to produce his case files. Under the 1974 Act this power is restricted to cases where there has been undue delay in dealing with a matter, so that the files can be given to another solicitor to complete the work. It is now extended to cover cases in which it is necessary for the society to examine papers for the purpose of investigating a complaint, whether of professional misconduct or of poor work.
These enlarged powers will fall to be exercised by the society's Professional Purposes Committee. But the society believes that it would help it in discharging its duties in the public interest to introduce a wider measure of representation in that committee. Schedule 1 therefore provides for the society to appoint to the committee solicitors who are not members of the council, and persons from outside the profession. It is intended that the Master of the Rolls should make the nominations, and he has already put forward his first list of names in advance of the legislation. I welcome this as a move by the Law Society to meet any concern that the committee might lack impartiality or fail to represent the layman's point of view in dealing with complaints against solicitors.
I now come to Clauses 3 and 4 of the Bill. Apart from these provisions relating to bad work, the Bill 781 also makes changes in the arrangements relating to practising certificates. Section 12 of the principal Act gives the society a discretion to impose conditions upon the annual practising certificate. The exercise of this discretion can at present take place only when a certificate is next applied for, not in relation to the one currently in force. This discretion is now to be extended by Clauses 3 and 4. It is now to be exercisable where a solicitor has failed to provide accountant's reports within the time required. Secondly, the Act is amended to make it clear that the society has power to impose as a condition on a certificate specified steps (which may or may not cost the solicitor money to take). For example, the society would now be able to require that a practice management service should be consulted and its recommendations complied with, or that retraining be undertaken.
Thirdly, in circumstances where urgent action is appropriate the society is enabled to impose conditions on an existing practice certificate, and will not have to wait for its expiry to impose them on the next. Clause 6 and Schedule 1 make minor amendments to the existing legislation.
Those are the measures for which the primary legislation in this part of the Bill is required. The changes will, however, emphasise the need for dissatisfied clients to be adequately advised of the range of available remedies and to select the one which would be most appropriate to their particular circumstances. To ensure that this is done, the society is reviewing the operation of its negligence panel whose ability to provide experienced and sympathetic advice to those who have problems in this area has been one of the more welcome developments in recent years. I am sure that the provisions and the associated improvements are a significant advance in the service which the profession will be giving to the public.
I now turn to Part II of the Bill. This is the largest and perhaps the most important single part. It establishes a framework for regulating conveyancers who are not solicitors, who will become entitled to compete with solicitors for conveyancing work. Your Lordships will recall that the Benson Commission, which reported in 1979, concluded by a majority that conveyancing should not be opened up to non-solicitors. Its reasoning was essentially that the benefits to be gained from additional competition were insufficient to justify the expense and inconvenience of establishing the necessary regulatory framework to ensure proper consumer protection. Although we are now departing from that conclusion, we entirely share the view of the Benson Commission that is is absolutely essential to protect the public from either incompetence or dishonesty. For most people, buying a house is by far the largest financial transaction they undertake in their whole lives, and it is one in which the consequences of incompetence may not become apparent for many years, perhaps not until the house comes to be sold. So this is not an area where the public interest would be well served by unrestricted competition. But restrictions on competition must, of course, be examined critically to ensure that they go no wider than is necessary for consumer protection. Accordingly, a little under a year ago we set up what is now the Ferrand Committee to advise on how 782 consumer protection could be ensured if non-solicitors were admitted to compete.
The committee suffered a grievous blow when its work had just begun, by the sudden death of its original chairman, the well-known Professor Harry Street. But it nevertheless managed under its new chairman to produce its report remarkably quickly. I am sure the House would wish me to congratulate the committee upon their achievement in producing such a comprehensive report in so short a time. On all essentials, the report was unanimous, and it is gratifying that a committee drawn from such a wide variety of interest groups could reach so great a degree of consensus.
The provisions in Part II of the Bill will effect the committee's main recommendations. Clause 8 establishes the Council for Licensed Conveyancers—the supervisory body—which will be responsible for the competence and integrity of those who seek to practise as licensed conveyancers. The following clauses give the council its necessary powers and responsibilities. It will be for the council to determine such matters as the areas of law to be covered by the tests of competence and in what detail. The rules will be made by the council but will require the Lord Chancellor's concurrence. That will enable Parliament to ensure that the requirements set by the council are both necessary and sufficient to protect the consumer.
Before I leave conveyancing, I should mention Clause 5, although it falls into Part I of the Bill and not Part II. This clause rationalises the two necessary restrictions on conveyancing for reward. The first will extend the restriction to the preparation of the contract—which is the stage at which protection really is most needed—and the second makes it clear that conveyancing work may be carried out without penalty under the direction and supervision of a qualified person.
Competition for conveyancing work has increased considerably in recent years. In my first term as Lord Chancellor, the Law Society abolished the old scale charges. More recently, the greater freedom given to individual solicitors to advertise has given a further impetus to competition. Indeed, I understand that one of the existing unlicensed conveyancers has complained that he cannot meet the competition from solicitors now that they are free to advertise. The provisions in Part II will inject an additional element of competition, and I hope that they will do so without sacrificing consumer protection.
Part III of the Bill contains provisions relating to legal aid. Clauses 36 to 40 introduce changes in the way in which legal aid complaints relating to banisters and solicitors are handled. At present, the Legal Aid Act 1974 establishes two separate tribunals: one for civil and one for criminal legal aid. Each of these is separately constituted, and the criminal tribunal has wider powers than its civil counterpart, since it is able to reduce or cancel the practitioner's remuneration. Each tribunal has sat once in the last two years, though they had not previously heard any complaints for some time. The main reasons for this seem to be, first, that the Law Society and the Bar Council view legal aid complaints as extremely serious matters relating to professional conduct and therefore to be treated as such and, second, that there is some concern that the 783 procedures and the constitutions of the legal aid complaints tribunals might offend against the rules of natural justice. The Royal Commission on Legal Services recommended in 1979 that the legal aid complaints jurisdiction should be transferred to the professions' disciplinary tribunals. Clauses 36 to 40 do this, enabling the Solicitors' Disciplinary Tribunal and that of the Senate of the Inns of Court and the Bar to deal with all legal aid complaints.
In broad terms, the two professional disciplinary tribunals (each of which contains lay representatives) are empowered to hear legal aid complaints and impose the appropriate sanctions. They will be able to reduce or cancel the practitioner's remuneration and may in more serious cases exclude solicitors or barristers from undertaking legal aid work. They will also be able to exclude a solicitor or barrister in this way even where the original complaint did not itself relate to legal aid but was sufficiently serious to warrant the conclusion that the lawyer was not an appropriate person to be allowed to undertake publicly-funded work. The legal aid complaints jurisdiction will therefore form part of the ordinary jurisdiction of the professional disciplinary tribunals. The reason for this is obvious. In some cases a complaint may relate to both the legal aid work and the general professional work of the same practitioner. The tribunals will now be able to deal effectively with these.
In practice, legal aid complaints sometimes relate to matters with which the assisted person himself might not be directly concerned. For example, one case which did lead to a hearing before a complaints tribunal related to a solicitor's failure to respond to inquiries from the Legal Aid Area Office. But even then the assisted client may nevertheless benefit from an exercise of the powers under Clauses 37 and 39, since the reduction or cancellation of the practitioner's remuneration would reduce the liability of the fund, and thus the client, too, may recover some part of any contribution he has paid or be subject to a smaller statutory charge.
These changes will thus enable legal aid complaints to be considered in a more effective and fairer way and will ensure that the professional disciplinary tribunals will have available a wide range of sanctions.
Clauses 41 and 42 also amend the Legal Aid Act 1974. Clause 42 empowers the Lord Chancellor to provide different capital limits on eligibility for advice and assistance and assistance by way of representation respectively. At present, these have the same capital limits (currently standing at £765) and this bears unduly heavily on those involved in proceedings for which no other form of assistance is available, since the cost of assistance by way of representation may be considerably higher than that of advice and assistance.
It is intended that the capital limit for assistance by way of representation will be aligned with that for legal aid proper, so that applicants with capital resources of between £765 and £3,000 will, for the first time, become eligible for assistance by way of representation. Clause 42 enables regulations to be made prescribing the circumstances in which payment may be made out of the legal aid fund for work done in cases of urgency before the application for legal aid in 784 criminal proceedings has been granted. This overcomes a difficulty in making such payments which became apparent as a result of a recent decision of the Court of Appeal.
Part IV of the Bill introduces a number of changes relating to the procedures and powers of the High Court and county courts. The main aim of Clause 43 is to provide that in future no appeal shall lie to the Court of Appeal from the decision of the High Court to refuse leave to apply for judicial review in a civil case.
Clauses 44 to 48 deal with matters relating to probate, wills and trusts. In 1981, the Review Body on the Chancery Division of the High Court under the chairmanship of Lord Justice Oliver submitted its valuable report. Nearly all the recommendations have already been implemented, and as a result there has been a significant improvement in the practice and procedure of the division. However, four of the recommendations required legislation and these are now brought into effect by Clauses 44 to 47 in this Bill.
What is in those clauses is largely technical, but the House might find it helpful if I were to spend a little time on one. It is a matter for frequent complaint that some personal representatives—that is, administrators or executors—take too long to wind up the estates of deceased persons. But the law does not provide a simple method of replacing them. Clause 47 will therefore enable the High Court to appoint substitutes for dilatory personal representatives. The changes introduced by Clauses 44 to 46 are intended to simplify procedures where those likely to be affected by the court's decision in relation to the administration of an estate consent to a particular course of action being taken.
Clause 48 simplifies the exercise of the county courts' probate jurisdiction. As a result, contentious probate cases may go direct to county courts from the District Probate Registries as well as from the Principal Registry of the Family Division. It will of course be for the county court to satisfy itself that the value of the estate is within the county court limit—£30,000 at present—as it does in any other kind of case.
Clause 49 deals with garnishee orders. It amends the right of certain financial institutions, such as banks, to deduct a prescribed amount towards the administrative expenses they incur in giving effect to the recovery of a judgment debt garnishee order. It was my intention when these provisions were first conceived that, as far as possible, the burden of the deducted expenses should be borne by the debtor, and not the creditor who applied for the order. Experience has shown, however, that the existing provisions are not apt to give full effect to this intention, and the purpose of this clause is to correct that defect.
Clause 50 will enable the Lord Chancellor to contract out one of the functions presently carried out by the department which might equally appropriately be carried out in the private sector, and enable the Lord Chancellor to redeploy the staff to other work within the department. Although this is, of course, in accordance with Government policy, it so happens that the origin of the proposal was conceived for a totally different cause.
785 As long ago as 1852, statute imposed a duty on the Lord Chancellor to maintain a register of county court judgments. It is a record of judgments entered in county courts on which more than £10 remains outstanding after one month from the entry of the judgment. Times and circumstances have changed, most notably in the use found for this register. It was orginally provided to enable persons to discover whether any unsatisfied judgment was entered against their names. But nowadays by far the largest category of users of the registry are the credit reference agencies who want to discover whether a person is creditworthy.
Some time ago I proposed to raise the minimum level of registration for a debt from £10 (the level set in 1852) to £50. Since the £10 limit had been unchanged for over a century I could hardly have been criticised for precipitancy in this respect. But there was an immediate outcry by the credit agencies, who thereupon offered to do the work themselves. The necessary enabling satutory provision is contained in Clause 50. The clause will enable the Lord Chancellor to enter into an agreement as to the keeping of the register by a body corporate. I must of course emphasise that even though its functions may be carried out by a corporate body, I shall have power to control, by means of regulations, the service to be provided. The prescribed matters will cover, for example, the maximum fees which may be charged. The regulations will largely reflect the existing arrangements and will provide for an improved level of service to the public.
I now come to Part V of the Bill, described under the general title of "Miscellaneous and General". The one feature common to its contents is that they are helpful and. I hope, uncontroversial. I do not think I need detain the House for long over them at this stage except to refer briefly to Clause 52, which reduces the limitation period in defamation actions from six to three years. The House will remember that this was the period recommended by the Faulks Committee. The general limitation period for actions in tort is six years, with the exception of actions for personal injuries for which the limitation period was reduced to three years in 1954. Mr. Justice Faulks considered that a similar reduction would be appropriate in the case of defamation. In these cases a six-year period may be unjust and oppressive to potential defendants. Furthermore, since in libel a fresh cause of action arises on each occasion on which the defamatory matter is published—which may mean each time a book is sold or borrowed from a public library—the defendant may, in practice, have an action hanging over him for considerably longer than six years. For this reason the Government have accepted this recommendation of the Faulks Committee. The clause will reduce the limitation period from six years to three, subject to the usual safeguards in cases of fraud or of mental incapacity of the plaintiff.
That completes my description of the Bill, but before sitting down I should mention briefly one matter which does not at present appear in the Bill. The High Court and the county courts do not have the same powers to grant lessees relief from forfeiture for non-payment of rent. This position is anomalous and I therefore intend to bring forward at Committee stage 786 an amendment which would, broadly speaking, align with those of the High Court the powers of the county court to grant relief against forfeiture of a lease.
I must apologise for detaining the House for so long on this Bill. It contains much that is useful and nothing, I hope, that is unwelcome and controversial. It improves disciplinary powers over solicitors. It enables licensed non-solicitors to undertake conveyancing for reward and will allow the machinery of justice to operate more smoothly. I commend it to your Lordships. I beg to move.
§ Moved, That the Bill be now read a second time.—(The Lord Chancellor.)