HL Deb 14 March 1985 vol 461 cc289-314

Consideration of amendments on Report resumed.

Clause 21 [The Discipline and Appeals Committee]:

Lord Mishcon moved Amendment No. 17: Page 19, line 17, at end insert— ("and (c) allegations or complaints made by any person about a licensed conveyancer where the Investigating Committee have refused or neglected to refer such allegations or complaints to the Discipline and Appeals Committee under section 20.").

The noble Lord said: My Lords, Clause 21 provides that the council—and we are dealing with the Council for Licensed Conveyancers— shall establish a committee, to be known as the Discipline and Appeals Committee, for the hearing and determination of—

  1. (a) cases referred to them by the Investigating Committee under section 20; and
  2. (b) applications and appeals made or brought under sections 23 to 25".

At Committee stage I moved an amendment which was based on my submission to the Committee that it was wrong that members of the public should not have the direct right of complaint in order to see that a disciplinary committee considered it where the investigating committee had decided not to refer it to the appeals committee. The analogy, of course, is with my own profession, where the layman has a complete right to see that a complaint made about the conduct of a solicitor is investigated by the appropriate committee.

On that occasion we were met by two arguments, and I shall now deal with them. The noble and learned Lord very courteously agreed to look at the matter again, but it is only fair to say that he did not accompany his words with any degree of optimism with which he wished me to go away. The arguments were two-fold. The first was that so far as solicitors are concerned there is some sort of analogy but there is not (and this was admitted) the exclusive right to pursue complaints to the adjudicating body with the shutting out of lay complainants from the process altogether. I could not see how that exclusive right could ever be held to be proper, having regard to the analogy which was made, as I say, with the solicitors' profession.

The other argument used was that there were lay members of this investigating committee who would be able, as it were, to see the layman's point of view and would thus be enabled to see that justice was done in regard to any complaint made when there was a question of referring it further. I have no doubt that lay members and, indeed, official members of any such committee would endeavour to do justice; but again I must point out that the same situation exists with my own profession. The effect of Part I of the Bill is that there will be substantial lay membership of the Professional Purposes Committee of the Law Society Council, but still the layman is able to make a direct complaint if the investigating committee decides not to proffer one itself as a result of a preliminary investigation.

It must be wrong that an investigatory committee should at the same time be an adjudicating committee. In my view, when we are starting with a new calling—that of the licensed conveyancer, which all of us wish well, but we do not know how this new profession will turn out—it is absolutely right that exactly the same type of procedure for the registration of complaints, for the making of complaints and for ensuring that complaints are at least heard should be available in regard to the public and the new profession. I beg to move.

The Lord Chancellor

My Lords, the noble Lord, Lord Mishcon, in moving his amendment, very fairly said that it was moved in Committee, and that although I promised to look at the matter again I did not open the door to hope very wide. The amendment which we are discussing would empower the Discipline and Appeals Committee, in the new structure, to hear and determine any allegations or complaints against licensed conveyancers which the investigating committee had turned down and declined to refer to it.

Since then I have examined other legislation; in particular, the Insurance Brokers (Registration Act) 1977, the Dentists Act 1957 as amended, and the Medical Act 1983. All these provide for a two-tier system of investigatory and disciplinary committees. None provides for an automatic right of access to the disciplinary committee, as envisaged by the amendment. Such a provision would not be welcome. It would remove the major purpose of the investigating committee; namely, to carry out preliminary investigations of cases to determine whether or not the matter ought to be referred to the Discipline and Appeals Committee for a hearing. It is not intended that the investigating committee should exercise any real judicial function except where the allegation or complaint is manifestly unfounded, or where it is clear that the allegation or complaint, even if substantiated, would not constitute a disciplinary offence. Apart from those two cases, it is envisaged that the investigating committee will refer every case.

Therefore, the fear which lies behind the amendment that members of the public might have genuine complaints blocked by the investigating committee is. I should have thought, unjustified. As I have said, the double committee system is not novel, and similar arrangements can be found in other legislation covering insurance brokers, dentists and medical staff. None of those statutes provides access to a second committee in cases where the investigating committee is satisfied that there is no case to answer or no disciplinary offence has been committed, even if the allegation were substantiated. Indeed, even the Solicitors' Disciplinary Tribunal is empowered to dismiss a complaint without requiring a solicitor to answer the allegations where it is satisfied that no prima facie case is shown.

Thus it is thought that an amendment of this character would introduce an unnecessary procedure. It is not anticipated that the Investigating Committee will act as an adjudicating body such as the Professional Purposes Committee may be. The Investigating Committee is a sieve. Only in cases where the facts alleged are manifestly unfounded or do not amount to a disciplinary offence if proved will the Investigating Committee decline to refer a case. In all other circumstances, where there appears to be a need for a full hearing, the committee, having collected the facts together into a coherent form, will refer the case to the Discipline and Appeals Committee.

The Professional Purposes Committee of the Law Society has not, as I think the noble Lord said, hitherto included lay persons. The situation is now being remedied, as the House will recall, by Part I of this Bill. But the Investigating Committee will from the outset contain a significantly greater element of lay representation. It will thus be far less vulnerable to any charge that it is acting to protect the profession rather than the consumer. I hope that, on the assurances that I have given, the noble Lord, Lord Mishcon, will not press his amendment, although I well understand the reasons which have led him to propose it a second time.

Lord Mishcon

My Lords, I am afraid that from my point of view—and I have listened with great care to the courteous reply of the noble and learned Lord—a matter of very distinct principle is involved. We are setting up a new service. It is absolutely vital for the public to know that, if they have reason to complain about the behaviour of a member of this new service, they do not have to take the decision of an investigating committee as final but in regard to any refusal or neglect, if they so wish, they are entitled to refer their complaint to the disciplinary committee directly and say, "Please, we think that it is an offence that you should look at". Of course, it could find that there is no prima facie case and say so, and that would be the answer to it.

Is there any reason why there should be a differentiation in regard to precisely the same sort of work that is done by solicitors—and I am talking about conveyancing—in regard to any complaint or disciplinary procedure of this kind? It cannot be right, in my submission, to make that difference. Furthermore, it seems odd not to be able to quote a parallel with a profession which is doing precisely the same work but to quote a parallel with insurance brokers, doctors and medical staff. I cannot follow the niceties of the argument in the way in which the noble and learned Lord, with such capability, presents it. In those circumstances, I have no alternative but to ask that the opinion of the House be taken.

8.13 p.m.

On Question, Whether the said amendment (No. 17) shall be agreed to?

Their Lordships divided: Contents, 31; Not-Contents, 43.

DIVISION NO. 2
CONTENTS
Airedale, L. Irving of Dartford, L.
Aylestone, L. John-Mackie, L.
Cledwyn of Penrhos, L. Llewelyn-Davies of Hastoe, B.
David, B. Lloyd of Kilgerran, L.
Dean of Beswick, L. Mishcon, L.
Diamond, L. Nicol, B. [Teller.]
Elwyn-Jones, L. Oram, L.
Falkender, B. Pitt of Hampstead, L.
Foot, L. Robson of Kiddington, B.
Gallacher, L. Selkirk, E.
Graham of Edmonton, L. [Teller.] Serota, B.
Simon of Glaisdale, L.
Gregson, L. Stewart of Fulham, L.
Hall, V. Stoddart of Swindon, L.
Hatch of Lusby, L. Strauss, L.
Hutchinson of Lullington, L. White, B.
NOT-CONTENTS
Abercorn, D. Caithness, E.
Avon, E. Cameron of Lochbroom, L.
Beloff, L. Campbell of Alloway, L.
Belstead, L. Carnegy of Lour, B.
Brabazon of Tara, L. Chelwood, L.
Brougham and Vaux, L. Cork and Orrery, E.
Bruce-Gardyne, L. Cox, B.
Craigmyle, L. Lucas of Chilworth, L.
De La Warr, E. Marley, L.
Denham, L. [Teller.] Morris, L.
Denning, L. Munster, E.
Dormer, L. Polwarth, L.
Ferrers, E. Rankeillour, L.
Fraser of Kilmorack, L. Rawlinson of Ewell, L.
Glenarthur, L. Reay, L.
Gray of Contin, L. Renton, L.
Hailsham of Saint Marylebone, L. Skelmersdale, L.
Swinton, E. [Teller.]
Henley, L. Teynham, L.
Home of the Hirsel, L. Trumpington, B.
Hornsby-Smith, B. Westbury, L.
Lane-Fox, B. Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.

8.21 p.m.

[Amendment No. 18 not moved.]

Clause 28 [Provision of conveyancing services by recognised bodies]:

Lord Morris moved Amendment No. 19: Page 23, line 38, leave out ("may") and insert ("shall").

The noble Lord said: My Lords, the amendment standing in my name, namely Amendment No. 19, provides to substitute the word "may" with the word "shall". I have tabled this amendment for the very simple reason that I am certain that the provisions of Clause 28, which enable licensed conveyancers to incorporate themselves on the very sound grounds that they invariably would, on the understanding that incorporating themselves—with limited, rather than with unlimited liability—is a more convenient form and indeed a cheaper form of commercial endeavour than any other. If this is the case, then I believe that it should be mandatory upon the council that they make rules prescribing the circumstances in which licensed conveyancers form themselves into bodies corporate, rather than permissive because I believe that they invariably will incorporate themselves in this particular form. I beg to move.

The Lord Chancellor

My Lords, there are two rather different aspects to this group of amendments, Amendments Nos. 19, 21, 22, 23 and 24, which are really associated together. Amendment No. 21: Page 23, line 41, leave out ("involving the provision of") and insert ("exclusively providing"). Amendment No. 22: Page 24, line 2, leave out ("involving the provision of") and insert ("exclusively providing"). Amendment No. 23: Page 24, line 8, at end insert— ("; and (c) not being, or associated with, a business providing loan, insurance or estate agency services."). Amendment No. 24: Page 24, line 9, leave out ("may") and insert ("shall"). I think the first point is clearly misconceived. Under these amendments the council would be required to make rules relating to conveyancing by recognised bodies (as they are called). However, it would be wrong to require them to make such rules because it is the intention of the Bill to enable the council to refuse, or not to permit, corporate practice at all. Therefore, "may" is clearly right in this connection and "shall" is clearly wrong.

The second aspect of the amendments is the prohibition on recognised bodies offering wider house transfer services or being associated with businesses providing insurance, estate agency or loan services. This is quite a separate issue. The Farrand Committee did not recommend any such statutory bar; indeed it commented that: if"— and I emphasise the word— the potential conflicts of interest can be overcome, we would encourage associations of this sort". It then went on to recommend that the council should make rules to preclude conflicts of interest arising out of any association that it wished to permit. The Bill follows that recommendation. It enables the council to make rules regulating any associations between licensed conveyancers and others in the provision of conveyancing services, whether by individuals in partnership or by recognised bodies.

It is of course essential that the rules ensure that the consumer does not suffer from conflicts of interest arising from the provision of a wider range of house transfer services. I hope the requirement for the rules to secure the concurrence of the Lord Chancellor will provide an adequate safeguard. But subject to the overriding need to ensure that consumers do not suffer from conflicts of interest, it is surely desirable to enable propective purchasers to obtain as wide a range of services from one source as possible.

Furthermore, there is to be no statutory bar on licensed conveyancers practising in partnership, as distinct from corporate form in association with other professions. Nor, I am advised, is there any statutory bar on solicitors forming such associations. I believe I am right in saying that they may not in fact do so, but that is not as a result of a statute. Therefore it is thought that at this stage it would not be right to put an unnecessary fetter on the way in which recognised bodies can operate. I therefore suggest that these amendments are undesirable, first on principle because it might be desirable to prohibit corporate practice altogether, and secondly for the reason that I have just given.

Lord Graham of Edmonton

My Lords, I wonder whether I may have guidance. Are we discussing not merely Amendment No. 19 but also Amendments Nos. 20, 21, and 22? If we are discussing only Amendment No. 19, then I understood the noble and learned Lord the Lord Chancellor to make reference to the case against accepting Amendments Nos. 21, 22 and 23. I certainly support what the noble and learned Lord, the Lord Chancellor, said and I wish to say something but I wish to say it at the proper place.

The Lord Chancellor

My Lords, I am grateful to the noble Lord. He is quite right to raise the point. I hate to say that "my instructions were"—one gets into the ways of advocacy very easily on these occasions—that these amendments were being taken together. However, as I pointed out, there are two separate issues. It is a matter for the House. Amendment No. 19 raises the first question of principle which I raised. If the House wants the amendments moved separately, only one has been moved and my noble friend Lord Morris will be free to move the others in due course and to speak to them.

Baroness Trumpington

My Lords, just in case there is any misunderstanding, I think I am right in saying that Amendment No. 20 which the noble Lord mentioned is not included in this batch.

Lord Graham of Edmonton

May I ask how many are included in this batch, my Lords?

The Lord Chancellor

My Lords, I think Amendment No. 20 has already somehow mysteriously been dealt with. However, as I was told, the batch includes Amendments Nos. 19, 21, 22, 23 and 24. But when my noble friend moves, Amendments Nos. 19, 21, 22, 23 and 24, the noble Lord will be quite entitled to make any point he wishes to make on that.

Lord Morris

My Lords, in the light of what my noble and learned friend has said with regard to this particular amendment may I say that I spoke only to this amendment. Though I understand the reasons why my noble and learned friend suggested that it might save the time of the Committee to speak to Amendments Nos. 21, 22, 23 and 24 together with this amendment, I deliberately did not do so. In the light of the first point that he made in response to this amendment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Lord Chancellor

Though I am having some difficulty in tracing the point, I have an idea that Amendment No. 20 has somehow already been disposed of.

Baroness Trumpington

My Lords, I do no think that Amendment No. 20 has been dealt with.

The Lord Chancellor

My Lords it will now be moved by the noble Lord, Lord Mishcon.

8.30 p.m.

Lord Mishcon moved Amendment No. 20: Page 23, line 40, leave out (", or join in the forming of,").

The noble Lord said: My Lords, I am most grateful. Your Lordships have I think been reminded, in view of the preceding amendment, that we are dealing with Clause 28, which provides: The Council may make rules prescribing the circumstances in which licensed conveyancers … may form, or join in the forming of I emphasise those words on purpose— bodies corporate to carry on businesses involving the provision of conveyancing services to members of the public". I am not dealing with the point about bodies corporate. Nor am I dealing with the point about it being wrong for licensed conveyancers to form bodies corporate to carry on businesses involving the provision of conveyancing services. My worry is that these provisions are so widely drawn, and that they do not ensure that control of, and responsibility for, recognised bodies will remain with fully accountable individual licensed conveyancers.

I remember well that the noble Lord, Lord Morris, raised this matter at Committee stage on 31st January. The noble and learned Lord the Lord Chancellor, if I may be permitted to say this, answered him really on the question of limited liability but did not deal effectively—I hesitate to use these words—with the main thrust of the amendment. It is that same thrust upon which I am now concentrating. One of the doubts that has occurred to those who are advising me on some of these amendments arises specifically because of the inclusion of the words, or join in the forming of". Obviously, various folk could be attached to the joining part in the forming of a body corporate. The one reason for moving this amendment—there is only one—is to confirm in this Bill that it is essential that such bodies, if formed, would be effectively controlled by licensed conveyancers. I beg to move.

Lord Morris

My Lords, with respect, I would support the amendment. The problem that the noble Lord, Lord Mishcon, has raised is a real one in the real world. It is simply a question of what the Americans call agency capture. When bodies corporate or individuals are joined together in the forming of a body corporate to provide the services of licensed conveyancers to the public, you have qualified licensed conveyancers and, for want of a better term, moneyed men who may join them in the formation of a body corporate to provide those services. The control of these particular bodies corporate will belong to those who provide the initial capital of the company rather than to those who are professional men providing a service to the consumer. I may be totally wrong, but this is the very danger that the noble Lord, Lord Mishcon, is trying to avoid in the general public interest.

Lord Simon of Glaisdale

My Lords, as I read the clause as it stands at the moment, I understood that "may form" meant that only licensed conveyancers could constitute the body corporate but that the addition of the words, or join in the forming of meant that others might. To leave out those words means that the body corporate is exclusively comprised of licensed conveyancers. I did not understand, however, whether that was the intention of the noble Lord, Lord Mishcon. I thought that the noble Lord merely wanted the licensed conveyancers to be in control. If that is all that he wants, has he not gone too far?

The Lord Chancellor

My Lords, the amendment would provide that only licensed conveyancers could participate in the establishment of a recognised body but it would not prevent them subsequently selling their shares to unqualified persons. I cannot believe that this, at any rate, would be exactly what the noble Lord, Lord Mishcon, would want. It would not restrict the services that the bodies could offer.

The council, under the Bill as drafted, has adequate powers in Clauses 16 and 28 and Schedule 5 to control these matters. It can hold licensed conveyancers responsible for the actions of their unqualified associates and it can withdraw recognition from a body corporate that fails to comply with the rules. Any rules made will (again I say) require the concurrence of the Lord Chancellor. The question is whether it is appropriate to impose a statutory bar on persons who are not licensed conveyancers joining in the formation of recognised bodies. There is no such statutory bar on partnerships either in respect of solicitors or in the arrangements proposed in the Bill for licensed conveyancers.

There is a new point that I had not really fully considered when I prepared these remarks. I gathered from what the noble Lord, Lord Mishcon, said that his concern was not so much the formation of these recognised bodies, if ever there are any, but their control. The fact that under the present amendment it would be possible for a perfectly viable body of licensed conveyancers to form a recognised body but then sell all its shares to unlicensed persons is a matter that I rather think I should look at more carefully than I have done. If I may do so, although I cannot accept this amendment in its present form, I shall give the noble Lord, Lord Mishcon, an opportunity at a later stage of putting down something different, or the same again.

Lord Mishcon

My Lords, the noble and learned Lord, Lord Simon, and the noble and learned Lord the Lord Chancellor have completely interpreted the purpose of my amendment. I am most grateful to both of them. It is purely and simply to see that control is vested—that is the essential part—in the licensed conveyancers in regard to any body that may be formed. I am most glad to accept the offer of the noble and learned Lord to look at this matter (I hope I am not wrong in saying) with sympathy, in the hope of putting into the Bill wording that is better than the wording in my amendment. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morris moved Amendment No. 21:

[Printed earlier: col. 293.]

The noble Lord said: My Lords, it would, I think, be convenient if I was to speak to this amendment and to Amendments Nos. 22 and 23 together.

Amendments Nos. 22 and 23: [Printed earlier: col. 293.]

It will be clear to noble Lords that these amendments raise the issue of conflict of interest. Amendment No. 21 provides that the phrase within Clause 28 "involving the provision of should be substituted by the phrase "exclusively providing". In the Second Reading debate, my noble and learned friend the Lord Chancellor made it clear to me in an assurance that he gave that Clause 28 does not allow banks and insurance companies to carry out conveyancing. My noble and learned friend went on to say: It has not that intention, and I do not think it has that effect".—[Official Report, 14/1/85; col. 828.]

This point was reiterated by my noble and learned friend in the Committee stage of the Bill. Furthermore, he suggested that the issue of conflict of interests had to be faced in the future, and this has now been done by the Farrand Committee in their second report which came out recently. This, of course, is the report of the conveyancing committee headed by Professor Farrand. It was interesting to note that in that report the conclusions were divided into different classes, if I may use the term. There were primary recommendations, strongly recommended recommendations, and recommendations which should be considered, if I remember rightly.

I found it somewhat astonishing that one of the strongly recommended recommendations was that conveyancers should combine or act with estate agents. In view of the fact that this was a majority view, I fail to understand how they could strongly recommend it when it was not the view of the whole committee. Furthermore, those members who took a different view (the minority) namely the Law Society, the National Association of Estate Agents, and the Royal Institute of Chartered Surveyors, did not share that view. Indeed, the Institute of Legal Executives, although they are not actually mentioned, subscribed to the minority view on this different point. I find it difficult to understand why this should be a strongly recommended recommendation.

The reason why the minority did not agree with this recommendation was solely that they saw a serious conflict of interest arising in these particular circumstances. More particularly, they saw it in those instances where they would be acting on behalf of the purchaser rather than the vendor of the property. It was put to the committee that the lay vendor needed legal advice which was independent, that there would inevitably be conflicts between the interests of clients and the interests of solicitors, and that the estate agents would be concerned to receive their commission on completion of sale.

This circumstance is very simple even for me to see: if a member of the public were to go to an estate agent who also offered conveyancing services it would be very much in the interests of the estate agent to bring as much pressure as possible upon the conveyancer not to be as thorough as he ought in the conveyancing work so that the estate agent could lay his hands on the commission as soon as possible. I am not suggesting bad faith here but this is a pressure which would undoubtedly arise. In Committee I argued the point relating to insurance companies and building societies. This is the sole purpose of this amendment, because it is a real fear which will arise.

I am fairly certain that my noble and learned friend the Lord Chancellor will rely very heavily indeed on Clause 34(1) of the Bill, but it is very important that Parliament takes a view on this particular point because I think there is a danger to the consumer. I beg to move.

Lord Graham of Edmonton

My Lords, I very much hope that your Lordships' House will consider very carefully the case which has just been made. In general, I start off by supporting the premise upon which the Bill rests: that there is a case for licensing non-solicitor conveyancers. We are attempting to make certain that the dignity and integrity of the new profession is such that we as parliamentarians are satisfied that it is in the best interests of everyone concerned. The noble Lord, Lord Morris, made particular reference to the consumer and ultimately it is the consumer of services, the client, about whom we are concerned. Clause 8, on the establishment of the Council for Licensed Conveyancers, says: It shall be the general duty of the Council to ensure that the standards of competence and professional conduct among persons who practise as licensed conveyancers are sufficient to secure adequate protection for consumers". 8.45 p.m.

I will refer in later amendments to a satisfactory definition of "consumers". As I read the Bill and as I read the purpose of Amendments 21, 22 and 23, the precise objective is to prevent banks, building societies and other lenders together with insurance companies, brokers and estate agents from investing in or setting up these recognised bodies. Those particular bodies by means of subsidiaries would thus be prevented completely from offering conveyancing services to their existing customers or to the public generally in conjunction with services which they now provide and which, pursuant to the recent Green Paper, they will probably be providing.

With great respect, in my view the case has not yet been made for denying those institutions the use of licensed conveyancers. I have no brief for any body to which I have referred, and I rely simply on papers which have been passed to me which I have read and in which I have been interested; so I have no other interest to declare in that respect.

As I see it, in recent years in public life we have seen movements towards—if I may use a clumsy phrase—the breaking up of hitherto established monopolies or relationships. One is seeing the opening up to a wider number of people access, properly protected—as under this Bill—to competence and expertise which up till now had been channelled somewhat narrowly. I should have thought that if we are moving to one-stop shopping or one-point access to various types of expertise, if we are about to embark upon providing the public with options—which is the whole raison d'être of this Bill—when we are talking about the other professions and businesses to which I have referred there really should be an opportunity of combining in the way which is set out in the Bill (which has been criticised) and permitting those institutions to offer conveyancing services to the public.

To the best of my knowledge, most of these people—certainly building societies—have not considered methods other than the use of proper conveyancing services as hitherto defined. I should certainly have thought that they ought to be provided with the option.

The noble Lord, Lord Morris, fairly raised the possibilities of conflicts of interest. Quite clearly, whether or not they are going to exist to a greater degree in the future remains to be seen. The legal profession has been very jealous in guarding its good name in regard to the charge that cosy relationships exist between the legal profession and others. I would suggest that the professionals involved in building societies, insurance companies, estate and property companies would equally wish to guard their integrity.

I have here a page from The Law Society's Gazette, dated 20th February 1985. In an article the society goes to some pains to discuss the whole issue of the possibilities of conflict. Above the article, the Gazette states: Reproduced below is the text of a memorandum delivered to the Lord Chancellor on 21 December 1984". This is a memorandum by the Law Society, whose standing in these matters is well respected and understood. The conclusion in that memorandum by the Law Society to the Lord Chancellor in respect of these matters says: The use by a lending institution of a subsidiary company to provide conveyancing services would give no better protection to borrowers than they would have if the services were provided by solicitors directly employed by the institution itself. Conflicts of interest arise from economic reality; they are not resolved by legal constructions that do not change the underlying economic facts. The economic unity of groups is recognised in many branches of the law. Conflicts of interest are a matter of increasing public concern. Other professions are facing up to the problems that they present. The legal profession should not be moved backwards". As I read those words, I thought that quite clearly there are in all our professions people with responsibility who recognise the importance of making sure that any arrangements which this House and Parliament make are not capable of being attacked on the basis that we have been loose in defining precisely the consumer interest and bodies. The noble Lord, Lord Mishcon, on earlier amendments, was moved to say that his prime concern was control; in other words, how we make sure that the various bodies which are involved in this business are controlled. Of course, the main control is the manner in which the council is able and willing to exercise its function. I should have thought that the amendments, which I certainly understand are well meant, are not necessary in the light of the current practices among the professional bodies.

The Lord Chancellor

My Lords, I am afraid that, under a mistaken apprehension, I already explained, in the discussion on Amendment No. 19, why these particular amendments are not acceptable to the Government. The discussion on them has ranged a little more widely than I had anticipated, and I think I must therefore remind the House of what I said last January and establish what I believe to be the present situation. When the Austin Mitchell Bill was going through we undertook to set up what subsequently became the Farrand Committee. Part II of this Bill is our view of how the recommendations of the Farrand Committee ought to be brought into effect, and it is therefore the implementation of a pledge.

At the same time, announcements were made in relation to quite a separate issue by members of the Government, including my honourable and learned friend the Solicitor-General and I think the Prime Minister and others, and maybe myself. They were made in regard to a further issue which had been raised at the same time but which was quite separate; that is, whether in-house solicitors employed by banks and building societies could be allowed to undertake, on behalf of potential customers of those institutions, conveyancing transactions. The Government's attitude was then made quite plain: that we favoured such a change, which was strongly resisted by the solicitors' profession. That related to solicitors and not to licensed conveyancers, as I understood it, because there were at that time no licensed conveyancers: there were solicitors; and there were in-house solicitors employed by banks and building societies. I do not think that anything that was said by the Government related to estate agents as such.

At any rate, what I promised your Lordships at the end of January was that I would not use this Bill as a subterfuge for inserting the Government policy in relation to in-house solicitors by a back-door route: that this Bill was not the instrument by which it would be done, and, if it were done, it would be done openly and above-board by a piece of primary legislation. I am speaking absolutely off-the-cuff, and therefore I may be misleading the House; but I think not.

I think that strictly from the statutory point of view a bank is not in the same position as a building society. A bank tends to be a limited company, and I suppose by altering its memorandum of association it could enlarge its objects. A building society is governed by statute and would require primary legislation before it could allow itself to use anybody it its employment for the kind of purpose envisaged. I do not know what is the position as regards estate agents, so I would not venture to say. But I reiterate, so far as I am concerned, that I do not intend this Bill to be used as a subterfuge to tackle the second issue as to whether in-house solicitors should be employed for conveyancing purposes. I hope the House will recognise that that is sincerely meant.

On the other hand, of course, if by any chance the Government were to introduce legislation to deal with the second issue, as they have announced their intention to do, if the question of conflict of interest could be resolved one would necessarily have to reexamine the problem of licensed conveyancers, the new profession, if by that time it has come into existence. That would be only consistent, and therefore I cannot go further than what I have said: that I do not intend that this Bill should be used as a subterfuge. If we are going to do the other thing—and that depends, in my view, on whether the conflict of interest points can be satisfactorily resolved—then it will have to be done by a separate piece of legislation; and then, of course, we shall have to reconsider the position of licensed conveyancers—or whatever Government are then in power will have to consider the position of licensed conveyancers. I have, however, explained why these particular amendments are not acceptable.

The prohibition on recognised bodies offering wider house transfer services or being associated with businesses providing insurance, estate agency or loan services is a slightly different issue. The Farrand Committee did not recommend any statutory bar; quite the contrary. As I think my noble friend said, the committee commented that if the potential conflicts of interest could be overcome it would encourage associations of this sort. It then went on to recommend that the new council should make rules to preclude conflicts of interest arising out of any association that it wished to permit. The Bill follows that approach by enabling the new council to make rules regulating associations between licensed conveyancers and others in the provision of conveyancing services, whether individuals in partnership or recognised bodies.

It is of course essential that the rules should ensure that the consumer does not suffer from conflicts of interest arising from the provision of a wider range of house transfer services. I should have thought that the requirement for the rules to secure the Lord Chancellor's concurrence will provide an adequate safeguard here. But, subject to the overriding need to ensure that consumers do not suffer from conflicts of interest, it is surely desirable to enable prospective purchasers to obtain as wide a range of services from one source as possible. Furthermore, there is to be no statutory bar on licensed conveyancers practising in partnership as distinct from corporate form in association with other professions. Whether or not that is desirable is a matter about which more than one opinion can be held, but it is not raised in this Bill.

Nor, am I advised, is there any statutory bar on solicitors forming such associations, although I think that there are practice rules prohibiting it. It would therefore not be right to put such a fetter on the way in which recognised bodies can operate. I am afraid that that is as far as I can take this amendment this evening. It raises rather wider issues than I had originally thought. I cannot take it further than I have done. I have tried to be as frank as possible with the House.

9 p.m.

Lord Morris

My Lords, I am greatly comforted by the words of my noble and learned friend the Lord Chancellor in—and I do not think that I use too strong a word—his undertaking with regard to this issue. I shall of course read what he said with very great care; but I believe that his argument with regard to these matters is, as I said initially, a source of comfort. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 22, 23 and 24 not moved.]

Clause 30 [Modification of existing enactments relating to conveyancing etc.]:

The Lord Chancellor moved Amendment No. 24A: Page 25, line 21, after ("69") insert (", 75(1)").

The noble and learned Lord said: My Lords, in moving this amendment, I should also like to speak to Amendments Nos. 24B, 24C, and 24D. Amendment No. 24B: Page 25, line 23, after ("(iii)") insert (", (xiv)"). Amendment No. 24C: Page 25, line 24, leave out ("and"). Amendment No. 24D: Page 25, line 25, at end insert— ("and ( ) sections 4(3) and 6(2) of the Matrimonial Homes Act 1983,").

These are technical amendments. Clause 30 modifies existing legislation relating to conveyancing which refers to "solicitor", to provide that such references shall be construed as referring also to licensed conveyancers. The amendments add a further four such references to the existing list in Clause 30 which have been brought to our attention as being appropriate. I beg to move Amendment No. 24A. The remaining amendments are consequential.

On Question, amendment agreed to.

The Lord Chancellor moved Amendments Nos. 24B, 24C and 24D:

[Printed above.]

On Question, amendments agreed to.

Clause 34 [Rules]:

Lord Morris moved Amendment No. 25: Page 26, leave out line 25 and insert ("before being made, be submitted to the Lord Chancellor for his approval either as submitted to him or subject to such modifications as he thinks fit, but where the Lord Chancellor proposes to approve such rules subject to modification he shall notify the modification to the Council and consider any observations of the Council on them.").

The noble Lord said: My Lords, your Lordships will be aware that Clause 34 of the Bill provides that: Any rules made by the Council under this Part shall be made with the concurrence of the Lord Chancellor". This is an extremely important clause upon which a great deal of the Bill hangs. I am not in any way suggesting that the present distinguished incumbent of this office would ever be accused of being shy in coming forward, but there is no doubt that the Lord Chancellor's Department would be under considerable pressure in practice if the council was unanimous in, say, its agreement over a series or block of rules and the Lord Chancellor's Department voiced doubts about it. It would be very difficult for the department to interfere with this decision-making process.

The purpose of my amendment is to ensure that my noble and learned friend the Lord Chancellor does not just concur with rules that are submitted to him, but is also given the power to modify those rules which, I understand, he does not have in the Bill. My construction of Clause 34 may be quite wrong on this point, but I believe that the amendment makes it quite clear that this is the case. Without wishing to delay the House any further at this very late hour, I beg to move.

Lord Simon of Glaisdale

My Lords, I hope that the noble Lord, Lord Morris, will forgive me if I say that what he is doing is to substitute six-and-three-quarter lines for three-quarters of a line in order to tell the noble and learned Lord the Lord Chancellor to do what he would do in any event. Every year we produce three of these enormous volumes of legislation. Anything that we do to add to them is not well done; anything that we can do to lighten them is well done. I hope that the noble Lord will not press his amendment.

Lord Airedale

My Lords, with respect, I entirely agree with those remarks. What would happen in practice would surely be that the noble and learned Lord the Lord Chancellor would say, "I do not concur with the rule which you propose; but if you care to modify it and return it to me, I might concur with that". Then the desired result would be achieved.

The Lord Chancellor

My Lords, I rather agree both with my noble and learned friend on the Cross-Benches and with the noble Lord, Lord Airedale. It is of course a mistake to suppose that in the Lord Chancellor giving concurrence to rules or withholding his concurrence, he will not have any negotiation and discussion with the council. He will explain to the council what he objects to, if he objects; he will explain to the council what he wants put in if he thinks that there are omissions. To that extent I wholly agree with what has just been said.

I cannot help thinking that there might be a confusion between the powers of scheme-making, which are provided in Schedule 2, and the powers of rule-making which are provided in the clause under consideration. The scheme-making powers come into effect before the council exists and the result is that the Lord Chancellor not only can but must be in a position to modify and draft for himself up to a point. The rule-making aspect which we are discussing is exactly as my noble and learned friend Lord Simon and the noble Lord, Lord Airedale, said. It will be the subject of discussion at official level between officials of the Lord Chancellor's Department and the new council, and they will arrive at a modus vivendi. I think therefore that it is not desirable to impose this particular wheel on the council's coach and on the Lord Chancellor's postillion position behind it. I think on the whole that we are better without it, to be honest.

Lord Morris

My Lords, no one could agree more with the sentiments of the noble and learned Lord, Lord Simon of Glaisdale, than I do. My rather pathetic defence is that I did not draft this clause myself. However, as I have taken responsibility for it, I accept his strictures. I also entirely agree with what the noble Lord, Lord Airedale, said, but what was more important was that I wanted to hear it from the mouth of my noble and learned friend the Lord Chancellor rather than from him. Having heard that, I am happy and reassured by my noble and learned friend the Lord Chancellor. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Selkirk moved Amendment No. 25A: After Clause 34, insert the following new clause:

("Provision for building societies . At any time after the coming into force of this Part of this Act the board of directors of a building society may by memorandum in writing alter the rules of the building society so as to enable the building society to instruct licensed conveyancers or authorised bodies to act on behalf of the building society in the provision of conveyancing services.").

The noble Earl said: My Lords, I put in this new clause in order to draw attention to an amendment which is necessary and which flows directly from the purpose of Part II of this Bill. The way to see it most easily is that the normal procedure of building societies is that when someone has agreed, or wants, to take a loan he asks to see a solicitor. When it is found that he is one of the solicitors on the list, which of course is almost universal, he can be instructed to act on behalf of both the building society and the borrower. That is the normal procedure, and it is both simple and economical.

The difficulty is that a great many of the building societies, which of course are mutual, have strict rules which were drawn up in the middle of the Victorian era in the manner of those days when things were regarded very strictly. They insist that their mortgages should be drawn by a solicitor. That means that they cannot use licensed conveyancers, and they will be excluded from any of the operations with some of the largest building societies.

One may say that it is an easy business just to change the rules of a building society. However, that is not so. It is much easier said than done. There are nearly a dozen or so building societies with a million members, and one, the Halifax, has two million. They reckon that it would cost a large part of half a million pounds in order to incorporate a rule of this character in their rules.

They of course will not do that. The result is to a considerable extent that licensed conveyancers will not be able to get the benefit of this business. The building societies inevitably handle a large proportion of the purchase of houses, and it is curious that almost alone among the things we buy houses are bought almost entirely by lent money. Therefore the licensed conveyancers would be substantially excluded from a large measure of business.

It is essential that this situation should be dealt with in one way or another. I do not necessarily press the wording of this amendment, but I ask the noble and learned Lord the Lord Chancellor to realise that this is a matter which requires fairly quick operation in order to give the licensed conveyancers a chance.

I suspect that the Lord Chancellor is going to say that this is a Bill which deals with licensed conveyancers and does not deal with building societies, and therefore it is not a matter which he feels he wants to deal with himself. The other point he will make is that it is imagined, rightly or wrongly, that there will be a building society Bill next year. Of course no one knows whether or not there will be, but this is a matter which requires action fairly quickly if the licensed conveyancers are to have a chance.

May I ask my noble and learned friend on the Woolsack whether he will consider this, although it is a small matter, as an important one both for the building societies as such and for the licensed conveyancers themselves? If he cannot take this on in some form in this Bill, will he, at a fairly early date, pass this information to the Treasury, which is the body which deals with building societies? I beg to move.

The Lord Chancellor

My Lords, clearly there cannot be any objection in principle to what my noble friend has proposed. It is clearly desirable that a building society should be able to instruct licensed conveyancers as well as solicitors to carry out the society's side of mortgage transactions. I understand that not all the societies will find themselves in the difficulties that my noble friend has described, although he is understandably concerned at the position of those which, without amending legislation, will be put to unnecessary expense and inconvenience. I understand, without making any promises—I hope I shall not be construed as making any promises—that there may be a building societies Bill next Session. I doubt whether it will be in force in time early enough to avoid the difficulties described. What I will do if my noble friend will allow me, is to give further consideration to whether a suitable amendment can be included in this Bill. I understand that it probably would be within the scope of the Bill (this would be a matter on which I would have to take advice) or the building societies Bill, if one is produced next Session. If this Bill were to be amended the necessary provisions could not be moved until it reaches another place. I take it that my noble friend would not find that an insuperable objection should he decide, on that kind of assurance, to withdraw the amendment.

9.15 p.m.

The Earl of Selkirk

My Lords, I thank my noble and learned friend for what he has said. I would add one point—that the building societies concerned are some of the largest. I guess that there are probably nearly a dozen, each with about 1 million members, so it is a considerable matter which would seriously affect the position of licensed conveyancers. I am extremely happy to accept what my noble and learned friend has said and I am grateful for it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 35 [Interpretation of Part II]:

Lord Graham of Edmonton moved Amendment No. 26: Page 27, line 6, at end insert— (" "consumer" means any person for whom services are or are sought to be supplied in the course of a business carried on by a licensed conveyancer and who does not receive or seek to receive those services in the course of a business which he himself carries on;").

The noble Lord said: My Lords, your Lordships may recall that at Committee stage I had down an amendment for consideration seeking to introduce a definition of "consumer" into the Bill. In going through the Bill I found the following references to consumers in the text. First, Clause 8(2) lays down that, It shall be the general duty of the Council to ensure that the standards of competence and professional conduct among persons who practise as licensed conveyancers are sufficient to secure adequate protection for consumers".

Secondly, Clause 20, on pages 18 and 19, which concerns the Investigating Committee which will make preliminary investigations of complaints about licensed conveyancers, refers to consumers in subsection (5). This provides that where it appears to the Investigating Committee that an allegation or complaint which it is investigating ought to be referred to the Discipline and Appeals Committee, and that it is necessary for the protection of the consumer to do so, the Investigating Committee may take certain action.

Another reference to consumers appears on page 47. In Schedule 2, paragraph 4(4) describes a scheme under which the members of the Council for Licensed Conveyancers are to be elected and it is required that there shall be at least two persons on the council who represent the interests of consumers.

All these references are in parts of the Bill which relate to the orderly organisation of those who are now known as non-solicitor conveyancers into the new profession of licensed conveyancers, and their recognition. Licensed conveyancers will compete with solicitors in the provision of conveyancing services. This Bill provides for the rules under which they will compete, and, as the noble and learned Lord the Lord Chancellor said when he made his opening contribution to the Second Reading debate, the restrictions on competition must be examined critically to ensure that they go no wider than is necessary for consumer protection.

To a substantial extent the restriction will be laid down by the Council for Licensed Conveyancers in just the same way as any member of any profession has restrictions placed upon him by the governing body of his profession. Since Clause 16 has been debated, it directs that the council shall make rules which constitute a mandatory code of conduct and shall do so in pursuance of a general duty referred to in Clause 8(2). As I have reminded your Lordships, that duty is to ensure that standards of professional competence among persons who practice as conveyancers are sufficient to ensure adequate protection for consumers. Thus we have the parameters within which the council will work.

The noble and learned Lord the Lord Chancellor will surely have the support of the whole House for his statement that restrictions on competition must go no wider than is necessary for consumer protection. The whole House, I would expect, is likely also to support the direction that the council must ensure adequate protection for consumers. Note, my Lords, that protection must he adequate but restrictions must go no wider than is necessary.

The amendment which I am asking your Lordships to consider is designed to avert difficulties for the council when fulfilling the responsibilities and duties imposed on it by this Bill. It is designed also to ensure that the Bill shall—and I use that word carefully, rather than "may"—be interpreted in complete accord with the intentions of Parliament. The amendment defines the word, "consumer". It might be said that everybody knows the meaning of that word and that no definition in this Bill is necessary. But, in fact, the word "consumer" in the sort of context in which it is used in this Bill does not have a self-evident meaning. Indeed, in the course of the past two decades it has come to be used as what I suggest can be conveniently described as a term of art. That is why it needs to be defined within its own context.

Probably the first recognition of the existence of a segment of society which could be described as composed of "consumers" happened when a departmental committee was set up with terms of reference requiring it: to consider and report what changes, if any, in the law and what other measures, if any, are desirable for the further protection of the consuming public". That was the second part of the terms of reference of what we now remember us the Molony Committee on Consumer Protection.

That committee's final report, published in July 1962, began by recording that, as a basic task, the committee had to decide upon a definition of a consumer. Paragraph 2 of the report provided the decision: we regard him as one who purchases (or hire-purchases) goods for private use or consumption". The Molony Report was the foundation of the Fair Trading Act 1973. There is a comprehensive definition of "consumer" in Section 137 of that Act. It is: any person who is either (a) a person to whom goods are or are sought to be supplied (whether by way of sale or otherwise) in the course of a business carried on by the person supplying or seeking to supply them, or (b) a person for whom services are or are sought to be supplied in the course of a business carried on by the person supplying or seeking to supply them, and"— (here we leave the subscriptions: what follows applies to both of them)— who does not receive or seek to receive the goods or services in the course of a business carried on by him".

In my amendment I am suggesting to your Lordships that this Bill should contain a definition of "consumer" in effectively the same terms as the "services" part of that definition in the Fair Trading Act. The noble and learned Lord the Lord Chancellor may respond by telling the House that he is satisfied that the definition in the Fair Trading Act can be properly regarded as constituting a definition of "consumer" for the purposes of this Bill. If that should be so, and goes on record by means of the Official Report of today's proceedings in this House, that may well be satisfactory to your Lordships, and if that should be so, it will certainly satisfy me. Meanwhile, I beg to move.

The Lord Chancellor

My Lords, if accepted this amendment would have a somewhat bizarre effect. The word "consumer" appears in two places in Part II of the Bill which are relevant to what I am about to say. Clause 8 requires the Council: to ensure that the standards of competence and professional conduct … as licensed conveyancers are sufficient to secure adequate protection for consumers.". The amendment provides: 'consumer' means any person for whom services are or are sought to be supplied in the course of a business carried on by a licensed conveyancer and who does not receive or seek to receive those services in the course of a business which he himself carries on.". It would clearly, therefore, remove from the council any duty to ensure that those involved in commercial conveyancing were protected from incompetent or dishonest licensed conveyancers. That cannot be what the noble Lord desires. I dare say it would hurt large organisations such as ICI rather less than it would a small shopkeeper; but it would clearly be unacceptable for a small shopkeeper, as my noble and learned friend Lord Simon said in connection with another amendment earlier this evening, buying a shop with domestic premises attached.

It is difficult to see, therefore, that this amendment can possibly be desired. The word "consumer" also appears in Schedule 2, where provision is made for the membership of the council to include at least two persons who represent the interests of consumers. It could be that the amendment is designed to ensure that such persons represent the lay person rather than a corporate body which receives conveyancing services; but, if it means that, it is doubtful whether any such distinction is particularly useful or desirable at all.

For those reasons, and because it would remove the small shopkeeper and others in small businesses from protection by the council, and also because the restriction on consumer representatives in Schedule 2 does not seem desirable, I do not see myself able to accept the amendment in its present form.

Lord Graham of Edmonton

My Lords. I appreciate the problems in the wording of the amendment, as courteously pointed out by the noble and learned Lord the Lord Chancellor, but I take heart from his final remark that the amendment is unacceptable to him in its present form. I should like to proceed on the premise that there is in fact a place in the Bill for a more precise definition of the term "consumer". With three references in three different contexts in the Bill, what I have sought to do, in a clumsy and clearly, tonight, in an unsuccessful way, is to try to understand words in other legislation which will be looked upon as defining the word "consumer". It is not unknown in this House to use for one Bill definitions that have been accepted as for another.

However, I do not in any way quibble at anything that the noble and learned Lord the Lord Chancellor has said as to the problem the present wording would cause. I shall read very carefully what he has said and perhaps there may be another opportunity to raise this point again. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 37 [Jurisdiction and powers of Senate Disciplinary Tribunals in relation to complaints against barristers]:

The Lord Chancellor moved Amendment No. 27: Page 28, line 24, leave out from (" (1) ") to ("any") in line 25 and insert ("The jurisdiction of a Senate Disciplinary Tribunal to hear and determine charges of professional misconduct against barristers shall include jurisdiction to hear and determine, as a charge of professional misconduct,").

The noble and learned Lord said: My Lords, we now turn to the question of legal aid discipline, which is dealt within Clauses 37 and 38, and if I may, with the leave of the House, I should like to speak simultaneously to Amendments Nos. 27, 28, 31 and 32. Amendment No. 28: Page 28, line 28, leave out subsection (2). Amendment No. 31: Clause 38, page 29, line 5, leave out ("a legal aid complaint, or"). Amendment No. 32: Page 29, line 6, after ("barrister") insert (" (whether pursuant to section 37(1) or otherwise) ").

These amendments make it clear that the jurisdiction of a Senate Disciplinary Tribunal to deal with legal aid complaints may be exercised as part of the tribunal's existing jurisdiction to hear and determine charges of professional misconduct, rather than as a separate, new jurisdiction.

Your Lordships will remember that Clauses 37 to 40 inclusive empower a Senate Disciplinary Tribunal and the Solicitors Disciplinary Tribunal to hear and determine legal aid complaints. These amendments, I think, are technical in nature and relate solely to the senate. A Senate Disciplinary Tribunal's existing jurisdiction is to hear and determine charges of professional misconduct.

The intention behind this part of the Bill is that legal aid complaints should be viewed as seriously as complaints of professional misconduct generally and should be treated in the same way. The approach presently taken in Clauses 37 and 38 does not in terms achieve this end. It is in fact preferable and procedurally more apt to ensure that legal aid complaints can be heard and determined as charges of professional misconduct.

These amendments therefore provide that a Senate Disciplinary Tribunal has jurisdiction to hear and determine, as charges of professional misconduct, legal aid complaints. This approach means that a tribunal will automatically have, in dealing with a legal aid complaint, all the powers it has on the hearing of a charge of professional misconduct and subsection (2) of Clause 37 can therefore be removed. By virtue of Clauses 37 and 38, a tribunal will of course be able to cancel and reduce legal aid remuneration or exclude a barrister from legal aid work. I beg to move.

On Question, amendment agreed to.

9.30 p.m.

The Lord Chancellor moved Amendment No. 28:

[Printed above.]

The noble and learned Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 29: Page 28, line 35, leave out from ("fees") to end of line 36 and insert—

  1. ("(a) otherwise payable under or in accordance with Part I or Part II of the Legal Aid Act 1974, or
  2. (b) otherwise chargeable as mentioned in section 5(1) of that Act (payment for advice and assistance otherwise than through client's contribution),
in connection with services provided by the banister").

The noble and learned Lord said: My Lords, these are Government amendments, and in moving Amendment No. 29 I should like to speak simultaneously to Amendments Nos. 30, 33 and 34. Amendment No. 30: Page 28, line 38, leave out subsection (4) and insert— ("(4) Accordingly, in so far as any of sections 4, 5, 10(1) and 37(2) of the Legal Aid Act 1974 (which relate to remuneration for legal aid work) has effect in relation to any fees reduced or cancelled by an order under subsection (3), it shall so have effect subject to the provisions of that order."). Amendment No. 33: Clause 39, page 30, line 1, leave out from ("costs") to ("under") in line 3 and insert—

  1. ("(a) otherwise payable under or in accordance with Part I or Part II of the Legal Aid Act 1974; or
  2. (b) otherwise chargeable as mentioned in section 5(1) of that Act; or
  3. (c) otherwise payable").
Amendment No. 34: Page 30, line 6, leave out subsection (4) and insert— ("(4) Accordingly, in so far as—
  1. (a)any of sections 4, 5, 10(1) and 37(2) of the Legal Aid Act 1974; or
  2. (b) any provision made by virtue of section 1(1)(b) of the Legal Aid Act 1982,
has effect in relation to any costs reduced or cancelled by an order under subsection (3), it shall so have effect subject to the provisions of that order."). These amendments relate to phrases contained in Clauses 37 and 39. They enable both a Senate Disciplinary Tribunal and the Solicitors Disciplinary Tribunal, in dealing with legal aid complaints, to order the cancellation or reduction of remuneration for legal advice and assistance, as well as for civil and criminal legal aid. The group of amendments will enable these two tribunals—the Senate and the Solicitors Disciplinary Tribunals—to order the reduction or cancellation of fees and costs in respect of work done by barristers and solicitors under the green form scheme.

When these tribunals take over the jurisdiction to hear legal aid complaints, it is intended that they should be able in an appropriate case to order the reduction or cancellation of a barrister's or a solicitor's legal aid remuneration. Clauses 37 and 39 presently refer to Sections 10 and 37 of the Legal Aid Act 1974 and Section 1 of the Legal Aid Act 1982, but not to Sections 4 and 5 of the 1974 Act, which are the provisions governing remuneration of green form work. These amendments therefore make it quite clear that the tribunals are able to reduce or cancel green form remuneration. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 30:

[Printed above.]

The noble and learned Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Clause 38 [Exclusion of barrister from legal aid work]:

The Lord Chancellor moved Amendments Nos. 31 and 32:

[Printed above.]

The noble and learned Lord said: My Lords, these amendments are consequential not on the amendment to which I have just been speaking, but on the one before. I beg to move.

On Question, amendments agreed to.

Clause 39 [Jurisdiction and powers of Solicitors Disciplinary Tribunal in relation to complaints against solicitors]:

The Lord Chancellor moved Amendments Nos. 33 and 34:

[Printed above.]

The noble and learned Lord said: My Lords, Amendments Nos. 33 and 34 are consequential on the immediately preceding one. I beg to move.

On Question, amendments agreed to.

Clause 41 [Eligibility for legal advice and assistance]:

Lord Elwyn-Jones moved Amendment No. 35: Page 32, line 2, leave out from ("1974") to end of line 11 and insert ("in subsection (1) the words "and (in either case) his disposable capital does not exceed £765" shall be omitted, and in subsection (2) paragraph (b) shall be omitted.").

The noble and learned Lord said: My Lords, this is an important amendment. Clause 41, as it stands, allows the noble and learned Lord the Lord Chancellor to provide a different capital limit for the purposes of advice and assistance by way of representation, which is commonly designated as abwor—unattractive as that word has become—from that laid down for advice and assistance under the green form scheme.

At present the capital limit—that is to say, the level at which liability to make contributions in respect of legal aid arises—for a single person for both schemes (representation and green form) is the low limit of £765—not much, after all, to have saved in a life time. Indeed, that that should be regarded as the capital limit making payments eligible is really a remarkable reflection on this day and age. There are additional allowances for those with dependants but, on the point of substance that I raise, that is not a great deal of assistance.

The unsatisfactory nature of the contradictions inherent in the present arrangements has long been recognised and criticised by lawyers, Citizens' Advice Bureaux and others. Many elderly people particularly have a small amount of savings—for instance, £1,000—which they regard as put away, sadly and mainly, for their own funeral. Heaven knows, we know how funeral expenses increase year by year. That amount, however, is enough to make them ineligible for free legal advice, and they are expected to pay when they consult a solicitor on the green form scheme the full cost of so doing.

On the other hand, the capital limit for legal aid for proceedings, below which no contribution from capital is required, is £3,000. The Lord Chancellor's Legal Aid Advisory Committee in its latest report, the 34th Report 1983–84, has carried out, at the request of the noble and learned Lord the Lord Chancellor, a review of the financial conditions for eligibility for all forms of legal aid and advice. Its conclusion is that, while an income test should remain for green form and representation, the capital limit should be abolished altogether.

The relevant part of the report of the Lord Chancellor's advisory committee reads: The present capital limit for advice and assistance is substantially lower than the free capital limit for legal aid and the green form dependants' allowances for capital do little to narrow the gap. The difference between the two limits has traditionally been justified by the small cost of green form bills which allows people to pay out of capital without hardship. Nevertheless, it is anomalous that a person who is held to be able to afford to contribute nothing from capital to the cost of legal aid can nevertheless be required to pay the full cost of advice and assistance from capital, especially bearing in mind that by contrast the income contribution provisions for advice and assistance are so much more generous than those for legal aid". The report goes on to acknowledge the strength of the practical arguments for a total disregard of capital in legal aid assessments, but acknowledges the uncertainty as to the probable cost. The report then says: For green form assessments the case for total disregard is all the stronger. The cost of disregard would be modest and simplification of administration has extra merit".

Those are powerful and, in my submission, irresistible conclusions. The amendment which I move carries out the proposal of the noble and learned Lord the Lord Chancellor's own Legal Aid Advisory Committee, and it would surprise me greatly therefore if he were to find it possible to oppose this amendment. I beg to move.

The Lord Chancellor

My Lords, the Bill as drafted permits regulations to provide for the capital limit for assistance by way of representation to be different from that for advice and assistance. That is, in effect, a tidying up of a loose end in the legal aid assessment system. The amendment radically alters the nature of the entire clause by abolishing capital assessment altogether for both advice and assistance and assistance by way of representation.

Apart from any merits the proposal might have, the Bill is not, I should have thought, an appropriate vehicle for such a fundamental change. However, without turning it down flat, which I do not want to do, I must tell the noble and learned Lord that it is less than a month since the Advisory Committee on Legal Aid published its broad review, undertaken at my request, of the financial criteria for the grant of legal aid and advice and assistance. The change which this amendment seeks to effect covers only one of its many recommendations and it would, therefore, pre-empt any comprehensive study of the committee's proposals.

I shall be considering all the advisory committee's recommendations in due course and I shall have to consult my colleagues who also have departmental spending interests to defend and Treasury interests to defend. I must be allowed, after the result of that, to make my own selection of priorities rather than pick out one which may or may not commend itself to the Government. After only a month of consideration I do not think that the noble and learned Lord is fair in pushing me thus far this evening. I am not being horrid to him—at least I hope I am not—but this proposal cannot he accepted, at any rate not tonight.

Lord Elwyn-Jones

My Lords, I confess that I find the noble and learned Lord's answer disappointing, though basically his attitude is undoubtedly one of goodwill. I believe that this particular issue in this proposal is separate and identifiable. There is discrimination against the poor people who have to rely on the green form schemes, early use of which prevents and inhibits much subsequent litigation. It seems to me that it is very important that this matter should be put right immediately. Therefore, it being a matter of such urgency and importance I think the opinion of the House should be sought and, if it is successful, it may well be of assistance to the Lord Chancellor in his own endeavours in regard to another Department of State. Accordingly, I again move the amendment.

9.43 p.m.

On Question, Whether the said amendment (No. 35) shall be agreed to?

Their Lordships divided: Contents, 24; Not-Contents, 40.

DIVISION NO. 3
CONTENTS
Airedale, L. Irving of Dartford, L.
Cledwyn of Penrhos, L. John-Mackie, L.
David B. Kilmarnock, L.
Denning, L. Llewelyn-Davies of Hastoe, B.
Diamond, L. Mishcon, L.
Elwyn-Jones, L. Nicol, B.
Foot, L. Phillips, B.
Gallacher, L. Pitt of Hampstead, L.
Gifford, L. Ponsonby of Shulbrede, L. [Teller.]
Graham of Edmonton, L. [Teller.]
Stewart of Fulham, L.
Gregson, L. Strauss, L.
Hutchinson of Lullington, L. White, B.
NOT-CONTENTS
Abercorn, D. Campbell of Alloway, L.
Avon, E. Carnegy of Lour, B.
Beloff, L. Chelwood, L.
Belstead, L. Cox, B.
Brabazon of Tara, L. Craigmyle, L.
Bridgeman, V. De La Warr, E.
Brougham and Vaux, L. Denham, L. [Teller.]
Bruce-Gardyne, L. Dormer, L.
Caithness, E. Glenarthur, L.
Cameron of Lochbroom, L. Gray of Contin, L.
Hailsham of Saint Marylebone, L. Renton, L.
Selkirk, E.
Henley, L. Simon of Glaisdale, L.
Hives, L. Skelmersdale, L.
Home of the Hirsel, L. Swinton, E. [Teller.]
Hornsby-Smith, B. Trumpington, B.
Marley, L. Tryon, L.
Morris, L. Westbury, L.
Mottistone, L. Young of Graffham, L.
Rankeillour, L. Zouche of Haryngworth, L.
Reay, L.

Resolved in the negative, and amendment disagreed to accordingly.

9.51 p.m.

Lord Denham

My Lords, I think the general feeling in the House is that we have probably gone as far as we can usefully go tonight.

I therefore beg to move that further consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.