HL Deb 19 July 1989 vol 510 cc778-88

2.56 p.m.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, with the leave of the House, I should like to make a Statement relating to the future of the legal profession. The Statement is as follows:

When I published the Government's Green Papers on the legal profession, which were designed to remove any unnecessary restrictions in the provision of legal services, I undertook to make a Statement to the House before the Summer Recess. I have received over 2,000 responses to the Green Papers, and held discussions with many of those directly involved. I would like to take this opportunity to thank all those who helped in that process. All the points which were put to me in writing or orally have been carefully considered. The Government are today publishing a White Paper containing their own proposals for legislation.

The Government propose to introduce legislation which will set out broad objectives designed to further the interests of the administration of justice, to increase access to justice and to extend the range of those possessing rights of audience before the courts. All those involved in granting rights of audience will be required by the statute to have regard to these objectives. An independent statutory Advisory Committee on Education and Conduct will give advice on the achievement of these objectives. Again there will be a statutory requirement for all those involved in granting rights of audience to have regard to this advice. The advisory committee will have a membership broadly as set out in the Green Paper, but, in order to emphasise its independence from the Government, it will have the power to appoint its own staff.

The Government propose that both the Bar and the Law Society should have a statutory entitlement to grant rights of audience to their members in all courts. All those called to the Bar should receive rights of audience in all courts. On qualification solicitors will continue to receive rights of audiences equivalent to those they now possess. Solicitors will, however, also be eligible to progress to rights of audience in some or all of the higher courts, if they have achieved the necessary standards of competence and conform to appropriate rules of conduct.

All rules relating to the competence and conduct of advocates will continue to be made by the professional bodies, but, building on the current arrangements for the Law Society's rules, all changes in such rules will in the future require the concurrence of the Lord Chancellor and each of the four Heads of Division (the Lord Chief Justice, the Master of the Rolls, the President o1 the Family Division and the Vice-Chancellor). All these will be required to have regard to the statutory objectives and the advisory committees's advice.

Other professional bodies might subsequently be empowered by Order in Council, approved in draft by both Houses of Parliament, to grant rights of audience in particular classes of business in particular courts, provided that their competence and conduct requirements satisfied the Lord Chancellor and the four Heads of Division. Similar arrangements will apply for the future to any professional body which might want to have the right to issue legal process or to take steps in proceedings on behalf of others. These rights are at present reserved by statute to solicitors.

The importance of ensuring that both a wide range of barristers generally and an adequate choice of specialist barristers are available to take cases in court requires that the Bar should continue to be able to make its own rules about partnerships and multi-disciplinary practices. Considerable concern was expressed in the responses to the consultation that removing such rules might threaten the future viability of the Bar. The Government attach great importance to the continued existence of a vigorous independent Bar.

Solicitors, who are also frequently involved in litigation, ought to be treated on an equal basis to barristers. The Government therefore propose to remove the existing statutory restrictions which prevent solicitors forming multi-disciplinary partnerships, but to provide that the Law Society will henceforth be allowed to make its own rules about partnerships and multi-disciplinary practices. Except in so far as such rules are related to advocacy and the conduct of litigation and are approved as necessary in the interests of justice by the Lord Chancellor and the Heads of Division, they will be subject to review under the new restrictive trade practices legislation proposed in the DTI White Paper, Opening Markets: New Policy On Restrictive Trade Practices. The links between the two sets of proposals, including an extended role for the Director General of Fair Trading, are set out in the two White Papers.

The Government propose also to remove the present statutory obstacles to multi-national practices and to ensure that lawyers from Scotland and Northern Ireland will have the same rights in England and Wales (and vice versa) as lawyers from other European jurisdictions will have under Community directives.

The Government propose to legislate, as the Green Paper suggested, to replace the provisions in the Building Societies Act 1986 with a power to allow the Lord Chancellor to recognise professional bodies as competent to authorise their members as authorised practitioners to undertake conveyancing for their borrowers. Conveyancing by such practitioners will be subject to the existing requirement that it is supervised by a solicitor or licensed conveyancer; and every such authorised practitioner will be required to offer its clients a personal interview with the solicitor or licensed conveyancer having conduct of the transaction. Throughout the transaction that solicitor or licensed conveyancer will have a paramount duty towards the borrower.

There will be a detailed code of conduct laid down by statutory instrument by which authorised practitioners will have to abide. Moreover, authorised practitioners will be prohibited from providing conveyancing services to both seller and buyer in the same transaction (except in very limited circumstances) and from providing estate agency services to the seller and conveyancing services to the buyer in the same transaction. Making the provision of one service conditional upon taking another (so-called "tying-in") in connection with house purchase will be prohibited. Authorised practitioners will be required to charge for their conveyancing services on a basis that is not less than the true cost of providing them.

These arrangements are designed to provide adequate protection for individual clients and also to ensure that all those who want to provide conveyancing services, whether small firms of solicitors or large financial institutions, can compete on fair terms.

Litigation will be permitted to be undertaken on the speculative basis now allowed in Scotland. It will also become possible in such cases for there to be a moderate percentage uplift on the ordinary taxed costs otherwise payable, within a maximum to be prescribed by statutory instrument. There should, however, be no introduction of any kind of contingency fee linked to a proportion of the damages received.

My Lords, I have dealt with these issues in particular because they are those about which there has been most public comment. These proposals, and others, are presented in more detail in the White Paper. Taken together, these proposals, which are an integral part of the Government's wider programme of improving access to justice, represent an appropriate balance between the encouragement of competition and the maintenance of standards in the administration of justice and the provision of legal services. I believe these proposals provide a satisfactory framework for the future.

3.7 p.m.

Lord Elwyn-Jones

My Lords, the House will be grateful to the noble and learned Lord the Lord Chancellor for making the much awaited Statement and for the publication of the White Paper which sees the light of day today. How much daylight there will be remains to be seen in what clearly will be contentious debates on several of the provisions in the White Paper.

Can the noble and learned Lord the Lord Chancellor give an indication of the Government's programme for the future handling of this important matter? Will there be an opportunity to debate the White Paper before a Bill is introduced? Further, when is it proposed to introduce such a Bill? Should there not be an opportunity for the House to discuss the White Paper before a Bill is introduced? Normally, that would be the procedure, I venture to think, after a White Paper has been published. Is it contemplated that there will be such an opportunity? I do not suggest that it is possible to fit in a debate between now and Thursday week, but there will be an overlap period of some weeks when the House resumes in October. I have not, happily or unhappily, been a fly on the wall at the discussions, but perhaps there will be the opportunity for a debate of substance before the Bill is produced.

As to the White Paper, clearly there has not been sufficient time to examine it in detail —I had the benefit of receiving a copy before lunch —but it would seem that some of the more objectionable proposals have gone, such as those tending to undermine the independence of the Bar, and, indeed, of the judiciary; no doubt as a result of the consultations which have taken place on the perhaps too hurriedly prepared Green Paper.

It is gratifying, for example, that the advisory committee is to be wholly independent, that there are proposals for improvement in legal education and that there is to be a new office of legal services ombudsman, the value of which on the face of it looks useful at any rate to those of us on this side of the House. However, its value will only be known after a constructive examination of the precise proposals and when all the details relating to it have been fleshed out.

Sadly, there is one glaring and crucial omission in the Statement and in the White Paper. The Statement claims, in the last paragraph, that the proposals are: an integral part of the Government's wider programme of improving access to justice". but we hear no further words about improved access to justice in the sense of increased provision to enable those who cannot afford it to go to justice —not a word. I submit that it is regrettable that there is no clue or indication of any proposed extension or improvement on legal services to those who most need legal assistance in present conditions. There is no provision for that in the White Paper as far as I have been able to read it this morning.

Even as regards proceedings which are of vital importance to the subject, there is no provision for legal assistance in the White Paper. These proceedings, for example, may relate to his home and may concern rent or possession disputes. Another problem may concern his family and the monstrous complexities of matrimonial disputes. These matters have resulted in difficult and expensive litigation. There may be problems with his work. At present an employee, unless he is supported by a trade union, is not likely to be able to afford to go to an industrial tribunal. Such a facility is not open to him in terms of expense.

There are also consumer disputes and insurance issues. There are proceedings affecting a citizen's rights vis-à-vis the state; for example being subject to a compulsory purchase order. We have had signs of that difficulty as regards the Channel Tunnel. There are also planning inquiries. Suddenly a person may find that the whole environment in which he lives has altered fundamentally. There are also immigration tribunals. In some ways they provide perhaps the most flagrant example of the absence of legal aid and advice. There are also the fields of social security and medical appeals tribunals, besides criminal injury compensation proceedings. For none of these matters is there provision for an extension of legal aid and advice.

Is it not the case that the policy of the Government has been to reduce the level of legal aid in a number of ways? Whereas in 1979 70 per cent. of the population qualified for legal aid, that percentage has fallen to 50 per cent. and it is still falling. This reduction has taken place at the very time when tribunals have increased in their numbers and complexity. The importance of their work has also increased. Alas, the network of law centres has also been in decline. I refer also to the citizens advice bureaux, family, housing and other advice centres. These facilities badly need strengthening but they are not getting it.

There is not a word about these matters in the Statement. Therefore we greatly hope that, when we come to resume discussion of these subjects, the Government themselves will have given urgent thought to them in the coming months so that this glaring omission in the gap between the noble words about improving access to justice and the reality of the diminution of it may be faced squarely by the Government.

Lord Meston

My Lords, we join in thanking the noble and learned Lord the Lord Chancellor for his eagerly awaited Statement. We are thankful now to have the considered view of the Government to set against the Green Papers that were published in January. I for one am particularly grateful for the comparative table in Annex B to the White Paper, which is most helpful. It enables us to compare the proposals in the White Paper with those in the Green Papers. It may enable some of us to put the latter where many wanted them to go in the first place.

This is certainly not the time to rehearse all the arguments in detail. It is not just the lawyers who will want time to study the small print. As the noble and learned Lord, Lord Elwyn-Jones, has just said, not only were the Green Papers silent on the strengths of the existing system but they were also silent on the topic of legal aid. On my reading so far, the White Paper, too, is silent on the topic of legal aid. Now we have government policy as distinct from propositions in consultative Green Papers, I hope that the noble and learned Lord the Lord Chancellor can tell us whether the Government accept and are concerned about the decline in the number of solicitors taking legal aid work.

Do the Government accept that there will still be a substantial risk of their proposals reducing the number of local solicitors available to the public and, conversely, producing a concentration of larger firms in the larger towns competing only for the more profitable work? If so, I hope that the Government will indicate how those trends can be reversed. I hope that at the forefront of our thinking will be the survival of the small firms whose conveyancing work enables them to do legal aid work.

I hope that the noble and learned Lord the Lord Chancellor can agree that the response of the Bar has been constructive and that the catalyst of these Green Papers has accelerated a considerable number of practical and structural changes in the operation of the Bar most of which were already under way without any necessity for legislation. I hope the Government now recognise that the Bar does, and will continue to, provide a cost-effective service.

Whether or not we have an opportunity to debate this matter before the legislation comes, we shall need to look carefully at the conveyancing proposals which, as the White Paper seems to indicate, must concentrate on the protection of the consumer. The picture of the large institutions providing all the conveyancing services to both parties as well as lending money was quite alarming. The trend towards one-stop shopping, meaning one-choice shopping, must certainly be arrested. The consumer must be protected as regards the terms on which money is advanced for these very important transactions.

Likewise we shall need to look very carefully at contingency fees. I am pleased that the Government appear willing to confine the proposals for such fees. I wonder whether the Government have estimated and allowed for what seems to be an inevitable increase in litigation which will be brought before the courts on a contingency fee basis. I welcome the recognition of the independence of the Bar. I am concerned about only one matter in that respect: it is dealt with in paragraph 3.23 of the White Paper. Apparently it is proposed to introduce a new criminal offence of impersonating a barrister. As far as I can see, that will stop me being in more than two places at once. I wonder what will be the penalty for this very serious offence.

The Lord Chancellor

My Lords, I am grateful to both noble Lords who have spoken. As regards the serious matter of the offence of impersonating a barrister, we are very open to suggestions as to what maximum penalty might be appropriate.

It is important to recollect that the Green Papers were dealing with the organisation of the legal profession and related matters such as contingency fees and authorised practitioners. Legal aid has always been provided in general terms through the legal profession. The White Paper is concerned with examining the arrangements in that connection. We spent a good deal of the last parliamentary Session discussing legal aid and the Legal Aid Act. Under that Act a new Legal Aid Board has been set up and to some extent the administration has been transferred to it. What we are concerned with here is the way in which the services may be delivered. As regards questions about a debate, these are matters for the usual channels. The Government express the hope that it will be possible to obtain an early opportunity for legislation in this area.

Dealing with matters concerning conveyancing which the noble Lord, Lord Meston, raised, the emphasis is of course on providing to the person who wants conveyancing services those that he wants together with proper protection for his interests. That is what the White Paper seeks to achieve.

I am very happy to recognise the changes that the Bar itself has proposed. I wish these changes well. They are in my view highly constructive changes which will themselves contribute to achieving the aims which the Government set out in the Green Papers and which remain the aim of the White Paper.

Lord Morris

My Lords, I broadly welcome my noble and learned friend's Statement on the White Paper. How do the Government intend to handle the general problem with regard to the fact that the legal profession, as demonstrated in its response to the Green Papers, was concerned not so much with the delivery of legal services as about being paid for delivery of those services? Perhaps I may also suggest a suitable punishment for those who have the temerity to impersonate a barrister: they should be compelled to perform as a barrister for at least a week.

The Lord Chancellor

My Lords, that is obviously a suggestion for consideration. The responses to the consultation papers have been extremely valuable, interesting and varied. I am sure that in the vast majority of cases the interest that the respondents have sought to serve is the interest of justice generally.

Lord Hutchinson of Lullington

My Lords, as someone who was very critical of the original Green Papers, I should like to say also how much I welcome the fact that the noble and learned Lord has introduced a White Paper for further consideration and discussion. It is quite clear that he has listened to the responsible views expressed as to the fundamental principles which lie at the basis of the administration of law in England and Wales. One is most grateful that he should have done so. No doubt he was greatly assisted in his task, and I am sure that he would want to pay tribute to the fact that the Faculty of Advocates in Edinburgh condemned the same unacceptable proposals in the Green Papers as did the Bar of England and Wales.

From a quick reading of the White Paper, the question of rights of audience would still seem to be left largely in the air and to be deferred. The rules for qualification of non-barristers to practise in the superior courts appear to have the concurrence of the Lord Chancellor and the judges. I wonder what will happen if the judges should differ from the advisory committee as to the contents of those rules. Can he help us as to whether the advocates will be truly independent, will be available to all, will obey the cab rank rule, will not be involved in the investigation of evidence and will be subject to the same rules of discipline as members of the Bar? If there were any dispute about that, it would seem that the judges might well be drawn into the political arena. I should like some assurance from the noble and learned Lord on that point.

The Lord Chancellor

My Lords, with regard to the noble Lord's first point, I am in the habit of paying attention to the views not only of the Faculty of Advocates but also of the Bar of England and Wales. I have seen the views of the Faculty of Advocates on these matters.

The noble Lord asked about the proposals for rights of audience. The rules for qualification and for conduct of solicitors are proposed to be made by the Law Society, having regard to the advice of the advisory committee. The present rules are subject to the consent of the Lord Chancellor, the Lord Chief Justice and the Master of the Rolls, as concerns training, and subject to the consent of the Master of the Rolls as concerns conduct. I am proposing to make that requirement for consent somewhat more general as these rights of advocacy would relate to the whole width of the court structure.

The content of the rules is a matter for discussion. This is a framework within which these matters can be discussed between the advisory committee, the professions, the four Heads of Division and the Lord Chancellor. This is a framework for progress and for development of the kind which my noble and learned friend the Lord Chief Justice advocated towards the end of his speech in our debate on 7th April. I certainly took it that this kind of structure might well meet the aim he had in mind in producing a structure which would give us the opportunity of satisfactory progress.

Lord Boyd-Carpenter

My Lords, is my noble and learned friend aware that many people will appreciate both his basic courage in coming forward with these proposals and the obvious care which he has given to the representations made to him in respect of what was set out in the Green Papers? Is he also aware that at any rate some of us are very glad that he is continuing with the proposal to give right of audience in the higher courts to members of the solicitors' profession? It has always seemed to me slightly ludicrous that the most junior member of the Bar is entitled, if anyone is foolish enough to brief him, to appear before the highest courts in the realm and before your Lordships' House, whereas the most experienced solicitor with 40 years of experience in the courts is not so permitted.

Is he further aware that many people feel that this is a belated but very sensible effort to modernise in some respect our somewhat old-fashioned system? Many of us have a deep affection for that system but have to accept that it is both expensive and often very slow. Therefore the moves which my noble and learned friend intends to make with the legislation forecast by the White Paper are welcome. Many of us wish him good luck in the no doubt stormy battles that lie ahead for him.

Lord Rawlinson of Ewell

My Lords, before the noble and learned Lord replies to those comments, will he accept that it is perfectly absurd to talk about decreasing costs by allowing the right of audience to solicitors of 40 years' experience? None of them —I have one beside me here —would ever want to appear before your Lordships' House. A great fear has always been that we might move into the American system, where litigation is far more expensive and takes far longer. What will happen if the Lord Chancellor disagrees with the judges after the advisory committee's proposals? What will be the position if the judges disagree with the Lord Chancellor, as, alas, we have seen in the recent past?

The Lord Chancellor

My Lords, the judges are entirely entitled to disagree with the Lord Chancellor. If it is this Lord Chancellor in question, it is probably this Lord Chancellor who would be wrong. On the other hand, the structure which we have proposed will minimise the risk of that and enable rational discussion to take place. Between the advisory committee chaired by a judge, the professional bodies, the Heads of Division and the Lord Chancellor, the prospects for rational discussion reaching an agreed conclusion are about as high as they could be in any assembly. I certainly hope that this structure will produce progress. I am extremely grateful to my noble friend Lord Boyd-Carpenter for his expressions of support.

I shall not go into the question of costs today because they are elaborate and, although one could do so, I think that they are matters which must be taken into account in the future. I believe that this is a structure which will produce sensible progress in the interests of those who wish to use the legal services in this country.

3.30 p.m.

Lord Cledwyn of Penrhos

My Lords, since the House debated the Green Papers of the noble and learned Lord on 7th April, it is clear that he has made important concessions and that those are contained in the White Paper. Unfortunately, the House at this stage has not had the opportunity to study the White Paper in detail and therefore the question of a debate, which was raised by my noble and learned friend Lord Elwyn-Jones, has not been fully considered by the noble and learned Lord.

The traditional reply to a request of this kind is that the matter must be processed through the usual channels. But, with respect to the noble and learned Lord, on this occasion that is not quite enough. The House will require to know whether it would be advisable to have a full debate on the White Paper between now and Prorogation. We should be grateful for the advice of the noble and learned Lord in this respect.

Would it therefore be appropriate for the House to ask, through the usual channels, for a full debate on the White Paper, or is the noble and learned Lord in a position to say that, in fact, such matters would be better dealt with in a Second Reading debate on a Bill which he is certain will follow in the Queen's Speech?

The Lord Chancellor

My Lords, it is not possible for me to say whether legislation will be introduced immediately following the next Queen's Speech. But we certainly expect, and I hope, that we shall have an early opportunity of introducing legislation. So far as concerns the debate, as your Lordships know we had a fairly full debate on 7th April into these various matters. Of course, for my part, there is nothing I like better than to debate matters about the legal profession. But, on the other hand, I am well aware that there are many others who have other interests to pursue. The interests of the House as a whole must be taken into account.

So far as I am concerned, I feel that taking into account the debate which we had on 7th April, and the written representations of which we have had a large number, views have already been clearly expressed. Therefore, I should have thought that a Second Reading debate on the proposals, if they come forward in legislation early, would be perfectly satisfactory. But, as I said earlier, these are matters for the usual channels. Nevertheless, since the noble Lord the Leader of the Opposition has asked me about this, I think that my own personal view is that a further debate at this stage in this Chamber is probably not necessary having regard to the other pressures on the time of the House.

Lord Renton

My Lords, is my noble and learned friend aware that his acknowledgment of the part played by the Bar Council during the consultation period was well justified? Is he also aware that the Bar Council has in fact, for the past two years been working on various changes in the profession which he would find welcome? Would it not be better, therefore, to study the effects of those changes, instead of of embarking upon the legislation to follow what we understand to be in the White Paper, which is bound to be controversial on many points? In particular, is he aware that, although he seems now to be placing this in the hands of the profession, the Statement he made about multi-disciplinary practices and about partnerships, possibly, for the Bar to be in hands of the profession will be controversial, and that he may well wish to reconsider those matters before legislating?

The Lord Chancellor

My Lords, I believe that it is right to make progress by legislation. I have certainly carefully considered the matters about multidisciplinary practices and partnerships. What I have put together on the subject is the result of very careful consideration of this matter and also consideration in relation to the White Paper published yesterday by the Department of Trade and Industry.

Lord Grimond

My Lords, I have not read the White Paper, but perhaps I may ask, first, whether it applies to Scotland. I rather imagine that is does not. But, if not, what will happen about Scotland? Will there be a separate White Paper in that respect? Secondly, when the Government are considering wider proposals, as was mentioned by the noble and learned Lord the Lord Chancellor, will they be considering an extension of the inquisitorial system which, after all, is widespread in Europe, with which we shall become more and more involved?

Thirdly, when it comes to widening rights of audience, to which many people attach the very greatest importance and upon which we very greatly welcome the stand of the noble and learned Lord the Lord Chancellor, do I understand correctly that the framework of which he speaks is to be entirely composed of lawyers? Finally, at what stage, in considering whether rights of audience should be extended, are clients and other professions to be consulted and what rights will they have to take part in the final decision?

The Lord Chancellor

My Lords, I must say, first, that the White Paper relates to England and Wales and not to Scotland, although I indicated the reciprocal arrangements based upon the provision under the Community directives towards the end of my Statement. So far as concerns changing from our present system to an inquisitorial one, that is obviously a very large question indeed. But the Civil Justice Review, which I indicated we were proposing to implement in its main outline, suggested that perhaps in relation to small claims those adjudicating might take a more inquisitorial line. That is certainly a development which I think the noble Lord would welcome.

As regards the framework, this will not be composed entirely of lawyers. I proposed that the central role of the advisory committee, which will be chaired by a judge, will consist of a majority of persons who are not practising lawyers. That is the Government's way of putting into the system, in a very central and important position, people who have an interest in, and an understanding of, the situation, but who are not themselves lawyers. Therefore the lay people, the clients, will have a voice in the framework in the way I described. I believe that that is a valuable aspect of the framework which we are proposing.

Lord Campbell of Alloway

My Lords, perhaps I may thank my noble and learned friend the Lord Chancellor for the concessions he has made and for having truly kept a wholly open mind. But, in particular, I should like to thank him for the concession he made during this discussion, to which I attach considerable importance; that is, self-regulation of the Bar. As regards that concept, can my noble and learned friend say whether within that area of self-regulation the Overseas Practice Rules will be included?

The Lord Chancellor

My Lords, the Overseas Practice Rules would not be part of the system which would require, so far as concerns changes, the approval of the Heads of Division and the Lord Chancellor. The rules which the Lord Chancellor and the Heads of Division would be considering would be rules relating to advocacy and litigation in this country. Accordingly, that particualr machinery would not come into the overseas practice.

I have sought to improve the proposals in the light of the consultation and, for example, to propose that the rights of the Law Society should be on the face of the statute, rather than subject to a statutory instrument as was originally proposed.

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