Lords Sitting of 1 February 1990

Preamble
The House met at three of the clock:The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Worcester.

Social Security Spending
Baroness Elliot of Harwood Baroness Elliot of Harwood asked Her Majesty's Government:
How spending on social security has increased during the last decade.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, spending on social security has increased from £16.4 billion in 1978–79 to £52.6 billion in 1989–90, a real terms increase of 36 per cent. The estimated expenditure for 1990–91 is £55.6 billion.
Baroness Elliot of Harwood: My Lords, I thank my noble friend the Minister for that admirable reply. However, can he indicate by how much expenditure on social security benefit is estimated to rise over the next three years?
Lord Henley: My Lords, expenditure is estimated to rise by an average of 4 per cent. in real terms over the next three years. Moreover, by 1992–93 the expenditure will be over £63 billion.
Lord Stallard:My Lords, can the noble Lord tell the House what proportion of that increase in spending results from an increase in the number of claimants, and what proportion results from an actual increase in benefits, taking into account the rate of inflation?
Lord Henley: My Lords, I cannot give the noble Lord such figures without notice. Obviously I would accept that a great deal of the increase is the result of an increase in the number of claimants. However, that is not necessarily a bad thing. It indicates that we are reaching a great many people who were not reached before. Perhaps I may give an example. Invalid care allowance over the 10 years has gone up by some 2,000 per cent. That is because we have extended the benefit to married women —something the noble Lord's party did not do.
Lord Carter: My Lords, perhaps it may help the Minister to know that 90 per cent. of the increase is due to an increase in the number of claimants and 10 per cent. is due to an increase in the real level of benefit. However, in view of the figures which he has given, can he comment on the Church of England report Living Faith in the City,issued this week, which concludes that changes in taxation and social security have greatly widened the gap between the rich and the poor, leaving at least some people materially worse off and thereby increasingly dependent upon private charity? According to the
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report a considerable number of poor people now actually have less in their pockets to spend than they had in 1985. Do the Government agree with the conclusions of the report?
Lord Henley: No, my Lords; I do not intend to comment upon the Church of England report. However, returning to the noble Lord's first point that 90 per cent. is attributable to an increase in the number of claimants, that may be true in respect of some benefits. I do not accept that it is so globally. Moreover, as I said to the noble Lord, Lord Stallard, it is no bad thing if we are reaching more claimants. Indeed, I have already had this conversation with the noble Lord on the issue of the long-term sick and disabled. I repeat: it is a good thing if we are reaching more people than the noble Lord's party did.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that during the decade in question the relationship between the state retirement pension and average earnings has consistently worsened and that it is now at the lowest level it has ever been? When do the Government intend to restore the relationship to what it was in 1979?
Lord Henley: My Lords, as we have already said, we shall continue to increase the retirement pension in line with the retail prices index. However, we shall also look at the average total income of pensioners which has increased by some 23 per cent. in real terms over the past 10 years. In addition to that —and I am talking now purely about government spending, not total average income—spending on the elderly as a group has increased by some 24 per cent.
Lord Mottistone: My Lords, my noble friend the Minister told the House that there has been a marked increase in real terms. However, is not the difference referred to by the noble Lord, Lord Stallard, due to the fact that the average wage has increased because the country has become so much more prosperous over the past 10 years?
Lord Henley: Yes, my Lords. My noble friend is absolutely correct. As I said, we intend to continue to increase state pensions in line with the retail prices index.
Lord Gisborough: My Lords, is my noble friend aware that the 23 per cent. increase in pensions means that the increase is appoximately five times that which occurred during the time of the Labour Government?
Lord Henley: My Lords, my noble friend is absolutely correct.
Baroness Ewart-Biggs: My Lords, as regards what the Minister said about targeting those people who are worse off, can he tell the House what is the take-up of family credit at present?
Lord Henley: My Lords, I may have the figure for take-up of family credit somewhere in my brief, but I am unable to look for it at the moment. I think, in

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the circumstances, that I had better write to the noble Baroness. However, as she will know, we launched an extensive campaign to increase the take-up of family credit and I can confirm that it is now ahead of that of its predecessor.
Lord Carter: My Lords, I can tell the noble Lord that I believe the relevant figure is 63 per cent. compared with 76 per cent. for the old supplementary benefit. However, was the Minister's unwillingness to answer the question I put to him about the Church of England report due to the fact that the Government do not agree with the conclusions, or because they do not like them?
Lord Henley: My Lords, I myself have not read the report, but no doubt we shall comment on it at some point.
Baroness Carnegy of Lour: My Lords, will the noble Lord accept from me that part of the report pays great tribute to what the Government have done? The noble Lord, Lord Carter, has used figures selectively out of the report. If my noble friend has time to read it, I think he will be encouraged on the Government's behalf to continue along the line which the Government are taking.
Lord Henley: My Lords, I thank my noble friend. I shall take time to read the report.
Baroness Fisher of Rednal: My Lords, is it not the case that the number of people now living on income support has increased by 50 per cent. in the last decade? That amounts to 9 million people now living on income support. How does the Government's increase in spending which the Minister has outlined today tie up with a 50 per cent. increase in need?
Lord Henley: No, my Lords, I said that we had increased spending overall on social security by some 36 per cent. in real terms. The increased spending on income support over spending on the previous supplementary benefit and housing benefit amounts to about 120 per cent.
Lord Leatherland: My Lords, have the Government any plan in mind to increase old age pensions to people over 90?
Lord Henley: My Lords, we have no immediate plans for that.

Investments: Advice to Ministers
3.14 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Whether they will publish the advice given to Ministers on taking office as to those actions they should take and those actions they should refrain from taking in respect of investments, to avoid a conflict of interests.
The Lord Privy Seal (Lord Belstead): My Lords, the general principle is that Ministers should ensure that no conflict arises or appears to arise between their private interests and public duties. This was set out by the then Secretary of the Cabinet in a memorandum to the Royal Commission on Standards of Conduct in Public Life in 1975, a copy of which is in the Library of your Lordships' House.
Lord Jenkins of Putney: My Lords, is the noble Lord the Leader of the House aware that towards the end of last year, to be exact on 25th November 1989, an article appeared in the Financial Times? It arose because of alleged impropriety by Mr. Cecil Parkinson and, with your Lordships' permission, I shall quote the passage for greater accuracy. It came at the end of a long article suggesting that some changes should be made. The newspaper stated:
"But is it really too much to ask that the government make its own guidelines public, in order to strengthen their impact and help ensure that conflicts are seen to be avoided?"
Is that not good advice, not merely from the point of view of the Opposition, but from that of the Government and even that of Ministers? Surely the majority of them are scrupulous in their observance of guidelines.
Lord Belstead: My Lords, the detailed advice to Ministers is contained in a Cabinet document. It has been the practice of successive governments that Cabinet documents should be confidential, but there is no great secret about them. As I said in my original Answer, in 1975 the then Secretary to the Cabinet submitted a memorandum to the Royal Commission, to which I referred. To all intents and purposes, the advice which was rehearsed in that memorandum is the same today.
Lord Cledwyn of Penrhos: My Lords, as the noble Lord has said, Ministers' rules of conduct are kept in confidence in the Cabinet Office. However, there is no secret about them. In those circumstances and because of recent events, would it not be proper to publish them so that the public may know precisely what the rules are?
Lord Belstead: My Lords, the noble Lord the Leader of the Opposition has a great deal more experience of these matters than I have. However, he would probably agree with me that as the years have gone by —and I am talking about the last 100 to 150 years —from time to time Prime Ministers or Ministers of the day have given answers about advice to Ministers, usually in answer to Parliamentary Questions. All the time it has always been accepted by all governments that the advice contained in a Cabinet document should be confidential.
I am being quite open with the House. I remind your Lordships that in 1975 a memorandum was drawn up; that memorandum is to be found in the Library of your Lordships' House. I state quite openly that to all intents and purposes the advice in the Cabinet document remains very much the same as it was in that 1975 memorandum.
Lord Jenkins of Putney: My Lords, no doubt the advice is the same but if the Government's policy

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of a shareholding democracy is put into effect, then is it not the case that more and more people would hold shares? Upon becoming Members of the Cabinet, a number of Members of the present Government did not put that policy into effect before declaring themselves to have no shares. Nevertheless, on reflection, the view may be taken that it is high time that this matter was made public. Thus if there is disquiet on the matter —and I think that there is —it may be put to rest and the public may be reassured that, while in the nature of things there may be occasional mistakes, there is no general avoidance of the rules laid down.
Lord Belstead: My Lords, perhaps I may seek to put the matter to rest. On assuming office, Ministers cannot be expected to dispose of all their investments. But when a Minister takes office he or she is given advice on how to ensure that any investments do not create a conflict of interest. I believe that that is right.

British Transport Police: Chief Constable's Report
3.18 p.m.
Lord Harris of Greenwich Lord Harris of Greenwich asked Her Majesty's Government:
Why the annual report of the Chief Constable of the British Transport Police is marked "Private and not for publication".
Viscount Davidson: My Lords, this is a matter for the British Transport Police committee. However, I understand that the committee considered the question of privacy last year and agreed that the chief constable's annual report for 1989 and subsequent years would be given a wider audience that in the past. Accordingly, the annual report for 1989, which will be presented to the BTP committee within the next few months, will not be restricted and its contents will be generally available. Meanwhile, as the noble Lord will know, copies of past reports are already available in the Library of this House.
Lord Harris of Greenwich: My Lords, I thank the noble Viscount for that reply. It gives me great pleasure because the matter was raised in the House on 26th January last year. Ministers undertook to discuss the matter and it has taken a year to make some progress. Nevertheless, I welcome the information given to us today because it is obvious that the travelling public have the right to know about the level of crime that takes place on British Railways.
Viscount Davidson: My Lords, I am delighted that the noble Lord is delighted.
Lord Underhill: My Lords, will the Minister say on whose authority the two embargos were placed on this year's annual report —first, that it is private and, secondly, that it is not to be published? I
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ask that question because in the annual reports of London Regional Transport and of British Rail reference is made to the British Transport Police. In the case of British Rail, details of offences and prosecutions are listed. That information should be amplified in the annual report of the BTP.
Viscount Davidson: My Lords, the precise arrangements are for British Transport Police and the police committee to decide. I understand that, as in previous years, a copy of the report will be available in the Library of this House and that copies will be distributed to main public libraries. I believe that is broadly in line with the practice in other police forces. That practice is largely a matter for chief constables to decide.
Lord Harris of Greenwich: My Lords, with great respect, the noble Viscount will find that chief constables of Home Office police forces, if I may describe them like that, have an obligation to publish an annual report and submit it through their police authority. Is the Minister aware that we very much hope that copies of the report will be made available not only to public libraries but also to the press so that the travelling public have information on this matter which affects their security when they travel on British Rail?
Viscount Davidson: My Lords, as I have already said, these are matters for the British Transport Police committee to consider and decide upon. The question of publication was considered by the committee following the appointment of a new chief constable in April 1989. The committee decided to make copies of future reports more widely available than in the past. However, the 1988 report had by then already been printed in the old form. I draw the attention of the noble Lord to the British Transport Police.
Lord Underhill: My Lords, is the Minister saying that if the BTP committee had decided to retain the confidentiality rule and the rule preventing publication, no one could overrule that? Surely a Minister could overrule that.
Viscount Davidson: My Lords, I am saying that the BTP committee has decided that the report will be available in future.

Defence Expenditure
3.22 p.m.
Lord Mayhew asked Lord Mayhew asked Her Majesty's Government:
By how much defence expenditure is planned to grow in real terms between 1988–89 and 1991–92.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, on current projections of inflation the planned defence budget for 1991 to 1992 is greater by just under 1 per cent. in real terms than defence expenditure in 1988 to 1989.
Lord Mayhew: My Lords, does the noble Earl agree that the present level of defence expenditure was decided some years ago to meet a threat from the Warsaw Pact which has since ceased to exist? Does he further agree that the new threats call for a budget of a different kind which is smaller in size? Is it not preposterous now to increase in real terms the level of defence expenditure? Is there not an overwhelming case for an immediate defence review?
The Earl of Arran: My Lords, we shall at all times continue to provide the resources necessary to maintain our security and to maintain our responsibilities within the alliance. At the same time we shall continue to pursue arms control agreements which enable our security to be maintained at less cost. Furthermore, we shall not take any steps which could prejudice the prospects for a CFE accord. At a time of heightened uncertainty in Europe, any budgetary decisions which had the effect of narrowing our options for the future would be very unwise.
Lord Boyd-Carpenter: My Lords, will my noble friend confirm that the Government will recall that twice in the lifetime of many of us the failure of successive governments to provide adequately for national defence brought us to the verge of defeat and involved us in long and terrible wars? Will the Government always keep that recollection firmly in mind and not be led astray by the noble Lord, Lord Mayhew?
The Earl of Arran: My Lords, my noble friend speaks wise words. It is with those recollections firmly in mind that we shall not reduce our defence budget. The right answers should only emerge after clear and rational thought, not as a series of knee-jerk reactions from those who do not carry the responsibility for the defence of our country.
Lord Tordoff: My Lords, does the Minister include among those he accuses of knee-jerk reactions President Bush?
The Earl of Arran: My Lords, I regard that as a somewhat facile remark in these circumstances. I should make it quite clear that we support the proposals of President Bush for further defence reductions in the United States and in Soviet stationed forces in Europe as part of the agreement being negotiated in Vienna at this time. The proposals were discussed with us in advance and we indicated our support. I should remind noble Lords that the United States spends a higher proportion of its national income on defence than any other major European country. Naturally it wants to make some reductions.
Lord Jenkins of Putney: My Lords, it appears that the United States is trying to get its defence expenditure down to our level. Is it not time that the Government looked at other European nations with a view to getting our expenditure down to the level of those nations? It is not merely a question of listening to the noble Lord, Lord Mayhew, although
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he is no mean expert on the subject. The advice he has received has come from many parts of the world. Action is being taken on this issue by the United States, the Soviet Union and other European countries but the Government are standing out for no good reason whatsoever except that they have made their decision and they are determined to stand by it even if they are wrong. Is that not the case?
The Earl of Arran: No, my Lords; that is most certainly not the case. I hope that I have made the reasons why the Government are not reducing the defence budget extremely clear in the past few minutes. Furthermore, at the last meeting of the defence planning committee in November 1989 all NATO defence ministers committed themselves not to make unilateral reductions in their force levels that would undermine the prospects of a CFE accord. That is the position we shall maintain.
Lord Stoddart of Swindon: My Lords, is the Minister aware that things are moving quickly? Is he also aware that we on this side of the Chamber are just as concerned about the defence of the realm as noble Lords opposite? However, are the Government not aware that things are now moving helter-skelter in Europe with the reunification of Germany high on the agenda? Is it not sheer complacency for the Government not to consider now radical alterations to their defence deployment, including alterations to the number of troops in Germany, so that when action has to be taken it can be done on a reasonable and planned basis?
The Earl of Arran: My Lords, the noble Lord makes the case for exactly what I have just said. As he pointed out, because things are moving with such speed and with such uncertainty in the rest of the world, particularly in the USSR, we shall continue to maintain our guard and keep it up until, and if, things improve. Certainly under previous Labour governments defence reviews meant defence cuts whatever the consequences for national security.
Lord Orr-Ewing: My Lords, is my noble friend not concerned that despite all the sweet and honeyed words that have come from the Soviet Union and the intentions which we believe are to be carried out, the production of submarines, particularly nuclear submarines, and the production of tanks in the Soviet Union has increased steadily since Mr. Gorbachev came to power? Until there is some reality, would it not be unwise to start disarmament while huge defence superiority exists in the Soviet Union?
The Earl of Arran: My Lords, my noble friend is of course right on that point. The production of submarines is still increasing at a considerable rate. I also agree with my noble friend that we must keep up our guard until, and if, things improve considerably in that part of the world,.
Lord Graham of Edmonton: My Lords, does the Minister not appreciate that the historic changes that have taken place in the political map of the world,

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especially in Eastern Europe, call for a major response from Her Majesty's Government? If the principle of flexible response has guided military policy over the years, how about some flexibility of response in military expenditure at this time? Will the Government take heart from the intention of President Bush to make reciprocal cuts in troops in Europe and give the British people the prospect of a peace dividend? Will the Minister bear in mind that there are many people in this country who want to share in that peace dividend —those who want homes, those who want better education and those who want a better health service?
The Earl of Arran: My Lords, we should all like to share in the benefits which the noble Lord mentioned. However, for the time being they will not come from a lowering of our defences in this country. I want to make that quite clear to the noble Lord. Regarding his point about flexible response, a flexible response is the best means of deterring aggression in a nuclear age. At all times it ensures that any aggressor would face the risk of unacceptable consequences. That is the best guarantee of effective security.
Lord Denham: My Lords, we have already taken 24 minutes on this business.
Noble Lords: Order!
Lord Denham: My Lords, I believe that the feeling of the House is that Question Time has gone on for rather longer than it normally does. The House has already expressed a wish; the Procedure Committee has recommended and the House has endorsed that recommendation that Question Time should last for 20 minutes. We have now taken 24 minutes. The time has come to make a statement, unless the House disagrees with me.
Lord Cledwyn of Penrhos: My Lords, I am sure that the House accepts the general proposition that we should follow the Procedure Committee's advice on these matters. However, in this case I believe that when the foreign affairs spokesman of the Liberal Democrat Party rises to his feet to ask a question the House would be prepared to listen to him. It does not help proceedings when the Government Chief Whip mumbles in his seat.
Lord Denham: My Lords, I shall of course give way to the noble Lord the Leader of the Opposition, but I had hoped for his support on this occasion.
Lord Bonham-Carter: My Lords, does the Minister disagree with the former United States Secretary of State for Defence who said that the military balance in Europe has been radically altered? Should we not respond to that alteration rather than sitting pat? Does he not also agree with the former Secretary of State, Mr. Schlesinger, that high ceilings of defence in Western Europe legitimise a Soviet presence instead of encouraging Soviet withdrawal?
The Earl of Arran: My Lords, we shall respond to that particular point when we think it appropriate.
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We do not believe that it is appropriate at this moment.

Business
3.33 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Arran will, with the leave of the House, repeat a Statement that is to be made in another place on Mr. Colin Wallace.
It may be for the convenience of the House to know that the Committee stage of the Courts and Legal Services Bill will be adjourned at about 7 p.m. for about one hour and that during that adjournment the Code of Practice Trade Union Ballots on Industrial Action and the Employment Protection (Variation of Limits) (No. 2) Order 1989 will be taken.
With the leave of the House, I should also like to confirm that, subject to the progress of business, it is intended that the Easter Recess should be taken in the week before Easter rather than afterwards, as is the normal practice. It is hoped that that will be more convenient for Members of the House since Easter is relatively late this year. It may also be for the convenience of noble Lords to know that it is expected that the House will return on Wednesday, 18th April.

British Film Institute Southbank Bill
Read a second time, and committed to an Unopposed Bill Committee.

Human Fertilisation and Embryology Bill [H.L.]
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Human Fertilisation and Embryology Bill has been committed that they consider the Bill in the following order—

Clauses 1 to 5

Schedule 1

Clauses 6 to 11

Schedule 2

Clause 12

Schedule 3

Clauses 13 to 41.—(The Lord Chancellor.)

On Question, Motion agreed to.

Weights and Measures (Sale of Wine) Bill [H.L.]
3.37 p.m.
Lord Mason of Barnsley Lord Mason of Barnsley rose to move, That the Bill be withdrawn.
The noble Lord said: My Lords, I have been informed by the Government that it is their intention to make an order prescribing the measures in which wine may be sold by the glass on licensed premises. I am informed that they expect to be able to raise such an order in Parliament before the summer for approval under the affirmative resolution procedure. It is therefore no longer necessary for me to proceed with the Bill. I beg to move.
Moved, That the Bill be withdrawn. —(Lord Mason of Barnsley.)
Lord Tordoff: My Lords, it would be appropriate for your Lordships to congratulate the noble Lord, Lord Mason of Barnsley, on the progress that he has made on this important matter. As a result of his having brought the matter before your Lordships' House it is now to be dealt with by the Government. The noble Lord is greatly to be congratulated.
The Minister of State, Department of Trade and Industry (Lord Trefgarne): My Lords, I am happy to confirm that it is the Government's intention to proceed as the noble Lord, Lord Mason, has described.
Lord Williams of Elvel: My Lords, we congratulate the Government on taking action on this matter at long last. They could have done so five years ago. Will the Minister be good enough to join the noble Lord, Lord Tordoff, in congratulating my noble friend Lord Mason on bringing the matter to the attention of Parliament?
Lord Trefgarne: My Lords, I shall be answering a Question for Written Answer from the noble Lord later today from which I hope that the noble Lord will extract the necessary measure of satisfaction.
On Question, Motion agreed to.

Courts and Legal Services Bill [H.L.]
3.37 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee. — (The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 37 [Regulations about competence and conduct of authorised practitioners]:
Lord Rawlinson of Ewell Lord Rawlinson of Ewell moved Amendment No. 178:
Page 29, line 38, after ("Lord Chancellor") insert ("with the consent of the Master of the Rolls").
The noble and learned Lord said: The clause deals with regulations governing the competence and conduct of authorised practitioners. Its provisions mainly concern the solicitors' branch of the
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profession. Earlier I moved and spoke to a series of amendments which attempted to remove those parts of the Bill in which the Executive seek novel powers to dominate an independent legal profession in the exercise of matters wholly outside politics and wholly within the province and practice of a profession.
I repeat my comment that it is ironic that, whereas in Eastern Europe the legal profession is excitedly throwing off all the shackles of executive domination which have existed for the past 50 years, here we are introducing them for the first time. That will make our country the only country outside a few remaining communist dictatorships where so much regulatory power is given to a Minister over an independent legal profession.
It will be said that the Lord Chancellor is a very special Minister, and has never taken such powers hitherto. Clause 37 deals with the competence and conduct of conveyancers, who are professionals to whom the citizen goes when seeking to buy or sell property. The Government will now enter that arena. It is not just this particular Lord Chancellor who will have the additional powers; they will apply to all future Lord Chancellors in all future governments. Hitherto the supervision of the solicitors' branch has been given to a judicial officer, the Master of the Rolls. Now it is to be given to a Minister. In the guise of reform the Government are seeking to extend government authority. That is a very strange path for a Conservative Administration to tread.
In my earlier amendments I sought to remove the Minister altogether from these novel powers which he now seeks. However, this amendment asks the Government at least to act with the consent of the judiciary in matters which are wholly unconnected with policy and concern merely administration of the ordinary business of an independent legal profession. The amendment tries, admittedly in a minor way, to maintain that balance between the Executive and the judiciary which, in the view of some of us, is affected by this Bill.
I hope that the noble and learned Lord will agree to qualify the assumption of increased government power by at least sharing that power with the Master of the Rolls whose duty, as I understand it, is at present to supervise the solicitors' branch of the profession. I beg to move.
Lord Renton: I do not agree with every amendment to this Bill that my noble and learned friend Lord Rawlinson of Ewell has moved. However, we are faced with a situation in which, as he says, the Master of the Rolls remains with statutory responsibility for the working of the solicitors' branch of the profession while Clause 37 gives the Lord Chancellor jurisdiction with regard to conveyancing services carried out by solicitors and other people.
Unless the amendment proposed by my noble and learned friend or an amendment with similar effect is added to the clause, we shall find (shall we not?) that the Master of the Rolls has been bypassed in the responsibilities which, under statute, he has to exercise.
The Lord Chancellor: Perhaps I may deal first with the point made by my noble friend Lord Renton. The

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regulation-making power in question is in respect of authorised practitioners. The jurisdiction of the Master of the Rolls at present is in relation to the solicitors' branch of the profession. There is no intention whatever in any way to diminish that jurisdiction. Indeed, it is reinforced in relation to rights of audience in the way that was described earlier.
The regulation-making power here in question is a regulation-making power in respect of authorised practitioners, who will be banks, building societies and the like. I should have thought it appropriate that responsibility for these regulations should lie with the Lord Chancellor and that he should be answerable to Parliament for them. It is quite clear that in making regulations under this kind of power the Lord Chancellor would wish to consult widely. I have no doubt whatever that in that situation it would be very appropriate for him to consult the Master of the Rolls and others. However, this is not a regulation so far as the solicitors' branch of the profession is concerned.
It is a regulation that may be of great importance to the solicitors' branch but I suggest to the Committee that the appropriate person to hold such responsibility is the Lord Chancellor. In fact this move is a reduction of the powers which were given to the Lord Chancellor under the Building Societies Act. In that Act he was given the responsibility of individual consideration of the grant of authority to authorised practitioners.
In the light of that explanation I hope that my noble and learned friend will feel able to withdraw the amendment.
Lord Rawlinson of Ewell: I was very glad to hear my noble and learned friend say that he personally, in holding the office that he does, would consult with the Master of the Rolls. Of course, that is the noble and learned Lord himself saying that. I immediately accept that. However, it seems a little strange that the Master of the Rolls who has perfectly adequately looked after the position with regard to conveyancers should not be the appropriate person to regulate it now that the practice is being extended to other persons. I just remark on the continual increase in the powers of the Executive who always see Ministers of the future coming in to control the affairs of an independent legal profession.
I happily accept what my noble and learned friend says on his own behalf in respect of his term of office; namely, that he will consult. I sincerely hope that any who follow him in office will also undertake consultation in the same way. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 178A and 178ZA not moved.]
3.45 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 178AA:
Page 29, line 43, at end insert ("; and
(c) that authorised practitioners settle their prices for the provision of conveyancing services on a fair and reasonable basis to provide a reasonable rate of return on the costs of providing those services alone.").
The noble Lord said: At the very outset perhaps I may say that the object of all the amendments with which I shall be associated together with my noble friend Lord Prys-Davies is to ensure that the public are properly safeguarded. It is not in any way an effort to exclude people who enter the competition field, as we must now refer to it in professional life presumably as well as in commercial life. With those who fairly come into the competition field, if they behave properly when authorised by this Bill, we have no quarrel. However, we want to ensure that the public are properly protected. The noble and learned Lord has always said that that was one of his aims, consistent of course with the changes that are effected by this Bill.
I should like to quote from paragraph 5.14 of the Government's White Paper. It refers to authorised practitioners, who shall submit to the board,
"each year details of the prices they charge for conveyancing services, certifying that those prices have been settled on a fair and reasonable basis to provide a reasonable rate of return on the costs of providing those services alone".
The people whom I have largely in mind are not the small authorised practitioners who may want very vigorously to undercut. That is not a pleasant situation; but it is not the main mischief that I am after. The main mischief concerns the large financial institutions which have very substantial resources. They would be able to destroy the very competition that is supposed to be fair and proper competition in providing conveyancing services. Compared with the independent conveyancers those institutions will be able to deal with the matter by subsidies from profitable parts of their financial enterprise other than conveyancing work. That is the mischief with which this amendment seeks to deal by underlining the intention contained in the White Paper and seeking its insertion in the Bill. I beg to move.
Lord Campbell of Alloway: Perhaps I may briefly support the principle behind the amendment. One of the concerns is the position of the high street solicitor. Some of us at the Bar think that that is perhaps almost as important as our own position. His position may be one of some difficulty. Any measure that seeks to ensure fair competition between those who provide services under the Bill must be acceptable.
This matter arose in another context with the cab rank and legal aid situation. It will arise in another context later in the Bill. But anything that can be done to ensure fair competition, with respect, should be written into the Bill. For that reason I support the amendment.
The Lord Chancellor: In Clause 37 power is given, that,
"The Lord Chancellor may by regulation make such provision as he considers expedient with a view to securing —

(a) that authorised practitioners maintain satisfactory standards of competence and conduct in connection with the provision by them of conveyancing services; and

(b) that the interests of their clients are satisfactorily protected".

In addition to that, there is provision in relation to the conveyancing board. I mentioned that earlier in the course of the consideration of this part of the

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Bill. There is the general duty of the board in Clause 32(1),
"to seek to develop competition in the provision of conveyancing services",
and the general provisions that appear in Clause 14 and open this Part of the Bill. Attention was drawn to them some time ago.
The concerns to which the noble Lord has referred are concerns that I certainly have very much in mind. My understanding is that the regulation-making powers that are contained in Clause 37 already enable me to make the regulations that would be required. I wish to make it clear that these are matters on which, before any regulations are made, I should like to consult. We have already indicated what is in mind. Before any regulations are made, that would be a matter that I would wish to consult about.
Perhaps I may refer to one other aspect. In considering this, I have felt that these regulations could be of quite considerable importance. At the present moment, we have provided that they should be subject to the negative resolution procedure. However, having regard to the other parts of the Bill, in which the affirmative resolution has been used, I believe that it might be very good that we should make this type of regulation subject to the affirmative procedure. Effectively I should be under the duty to report fully to Parliament on the results of the consultation and the final form of the regulations so that Parliament would know exactly what the regulations were to be before the system was put into effect. Of course there is power to alter the regulations, to which the same procedure should apply.
I believe that it is in the interests of us all that we achieve the best possible procedure in the light of practical considerations. I believe that this system is the best way of assuring Parliament that its wishes in this connection are fully carried out.
I hope that, in the light of that explanation, the noble Lord may feel able to withdraw the amendment. If the lines that I have suggested are acceptable, then I shall undertake to bring forward at Report stage an amendment to put it into the affirmative resolution procedure. I believe that in this way we may well be able to settle the detailed matters in a way acceptable to all those who have an interest in the matter.
Lord Mishcon: I am sure that the Committee will be grateful —we on these Benches certainly are —for the assurance of the noble and learned Lord that there will be an amendment at Report stage which makes the making of regulations, including regulations under Clause 37, subject to the affirmative procedure. I thank the noble and learned Lord for that assurance.
Perhaps I may refer back to the reasoning behind the amendment. He will remember that I especially stressed the threat of cross-subsidy (if I may use that phrase) which may come from the rather wealthy institutions, contrary, as I would say, to the public benefit. I am sure that the noble and learned Lord agrees with that. He has said that it is the kind of
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matter that he would have in mind when making regulations, and that he would be consulting in regard to them. I understood, I hope correctly, that the noble and learned Lord has fully in mind the dangers about which I have tried to speak. He has nodded his head, for which I am most grateful. I understand that it was the type of regulation about which he would be thinking, the precise nature of it being determined after he has had consultation with the appropriate bodies. The noble and learned Lord wishes to say something.
The Lord Chancellor: I should not like it to be left on the nod of the head, as it were, in case it might be thought disrespectful to the noble Lord. I should like to make it clear that I believe it essential that the competition should be fair. The question is how best to secure that without involving some unnecessarily elaborate procedure. It is quite clear that, among other things, we shall require —and I believe, so far as I can judge, that it is agreed by all those who have an interest in the area —that the precise prices being charged should be stated. Therefore the level of charge that these authorised practitioners are making will be obvious. I shall endeavour to ensure that there is machinery for dealing with any difficulty that might arise from that pricing being in any sense unfair. I believe that that is the objective that the noble Lord has in mind on this aspect of the matter.
I have in mind of course the protection of clients and the maintenance of satisfactory standards of competence and conduct in the discharge of the responsibilities of providing conveyancing services.
Lord Mishcon: Although not using again the phrase "cross-subsidising", I am sure that the noble and learned Lord will have that very thought in mind when he considers what is fair and proper and will safeguard the public. In view of the very fair assurance that he has given, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 178AB:
Page 29, line 43, at end insert ("; and
(c) that authorised practitioners are not unfairly prejudiced against in relation to their conveyancing competitors.").
The noble Lord said: First, I have to apologise for my noble friend Lady Stedman, who is temporarily indisposed and was unable to be present when the paving amendment was called. However, the paving amendment was only to leave out the word "and". I hope therefore that the essence of the matter is still available to me.
These are probing amendments at this stage in our proceedings. I hope therefore that the Committee will forgive my lack of thorough acquaintance with the essence of these matters at short notice. The amendment stems from the White Paper, in which the Government stated their intention to introduce a conveyancing code of conduct which would prohibit an authorised conveyancer acting for both buyer and seller. I understand very well the desire of the Lord Chancellor to avoid conflict of interest for the better conduct of justice and of conveyancing.
Nevertheless I also understand that the Council of Mortgage Lenders takes the view that such a prohibition, in addition to being impractical, would be unfair, given that licensed conveyancers can already act for both parties, as can solicitors in certain circumstances.
I realise that it is a difficult issue and that the Government have an understandable desire to prevent any potential conflict of interests. However, it appears that the circumstances in which all those carrying out conveyancing could act for both parties should be clearly defined in regulations. I beg to move.
4 p.m.
The Lord Chancellor: This is the other side of the question that we were discussing earlier. I am grateful to the noble Lord, Lord Diamond, for presenting the amendment. His knowledge of the subject is wide but we appreciate that he has taken over the matter at short notice.
In achieving a balanced set of regulations it is one of the points with which I am trying to deal. As I explained earlier, it is right that the regulations should be the subject of consultation and affirmative resolution procedure. The position of the financial institutions on the one hand —if I may refer to the general body of authorised practitioners as such —and licensed conveyancers or solicitors on the other may be somewhat different. The authorised practitioners are to be a new and innovative force in the conveyancing field. Therefore, one must be particularly careful and I wish to ensure a balanced protection.
The powers under Clause 37 are directed towards the protection of the clients as well as satisfactory conduct on the part of the authorised practitioner. All the codes of conduct applicable in the area must be taken into account. There is an interaction between the professional conduct rules of the professional bodies and the authorised practitioners' possible practices because, on the basis of what we have in mind, the authorised practitioners require to have their transactions in that area supervised by qualified people. Therefore, the way in which the qualified people carry out transactions and so forth will be subject to that.
The noble Lord can be assured that I shall endeavour to produce regulations which are fair to everyone operating in that field.
Lord Diamond: It is with great sincerity that I thank the noble and learned Lord for having dealt with the matter so fully and, as one would expect, so reasonably. I look forward to the next stages. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 178B:
Page 30, line 1, leave out ("may") and insert ("shall").
The noble Lord said: The amendment stands in the name of the noble Earl, Lord Lytton, who spoke to it in moving Amendment No. 175A. He tells me that he does not wish to move the amendment today. When the noble Earl spoke my noble and learned
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friend did not reply to this amendment, and before he does so I should like to put before the Committee several further considerations.
I believe that where the subsection gives particular examples of regulations to be made in a clause which, in formal terms, is permissive on the Lord Chancellor, it would not be unreasonable to put down a marker by providing that any provision which the Lord Chancellor deems it expedient to make —I quote from subsection (1) —shall (and not just may) include provisions to deal with some of the significant matters listed in subsection (2). I make that point in particular because the matters listed in subsection (2)(b), (c) and (d) —I do not comment on other matters contained in the subsection —should be set out in full in primary legislation.
Will my noble and learned friend consider dividing the clause so that some of the matters are "may" matters —for example, subsection (2)(a) —and others are "shall" matters? Would that be seen as a draftsman's abomination? To deal in that way with the matters which I believe should be in primary legislation would reassure some of us who view with a measure of cynicism various provisions contained in this part of the Bill.
I have another concern about these matters. I am not sure whether both subsections (2)(b) and (c) or only one —and if only one, which one? —should qualify for "shall" treatment. They are most confusing, as is the White Paper.
In paragraph 5.9 of the White Paper the Government propose that the legislation will require conveyancing to be carried out or supervised by defined persons with the relevant professional expertise. The code of conduct was to have provided that one individual must be responsible for the direction and supervision of the conveyancing services. Neither the legislative requirement nor the code of conduct appears to have come through into the Bill.
It may be that between them both subsections are intended to provide the proposals contained in the White Paper, but I find it difficult to see how. In an effort to resolve my difficulty I trawled through the briefs that I received. In a critical analysis of the Bill published by the Society of Licensed Conveyancers, I read that subsection (2)(c) is intended to replicate the provisions contained in the code of conduct —I am not too sure about that —and that subsection (2)(b) is a deliberate obfuscation which caused the society concern. That is just so. I note also from its briefing that the society considers Clause 37 to be the single most important clause of the Bill's conveyancing provisions; and it may be right.
We shall come to several important amendments to the clauses I have mentioned, and I do not wish to pre-empt the debate. However, it would be helpful to the Committee if, in answering this amendment, my noble and learned friend could explain the drafting of the clauses and say what they are intended to accomplish.
The amendment on the Marshalled List standing in the name of the noble Earl proposes to substitute "shall" for "may" in line 1 on page 30. I beg to move.
The Lord Chancellor: I gave an explanation of the amendment when it was spoken to by the noble Earl. However, for completeness I shall refer to the matter in answer to my noble friend Lord Coleraine. First, the general purpose of the regulation-making power is set out in Clause 37(1)(a) and (b). Subsection (2) is the actual regulation-making power and I have sought to set out the headings under which, as I now see matters, the regulations may be required.
As regards subsection (2)(b), I have in mind the description of the qualifications referred to in the White Paper; namely, holding the proper degree of legal qualification either as solicitor, barrister or licensed conveyancer. I believe that it may also be desirable to have power to make quite clear which are the descriptions of work. My noble friend Lord Selkirk asked the other day about conveyancing services. Of course, there is a definition of that sort in Section 22 of the Solicitors Act. Therefore, I believe that it may be useful in the conduct of the work, particularly in the initial stages, that descriptions of work are set out in fair detail so that those operating this scheme may know what is wanted. The idea is to direct attention to the particular type of qualifications which are required on the lines which I have just described.
The object of subsection (2)(c) is to enable me to make regulations putting the particular transaction under the control of a particular individual. I have a fear, which I wish to avoid, that if a large organisation does conveyancing, one might find one's transaction passing from one person to another. It is desirable to ensure, so far as practicable —and obviously there are situations where a person may be taken ill in the middle of a transaction, which happens even in the best regulated firms of solicitors —that the client should be able to have recourse to a particular person whom he recognises as being responsible for the supervision of his transaction and to whom, if the client has taken up the offer of a personal interview (which I believe is quite an important aspect of this) the client would expect to speak if he had another matter to raise. Therefore, that is the purpose of subsection (2)(c).
As regards replacing "may" by "shall", or splitting the clause, I believe it would be right to make provision under all of the subsections so that that sort of distinction would not be justfied on my present understanding of what is required. However, I also believe that "shall' is not an easy word to have in this sort of situation where, in the light of experience, there also needs to be power to alter the regulations. Of course, to be completely effective the word "shall' requires some form of time limit and that would not be practical.
I believe I am right in saying —and no doubt I shall be corrected if I am wrong —that that form of drafting powers is quite common and reasonable. I know that sometimes even the giving of headings is regarded as unnecessary, but I believe that that is a proper method of indicating to Parliament what we believe should be required in the form of headings as we stand at this stage. In the light of that explanation, I hope that my noble friend will withdraw his amendment.
The Earl of Selkirk: I thank my noble and learned friend for what he has said but how far is this to go? It is not very difficult to do a conveyance as such, but there are all sorts of matters such as inheritance and ownership of one kind or another which can complicate the issue. Would the conveyancer be expected to go into all those questions, because those matters would normally be the responsibility of a solicitor?
The Lord Chancellor: I suggested in the White Paper that the qualified person in charge of the transaction should have a responsibility at the initial interview to explain precisely the nature of the service to be offered. Obviously, the essential part of that is the preparation of the conveyancing documents, but solicitors in private practice might, for example, give a much more ample service by giving advice on matters related to the transaction.
Therefore, I believe it right that there should be an obligation on those providing the service as authorised practitioners to state exactly the scope of what they are able to provide. If there are matters which appear to be related to the transaction upon which legal advice is required but which they are not able to offer, the client should be so advised. He will then have an opportunity to go elsewhere to cover the whole matter.
Lord Rippon of Hexham: Is the problem not what they are able to provide but what they think they are able to provide, which may be totally inadequate?
The Lord Chancellor: I hope that the professional standards of those carrying out the work will be such as to enable them to communicate effectively. They are to be solicitors, licensed conveyancers or barristers and I believe that they are the most satisfactory people in whom to repose confidence on this point. I believe that that is justified confidence. I cannot think of anybody else upon whom I would wish the responsibility of explaining this matter to rest but a professional person with a responsibility for the transaction.
The Earl of Selkirk: Is my noble and learned friend suggesting that the licensed conveyancers would normally be working under the general supervision of a fully qualified person?
4.15 p.m.
The Lord Chancellor: Parliament decided some considerable time ago that to be a licensed conveyancer is a sufficient qualification to do conveyancing. Therefore, an option available here is to have licensed conveyancers in charge of the conveyancing transactions.
However, if they are in charge of a transaction, they will be obliged, at the first interview to explain to the client the limitations of the service which they are able to provide. If legal advice is required beyond that, then that is for others to do. However, the setting up of a profession of licensed conveyancers has been accomplished and there are quite a number of licensed conveyancers in action at present. They do not and cannot profess to offer the full service which a solicitor can give because they are not

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qualified in the whole range of professional expertise of a solicitor.
Lord Mishcon: I have no wish to enlarge this debate beyond reason. However, I am sure that the noble and learned Lord realises that the point made by the noble Earl, Lord Selkirk, is very real and practical. I say with deep respect that, very largely we are living in a dream world.
First, the person who comes along to the licensed conveyancer or authorised practitioner does not know in the normal way what questions to ask at the consultation. It would be a very intelligent and experienced layman who would know the limitations of the advice of the conveyancer.
Also someone who does not have the knowledge will not know what he should warn the client about in regard to the limitations of his knowledge. To a large extent we are really operating in a dream world. Nevertheless, the Bill is before us, the Second Reading has taken place and one can only pray.
Lord Simon of Glaisdale: Yesterday evening on an Unstarred Question there were protests from all sides of your Lordships' Chamber about the prolixity of statutes and in particular about the insertion of unnecessary provisions. I venture to ask my noble and learned friend a question about the necessity of subsection (2) in its present permissive form.
Subsection (1) is permissive. It states:
"The Lord Chancellor may by regulation",
carry out paragraphs (a) and (b). Subsection (2) states:
"The regulations may in particular",
and then there are 15 lines of, presumably, particular examples of what he could do under subsection (1).
The question therefore arises: if these words —the whole of subsection (2) —were removed, could not my noble and learned friend exercise precisely by regulation all the powers that are mentioned therein? If the answer is inevitably yes, why are the words there? My noble and learned friend said that this form of legislation was common and reasonable. I personally had not noticed it until last Session when it is true it came into a number of Bills, I think for the first time. Whether it is reasonable is altogether another matter. If it is a prolix form of legislation, it is clearly unnecessary, unreasonable and undesirable.
Lord Peyton of Yeovil: I willingly join the noble Lord, Lord Mishcon, in prayers; whether or not those prayers will be answered I am not certain. However, I certainly share his anxiety.
Perhaps I may ask my noble and learned friend whether the authorised practitioner, in describing the services he offers, will be required to do so in writing? That seems to be particularly necessary having regard to subsection (2)(c), which only requires,
"authorised practitioners to arrange, so far as is reasonably practicable, for each transaction to be under the overall control of the same individual".
It therefore seems to me that without something in writing the possibility of confusion becomes virtually a certainty.
The Lord Chancellor: There is at the present time in existence —and there has been for some time —a profession of licensed conveyancer. If a member of the public goes to a licensed conveyancer he is entitled to an explanation of the services the licensed conveyancer can offer. There is nothing of a dream world about that. If he goes to a solicitor he can expect the solicitor to explain to him what services he offers. If he wishes to make a comparison he should be able, by comparing what the two professional people have told him, to ascertain the difference between those services. That is a practical matter and I have no doubt that it happens.
It may well be, for all I know, that some who go to solicitors may be left somewhat hazy about the services offered, but, if so, that particular aspect of dreaming should be resolved at the earliest possible moment. The art of communication is an important part of satisfactory legal services, whether they be conveyancing or other matters.
With regard to my noble friend Lord Peyton, I appreciate that he is willing to join the noble Lord, Lord Mishcon, in prayer. I certainly hope that his prayers will be answered and that the legal profession and the profession of licensed conveyancers will be able to carry out the desires of the noble Lord.
It is certainly my intention that the services should be described in writing and that at the conclusion of the interview the client should have the necessary advice in writing from the practitioner, the professional person. I believe that will be of considerable assistance. Where the client does not wish to take advantage of the personal interview, writing would also be necessary.
Lord Simon of Glaisdale: Will my noble and learned friend kindly answer my original question; namely: if the 15 lines were removed would he not be able to do everything contained in those 15 lines?
The Lord Chancellor: I thought I had dealt with that matter, but I shall try to do so more directly in answer to my noble and learned friend Lord Simon of Glaisdale. Strictly speaking, I think it is true that if those 15 lines were omitted I could still do what I have in mind. As I said earlier, it is right that where regulation-making power is being conferred by Parliament on the Lord Chancellor —or on anyone else, for that matter —the heads under which it is anticipated the power may be used should be indicated. I believe that is part of the way in which Parliament may be reasonably assured of what is in mind.
It is obvious, for example, that the noble Lord, Lord Mishcon, believes that to do that has an effect. It is not just the addition of unnecessary words; it is also indicating that Parliament has in mind that this is a power which would be useful and which it may well expect to be exercised. The purpose of this, therefore, is to give some degree of detail about the areas in which Parliament in particular has it in mind the powers will be exercised. I believe moist of your Lordships will find that useful in considering whether these powers should properly be granted.
Baroness Elles: Perhaps my noble and learned friend will reconsider this clause. He is aware of clients who know what solicitors and conveyancers say and they understand what is said to them. The noble Lord, Lord Mishcon, referred to a dream world; but I would not call it a dream world —I would call it the world of reality. The vast number of people I have assisted in my voluntary social work over many years in south London simply do not understand the beginning of what a conveyance is, even when they have to move house. We have tremendous trouble trying to explain such matters to ordinary people. whom I thought it was the purpose of this Bill to help. I do not think this clause helps those people, though it may help the kind of people my noble and learned friend possibly has in mind. I should be most grateful if he would reconsider the objective of this clause and the people it is meant to help.
The Lord Chancellor: My noble friend expresses exactly what I wish to achieve; namely, that I can make regulations under which it will be the responsibility of the professional person to tell these people in plain language what it is the professional person is prepared to do for them. I do not imagine for one moment that the professional person —at least, I hope not —will proceed by trying to explain the matter to the ordinary client in technical language. The purpose of the interview is for the client to understand what is happening and what the solicitor or licensed conveyancer is to do for him. The purpose of this clause is to enable me to make the necessary regulations.
I believe the objective that my noble friend has stated is precisely what we want to achieve. I believe that a great deal of the trouble between the legal profession and its clients is in failure properly to explain the nature of the service. That is one reason I believe it is right that the advisory committee, which has general responsibilities under Part II, should be lay dominated. It should have in the majority people who are not lawyers and who will do what they can to make sure that when lawyers talk to them they do so in language that ordinary people can understand and appreciate.
Baroness Elles: My noble and learned friend makes a very valid point. Regulations made by him do not actually teach lawyers to speak simple and plain English. If he could put that into regulation he would provide a great benefit to the people of this country.
The Lord Chancellor: I shall certainly have in mind including in the regulations that the advice should be given in language that clients can understand.
Lord Rippon of Hexham: I made, in effect, a Second Reading speech when we had an amendment to Clause 16, but I express the hope that my noble and learned friend the Lord Chancellor will have regard to what my noble friend Lady Elles said. My view is that the ordinary person seeking help in buying or selling a house is better protected by the law as it stands than he would be by the Government's proposals.
Lord Coleraine: I agree with my noble friend Lord Rippon. I also very much agree with my noble friend Lady Elles. It is absolutely vital that lawyers should talk in a way which everyone can understand. As my noble and learned friend said, there is nothing in this clause which casts doubt upon that.
I hope that the noble and learned Lord, Lord Simon of Glaisdale, will forgive me when I also say that it seems that where these provisions are not to be in private legislation —it is a pity that they are not —it is very much better that they should be set out in the clause even if that lengthens it. Having said that, I wish to thank my noble and learned friend for confirming that he is minded to put these provisions into effect. I thank him also for his very useful explanation of subsections (2)(b) and (2)(c). I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Ullswater: I think that this would be a convenient moment to take the Statement. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Mr. Colin Wallace
4.30 p.m.
The Earl of Arran: My Lords, with the leave of the House, I shall now repeat a Statement being made by my right honourable friend the Secretary of State for Defence in another place about the case of Mr. Colin Wallace. The Statement is as follows:
"Mr. Speaker, with permission I should like to make a statement about the case of Mr. Colin Wallace.
"In a Written Answer on Tuesday to the honourable member for Arundel, my honourable friend the Minister of State for the Armed Forces said that records had been found which brought to light information of material significance to the case of Mr. Wallace. Because those records had been overlooked, some misleading information had unwittingly been given to Members of this House by Ministers.
"As regards Mr. Wallace's employment in the Civil Service, the papers revealed no evidence that the decision to terminate it in 1975 was taken for reasons other than the offence with which he was charged; namely, disclosing classified information to the media without proper authority and at a time when he had already relinquished his post at Headquarters Northern Ireland. Nevertheless, in the light of the new information about his duties which has now come to light, the Government have decided to ask Mr. David Calcutt QC to examine the papers relating to Mr. Wallace's case so that he can consider whether its presentation to the Civil Service Appeal Board may have resulted in any injustice to Mr. Wallace and, if so, whether compensation should be paid.
"My honourable friend the Minister of State for the Armed Forces in a long Written Answer in

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Hansard [col. 110 of 30th January] set out the position that had now emerged over Mr. Wallace's case. He set out also the distinct issues as they emerge from a special re-examination of departmental records by senior officials. This re-examination indicated:
"First, that papers previously overlooked showed that their earlier statements and letters need to be corrected (the Government have come forward to the House on this as early as possible and an inquiry is in hand within my department into how the papers were overlooked);
"Secondly, that the newly-found information raises a question-mark over the presentation of Mr. Wallace's case to the Civil Service Appeal Board, and Mr. Calcutt will review these matters;
"Thirdly, that no information has been found to substantiate Mr. Wallace's allegations of a cover-up relating to the Kincora Boys' Home in Belfast or to call in question the thoroughness of the major inquiries already made into that affair, including those of Sir George Terry and Judge Hughes;
"Fourthly, that no information was found to call into question Mr. Wallace's conviction for manslaughter on which my right honourable friend the Home Secretary advised the House on Tuesday; and
"Fifthly, that none of it calls into question the conclusion stated to the House by my right honourable friend the Prime Minister on 6th May 1987, following a special report to her by the Director-General of the Security Service, that there is no evidence to support suggestions of attempts to undermine or discredit Ministers or former Ministers.
"Mr. Speaker, my Statement follows the detailed answer given by my honourable friend the Minister of State for the Armed Forces and my right honourable friend the Home Secretary and the published letters to right honourable and honourable Members to whom the previous incorrect answers were given. In their actions, which relate to events some 15 years ago and the administrations of that time, the Government have sought to respond promptly and candidly to meet the responsibilities that fall to them as a result of the new information and in particular to tackle the question of possible injustice to Mr. Wallace in his Civil Service appeal."
My Lords, that concludes the Statement.
4.35 p.m.
Lord Graham of Edmonton: My Lords, I believe that the House will be grateful to the Minister for repeating so clearly the Statement which has just been made in another place. First, does the Minister acknowledge that we are dealing with a major constitutional matter which ranges over all governments and leading parliamentarians for the past 20 years? Will the Minister confirm that the Prime Minister was made aware of the matters which
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caused the statements to be made this week as far back as last summer when Sir Michael Quinlan, Permanent Secretary at the Ministry of Defence, urged Sir Robin Butler, the Cabinet Secretary and his deputy, Mr. Len Appleyard, to support an inquiry into these matters?
Can the Minister say at what precise date the Prime Minister was told of the unease of Sir Michael Quinlan? Can the Minister further explain why such a serious and potentially security-related matter was dealt with in such an offensive way to the dignity and rights of Parliament; namely, a Written Answer to a planted Question, which is acknowledged as the lowest form of response? At col. 726 of Hansard of 6th May 1987, in a statement on state security, the Prime Minister said that it was time to stop raking over the embers of events then 10 years old.
What does the Minister say now that these embers have burst into flame? In the same paragraph she asserted her confidence in the security service and in its skill and loyalty in carrying out its tasks. Can the Minister tell us how the Prime Minister and other Ministers evaluate advice from the security service? Can he say whether that advice is ever questioned or challenged?
The Prime Minister was yearning for bipartisan support for the security service in the statement which she made on 6th May 1987. Does the Minister understand that to earn that support there has to be full and frank disclosure, a measure of trust and a sense that reports are not just accepted at their face value? I sugggest that is a premise which is certainly lacking in this episode.
The Prime Minister has chosen letters and press briefings by her press secretary to tell the world that she has misled Parliament, ableit unwittingly, having been misled herself. Can the Minister say why she does not herself come to Parliament and make a statement? The second paragraph of the Statement says that misleading information had unwittingly been given to Members of this House. Can the Minister say whether that advice was given to the Prime Minister by civil servants?
Does the Minister not acknowledge that severe limitations have been placed upon the inquiry to be conducted by Mr. David Calcutt? Finally, in view of the fact that this Statement leaves more questions unanswered than otherwise, will he tell his right honourable friend that this matter can only be cleared up by a wide-ranging inquiry which will enable many of those in both governments and on all sides in both Houses to influence what is a major constitutional matter affecting both Houses, all parties and the national interest?
Lord Jenkins of Hillhead: My Lords, we are grateful to the noble Earl for repeating the Statement. There now appears to be one central question and two subsidiary questions which arise from this very uneasy Statement to which we have listened. First, is it not absolutely clear that a number of people in the public service knew perfectly well, and have known for some years, that what Ministers were saying to Parliament was untrue and that they did nothing about it and were therefore, unlike

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Ministers, a knowing party to the deceit? What action do the Government intend to take about this? Secondly, I reiterate what the noble Lord, Lord Graham, said. On what date did Ministers, and the Prime Minister in particular, become aware that the information they had given to Parliament was untrue? The Statement referred to the promptness of the response. We shall be able to judge the promptness of the response when we receive that precise information.
Thirdly, and centrally, the Prime Minister has in the past refused to countenance any part of the allegations of Mr. Wallace relating to the so-called Clockwork Orange operation. The Government have now been forced to admit that half of those allegations were true. Why should we be expected to believe, in the absence of a full and independent inquiry, that the other half relating to the smearing of politicians and the attempted destabilising of governments of both parties is any less true? Rumours of this kind have been occurring and occasionally surfacing for years. I have been loath to believe them. But they have reappeared too frequently and from too many different sources for automatic dismissal now to be sustainable.
Of those who bore primary responsibility for the security services in the relevant period, the former Prime Minister, the noble Lord, Lord Callaghan of Cardiff, has asked for a full judicial inquiry. He did so in 1987. So have the two Home Secretaries in that government, Mr. Merlyn Rees and myself. Mr. Calcutt's inquiry in no way meets the need. He is concerned with compensation for Mr. Wallace, which may well be appropriate, but much wider issues are at stake here. Nor is the matter in any way covered by the statement of the noble Lord, Lord Callaghan, of 8th December 1977 which the Prime Minister is very fond of quoting. A good deal of new material has emerged since then. As his statement in 1987 made clear, the noble Lord, Lord Callaghan, has changed his mind about the need for a further inquiry.
In all these circumstances, if the Government continue to refuse a full and proper judicial inquiry, they will be behaving with an extraordinary discourtesy towards a former Prime Minister, a discourtesy bordering on the unconstitutional. They will be behaving with a lack of regard for proper and widespread concern and without responsibility for the true interests of the public service, including the security service.
The Earl of Arran: My Lords, I thank both noble Lords for their comments and questions on the Statement. Ministers were made aware in September last that inaccurate statements may have been made. Since then an extensive review of papers has been conducted in preparation for a Statement to the House. The matter was decided by my right honourable friend the Secretary of State for Defence concerning Mr. Wallace. I think noble Lords will agree that the Government have acted promptly and with great candour and honesty. They have come forward as soon as possible in a positive manner.
Regarding Mr. Wallace's disciplinary case, there are some grounds for concern that an injustice may
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have been done to Mr. Wallace in the manner in which his case was presented to the CSAB in 1975. If so, he is entitled to have that injustice remedied. That is what Mr. Calcutt is inquiring into. Mr. Calcutt's inquiry will be both thorough and impartial. He will see all the relevant papers in circumstances that will protect their confidentiality. Mr. Wallace will be able to make representations to him and Mr. Calcutt may also see other witnesses if he so wishes.
As concerns advice to Ministers, recent work in dealing with parliamentary inquiries about Mr. Wallace's case brought to light information on matters which arose under earlier Administrations. This information was found on departmental files and showed that some statements made by Ministers and officials required correction or clarification. The Ministry of Defence is making inquiries to establish how these errors occurred. My right honourable friend the Secretary of State will report the outcome to the House.
The noble Lord, Lord Jenkins, referred to Clockwork Orange. Clockwork Orange appears to have been an anti-terrorist project conceived by individuals and directed at PIRA but never authorised. No evidence has been found of any Clockwork Orange II aimed at politicians or government. Regarding the wider spectrum mentioned by the noble Lord, Lord Jenkins, I make these positive points. A possible injustice to Mr. Wallace over his disciplinary case is being remedied by the Calcutt investigation. The Home Secretary has again reviewed the safety of Mr. Wallace's manslaughter conviction. Kincora has been investigated by the Terry and Hughes inquiries. Allegations of a cover up have not been substantiated by the review of departmental files. No information has been found to substantiate allegations of disinformation or black propaganda campaigns against politicians or Ministers of the day.
I hope that I have answered the important questions put to me. I hope noble Lords will agree that the Government are acting in a responsible manner in this case.
4.48 p.m.
Lord Kennet: My Lords, the House will be grateful to the Minister for repeating the Statement. It seems to me that he has not sufficiently or properly answered the principal question of my noble friend Lord Jenkins. Perhaps I may rephrase it. If Ministers were for 15 years misled by officials about the existence of a dirty tricks project in Northern Ireland, how can we know that they are not still being misled by officials about the existence of a dirty tricks project at national level in Britain? Is it not obvious that this question cannot be answered by the two extremely narrow inquiries being carried out? The Government repeatedly rest on the phrase that no evidence has been found to suggest that anything has happened which is worse than what has been admitted. Is it possible for either of the two inquiries which are now going forward actively to seek evidence —for instance, by calling on evidence from officials who are now retired —instead of passively glancing through the papers?
The Earl of Arran: My Lords, I apologise to the noble Lord, Lord Jenkins, if I did not answer one of his questions. Official researches have been very extensive, and it is believed that the main facts of Mr. Wallace's case as disclosed by the available papers have now been established and that the record has been set straight. The Government have been extremely open in volunteering this information to the House. Again no one could argue that Ministers have sought to cover up anything at all.
Lord Hailsham of Saint Marylebone: My Lords, perhaps I may just say to my noble friend that obviously no one ought to take lightly the fact that the Government, or Ministers, were misled by public servants of any kind. That is a serious matter and obviously ought to be looked into. But if ever there was a mare's nest it is surely the mare's nest of the dirty tricks against the previous Labour Government. I should have been one of the first to notice if any allegations had been made to the detriment of either of the two Home Secretaries, of whom the noble Lord, Lord Jenkins of Hillhead, was one, or either of the two Prime Ministers, the noble Lords, Lord Wilson and Lord Callaghan.
I think I should have been the first to have been told of all this had there been a dirty tricks campaign actually in progress. In fact I think it is known to every single noble Lord and noble Baroness in this House that not a shred of suspicion has ever fallen upon the noble Lord, Lord Wilson, the noble Lord, Lord Callaghan, or the noble Lord, Lord Jenkins of Hillhead. Their reputation is wholly unsmeared. If there ever was a dirty tricks campaign, it would be difficult to imagine anything more fatuous or unsuccessful.
The Earl of Arran: My Lords, I thank my noble and learned friend on the particular points that he made. I can say that disinformation in the early 1970s seems to have been aimed at paramilitaries and consisted mainly of attempts to show terrorists in their true light—initiatives by Mr. Wallace and others to counter terrorism at the peak of PIRA attacks, when there was a lack of experience in dealing with them. No evidence —I repeat, no evidence —has been found that such campaigns were aimed at politicians or at government.
Lord Stallard: My Lords, will the Minister accept that there has been widespread agreement on his remarks about Colin Wallace and the inquiries that are about to take place? We would all accept that some inquiry must be made there, although we shall have to wait for a month or perhaps more for the Calcutt inquiry to report. However, does the Minister accept that the problem goes much deeper than that, as has been said by noble Lords on both this and the other side of the House?
It is not just a question of righting Mr. Colin Wallace's predicament, important though that is. It is a question of the whole situation surrounding these documents, the reports, and so on. It is all right for the noble and learned Lord, Lord Hailsham, to say that he would have known. How would he have known? Nobody else knew. Why would they have
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told the noble and learned Lord? None of us can believe that they would have sought him out to tell him that this existed when they did not tell anybody else. Therefore, I do not necessarily accept that that would have been the case. We are now all concerned, despite the Minister's assurance that this was a simple operation against the Provisional IRA. That may well be true, but we cannot now accept that without seeing the necessary documentation.
That brings me to my final point. I would want some assurance that, when these documents that the Calcutt inquiry is to call for are produced, they will be publicised. How will the press and television be restricted in their reporting of this because by then the recently passed Official Secrets Act will be being implemented and there will no doubt be a ban on television and press and public comment on these issues generally? Can the noble Earl tell me how that will be dealt with in the light of the new Official Secrets Act? If the noble Earl takes those factors into account, is it not all the more essential that we should have a judicial inquiry as soon as possible, and that the findings should be publicly debated?
The Earl of Arran: My Lords, in answer to the noble Lord on the particular point that he raises, I can tell him that Mr. Calcutt's conclusions and recommendations, and the Government's decision, will be made known to Parliament by my right honourable friend the Secretary of State.
Lord Jenkins of Hillhead: My Lords, will the noble Earl accept from me that, while I am grateful for the solicitude of the noble and learned Lord, Lord Hailsham of Saint Marylebone, he slightly misunderstands my concern. It is not my reputation that I am concerned about. I was not aware of any smears—whether it was because I was not a big enough target or for other reasons —that were directed at me.
What I am concerned about is not smears against me or other Ministers particularly, it is what may, or may not, have gone on in the security service for which I was the Minister responsible. On this issue, when so many rumours consistently arise, I feel that those who bore that responsibility are entitled, when they ask for it, to have a fully inquiry.
The Earl of Arran: My Lords, I think that the noble Lord, Lord Jenkins, is trying to imply that there should be a public inquiry about the whole situation. As I said before, it is most regrettable that some inaccurate information should have been given to Parliament and to Mr. Wallace, and this may call for departmental action. However, it is the Government's view that no purpose would be served by holding a public inquiry.
The possibility that an injustice may have been done to Mr. Wallace by the manner in which his appeal to the CSAB was conducted will be dealt with by Mr. Calcutt's investigation. Mr. Calcutt's inquiries could take him into sensitive and highly classified areas, and that is why there will not be a published report. It is a serious and unjustifiable aspersion on Mr. Calcutt to suggest that his investigation will not be thorough and wholly impartial.
Lord Morris: My Lords, may I ask my noble friend how long it is anticipated that Mr. Calcutt's inquiry will take? Will his responsiblities under that inquiry in any way impinge on his duties as chairman of the Takeover Panel?
The Earl of Arran: My Lords, I think that the second part of my noble friend's question has not much to do with the matter under discussion, if I may say so. As regards his investigations and the inquiry and the length of it, it is hoped that it will be conducted as soon as is possible once all the evidence has been taken into consideration.
The Earl of Onslow: My Lords, is my noble friend aware that —
Lord Stoddart of Swindon: My Lords, is the noble Earl aware that his replies so far are completely unsatisfactory? They certainly do not satisfy me, nor indeed this side of the House. Is he further aware that this is not a matter of party politics, but a matter of proper government and the role of Parliament within proper government? Is the noble Earl further aware that, over the last six months, hundreds of questions have been asked in the House of Commons about this matter? They have not been satisfactorily answered. Indeed the impression has been given that the Government have wished to evade answering proper questions.
Is the noble Earl aware that the public, as well as the House of Commons and Parliament in general, this House as well, will be more than uneasy as to what has gone on? He will know that a former Home Secretary, Mr. Merlin Rees, has just said in another place that there was clearly an attempt —in fact, not an attempt but something which actually occurred —by army officers and security forces to act outside government and outside Whitehall. That is a matter for serious concern.
When we have a situation where parliamentarians are not allowed —or perhaps they are allowed to ask questions about the security services but are never given answers —it is incumbent upon the Government, in order that the public may be properly satisfied and their confidence restored, to have a proper judicial inquiry into all aspects of this matter. Nothing else will do. If the Government do not agree to it at this stage, they will be hounded and pursued until they do.
The Earl of Arran: My Lords, the Government fully realise that this is a sensitive problem, and that is why they have acted in a proper way. That is why they have brought forward the present solution. They have reviewed the problems. They have decided what to do in the circumstances. I can only repeat that they have acted in a responsible and proper way, as they should have done.
5 p.m.
Lord Elton: My Lords, does my noble friend not agree that the main issue concerning the House is not so much the inquiry about justice for Mr. Wallace, important though that is, as the issue as to whether and, if so, when, why and to what extent Ministers
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have been misled? Does he also not agree that in a service of this sort and over this period of time the interests of the present Government and of their predecessors and their Ministers are the same, and that therefore Ministers of previous governments could rely safely upon Ministers of the present Government to see that justice is done internally where there have been miscarriages of justice and to ensure that miscarriages of responsibility are not repeated?
Finally, does my noble friend accept that we on this side of the House realise that these matters, if one can be sure that they are done, are better done in private rather than debated at length in the national press, as would be the case if there was an inquiry of the sort that has been asked for?
The Earl of Arran: My Lords, I quite agree with the last point made by my noble friend regarding the privacy of such a case and its conduct. I can also tell my noble friend that Ministers necessarily have to rely on the advice given to them by their officials in a case of this kind. It would not be proper for them to see papers recording the advice given to, or the views expressed by, Ministers of a different party.
Lord Harris of Greenwich: My Lords, may I ask the noble Earl, first, is he not aware of the accuracy of the point made by my noble friend Lord Jenkins —namely, that for months, if not years, some people in the public service have been fully aware of the fact that Parliament had been misled? That is absolutely obvious from the circumstances of this case. Is that not another reason why there should be an independent judicial inquiry into these matters?
Secondly, he told us a few moments ago that we are not even to hear the full truth of the Calcutt inquiry on the narrow question involving this former public servant. He has told us that we are going to see only the recommendations and that we are not in fact going to see the full report. Is the noble Earl aware that his answers today will simply stir up still more suspicion as to what has been going on and add to the climate of suspicion which now exists over these episodes?
The Earl of Arran: My Lords, on the second point made by the noble Lord, I do not believe that would be right because the Government, I repeat, have acted in a proper, sensible and responsible way. I do not believe that what he envisages will actually happen. As regards Parliament being misled for many years over this particular question, to the best of my knowledge that is not the case.
The Earl of Onslow: My Lords, is my noble friend aware that on the "The World at One" today Mr. Joe Haines, who was in the office of the noble Lord, Lord Wilson of Rievaulx, for most of the time, went on record just to say that these rumours about stirring up trouble against political figures and Ministers were a load of rubbish? He also said that the noble Lord, Lord Wilson, had made inquiries of the CIA about this matter and that they also came up with the view that it was a load of rubbish. He did, I admit, accept that it was possible that one or two of them might have had and I quote —"a glass

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of Jameson's and mumbled something". But that is as for as these things got and I do not think we should be getting too over-excited about a rumour which has gone on and has been shown by people who were in the office concerned not to have any substance.
The Earl of Arran: My Lords, I can only thank my noble friend for that particluar piece of information that he brings us hot from the press.
Lord Diamond: My Lords, is it not very evident that the Government have totally underestimated the seriousness of this situation? There are two reasons for saying that. The first is that this matter, which is described by the Government as a "dirty tricks campaign", appears to uninitiated minds like my own not necessarily to be the kind of case where everybody who has succeeded in hiding something for years will now come forward voluntarily and present all the papers and information about the matter. Is it not the case that with this dirty tricks campaign the reputation of the secret services upon which this country relies will never be cleared? Is this not a constitutional matter which has been seriously misjudged and underestimated by the Government? If that were not the case, the Leader of the House would have thought it proper to take this matter up.
The Earl of Arran: My Lords, I think that all your Lordships would recognise the very good service that the security service has performed, and continues to perform, in this country, in spite of all the prevailing conditions. I believe that the other point made by the noble Lord, Lord Diamond, is unwarranted and unjustified for the reasons I have already given: in other words, I repeat that the Government have been frank and candid about this case and have brought it into the open so that it may be discussed.
Lord Cledwyn of Penrhos: My Lords, I understand the noble Earl's difficulties, but would he not agree on reflection that it is somewhat premature to say that a further or wider inquiry may not be necessary? Is it not the case that what Parliament and the country will hear in due course, when the distinguished lawyer Mr. Calcutt has completed his work, is a Statement by his right honourable friend and, as the noble Lord, Lord Harris, has said, that the substance of that Statement and the evidence which Mr. Calcutt hears will not be made available to Parliament or to the country?
Would he not agree in all the circumstances, given the undoubtedly grave constitutional implications of this case, that a public inquiry may in due course be absolutely essential if the honour of the Government and of Parliament is to be preserved?
The Earl of Arran: My Lords, as regards a further and wider inquiry, that may or may not be necessary. I believe I said "may" before, but equally it may not be. Concerning the need for a public inquiry, with respect to the noble Lord the Leader of the Opposition, I have very firmly given the reasons why we consider that a public inquiry is not necessary.
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Perhaps I may just repeat the two most important reasons. The first is that any possible injustice to Mr. Wallace in this disciplinary case is being remedied by the Calcutt investigation. Secondly, no information has been found to substantiate allegations of disinformation or black propaganda campaigns against politicians or Ministers of the day. I gave other reasons for not having a public inquiry before which I think and I hope your Lordships understood at that time.

Courts and Legal Services Bill [H.L.]
5.9 p.m.
House again in Committee on Clause 37.
Lord Mishcon Lord Mishcon moved Amendment No. 178ZAA:
Page 30, line 4, at end insert —
("( ) requiring authorised practitioners to have one named person, who shall be either a solicitor who has in force a practising certificate or a licensed conveyancer, who shall be directly responsible for ensuring that conveyancing services are carried out according to any rules or regulations made under this Part;").
The noble Lord said: Before this important Statement was taken, your Lordships heard with some interest of the protection the public would need when going to someone who was not a solicitor, be he a licensed conveyancer or an authorised practitioner, when certain aspects which are treated usually with conveyancing might be relevant for the client concerned. In answering the concerns expressed, the noble and learned Lord the Lord Chancellor dealt with the power that he has under this clause to make regulations. I think that the inference which the Committee properly took from him was that he was well aware of the need for this public protection and that the regulations, after consultation, would be made as befits the duties that he thought were cast upon him.
Of course one of the safeguards as regards an "authorised practitioner" was contained in the Green Paper entitled Conveyancing by Authorised Practitioners. It provided that each authorised practitioner must have one named person who is responsible for ensuring that conveyancing services are carried out according to the code. Therefore, that is a most important provision and it is a safeguard in regard to the matters about which we were talking in relation to authorised practitioners but it is not written into the Bill.
In regard to previous amendments the noble and learned Lord referred to the power under Clause 37 to make regulations. I should tell the Committee, with respect, that I have looked carefully at the provisions contained in that clause and I am not sure as a person —although that would not be important but I am told that the Law Society is also not sure and that is much more important —that there is clear power under the clause to make a regulation covering this requirement. Therefore, I ask out of an abundance of caution, if the Committee so feels, that this provision should be included in the Bill so that if the regulation-making power is not contained in Clause 37 this important matter is not left to drift. I beg to move.
Lord Stanley of Alderley: I rise briefly to express my support for this amendment. I share the doubts voiced earlier by my noble friend Lord Rippon about the efficacy of these provisions and their usefulness to those members of the public whom they are supposed to benefit. In the event, I think that members of the public would be less well protected than they were in the past. I believe that this amendment would go some of the way towards focusing responsibility for the advice given on those concerned.
I am much concerned that without such provision there is more than a danger that banks and building societies will lack the modesty to say that a particular case is beyond their knowledge and that it ought to be dealt with by a solicitor. For the reasons given by the noble Lord, I very much hope that my noble and learned friend will at least look again at the matter and will perhaps accept the amendment.
Lord Campbell of Alloway: I too support the amendment. It raises in the proposed regulations the other important principle. We have already dealt with the principle of fair competition but this is the principle of adequate protection of the public. These twin principles must be reflected, as I think my noble and learned friend accepts, in the regulations. I ask with the greatest respect, would not the amendment fall within the ambit of Clause 37(1)(a)? The noble Lord, Lord Mishcon, suggested that perhaps this could be, so to speak, the ultra vires power of the clause. I merely suggest, with respect, that it could fall within the scope of that paragraph.
The Lord Chancellor: As I said, the structure of the clause is that paragraphs (a) and (b) of subsection (1)) indicate the objectives which are to be secured. I think that it is implicit in the form in which the noble Lord, Lord Mishcon, has moved the amendment that he believes that this particular power would be within the scope of those objectives. However, what is in question is whether there are sufficient powers under subsection (2) to achieve that result.
As my noble and learned friend Lord Simon of Glaisdale said, strictly speaking the powers do not need to be spelt out in much detail, although I believe that it is helpful to do so. Moreover, so far as concerns this particular matter, I intended that it should be covered by the regulation-making power contained in subsection (2)(b), which reads:
"as to the supervision, by persons with such qualifications as may be prescribed, of such descriptions of work as may be prescribed".
In other words, I have the power to say what the qualifications are that the people must possess in relation to each particular part of the work. I believe that by this method it is possible to make regulations covering all the matters referred to in the noble Lord's amendment. Indeed, it will do so with greater particularity than the terms of his amendment would permit, because I could make different descriptions in relation to different classes of work. It may well be that in practice more than one class of work may be in question.
I hope in the light of that explanation that the noble Lord will feel able to withdraw the
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amendment. I should say that I certainly have in mind the desire to make regulations along the lines he described. Moreover, I have endeavoured to secure that the powers which are laid down will clearly cover that situation. Of course that is in accordance with advice that I have so far received.
Lord Mishcon: If the noble and learned Lord has said that he has sought advice on the matter, that he has the power, in his view, to make regulations covering the specific matters mentioned in the amendment and that he agrees with the spirit of what is proposed, it would be quite wrong for me to press the matter to a vote. I have accepted from what he said —and, I hope, properly so —that we have an assurance from him that the provisions of this amendment are very much in his mind. I understand that he feels that he has the power under Clause 37 to make a regulation covering the matters contained in the amendment. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 178ZAB:
Page 30, line 5, leave out ("persons with such qualifications as may be prescribed") and insert ("solicitors having in force practising certificates, or licensed conveyancers,").
The noble Lord said: I listened carefully to what the noble and learned Lord said in replying to the previous amendment. On re-reading subsection (2)(b), it seems to me that it may be unsatisfactory on two grounds. However, our amendment only addresses one of the potential defects. If I read the paragraph correctly, it would seem that it may not be necessary for the entire conveyancing transaction to be supervised. The paragraph says that only,
"such descriptions of work as may be prescribed",
will be subject to supervision. However, we all know that a conveyancing transaction consists of four main parts; that is, the contract stage, the title stage, the drawing up of the transfer deed and the completion stage. Perhaps the noble and learned Lord can tell the Committee whether it is intended that the work undertaken in respect of one of those stages may not be subject to supervision, or is it intended that every part of the transaction will be supervised, but by different supervisors, each with a different qualification?
Our amendment requires that all stages of the transaction should be supervised by a solicitor or a licensed conveyancer. Obviously the authority, if we need an authority, for that principle is to be found in paragraph 2 of the proposed code of conduct to which my noble friend has referred. It is also to be found in the Notes on Clauses. We are told there that the Government believe that the present state of the law relating to conveyancing is such that a legal qualification such as being a solicitor or a licensed conveyancer is necessary for proper supervision.
Therefore from these Benches we should be grateful if the noble and learned Lord could respond to the amendment and confirm whether or not it is envisaged that every stage of the conveyancing transaction will be supervised. Would he also

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confirm whether or not it will be supervised by the same individual? I beg to move.
The Lord Chancellor: As concerns the individual, subsection (2)(c) endeavours to give sufficient detail of what I have in mind for this purpose,
"requiring authorised practitioners to arrange, so far as is reasonably practicable"—
which is quite a strong form of obligation—
"for each transaction to be under the overall control of the same individual".
That is intended to secure the individual's control, that the responsibility should be on an individual.
As I said in answer to one of my noble friends who asked me about this earlier, I believe that it is important in a body such as a building society or bank for a client to be able to go to a particular individual on the understanding that that individual carries the responsibility for that transaction. There is a need for practical considerations to be taken into account: the individual might be ill, on holiday or something similar and reasonable arrangements would require to be made. However, that is the idea and it is important, and that is the purpose of subsection (2)(c).
In subsection (2)(b) the idea is that I should be able to specify qualifications. The qualifications that I have in mind are the same, except that a barrister can do conveyancing at the moment. Perhaps the best known of these are the conveyancing counsel attached to the Chancery Division —recondite conveyancing indeed. The qualifications will be prescribed and those concerned would be solicitors, licensed conveyancers or barristers.
The phrase,
"of such descriptions of work as may be described",
was put that way in order to make it possible to differentiate, if necessary —I do not know that it will be —between different types of work and to specify possibly in some detail precisely what work requires to be supervised. I have in mind that the conveyancing transaction as a whole should be under the supervision of a particular individual.
The point is that the qualifications of the individual might possibly vary between one type of transaction and another. As I stand here, I do not envisage that but if we are making powers that are intended to last, it may well be that, as matters develop, different types of work might merit different qualifications. For example, a conveyance might involve advice in relation to surrounding circumstances. The work there might appropriately be done by one class of practitioner —for example, a solicitor—but it might not be appropriate for a licensed conveyancer. Therefore it may be important to have the power to differentiate between different parts of the work or different types of work in regard to the qualification required to perform the work. My present intention is on the lines that have been described by the noble Lord, Lord Prys-Davies, in moving the amendment.
Lord Coleraine: When we are talking about supervision under Clause 37(2)(b) it does not seem
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to me that it touches the question of who is giving the advice, whether it is the licensed conveyancer or the solicitor. That seems to be a different question. Regarding supervision, it seems to me that within the terms of the paragraph that supervision could be provided on the hot line somewhere. I rather feel that the two paragraphs which we are examining, subsection (2), paragraphs (b) and (c), suggest that a situation might be tolerable where a person with suitable qualifications was supervising the work of an organisation in, say, Halifax. However, at the various places on the ground where the client or customer wishes to be helped and where the work will be carried out, there may be nobody with such qualifications as we are seeking. If that is the intention behind this, I find it surprising and unacceptable.
The Lord Chancellor: That is certainly not the intention behind this. Clause 37(2)(c) requires that the transaction should be,
"under the overall control of the same individual".
That is designed to link an individual to a transaction for the reasons that I specified. Subsection (2)(b) is intended to deal with the qualifications that such a person must have in order to supervise a transaction. The description of these qualifications has to be prescribed. Therefore, for example, my intentions as matters stand are that I require that there should be the same solicitor, licensed conveyancer or barrister in overall control of every ordinary conveyancing transaction. The only reason for having power to make different qualifications in respect of different descriptions of work is the one I have suggested.
Lord Prys-Davies: We shall obviously have to read the reply of the noble and learned Lord carefully. However, it seems to me that there is a clear difference between paragraphs (b) and (c). In the latter paragraph the Bill requires the transaction to be,
"under the overall control of the same individual".
It does not define the qualifications required for that individual to exercise control, whereas Clause 37(2)(b) refers to "supervision". I should have thought that that was different. The person who exercises supervision needs to be qualified. But there is no assurance in paragraph (b) that the entirety of the conveyancing transaction will have to be under the supervision of a person with qualifications.
Looking to the future, one envisages a big organisation taking on board conveyancing transactions and the whole floor of a building could be a conveyancing factory, we go from stages 1 to 2, to 3 to 4 and I am not sure that throughout it must be under the supervision of a person who is legally qualified, although nominally the whole transaction is under the control of an individual, as required by paragraph (c).
I have listened carefully to what the noble and learned Lord has said. We shall have to consider whether this is a matter which we need to return to at another stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.30 p.m.
Lord Tordoff Lord Tordoff moved Amendment No. 178ZAC:
Page 30, line 10, leave out ("same") and insert ("one").
The noble Lord said: I am conscious of the fact that I am a lesser man than the noble Lord, Lord Evans of Claughton, and I am also conscious at the moment that I am not a lawyer. I hope the Committee will forgive me if I stumble through this amendment. The noble Lord, Lord Evans, has asked me to offer his apologies to the Committee, but even Liverpool solicitors have to go and earn their money occasionally. He is about his lawful business in that great city. I call Liverpool a great city but as a Mancunian that rather sticks in my mouth.
In moving Amendment No. 178ZAC I thought it would make sense to speak also to Amendment No. 178ZB. They are not directly linked but I believe they can be dealt with together if the Committee will permit me to do so. I intend to speak mainly to Amendment No. 178ZB, the effect of which would simply be that the client would be told the identity of the person who is in overall control of his transaction. The amendment also seeks to permit the client to have reasonable access to that person at reasonable times. I understand that this provision has the support of the Law Society.
I believe that in a sense the noble and learned Lord the Lord Chancellor assisted me in this matter when he said that it was his intention that clients should be able to deal with one individual. I believe those were the words he used in relation to the previous amendment. People are afraid that they may only be able to see the person who is in the front office and they may find it difficult always to see the person in control of their case unless there is some provision to make the regulations state that they shall be able to get in touch with the person in overall control of their case. That is the simple concept behind these two amendments. I beg to move.
Lord Airedale: I wish to support the amendment. It seems to necessitate that in a large firm one person must supervise all the transactions for one individual. However, that may mean too great a work load for one person. In a large firm there may well be several partners with equal supervising skills who could divide up the work between them. One partner could supervise certain transactions while another partner could supervise others. If the amendment is accepted, all the transactions will be supervised by one individual, but in a large firm that person does not necessarily have to be the same individual as such a step may involve too much work for him. Therefore, I believe the amendment is an improvement on what is stated in the Bill.
The Lord Chancellor: The purpose of these two amendments and what we have in mind is very much the same. I have in mind that a particular individual who is qualified in accordance with the qualificaton regulations should have the overall control of a particular transaction. I envisage that the same person should carry out all the affairs relating to that transaction. In other words, when a client enters a firm's offices and gives his instructions to a Mr. X
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he should see the same Mr. X later on if a problem arises as regards for example, completion of a transaction or some physical matters affecting a property. It is important that the client knows who is dealing with his transaction and has access to that person. That is necessary in the organisations that we are discussing. We have tried to set out in the White Paper what we have in mind. Paragraphs (b) and (c) are intended to produce that result.
As regards Amendment No. 178ZB, the power to make these arrangements is sufficiently contained in the clause as it stands. As I said in the White Paper, it is intended that a qualified person should offer to see the client at the beginning of a transaction and then explain all the circumstances in plain language.
The advice that I have received suggests that the arrangements that I have set out can be achieved under this clause. I appreciate the point about a client seeing the same individual and I shall consider that to see whether the wording can be improved, but the intention is that the client should see the same individual throughout the entire course of the transaction.
Lord Airedale: I am much obliged to the noble and learned Lord the Lord Chancellor for his comments. I understood the words "each transaction" to apply to every transaction. I believe others may read it in that way. If the clause can be considered and made easier to understand that should be a great help.
Lord Tordoff: I am most grateful to the noble and learned Lord. His advice is bound to be far better than mine on these matters. Nevertheless, I hope that he will reconsider this matter and consider the words "overall control" because they could be considered in certain circumstances to apply to someone who is remote from what I have described as the front office. I hope that when the wording of the regulations is drafted that point will be taken into consideration.
The Lord Chancellor: Before the noble Lord sits down I should make it clear that I have in mind that the person to whom the client will have access is the person who is in overall control of his case and that the client is not put off in the front office as it were. The person he sees should be the qualifed person who is in charge of the transaction. The words "overall control" are intended to signify that. Obviously typists, secretaries and other people will help in carrying out the transaction but the client should be able to see the qualified person who is responsible for his case and who is giving directions in it. I shall certainly look at the provision again in the light of what has been said, but that is the purpose that I was trying to serve.
Lord Tordoff: I am most grateful to the noble and learned Lord. We all accept that that is his purpose. However, I am still slightly worried that large organisations may need that purpose spelling out to them. No doubt the words that the noble and learned Lord has uttered today will spell it out for them. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 178ZB not moved]
Lord Mishcon Lord Mishcon moved Amendment No. 178ZBA:
Page 30, line 10, after ("individual") insert ("who shall be either a solicitor who has in force a practising certificate or a licensed conveyancer").
The noble Lord said: I believe that I heard the noble and learned Lord correctly, and if I did not he will of course chastise me in his usual gentle and courteous way. I understood him to say that under Clause 37(2)(c) he sought to ensure that the qualified person who had overall control of the matter would be the person that the client would see. I caught the words "the qualified person". However, there is no mention in Clause 37(2)(c) of the person in control having to be a qualified person. For that reason my amendment states that the person:
"shall be either a solicitor who has in force a practising certificate or a licensed conveyancer".
I heard, and the Committee will have heard, the noble and learned Lord very correctly mention a member of the conveyancing Bar. I certainly would have no objection to the words "solicitor with a practising certificate, a member of the conveyancing Bar or a licensed conveyancer" being inserted in the Bill. If I heard the noble and learned Lord correctly, that was his intention. May we have that stated clearly in the Bill? I beg to move.
The Lord Chancellor:I regard Clause 37(2)(b) as dealing with qualifications. Clause 37(2)(c) is intended to deal with the continuity of control. I intend to provide that the properly qualified person should be continuously in control of a transaction and that it should not pass from one qualified person to another.
The purpose of subsecton (2)(b) is to set out the qualifications. There could be 10 solicitors in an office, all fully qualified with up-to-date practising certificates and having paid their dues to the Law Society. However, I believe that the firm would not be providing a good service to the client if on his first visit he saw solicitor A, when he came for the second time he saw solicitor B, and so on. The fact that the person he sees must be a solicitor, licensed conveyancer or member of the conveyancing Bar is dealt with by paragraph (b). Paragraph (c) sets out the intention that the client should not see A, B, and C but he should see A all the time unless there is a very good reason why he cannot see him on a particular occasion, in which case there might be an arrangement for substitution. That is the point that I have tried to cover. I believe that it is a very important point in relation to the type of business in question.
I should like to retain that emphasis. To repeat the qualifications in paragraph (c) reduces its effect and is confusing. I believe that continuity is important. It should be the same individual who responds to the client. In an ordinary solicitors' or licensed conveyancers' firm in private practice one would hope and expect that that would normally happen. In a large practice it might not be easy. However, I should particularly like to see that emphasis in relation to corporate business. I have tried to set that out in the White Paper. I hope that the noble Lord will feel that to focus only on the identity of the individual is effective. That is what
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is intended by paragraph (c). I should like to retain that emphasis.
Lord Mishcon: I should not dream of wasting the time of the Committee. Having regard to the clear statement of the noble and learned Lord that the qualifications under paragraph (b) will be clearly laid down in regulations, that they will be those of a solicitor, licensed conveyancer or member of the conveyancing Bar, and that those qualifications are also intended to apply to paragraph (c), I shall ask leave to withdraw the amendment. I am grateful to the noble and learned Lord for that clarification.
Lord Coleraine: Before the noble Lord withdraws the amendment, perhaps I may say that I am still worried about the drafting. My noble and learned friend has made his intention clear. That is why I raised the question earlier this afternoon. However, some Members of the Committee will regard paragraph (b) as relating to supervision and paragraph (c) as relating to what happens on the ground. I and other Members of the Committee will look very carefully at the drafting, and I hope that my noble and learned friend will also consider those points.
Lord Mishcon: I am most grateful for the observations of the noble Lord, Lord Coleraine, which, as always, are intended to be helpful. I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Lord Tordoff Lord Tordoff moved Amendment No. 178ZC:
Page 30, line 11, at end insert ("or potential conflicts of interest and for the purpose of this paragraph acting for two or more parties in one transaction shall constitute a conflict of interest").
The noble Lord said: The masquerade continues. I seek to insert in line 11 words the effect of which would be to enable regulations to be made preventing authorised practitioners from acting for two or more parties in one transaction. In addition to banning acting for vendor and purchaser, that could extend to acting for lender and borrower.
I am advised that the amendment embodies the policy that the Government adopted in 1985 —namely, that lending institutions should not be permitted to act for those borrowing money from them. The Law Society supported that policy. However, in the Green Paper the Government indicated that they had changed their mind on the issue. The Government claim that banning the conveyancer employed by the lending institution from giving financial advice to the client will eliminate the conflict of interest. However, it will do so only at the expense of the client, who will no longer be able to ask for independent financial advice. I beg to move.
Lord Boardman: It may be for the convenience of the Committee if I speak to Amendment No. 178AZC, which stands in my name. The issue is rather wider and, I suggest, more important than some of the discussions on drafting which we have

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had earlier this afternoon, important though those were. It touches the heart of conflicts of interest.
I was delighted to hear from my noble and learned friend the Lord Chancellor that before producing the regulations he will initiate wide consultation and that regulations will be introduced under the affirmative resolution procedure. I shall not attempt to comment on drafting, particularly that of my own amendment, which I confess is somewhat amateurish. The principle at issue is that of conflict of interest.
I am particularly grateful to see my noble and learned friend Lord Hailsham in his seat, because I know that the matter is one in which he took a very active interest in 1985 and 1986 during the passage of the Building Societies Bill.
The purpose of the amendment is to create a presumption of a conflict of interest where an authorised practitioner acts for more than one party in a transaction unless the interests of each party are the same. The words:
"unless the interests of each party are the same",
are intended to cover cases in which the practitioner is doing work for more than one party, each of whom has the same interest in the work being done and the result of the work. For example, it is intended to cover the case where a solicitor or licensed conveyancer is acting for the purchaser (mortgagor) and also for the mortgagee. I understand that that is usual practice in the case of building society mortgagees. The work for which the solicitor or licensed conveyancer is paid is to ensure that each of the parties has a good title to the property being purchased or mortgaged. I do not believe that a conflict of interest arises in such cases. It has always been accepted that that is so. It was certainly accepted when the Building Societies Act was debated in 1985 and 1986.
The position is very different if the authorised practitioner is also acting in other capacities for one of the parties. If that practitioner is a bank or building society, possibly with an estate agency subsidiary, and also a tied insurance agent, quite different considerations arise. First, the building society or bank acting as an authorised practitioner cannot give independent financial advice. Quite apart from what may be in the Bill, under the Financial Services Act it would be unable to do so because all of the major banks, with one distinguished exception, and almost all the building societies are tied agents and free only to offer their in-house product to their customer or client. No choice can be offered and no advice can be given. The independent solicitor is in a quite different position. He is not so constrained. He can advise on alternatives that are available. I understand that the rules of the Law Society prevent solicitors from being tied agents; they must be independent intermediaries.
Secondly, under the Bill an authorised practitioner could have a special interest in securing for the group of which he is a member fees that flow from services outside the conveyancing—estate agency fees, survey fees, commission on endowment policies or other insurance policies. In addition, there may be
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the benefit of securing and investment of funds, a benefit for which institutions are often prepared to pay a commission to those who introduce the business. There are a number of benefits totally outside the conveyancing operation which would flow to the institution acting with an authorised practitioner.
There is a further point of considerable importance. At present there is no statutory requirement, and there is nothing in the Bill, requiring that any of those fees, insurance commissions, survey fees and the like must be disclosed to the client or customer, nor do they have to be accounted for. By that I mean that they must be paid over to the client.
In the case of the independent solicitor or licensed conveyancer the position is completely different. Any fees have to be disclosed and credited to the client. I believe that there is a quite different position in each of the two situations that I have outlined. The authorised practitioner, with his varied interests in the transaction, must be subject to tremendous conflicts of interest. Indeed, as I understand and recall it, that was the problem in the Building Societies Act 1986.
At that time a very real concern was the conflict of interest that could arise on the lines that I have mentioned in the present case. I suggest that those conflicts were the reason why the powers included in the Building Societies Act were not implemented. I have recently reread some of the debates that took place in this House and another place at that time in which the doubts that I have expressed were very clearly stated in the context of the Building Societies Act. Therefore I ask why the Government have changed their views.
Since 1986 the trend has rightly been strongly toward consumer protection. In fact legislation has been tightened up against conflicts of interest in a way that did not exist before. The Financial Services Act is an attempt at that, though perhaps it is not one of which we should be very proud. I see no justification today for relaxing the safeguards which at present exist against such conflicts. If it was unwise to do that in 1986, I ask why it should be wise to do so now when a far wider range of services is on offer.
I see the attraction of the one-stop shop but, as has been said many times, property represents the single biggest transaction that most people will ever enter into. Surely they should be quite clearly and independently advised on it. During the Second Reading debate I gave an example of how even today the innocent purchaser can be exploited. Under the Bill as it stands I believe that the position could be considerably worse.
I also fear that a consequence that is likely to flow from the Bill in its present form is that a few large chains of financial services firms, estate agents, insurance agents and authorised practitioners will be created, backed by massive television and press advertising to promote the one-stop conveyancing shop to which people are urged to go. The effect on the high street solicitor could be disastrous.
It will not be only those who require conveyancing who will suffer. Small and medium sized businesses

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will also be affected. The CBI has expressed its grave concern about that possible danger. The people who will suffer are the deserted wives who want the high street solicitor to help them deal with their very severe problems, those people who want to make a will or those who need someone to defend them in the local court. Those and other such matters that come across the desk of the high street solicitor are cases in point. The high street solicitors are needed and they may not be there.
I feel that it must have been such considerations that persuaded the Government not to implement the powers in the Building Societies Act 1986. I believe that that was a wise precaution. I also like to believe that my noble and learned friend Lord Hailsham played a major part in the wisdom of that decision, but I know not.
However, as a solicitor who has not practised for upwards of 25 years and as a more recent banker, I do not put forward these views or support this amendment on behalf of either of those competing interests. I support the amendment on behalf of one section whose views have not been heard very much in this Committee in the past few days. I speak on behalf of the customer who I believe will suffer if these proposals go forward unamended. I support the philosophy that underlies this amendment.
Lord Templeman: There is a great problem here and I am not sure how the Bill will resolve it. I know that my noble and learned friend the Lord Chancellor wishes to resolve it.
As I understand Clauses 34, 37 and 48, there is nothing to prevent, and the Law Society could not prevent, a limited company being formed of, say, 150 accountants, 50 solicitors, 50 barristers and an assortment of builders and insurance advisers which also constitutes or is tied to a building society or insurance company. There is nothing to stop such a large firm having a small branch in Tolpuddle.
The local farmer who goes into that local branch is rather surprised that the solicitor with whom he used to deal has been driven out of business, but he is faced by a charming representative of that company. He asks, "What can you do for me?" According to Clause 37, he is told, "We can see that you borrow some money. We can see that you take out an insurance policy. We can see that your conveyancing is carried out. If you have any trouble with your vendor you can go to our solicitor's branch for it to carry out the litigation. If the litigation becomes very recondite and goes to the House of Lords, we can see that our barristers conduct your case for you. Eventually, my dear sir, you can apply to our funeral service at the end of the day".
The effect of that conglomerate must be borne by the client who will have to take it or leave it. He will have lost his own friendly solicitor. The effect on high street solicitors in general may be fatal; and if the high street solicitor goes, the independent Bar will go.
I accept that my noble and learned friend the Lord Chancellor does not intend that either branch of the
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legal profession should be eliminated. He intends that they should be freshened up by competition and he hopes that by such means there will be reduced costs and less delay. I shall not debate the matter because nobody knows what the net result will be. However, I ask him to consider what the likely effects will be if such great conglomerates can come into existence. I believe that they are the only threat in this Bill. From my point of view I do not think that rights of audience raise a threat. The threat is the big conglomerate.
There are already enormous firms of accountants and large firms of solicitors. The only effect that I have observed is that when they are engaged, cases and appeals take much longer and become less meritorious and costs are increased. I myself have not seen any benefit to the public, although I assume that the great conglomerate clients and corporations get a good service from them. I find it very hard to believe that they will give a good service to the individual in the country.
If the net result is to drive out the local solicitors and damage the Bar it will be the very result that my noble and learned friend wishes to avoid. I have long felt that that is the only real danger in this Bill. If it is realised, it will be unintended and I hope that some of these amendments will enable precautions to be taken against it taking place.
Lord Coleraine: The intervention of the noble and learned Lord is most apposite. We had to wait a long time for his first intervention and I am glad that the second one has come sooner. I should like to say a few words about conflict of interest in support of the thrust of both the amendments.
I recall that during the passage of the Building Societies Bill when institutional conveyancing was being put forward the question of conflict of interest was very much in our minds. I drew to the attention of the House a case which had been brought to my attention. It concerned a solicitor in the Midlands. A client was offered an advance by a building society which was to be repaid by an endowment policy. The client came to the solicitor. The building society instructed the solicitor to carry out the mortgage side of the conveyancing. We always think that in these cases there is no conflict of interest involved. It has already been suggested in the debate that that is so.
However, in this case there was clear conflict of interest because the solicitor took one look at the details and saw that the repayment arrangements through the endowment policy proposed by the building society were not suitable for his client. The solicitor did what I like to think I would have done: that is, forget about any question of conflict of interest and tell the client that he would do better to get a different mortgage. The solicitor did this, and the building society was absolutely furious.
It seems that when one is in private practice it is one's privilege to be able to give such advice to a client. I pity the solicitor trained in this way, acting for an authorised practitioner, who, when he sees such a situation, has to keep silent.
6 p.m.
Lord Hailsham of Saint Marylebone: I should like to say something about conflict of interest. I am very much less qualified than those who have spoken so far. However, I am much concerned about conflict of interest in relation to the one-stop shopping concept. Obviously, it has its advantages and its attractions. I put myself in the position of a young married couple who are trying to set up house. Although they have a little money they cannot buy the house out of their own resources. As matters now stand, they often go to a quite small firm of family solicitors where they happen to know one or more of the partners. They say what their situation is. The partner who knows the family affairs rather well may say, "Look, have you enough money to borrow at all? Ought you not for a time at least to have rented accommodation? Would you not be wiser to borrow the money off your father-in-law rather than go to the big business firm with the building society whose attractive advertisements appear on television? Do you realise that if you buy a house under mortgage you are liable to lose your home after five years if you cannot keep up your payments? The building society is all right. The mortgagee will re-possess. Do you not think that perhaps this company rather than that company offers you better terms of greater security?".
That is what a medium-sized firm of family solicitors will do for the ordinary young married couple setting up home together. I see a quite different picture emerging as the young man enters the shiny self-opening doors of a big conglomerate of one kind or another —my noble and learned friend on the Cross-Benches knows far more about that possibility than I do —to be offered a sequence of services but never to be told the facts of life in relation to his own financial circumstances and those of his fiancee.
What is worrying about this part of the Bill —and my noble and learned friend the Lord Chancellor knows that I have been worried about it for a long time —is that insufficient attention has been drawn to the inherent conflict of interest between a lender and a borrower which arises in the case of almost every borrower who is setting up house. This one-stop shopping concept is all very streamlined, attractive and modern, and will be backed by a great number of very useful services, and no doubt a very honourable set of people, but everyone who has acted in a professional capacity of any kind —whether he is a doctor, solicitor or anything else —knows at the bottom of his heart that one cannot advise somebody if one has an inherent conflict of interest involving that client or that patient and someone else with a different interest.
I have felt for a long time that the Government have not paid sufficient attention to this moral possibility. It is one of only a number of issues that give me great concern as a matter of principle. I do not know whether or not these amendments are well drafted. I am not competent to say that. I am however deeply concerned about the underlying professional morality of what is proposed in this part of the Bill.
Lord Mishcon: Perhaps I may be allowed to add a couple of sentences. The noble and learned Lord and many Members of the Committee will know that very strong representations have been made by the Law Society not for its own good or for the good of its membership but because of its worries about the very points that the noble and learned Lord has just made.
I should like to give another example. The instance of the young married couple is very typical. All of us know the problems that many such couples have in purchasing their first house. Will the Committee accept the example given by the noble and learned Lord and reflect for one moment? When that couple go through the portals so vividly described by the noble and learned Lord, would there be a temptation for the solicitor within the organisation we are discussing to suggest that it might be a good idea if both husband and wife entered into the mortgage deed? If the conveyance was made in their joint names, would there be a conflict of interest in the sense that there is obviously more security for the lender if there are the signatures of both husband and wife rather than one? If the couple walked into the independent solicitor's office that solicitor might explain what was at stake if both husband and wife did not have a purchase in joint names. What would be the situation if only one of them entered into the conveyance as the purchaser and only one of them entered into the mortgage with the lender, bearing in mind that in this day and age husband and wife are usually earners in their respective employment?
I am very perturbed —and the Law Society always has been perturbed —about conflict of interest. I would be lacking in duty to my profession, I believe, if I were not to echo those fears, worries and concerns on behalf of the public in the same way that the noble and learned Lord, Lord Hailsham, has done.
Baroness Carnegy of Lour: Before the noble Lord sits down, although I have not been taking part in the debate as a Scot —I have been listening to and taking part in discussion on the Bill relating to Scotland —I am very concerned about conflict of interest. I ask the noble Lord for information. Perhaps we may consider a young couple who are selling a house. They go to their family lawyer in a small country practice and ask him to act for them. They put the house on the market and a price is decided. In a small country town it may happen that the person to whom the owner wishes to sell his house is a long-standing client of a solicitor in the same firm. I understand that in Scotland solicitors are allowed to act for the seller and the buyer in the same transaction if both clients are long-standing customers of the firm. That is so in England. I see the noble Lord nodding his head.
Similar problems must arise in this case because the solicitor acting for the buyer may also be in a position to arrange for a mortgage to be provided for the buyer. He may attach an insurance policy —life and fire insurance —and receive commission for arranging it. Is there not a conflict of interest within that small solicitors' practice which is not dissimilar from that which we are discussing in the arrangements under the Bill?
Lord Mishcon: If the noble Baroness will permit me, and if the Committee will be indulgent, I shall endeavour to point out to her that, although in England and Wales it is the rule of practice that solicitors are not normally permitted to act for vendor and purchaser, they can do so if both are long-standing clients of the firm. That exception does not operate if the solicitor believes that there is the slightest chance of a conflict of interest. If he believes that there is such a chance the exception does not apply. If, knowing of the conflict, he continues to act for vendor and purchaser he will be acting wrongly and unprofessionally.
Lord Alexander of Weedon: Long before I became involved with a financial institution I felt great concern about the proposals that financial institutions should be entitled to provide those services together with lending services. I hope that it will not be thought disloyal to the financial institutions with which I am involved if I say that I still have the same reservations.
Essentially they are the twin reservations about the conflict of interest and the effect on the high street solicitor. I echo what was said by the noble and learned Lord, Lord Templeman. I believe that the high street solicitor, together with the independent Bar, is the most accessible face of justice. If he is diminished in terms of availability to clients the Bill will have a retrograde effect and will not advance the position in terms of access to justice.
As regards conflict of interest, I cannot attempt to put the matter as well or with as great experience as my noble and learned friend Lord Hailsham. However, I wish to pose the following illustration. Let us suppose that a bank or other major financial institution has offered a mortgage on particular terms to a potential borrower. Let us also suppose that, after being offered a perfectly appropriate choice, the borrower has decided to take the benefit of the conveyancing services of that same financial institution. It may be that the solicitor employed by that institution knows that better financial terms are available from another financial institution. What is to be the duty of that solicitor? In practice, is he to be able to say, "Don't take this building society's terms; you would do much better by going elsewhere"?
I recollect that in the White Paper the Government expressed the position by saying that the solicitor who was employed by the institution would, in law, owe the primary duty to the borrower or client. I have always wondered how practical and realistic that position is. I am bound to say that I still wonder.
I wish to add a further consideration in this area. We are all agreed that the transaction of the purchasing of property is probably the most important single financial transaction into which most people enter. I firmly believe that it does not necessarily call for advice only in regard to conveyancing. A number of other questions must also be raised when a couple or an individual have the conveyancing transaction carried out. Those questions may involve consideration of personal circumstances and decisions and advice given on
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questions such as: in which names should the transaction be put? Is a will necessary at that time? Ought a trust to be created? In my view, it is almost imperative that the person who carries out the conveyancing transaction should be in a position to give such advice.
I am conscious that my question strays slightly outside the scope of the amendment, and I apologise. However, I should be grateful if, in response, my noble and learned friend would indicate whether he contemplates that those who are qualified to carry out conveyancing must in all cases be qualified to give the other advice that it is necessary to receive at the same time.
6.15 p.m.
Lord Prys-Davies: I wish to ask a further question following on from the comments of my noble friend Lord Mishcon. If an employee of an authorised practitioner is also acting for the borrower, is there not a special need to protect the confidentiality of the information which the employee has collected in the course of a conversation with the borrower? Otherwise, is there not a possibility that the employee might be tempted to disclose that information to his employer in breach of privilege? I am conscious of the decision given by the Court of Appeal two years ago in the case of Goddard v. Nationwide Building Society. I wonder whether the Bill as it stands might reverse that decision.
The Lord Chancellor: Clause 37 provides that the regulations may in particular make provision designed to avoid conflicts of interest. My noble and learned friend Lord Hailsham has suggested that there is an inevitable conflict of interest between the purchaser and the person from whom he borrows in order to complete the purchase. That is the fundamental point made by my noble and learned friend.
That was a matter to be faced because Parliament passed the Building Societies Act in order that it should be implemented. I knew of no decision not to implement it until these proposals came forward to replace those in the Act. When I considered the situation I felt that there were difficulties about the arrangements contemplated in the Building Societies Act, particularly the idea that the Lord Chancellor should be responsible for licensing individual authorised practitioners. Following the advice that I have recently received from my noble and learned friend Lord Rawlinson, I do not think it right for the Lord Chancellor to have that responsibility. Therefore, the Bill intends to make the Lord Chancellor more remote from the individual grants.
The second point relates to the question of conflict of interest. I came to this matter and endeavoured to face it. I knew, as I am sure did many Members of the Committee, that it is very common —indeed, it is the commonest method of having professional conveyancing carried out in these cases —that the same solicitor acts in the conveyance for the borrower as the purchaser of the house in the conveyancing, and also as the solicitor for the lender in the transaction. In the vast majority of cases, that is the way it arises.

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I know the legal profession well enough to know that it would not tolerate that if there was an inevitable conflict of interest. Therefore I believed that it was not maintainable to suggest that there is always or inevitably a conflict of interest in this situation. But I consider that there might be conflicts of interest depending on individual circumstances, as the noble Lord, Lord Mishcon, and other Members of the Committee have said. I asked myself how one can deal with that. I took the view that the way to deal with it is that the professional person should have the responsibility of saying whether there was a conflict of interest in relation to the transaction, and, if there was, the building society or the bank would not be able to act. That is the purpose, among other matters, of the initial interview; namely, that that be a matter for determination by the professional person in the light of his standards of competence and conduct as laid down by his own professional body.
As the noble Lord, Lord Mishcon, pointed out in answer to my noble friend Lady Carnegy of Lour, where a problem of that kind arises in relation to other transactions the professional person must consider that and decide whether there is any probability of such a conflict, and, if so, take the necessary action.
Lord Mishcon: Perhaps I disturb the noble and learned Lord in the middle of his statement; if so, I shall sit down at once. However, if he has concluded his thoughts on this matter, for the guidance of the Committee (because I am sure that he knows the situation) I raise this point. Independent solicitors find themselves acting for a client on a prospective purchase. As regards a number of building societies, there is a roll of solicitors of whom they have had experience and whom they are prepared to see act for them, although of course they realise that they are giving that permission not to solicitors acting regularly for them but to an independent solicitor whose client is the purchaser. Quite obviously they run the risk that the main loyalty is automatically owed to the client. They are merely the solicitor authorised to act for them because they appear on a roll of solicitors. That in no way compares in loyalty or duty or to the practicalities of somebody who is employed by the building society.
The Lord Chancellor: The noble Lord intervenes as I am seeking to develop the point. The point is that the noble Lord must therefore conclude, if solicitors do that and however they come to do it, that in relation to the actual conveyancing which is the subject of the statutory monopoly under Section 22 of the Solicitors Act there is no conflict of interest in the cases in which the independent solicitor acts for both sides; that is, both for the lender and for the borrower. He must accept that that is so; otherwise the profession would not tolerate that for a moment.
That demonstrates that as regards the actual conveyancing transaction there is frequently, at the very least, no conflict of interest which prevents the solicitor doing the necessary conveyance both for the purchaser and for the lender. As I said, I entirely
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accept that there may be circumstances in which a conflict of interest will arise. In that situation it is for professional advice as to whether that has happened.
I have heard a great deal about independent financial advice and I am as concerned as anybody that people should have independent financial advice. However, there is no statutory monopoly associated with that. Under statute, one does not need to go to a solicitor in order to receive independent financial advice nor is a solicitor required, if conveyancing is sought, either to be in a position to give or indeed to give independent financial advice. I believe I am right in saying that recent surveys carried out by the National Consumer Council indicate that many people who go to solicitors for their conveyancing neither ask for nor obtain independent financial advice. In a great number of cases, young people who are seeking to purchase a house are referred to the solicitor in the first instance from the building society. Very often they go to the building society first in order to see what financial arrangements they can make which may be suitable to them.
Lord Boardman: I wonder whether my noble and learned friend has taken account of the fact that building societies and banks are mainly tied agencies as regards insurance and therefore are not allowed to give any other advice on a better policy, and so on. Most mortgages are now linked with endowment policies. Therefore, in that case the purchaser, or mortgagor, is not able to get the independent financial advice from one of those authorities which he could get and would get if he went to an independent solicitor.
6.30 p.m.
The Lord Chancellor: I understand that point and I shall endeavour to come to it. However, at present I am dealing with the situation of a solicitor. In practice, according to the National Consumer Council surveys, the majority of those who go to solicitors for their conveyancing neither ask for nor are given independent financial advice.
There are, as the noble Lord said, tied arrangements of the kind to which he referred. Attention has been devoted to practices under which, for example, inappropriate insurance policies are given. That is in the market as it is. The mere fact that the law requires the conveyancing to be done by a qualified solicitor or licensed conveyancer in no way obliges the client either to ask for, or be given, independent financial advice. There is nothing in the Solicitors Act requiring that as a condition of carrying out the conveyancing.
If the situation is that all solicitors are in a position to give independent financial advice to anyone who comes to them about matters of that sort, then that is a very valuable service which I have no doubt they can bring to the attention of the public. That will perhaps make the public anxious to go to them rather than to the building society. However, as the Law Society itself demonstrated that sort of inappropriate financial arrangement can arise under the present situation. The purpose of the

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conveyancing monopoly is to ensure that the conveyancing transaction is carried out by people who are properly qualified to do so. It is no part of that to require that independent financial advice be given or anything of that sort.
I agree entirely with the view that young people, and indeed older people, going to an institution, may well find it wise to take independent financial advice. They can see what are the different terms available. Some people do so quite effectively and are able to get the best that is available to them. However, that does not in any way detract from my view that if a client wishes, perfectly reasonably, to have his conveyancing done by a qualified person provided by the bank or building society, there is no inevitable conflict of interest which would prevent that happening. There is a substantial body of evidence which shows that that is what people want.
My noble friends Lord Boardman and Lord Alexander, and my noble and learned friend Lord Hailsham of Saint Marylebone, think it wise that those clients take independent financial advice. There is nothing in my proposals to prevent them from so doing. Indeed, one of the effects of my proposals will be that high street solicitors come to emphasise that aspect of the service they can provide which, as my noble friend correctly points out, the banks or building societies cannot provide.
Contrary to the somewhat dismal prognostications about high street solicitors that I have heard, they could make their services much more valuable, and appear much more valuable, to clients by advertising and by emphasising that aspect of their service if this form of conveyancing is allowed. It may well be that the tremendous resources —which are of value to the public —residing in the high street solicitor will become more apparent as a result of the proposals instead of less so. The high street solicitors have no reason to be afraid of competition from this quarter. They have plenty to offer in the form of independence and independent advice so long as they are prepared to give it. They are in a position, properly instructed, to advise as to what terms are on offer and so on. Their independence is surely an important selling point which will not be available to a bank or building society under this arrangement.
It is not possible to define completely all situations in which conflicts of interest arise. As the noble Lord, Lord Mishcon, explained in relation to long-standing clients, this is a matter on which a professional view must be taken. The solicitor must decide, in the light of his professional knowledge, whether or not such a conflict is likely to arise.
I envisage that the regulations under this clause —as set out in the White Paper —will provide that the qualified person in charge of the transaction should have a personal interview with the client at the beginning of the transaction. A number of points should then be considered, the most important being whether there is any likelihood of a conflict of interest. I also envisage that the qualified person will advise on the nature of the services he can provide and whether there are any other legal services related to the transaction which he is not able to provide.
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He should then indicate to the client that those services are desirable but not available from him. That is a perfectly reasonable requirement to deal with the type of problem raised by my noble friend.
The interview should lead to a formulation in writing, as I said earlier in answer to my noble friend Lord Coleraine. The result would be not only a permanent record for the advice of the client but also the name of the professional person in charge of the transaction. That will give the kind of security which is required. With regard to independent financial advice, the proposals may help to concentrate the minds of the high street solicitors on the advantages that their services have to offer.
The information available to me about the ordinary people who wish to buy a house —first-time buyers of houses—indicates that many of them do not have a family solicitor. They find themselves in contact with a solicitor recommended by the building society. There are other matters in that area, in relation to estate agents and so on, which are the subject of concern and with which the Government are endeavouring to deal. The Financial Services Act authorities are concerned to ensure that adequate protection is available against such activities as the provision of inappropriate insurance policies. These are all matters for concern and for regulation, but they are not matters covered by, or in respect of which, protection is given by the existing conveyancing monopoly.
The other matter raised by my noble and learned friend Lord Templeman is certainly a matter for consideration. He envisaged the conglomerate that provided everything one needed until the time of one's tragic demise. It is certainly possible to envisage a number of scenarios, but I have sought to provide that those who grant the authority to be an authorised practitioner have to be satisfied that the applicant's business is, and is likely to continue to be, carried on by fit and proper persons or, in the case of an application by an individual, that he is a fit and proper person. I have no doubt that consideration of the probity and character of those in control, for example, of a limited company, would be a relevant consideration in that respect.
I am anxious to secure that the services provided under this aspect of the Bill are in accordance with what the public want and that the public are adequately protected. I have sought to indicate the nature of the protection I have in mind and to provide the necessary powers to enable that protection in detail to be provided. I am extremely open to proposals for improving that protection, but I cannot accept a suggestion which would go to the very root of the legislation by suggesting that invariably there is a conflict of interest between borrower and lender in respect of the conveyancing which is the subject of the monopoly.
In the light of my explanation I hope that the noble Lord, Lord Tordoff, who moved the amendment we are considering, of which I hope I have not lost sight —I think that I have dealt with the central point —will feel able to withdraw the amendment.
Lord Donaldson of Lymington: Before the noble and learned Lord the Lord Chancellor sits down, can

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he help me with regard to the question of conflict of interest? I fully understand his answer to the noble Lord, Lord Mishcon concerning inherent conflict between the solicitor for the borrower and the solicitor for the lender, on the ground that, "Ah but in practice the same solicitor acts". I have considered that and I probably have the wrong answer but it seems to me that where the solicitor is advising a borrower in the ordinary house transaction, whether the borrower has found the solicitor himself or the building society has supplied the name from a panel, either expressly or impliedly the mandate from the building society to the solicitor is a very limited one; namely to make sure that there is a good title. It covers nothing else. In regard to the rest of the transaction, the building society looks elsewhere.
Provided the building society's mandate to its solicitor is sufficiently confined, there is no conflict of interest. I put forward for the consideration of my noble and learned friend the Lord Chancellor the question of whether he will have to provide that solicitors and others who are acting as employees or staff members of newly authorised practitioners in some way or other should have their mandate and responsibility to their employer similarly confined. If they are similarly confined, there will be no conflict of interest. The only problem about their advising a borrower as fully as a solicitor is that they will not know how to do it.
The Lord Chancellor: As regards the last point, I am not exactly sure on what it is based.
Lord Donaldson of Lymington: I mean that the conveyancer is not necessarily an expert on CTT. He is not necessarily a man of sufficient wisdom to say, for example, to someone of my age that you have to think twice before you put your house in the name of your grandchildren because you have to remember the position of your widow, and other matters of that nature. That is the kind of advice which a solicitor gives. I doubt whether a licensed conveyancer can deal with these matters, and not because he is less skilled. I do not see why he should be considering these factors because they are not in his field.
The Lord Chancellor: That is a somewhat different point. It might well be a point against having licensed conveyancers authorised to do conveyancing. The law has already dealt with that. One may now go to an independent licensed conveyancer under the Solicitors Act and perfectly lawfully he may provide the conveyancing services. I suggest to my noble and learned friend that obviously the best service you can get is the best service for you. As regards the question of the advice you ask for, that is one matter, but deciding to which person you go to get that advice depends on the advice that you wish to receive.
Lord Donaldson of Lymington: I only introduced the matter because I was asked. It was not part of my argument.
The Lord Chancellor: I am obliged to my noble and learned friend. I was wondering about the basis
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of the last point he made. Perhaps I can now go to the major point, which can be answered in this way. We have provided, and I intend to provide, that if the solicitor employed by the building society undertakes a transaction for a client, then his primary duty will be to the client. There is nothing to prevent that happening merely because he is employed. The terms of employment can secure that position. Therefore, his mandate from the employer will be to secure for the employer a properly secured mortgage on the property in question.
If other matters are outstanding at the time that the solicitor is approached the situation will be different. The mandate would be on the basis that matters have been settled when the conveyancing transaction is undertaken. I therefore believe it is right that the matter should be dealt with by the arrangement under which the solicitor or licensed conveyancer, at the very opening of the relationship between the conveyancing department of the building society or bank and the client, explains the situation and determines on his professional judgment and competence whether or not there is a conflict of interest or likely to be one. He must not take on the transaction if there is any such conflict. If a conflict emerges during the course of the transaction that situation must be dealt with in accordance with their arrangement. I hope the noble Lord will feel that his amendment has been adequately dealt with.
Lord Prys-Davies: Following the valuable contribution made by the noble and learned Lord the Master of the Rolls, I wish to mention another aspect which causes me some concern. To some extent the interests of the employer and those of the borrower coincide because both are interested in acquiring a good and marketable title to the property. But unlike the building society or the borrower, the borrower-purchaser will be vitally concerned with the terms on which he acquires the title. The lender may be less interested in the terms provided he gets a good and marketable title.
It is my experience that solicitors spend a great deal of time and concentration advising on the terms of a contract by which the title is acquired. I wonder whether that will continue to be so under the new regime.
6.45 p.m.
The Lord Chancellor: We are dealing with a conflict of interest. How far a solicitor serves a client's interests is another matter. Assuming the building societies take on the service, that service will be defined and quite extensive if it is to be successful. The precise service as regards the conveyancing monopoly is defined by that monopoly. There is nothing to prevent a building society's solicitor giving services over and above those covered by the monopoly if the building society wishes to make such an arrangement.
I certainly accept the view that it is of the greatest possible interest to the client that matters affecting the property should be in accordance with his wishes. That is the reason I say that the primary responsibility will be to the client. It will be the

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business of the solicitor employed by the building society to make sure that the interests of the client in the matter are safeguarded and there is nothing to prevent him doing so arising out of the doctrine of the conflict of interest. There is no conflict of interest with the building society in securing these matters. I believe that the standard of service given will ultimately determine whether or not the building society gets business over the long term.
Lord Tordoff: When I sat down some 60 minutes ago, having moved what I had thought was a simple amendment, I expected to be on my feet withdrawing it within two or three minutes. Talking of conflicts of interest, when I see the noble Lord, Lord Evans of Claughton, next week I shall suggest that there may be a conflict of interest as regards all the houses that he has conveyed for me in saddling me with this amendment this afternoon.
It has been a fascinating debate. I sought not to go into the generality of the subject, though as a non-lawyer I should have been delighted to do so. I believe that far too often in the debates of the Committee on this Bill there has been a feeling that they are all about professionals looking after their own interests. As a layman who has bought and sold houses from time to time and as someone without any professional interest in maintaining the future of solicitors, I support many of the things which have been said today on both sides of the Committee.
One of the most remarkable comments that I have heard for a long time came from the noble and learned Lord, Lord Hailsham, when he said that everybody who had spoken before him was more qualified than he. He had clearly forgotten that I was moving the amendment. I believe that the noble and learned Lord the Lord Chancellor has been less than fair, not as regards the amendment itself, which does not matter, but concerning some of the things that have been said. For example, he said that solicitors do not need to be afraid of competition. That seems to be introducing into these discussions a note which was not intended to be there in the first place. We are talking not about competition but whether solicitors will exist in the future if they are completely subsumed within the large organisations that we have been talking about. The noble Lord, Lord Boardman, touched on this point very strongly. If the high streets and country towns are denuded of solicitors because of the changes arising from this Bill, it will be a sad day not just for lawyers but for lay people as well.
The noble and learned Lord the Lord Chancellor said that in most cases clients neither ask for nor get independent financial advice. I do not believe that Members of the Committee will dissent from that. However, there are cases when clients get such advice without asking for it because it is in their interests to be given it. The average solicitor deals with precisely the kind of people to whom the noble and learned Lord, Lord Hailsham, referred. They are treated by the ordinary high street solicitor with a great degree of respect, including respect for their lack of knowledge. In other words, a solicitor will act in an avuncular way in many of these cases.
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I do not intend to divide the Committee although there is clearly great concern on all sides. I do not think that this is the right amendment to divide on but I am sure that we shall come back to this subject at a later stage. I hope that the noble and learned Lord the Lord Chancellor will look at this subject again and will take on board the genuine concerns expressed from all sides of the Committee and which are clearly felt outside not only by professionals but by ordinary people buying and selling their houses. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Boardman Lord Boardman had given notice of his intention to move Amendment No. 178AZC:
Page 30, line 11, at end insert ("or potential conflicts of interest and for the purpose of this paragraph benefits or rewards that would be receivable by an authorised practitioner in respect of services provided for more than one party to any transaction shall be deemed to create a conflict of interest unless the interests of each party are the same").
The noble Lord said: I have spoken at some length on this amendment and I should like only to respond to some of the remarks made by my noble and learned friend the Lord Chancellor in response to the earlier amendment. He distinguished the role in conveyancing and the lack of conflict that is likely to arise in a purely conveyancing transaction, where the common interest is to pass on a good title, from the other activities that may be carried on by the authorised practitioner. My amendment was designed to try to separate those two aspects of the transaction, to say that there was no conflict of interest when the interests of the parties were the same, as my noble and learned friend accepted they were in most cases with a purchaser and with a building society.
The conflict comes in a whole range of other transactions. For example, in buying a house, nine times out of 10 a person looks in an estate agent's window and eventually sees something he likes. If that estate agent is part of one great group of estate agents, conveyancers and insurance agents, he is unlikely to start separating the various pieces of the transaction. I made a point to which my noble and learned friend did not respond. I gave an example of a grave contrast between the solicitor and the financial institution. This concerned the declaration of commission and the accounting for it.
If a solicitor advises a client to take out an endowment policy, that solicitor will receive a commission. The solicitor is bound both to declare it and to account to the client for it. A building society, an insurance company or a bank has no such obligation. The client —in that case I call him the customer —may not be conscious of the commission. I wonder whether one is inclined to import into the commercial operations —by estate agents, insurance agents and, so on —the standards which lawyers believe they particularly possess to discharge their duty to their client. Their first and overall responsibility is to their client. The estate agent, the insurance agent and so on must act honestly and properly according to the rules but he does not have the same duty as the solicitor. There is a great distinction.
For that reason, in drafting my amendment, albeit no doubt inadequately, I tried to distinguish between the conflicts that would arise in such non-conveyancing transactions and those others. The Committee has spent a long time on this debate. I do not propose to press the amendment but I hope that my noble and learned friend will feel able to consider the points raised in the debate and before Report come back with something to avoid the dangers or apparent dangers that some of us see in the Bill as it is now drafted. I shall not move the amendment.
[Amendment No. 178AZC not moved.]
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 178ZCA:
Page 30, line 11, at end insert—
("( ) requiring authorised practitioners to offer to clients free personal interviews with a solicitor or licensed conveyancer;").
The noble Lord said: This amendment would require an authorised practitioner to offer clients a free personal interview with the solicitor or the licensed conveyancer. The Committee will probably recognise that this amendment rests on the authority of paragraph 5.13 of the White Paper. I quote:
"The authorised practitioner's client must be offered at least one interview with the solicitor or licensed conveyancer, reasonably near either the client's home or the property being conveyed".
The paragraph goes on to specify matters which should be covered in that interview.
The Law Society supports this amendment but emphasises in particular that it should be a free interview. If the authorised practitioner could make a separate charge for the interview, that could readily deter clients or potential clients from taking advantage of the offer of an interview. Having followed the discussion on the previous amendment, I have a feeling that the noble and learned Lord the Lord Chancellor will be sympathetic towards this one. He referred twice to an initial interview or a personal interview. He did not refer to that interview being a free interview. I note that reference is also made in the Notes on Clauses to the importance of the initial interview. I shall not detain the Committee any further with this amendment. It is self-explanatory. I hope that the noble and learned Lord will be able to respond favourably to its terms. I beg to move.
Lord Hooson: I wish to ask the noble and learned Lord the Lord Chancellor one or two brief questions. During his remarks on the previous amendment, he said that research carried out by the National Consumer Council tended to show that first-time buyers, young couples, do not receive financial advice from solicitors or from anyone else. However, I would point out that from solicitors they receive legal advice, and legal advice has financial implications.
I have in mind the conflict of interest which is so often not apparent to young couples whom we assume are fairly ignorant of the law. I shall give an example. Of the couple, let us say that the woman is in a secure job with a good salary. The husband
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is an entrepreneur, in a one-man business in a risky sphere. The implications for the young couple as to whether the conveyancing should be done in their joint name, their names in common or in only one of the names are considerable. Once the legal effect is spelt out to them, they can work out the financial implications for themselves. The research discloses that in most cases financial advice is not given. But if legal advice is given, it has important financial implications which the clients can work out for themselves.
Lord Coleraine: I support the amendment. If there is to be an initial advice session it should be free. The reason is plain. The initial advice session will be a promotional one put on by the corporation in order to stitch up the customer. It will make it quite clear that in aspects of the deal the conveyancer will close his eyes to the interests of the customer and that the customer must look elsewhere. On this basis, I am surprised that we feel it necessary to discuss the amendment. It is quite obvious that any corporation will make darn certain that the interview with the client in which all this takes place is the first thing that will happen.
The Lord Chancellor: The purpose of the interview is in order that a decision may be come to as to whether the client will be offered conveyancing services by the institution. It is an interview with qualified persons, a solicitor or licensed conveyancer, governed by the professional standards of his or her profession. That is the purpose of it. Of course the intention is that it will be free in the sense that it will not be determined until it is finished whether or not there should be a transaction on the conveyancing side at all.
If the transaction goes ahead it may well be that the information taken at the interview will be of value and the cost would be included in the conveyancing. But my intention certainly is to make a provision on these lines in the regulations. My understanding is —and I shall check this again —that the power to make such a requirement is already in the clause. It is my clear intention to make these provisions in the regulations.
Lord Prys-Davies: We are grateful to the noble and learned Lord for that encouraging reply. It seems to us that it is not clear from Clause 37 as it stands that the regulations would cover this point, but we are grateful for the response and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Ullswater: I believe that this might be a good time to break for dinner. Therefore, I beg to move that the House do now resume. In moving this Motion may I suggest that the Committee stage begins again at five minutes past eight o'clock.
Moved, That the House do now resume —(Viscount Ullswater.)
Lord Simon of Glaisdale: May I ask the noble Viscount until what time it is proposed to sit to consider the succeeding extremely important

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provisions of the Bill? I hope he will not say that a target has been fixed by the Whip and that the Committee must sit until that is reached, whatever the hour. In asking the question I would venture to ask him whether he noticed —I am sure he did —that although the House sat at three o'clock Starred Questions ran over time and there was a Statement which took almost 40 minutes.
Viscount Ullswater: In responding to the noble and learned Lord I would say that a target has been set. It is to take Amendment No. 186G, which gets to the end of Clause 43. I understand that that is a reasonable target. Further than that I cannot say.
On Question, Motion agreed to.
House resumed.

Code of Practice "Trade Union Ballots on Industrial Action"
7.3 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde)The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde): rose to move, That the draft code laid before the House on 9th October 1989 be approved [6th Report from the Joint Committee].
The noble Lord said: My Lords, this code of practice would be issued under Section 3 of the 1980 Employment Act, as amended by the 1988 Employment Act. This gives the Secretary of State power to,
"issue Codes of Practice containing such practical guidance … for the purpose of … promoting … desirable practices in relation to the conduct by trade unions of ballots and elections".
The Government believe that union members are entitled to be given the opportunity to indicate whether they are prepared to take part in industrial action before their union proceeds to organise it. We also believe—and this is an equally important principle —that proper standards of democratic conduct should be applied to that balloting process. Section 3(8) of the 1980 Act sets out the legal status of a code once it has been approved. It provides that the code will be admissible in evidence in all relevant court proceedings.
No one is or will be able to bring legal proceedings against a union or anyone else solely on the basis that it has failed to observe any provision in such a code. This code would not, and indeed could not, add a single ground for legal action to what the law already contains. I emphasise this point to make clear the distinction between this sort of statutory code which describes and recommends good practice —and the relevant primary legislation which imposes what can properly be called requirements. This code does not and could not change primary legislation.
The Secretary of State published a draft code for consultation in November 1988. The code has been modified and presented for approval in its present form in the light of representations made during the consultation period. It is now considerably shorter—only 56 paragraphs, plus one annex, as opposed to 103 paragraphs, plus four
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annexes—despite the fact that it contains some new material. The passages on blue background are restatements of the relevant provisions of primary legislation.
The draft code, if approved, will be a valuable source of reference for unions, union members and others. Taking account of its recommendations will help to improve the conduct of ballots, and that can only continue the improvement to this country's industrial relations that was such a prominent feature of the last decade. I beg to move.
Moved, That the draft code laid before the House on 9th October 1989 be approved [6th Report from the Joint Committee]. —(Lord Strathclyde.)
Baroness Turner of Camden: My Lords, I suppose I should be grateful that the code we are now discussing is an improvement on the first draft. For once in a while the Government appear to have taken some measure of the criticisms levelled at their first draft not only by the TUC but by the CBI and others directly concerned with industrial relations. However, I really cannot welcome even this draft since it is based on and derives from legislation that I believe to be basically unfair and one-sided.
The first thing that strikes one on reading through this code is just how one-sided it all is. It is based on this Government's perception of industrial relations, which is that employees are expected to do as they are told and be grateful for having employment. If there are grievances, too bad. In a free market economy they can always move on.
No one with real experience of working life can possibly share this view. It is not in accord with the views of those, apart from unions, concerned with industrial relations, nor is it in accord with the perceptions of our partners in the EC, as the social charter shows, and we shall have the opportunity of debating this in this House in the near future. The code before us is one-sided because, although the title refers to,
"Trade Union Ballots on Industrial Action",
in fact employers have a direct involvement throughout the code.
A few examples of this will suffice. In the introduction, paragraph 1, Section A, there is a reference to the need to exhaust procedures, either formal or informal. But employers are involved in procedures too. They are the signatories on the other side of whatever agreement exists. What if the employer takes a unilateral action in breach of procedure? Suppose he tears up a recognition agreement, and it does happen. The code is silent on that.
There is a reference in the next section to the need to involve ACAS. It is significant that there is no suggestion of arbitration. After all, the Government do not believe in arbitration. Their previous legislation substantially diminished the role of a central arbitration committee, and they have steadfastly refused to go to arbitration themselves, as their attitude to the ambulance dispute shows.
Then in paragraphs 20 and 21 we see that workplace balloting is still to be permitted, although

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postal balloting is the preferred option. Many unions prefer workplace balloting for the simple reason that more people are likely to participate in that way, provided of course that the employer will provide facilities. But although there is a recommendation that facilities be provided, there is no obligation to do so and the code is careful to emphasise that time off from work or payment for time off need not be provided by employers. Yet industrial relations are a two-way process. In any reasonable, even-handed system the employer would be as bound to provide facilities for employees as the union is bound now to ballot under present legislation.
Then there is the matter of external, independent scrutineers. Again this adds to trouble and expense for the union, although there is little evidence that unions generally have been in the habit of adopting fraudulent practices or fixing votes. Indeed I must say, as a former official, that it is not in the interests of the union to do so. The union, if it is involved in a dispute, wants to run it with as few problems as possible and with as much membership support as possible. If that support is not there the official can find himself or herself in the unenviable position of having the dispute crumble away beneath the leadership. No one in the union wants that to happen, so it is in the union's interest to ensure that the arrangements are fair in the first place.
Then of course there are the points which must be put to members when dispute action is contemplated. Obviously those in the code are in line with the present law, but the emphasis throughout the code is on the need to tell employees that they may risk breaking contracts of employment, that they must be told the consequences of a dispute, that the union must set out the potential consequences for employers and so on. All these are designed as "frighteners" to members, and of course it does not have to be so.
During previous debates in this House I and my noble friends have constantly pointed out that the contract of employment does not have to be terminated: it could be suspended. That is what happens in many European countries, where the right to withdraw labour collectively has stronger guarantees than in the United Kingdom, where we rely upon a constantly eroding system of trade union immunities.
Then we have paragraph 53, which suggests that a union, even after receiving a majority vote in a ballot, should consider all options other than authorising or endorsing industrial action as a means of resolving the dispute. It is fair to say that the union will have done this already before authorising a ballot. I have known disputes not to be proceeded with at the last moment because there has been a fresh development or a possible new offer. However, this is not in the hands of the union but in the hands of the employers. Why not give some advice to employers under this heading? I have known disputes occurring in the past —and there have been some recent ones falling within this category —which have occurred because of management incompetence and failure to communicate, or else because of a provocative stance adopted in
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negotiations. If this Government are really intent upon minimising disputes they really have to look at both sides of industry.
Then there is the provision in legislation, and referred to in paragraph 54, that the union has four weeks from the date of the ballot in which to induce industrial action. But, as we have seen in the dockwork dispute, the union does not always have 28 days. In that dispute the period disappeared altogether because of employer-initiated action in the courts, which, incidentally, the employers eventually lost.
The Private Member's Bill introduced by the noble Lord, Lord Campbell of Alloway, attempts to deal with this injustice and the Government really ought to reconsider their attitude to it. As it stands, the union may very well find itself without four weeks and might well have to ballot the membership again —a membership which by then has become frustrated not only with the employers but even perhaps with the union as well.
Then there is the section dealing with trade union liabilities. Again the one-sided approach is apparent. Individuals, it is said, may have grounds for proceeding against a union's trusteees if they have caused or permitted the unlawful application of union funds or property. The Commissioner for the Rights of Trade Union Members may assist a member of a union in connection with such proceedings. I may say that the commissioner appears to have had very little to do since that office was established, nor have the cases she has supported always succeeded. The Government seem quite unwilling to accept that malpractice within unions in this country is very rare indeed. Such cases as have occurred have had very wide publicity, and the individuals involved have usually been dealt with very severely by their own unions.
The Government seem quite unwilling to appreciate that we have in this country a serious, high-minded and extremely responsible trade union movement, led by people who would much rather see negotiated settlements and an orderly system of resolving disputes than strikes and disruption. However, the Government persist in believing that all the problems come from one side. They attribute a decline in the number of disputes at grass roots level to their legislation rather than to the fact of widespread unemployment in manufacturing industry, which is where unions have traditionally been strongest.
No one would think, to listen to Ministers and to read this code, that employers ever acted unreasonably, ever sacked people unfairly, ever broke procedures or attempted to introduce systems of payment perceived to be unfair. Nor does it ever, so far as I am aware, criticise employers for failing to consult their workforce: yet lack of consultation is very widespread.
Since the Government do not believe in arbitration and are clearly set upon making official industrial disputes more and more difficult to organise within the law, one is entitled to ask: what is the Government's attitude to employee grievances? Do they think that employees should

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simply put up with what they regard as unacceptable levels of pay and conditions? If that is so, it does not say very much for the Government's so-called attachment to human rights.
This is an unpleasant and unfair code, based on unjust, unfair and one-sided legislation. It is not, I understand, the tradition in this House to oppose codes already accepted in the other place, and for that reason I do not oppose this one, despite all the objections to which I have given voice tonight.
7.15 p.m.
Lord Rochester: My Lords, before I say anything else, may I apologise to the House and to the noble Lord, Lord Strathclyde, in particular if I have to leave before he has replied to our discussion? In mitigation, I can only say that this is the second Thursday in succession that we are debating during the dinner break an industrial relations matter, and this time at very short notice. I have to catch a train home tonight so as to be in Cheshire tomorrow morning.
I should like to thank the Minister for the clear way in which he has introduced the revised draft of this code of practice. I accept in principle the desirability of having a code on ballots concerning industrial action, and I consider this draft to be a welcome improvement on the one which was so roundly criticised a year ago, not only in this House but by practically every reputable employers' organisation in the land.
As the noble Baroness, Lady Turner, has already said, the Government have clearly taken to heart these criticisms. A major defect in the earlier draft was that it was so much more prescriptive than the law and so burdensome to trade unions that without drastic amendment it might well have had the disastrous effect of discouraging the unions from making use of lawful ballots altogether. I am glad that in the revised document there is now a much clearer separation of the law's requirements from the practice that is recommended.
Even now, however, I think that a better balance could have been struck as between employers and trade unions. The noble Baroness has already made this point in relation to the need for employers as well as unions to observe negotiating procedures, and indeed other matters. About the only advice to employers that I could find is in the footnote on page 9, where it is said that employers might consider that it would accord with good industrial relations practice to make premises available for the holding of workplace ballots.
I am relieved to find that some of the more flagrant attempts in the earlier draft to weight the scales against trade unions have now been abandoned. I have in mind, for example, the suggestion that a majority in favour of industrial action of at least 70 per cent. of those voting in a ballot, rather than a simple majority, would constitute good practice.
Welcome improvements have also been made in the examples of acceptable voting papers, particularly that in accordance with normal speech and practice the Yes box should take precedence over the No box.
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There is one drafting point to which I should like to draw attention. In Section E, on the procedures to be followed in the counting of votes following a ballot, it is stated in paragraph 47 that,
"The union should consider and apply the following procedures".
Surely the passage should read either that the union should consider applying the procedures —I hope that the Minister will be able to confirm that that is the intention —or that it, in fact, should apply them. If that is the case, the words "consider and" are redundant.
I noted that Clause 10 of the Employment Bill, which received its Second Reading in another place last Monday, makes provision for codes of practice to be revised so as to bring them into conformity with statutory provisions coming into force after they have been issued. As we are required tonight either to accept or to reject the code as it stands, I hope that, if and when it is revised, the opportunity will be taken to remedy apparent defects such as the one I have just mentioned.
I do not wish to speak at any greater length on the matter. In conclusion I shall simply say that, subject to the qualifications to which I referred, we on these Benches are content to accept the revised draft of this code of practice.
Lord McCarthy: My Lords, in a slightly more crowded Chamber yesterday the Minister was likened to Professor Pangloss because of his determination to ensure that the Government's training and education policies go forward. He said that he saw them as the best and all for the best in the best of all possible worlds. However, tonight it seemed to me that he looked more like despondent Billy Bunter gazing down at a half empty tuck box. I must say to him that we regard this matter as not so much a tuck box as a poisoned chalice.
As previous speakers have said, it is perfectly true that this code is a great improvement upon the previous one. Indeed, it must be because it is less than half as long. As the Minister said, it has 16 pages and 56 paragraphs as against 53 pages and 103 paragraphs. Moreover, it has even shrunk in size. Indeed, if we could have had a third or fourth draft if might even have disappeared altogether. It is also better because the confusion of law and opinion which was so criticised, as previous speakers have mentioned, has been removed. The law is in Cambridge blue and the opinion is in black and white.
Of course, as the Minister said, the code is shorter despite the fact that new material has been added. They were able to add the new material and still make the document smaller because, we are glad to say, much of the silliest opinion has been cut out. In fact, it was very difficult for anyone to believe that the material which has been removed was written by civil servants at the Department of Employment. There was an apocryphal story that it was dictated by Mr. Fowler while he was in a trance. I do not know whether that is true, but it is certainly a very good thing that, along with Sir Norman, it has gone and that no longer will this code of practice tell us

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that the trade unions should not have a ballot if it will be bad for industrial relations. We were told in paragraph 42 that it was bad for industrial relations if the workers were likely to vote for a strike.
We are no longer told that you should first ask the employer whether he thinks a ballot is a good idea —that was paragraph 16. It is now no longer necessary to find room on the ballot paper for a statement of the employer's case. That was surely the most ridiculous proposal ever to come from anyone with a responsibility for industrial relations. Moreover, nowhere does it say that if you receive a majority for a strike now —and, this proposal was severely criticised by the CBI, the TUC, IPM and other organisations —you must return to square one or you return to goal and raise the ante and you ask for a more substantial majority and a 70 per cent. turnout. That provision —thank goodness! —has been removed.
All those matters have been removed because of the criticism which was aimed at this code of practice, not merely, I am bound to say, because of a perceptive study published by the Institute of Employment Rights, but also because of the denunciation of unfairness and counter-productiveness made by the CBI, the IPM, the EEF and ACAS. That was an amazing indictment of government policy by the ACAS council, which is a bipartite, two-sided council.
When the code of practice was first introduced the Government received their worst press since the Westland crisis. Nevertheless, if we read the tiny document there is still much which remains objectionable, much which is unjustified, much which is ignorant and much which one can only charitably assume was written by a Minister in a trance. We still have the random paragraph 20 proposal that there should be a presumption that postal ballots are to be preferred to workplace ballots. No reasons are given, because, of course, there are none. Indeed, the only reasons that exist are against it because, on the whole, the response to postal ballots is larger than the response to workplace ballots.
The code of practice still spells out that the ballot form must state the possible effects of going on strike. In paragraph 34 the union still has to tell the members all the possible consequences of strike action, including an estimate of the chances that the employer might victimise them by sacking them. Under paragraph 33 the union is still obliged to give an unbiased picture of the background of the ballot and why it is required.
However, it is still unclear how far the executive —and, this is a point of some substance —of the union is allowed in the course of a ballot to campaign for a "yes" vote. The whole direction of the code of practice is that you cannot do that in the same envelope; you must do it separately on posters, with postcards or in some other way. Moreover, if the executive dares to say in the ballot form why it thinks the members should vote in favour of a strike —of course, it would be all right if it is suggested that members should vote
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against it —then that will be contrary to the code of practice in some way and may even be contrary to the law.
The nonsense about the independent scrutineers who have to be present at each voting point still remains, together with the nonsense as regards the double envelopes and the universally available postal votes —that is, all those matters which the Government never insist upon in the Representation of the People Act. If all those stipulations had been applied to the vote in Finchley, the Prime Minister would have been declared unlawfully elected. All those requirements are there for trade unions alone.
Therefore it is not much better. Above all, we are still asked to consider every conceivable factor before strike action. Examples are the consequences of the members getting sacked, any last-minute offer by the employer and whether the size of the vote is sufficient to warrant a strike. However, a fundamental difference in the code of practice is in the approach in paragraph 56 as regards what a union does —and this really does give the Government's bias away —when it is thinking about calling off a strike. All those measures must be carried out if a union is thinking of calling a strike. However, the draft code of practice makes it clear that if a union is thinking of calling off a strike it should remember that there is no statutory obligation to consult the members before doing so. In other words, no problem of democracy arises. According to the code, it is only if the union are thinking of continuing the struggle that a further ballot should perhaps be carried out.
Therefore, the Government want ballots if they will discourage strikes. However, if you can call off strikes or avoid having strikes by not having ballots, they are not concerned about ballots at all. The code is not in favour of ballots. It is essentially a quietist, pro-employer document. The clear inference that anyone reading the document would draw is that if you are a trade union leader or member then you had better not start the miserable business in the first place. The reasons for that are clear enough. As the Minister said, they are clearly set out in paragraph 7 of the code, which reads:
"Failure to observe it does not by itself render anyone liable to proceedings".
But it continues:
"any provisions of the Code are to be admissible in evidence and are to be taken into account in proceedings before any court where it considers them relevant".
In other words, the aim of this code is the aim of the picketing code —to extend the area of legal regulation. In that way matters in this code can become part of the law, even though they have no legislative support, like the estimate of six as a maximum in the case of the picketing code.
All these matters might make courts consider that perhaps higher standards are required in workplace ballots and that it is reprehensible and may even be unlawful if there are no double envelopes. Those matters frequently stated in legislation to be reasonably practical —which means what is lawful, because what is reasonably practical and is not done is unlawful —could be taken to fit in with the

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prejudices and preferences of the Government as specified in the code.
In other words, the basic aim of the improved code remains the same: to confuse and to intimidate. Therefore although it is less extensive, less ridiculous and less biased, it is just as ignorant. It is the same pile of old rope and we oppose it.
7.30 p.m.
Lord Strathclyde: My Lords, the noble Baroness, Lady Turner, surprised me. She started by essentially welcoming the fact that the Government had consulted and that we had made considerable changes in our code of practice. She then went on to say that it was all a waste of time, that there was absolutely nothing good in the code of practice and that we should bin the whole thing and probably not even bother starting again. The noble Baroness said that we had been one-sided. But the draft code concerns ballots by unions of their own members, asking whether those members are willing to take part in, or to continue with, industrial action which their union may authorise or endorse. That is the subject of the draft code.
Baroness Turner of Camden: My Lords, will the Minister allow me to intervene? Can he say whether the Government would consider producing a code for employers concerning good industrial relations practice?
Lord Strathclyde: My Lords, I shall answer that in a moment. Proper ballots can give a union protection against legal proceedings that could otherwise be brought against it. Such ballots relate to industrial action: it is up to a union to decide to organise it. The law does not oblige a union to consider calling on its members to take industrial action. The law places requirements on employers to allow the use of premises for certain ballots in certain circumstances. The code refers to these obligations. To do more would distort the fundamental purposes of the code.
The noble Baroness talked about the TGWU last summer. We have discussed that at considerable length in other debates. I must remind the noble Baroness that the circumstances of that dispute and those proceedings had some unique features, not least the relationship to the outmoded statutory dock labour scheme. The issues considered by the courts did not relate to the conduct of the ballot but whether there could be immunity for organising particular industrial action. A union cannot and should not be able to put itself above the law simply by holding a ballot of its members.
The noble Baroness brought into her defence, practice on the Continent. I was quite surprised at that. I cannot believe that with the traditions of industrial relations that have been built up in this country over many years the noble Baroness seriously thinks that we should bring over some of the practices that are prevalent on the Continent. That is a subject we shall enjoy discussing when we reach the debate on the social charter in a few weeks' time.
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The noble Baroness also stated that trade unions were reasonable or were led by reasonable men. That may well be so; we also know that the history of the last two decades shows that that has not always been the case. There is a good argument for saying that the reforms —and they are reforms —brought in over the past 10 years have done more to help industrial relations than anything else.
I turn to the point about employers. It is directly in the interests of employers to treat people, employees, as valuable assets; to treat them as fairly and equitably as possible. That is backed by legislation. We have sex discrimination legislation and equal pay legislation. We have industrial tribunals and health and safety regulations. That is what is important in protecting individual employees.
I am glad that the noble Lord, Lord Rochester, is still here. I hope we shall not delay him too long so that he misses his train. I welcome his acceptance of the code of practice. I know that his party believes in these approaches to industrial relations, as we do. The noble Lord mentioned some drafting points. He said that we should look at paragraph 47 of the code and that the unions should consider and apply those words. So far as I can see, the unions should consider all the recommendations and apply them as appropriate. In some cases there may be a need to adapt them to circumstances. The requirements for postal ballots, for instance, are not the same as for workplace ballots. Obviously, a code like this, over the years, may become outdated. Changes may be required. We shall keep an eye on it and correct any defects as they arise.
I am sorry that the noble Lord, Lord McCarthy, missed the end of the debate yesterday. I think that he would have enjoyed it. However, I am sure that he had a better dinner in Oxford. The noble Lord described my opening speech as "Billy Bunter-esque". All I can say about that is that it says more about the kind of literature that the noble Lord reads.
The noble Lord, Lord McCarthy, is unhappy. He is always unhappy when he comes to talk about industrial relations. However much we consult and make changes, however much we read his pamphlets written in the past, however much the officials in the Department of Employment try to accommodate him, the noble Lord is still unhappy. Today I can see quite clearly why: he and his party are isolated. The noble Lord, Lord Rochester, said that he welcomed the code. We obviously welcome it, the employers welcome it; but the noble Lord is still unhappy. That is because fundamentally he is more interested in trade unions while we are interested in trade union members. I think that I have dealt with all the points. I hope that the House—
Lord McCarthy: My Lords, perhaps I may intervene. The noble Lord says that I am unhappy. I can assure him that if he took the code away and burned it I should be very happy.
Lord Strathclyde: My Lords, that is precisely because the noble Lord is not interested in the rights of trade union members or of democracy when it

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comes to dealing with trade union ballots. I commend the order to your Lordships.
On Question, Motion agreed to.

Employment Protection (Variation of Limits) (No. 2) Order 1989
7.38 p.m.
Lord Strathclyde Lord Strathclyde rose to move, That the draft order laid before the House on 15th January be approved [5th Report from the Joint Committee].
The noble Lord said: My Lords, the purpose of the order is well known. It has been laid in accordance with Section 148 of the Employment Protection (Consolidation) Act 1978. This requires the Secretary of State to review the upper limits on the amount of a week's pay used for calculating certain payments and awards under employment protection legislation.
In reaching our decision this year, the Government have sought to quantify an obligation that we acknowledge exists for this limit to keep some pace with the overall level of inflation. At the same time the Government are mindful of the effect that any increase could have on business. We are not required to consult but nonetheless we have as usual undertaken consultations with relevant employer and employee organisations. These reveal, not surprisingly, that employers are in general against any increase on the grounds of the extra costs imposed on industry while employees, on the other hand are in favour of increases that are in line with average earnings. Having very carefully considered these views and having taken into account other factors, as the Secretary of State is required to do, we have decided to increase the limits by roughly 6.8 per cent. Thus the limit on a week's pay will rise from £172 to £184 and the limit on the daily amount of guarantee pay will go up from £11–85 to £12–65. Certain other limits relating to guarantee pay will not be increased this year and the Secretary of State has laid a report explaining that. I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 15th January be approved [15th Report from the Joint Committee].—(Lord Strathclyde.)
Baroness Turner of Camden: My Lords, I rise to thank the Minister for his clear explanation of this order. We on these Benches certainly do not oppose increasing these limits. I note that workers, as one would expect, want an increase in line with the wages index, and I can understand that. However, on the other hand I think that in current circumstances the amount, which is roughly in line with current inflation figures, is broadly acceptable. With those comments, we have no objection to offer to the order.
On Question, Motion agreed to.
The Earl of Strathmore and Kinghorne: My Lords, I beg to move that the House do now adjourn during pleasure until five past eight.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.41 to 8.5 p.m.]

Courts and Legal Services Bill [H.L.]
House again in Committee on Clause 37.
Lord Mishcon Lord Mishcon moved Amendment No. 178ZCB:
Page 30, line 13, at end insert —
("( ) requiring authorised practitioners who or which are willing to add the costs of conveyancing services to loans being made to their clients to be prepared to add the costs of such services to such loans whether or not the conveyancing services are provided by the authorised practitioner").
The noble Lord said: Perhaps I may move this amendment to a crowded Chamber. I shall do so briefly. An obvious ill could be caused if we are not careful. Lenders could say to borrowers, "We realise that you do not have a lot of money. We would be perfectly prepared to lend, in addition to the loan, the conveyancing costs provided that you use our conveyancing department". That would lure the borrower quite unfairly into that conveyancing department unless there were a regulation specifying that such an offer of an additional loan for conveyancing costs should apply regardless of whether the borrower used the conveyancing services provided by the lending institution or those of an independent solicitor. I do not believe that I need say any more in support of the amendment. I beg to move.
The Lord Chancellor: Both in the Green Paper and in carrying the matter through it has been my view that something of that kind is required in the regulations. I believe that the powers that the Bill confers are sufficient to enable that to be done. I certainly have every intention of including a requirement on those lines in the regulations.
Lord Mishcon: Having regard to that very clear reply and the intention of the noble and learned Lord to regulate on precisely the lines of the amendment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Strabolgi): I have to inform the Committee that if Amendment No. 178ZCC is agreed to, I cannot call Amendments Nos. 179 or 179A.
Lord Mishcon Lord Mishcon moved Amendment No. 178ZCC:
Page 30, line 14, leave out paragraph (f).
The noble Lord said: With the agreement of the Committee, I should like also to speak to Amendments Nos. 180E and 180F. The amendments deal with the obvious necessity that proper care should be exercised, regulated by the Bill, regarding clients' money. The handling of clients' money by authorised practitioners should be covered by the same rules as at the moment govern

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solicitors and licensed conveyancers. I hope that the Committee and the noble and learned Lord will feel that in drawing up the new clause which forms part of the amendments we have carried through those provisions which relate to solicitors and licensed conveyancers. We have done so with the object of safeguarding the public in the same way as they have been safeguarded by statute with regard to those other callings. I beg to move.
The Earl of Shannon: The noble Lord has rather beaten me to the post. Although his amendment, Amendment No. 180C, comes after my amendment, Amendment No. 179, obviously it covers very much the same ground. Should my amendments (Amendments Nos. 179 and 180) fail, I shall very strongly support Amendment No. 180C to which the noble Lord has spoken but not yet moved.
The Lord Chancellor: Paragraph (f), which is the last paragraph of subsection (2), provides that the regulations may deal with the handling by authorised practitioners of their clients' money and it will be possible for regulations to be made on the lines of these amendments if that is what seems to be required after full consultation.
I certainly intend the regulations to be as full as is necessary appropriately to deal with this matter. The matter is exactly covered by paragraph (f). I believe that that is in sufficient detail for the purposes of the primary legislation.
In the light of my explanation, I hope that the noble Lord will feel able to withdraw his amendment. I believe that what I have said also covers the point made by the noble Earl, Lord Shannon.
Lord Simon of Glaisdale: As I might have done on the previous amendment, I merely remark that my noble and learned friend has very properly said what he proposes to do, which is a perfectly adequate way of dealing with these matters of detail, rather than to have a permissive clause stating that the Minister may in particular do so and so.
I am glad to say that there were only two words of difference between my noble and learned friend and myself. I ventured to say that the whole of that subsection was unnecessary. My noble and learned friend said that strictly speaking it was unnecessary. I am glad that only two words remain between us. I shall return to the matter at the Report stage.
Lord Mishcon: In view of the very clear statement made by the noble and learned Lord, I ask leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Shannon The Earl of Shannon had given notice of his intention to move Amendment No. 179:
Page 30, line 14, after ("handling") insert ("and financial surveillance").
The noble Earl said: I would have asked leave of the Committee to speak to both my amendments, Amendments Nos. 179 and 180, but as they have recently been very well spoken to by the noble Lord, Lord Mishcon, when he dealt with an earlier
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amendment which he has withdrawn, and in view of the clear, very convincing and reassuring statement by the noble and learned Lord the Lord Chancellor, I do not intend now to propose an amendment which would merely add a belt to an otherwise perfectly satisfactory pair of braces. I shall not move the amendment.
[Amendment No. 179 not moved.]
Lord Evans of Claughton Lord Evans of Claughton had given notice of his intention to move Amendment No. 179A:
Page 30, line 15, at end insert ("and interest on client's money and commissions").
Lord Foot: This amendment is very largely covered by the next one which appears on the Marshalled List. In those circumstances it is not moved.
[Amendment No. 179A not moved.]
8.15 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 179B:
Page 30, line 15, at end insert —
("( ) as to the disclosure of and accounting for commissions.").
The noble Lord said: Following the usual courtesy of the noble Lord, Lord Foot, which I much appreciate, I move this amendment. Clients who deal with institutional conveyancers should obviously be able to expect the same rules as to disclosure and accounting for commissions as if they were dealing with a solicitor. The matter is as simple as that. Accordingly I beg to move.
The Lord Chancellor: A power to make arrangements along these lines is already indicated, as it were, as a particular in subsection (2)(e). This is a matter on which I should certainly wish to consult in detail because there are many detailed matters that would have to be dealt with in relation to this area if it were to be the subject of regulations. The noble Lord may therefore take it that I shall have this very much in mind as a matter to be considered in relation to the reglations. I shall undertake full consultation upon them when they are drawn.
As I said, there are a number of difficulties inherent in this area which I need not elaborate at this stage but which I shall certainly bring out in the consultation on the regulations. In the light of that reply I hope that the noble Lord will feel able to withdraw the amendment.
Lord Mishcon: Perhaps I may respectfully tell the noble and learned Lord why I am in some difficulty and I hope that he will understand my position. The ambiguous wording of the White Paper causes me some problems because in the White Paper the statement is made that:
"Authorised practitioners will be required to disclose to the client any commissions or like benefits".
In the Green Paper it seemed that there would also be an obligation to account. Disclosure is one thing, as the noble and learned Lord very readily appreciates; accounting for it in exactly the same way as solicitors have to do is an entirely different matter. I wonder whether the noble and learned

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Lord can help me by making it quite clear to the Committee that it is not just the question of disclosure at which he will be looking but he will also be looking at the question of accounting.
The Lord Chancellor: I have the question very much in mind and in that sense I am looking at it. I propose to make it necessary to separate out the cost of each item and each part of any services which a building society, for example, may offer. That may well be a way of dealing with this point. I shall certainly keep in mind all that the noble Lord said. As I observed, there will be full consultation on this matter as we draft the regulations.
Lord Mishcon: I obviously do not want to indulge in cross-conversation of any length with the noble and learned Lord. But as this is a consultation on principle and not a consultation on the wording of any regulation, does he intend to have those consultations during the various stages of this Bill in this Chamber so that at all events by the end of Report stage we should have an opportunity to have a statement from him which at least would enable us to say what the principle ought to be when we reach Third Reading?
I say respectfully to the noble and learned Lord that I well understand that the wording of regulations may require great care. However, he has shown in his remarks quite clearly that there may be an issue of principle involved in this matter. Can the principle at least be announced in very definite terms before the Bill reaches this Chamber so that the opinion of noble Lords on this matter may be taken if, by some mischance, the noble and learned Lord were to decide the principle in a way which was not acceptable?
The Lord Chancellor: I doubt very much whether it would be possible to produce the draft regulations at this stage. I feel that we must try to get right first the primary legislation. Certainly I undertake to have full consultation about the principle. Also, these regulations would come under the affirmative resolution procedure.
The point of principle and the point of detail in this area are very closely connected. So far as I am concerned, in principle I should find it perfectly easy to think of something along the lines of the noble Lord's amendment. The difficulties arise from the way that that might be applied. Therefore I think it quite difficult to dissociate the detail from the principle in this situation. I therefore believe that the best I can do is to make it absolutely plain that very full consultation on the regulations will be afforded before this part of the Bill becomes effective and the regulations are produced.
Lord Mishcon: I know that the noble and learned Lord is trying to help me. He will not think me in the slightest degree discourteous if I say that he has only gone a very small distance down the path to helping me. What I believe is so essential is that the principle of not only disclosing but accounting for commissions, which solicitors have to do —and I am limiting it to that —should be the rule in regard to
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other institutions that are enabled by this Bill to take the place of solicitors.
If the noble and learned Lord will go a little further down the road to help me by saying that he accepts that there should be a principle —and I ask for it only in general terms —to disclose and account by the institutions about which we are talking, then I leave the question of consultation as to how it is done and the wording of the regulations until a later date, the timing of which I do not even ask for. But I cannot leave the principle, which is such an important one for the public safeguard and for equitable treatment, unanswered.
If the noble and learned Lord can go that distance with me on the general principle, I can obviously take a certain course. If he does not go down the road with me by agreeing to the principle, then I have to consider the position very carefully.
The Lord Chancellor: I have said as much as I reasonably can at this juncture.
Lord Mishcon: It is a great shame. I thought that I had opened a door that the noble and learned Lord could have entered with ease. However, unless he can reconsider his statement, he has given me no alternative but to divide the Committee.
8.23 p.m.
On Question, Whether the said amendment (No. 179B) shall be agreed to?
Their Lordships divided: Contents, 31; Not-Contents, 30.

DIVISION NO. 1

CONTENTS

Ackner, L.

Lockwood, B.

Boardman, L.

Lytton, E.

Bonham-Carter, L.

Macaulay of Bragar, L.

Bridge of Harwich, L.

Mishcon, L.

Byron, L.

Monson, L.

Carlisle of Bucklow, L.

Pitt of Hampstead, L.

Carter, L. [Teller.]

Ponsonby of Shulbrede, L.

Coleraine, L.

[Teller.]

Craigavon, V.

Prys-Davies, L.

Donaldson of Lymington, L.

Renton, L.

Foot, L.

Roskill, L.

Graham of Edmonton, L.

Shackleton, L.

Hacking, L.

Shannon, E.

Irvine of Lairg, L.

Simon of Glaisdale, L.

Kilbracken, L.

Strabolgi, L.

Lawrence, L.

Templeman, L.

NOT-CONTENTS

Belstead, L.

Henley, L.

Blatch, B.

Hives, L.

Brabazon of Tara, L.

Hooper, B.

Butterworth, L.

Joseph, L.

Carnegy of Lour, B.

Long, V.

Carnock, L.

Lucas of Chilworth, L.

Cork and Orrery, E.

Lyell, L.

Craigmyle, L.

Mackay of Clashfern, L.

Cullen of Ashbourne, L.

Macleod of Borve, B.

Davidson, V. [Teller.]

Mountevans, L.

Denham, L. [Teller.]

Strathclyde, L.

Elliot of Harwood, B.

Strathmore and Kinghorne,

Ferrers, E.

E.

Fraser of Carmyllie, L.

Trefgarne, L.

Glenarthur, L.

Ullswater, V.

Hastings, L.

Resolved in the affirmative, and amendment agreed to accordingly.
8.30 p.m.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 179C:
Page 30, line 15, at end insert —
("( ) Any solicitor who is carrying out conveyancing services on behalf of an authorised practitioner or who is supervising the carrying out of such services must have in force a practising certificate.").
The noble Lord said: The object of the amendment is to require any solicitor who is carrying out or supervising conveyancing services on behalf of an authorised practitioner to hold a practising certificate. Members of the Committee will know that it is only through the requirement that a solicitor holds a practising certificate that the Law Society is able to impose certain necessary controls.
The practising certificate is fundamental if the Law Society is to ensure the maintenance of standards of competence, conduct and integrity of solicitors. It is in the interests of the clients of authorised practitioners that such standards be maintained; otherwise some people could cause considerable damage to clients. I beg to move.
The Lord Chancellor: As I explained earlier, the provisions of subsection (2)(b) make it appropriate to prescribe the nature of the qualifications that are to be required. One would take the qualifications in relation to solicitors on the basis of the Law Society's statutory requirements. Accordingly, the powers properly to prescribe qualifications are already contained in the Bill. Therefore, I hope that the noble Lord will consider that the amendment is unnecessary.
Lord Donaldson of Lymington: Perhaps the matter can be looked at in a wider context. Ought a solicitor to be allowed to carry on any practice as a solicitor —as he would be if he were using his qualifications to carry out conveyancing work—without a practising certificate? That will require the amendation of various sections in the Solicitors Act.
The Lord Chancellor: I agree entirely with what my noble and learned friend has said. Primarily the question must be settled in the legislation dealing with solicitors. However, the prescribing powers enable me to follow that in prescription under the Bill.
Lord Prys-Davies: I am grateful for an indication of the noble and learned Lord's thinking. I do not propose to pursue the matter further. I beg leave to withdrawn the amendment.
Amendment, by leave, withdrawn.
The Earl of Shannon The Earl of Shannon had given notice of his intention to move Amendment No. 180:
Page 30, line 15, at end insert —
("(g) as to the establishment of a compensation fund to recompense any member of the public who has sustained financial loss.").
The noble Earl said: The amendment is similar to my previous amendment. In view of the assurances given by the noble and learned Lord with regard to
488
the handling of clients' money, I do not seek to move the amendment.
[Amendment No. 180 not moved.]
[Amendment No. 180A had been withdrawn from the Marshalled List.]
The Earl of Shannon The Earl of Shannon moved Amendment No. 180B:
Page 30, line 15, at end insert —
("(3) Prior to making any regulations under this section the Lord Chancellor shall consult with his advisory committee and the regulatory bodies governing the Bar, Solicitors, Notaries and Licensed Conveyancers.").
The noble Earl said: I do not know whether I should move the amendment because it is not mine. It has been tabled in my name in error. I do not know whether any Member of the Committee wishes to speak to it. In a previous issue of the Marshalled List it was tabled under the name of the noble Lord, Lord Evans of Claughton. However, in case any Member wishes to speak to it —I do not understand it —I formally beg to move.
The Lord Chancellor: I intend to have wide consultation as regards making regulations under the clause. All the interests referred to in the amendment would be among those to be consulted. The advisory committee has no specially important role but we should wish to have its views as well as those of the governing bodies of the Bar, the Law Society, notaries and licensed conveyancers.
The Earl of Shannon: I thank the noble and learned Lord for his reply. I am sure that the Member who tabled the amendment will be pleased to read that in Hansard. In view of the fact that no one wishes to speak to it, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 37, as amended, shall stand part of the Bill?
Lord Foot: I should like to offer a few observations on Clause 37. It is of immense importance because it seeks to outline and define the obligations of an authorised person and a solicitor. More importantly, it seeks to provide safeguards for the interests of the lay client.
I acknowledge that this afternoon we have had a debate of considerable importance. However, I am left with the feeling that there is an air or unreality about the clause. Subsection (1) merely states the purposes of the regulations which the Lord Chancellor will make. Subsection (2) sets out the various matters which may be dealt with by the Lord Chancellor in his regulations. However, no indication is given of the substance of the regulations. For example, we have had a long debate about the regulations being designed to avoid conflicts of interest yet we still do not know the regulations which will achieve that object.
It is impossible for the noble and learned Lord to tell us what the regulations will be because he may not be the author. Unhappily, he will not be with us for ever. Presumably in the course of time regulations will be made by other Lord Chancellors.

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After our long debate we have no indication, guarantee or assurance about what the regulations will provide. Therefore, we move on to the rest of the Bill with no confident knowledge of what will happen in reality and in practice as a result of the clause.
I do not know whether it would have been possible for the clause to have defined more precisely the contents of the regulations. During the course of the debate suggestions have been made from more than one side of the Committee as to what the regulations should contain and provide. On each occasion the noble and learned Lord has resisted the suggestion that he should define the way in which the regulations will be framed. That appears to be an unsatisfactory state of affairs. I believe that it is possible to indicate not only the subjects upon which regulations are to be made but also the nature of the regulations.
The Lord Chancellor: I have endeavoured to do that in so far as I possibly can in relation to the various matters raised. The White Paper sets out the thinking as far as it was developed at that stage in relation to regulations.
What I have said —and I think this is important —is that I undertake to bring back on Report an amendment making the regulation-making power subject to the affirmative procedure. I have also said that there will be wide consultations on these regulations before they are put forward for approval by both Houses of Parliament.
I believe that that is as full a description of the situation as is reasonably possible at this stage. I have sought to indicate, where I have been asked, what I am able to do. The reason that we had a Division on the last amendment was that the noble Lord, Lord Mishcon, felt that I had not been able to go far enough. I have tried to be absolutely clear to the Committee at every stage as to what is my state of thinking at present.
The noble Lord is right. This is a matter which will go into the future, but as regards the making of the regulations I cannot do more than indicate. My noble and learned friend Lord Simon of Glaisdale put the point that the headings are perhaps not necessary. I said that they are not strictly necessary and he said that they are not necessary at all. I said that they are not strictly necessary but I put them in to indicate the headings so that Parliament may go forward on the basis that these are matters which will be considered in relation to making provisions. Those are the headings under which, as at present advised, provision is required. I hope the noble Lord feels that that is as far as we can reasonably go.
The desirability on making the list is to give as much indication as one can in the primary legislation of the matters which the regulations are designed to cover.
Clause 37, as amended, agreed to.
Lord Mishcon Lord Mishcon had given notice of his intention to move Amendment No. 180C:
After Clause 37, insert the following new clause:
("Compensation for losses caused by authorised practitioners
.—(1) The Lord Chancellor shall make rules establishing a fund for the making of grants or other payments for the purpose of relieving or mitigating losses suffered by persons in consequence of —

(a) fraud or other dishonesty on the part of authorised practitioners, or of officers, employees or associates of theirs, in connection with their practices (or purported practices) as authorised practitioners; or

(b) failure on the part of authorised practitioners to account for money received by them in connection with their practices (or purported practices) as authorised practitioners.

(2) Without prejudice to the generality of subsection (1) above, rules under this section may —

(a) provide for the levying of contributions from, or from any class of, authorised practitioners and otherwise for financing the scheme and for the payment of contributions and other money into the fund;

(b) specify the terms and conditions on which, and the extent to which, compensation is to be payable and any circumstances in which the right to compensation is to be excluded or modified;

(c) specify the circumstances in which authorised practitioners are exempt from the rules and in particular may specify the circumstances in which bonding arrangements made by an authorised practitioner may be regarded by the Board as sufficient to exempt that authorised practitioner from the rules; and

(d)) contain incidental, procedural or supplemental provisions.

(3) Where the applicant is —

(a) a bank which is authorised by the Bank of England, under Part I of the Banking Act 1987, to operate a deposit taking business;

(b) a building society which is authorised by the Building Societies Commission, under section 9 of the Building Societies Act 1986, to raise money for its members; or

(c) an insurance company which is authorised under section 3 or 4 of the Insurance Companies Act 1982,

the Lord Chancellor shall have regard to the fact that it is so authorised in determining whether it should be exempt from the compensation fund rules.").
The noble Lord said: The whole subject of compensation is dealt with hereafter in certain amendments. In the circumstances, I shall not move the amendment.
[Amendment No. 180C not moved.]
Lord Mishcon Lord Mishcon had given notice of his intention to move Amendment No. 180D:
After Clause 37, insert the following new clause:
("Rules concerning indemnity
—(1) The Lord Chancellor shall make rules concerning indemnity against losses arising from claims in respect of any description of civil liability incurred by an authorised practitioner or former authorised practitioner in connection with the provision of conveyancing services.
(2) For the purpose of providing indemnity the rules —

(a) may authorise or require the Board to establish and maintain a fund or funds;

(b) may authorise or require the Board to take out and maintain insurance with insurers authorised to carry on insurance business under the law of the United Kingdom or any other member State; and

(c) may require any authorised practitioner to whom the rules apply to take out and maintain insurance with any such insurer.

(3) Without prejudice to the generality of the foregoing provisions, the rules may —

(a) specify the terms and conditions on which, and the extent to which, indemnity is to be available, and any circumstances in which the right to it is to be excluded or modified;

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(b) provide for the management, administration and protection of any fund maintained by virtue of subsection (2)(a) above and require authorised practitioners to whom the rules apply to make payments to any such fund;

(c) require authorised practitioners to whom the rules apply to make payments by way of premium on any insurance policy maintained by the Board by virtue of subsection (2)(b) above;

(d) prescribe the conditions which an insurance policy must satisfy for the purposes of subsection (2)(c) above;

(e) authorise the Board to determine the amount of any payments required by the rules, subject to such limits or in accordance with such provisions as may be prescribed by the rules;

(f) specify circumstances in which, where an authorised practitioner for whom indemnity is provided has failed to comply with the rules, the Board or insurers may take proceedings against him in respect of sums paid by way of indemnity in connection with a matter in relation to which there has been a failure to comply with the rules;

(g) specify circumstances in which authorised practitioners are exempt from the rules;

(h) empower the Board to take such steps as it considers necessary or expedient to ascertain whether or not the rules are being complied with; and

(i) contain incidental, procedural or supplemental provisions.

(4) Where the applicant is —

(a) a bank which is authorised by the Bank of England, under Part I of the Banking Act 1987, to operate a deposit taking business;

(b) a building society which is authorised by the Building Societies Commission, under section 9 of the Building Societies Act 1986, to raise money for its members; or

(c) an insurance company which is authorised under section 3 or 4 of the insurance Companies Act 1982, the Lord Chancellor shall have regard to the fact that it is so authorised in determining whether it should be exempt from any rules made under this section.").

The noble Lord said: Again, the question of indemnity has been discussed on a previous occasion. In those circumstances, I shall not move the amendment.
[Amendment No. 180D not moved.]
Lord Mishcon Lord Mishcon had given notice of his intention to move Amendment No. 180E:
After Clause 37, insert the following new clause:
("Rules with respect to handling by authorised practitioners of clients' money
.—(1) The Lord Chancellor shall make rules with respect to the handling by authorised practitioners of their clients' money.
(2) Without prejudice to the generality of subsection (1) above, rules under this section shall —

(a) require authorised practitioners (except in such cases as may be specified in the rules) to open and keep at an institution of a kind specified in the rules acounts for clients' money;

(b) require authorised practitioners (except in such cases as may be specified in the rules) to pay clients' money into such an account;

(c) require authorised practitioners to keep accounts containing particulars and information in respect of clients' money; and

(d) require any such accounts to be examined by an accountant having such qualifications as are specified in the rules and shall require the accountant to report to the Board whether in his opinion the provisions of the rules have been complied with and on such other matters as may be specified in the rules.

(3) Where an authorised practitioner is required to have an auditor, whether by virtue of any provision contained in or
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made under any enactment or of the rules of any professional' or other body, the rules may require the examination and report referred to in paragraph (d) of subsection (2) to be carried out and made by that auditor.
(4) For the purposes of this section and section (Accounting for interest on clients money) "clients' money" includes money held by an authorised practitioner as a stakeholder (whether or not paid by a client of the authorised practitioner).").
The noble Lord said: Again, the principle has been spoken to earlier in the debate. I shall not move the amendment.
[Amendment No. 180E not moved.]
Lord Mishcon Lord Mishcon had given notice of his intention to move Amendment No. 180F:
After Clause 37, insert the following new clause:
("Accounting for interest on clients' money
.—(1) Rules made under section (Rules with respect to handling by authorised practitioners of clients' money) shall make provision for requiring an authorised practitioner who has received clients' money to account, in such cases as may be prescribed by the rules, to the person who is or becomes entitled to the money for the interest which was, or could have been, earned by putting the money in a separate deposit account at an institution authorised for the purposes of rules under subsection (2)(a) of that section.
(2) The cases in which an authorised practitioner may be required to account for interest by rules made by virtue of subsection (1) may be defined by reference to, among other things, the amount of the sum held or received by him or the period for which it is likely to be retained, or both; and any such rules may include provision for enabling a client (without prejudice to any other remedy) to require that any question arising under the rules in relation to the client's money be referred to and determined by the board.
(3) Except as provided by any rules so made and subject to subsection (4), an authorised practitioner who maintains an account in pursuance of section (Rules with respect to handling by authorised practitioners of clients' money) (2)(a) in which he keeps money received or held for or on account of his clients generally shall not be liable to account to any person for interest received by him or it on money in that account.
(4) Nothing in this section or in any rules shall affect any arrangement in writing between an authorised practitioner and his or its clients as to the application of the clients' money or the payment of interest on it.").
The noble Lord said: The same applies to this amendment, which I do not intend to move.
[Amendment No. 180F not moved.]
[Amendment No. 180G not moved.]
Clause 38 [The Conveyancing Appeal Tribunals]:
[Amendments Nos. 181 to 184 not moved.]
[Amendment No. 184A not moved.]
Schedule 6 agreed to.
8.45 p.m.
The Lord Chancellor The Lord Chancellor moved Amendment No. 184B:
After Schedule 6, insert the following new schedule:

SCHEDULE THE CONVEYANCING OMBUDSMAN SCHEME
1. In this Schedule "the scheme" means the "Conveyancing Ombudsman Scheme" established by rules made under section 40(1).
2. The scheme may provide—

(a) for the Conveyancing Ombudsman to appoint his staff; and

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(b) for the establishment and functioning of an independent body (whether corporate or unincorporate) to administer the scheme.

3. The jurisdiction of the Conveyancing Ombudsman shall be determined by the scheme.
4. The scheme may provide for the Conveyancing Ombudsman not to have jurisdiction to investigate complaints unless —

(a) the procedure for investigating complaints which is maintained by the authorised practitioner against whom the complaint is made has been exhausted; or

(b) the Conveyancing Ombudsman considers that the circumstances of the case are such as to justify his investigating the complaint before that procedure has been exhausted.

5. The scheme shall require the Conveyancing Ombudsman to investigate any complaint which falls within his jurisdiction and which is properly made to him in accordance with the provisions of the scheme.
6. The scheme may empower the Conveyancing Ombudsman, when investigating any complaint, to investigate the subject matter of the complaint as well as the way in which it has been handled by the authorised practitioner concerned.
7. The scheme shall —

(a) confer on the Conveyancing Ombudsman power to require —

(i) information and documents relevant to any investigation under the scheme to be furnished to him;

(ii) the payment by an authorised practitioner of compensation where loss has been suffered by any person as a result of any matter in respect of which a complaint made against that practitioner has been investigated under the scheme;

(b) provide for an authorised practitioner against whom a determination has been made by the Conveyancing Ombudsman, on an investigation under the scheme, to be relieved of the obligation to comply with that determination on publishing, in such manner as may be required by the scheme, details of the determination and of the practitioner's reasons for failing to comply with it.

8. The scheme may provide that compensation which the Conveyancing Ombudsman may require to be paid by virtue of any provision made under paragraph 7(a)(ii) is not to exceed a specified amount.
9. Subject to paragraphs 10 and 11, a determination of the Conveyancing Ombudsman under the scheme which is, by virtue of the complainant's acceptance of it, binding on the authorised practitioner concerned shall be final and shall not be questioned in any court of law.
10. Paragraph 9 does not apply where the authorised practitioner concerned is, by provisions of the scheme made by virtue of paragraph 7(b), relieved of the obligation to comply with the Conveyancing Ombudsman's determination.
11. Where a determination of the Conveyancing Ombudsman is binding on an authorised practitioner, the Conveyancing Ombudsman shall, at the request of that practitioner, state a case for the opinion of the High Court on any question of law.
12. Where a case is so stated the High Court may direct the Conveyancing Ombudsman to reconsider the complaint.
13. A decision of the High Court under paragraph 12 shall be treated as a judgment of the High Court within the meaning of section 16 of the Supreme Court Act 1981 (jurisdiction of Court of Appeal to hear and determine appeals).
14. No appeal shall lie from any decision of the High Court under paragraph 12 without the leave of the Court of Appeal.
15. Nothing in this Schedule is to be taken as prejudicing the generality of the power to make rules under section 40.").
The noble and learned Lord said: I shall speak also to Amendments Nos. 186YA and 186ZB.
Clause 40 provides that the Authorised Conveyancing Practitioners Board must make rules, with the approval of the Lord Chancellor, to establish
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and maintain a conveyancing ombudsman scheme to which all authorised practitioners will be subject. The clause as originally drafted only makes specific provision for the ombudsman not to have jurisdiction in certain circumstances and to appoint his staff. I decided that certain other functions should be set out, so that the board will have some guidance when it is drawing up the scheme as to the functions the ombudsman should perform and to place the scheme's operation on a sound legal basis. In addition, defining certain of the ombudsman's functions would be of assistance to applicants for authorisation who would know at least the minimum requirements of the scheme that they would be expected to belong, or be subject to. I therefore bring forward these amendments for consideration. I beg to move.
Lord Mishcon: I briefly say that in general terms we support the amendment. However, there is one respect in which I ask the noble and learned Lord to consider whether there is an omission here that I tried to cover in Amendment No. 177B, which is now past history.
That amendment dealt with this detail, as the noble and learned Lord may regard it; but it is important. It empowered the board, where it was satisfied that the services provided by an authorised practitioner were not of the quality which could reasonably be expected of him or it, to do one or more of the following things. First, it could determine that the costs to which the authorised practitioner should be entitled be limited to such amount as may be specified in the board's determination and direct the authorised practitioner to refund or waive its or his costs. Secondly, it could direct the authorised practitioner to secure at his or its own expense rectification of any error. Thirdly, it could direct the authorised practitioner to pay compensation of up to £1,000.
As I understand it, the amendment tabled by the noble and learned Lord the Lord Chancellor and to which he has just spoken would only allow the ombudsman to require the payment of compensation and would not enable him to require either the refunding or waiving of costs or rectification of any error.
As the noble and learned Lord knows very well, the Law Society has a statutory power to require a solicitor to waive or refund costs or to rectify an error. It is a mystery to me at present as to why this board does not have precisely the same power. Perhaps the noble and learned Lord will consider what I have said and possibly review it so that the matter can come forward on Report with that suggested omission rectified.
The Lord Chancellor: Certainly I am willing to look at the matter raised by the noble Lord. We thought it right to set out those powers and of course compensation is a wide word. However, I shall certainly consider what the noble Lord said.
On Question, amendment agreed to.
Clause 39 agreed to.
Clause 40 [The Conveyancing Ombudsman Scheme]:
[Amendments Nos. 185 and 186 not moved.]
The Lord Chancellor The Lord Chancellor moved Amendment No. 186YA:
Page 31, line 34, leave out subsection (4) and insert —
("(4) Schedule (The Conveyancing Ombudsman Scheme) shall have effect for the purpose of supplementing this section.").
On Question, amendment agreed to.
Lord Mishcon Lord Mishcon had given notice of his intention to move Amendment No. 186ZA:
Page 31, line 43, at end insert —
("(4A) Where the Conveyancing Ombudsman has completed an investigation he may recommend —

(a) that the Board consider exercising its powers in relation to the authorised practitioner with respect to whom the complaint was made;

(b) where the complaint involves the acts or omissions of a solicitor, licensed conveyancer, barrister or notary public, that the professional body concerned exercising its powers in relation to that person;

(c) that the authorised practitioner with respect to whom the complaint was made pay compensation of an amount specified by the Conveyancing Ombudsman to the complainant for loss, expense or inconvenience caused to him, as a result of the matter complained of; and

(d) that the Board pay compensation of an amount specified by the Conveyancing Ombudsman to the complainant for the loss, expense or inconvenience caused to him, as a result of the way in which the complaint was handled by the Board.").

The noble Lord said: This amendment deals with the recommendations that I have just spoken about with regard to the board. In the circumstances I do not intend to move it because the noble and learned Lord has kindly said that he will give consideration to the principles contained therein.
[Amendment No. 186ZA not moved.]
The Lord Chancellor The Lord Chancellor moved Amendment No. 186ZB:
Page 32, line 12, at end insert —
("(11) It shall be the duty of the Conveyancing Ombudsman to inform the Board of any evidence which comes to his attention suggesting that there has been, or may have been, a breach of any of the rules made under subsection (1) or of the regulations made under section 37.").
The noble and learned Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 40, as amended, agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No. 186ZC:
After Clause 40, insert the following new clause:
("Compensation scheme
.—(1) The Board may, with the approval of the Lord Chancellor, make rules establishing a scheme for compensating persons who have suffered loss in consequence of dishonesty on the part of authorised practitioners or their employees.
(2) The rules may, in particular —

(a) provide for the establishment and functioning of an independent body (whether corporate or unincorporate) to administer the scheme and, subject to the rules, determine and regulate any matter relating to its operation;

(b) establish a fund out of which compensation is to be paid;

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(c) provide for the levying of contributions from authorised practitioners and otherwise for financing the scheme and for the payment of contributions and other money into the fund;

(d) specify the terms and conditions on which, and the extent to which, compensation is to be payable and any circumstances in which the right to compensation is to be excluded or modified; and

(e) contain incidental and supplementary provisions.").

The noble and learned Lord said: It is already a condition of authorisation that an applicant has satisfactory arrangements in force at all times to cover adequately the risk of any claim made against him in connection with the provision of conveyancing services, however arising. I appreciate, however, that it is likely to be difficult for authorised practitioners to obtain insurance covering their own dishonesty. I have therefore put down an amendment which provides that the board may make rules establishing a compensation fund, to be financed from contributions from authorised practitioners, the purpose of which is to compensate persons who have suffered loss as the result of the dishonesty of an authorised practioner or his employees. The rules which the board may make are to be subject to the Lord Chancellor's concurrence. I believe that it is right that express power of that kind should be provided for. I beg to move.
On Question, amendment agreed to.
Clause 41 [Advisory and supervisory functions of Director General of Fair Trading]:
On Question, Whether Clause 41 shall stand part of the Bill.
Lord Renton: I tabled a notice in the formal way saying that I would be opposing Clause 41. However, I can assure the Committee that my purpose is merely to probe and to discover exactly what it is that the Government are getting at in bringing in the Director General of Fair Trading.
Although there are references to him in Clauses 28, 29 and 30, to which I shall come later, it is not until we reach Clauses 31 to 42 which deal with conveyancing that we find the Director General of Fair Trading is primarily mentioned. It is not until then that we find what functions he is to perform, apart from those in the earlier clauses. We should consider what part he is to play and whether it is necessary.
Clause 41 requires the Lord Chancellor to obtain advice from the director on rules to be made by the Authorised Conveyancing Practitioners Board and on regulations made by him and binding on that board. Clause 41, in subsections (2) and (5), requires the director to consider the effect on competition of those rules and regulations.
It is also relevant to consider Clause 42, and I am sure I have the Committee's leave to refer to it, because that clause gives the director power to investigate any matter arising under Clause 41. The enforcement provisions under the Fair Trading Act are to apply to notices given by him before investigating matters under Clause 41.
We must acknowledge that the White Paper in Chapter 11 said that in order to secure competition in legal services the Director General of Fair Trading

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would be given a part to play under the Bill. I wish to make it clear —I am sure I speak for all members of both branches of the profession —that we are not afraid of competition either from each other or from anybody else. Indeed, we are accustomed to it from each other and a very healthy thing in the public interest it has always been. However, in relation to conveyancing the Lord Chancellor and his department will have the co-operation of the advisory committee, of the Authorised Conveyancing Practitioners Board, of the Ombudsman in certain cases and of the Director General of Fair Trading. Each of those bodies will have its own bureaucracy.
I suggest that my noble and learned friend is going in for overkill by having this quadripartite supervisory machinery with regard to conveyancing practitioners. I ask him to consider whether that is necessary. Conservative Governments have always held themselves out as not wanting over-government, not wanting bureaucracy, not wanting statutory bodies to have overlapping functions; but that is exactly what we have here. It is sheer overkill.
The Committee may think that it is somewhat incongruous for learned professions to be informed that they are to be treated in just the same way as traders. We must lump it, I suppose, but I find it incongruous. It has never been considered necessary for us to be called a trade. A learned and liberal profession which provides a service to the people is what we have always tried to be and succeeded in being. My noble and learned friend should therefore consider that point.
Perhaps I may come to the earlier clauses where without previous warning the director is brought in. When I first read them I thought it must be the Director of Public Prosecutions, but I had not reached Clause 41. Let us look at Clause 28, which deals with the position of the General Council of the Bar. Under Clause 28(3) we find that:
"In the event of any question arising as to whether any provision is deemed to have been approved by virtue of subsection (2) —

"(a) the Lord Chancellor shall seek the advice of the Advisory Committee"—

we must accept that part—
"and the Director".
In Clause 28(4)(a) we find:
"In the event of any question arising as to whether any provision of the qualification regulations or rules of conduct of the General Council of the Bar requires to be approved by virtue of section 26(3) or (4)—

(a) the Lord Chancellor shall seek the advice of the Advisory Committee and the Director".

Very similar provisions relate to Clause 29, which deals with the Law Society and the grant of rights of audience. In subsection (3) of that clause we find exactly the same sort of thing:
"the Lord Chancellor shall seek the advice of the Advisory Committee and the Director".
I want to shorten this so I will not read it all out. In Clause 29(4)(a) we find the same and it is analogous to Clause 28.
We then come to Clause 30, where we have the position of the Law Society in relation to the
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question of "rights to conduct litigation". In subsection (3) we find:
"In the event of any question arising as to whether any provision is deemed" —
I repeat "is deemed" in this case—
"to have been approved …

(a) The Lord Chancellor shall seek the advice of the Advisory Committee and the Director".

We have another reference of a similar kind to what has gone before in subsection (4)(a).
As regards these earlier clauses of Part II of the Bill, my noble and learned friend the Lord Chancellor will have to consult designated judges on some matters and the advisory committee, and the ombudsman is also given a part to play. When we are legislating in this radical and new way concerning the branches of the legal profession and others who are to be given rights of audience and to conduct litigation, we should make sure that we are not establishing an unnecessary top-weighted superstructure which will inevitably have to be aided by bureaucratic processes.
I hope I have brought to the notice of the Committee the problem which arises with regard to these matters. What we need to ask of ourselves is whether the expense and the amount of regulation and rule-making that will be required are going to secure any more competition than there is already.
9 p.m.
The Lord Chancellor: My noble friend is speaking on clause stand part. The question is whether the Director General of Fair Trading should have a part in this matter. My noble friend knows that the statutory provisions arising out of competition law have been applied to the professions before. It is not a new thing. For example, in the past the Monopolies and Mergers Commission has had to inquire into certain rules of the legal profession.
The idea of this provision is that the Director General of Fair Trading, who has responsibility for the competition aspects of the law, should be in a position to tender appropriate advice on that aspect of any rules. The reason for that is the need to make sure that no rule inadvertently creates or confirms any kind of anti-competitive regime or has an effect such as distorting competition. That is the purpose of the clause. I believe it is appropriate to have the measure for that purpose.
My noble friend says that we have a tremendous number of these provisions but each has a distinct function. For example, there is the approval of rules in relation to rights of audience. The function of the advisory committee is to consider the rules from the point of view of their appropriateness in the interests of the public which the law is designed to serve and in the interests of securing adequate standards. The function of the director general is to draw attention to any aspect of the rules which may affect competition in the way that I have described. The function of the Lord Chancellor is to take account of all these considerations. The function of the designated judges is to ensure that the rules correctly provide what is appropriate in the interests of the proper and efficient administration of justice.

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So each provision has a distinct function. We are not creating unnecessary consideration of these matters; we are providing for appropriate consideration of them and all to be done in conjunction with the ultimate decision that approves the rules in a case. So when the rules are approved they will not be subject to further inquiries under the competition law. That is quite an important matter. We are getting rid of the older way in dealing with these issues.
That is the function of the director general. I believe it is an appropriate function. I remind my noble friend that the director general commented quite publicly on the Green Papers. Some of the things he said were regarded in some quarters of the Bar as being particularly appropriate and acceptable. Therefore, he may well be a very considerable friend in important matters affecting the profession. He is an independent officer of wide experience in relation to these issues. He is able to warn against dangers whatever their source in so far as they affect competition.
One of the anxieties expressed earlier in the various debates that we have had was that competition should be fair. This is the primary responsibility of the Director General of Fair Trading. Trading may not be a word which particularly attracts my noble friend. Trading is sometimes regarded as an activity which is devoid of ethical standards, but I believe that trading in its finest sense is capable of applying to at least aspects of the professional way of life.
Lord Mishcon: I hope the noble and learned Lord will not think me facetious at this hour if I ask a perfectly serious question. The noble Lord, Lord Renton, has made a point as regards an issue which is hurting many professional people. If anybody had told the noble and learned Lord during his distinguished career as an advocate in Scotland that he was a trader, what would have been the effect of that remark on him?
The Lord Chancellor: All I can say is that I was vice-dean of the Faculty of Advocates when we had our first passage of arms with the Director General of Fair Trading. I did not object to his jurisdiction on account of his name. I was not particularly happy with some of the issues that he was seeking to pursue, but we nevertheless had an inquiry. No doubt when the fair trading legislation is considered and if there is any question of how appropriate his title is to his functions, that can be considered. We are dealing with a statutory officer and that is the description of his function. That function has a bearing on aspects of professional life.
I hope that my noble friend appreciates that we are not creating overlapping jurisdictions but jurisdictions which are capable of being brought together in one ultimate decision in approval of the rules or in the making of the regulations.
Lord Renton: I thank my noble and learned friend for his reply but I feel bound to say that I do not find it convincing. I wonder whether he will be so good as to answer this question. Bearing in mind the
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way in which the Bar and the Law Society have abolished restrictive practices over the years, and bearing in mind the competitiveness that already exists in the two professions, does my noble and learned friend really think that there will be less competition in future if we do without the Director General of Fair Trading?
The Lord Chancellor: I do not profess expertise in the practical effects of competition law. That is the responsibility of the director general. I can only answer that question in relation to a particular case in the light of his advice. That is why we have these provisions for taking his advice. If the decision in relation to the approval of regulations is to have final authority it is right that competition matters should be taken into account before the final decision is taken. That is the purpose, and I believe it is an appropriate purpose. I hope that my noble friend will feel that it is appropriate.
Clause 41 agreed to.
Clause 42 agreed to.
Lord Mishcon Lord Mishcon moved Amendment No. 186A:
After Clause 42, insert the following new clause:
("Lord Chancellor's duty to report on effects on the Legal Aid Scheme
The Lord Chancellor shall report to Parliament, within two years of the Board first authorising a practitioner to provide conveyancing services, on the effect of authorised practitioners offering conveyancing services on the availablity of services provided under the Legal Aid Scheme.").
The noble Lord said: I hope that the brevity of my remarks will not belie the importance we attach to this amendment. There is grave concern about the effect the provisions of this part of the Bill may have on those whose duty it is —in many cases they regard it as a privilege —to look after legal aid. This amendment is not inspired by the Law Society. It is put forward by the National Consumer Council which is extremely worried about the effect the provisions of the Bill will have on the carrying out of legal aid work. It is in order that this may be reviewed, looked at and examined periodically that the amendment is put forward. It obliges the Lord Chancellor to report to Parliament,
"within two years of the Board first authorising a practitioner to provide conveyancing services, on the effect of authorised practitioners offering conveyancing services on the availability of services provided under the Legal Aid Scheme".
I beg to move.
The Lord Chancellor: Whatever may be the superficial attraction of this new clause, I suggest that it should not form part of the Bill. Its origin lies in concern that the conveyancing activities of authorised practitioners might lead to a decline in the provision of legal aid services. Although I do not agree that there is real foundation for that fear, I doubt both the practicality of the new clause and whether it can serve any useful purpose. It will certainly be very difficult at the very least, in the time-scale provided for, to determine the exact impact of any one factor on the general availability of legal aid services. Indeed I am seeking to make some investigations at present in another connection in relation to the spread or distribution of these services.

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In such a field it is difficult enough to assess the overall picture without claiming to be able to match any particular cause to any particular effect. I do not believe it would be right to put a provision of this kind into the Bill if it had the effect of suggesting that the provision of conveyancing services in the manner provided for in the Bill is in some way conditional. Parliament has already shown quite clearly in the 1986 Act that it considers that this kind of provision is the right way forward. I believe that that is appropriate.
I also believe that it is right to remind the Committee that I am already responsible to Parliament for the discharge of my general function to maintain the provision of legal aid. Against this background it would be anomalous to create a particular statutory requirement for a special report at a particular time on a particular aspect of that provision, no matter how much it may be in our minds during the debates on the Bill. Of course the method of Parliamentary Question and indeed debate and so on are all available in this connection. The Legal Aid Board has a statutory duty to report in relation to its activities.
I believe therefore that we have all the necessary machinery to enable your Lordships to have any facts that are available touching on the sort of concerns expressed in this clause without this addition to the Bill. I hope that the noble Lord will feel that we do indeed have such avenues of exploring these concerns from time to time —not just at a fixed period, but from time to time —and I am sure that the Committee believes that the Lord Chancellor particularly endeavours to answer your Lordships' questions fully and fairly.
9.15 p.m.
Lord Mishcon: With that last observation I would not only agree but I should like to take the opportunity of congratulating the noble and learned Lord not only on his agility of mind when he stands on his feet, which all of us are noticing, but on the physical endurance that he shows in going through very long hours on the Committee stage of this Bill, retaining his courtesy throughout and a clarity of mind that is the envy of most of us. It was possibly with that in view that I hated the idea of anyone ever inferring that in the course of his brilliant legal career he was called "a trader".
Now may I just refer for a moment to what the noble and learned Lord has said. As I understand it, he feels that this should not form part of the Bill and he gave reasons for it. For the moment, if I may say so, I accept the reasons as to why it should not be a statutory provision. But may I take it from the noble and learned Lord's reply to this amendment that he would welcome the objective reports that came to him from the Law Society, for example, which would hear from practitioners whether or not their legal aid work was suffering, if it did not have to cease as a result of some of the provisions of this Bill? Do I take it from the noble and learned Lord's remarks that he would always welcome representations based on fact from the National Consumer Council, which, as I said, has anxieties? Would he always welcome
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representations that are made based on these facts to see whether harm is being done to the legal aid scheme, which I know he values so much?
The Lord Chancellor: Certainly I welcome the information that is given to me by the Law Society from time to time, in particular in relation to any matters touching the concerns that the noble Lord has expressed, and certainly the same for the National Consumer Council. The National Consumer Council has, I think, taken the view that what we are doing here in the general pattern of it is the right way forward. That is a view that has affected my own thinking about what we ought to do.
I welcome any reports that they put in, or indeed any other factually-based reports that from time to time we receive, including the reports from the Legal Aid Board and the like. The noble Lord can therefore take it that I shall be extremely concerned, as I think I have shown in the papers that we put out about these matters. I have shown a concern for the solicitors' network and the provision of legal services generally, and I have done what I believe is reasonable to look after that point of view while still endeavouring to give members of the public the service in the conveyancing field which it appears that they desire.
Lord Mishcon: Having regard to what the noble and learned Lord has been pleased to say, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 43 [Preparation of papers for probate etc.]:
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 186B:
Page 34, line 5, at end insert—
("provided that in the case of any body falling within paragraph (c), (d), (e) or (f) or any person or body falling within paragraph (g) that body or person has been authorised to provide probate services by the Authorised Conveyancing and Probate Practitioners Board (in this Act referred to as "the Board")").
The noble Lord said: The object of this amendment is to ensure that any body wishing to prepare papers for probate would have to be authorised to provide probate services by an independent body. We have in mind the Conveyancing Board, which we suggest could be renamed the Authorised Conveyancing and Probate Pracitioners Board.
We have seen that under the provisions of this Bill relating to conveyancing services it will simply not be enough for a would-be authorised conveyancing practitioner to be a bank, a building society or an insurance company. Each bank or other body wishing to provide conveyancing services must be individually authorised by the board. It is just as important, in our view, in order to safeguard personal representatives and beneficiaries, that those wishing to provide probate services should be individually authorised by an external body, the conveyancing board. Of course one appreciates that a relevant distinction can be drawn between conveyancing services and probate services. Thus, for example, a bank which is an executor is not a

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client of the bank. Nevertheless, we think that the need for authorisation is just as great as for conveyancers.
I say that because the scope for negligence and delay in the administration of an estate, or for dishonesty, is probably much greater in the course of the administration of an estate than is the case during a conveyancing transaction. Estate funds may not be placed on deposit, income on estate funds may not be accounted for, and assets may not be called in when they should have been. So we say that those bodies wishing to administer estates should have to satisfy an external body that they will, and can, comply with the requirements of the Bill. This amendment is supported by the Law Society. I beg to move.
The Lord Chancellor: I consider that one must have regard to whether or not it is necessary to establish a board's authority in relation to the system or authorisation in respect of probate practitioners. So far as banks and insurance companies are concerned, many of whom already undertake trust corporation business, we are merely extending to them the right to prepare applications for probate and letters of administration. Banks and insurance companies are already subject to authorisations under statute and are prudentially regulated. Although building societies do not at present undertake trust corporation work, it seemed reasonable to include them in the list of those who might, as they too are regulated in such a way that one could presume they were fit and proper organisations.
Further protection is provided to the client by the requirement that all new probate practitioners must belong to a complaints scheme which makes the requirements prescribed by regulations made by the Lord Chancellor. I do not think it necessary to require these organisations to be authorised by the board.
As far as the other classes which will be authorised are concerned, these will be subject to scrutiny by the advisory committee and the President of the Family Division as well as by the Lord Chancellor. I have been giving some further thought, in the light of these amendments, as to whether or not the clause goes far enough in regard to the authorisation of these new classes. For example, is it necessary to make specific provision with regard to revocation of authorisation? I am also considering whether the legislation should set out certain standards of competence and conduct, to which the Lord Chancellor, the advisory committee and the President should have regard when considering applications from these other classes.
I would not wish to put an unnecessary authority into this particular field if it can be appropriately avoided. So far I believe we may be able to deal with the matter on the lines that I have suggested. I hope that in the light of this explanation the noble Lord will feel able to withdraw his amendment.
Lord Prys-Davies: I am very pleased that the noble and learned Lord the Lord Chancellor has come
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some way towards meeting these very genuine concerns of the Law Society. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 186C:
Page 34, line 11, leave out ("may") and insert ("shall").
The noble Lord said: I think it follows from what the noble and learned Lord has just said that it is very important, indeed essential, that there should be regulations made by the Lord Chancellor for these probate services. Therefore it follows that the word "shall" should be substituted for "may". I beg to move.
The Lord Chancellor: It is the same sort of matter that we dealt with previously in relation to another part of the Bill. The existing power is really sufficient to enable proper regulation to be made. Of course it has the effect of ensuring that the regulations may be amended from time to time in the light of experience. Therefore, they can be improved if any loophole or defect turned out to be present in existing regulations. I hope that the noble Lord will take it that I shall consider carefully what should be done, but that he will also bear in mind that I believe that the ordinary drafting mechanism of the word "may" is adequate for this purpose.
Lord Mishcon: It may be that when I move the next amendment which deals with specifying what the regulations should cover my point will be met. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 186D:
Page 34, line 17, at end insert —
("(2C) Regulations made under subsection (2A) shall make provision with a view to securing —

(a) that authorised probate practitioners maintain satisfactory standards of competence and conduct in connection with the provision by them of probate services; and

(b) that the interests of their clients and any beneficiaries entitled under the estate are satisfactorily protected.

(2D) The regulations shall, in particular, make provision —

(a) designed to —

(i) provide for the efficient administration of estates;

(ii) avoid unnecessary delays;

(b) as to the supervision, by persons with such qualifications as may be prescribed, of probate services;

(c) requiring authorised probate practitioners to have one named person, who shall be either a solicitor who has in force a practising certificate or a barrister or a duly certified notary public or a person falling within subsection (2)(g), who shall be directly responsible for ensuring that probate services are carried out according to any rules or regulations made under this section;

(d) requiring authorised probate practitioners to arrange, so far as is reasonably practicable, for each matter to be under the overall control of the same individual;

(e) designed to avoid conflicts of interest;

(f) as to the terms and conditions on which authorised probate practitioners may provide probate services including the remuneration for such services; and

(g) as to the disclosure of and accounting for commissions.

(2E) The regulations shall also make provision for rules made under:

(a) Section (Rules concerning indemnity) of the Courts and Legal Services Act 1990;

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(b) Section (Compensation for losses caused by authorised practitioners) of that Act;

(c) Section (Rules with respect to handling by authorised practitioners of clients money) of that Act; and

(d) Section (Accounting for interest on clients' money) of that Act, to have effect in relation to authorised probate practitioners with such additions, omissions or other modifications as appear to the Lord Chancellor to be necessary or expedient and, accordingly any reference in such rules to the clients of an authorised practitioner shall be construed, unless otherwise provided by the regulations made under subsection (2A), as including a reference to the beneficiaries of an estate in respect of which an authorised probate practitioner is acting.").

The noble Lord said: As we see it at present, Clause 43(1) simply requires in the new subsection (2A), which is inserted into Section 23 of the Solicitors' Act, that the provider of probate services must be a member of a scheme which,
"complies with such requirements as may be prescribed by regulations made by the Lord Chancellor".
In view of the importance of this matter, and in view of what the noble and learned Lord said about regulations, one submits that the amendment would considerably extend the noble and learned Lord's regulation-making powers and therefore would be a very welcome inclusion in the Bill, instead of the general provider clause which currently exists.
I do not intend to do more than say that as a result of the amendment the regulations would be able to deal with all mattters which were necessary to secure that the providers of probate services maintain satisfactory standards of competence and conduct —the very matter, if I may say so, to which the noble and learned Lord earlier referred —and that the interests of clients and beneficiaries were satisfactorily protected.
Much of the material in the amendment is drawn from the provisions of the Bill regarding the regulation of authorised conveyancing practitioners. I hope therefore that the logic and sense of what is proposed will commend itself to the noble and learned Lord and that the amendment will be accepted.
Lord Boardman: Before the noble Lord sits down, perhaps I may intervene at this point. It may be that I have not done my homework adequately, but can he clarify the following situation? Under his amendment, what would be the remedy in the case of a building society undertaking probate services which caused acute delay, and so on, and which is not subject to the disciplines applicable under the Law Society rules which would apply to a solicitor who did likewise? It may be that I have not followed his argument, but does his amendment provide any disciplinary protection in such cases?
Lord Mishcon: I do not know whether I follow the full impact of the question of the noble Lord, Lord Boardman. Was his query connecting the quality of regulation that the Law Society would exercise on those who were conducting probate work with what I am now trying to provide in the amendment; or did I misunderstand what he said?
Lord Boardman: I asked whether there is a similar discipline which could be applied to those people, other than members of the Law Society —that is, those working in building societies, and the like—who are granted the right to operate and apply for probate but who do so in such a way that if they were solicitors complaints would be made which would lead to the final discipline of their being struck off. I asked whether his amendment contained or opened up some such discipline which would apply to other bodies.
Lord Mishcon: Yes. It is to be hoped that that would be so.
The Lord Chancellor: My noble friend Lord Boardman will see that Clause 43(1)(2A), which substitutes a new section in the Solicitors Act, provides that,
"The conditions are that the body is a member of, or otherwise subject to, a scheme which —

(a) has been established (whether or not exclusively) for the purpose of dealing with complaints about the provision of probate services".

Therefore, there is a scheme already provided for that purpose. I have already indicated those matters which I was thinking of in relation to the amendments. It may be that in the light of what I said regarding the earlier amendment the noble Lord will feel that the matters which he wishes to deal with will receive consideration.
Lord Mishcon: I once introduced, and the noble and learned Lord did not object to it, the adjective "favourable" before "consideration". I assume that the consideration will be equally favourable on this occasion. On that assumption, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 186E:
Page 34, line 20, at beginning insert —
("(3A) Subsection (1) also does not apply to any act done by an officer or employee of an authorised probate practitioner if —

(a) it was done by him at the direction and under supervision of another person who was at the time an officer or employee of the body; and

(b) it could have been done by that other person for or in expectation of any fee, gain or reward without committing an offence under this section." ").

The noble Lord said: The purpose of this amendment is to make it clear that the unqualified staff of a body providing probate services must be supervised by a qualified person. Again obviously we have in mind a solicitor, barrister or I suppose in this case a notary public. I beg to move.
The Lord Chancellor: I am happy to consider this amendment perhaps I should say "favourably" in the sense that we may be able to do something in the direction which the noble Lord has in mind.
Lord Mishcon: I thank the noble and learned Lord for that courtesy. In those circumstances I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 186F:
Page 34, line 23, at end insert —
("2A) The intervention powers conferred by Part II of Schedule (Intervention in authorised practitioner's practice) shall be exercisable by the Board in relation to an authorised probate practitioner in the circumstances specified in Part I of that Schedule in like manner as they are exercisable in relation to an authorised conveyancing practitioner and accordingly any reference in that Schedule to an authorised practitioner shall be construed as including a reference to an authorised probate practitioner.").
The noble Lord said: This amendment would enable the board to exercise intervention powers in relation to an authorised probate practitioner in the same circumstances as the Committee will remember it can exercise intervention powers in respect of an authorised conveyancing practitioner. It seems to be logical, equitable and a proper protection of the public. I beg to move.
The Lord Chancellor: This depends on whether the board has any jurisdiction in this area. As I indicated in answer to the noble Lord, Lord Prys-Davies, so far I am not persuaded that it is desirable to extend the conveyancing board's functions into this area. Therefore it follows that the amendment would go out of this jurisdiction along with the board.
Lord Mishcon: This is a matter which I shall have to consider with my noble friends and those who have made representations to us. We shall see where we stand at a further stage of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 186G not moved.]
On Question, Whether Clause 43 shall stand part of the Bill?
The Lord Chancellor: Perhaps I may take this opportunity of the Question having been posed to thank the noble Lord, Lord Mishcon, for the kind remarks he made about me a few moments ago. I am extremely grateful for them and I reciprocate them in regard to all Members of the Committee who have shown such patience in remaining with us until this time of night.
Lord Renton: The fact that I did not utter an endorsement of what the noble Lord, Lord Mishcon, said about my noble and learned friend at the time should not be taken as an indication of my disagreement. Although I disagree with my noble and learned friend so much over the Bill —a great deal of it worries me —my admiration for his ability and his conscientious attitude is not in any way diminished.
Lord Hacking: Hear, hear!
Clause 43 agreed to.
Viscount Ullswater: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-five minutes before ten o'clock.