Courts and Legal Services Bill [H.L.]

HL Deb 05 February 1990 vol 515 cc605-92

9 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.)

House in Committee accordingly.

[THE DEPUTY CHAIRMAN OF COMMITTEES (LORD AIREDALE) in the Chair.]

Lord Mishcon moved Amendment No. 200A: After Clause 47, insert the following new clause:

("Duty of the Law Society to find a solicitor on behalf of those reasonably requiring litigation or advocacy services.

.—(1) Where a person applies to the Law Society stating that they cannot obtain litigation or advocacy services from a qualified legal practitioner, the Law Society shall determine whether that person reasonably requires such services.

(2) Where the Law Society determines under subsection (1) above that a person reasonably requires litigation or advocacy services, it shall be under a duty to find a suitably qualified and able practitioner to act for that person.

(3) In performing its duty under subsection (2) the Law Society may require one or more of its members to act for the applicant.

(4) Where a member fails to comply with a requirement made by the Law Society under subsection (3), the Law Society may apply to the Solicitors Disciplinary Tribunal for them to exercise their powers under section 47 of the Solicitors Act 1974 against that member.").

The noble Lord said: I spoke to this amendment when we were dealing with the cab rank rule part of the Bill. I beg to move.

Lord Ackner

I spoke in support of the proposal when it was referred to en passant in the cab rank debate. It is only in order to reculer pour mieux sauter that I rise to continue to support the amendment, but I support even more the cab rank rule. One is not an appropriate alternative to the other.

Lord Mishcon

The noble and learned Lord is always welcome in this Chamber, whether he reculers or does not reculer.

Lord Hutchinson of Lullington

Talking English, I support the amendment in a half-hearted manner. It is a poor amendment, not a cab rank amendment. The idea is that a person seeking representation in an unpopular case must go round the mega-firms and be refused and then go round to the groups of advocates in the Crown Court and be refused. Then he has to make an application to the Law Society which decides whether he reasonably requires representation. When it has decided that, it sets out to find a suitably qualified practitioner.

One could hardly get further away from the simple cab rank principle which has been followed for many a long year in serious criminal courts by those who have rights of audience there. The principle is perfectly straightforward and simple: the client is entitled to the advocate of his choice. He does not have to go before some body which decides whether he reasonably requires some advocate, and then have that advocate told to represent him.

If anyone suggests that this is a substitute for a cab rank, I regret to say that it is yet one more example of the downward path of the Bill regarding advocacy in the future. However, one has to go out and grasp whatever one can. So I support the amendment in a half-hearted manner.

Lord Rawlinson of Ewell

I agree with the noble Lord, Lord Hutchinson of Lullington and support the amendment, as one must, because at least it is something. Over the weekend I read of two prominent firms of solicitors who engage in criminal practice. They publicly announced that they refused to take in certain admittedly very unpleasant types of criminal cases. They refused ever to take the defence of persons accused of the offence of rape. These were two solicitors practising to a considerable extent with much criminal expertise. They publicly announced that any defendant who came to them under an accusation of rape would not receive any assistance from them. That is what we shall be up against.

I know that the noble Lord, Lord Mishcon, is doing his best by producing this clause. As was said, it is, at any rate, something. It is a humble exchange for the cab rank principle. However, what happened over the weekend demonstrates how sad it is that the Committee rejected the arguments insisting that the cab rank principle should apply to every advocate. Therefore I join half-heartedly in supporting the clause.

Lord Meston

I do not wish to repeat what has been said about the amendment which I agree should be a last resort rather than a substitute for the cab rank rule. I wonder whether the noble Lord, Lord Mishcon, would consider improving the wording of subsection (2) in order to impose a duty on the Law Society to find a suitably qualified and able practitioner as quickly as possible.

What one can see happening, particularly in civil litigation, is that if a litigant is abandoned by his legal advisers shortly before trial, there will be delay. In civil litigation the delay could be harmful to the other party and necessitate an adjournment. This system may work to the advantage of all concerned if the Law Society's duty is a duty to act as swiftly as possible.

The Lord Chancellor

I understand the spirit in which the amendment has been put forward. However, I take the same attitude to it as I took to the amendment dealing with the cab rank principle. These are matters that are best dealt with in considerable detail in the rules that will be set out for dealing with them when they arise. The point which the noble Lord, Lord Meston, made about the rule shows that the details need to be worked out closely. I should have thought this was one of the considerations that it would be right for the profession, the designated judges and the Lord Chancellor to have in mind when considering the report and the advice of the advisory committee. That committee should be asked to comment on it.

Strength comes through the detail of these rules and the way in which they are applied. That is true of the existing rules of the Bar relating to the cab rank and the rules that should prevail in future regarding the Law Society. I hope that the noble Lord may feel in the light of that response that the point he is putting forward in this amendment will certainly not be lost sight of. However, I believe it is best dealt with in the way I have mentioned. Where the Law Society has a duty to find someone fairly detailed rules would be required in that connection.

Lord Mishcon

In view of what the noble and learned Lord has just said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 48 [Multi-disciplinary and multi-national practices]:

The Earl of Shannon moved Amendment No. 201: Page 37, line 28, leave out subsection (2).

The noble Earl said: With the leave of the Committee in moving this amendment, I shall speak also to Amendment No. 202 which stands in my name. These two amendments to Clause 48 are fairly self-explanatory. The purpose of both amendments is to prevent the two legal professional associations, the Law Society and the General Council of the Bar, from having a quite unreasonable restrictive power over the individual freedom of both solicitors and barristers to enter mixed disciplinary practices.

The current situation as described in subsections (1) and (5) is that both are prevented by statute from entering a multi-disciplinary practice. The clause as it stands quite rightly states that this restrictive practice should stop. However, the freedom does not extend very far because it puts the power to enact provisions in this regard into the hands of the lawyers' professional associations whom I understand from their past record are not particularly favourable to this kind of freedom for their members. The clause puts that power into their hands effectively to prevent their members from entering multi-disciplinary practice and getting such an organisation off the ground. That means that the provisions of subsection (1), or alternatively subsection (5), are effectively repealed. Surely that is illogical nonsense.

In my view, the public would benefit from professionals embracing a number of diciplines and offering services from under one roof. While from time to time conflicts of professional interest and responsibility could arise, there is nothing that could not be resolved with thought and good will. That must have been realised when drafting subsection (1), or alternatively subsection (5).

A varied array of disciplines co-operating from the same office may well be able to offer the consumer a saving of time, an efficient throughput of work, a fertile ground for practical improvements, and could also provide a structure which could attract capital investment to finance a more professional service for the house-owning public. Like every other business structure, there can be no absolute guarantee of success but at least it should be on offer to the public.

The clause as it stands runs against the trend of the welcome changes which we have seen in the property market in recent years. It is also odd that the desirable provisions in subsections (1) and (5) of this clause are effectively removed in subsections (2) and (6). Although no amendment has been tabled to that effect, similar objections could be made to subsection (4). I beg to move.

Baroness Elles

It would be regrettable if the two amendments tabled by the noble Earl, Lord Shannon, were accepted. I regard subsections (2) and (6) as shining lights in a rather gloomy Bill leaving for both sides of the legal profession the possibility of regulating their own affairs in at least one area, not for their own benefit but for the benefit of the public whom they seek to serve. The noble Earl has not addressed himself to some of the problems that would arise in the creation of multi-disciplinary practices. There is the question of conflict of interest. If accountants and lawyers practise in the same firm and a will or a probate case arises and the client goes to an accountant who passes him on to a lawyer in the same firm, who will the lawyer act for if the case concerns a family problem? Legally binding confidentiality exists between a client and his lawyer, so how can that be dealt with when a client is passed down what I might call the assembly line of professional help offered under one roof? These different professions are subject to different rules of professional conduct. What one wants for the client is certainty. No client going to a mixed professional practice would know what rules applied to the people with whom he was dealing. That would be very unsatisfactory.

There are other cogent reasons why the amendment should be rejected. The President of the American Bar Association has already stated that if multi-disciplinary practices were allowed in England and Wales there would be a very grave risk that lawyers in those firms would not be able to practice in some states in the United States. Furthermore, lawyers would be unable to practice in certain member states of the European Community in which multi-disciplinary practices are barred.

There is one further cogent reason why the amendments should not be accepted. United Kingdom delegates on the CCBE—the Law Societies of Northern Ireland, Scotland and England and Wales together with the Bars of those countries —are all against the setting up of multi-disciplinary practices. I hope that the clauses will remain in the Bill and will be used by the profession for the benefit of the public.

9.15 p.m.

Lord Ackner

I should like to intervene briefly on this matter. It was proposed in the Green Paper that solicitors and barristers should be allowed to go into partnership. That is one of the consequences of the amendment.

Perhaps the strongest and most consistent critic of my noble and learned friend the Lord Chancellor was the Director General of Fair Trading. In 1986 he wrote a memorandum addressed to all Ministers pointing out that the effect would be a strong step towards fusion. It has always been the expressed sentiment of my noble and learned friend the Lord Chancellor that he was against fusion. On the occasion of the introduction of the White Paper he spoke of the need for a strong and independent Bar. That could not exist if the two amendments were accepted. Accordingly, I suggest strongly that they should not be agreed.

The Earl of Lytton

Perhaps I may speak briefly in favour of Amendment No. 201. It has a direct bearing on my own amendment, Amendment No. 201A.

We have already heard the opposing views that have been put forward. Professional bodies should be in a position to regulate to a large degree what their members do. However, it seemed to me that the Government's intention was to remove the statutory embargo on multi-disciplinary practices. If that is the case, it is curious to say the least that the same embargo should effectively be placed on the members of a professional body. I speak not as a lawyer but as a chartered surveyor. My own profession is one of the most deregulated professions in the land. It does not square with the purposes of the Bill that it should be transferred from a statutory provision to wording which seems to me, as a layman, to lead to the assumption that it is in order for professional bodies to have such forms of embargo.

As the noble Baroness, Lady Elles, has already explained, there are misgivings among the members of the Bar, and no doubt also in the Law Society, about how that would work in practice. The criticisms are based on a supposition that multi-disciplinary practices would not adhere to the general rules that prevail among the various professions concerned. It is no doubt the case that the rules of the Law Society and the Bar are very different from those of my own profession. However, I do not believe that they differ materially in their aims and objectives in so far as concerns conflicts of interest and confidentiality of clients' affairs. After all, in a legal partnership the fact that one partner deals with a client's affairs and makes that fact known to his partners presumably is not considered as a breach of that duty of confidentiality towards the client. It is perhaps unfair on the other professional bodies to imply that they are not capable of keeping a confidence or are not bound by rules and regulations as to their conduct. All professions are most severely bound by those constraints. That is what generally makes our professions the pillars of our society.

Baroness Elles

The noble Earl may not be aware that confidentiality between a client and his or her lawyer is bound by law. I do not think that that is the same for the other professions.

The Earl of Lytton

The noble Baroness, Lady Elles, speaks with much greater knowledge on this matter than I do. I could not begin to tell her what the situation was regarding even my own profession, save to say that I could be expected to have legal action taken against me were I to breach a confidence. I am not competent to say whether it would make any difference if that were backed by force of statute or by force of the wrath of one's client, but I take her point.

I should like to make one or two further points. First, with regard to my Amendment No. 201A, to which I shall speak briefly but which I shall not move at the moment, it will be for the convenience of the Committee if I say that it seeks to have all such rules or bars against multidisciplinary practice referred to the Director General of Fair Trading. The idea behind the amendment is that the matter should be subject to the scrutiny of someone whose primary interest is in fair trading and the public interest side of the matter.

Secondly, I understand that such a provision would be a direct parallel to the legislation introduced in Scotland under the Law Reform (Miscellaneous Provisions) (Scotland) Bill on the precise details of which I have no doubt that the noble and learned Lord the Lord Chancellor can enlighten me. The purpose of my amendment is in keeping with what I understand is the Government's policy on competition and is based on Clause 23 of the Scottish Bill. I do not know whether my amendment goes as far as or perhaps a little further than the amendment of my noble friend Lord Shannon, but I support the principle of his amendment.

Lord Mishcon

Perhaps it would be convenient to the Committee —it would certainly save time —if I were to address noble Lords on Amendments Nos. 201B and 201C because the matters with which we are now dealing are dealt with by those amendments. Anyone who has read those amendments will wonder why there are two amendments which say the same thing. Reflection made it apparent that Amendment No. 201C was better worded. I therefore ask noble Lords to consider only that amendment.

Clause 48(2) states: Nothing in subsection (1)"— subsection (1) recites a section of the Solicitors Act 1974 which prevents solicitors from entering into partnership with persons who are not solicitors — prevents the Law Society making rules which prohibit solicitors from entering into any unincorporated association with persons who are not solicitors, or restricts the circumstances in which they may do so". Noble Lords may recall the answer given by the noble and learned Lord the Lord Chancellor on a previous amendment which affected the Bar. "All that I am doing", said the noble and learned Lord, "is to give a power to the professional bodies to make such regulations if they see fit. I am not forcing them to do so. I am merely saying that I am loosening the force of Section 39. I am taking away that inhibition and giving the Law Society the power, if it wants, and only if it wants, to use it, to make rules which might enable solicitors to enter into an association with people who are not solicitors".

In those circumstances the Committee may wonder why I rise to oppose this subsection as emphatically as I can and ask the Committee to accept the amendment that I shall move in due course. I assure the Committee that my objection is not to multinational practice as between lawyers but to multidisciplinary practices; namely, that there should be the possibility of solicitors going into association or professional partnerships with those who are not lawyers.

The reason for my strong objection is that, if there were no statutory inhibition on the Law Society permitting such practices, the very gentleman who has been mentioned in the course of this debate —the Director General of Fair Trading —would be able to challenge the Law Society if it did not make regulations which allowed associations between lawyers and those who are not lawyers.

I remind Members of the Committee —I am sure that the noble and learned Lord will remember —that the restrictive trade practices tribunal under the proposed competition legislation announced in the DTI White paper called Opening Markets: new Policy of Restrictive Trade Practices, that the judgment as to whether rules are anti-competitive will be primarily made on economic criteria rather than general public interest criteria. In other words, economic criteria are to rule and the Director General of Fair Trading will be governed by those criteria when making his recommendations and challenges to any professional association that in his view acts contrary to those economic criteria. Indeed the Director General of Fair Trading published a report in August 1986—Restrictions on the kind of organisation through which members of professions may offer their services—and concluded that the statutory and practice rule restrictions on mixed partnerships should be removed.

My professional organisation, which is the Law Society —I should be very anxious if it did not hold such a belief—believes that that recommendation just did not take account of the special position of lawyers, which was so eloquently and, if I may say so, clearly explained by the noble Baroness, Lady Elles, nor of their obligations to the courts and their unique legal position regarding confidentiality. That was a matter to which the noble Baroness specifically referred. Therefore it is my submission that it would be completely unsafe under subsection (2) to remove the statutory inhibitions which are contained in Section 29 of the Solicitors Act 1974 because it would mean —I repeat —that the Director General of Fair Trading could challenge the Law Society and say, "There is the Courts and Legal Services Act 1990. Look at Section 48(2). The statutory prohibition has gone. Why are you not encouraging mixed partnerships between various professions? Why are you not dealing with the matter on the basis of economic criteria? We say that you should". Then there will be a battle. If that battle is lost by my profession, in my view a most dangerous situation will be set up with different rules of discipline and ethics binding the various constituent parts of a partnership. I should have thought that that was a very sorry event.

I therefore hope that subsection (2) goes. I hope that when I move Amendment No. 201 it will be accepted by the noble and learned Lord; and if not by him by the Committee. I very much hope that on the question of multinational practices, as the noble and learned Lord indicated at Second Reading, there will be provision to introduce regulations that will deal with those multinational partnerships. I hope that we shall see that the same rules which apply to our English profession will apply to such partnerships whether on competition matters or otherwise.

I have spoken to amendments that I have not yet moved. However, I hope that my contribution to the debate will clarify the issue, which is very important for my profession.

9.30 p.m.

Lord Templeman

Amendments Nos. 201 and 201A on Clause 48 raise questions of fundamental importance. First, is there a difference between a business and a profession? Secondly, is it wise or right to believe that anybody can do anything in any trade or profession whether trained to it or not? Thirdly, is it right that if there is a difference between a business and a profession, this legal profession should be left, within limits, to govern itself and lay down its professional rules?

The net result of the amendments moved by the noble Earls, Lord Shannon and Lord Lytton, would have the effect of destroying the profession. One could have a token lawyer in any firm. The noble Earl, Lord Lytton, spoke about the profession of a surveyor. There is no such profession. There is a noble profession of chartered surveyors. All kinds of people can call themselves surveyors and take part in multi-disciplinary partnerships in whom no reliance whatsoever can be placed.

It does not rest only with surveyors. All kinds of fringe people could become partners or directors of a company, so long as it had a token lawyer. All lawyers are subject to discipline. No one has explained how it will work in this great multi-disciplinary partnership, which will have different approaches. Its main thesis may simply be, "As long as we are making money out of it, let us go on".

Secondly, in my submission it is not right to assume that anybody can do anybody's job: that if one has a token lawyer one can engage on any work whether it includes law or any other area. It is the other way round. One ought to try to get every man to keep to his last. I know that my form of law occupies me quite long enough without my wanting to engage in partnerships with other professions and trades.

I believe that it would be detrimental to the public to have conglomerates which pretend to do everything and which are jacks of all trades but masters of none. It may be said that they may be found out. So was the Clowes organisation. Some other trades, industries and professions have been found out, but only at the cost of millions of pounds to poor investors and with great trouble and tribulation both for the Government and for everybody else.

Thirdly, if there is no case for a separate profession let us abolish every profession. Let everybody be able to do everything. But if there is a case for having a profession there surely must be a case for the legal profession. I know that in certain quarters that is thought to be elitist, as though we were trying to obtain some special privilege, but that is not so. Those of us who are no longer concerned with receiving fees and adding them up should at least be listened to when we say that beyond that there is a professional duty which we all respect because it is a duty to the public. We genuinely believe that if you throw everybody into the melting-pot or if you take all your eggs, break them and make them into an omelette, the one bad one will affect the rest.

We are asking for a separate profession. If there is a separate profession, albeit subject to the rules which my noble and learned friend the Lord Chancellor is introducing in order to ensure that they are competitive and so forth, it must have self-government within separate rules.

If the amendments tabled by the noble Earls, Lord Shannon and Lord Lytton, are carried, the provisions will destroy the profession because there will be no distinction between one company and another. While there is one man who is qualified for the Bar or who is a qualified solicitor you can do anything.

I hope that the two amendments will be defeated and that the Committee can turn to the more difficult amendment to be moved by the noble Lord, Lord Mishcon.

Lord Renton

This is a most important matter. The formation of multi-disciplinary partnerships by members of the Bar is against the public interest. It conflicts with the independence of the Bar and with the individual responsibility of the barrister to represent his client in accordance with the rule of law and to be answerable to the court for doing so.

It is a most extraordinary way of legislating. On the one hand we say that solicitors shall be allowed to enter into partnerships with people who are not solicitors. On the other we declare that there is no rule of law preventing barristers from entering into unincorporated partnerships with people who are not barristers. That is the foundation of the clause. Yet, in spite of Parliament enacting those two provisions as part of the law, we pass the buck to the Law Society and the Bar Council respectively for doing exactly the opposite to what Parliament has declared.

That is a strange and unprecedented way in which to legislate—although it is not totally unprecedented because we did so two clauses earlier but in a slightly different context. So far my noble and learned friend has been most successful in carrying highly controversial provisions contained in the Bill. I plead with him to take away the clause and look at it totally afresh in the light of what has been said by the noble and learned Lord and the noble Lord, Lord Mishcon.

However, if we must have the clause I agree that Amendment No. 201C tabled by the noble Lord, Lord Mishcon, should be enacted. I am reluctant to say so but, strictly speaking and if we follow his speech, the word "shall" in the first line ought to be the word "may". I speak for myself and perhaps some of my noble friends when I say that on Report it would be right, proper and logical for a similar subsection to be added affecting the Bar Council in the same way as the noble Lord's subsection affects the Law Society.

Lord Mishcon

The noble Lord said that the word "may" should be substituted for the word "shall". Does he remember his own words; namely, that he would wish to see the multi-professional association prohibited?

Lord Renton

Yes, I do. However, I was referring to what the noble Lord said in his speech and it may be printed in Hansard tomorrow. I understood him to say —and he must correct me if he did not say it —that the Law Society would not be bound to do that but it should be given the opportunity of prohibiting. If he did not mean to say that or did not say that, then I withdraw it.

Lord Mishcon

I started my speech —and I am sorry if I was not sufficiently clear —by saying that it might be thought that we did not have to worry about this matter because the noble and learned Lord might say, as he said previously in regard to another amendment which affected the Bar, that the Law Society does not have to enable multi-professional associations to exist. Therefore, why not give the Law Society that power? I then went on to say that the reason is that we are in danger, if that is done, that the Director General of Fair Trading, if there is not a statutory prohibition as I have tried to make it—and that is why I use the word "shall not" —could challenge the Law Society and on the ground of economic criteria say, "I am awfully sorry, but you are acting in an anti-competitive way. You have been enabled by an Act of Parliament to permit these things. Why are you not doing that?"

Lord Renton

That is splendid. However, it makes the clause, if I may say so, even more nonsensical. On the one hand, the Law Society is told in one subsection not to prohibit and in the other subsection it would be required to prohibit. we have got ourselves into a ridiculous situation. I hope that on Report my noble and learned friend will see that we put some sense into the Bill.

The Lord Chancellor

With the greatest respect to my noble friend, it is not a nonsensical situation at all. The present law prohibits the Law Society—and I take that first—from allowing partnerships with anyone who is not a solicitor. Of course, that includes lawyers in other countries. Therefore, the existing law makes impossible having a partnership between, for example, a firm in London and those who practise the law in France or Germany.

As I understand the position, the Law Society is of the view that that prohibition should not continue. Therefore, the statutory prohibition must be removed and I agree with that. The only question is: what should be substituted for it? I believe that the right substitution is that the Law Society should have the power to regulate this. Instead of there being a blanket prohibition in the statute as we have now, the Law Society should be given the power to make these regulations. It has the good of the profession at heart, and will make such rules as it thinks to be right in this connection. It is right that that responsibility should rest with the Law Society. That is what the clause does.

The noble Lord, Lord Mishcon, in his amendments to which we shall come later, is endeavouring to fight a battle in advance which he may have with the Director General of Fair Trading. However, as my noble and learned friend Lord Ackner pointed out, the Director General of Fair Trading can be a great friend in some situations although he may not be quite such a friend in others. In his responses he has distinguished very clearly between the Bar and the Law Society in that connection.

This provision leaves it with the Law Society to make the rules, and I believe that that is entirely right. It can regulate the circumstances, and so on. If another law comes along which has to do with that, then the Law Society will have to deal with that as it arises. For example, it is quite clear from the Department of Trade and Industry's White Paper that it envisages that professional rules which are justified as required to avoid conflicts of interest would be perfectly acceptable under the legislation proposed from that department.

What we have in this clause is entirely sensible and right, leaving the matter to the Law Society. If we are to do that for the Law Society, there is no statutory prohibition on the Bar, so far as I know; but it is thought by some that there may be a common law rule. It is not at all clear that there is, but in order to make clear that the Bar should have the same sort of right to make rules, Clause 6 makes that perfectly plain. It takes away any concern there may be about existing law and replaces it with a clear power for the General Council of the Bar to make rules which have the effect of prohibiting barristers from entering into any such unincorporated association or restricting the circumstances in which they may do so.

I strongly urge the Committee not to accept Amendment No. 201, moved by the noble Earl, Lord Shannon, because I believe that this is a matter for the profession. The profession has pointed to considerable difficulties, which my noble friend Lady Elles has summarised, in allowing anything of the kind. These difficulties would certainly have to be dealt with before any rule could be contemplated which would have the effect of allowing multidisciplinary practices between solicitors and other professions in this country.

I believe that these are matters for the Law Society to consider. It has considered them and no doubt will continue to do so in the future as the situation develops. I believe it is right that the matter should be left with the Law Society. We are not encouraging the society in any way but merely making clear that it has this power and that it is for the society in its professional judgment to decide what is right. I am certainly of the view that it is correct to do that.

The same remarks apply as regards the General Council of the Bar and Amendment No. 202, to which the noble Earl spoke. I hope that in the light of that explanation the noble Earl will feel able to withdraw the amendment and, if not, that the Committee will negative it.

9.45 p.m.

Lord Simon of Glaisdale

My noble and learned friend the Lord Chancellor is, it seems, at one with the Law Society in wishing to sweep away any restriction on multi-national partnerships and associations. But he has gone on to sweep away more than that. He has swept away any restrictions on multi-disciplinary partnerships and associations. In doing so he has failed to recognise the point validly made by the noble Lord, Lord Mishcon, that the Law Society would be left open to objection by the Director General of Fair Trading on the grounds of setting up a restrictive practice if it took advantge of the power given by my noble and learned friend to inhibit multi-disciplinary practices. The only answer from my noble and learned friend appeared to be, "Well, the Director General of Fair Trading may not take that adverse view of the action by the Law Society". I imagine that the noble Lord, Lord Mishcon, would reply to that, "Well, he may not, but on the other hand he may". It is because he may that we want the protection.

The Lord Chancellor

Certainly the only point is whether it is right to exclude altogether any question of this sort. The Law Society being empowered to make the rules —and this is what I intend—any question of that kind is left for any legislation which may follow. However, as regards present law, it appears to me entirely right that the Law Society should have complete freedom in this area and that it should be able to make the rules it thinks right in the light of its consideration of these matters.

Lord Mishcon

I rise only to save time on the amendments when I move them. There are occasions —and I say this with the utmost respect to the noble and learned Lord —when his agility of mind supersedes his willingness to concede an obvious point. I hope that this is not going to be one of those occasions. Has one ever heard of a body generously given power by the noble and learned Lord which declines to accept it unless it be for very good reason? The noble and learned Lord is talking of giving power to the Law Society in order to make it possible for it to include multi-disciplinary practices which are now prohibited by statute. I can tell the noble and learned Lord that the Law Society does not want that power. While it appreciates his generosity, the Law Society tells him in no uncertain terms, "Please do not give it to us".

It gives a reason. It wants the multi-national practices and my amendment will provide for that when we come to it. The reason it does not want it is because there have been writings by the Office of Fair Trading which are sufficient to put the fear of the Almighty into any professional body. Those writings say: "We are after competition and trading in a fair manner. If we come across, through economic criteria, the acts of people who are empowered to have multi-disciplinary associations and they have not got them, we say that they should have them".

That is a very important matter. It is for that reason that I say to the noble and learned Lord: please do not give gifts which are not desired because those who give them create fear. That is exactly the situation here. I do not have to quote the classical phrase to the noble and learned Lord, who knows Latin and Greek much better than I do. We fear these gifts and we say to the noble and learned Lord: "We do not want them and we have given a very good reason as to why we do not want them".

Lord Donaldson of Lymington

There are times when I wonder whether this is not a private discussion between the noble Lord, Lord Mishcon, and my noble and learned friend the Lord Chancellor into which two noble Earls have butted unintentionally. I am about to say something intentionally. The reason I say something intentionally is because of the doctrine well known to lawyers as estoppel. I do not wish it to be said hereafter that I cannot take the point because I did not take it at this stage. So let me take it now and clearly.

As regards the utterances of the Committee, I do not accept the proposition that the competition board will have any power to interfere with the exercise by the Law Society of its powers proposed in this subsection. I say that for this reason. I imagine that we all agree that where rules of conduct or practice affect the process of litigation they have to be dealt with through the procedure laid down in Schedule 4 as regards the advisory committee, the Lord Chancellor and the designated judges. I do not believe that to be controversial.

I fancy that there is a deal of controversy between the noble and learned Lord the Lord Chancellor and myself which concerns what happens when a partnership of solicitors wants to do something in the non-litigious role. I take the view that the answer is self-evident, though I understand that the noble and learned Lord the Lord Chancellor takes a different view. In my opinion it is self-evident that A and B cannot be in partnership for one purpose and not another. A solicitor cannot be in partnership with a surveyor for non-litigious purposes, but not in partnership for litigation purposes.

The solicitors who will be partners in both partnerships would be in a quite impossible position. If there are two totally separate partnerships, which is a concept possible in law, it would not work. They would undoubtedly be sharing premises, confidences and staff. This arrangement is not on. As I see the matter —I shall argue it again if necessary hereafter, and that is the purpose of the present intervention —if it is permitted for barristers and solicitors to be in partnership, or solicitors and surveyors or solicitors and accountants, for any purpose, it has to be permitted for all purposes, including litigation. If it is permitted for litigation purposes, it has to go through the Schedule 4 method. I very much doubt whether there is a problem here but I range myself sturdily behind the noble Lord, Lord Mishcon. If there is any doubt, let us for goodness sake remove it by passing the amendment.

Lord Mishcon

Perhaps I may turn a conversation between the noble and learned Lord the Lord Chancellor and myself to one between myself and the noble and learned Lord the Master of the Rolls. I say this with deep deference but he has overlooked the provisions of the Administration of Justice Act 1985 which permit incorporated practices. One could therefore have a limited company with the objects of carrying out non-litigious work with a director who was a solicitor. He might have a separate practice or might not conduct litigation. He could be a director of that company and other people belonging to other professions could be fellow directors. Therefore it is possible to have such an organisation.

Lord Donaldson of Lymington

Perhaps the noble Lord will forgive me for returning to the fray just to mention this point. Under the existing rules of the Law Society —I am not sure whether they are the existing rules or proposed rules; at any rate they have been passed by the Council of the Law Society and I have approved them —to the best of my recollection it is not possible to have a director of an incorporated body of solicitors who is other than a solicitor. That rule will be maintained after the Bill is passed, if it is passed, and then the question will arise whether that rule is permissible. That will have to go through the Schedule 4 procedure and the considerations that I have already mentioned will apply.

The Lord Chancellor

I do not wish unduly to enter into this conversation except to say that I do not know whether my noble and learned friend the Master of the Rolls exactly stated my position. A number of problems are associated with it which I do not think it appropriate to go into at this juncture. In my view it is right that we should give this power to the Law Society and that we should not attempt to deal with what may or may not arise under legislation which has not come forward and which ought to be dealt with as it arises. It appears to me to be right to leave the matter as one which is no longer a matter of statutory prohibition but one for the Law Society and the General Council of the Bar.

The Earl of Shannon

I realised when I put down the amendment that I might be treading on some toes, but my, I did not realise quite how tender those toes were. The object of my amendment was to draw attention to the fact that we had two incongruous clauses alongside each other, one saying that you may have this extra freedom and the other saying that you will not be allowed to use it. That, fortunately, was when the noble Lord, Lord Renton, brought us back to the subject of my amendment. Previous to that we heard some pretty good speeches but I would suggest that they were not on my amendment. They were made to an amendment that was not down on the Marshalled List. They were speeches to an amendment to leave out subsections (1) and (5).

I was trying to draw attention to the incongruity of the clauses. To use the words of the noble and learned Lord the Lord Chancellor, he was removing one blanket but putting another blanket in its place. I was not terribly happy with it but I realised that the more the debate went on, the more eminent and the more learned were the guns against me. I shall leave it to the amendment which has been spoken to so eloquently with this one and see what happens there. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10 p.m.

The Earl of Lytton moved Amendment No. 201A: Page 37, line 28, leave out subsection (2) and insert — ("(2) Any rule, whether made before or after the coming into force of this section, whereby a solicitor is prohibited from forming a legal relationship with another solicitor or any other person for the purpose of their jointly offering professional services to the public shall have no effect unless it has been approved by the Lord Chancellor and the Secretary of State, and before approving any such rule the Secretary of State shall consult the Director General of Fair Trading.").

The noble Earl said: I shall speak briefly to the amendment, because there is one point that I should like to raise in connection with it. Perhaps I may clarify my position. Although I have referred in loose and imprecise terms to "surveyors" —I am a fellow of the Royal Institution of Chartered Surveyors —I intended that the reference should have been to those who are members of professions and not just anyone who calls himself a surveyor or, for that matter, anything else. I apologise to the noble and learned Lord the Lord Chancellor for my lack of precision when giving evidence to the Committee.

While multi-disciplinary practices are not commonplace in the field of law, they are commonplace among practising chartered surveyors with chartered town planners and other bodies. That does not mean that everyone has to do everything. It does not mean that the chartered surveyor has to give evidence before a planning inquiry or that the chartered town planner gives evidence on valuation. Those practices operate successfully because there is a symbiosis between the professions concerned. That is my understanding of multi-disciplinary practices.

When I worked for a small firm in the West End it did not call itself a chartered surveyor, but that did not prevent me from being an associate of the Royal Institution of Chartered Surveyors at the time. It did not impugn my professional status. Subsequently, when I worked for a large insurance company that did not mean that I had to sell financial services. Now I work for myself and I can do more or less what I like when I like within the byelaws of my profession. I do not accept the criticisms of the risk of a multi-disciplinary practice, with the sole exception of the field of litigation where there may be problems in relation to advocacy which is only one part of the panoply.

The point that I should like to raise in connection with the amendment is that I fail to see that there is a special reason for the Law Society, or any other professional body for that matter, to be exempt from the overriding scrutiny of the Office of Fair Trading. The noble and learned Lord the Lord Chancellor pointed out that he does not exclude that possibility. The noble Lord, Lord Mishcon, clearly wishes to exclude it absolutely because he sees that his profession is at risk. It is not for me to suggest which of those opposing views are correct, but there is a point of public interest: the profession should be seen to be subject to the overriding scrutiny of those watchdogs that police our public affairs.

I should like to prompt the noble and learned Lord to consider making a specific inclusion —not necessarily the wording of Amendment No. 201A, but something along those lines —to make it clear beyond all reasonable doubt that that overriding scrutiny will be in place. If he gives me the assurance that it is not his, or for that matter the Government's, wish to exclude the provision I would not wish to press the amendment. I beg to move.

The Lord Chancellor

I would not wish to accept this amendment. The machinery that has been set up in the earlier part of the Bill for dealing with rights of audience and right to conduct litigation is one under which the designated judges and the Lord Chancellor will have to approve the rules before they become effective. If that is done, then the rules, according to the Department of Trade and Industry's White Paper, would not be challenged under the legislation that is being adumbrated in that paper.

But it appears to me that jurisdiction in relation to rights of audience and right to conduct litigation is the proper field for that kind of approval. The question is how far that goes, and that is a question which would obviously depend upon the circumstances. But I do not believe that it is right to seek to draw the Lord Chancellor into any area which is outwith that particular scope. Accordingly, I think that, so far as it is proper for the Lord Chancellor to have a place in this, that is provided for under that machinery.

In so far as it is not, it is best that he be left out of it. Therefore I think that Amendment No. 201A is inappropriate. In so far as it goes beyond the proper field for the Lord Chancellor, it is an inappropriate amendment. I hope that the noble Earl, in the light of that explanation, may feel able to withdraw his amendment.

The Earl of Lytton

Obviously, I hoped that the noble and learned Lord would go further than he has done. He has picked his way extremely adroitly through what is a not inconsiderable minefield of differing views here. But in the light of what he has said, there is obviously a procedural and structural deficiency to my amendment and therefore I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendment No. 201B not moved.]

Lord Mishcon moved Amendment No. 201C: Page 37, line 28, leave out subsection (2) and insert — ("(2) Rules made by the council of the Law Society shall prohibit—

1. (a) solicitors entering into any unincorporated association with any persons other than
1. (i) solicitors, or
2. (ii) lawyers qualified other than in England and Wales; and
2. (b) persons who are not
1. (i) solicitors, or
2. (ii) lawyers qualified other than in England and Wales

becoming directors or shareholders of bodies recognised by the council of the Law Society under section 9 of the Administration of Justice Act 1985 (solicitors' incorporated practices)").

The noble Lord said: This amendment is most definitely moved and I shall not weary the Committee with another speech. I have already spoken on about four occasions in favour of this amendment. I beg to move.

Lord Templeman

Perhaps I may ask for information on this amendment. The Committee has now agreed that under Clause 48(2) the Law Society may make rules which prohibit solicitors from entering into any unincorporated association with persons who are not solicitors. So when five multi-disciplinary chaps get together, assuming that the Law Society makes a rule as permitted by Clause 48(2), they are bound to say, "But we cannot do it as an unincorporated association. That is easy enough. We can buy a company off the shelf and we become directors and shareholders. Although in law it will be a separate entity, in fact we shall just be the same five jolly chaps all doing the five different disciplines which the Law Society has made rules against, and therefore we shall not be bound by those rules".

I appreciate the difficulty which my noble and learned friend the Lord Chancellor has with building societies and banks, because of legislation which unfortunately was passed last year; but ignoring those for the moment, I want to know this. If the Law Society makes a rule which prohibits or curtails the rights of solicitors to join in as directors and shareholders of the kind of multi-disciplinary company which I have envisaged, is that a law which the Law Society can make, or is it one that falls under the general prohibition in Clause 48 or some other general prohibition? I should just like to know what is the situation.

Perhaps the noble Lord, Lord Mishcon, already knows the answer, but if so he has the advantage of me. I do not know what the answer is. I see that they can make rules about unincorporated associations, and my practice leads me to believe that it is very easy to form an incorporated association which has exactly the same effect. That would be undesirable.

The Lord Chancellor

I have not got all the legislation in front of me but my understanding of the situation is that the general rule with which we are dealing here prevents unincorporated associations. If we take that away we must replace it by giving the Law Society a power to prohibit.

On incorporated matters, an incorporated body can carry on the business of a solicitor only provided that it conforms with the rules made by the Law Society. These are subject to the approval of the Master of the Rolls. I also have a part to play in these rules and rules have been made. I shall check this since my noble and learned friend has raised it, but my understanding of the position is that there is nothing to inhibit the Law Society from making whatever rules it wishes preventing people other than solicitors being directors of a company, an incorporated practice, carrying on the business of a solicitor.

The reason for the clause being restricted to the unincorporated association is that the general blanket rule which we seek to abrogate is so restricted. Therefore I believe that what my noble and learned friend seeks to cover is adequately covered.

Lord Mishcon

In view of the importance of this matter to my profession, I have no hesitation in saying that it is the duty of this Committee —and I put it most respectfully —not to behave recklessly in regard to what may or may not be the future activity of the Director of the Office of Fair Trading or future legislation. In protection of the traditions of my profession I not only move the amendment but in the circumstances I wish to divide the Committee.

10.12 p.m.

On Question, Whether the said amendment (No. 201C) shall be agreed to?

Their Lordships divided: Contents, 23; Not-Contents, 38.

DIVISION NO. 2
CONTENTS
Ackner, L.	Macaulay of Bragar, L.
Bonham-Carter, L.	[Teller.]
Byron, L.	Meston, L.
Carnock, L.	Mishcon, L.
Coleraine, L.	Rawlinson of Ewell, L.
Dilhorne, V.	Renton, L.
Donaldson of Lymington, L.	Rippon of Hexham, L.
Gallacher, L. [Teller.]	Seear, B.
Grantchester, L.	Simon of Glaisdale, L.
Hacking, L.	Templeman, L.
Hutchinson of Lullington, L.	Tordoff, L.
Irvine of Lairg, L.	Williams of Elvel, L.

NOT-CONTENTS
Ampthill, L.	Johnston of Rockport, L.
Belstead, L.	Joseph, L.
Blatch, B.	Long, V.
Brabazon of Tara, L.	Lyell, L.
Butterworth, L.	Lytton, E.
Caithness, E.	McColl of Dulwich, L.
Clanwilliam, E.	Mackay of Clashfern, L.
Craigmyle, L.	Macleod of Borve, B.
Davidson, V. [Teller.]	Mersey, V.
Denham, L. [Teller.]	Morris, L
Elles, B.	Reay, L.
Ferrers, E.	Saint Levan, L.
Fraser of Carmyllie, L.	Saltoun of Abernethy, Ly.
Gardner of Parkes, B.	Shannon, E.
Glenarthur, L.	Strathclyde, L.
Henley, L.	Strathmore and Kinghorne, E.
Hesketh, L.	Swinton, E.
Hives, L.	Torrington, V.
Home of the Hirsel, L.	Trumpington, B.

Resolved in the negative, and amendment disagreed to accordingly.

10.20 p.m.

The Deputy Chairman of Committees: I believe Amendment No. 202 is not moved.

The Earl of Shannon

As I have already spoken on this matter at length, I shall not seek to move this amendment.

[Amendment No. 202 not moved.]

On Question, Whether Clause 48 shall stand part of the Bill?

Lord Hacking

Before we agree that Clause 48 stand part of the Bill I wish to draw attention to a difficulty which faces equally barristers and solicitors who aspire to participate in multi-national practices. The same difficulty would face barristers and solicitors who aspire to multi-disciplinary practices. However, it seems that there are not aspirations from either side of the profession to participate in multi-disciplinary practices.

I refer to Section 716 of the Companies Act 1985. If there are Members of the Committee who wonder what that section covers, let me state that it limits to 20 persons partnerships except in certain specific circumstances. One of those circumstances is a practice which is carried on by solicitors if the other members of that practice are also fully qualified solicitors. There is not an exception for members of the Bar who under their present rules do not practise in partnerships. However, as I indicated, it affects members of the Bar if they also aspire —as I understand that they do —to participating in multi-national practices. The difficulty is that a foreign lawyer, say one from another member state, does not fit into the category of persons defined under Section 716.

I understand that a letter has been written to the noble and learned Lord on the subject. I believe that there are three ways to deal with the matter: to treat Section 716 as redundant and repeal it; to amend Section 716; or to use a statutory instrument under Section 716(3). I do not know how the noble and learned Lord intends to act on the matter, but I draw it to his attention. It is a difficulty, one which faces both barristers and solicitors regarding multi-national practices.

The Lord Chancellor

The matter is one on which I seek to achieve a good way forward. I have the matter in hand. The Companies Act is the responsibility of the Secretary of State for Trade and Industry. However, I believe that we shall be able to find a way of dealing with the mater. Perhaps the noble Lord will feel able to leave it at that. I hope that the Committee will allow the clause to stand part of the Bill.

Clause 48 agreed to.

Lord Hacking moved Amendment No. 202ZA: After Clause 48, insert the following new clause: (". —(1) Regulations made by the Law Society under section 2 of the Solicitors Act 1974, rules made by the Council of the Law Society under section 31 of the Solicitors Act 1974, and rules made by the Council of the Law Society under section 9 of the Administration of Justice Act 1985 shall not have effect unless they have been approved under Part II of Schedule 4. (2) The concurrence of the Lord Chancellor, the Lord Chief Justice and the Master of the Rolls under sections 2 and 31 of the Solicitors Act 1974 and section 9 of the Administration of Justice Act 1985 shall no longer be required for the making of regulations and rules under those sections. (3) Section 26 shall not apply to the rules of conduct of the Law Society and the General Council of the Bar. (4) In this Act "rules of conduct" means rules (however they may be described) as to the conduct required of members of an authorised body in exercising any right of audience or (as the case may be) any right to conduct litigation granted by it").

The noble Lord said: As the Committee is aware at this stage of the Bill, our sixth day in Committee, a new regulatory regime is being set up under Part II and Schedules 1 to 4 to the Bill. The current regulatory regimes covering solicitors are set out in Sections 2 and 31 of the Solicitors Act. Section 2 states that the Law Society, with the concurrence of the Lord Chancellor, the Lord Chief Justice and the Master of the Rolls, may make regulations in this Act referred to as 'training regulations' about education and training for persons seeking to be admitted or practise as solicitors". Section 31 gives slightly wider powers to the Law Society's Council who, may, if they think fit with the concurrence of the Master of the Rolls, for regulating in respect of any matter the professional practice, conduct and discipline of solicitors".

There is a third regulatory regime, which is to be found in Section 9 of the Administration of Justice Act 1985, to which the noble Lord, Lord Mishcon, recently referred us, covering incorporated practices.

The amendment proposes that the regulatory regime for my side of the profession should come under the terms of the Bill. In proposing the measure —the noble and learned Lord the Master of the Rolls is present at the moment —I should make it plain that there is no dissatisfaction, despite one threatened application for judicial review, with the services with which he and his predecessors have kindly provided my side of the profession in reviewing and approving the Law Society rules. It is directed solely to bringing the regulatory regime under the one authority of the Bill.

The Government's White Paper, Opening Markets: New Policy on Restrictive Trade Practices, made it clear that competition law will be applied to professional rules, but that rules approved by Ministers will not be liable for subsequent challenge by the competition authorities. Thus, the Law Society's rules on training and conduct for higher court advocacy will, because they will require the approval of the Lord Chancellor under Section 4, be exempt from challenge, but other rules will not be. That will lead to considerable anomalies.

The Law Society believes that a single competition law regime for the legal profession would be appropriate and that, under that regime, the last word should rest with the Lord Chancellor who will naturally take into consideration advice on competition aspects before giving his approval to the rules. That is required under Schedule 4(9) with regard to seeking the views of the Director General of Fair Trading. The amendment will therefore provide that all the Law Society's training and conduct rules should go through the same procedure for approval; namely, via the Lord Chancellor and the four senior judges, after advice from the advisory committee and the Director General of Fair Trading.

The legal profession would not be the only sector to have a separate competition law regime. For example, the Financial Services Act 1986 provides that the rules of the SIB shall be submitted to the Director General of Fair Trading for this advice, but that the rules shall be approved by the Secretary of State. Under the Companies Act 1989, the regime for the authorisation of auditors likewise requires the Secretary of State to approve the rules with the Director General of Fair Trading offering advice in advance as to the competition aspects. For all those reasons, I beg to move.

The Lord Chancellor

The new machinery provided in the Bill is intended to deal with the right to conduct litigation and rights of audience. It is appropriate that it should deal with those aspects of solicitors' practice, but there is no cause to alter the arrangements that have stood the test of time in the balance of the situation. That is the way in which the matter has been approached from the time of the White Paper onwards.

If the Lord Chancellor has a place along with the Lord Chief Justice and other Heads of Division in relation to rights of audience and the right to conduct litigation, that is the appropriate place for his consent to be given. I do not believe it right that we should extend that over other areas which are presently the jurisdiction of the Master of the Rolls alone. I hope that, in the light of that explanation, the noble Lord will feel able to withdraw his amendment.

Lord Hacking

I thank the noble and learned Lord for his explanation. If the noble and learned Lord the Master of the Rolls is kind enough to continue his statutory duties, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 49 agreed to.

Clause 50 [Qualification for judicial and certain other appointments]:

Lord Mishcon moved Amendment No. 202A: Page 39, line 12, at end insert —

• ("(ii) he is a solicitor or barrister of 10 years' standing; or").

The noble Lord said: With the permission of the Committee, I shall speak also to Amendments Nos. 202B and 204AA which deal with the same point of principle.

The matter can be dealt with very briefly. Noble Lords will remember that, under Clause 28, barristers are deemed to have been granted full rights of audience in all courts. That means that all barristers of ten years' standing will be eligible for appointment as a Lord Justice of Appeal or as a High Court judge. Solicitors other than circuit judges will not be eligible for such appointment until at least ten years have passed from the time that the first solicitors are granted rights of audience in the High Court by the Law Society under the regulations; namely, those approved by the Lord Chancellor and the four heads of divisions of the High Court.

It seems that if the exercise of a right of audience in the High Court, possibly on a regular basis, is to be the prerequisite of an appointment as a High Court judge, it will exclude from those available a very large number of talented solicitors, many of whom would be a credit to the High Court Bench.

The amendment is intended to make all solicitors and barristers with substantial legal experience eligible for appointment to the High Court Bench and, if I may say so, leave it to the good sense and judgment of those making the appointments to ensure that suitable appointments are made. I beg to move.

10.30 p.m.

The Lord Chancellor

The general route that we have proposed is that a right of audience in a court held for a sufficient time confers the necessary qualification to be a judge of that court. So far as concerns solicitors and others who have been judges in a court below, service in the court below will also be a qualification. That could result in solicitors reaching the High Court Bench much more quickly than in the kind of period mentioned by the noble Lord, again obviously subject to a suitable candidate. None of these is more than a qualification. It does not at all mean that anyone with the qualification would necessarily be a suitable person.

The method of reaching the High Court via the circuit Bench is open from the time that this Bill becomes law and I think it natural that the right of audience position, because it involves a change, should require to be in existence for a reasonable time before that qualification applies. In the light of that explanation I hope that the noble Lord will feel able not to press his amendment.

Lord Mishcon

Obviously I did not say it very clearly, but I said that those who were appointed to the circuit Bench did not come within the ten-year rule. I made that abundantly clear. But there are many talented solicitors who would not find it a natural course to go through the circuit Bench. If I may respectfully say so, the noble and learned Lord is depriving the High Court Bench of that talent.

Surely one could rely on the good sense of those making the appointments to say, "We are relieved at the fact that there does not have to be a period of ten years' standing since the advocate's certificate" —if I may use that expression —"was granted. Thank heavens that we have eligible solicitors. We want to appoint them. How sensible of Parliament not to have legislated so that we cannot possibly appoint those people". That is what I had in mind.

Will the noble and learned Lord be kind enough to consider that aspect of the matter? I believe that my side of the profession can contribute —I hope in good time very substantially —to the undoubtedly very high quality of the High Court Bench. If its members do not attain that quality, there will not be the appointments; but surely it is wrong to shut the door.

Lord Donaldson of Lymington

Perhaps I may intervene purely in the hope of being helpful. When I listen to the noble Lord, Lord Mishcon, it strikes me that the problem he raises is essentially a transitional one. There are now highly experienced solicitors, a few of whom do a lot of work in the county court, and who if they had been able to do so —if this legislation had been in effect —would have started off in the High Court many years ago. That is a rather different situation from that which will obtain in a few years' time when, should people in the capacity of fairly junior solicitors want to go in for High Court litigation, they will be building up the necessary qualification.

If the Government, for reasons on which I shall express no view at all, think that it is right to have a ten-year qualification in the future —that is to say, after four or five years —there might be a case for considering whether there should be a transitional qualification by which long standing in the solicitors' profession, perhaps of those engaged in county court litigation, might knock off a few years of the ten years shown here.

Lord Hacking

I do not think that the noble and learned Lord the Master of the Rolls meets the whole problem. There are extremely experienced solicitors who may have no wish to undertake the experience in litigation which would be required under the terms of Clause 50 of this Act but who nonetheless have high expertise as lawyers, high intelligence and high ability, and who would be wholly fit for High Court appointments. As the noble and learned Lord is aware, while in many ways it may be a better route on to the Bench for all persons to serve on the Circuit Bench before going on to the High Court Bench, it has not been possible by setting up such a regime to attract the great talent that the High Court Bench requires.

Exactly the same applies, for reasons advanced by the noble Lord, Lord Mishcon, concerning my side of the profession. I am disappointed with the reply of the noble and learned Lord the Lord Chancellor. The effect will be to deprive the High Court Bench now and in the future of persons who may be highly eligible to be among the finest judges in the land.

Lord Ackner

With great respect, the basis of entitlement is being widened. As I have understood the Bill, the appointment will be based essentially on advocacy experience. If it is advocacy experience the solicitor may have been highly successful and highly busy for 10 years in a specialised commercial field but he is not entering that field of qualification. If it is intended in future that the mere qualification as a lawyer is sufficient to become a judge, then that is taking the matter even further.

I thought when the rights of audience were being extended that we were keeping to audience. But apparently the appetite is growing in the feeding.

Lord Mishcon

It is not a question of appetite but of supplying need. That is what I am addressing my mind to. The noble and learned Lord, Lord Ackner, was a very fine advocate in his time as I had occasion to witness on more than one occasion; and —thank heavens! —it was on my behalf that his great advocacy on the occasion that I remember was so successful. He will be the first to remember that in the history of the judges great advocates have been poor judges, and poor advocates have been great judges.

The Lord Chancellor

On transitional provisions, I certainly have in mind that we may need to consider exactly how that would be achieved. But I have endeavoured to set out the criteria on rights of audience. Not every person who has a right of audience is necessarily a great advocate. But many who have acquired rights of audience in the past have turned out to be extremely good judges. I believe it to be a reasonable criterion to apply along with the criterion of service in a lower court. At the moment, as the noble Lord knows, a circuit judge of great distinction is not eligible for appointment to the High Court Bench if by chance he came from the solicitor's branch of the profession. That we are seeking to remove. It is an avenue of importance. I believe it is right to go forward in this way.

On the transitional provision, I shall consider further whether we ought to make some special provision.

Lord Mishcon

I am most grateful to the noble and learned Lord the Master of the Rolls for introducing the transitional point. and to the noble and learned Lord the Lord Chancellor for agreeing to consider the matter on that aspect. I hope that he may even widen his consideration and take in some of the comments that I ventured to make.

On the basis of what he has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 202B not moved.]

Lord Ackner moved Amendment No. 202C: Page 39, line 31, leave out paragraph (c).

The noble and learned Lord said: In the interests of expedition I should like to speak to six amendments. They are Nos. 202C, 204CA, 204D, 204E, 204F and 204G. The first amendment relates to the clause and the others to the schedule. It will have the great virtue —probably none other —of subjecting the Committee to only one speech rather than to a series of disjointed speeches.

In my speech in the debate on Second Reading I invited Members' attention to the clause and to what I referred to as: the grotesque Schedule 7 running for some 20 pages in order to consider who will in future be our judges". I ventured the proposition: Perhaps we are to have People's Courts! The hostages which this Bill gives to an ill-disposed minister of justice are incalculable". —[Official Report, 19/12/89; col. 206.]

Perhaps I may first lighten the atmosphere quickly by recounting to the Committee the forensic fable of an eminent Queen's Counsel who did not reach the High Court Bench. He was addressing the Court of Appeal and, being eminent, he had carefully thought out his submissions. He put them before the court and, as sometimes occurs, the presiding judge said, "Oh, but Mr. Brown, is not a much better way of putting it …", and he mentioned his method. Mr. Brown spoke the usual forensic cliché, "I am so grateful to your Lordship. Your Lordship puts it so much better than I do". In answer the presiding judge said, "Really, Mr. Brown, you should not say that". Then came the fatal answer, "No, my Lord, indeed I should not but then we always do".

I have recounted that fable because the tributes that I pay and have paid to my noble and learned friend the Lord Chancellor are most sincere. I pay tribute to his courtesy, charm, great intellectual abilities and outstanding powers of advocacy. But I have long been of the view, so succinctly expressed by my noble and learned friend Lord Hailsham, that the Lord Chancellor has one paramount duty: the protection of the independence of the judiciary and the integrity of the profession. The judges have no written constitution to which they can appeal. As my noble and learned friend Lord Rawlinson has emphasised throughout the debate, the Lord Chancellor is the guardian of the interests, powers and independence of the judiciary and that in relation to this function the officer was designed for a Minister to whom the Prime Minister and every other Minister ought to defer.

I hope that I shall be forgiven for once again quoting from the lecture given last year by my noble and learned friend Lord Hailsham on the office of the Lord Chancellor. I referred to it a week ago. He explained that the least support for judicial independence is to be found from: individual members of the Cabinet, whose departmental interests from time to time basically conflict not only with the views of the judiciary where they are entitled to differ, but in the provision of the means necessary to enable the courts to discharge their functions". — [Official Report, 25/1/90; col. 1237.]

If my noble and learned friend the Lord Chancellor, supported by the law offices, had been prepared to say to the Cabinet, using the words of my noble and learned friend Lord Hailsham last Monday at col. 54, "I believe that the end product of Part II of the Bill will be to undermine the integrity of the system of justice that we have developed over the years", that would have been an end of the matter. Then we should have had a glad confident morning again. However, that was not to be so; we are left with a glimmer of twilight.

I turn to Clause 50. In doing so, I ask Members of the Committee to be particularly concerned with what is the astonishing goal which the Government are setting out to achieve. Part II, which we debated at length, dealt with the rights of audience in Her Majesty's courts. By now it will be fully appreciated, if it was not before, that one of the major proposals of the Government is that laymen, provided that they meet certain requirements, shall have the right of audience —the right to appear in all courts from the lowest to the highest. We all know that the Government have produced no evidence that there is any shortage of lawyers properly qualified to serve the public in all courts in the land. Indeed proposals to extend the rights of audience of solicitors are clearly designed to provide a yet further supply of advocates.

Clause 50 carries those radical proposals one stage further. It proposes to enable laymen who have achieved the appropriate rights of audience —that is, the right to act as advocates in the appropriate courts—to become judges, again in all from the lowest to the highest courts. I venture to suggest once more that we shall hear no evidence that there is a shortage of properly qualified lawyers to act as judges. Indeed once again, in extending to solicitors appointments to the judiciary and the higher courts, a new supply of judges will be made available. Once more I anticipate that we shall receive no evidence that there is the slightest demand for lay judges beyond, of course, magistrates' courts.

My first amendment is to focus upon the fourth classification of the qualifications required. I emphasise again that I am focusing wholly upon laymen. If solicitors are to have the rights of audience in the higher courts, clearly they should be entitled to qualify for appointment to the judiciary in those courts, given that they have the appropriate experience and have achieved the appropriate competence.

Clause 53 provides that a person has a general qualification if he has a right of audience in relation to any class of proceedings in any part of the Supreme Court or all proceedings —and I stress the word "all" —in the county court or magistrates' courts. If one turns to Schedule 7 one will find a very high proportion of the appointments there identified as open to laymen who have that general qualification. The constant reference to that general category tends to hide the fact that in each case a right of audience is achieved by a layman in relation to proceedings in the magistrates' courts. That qualifies him for judicial appointment to the relevant office.

At page 8, Members of the Committee will find that a layman can hold the post of president of the Lands Tribunal —who, incidentally spends more of his time (or did, in my recollection) sitting in the High Court trying High Court actions —provided that for seven years he has had a magistrates' court qualification. The Committee will remember that that experience does not have to be continuous because Clause 50 (4) (b) provides that the period need not be continuous.

At paragraph 10 of the schedule, Members of the Committee will see reference to the very important offices of Judge Advocate of the Fleet and Judge Advocate General. That is now to be open to a layman who has a 10 year general qualification. That means that he has for 10 years, though not continuously, appeared in the magistrates' court.

I have suggested the deletion of this all-embracing general qualification to oblige the Government to come out in the open and record quite clearly that if that is the sort of qualification which is considered by them to be appropriate in relation to—again, I stress—laymen, then let it be clearly stated in the Bill so that all can read it.

It will no doubt be said, "Why this anxiety about laymen? Why should it be anticipated that they will to any real extent be appointed?" To those questions I answer quite simply, "Why make provision for them at all?" At the same time I invite the Committee's attention to page 91 of the Bill, lines 35 to 40. The permanent secretary to the Lord Chancellor, who is the permanent head of this immensely powerful department, need no longer be a barrister of not less than 10 years standing, as provided by the Supreme Court Act 1981, Section 88 and Schedule 2, Part I. He can be a layman who has been an advocate for the appropriate period solely in a magistrates' court. But far worse, under paragraph 1(2) he need never have been near a court in his life since a civil servant who has served at least five years in that department qualifies. I imagine that includes from the tea boy upwards.

The penchant towards civil servants without legal qualification acting as judges is again emphasised at page 92, item 9, headed: District judge of the principal registry of the Family Division". A civil servant in that registry who has had a certain length of service now qualifies. At page 93 of the Bill, under item 12, the position of "District probate registrar" is to be open to civil servants without any qualification. Of course, once having arrived, promotion can take them ever upwards and onwards.

We have until now eschewed the continental system of a career judiciary. According to the White Paper, that is no longer to be the case. Paragraph 15.2 says: For these reasons the Green Paper proposes that all those who had held the appropriate advocacy qualifications for suitable lengths of time should be eligible for judicial appointments; and that the judges in a lower court should be eligible for promotion to a higher one on the basis of their judicial experience in the lower court".

I turn finally to circuit judges. These include county court judges and judges who try crime in the circuit courts. They are to be the recipients of a large injection of new civil work from the High Court. That gave rise to paragraph 183 in the Lord Chancellor's review body report, which states: The general weight of the judicial work to be done by Circuit judges on the civil side will move significantly up the scale. At the same time it will be necessary to attract to the Circuit bench candidates of the right standing, with sufficient experience to enable them to take this enhanced civil work. This consideration has led the Review Body to suggest that there should be a substantial upper tier of Circuit judges who would be remunerated at a higher rate".

Hot from the press comes the observations of the Top Salaries Review Body in its 13th report, published last week. At paragraph 59, on page 15, there is this reference to the Lord Chancellor: He regards the circuit bench as a mainstay of the judiciary to which it is vital to attract enough lawyers of the right calibre. Sitting in the crown and county courts and on occasions as judges of the High Court, circuit judges are responsible for hearing nearly all serious criminal cases and a considerable proportion of civil cases. They have a wide-ranging civil and criminal jurisdiction and a great deal of publicity can attach to some of their judgments". There is no sign in this Bill. On the contrary, the circuit judges are to be downgraded. To carry out this added and more demanding work, an upper tier of circuit judges to take responsibility for heavier civil work should be appointed, but that has not yet been suggested. By turning to page 87 of the Bill, the Committee will see that the Government have gone precisely in the reverse direction. Laymen, with the appropriate advocacy qualifications, will be permitted to be circuit judges. A whole new range of office-holders is set out in the schedule. They will be appointed or they will qualify to be the holders of the office of circuit judges.

Under the old provisions which are to be added to, as regards the Courts Act 1971 Part 1 Schedule 2 there were only seven additional office holders who should, by virtue of the legislation, become a circuit judge: the Official Referee; Recorder of Liverpool; Recorder of Manchester; additional judge of the Central Criminal Court; assistant judge of the Mayor's and City of London Court; county court judge and whole-time chairman or deputy chairman of courts of quarter sessions for Greater London, Cheshire, Durham, Kent and Lancashire.

If Members of the Committee now turn to page 87 they will see a wide addition to those who shall also be considered as circuit judges. Not quite half-way there is reference to, Member (excluding the President) of the Lands Tribunal appointed under section 2 of the Lands Tribunal Act 1949". However, as a member of the Lands Tribunal need not be a lawyer at all, but a surveyor—provided he is approved by the Royal Institute —in future there will be a non-lawyer in this important judicial capacity.

Last Tuesday I had the privilege of listening to the Scottish counterpart of this Bill. I heard the speech of my noble and learned friend Lord McCluskey and read it in Hansard. It makes attempts on my part to make contributions to this debate look decidedly timorous. In the Scottish Bill, though there is a provision for laymen to appear as advocates, there is no provision for them to become judges. I wonder why. Perhaps my noble and learned friend the Lord Chancellor will enlighten us when he replies. I beg to move.

11 p.m.

Lord Rawlinson of Ewell

In moving Amendment No. 202C standing in his name, my noble and learned friend has spoken to six other amendments, as he said he would. Some of them are covered by amendments which are in my name and which follow fairly shortly. As he opened the subject so generally, it might be for the convenience of the Committee at this hour if I add my comments as regards the amendment I intend to move, namely, Amendment No. 204A. It deals with the appointment of Lords of Appeal in Ordinary. I make exactly the same comments as my noble and learned friend made about the persons who will in future qualify for appointment. I say quite frankly to the Committee that this country would be a laughing stock if the highest court in this country, the Lords of Appeal in Ordinary, could have appointed to it someone who was not a barrister or a solicitor. It would be absolutely absurd.

It will be said that for the layman to get to that position he will have to go through the advisory committee; he will have to be expert as an advocate; he will have to have some knowledge of the law; and he will have to be bound by the rules of his profession. But let us consider for a moment that here we sit at eleven o'clock at night, a vibrant revising Chamber, dealing with a great constitutional matter and deciding who in the future will be the highest judges in the land. Are we prepared to say, sitting here as a Committee, that they can be laymen? It is quite obvious that they must be persons who are either barristers, or, now, solicitors. I am content that solicitors should be added to the list. They must be persons who have spent their lives in the practice of the law. I say that in respect of Amendment No. 204A. My reasons for saying it are the same as those given by my noble and learned friend Lord Ackner. I vigorously support him in his amendments.

Lord Simon of Glaisdale

The Committee has heard a quite remarkable speech from my noble and learned friend Lord Ackner. It is an absolute tragedy —indeed, a constitutional outrage —that it should have started at twenty minutes before eleven and finished at just before eleven o'clock in a Chamber that is virtually empty, with the television cameras shrouded and with the press gallery, I imagine, conveniently empty. An exceptional burden in the peculiar circumstances of this Bill has fallen on my noble and learned friend. He has no research assistant, but noble Lords have heard from him just now a most remarkable deployment of facts and evidence.

The Committee stage was fixed for three working days after Second Reading. That complied with the letter of the Companion to the Standing Orders but flouted its spirit. Of those three days, one was the day the House rose before Christmas, sitting at 11 a.m. The second day was the day the House reassembled after Christmas. Otherwise there was the recess for anyone working on amendments to the Bill. Looking at that, and bearing in mind the speech we have just heard, I think that noble Lords will all want to pay tribute to what my noble and learned friend has done both in his deployment of the principle that he has sought so strenuously to vouchsafe and in his deployment of the evidence in support of it.

Lord Hutchinson of Lullington

We are on Schedule 7, which contains what has been referred to as a grotesque situation. Perhaps I may ask the noble and learned Lord about the qualifications for appointment as a puisne judge of the High Court in Clause 50(1)(b). He has to have a 10-year qualification. That presumably means in the Chancery, Queen's Bench or Family Division. It does not include the Criminal Division. The situation under the Bill therefore is that if one's practice has been in the criminal courts one cannot qualify for the High Court Bench unless one becomes a circuit judge. That would seem to bar a number of highly distinguished High Court judges at the moment.

Returning to the grotesque situation —the circuit judge qualifications on page 87 —one reads that one qualification is that those persons who have held office under Part IA, as set out on that page, for at least three years qualify to be a circuit judge. Can what one reads be possible? A special commissioner of income tax, an Admiralty registrar, a registrar in bankruptcy, a district probate registrar, after three years will be experts, I suppose, in sentencing offenders, in the understanding of the rules of evidence, the law of contempt, the more esoteric provisions of the Theft Act, the burden of proof, and so forth. Is it really suggested that those persons will be qualified to be circuit judges and to sentence people to imprisonment?

Like the noble and learned Lord, Lord Ackner, I find that the only word that is suitable is "grotesque". When one conies to paragraph 59 and the various persons who hold offices, there is the office of the Director of Public Prosecutions. As the noble and learned Lord has pointed out, once again it is a 10-year general qualification. A person who has a 10-year general qualification will be qualified to be the Director of Public Prosecutions with all the powers which at five minutes past 11 I shall not detail. It is about the most responsible job on the criminal side and that of the liberty of the subject that there is. Again, the situation is almost grotesque.

One could continue through the list. One notices that the president of the Immigration Appeal Tribunal requires a general qualification of seven years, whereas opposite —I shall not bother to give the page —the assessor to the Farriers' Disciplinary Committee, which I am sure is a crucial appointment, must have a qualification of 10 years. Again, one wonders why the one is so much more important than the other. So it goes on. A justice's clerk needs a qualification of only five years' practice in the magistrates' court and need not be a lawyer. He is the man who advises every bench of magistrates, who try over 90 per cent. of crime in this country, and he does not have to be a qualified lawyer. Grotesque is the only word that one can apply.

The Lord Chancellor

The general qualification that applies at present to many judicial offices is of being, for example, a solicitor with a certain number of years' standing. There is no qualification in quite a number of these instances in respect of any particular experience, though for solicitors there is presently a requirement to serve as recorder for a certain time. But the basic qualification is the first matter.

So far as qualification is concerned, the general principle that we have adopted in preparing this schedule is that, first, a right of audience in the court in question will qualify so long as it is held for a particular time, and that, secondly, there is experience in a court below which would give a qualification for the court above.

My noble and learned friend Lord Ackner, in a speech to which I am very happy to pay tribute along with my noble and learned friend Lord Simon of Glaisdale, because he set the matter out very plainly and clearly, has repeatedly referred to a lay person qualifying. I am not absolutely certain that I know precisely what he means by "lay" in that situation. But a person who has a general qualification will be somebody who has satisfied the training qualifications which are approved by the senior judiciary and the Lord Chancellor as qualifications appropriate for pleading in the courts referred to in the general qualifications.

I have no reason to suppose that the qualifications will not be appropriate to that work. The precise nature of the qualifications is a matter for judgment in the light of developments. But that is surely the highest possible assurance that people who are qualified to have rights of audience there described are people who are properly qualified in terms of regulations, the standards of which have been set.

The noble Lord, Lord Hutchinson of Lullington, mentioned first the question of the High Court qualification. It is right to point out that a High Court qualification exists if a person has a right of audience in relation to all proceedings in the High Court. A barrister under the arrangements in this Bill will have a right of audience in all parts of the Supreme Court because on satisfying the qualifications he will have that.

The point about a High Court qualification is that in future there might be a person who was qualified in the High Court only, a person who wished to confine himself to civil proceedings and not to handle work in the remainder of the Supreme Court.

The idea that the right of audience in the High Court would not of itself be an appropriate qualification is, in my judgment, grotesque. Surely those who will be entitled to practise in the High Court can be regarded as people judged properly qualified by the senior judiciary and the Lord Chancellor. The principle which applies to all the cases to which my noble and learned friend Lord Ackner referred, and which have been referred to by the noble Lord, Lord Hutchinson of Lullington, is the general principle that I have described; namely, that qualification of judicial office in a court below will, generally speaking, qualify for the immediately higher court.

It does not follow by any means that a person who has these qualifications is suitable. All barristers are theoretically qualified for appointment to the High Court at present on a certain number of years' standing. It does not at all follow that everyone would be suitable. But these seem to be defensible qualifications in principle. I hope in the light of that explanation your Lordships will see that the principles on which these qualifications are constructed are sound principles which should be affirmed.

11.15 p.m.

Lord Ackner

Before my noble and learned friend sits down, perhaps he would be kind enough to assist me on two matters. When I used the word "lay" I do not mean a lawyer. The two questions on whicn I should be grateful for his assistance are these. Is there any evidence to indicate that there is any demand in this country now, or anticipated in the immediate future, for non-lawyers to be judges? Secondly, perhaps he could answer the question which I specifically raised in my speech: why is this not also being provided for in Scotland if it is a good idea? We have just had a modified Scottish contingency fee imposed upon us.

The Lord Chancellor

I have sought to explain that we have put forward a system which depends on rights of audience. That is the way in which the matter has developed. We have simply provided a framework under which those other than members of the Law Society and the Bar might qualify for rights of audience or the right to conduct litigation.

There is no evidence whatever that if a person is properly qualified to conduct litigation or to have a right of audience in the High Court, that person would not be reasonably qualified to be a judge in that court. He might not be suitable for other reasons. Therefore in my judgment it is right that when one is making provision for a possibility which may arise for people with qualifications to have rights of audience other than those people who are members of the Law Society and the Bar, their qualifications to act as judges should also be recognised.

Lord Rawlinson of Ewell

The noble and learned Lord has not replied to the point about Scottish law. Why is the Scottish system to be different? That question was specifically asked by my noble and learned friend and we should be grateful if the noble and learned Lord the Lord Chancellor could enlighten us as to why we are selected in this particular way in England and Wales when Scotland is still allowed to have lawyers as judges.

The Lord Chancellor

The circumstances differ in some respects. The most important difference is that the arrangements here for the enlargement of rights of audience are a good deal more elaborate than the arrangements which are provided in Scotland, although the safeguards are very much the same. The principles which we have adopted are the same as those which underlie the Scottish legislation.

Lord Hutchinson of Lullington

Perhaps I may put the question again. The qualification for a High Court judge, a puisne judge, is a 10-year High Court qualification within the meaning of Section 50 of the Courts and Legal Services Act. "High Court qualification" means having a right of audience in relation to all proceedings in the High Court. That is in the Chancery Division, the Queen's Bench or the Family Division. Suppose that one's practice was not in the High Court but in the Criminal Division. That would mean that in the future such an advocate could not become a High Court judge. Was I correct in my reading of these provisions?

The Lord Chancellor

A Supreme Court qualification means that a person has a right of audience in relation to all proceedings in the Supreme Court; that would be a sufficient qualification. If a person were a barrister under the present arrangement, he would have the right of audience in relation to all proceedings in the Supreme Court and be eligible. The noble Lord was suggesting that many people who are presently High Court judges would not be qualified. However, that is not correct on the basis that I have just explained to him. The idea is that if a person had purely a High Court qualification in the future he would not be eligible by reason of that alone to sit as a Supreme Court judge in the Crown Court.

Lord Hutchinson of Lullington

With the greatest possible respect, I should draw the attention of the Committee to Clause 50(1)(b), which states: (qualification for appointment as puisne judge of the High Court) for the words 'unless he is a barrister of at least ten years' standing' there shall be substituted — 'unless —

1. (i) he has a 10-year High Court qualification' ".

That is not, with the greatest respect, a Supreme Court qualification but a High Court qualification. That is the point that I am making. The words used mention a, 10 year High Court qualification". A High Court qualification involves, a right of audience in relation to all proceedings in the High Court". That does not include anything other than the Chancery Division, the Queen's Bench Division and the Family Division. What is the position of an advocate whose practice is in the Criminal Division? Does that mean that he cannot become a High Court judge? That is the question I am asking.

The Lord Chancellor

The answer on this point depends whether he has, a right of audience in relation to all proceedings in the High Court". Under the arrangements which presently subsist and which are likely to subsist for some time to come, the person who has a criminal practice in the Supreme Court will also have, a right of audience in relation to all proceedings in the High Court". However, the question concerns whether it is right that a person who is to be a Lord Justice of Appeal should be so unless he has a, 10 year High Court qualification", within the meaning of this clause. I suggest to the Committee that a person who will have a jurisdiction in the Court of Appeal should be qualified in all proceedings in the High Court.

Lord Renton

But that would mean (would it not?) that somebody who had never appeared before the Court of Appeal could be made a Lord Justice.

The Lord Chancellor

That is technically the position at the present moment.

Lord Ackner

At this late hour the Committee would not look upon it as respectful for me to divide it. I am therefore left with no alternative but to withdraw my amendment. However, I reserve all proper rights to return to my amendments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 203 and 204 not moved.]

Clause 50 agreed to.

Schedule 7 [Judicial and Other Appointments]:

The Deputy Chairman of Committees (Lord Grantchester)

If Amendment No. 204A is agreed to I cannot call Amendment No. 204AA. I now call Amendment No. 204A.

Lord Rawlinson of Ewell moved Amendment No. 204A: Page 80, leave out lines 12 to 21.

The noble and learned Lord said: I have already touched on this amendment. We come now to the qualifications for a Lord of Appeal in Ordinary. Under the Appellate Jurisdiction Act 1876 a Lord of Appeal in Ordinary must have been for not less than 15 years a practising (that word is important), barrister in England or Ireland, or a practising advocate in Scotland". As the Committee has accepted that the solicitors' branch should be eligible for judicial appointments—I fully support that —that would mean that the same principle should have been left as it was. As we all know, that should be a proper qualification for the Supreme Court, the highest court in the land. It should be a proper qualification for the judges, some of whom have participated in our debate.

I can only repeat that it will make us a laughing-stock if we do not confine Lords of Appeal in Ordinary to persons who are qualified lawyers, by training and practice, barristers or solicitors. I beg the noble and learned Lord at least to have regard to the reputation of this country. There should not be the possibility that the highest judges of the land could be persons who are not either barristers or solicitors. I beg to move.

The Lord Chancellor

The persons who are qualified under the schedule to be Lords of Appeal in Ordinary are those who have a right of audience in relation to all proceedings in the Supreme Court. I submit that, having regard to the safeguards which are required in that respect, a person with Supreme Court qualifications is indeed appropriate to be regarded as being eligible for appointment to the highest tribunal in the land as someone who has been regarded, in terms of the qualifications which have been approved by the senior judiciary and the Lord Chancellor, as having a right of audience in the Supreme Court.

Lord Rawlinson of Ewell

It is because we have built up this elaborate, and to some of us absurd, procedure that we find ourselves in this position. My noble and learned friend cannot deny that under the provisions that he proposes, it will be said that the highest judges of this land could be people who are neither barristers nor solicitors, or lawyers at all. I say that that makes this country a laughing-stock.

The Lord Chancellor

With great respect, I do not accept that they would not have sufficient qualification in law to be properly regarded as advocates in all branches of the Supreme Court. Whether one calls them a barrister or a solicitor is not the issue. The question is whether they have the qualifications that are required under the regulations approved by the senior judiciary and the Lord Chancellor to appear in the Supreme Court in all its aspects.

Lord Rawlinson of Ewell

People will ask, "What are the qualifications for your Supreme Court? What are the qualifications of your Lords of Appeal in Ordinary?" One will say, "They are people who have some qualification. They may be surveyors who have been trained in this particular way. They are very good people and they have had some practice in the High Court". "Do you mean to say", we shall be asked, "that they are not persons who have been admitted by the Law Society or called to the Bar and recognised as lawyers?" We shall have to say that that is not the case because of the procedure that has been built up in the Bill. It is not good enough. We should say that our highest judges must have professional qualifications.

Lord Hutchinson of Lullington

I believe that the matter should be pursued further. Hereafter is the situation to be that there will be lawyers who qualify as barristers, lawyers who qualify as solicitors and a category which covers people who are not lawyers but have some other qualification which entitles them to practise in a court of law? Therefore, when one says "Who is so and so, who is Lord X or Lord Y?" one will be told, "He is a Law Lord". If one asks whether he was a barrister or solicitor the answer will be, no, he was someone who qualified to be an advocate in various courts. Is that really to be the situation in the future regarding the qualifications for the greatest judicial office in the land? I find it almost unbelievable.

11.30 p.m.

The Lord Chancellor

The short answer is that when one mentions a barrister to some people abroad, they do not know exactly what he is. I have no doubt that many do, but not everyone does. It is perfectly reasonable to ask what Lord X was, to which the reply might be that he was a distinguished and qualified Supreme Court advocate for 20 years. I should have thought that that was a perfectly reasonable answer which would satisfy the intelligent and inquiring observer.

Lord Hutchinson of Lullington

I find it particularly sad that in discussing the Bill we have reached the stage at which it is suggested by the noble and learned Lord the Lord Chancellor that a normal person would have no idea what a barrister is.

The Lord Chancellor

I did not say that. I am sorry that the noble Lord has to turn what I said to something else. I said that some people abroad do not know what a barrister is. I have met some people who did not know what an advocate was; that was my professional qualification. I certainly did not indicate that the ordinary person did not know what a barrister was. I should have thought that a Supreme Court advocate was a perfectly reasonable and intelligible description.

Lord Ackner

In the debate on the Law Reform (Miscellaneous Provisions) (Scotland) Bill on 30th January, my noble and learned friend Lord McCluskey was able to give some assistance. He said: Any professional or other body can apply for rights of audience in any court for its members". He was dealing merely with advocates because the provision does not apply to judges. He went on to say: That applies to the Royal Institute of British Architects, the Scottish Citizens' Advice Bureau, the Orange Lodge, the Showman's Guild and the Licensed Victuallers Association, all of which are from time to time concerned in litigation in our higher courts."—[Official Report, 30/1/90; col. 189.] There is no doubt that, with a little research, we can provide further and even better particulars, but that is some idea of what looms large in the future. Hence my phrase of a glimmer at twilight.

Lord Rawlinson of Ewell

It is half past eleven. All I can say is that I wonder whether it is worth noble Lords continuing the debate on the Bill. I should have divided the Committee if it had been reasonable so that we could have obtained a decision. I found it not only grotesque, as the noble Lord, Lord Hutchinson, said, but shaming that we have got ourselves into this position when our aim is quite simple. We want to provide access to more people who are qualified to provide the services. We should set that aim out straight. Judges should be drawn from barristers and solicitors. We have been playing with words. He does not need sympathy from me, but I feel sorry for the noble and learned Lord the Lord Chancellor that we have got into this position. It is with a desperate feeling of shame that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 204AA to 204G not moved.]

Schedule 7 agreed to.

Clause 51 [Presiding Judges]:

The Lord Chancellor had given notice of his intention to move Amendment No. 204H: Page 40, line 7, leave out ("two") and insert ("one or more").

The noble and learned Lord said: I do not propose to move the amendment, although I intend to come back to it on Report. As it stands, the clause imposes a requirement to appoint two presiding judges to each circuit. What is needed is flexibility to appoint more if necessary. On reflection I prefer to express the power in that way. I shall not therefore move the amendment.

[Amendment No. 204H not moved.]

[Amendments No. 205 and 206 not moved.]

Lord Ackner moved Amendment No. 206ZA: Page 40, line 20, after ("Chancellor") insert ("with the agreement of the Lord Chief Justice").

The noble and learned Lord said: This is such a small amendment that I can only assume that through some oversight the words that I suggest —namely, with the agreement of the Lord Chief Justice" — at line 20 have just been left out. The clause deals with presiding judges. Presiding judges were an invention of the Beeching Commission. They have hitherto been appointed by the Chief Justice because he is responsible for the judicial administration as distinct from the courts administration. Accordingly one finds in Clause 51(3): Any appointment [of a presiding judge] … shall be made by the Lord Chief Justice with the agreement of the Lord Chancellor".

The areas or circuits are then set out, and after identifying the six circuits subsection (3) continues: or such other areas of England and Wales as the Lord Chancellor may from time to time direct". I ask myself the question: why not again with the agreement of the Lord Chief Justice? In the absence of an answer, I can only assume that that phrase has dropped out through a typing error. I beg to move.

The Lord Chancellor

The situation is that obviously if there were to be any change in the circuits the Lord Chief Justice would be consulted and so of course would the other heads of division, because they too would have an interest in this matter since the circuits also deal —and I hope will deal even more—with specialist work not only in the south-eastern circuit in the Royal Courts of Justice. The situation is that, if there were to be any changes in the circuits, a great deal of consultation would require to be held with others: the local law societies, the Bar, the circuit leaders, and so on.

However, this is a matter which I am perfectly prepared to consider further in the light of the fact that I shall reconsider the precise way in which this provision is framed. I had understood the matter to be right, as it was originally put forward, until it was found that it was desired to have perhaps a third presiding judge in one of the circuits. That is the reason for the change, but I am happy to consider this suggestion.

Lord Ackner

In view of the noble and learned Lord's helpful observations, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 51 agreed to.

Clause 52 [District judges]:

Lord Meston moved amendment No. 206A: Page 40, line 41, at end insert ("and in subsections (3) to (6) of this section, the expression "district judge" shall include district judges of the Principal Registry of the Family Division").

The noble Lord said: In moving this amendment I should like to speak also to Amendment No. 210, and I shall do so as swiftly as I can. Clause 52 merges the offices of county court registrar and district registrar of the High Court into the new office of district judge (or DJ, to which no doubt they look forward to being abbreviated). The clause also makes the registrars of the principal registry of the Family Division into district judges of the principal registry.

As the Committee may well appreciate, the principal registry has both a High Court and a county court jurisdiction. For some reason the powers which are extended by Clause 52 to district judges outside the principal registry are not conferred by this clause on district judges within the principal registry. The Committee will be aware that the principal registry deals with cases involving children and family finance which can become highly charged with emotion and can need a measure of firm control. I therefore venture to suggest that district judges of the principal registry should have the same powers as their colleagues elsewhere. I also suggest that it is proper to indicate the status of the district judges in the principal registry by extending to them the judicial oath. I beg to move.

The Lord Chancellor

The intention of the noble Lord, Lord Meston, and the intention that I have are the same. Clause 52(2) states: The office of registrar of the principal registry of the Family Division of the High Court shall become the office of district judge of the principal registry of the Family Division". That is a particular district judge; and he is intended to be included. But in view of the fact that the noble Lord has suggested that clarification is required, I shall certainly consider whether we can achieve it.

Lord Meston

I am very grateful for that indication. It seems to be designated as a distinct office under the Bill in Clause 52 and in the schedule. On the basis that it will be considered, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 52 shall stand part of the Bill?

Lord Simon of Glaisdale

Perhaps I may ask my noble and learned friend a question about subsection (2) which deals with the principal registry of the Family Division. As I understand it, first, the Bill effects a change of nomenclature from registrar to district judge. Secondly, it gives the right to commit for contempt. I cannot see —I shall be corrected —that anything else is given.

I wish to draw attention to what seems an anomaly. As I read it, the masters of the Queen's Bench Division are not district judges and do not have power to commit for contempt. Why is that distinction made? I do not think the masters of the Chancery Division are made district judges, nor are they given any power to commit for contempt. I do not know what the position is about the registrars of the Chancery Division, if I still have the nomenclature right.

Has there been any request by the registrars of the Family Division that they shall be given power to commit for contempt? If the masters of the Queen's Bench Division do not need such power, why should the registrars of the Family Division need it? I practised before them for a number of years and was responsible for them for a number of years. I never came across any instance where there was any cause for them to have the right to commit for contempt such as seems to be given to them in this clause.

I desire to say this because it relates to something that my noble and learned friend Lord Ackner said recently. Of the registrars of the Family Division in my time —then the principal probate registry —half were lawyers, mainly barristers. There was one distinguished litigating solicitor appointed. The other half were probate clerks from the registry. When I was president, I was asked to hand over the patronage of appointment because even then the Lord Chancellor's Department had started trying to collect patronage although on nothing like the scale vouchsafed by this Bill. I was willing to do so, but I received an undertaking from Lord Gardiner, the Lord Chancellor of the time, that he would continue to have half the registrars appointed from the Bar or solicitors, and the other half continuing to be appointed from the registry clerks. I believe that that is a proper avenue of promotion to be retained. He gave that undertaking, but is it still observed? I imagine that it is.

If so, it means that probate clerks, expert in the administration of probate work, can become district judges with all the other avenues thereafter open. My noble and learned friend referred to them, as did the noble Lord, Lord Hutchinson. I should be grateful if the Lord Chancellor could clear my mind on this point.

11.45 p.m.

The Lord Chancellor

The history of the matter is that the Civil Justice Review suggested that the title "registrar" was open to misconstruction and that people were treating the registrars, who are holders of judicial office, as though they were the same as the people who dealt with births, marriages and deaths. That shows that sometimes even the present nomenclature is not beyond some ambiguity. The Civil Justice Review recommended that the title "registrar" should be changed to a title incorporating the word "judge".

I canvassed as many different variations as I could think of. The ultimate title which appeared to be best, and which most commended itself to the registrars, was that of "district judge". The question is whether one should differentiate between the various registrars. After consideration, the answer appeared to be that one should not. The registrars in the district registries, the county court and the principal registry of the Family Division should have that office. I believe it to be right that if they have the office of a district judge they should have this power.

The masters were consulted and their attitude to the question varied. It may be the case that we shall wish to include them. The title "master" has been regarded as distinctive and there is no risk of confusion between it and other possible types of master, as there appeared to be in the case of the registrars. That is the reason for the present situation.

At present four out of the 13 Family Division registrars are not members of the Bar; the remaining nine are members of the Bar. Therefore, the undertaking given by my noble and learned predecessor to my noble and learned friend Lord Simon of Glaisdale is at present fully implemented. The principle behind my earlier comments also applies in this case; that is, if well performed the service in this office, which is in the nature of performing judicial functions, might well indicate the quality which would entitle the person to be considered for promotion.

Clause 52 agreed to.

Clause 53 agreed to.

Clause 54 [Registrar of Criminal Appeals]:

Lord Simon of Glaisdale had given notice of his intention to move Amendment No. 206B: Page 42, line 10, leave out ("with the approval of the Treasury").

The noble and learned Lord said: The amendment raises the same question as was discussed very late at night when the noble Lord, Lord Renton, moved a similar amendment on my behalf. It concerns very much the question of how far the Government are at all serious about trying to clear legislation of unnecessary phrases. However, it is now well over one and three-quarter hours beyond the latest time at which your Lordships normally sit. Therefore, I believe that it is better to raise again this matter on Report and I do not move this amendment or the following one.

[Amendment No. 206B not moved.]

Clause 54 agreed to.

Clauses 55 and 56 agreed to.

Clause 57 [Transfer of accrued rights to and from judicial pension schemes]:

On Question, Whether Clause 57 shall stand part of the Bill?

Lord Ackner

I gave notice that I wanted to make a small intervention, stimulated by nostalgic recollections of two old friends. Their position was that they had been county court judges. There were no circuit judges in those days. They were appointed to the county court Bench aged about 52 and were promoted to the High Court Bench after about 12 years which brings them to about the age of 64 or 65.

Their pension position then was, as it is now, lamentable. They could not continue, having reached 54, to be a High Court judge for 15 years because that would take them beyond the age of 75 and thus qualify for a High Court pension of half salary. All they could do was to serve 11 years as a High Court judge and receive eleven fifteenths, or receive a full county court judge pension because they would have served their full period.

That caused me to make inquiries as to why that was. There is rather a venomous Statutory Instrument No. 376 entitled the Superannuation Judicial Offices Aggregation Services Rule 1987 and I am happy to discover, again hot from the press, that that point was picked up in the 13th report of the Top Salaries Review Body published last week at paragraph 73 which states: Consideration might also be given to the position of those who are offered promotion within the judiciary from the circuit judge to the High Court judge. In their case they are restricted to taking a pension based either on years of service and final salary in the higher office or on the aggregated years of service at both levels and the salary on retirement for the lower office. We feel strongly that as for High Court judges who are promoted to the Court of Appeal", and I may add, Court of Appeal judges who are appointed to the House of Lords, all years of service in the judiciary should count for a pension based upon final salary in payment to the individual at the time of retirement". That seems a matter which should be looked into, and I raise that now so that thought may be given to it before Report stage.

The Lord Chancellor

I am grateful to my noble and learned friend for raising this matter. I regret that it is most unlikely that I will be able to deal with it before Report stage in any comprehensive way. I propose to say something about the matter in answer to the amendments that my noble friend Lord Coleraine has tabled. They raise the same sort of issue. If my noble and learned friend can wait until then I shall avoid repeating myself.

Clause 57 agreed to.

Clause 58 [Voluntary contributions]:

[Amendment No. 206C not moved.]

Clause 58 agreed to.

Clause 59 [Period of service to qualify for certain superannuation benefits]:

Lord Coleraine moved Amendment No. 206D: Page 45, line 1, leave out subsection (2) and insert — (" (2) For subsections (1), (2) and (3) of section 7 of the Act of 1981 (rate of pension payable to a stipendiary magistrate) there shall be substituted — (1) A stipendiary magistrate in England or Wales may on the recommendation of the Lord Chancellor be granted a pension —

1. (a) if he retires after 15 years service and at the time of his retirement he has attained the age of 65 years, or
2. (b) if at the time of his retirement he has attained the age of 70 years, or
3. (c) the Lord Chancellor is satisfied by means of a medical certificate that by reason of infirmity of mind or body he is incapable of discharging the duties of his office, and that the incapacity is likely to be permanent.

(2) The annual rate of pension payable under this section to a person retiring after not less than 15 years service shall not exceed one half of his last annual salary. (3) The annual rate of pension payable under this section to a person retiring after less than 15 years service shall not exceed—

1. (a) if the period of service does not amount to 5 years, 6/40ths of his last annual salary,
2. (b) if the period of service amounts to 5 or more, one quarter of that salary plus 1/40th for each completed year of service exceeding 5." ")

The noble Lord said: I speak also to Amendment No. 206E. The amendments would change the structure of pension provisions applicable to the lower judiciary in order to bring it more into line with the structure applicable to the higher judiciary and the circuit judges. In particular I see the need to shorten the present length of service required before a full pension is payable. This is on the broad principle that there may be good reason why the lower judiciary should receive smaller pensions than their seniors but there seems to be no reason in fairness or fair dealing why they should be required to serve longer for their smaller pensions.

There are, as it will be my principal purpose to show, some compelling reasons not unconnected with the administration of justice why these amendments should be accepted. The amendments are intended to ensure that the right calibre of persons with appropriate professional experience continue to be recruited to the lower judiciary and that there should be no financial reason compelling that person to remain in post when he, his colleagues and those who appear before him, may all be agreed that he should be out at pasture.

The body of persons to whom I refer as the "lower judiciary" is to be found in three courts and can thus be divided into three categories. In the High Court there are the masters. In the county court there are the registrars and assistant registrars, soon to be retitled "district judges" and so referred to in my second amendment. Thirdly, there are the stipendiary magistrates in the magistrates' court, who are the subject of my first amendment.

Common to all these members of the lower judiciary —I do not know how many they number but there must be 300 of them —is the fact that they have traditionally been recruited from the ranks of the practising legal profession at around the age of 50 years. That applies also to circuit and High Court Benches. Another factor they have in common with circuit and High Court Benches is that their full pension entitlement is half their final salary and that in the normal way they must have served 15 years, with the exception of stipendiary magistrates, and reached at least the age of 65 before achieving any pension at all. There is no reduced pension payable on voluntary retirement at an age of under 65.

For retirement with less than 15 years' service—at 72 or earlier on the grounds of ill health —circuit judges are entitled to a reduced pension. Masters and district judges are also entitled to a reduced pension, but only if they have served five years. On the other hand, stipendiary magistrates with at least five years' service may now take early retirement at 65 instead of 72.

My amendments are intended to remove the requirement that at least five years should be served by the lower judiciary before there is entitlement to a reduced pension in order to put them on the same footing as the circuit judges in this respect and also to increase, with the same intention, the fractions of full pensions which will have been earned for each year of service.

The amendments have the effect of removing from stipendiary magistrates the slight anomalous advantage that they can take voluntary retirement on a reduced pension after five years' service. The whole arrangement is made consistent with the circuit Bench. This is a matter to which we can return if my noble and learned friend accepts the amendment or if the Committee sees fit to do so.

The main thrust of my arguments concerning these amendments is intended to be directed at the provisions related to the length of service necessary to qualify for full pension. The position of the lower judiciary is undesirably anomalous in that a full pension is payable only after 20 years' service in their case, but it is earned after 15 years' service in the case of High Court and circuit court judges.

That has the effect that, on appointment at the age of 50, a High Court or a circuit court judge may look to retire at the age of 65 on full pension, but a member of the lower judiciary will have to wait until he is 70 before being able to retire on full pension. This period of 20 years was reduced from 25 years as long ago as 1960 in the case of the High Court masters. Even then Sir Frank Soskice, in another place, pointed out how unsatisfactory it was that there should be a 20-year rule when a 15-year rule applied to county court judges. He called for the 15-year rule to apply to High Court masters. The Attorney-General said that he would look at the point, but the matter proceeded no further.

Much more recently the Top Salaries Review Body in its reports in 1982 and 1985 drew attention to this situation. It recognised that it was unsatisfactory. It recommended that the situation be dealt with by legislation and not by adjusting pay differentials. It urged, as I do, that pension arrangements be rationalised.

I feel sure that it is only because the lower judiciary are long-standing offices that we still have the 20-year rule. I feel sure that if they were a new creation the 15-year rule would apply to them. That is borne out by the fact that the more recently conceived chairmen of industrial tribunals are covered by the 15-year rule. I see harm being done to the administration of justice by the continuance of this rule. The supply of good, practising barristers and solicitors in middle life who are prepared to take on the relatively unglamorous but vital work of the lower judiciary is, I am told, drying up both in the face of comparably greater earnings outside in the professions and in the face of this altogether unreasonable retention of the 20-year rule.

Like the noble and learned Lord, Lord Ackner, I wish to read from the report of the Top Salaries Review Body which was published last week. The report states: In past reports we have also referred to the discrepancies in pension arrangements for different judicial posts within the same country. For example, Stipendiary Magistrates in England are required to serve for 20 years for a full pension. It has been put to us strongly that this is a particular disincentive to recruitment to these posts and not in the public interest. Our judicial sub-committee has taken the view in the past that the proper way to deal with pensions anomalies which were seen as clearly inequitable was by amending the legislation concerned, not by adjusting salary relativities. We have urged in the past, as in our reports in 1982 and 1985, that the present pension anomalies should be removed as soon as possible, but no such changes have been made". That is what I am asking for this evening. I beg to move.

12 midnight.

Lord Irvine of Lairg

I would like to bring the support of these Benches to both these amendments. I focus on Amendment No. 206E which is designed, among other things, as the noble Lord said, to remove an inequality which the High Court masters suffer in their pension rights. They have to toil on for 20 years before they qualify for a full pension, but not so circuit judges or chairmen of tribunals. They have to complete only 15 years. So the noble Lord asks why should not the masters qualify for full pension after 15 years? It is too hard to require them to work on after 15 years, regardless of health, for a further five years in order to qualify for full pension.

I should have thought that High Court masters bring to their office skills and experience probably as great as are required of circuit judges or tribunal chairmen. They require knowledge of the civil law over the widest field to handle the huge variety of work that comes before them. Their job is arduous and their jurisdiction is important. They can, for example, give summary judgment —that is, without a trial —in claims involving large sums of money. That is to mention one of their other many important functions.

I cannot think of any ground on which they could be regarded as judges whose judicial role is inferior to that of circuit judges or chairmen of tribunals in the sense of the nature and the difficulty of the work they do, the skills and experience they provide or the market value they have considered as legal practitioners at the time of recruitment. I dare say that we may be told, in accordance with the law of unright time or occasion, that this Bill is not the appropriate place or this is not the appropriate time to do something to remedy the anomaly to which the amendments call attention. But I wonder whether in replying to the amendments the noble and learned Lord can say that he agrees in principle that the inferior pension rights of masters and others is an anomaly and that he is in favour of taking steps on some other and suitable (and it is to be hoped not too far distant) legislative occasion, if this occasion is inappropriate, to remedy the inequity and the anomaly.

Lord Benson

I am anxious to support the amendment. However, I do not want to go through all the reasons as that would take a little time. I understood from what the noble and learned Lord the Lord Chancellor said a few moments ago in relation to another amendment that he would look into this matter. If that is the case it would save time if he could help us on that point.

The Lord Chancellor

I am grateful to the noble Lord. I have sought to bring forward in Clauses 57, 58 and 59 and Schedule 9 the necessary amendments to the judicial pensions schemes, which are generally speaking in primary legislation, to bring them into line with the requirements of the Social Security Acts of 1985 and 1986. The judicial pensions schemes are extremely complicated, as anyone who has tried to understand them knows. They carry a good number of difficulties for those who have to try to make out their rights under them.

The situation calls for radical examination of pension arrangements. This is particularly clear in the light of the latest Top Salaries Review Body report in relation to pension law and practice generally. This is not by any means a matter that one can deal with briefly. I have already had some preliminary contact with the difficulties involved. But I can inform the Committee that along with my officials I hope to undertake such an exercise within the next few months in the hope that we shall be able to come forward with a revised scheme as soon as legislative time permits. It is hard for me to say how soon that may be, but we certainly intend to go into the detailed planning of the structure as soon as possible—within the next few months is what I have in mind. It is bound to take some time to do that, but I assure the Committee that there will be no unnecessary delay although some delay is inevitable because of the nature of the work that has to be done. I hope that that is the type of indication for which the noble Lord, Lord Irvine of Lairg, was asking and I give it in answer to the amendment tabled by my noble and learned friend Lord Ackner, and my noble friend Lord Coleraine, supported as they have been.

Lord Renton

I am sure that we are all most grateful to my noble and learned friend the Lord Chancellor. There is only one point that should be added to what has already been said and which he may wish to bear in mind when giving further thought to the matter. It is that broadly speaking people are not appointed as stipendiary magistrates or masters of the High Court until they have reached the age of 50 or more. That is the usual practice.

Viscount Dilhorne

Perhaps I may assist the Committee. I believe that the last two members to be appointed as masters were aged 54 and 55. It was nearly 29½ years ago on 11th November 1960, when my father, as Her Majesty's Attorney-General, moved the Second Reading of the Administration of Justice (Judges and Pensions) Bill. As my noble and learned friend said, during the course of the Bill the eminent lawyer Sir Frank Soskice vigorously, but in vain, tried to convince my father that stipendiary magistrates, High Court masters and the lesser judiciary should qualify at 15 years. He was partly successful because I understand that my father gave way from 25 to 20 years. That was 29½ years ago. I hope that within the next three months my noble and learned friend the Lord Chancellor will be able to see whether all the judges, lesser and higher, can be on the same pension basis. If he cannot, I shall look forward to hearing why there should be what seems to me, in a rather simple way, to be a distinction of some unfairness.

Lord Coleraine

I have listened to what my noble and learned friend has said. I wonder whether he feels that at the end of his review he will be in a position to introduce the primary legislation that the provision would require, and when it might happen, because these occasions do not happen all that often. This seems to be one of the times when such a rationalisation could take place.

The Lord Chancellor

As I have said, the first thing to do is to think out what the scheme should be, which is an onerous task, as I am sure my noble friend appreciates. Anything to do with pension schemes is complicated, and this one is particularly so because there is a wide variety of anomalies, some of which have been touched upon.

I do not envisage a timescale of 29½ years, but the timescale for the review will at the very least be a matter of some months, as I have said. I hope to be able to bring forward legislation when legislative time permits thereafter. I hope that it will not be too long deferred. My noble friend will appreciate, as I am sure the Committee does, that it is not appropriate for me to try to forecast when it might come forward. The Committee can take it that I shall do my best to bring it forward as quickly as I can.

Lord Coleraine

Some months is quick, but it is what comes after that will be of interest to us all ultimately. It is clear that my noble and learned friend is fully appraised of the injustice and of the unsatisfactory effect that the provision of judicial pensions has on recruitment, to mention just one point. In the circumstances, at this time of night the best thing that I can do is ask the Committee for leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 206E not moved.]

Clause 59 agreed to.

Schedules 8 and 9 agreed to.

Clause 60 agreed to.

Clause 61 [Commencement; expiry and replacement of practising certificates]:

[Amendment No. 207 not moved.]

Clause 61 agreed to.

Clauses 62 to 67 agreed to.

12.15 a.m.

Lord Byron moved Amendment No. 207ZA: Before Clause 68, insert the following new clause:

("Power of parties in certain cases to supply vacancy.

. —(1) For section 7 of the Arbitration Act 1950 (power of parties in certain cases to supply vacancy) there shall be substituted—

"Power of parties in certain cases to supply vacancy.

7. Where an arbitration agreement provides that the reference shall be to two arbitrators, one to be appointed by each party, or that the reference shall be to three arbitrators, one to be appointed by each party and the third to be appointed by the two appointed by the parties or in some other manner specified in the agreement then, unless a contrary intention is expressed therein —

1. (a) if either of the appointed arbitrators refuses to act, or in incapable of acting, or dies, the party who appointed him may appoint a new arbitrator in his place;
2. (b) if, on such a reference, one party fails to appoint an arbitrator, either originally, or by way of substitution as aforesaid, for seven clear days after the other party having appointed his arbitrator, has served the party making default with notice to make the appointment, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference and his award shall be binding on both parties as if he had been appointed by consent:

Provided that the High Court or a judge thereof may set aside any appointment made in pursuance of this section.

(2) Section 58 of the Administration of Justice Act 1985 shall cease to have effect." ").

The noble Lord said: We now come to that part of the Bill which deals with the law of arbitration. I hesitate to introduce a rather technical amendment at 15 minutes past midnight, and I shall do so as quickly as I can.

The purpose of the amendment which stands in my name is to substitute for the existing Section 7 of the Arbitration Act 1950 a new Section 7, which will apply not only where the reference is to two arbitrators but also where the reference is to three arbitrators. Section 7 deals with the situation when one party fails to appoint an arbitrator and it allows the other party, in certain circumstances, to appoint his own arbitrator as sole arbitrator. It is a valuable procedure which entails the minimum of delay and expense in obtaining a properly constituted tribunal in the circumstances where one party, after due notice, fails to appoint his own arbitrator. I have written to the noble and learned Lord the Lord Chancellor on this point and I can avoid therefore going into too much detail now, or into the history of how the law comes to be in the state it is in now.

To put it very simply, there are two separate procedures laid down in the 1950 Act. If the arbitration reference is to two arbitrators and an umpire then, if the opposing party fails or refuses to appoint his arbitrator, you use the Section 7 procedure to appoint your arbitrator as sole arbitrator. However, if the arbitration reference is to three arbitrators, then the Section 7 procedure is not available and you have to use what is now Section 10(3) of the Arbitration Act 1950, as inserted by Section 58 of the Administration of Justice Act 1985.

The purpose of my amendment is to make the Section 7 procedure available in both cases. There is no logical reason why different procedures should apply, depending on whether the arbitration reference refers to two arbitrators or to three arbitrators. Both forms are in widespread use. I believe that the Section 7 procedure has proved to be speedy and efficient over many years and there is no good reason for laying down a different procedure which makes necessary an application to the court.

Moreover, there does not seem to be any good reason why, if one party refuses to appoint an arbitrator, the other party should be encumbered with a tribunal of three arbitrators which he will be responsible for paying for. If a party is refusing to appoint an arbitrator, the likelihood is that he will also seek to avoid enforcement of any award, leaving the original party to pick up the bill for all three arbitrators.

I am aware that the procedure under Section 7 is against the international trend with regard to appointing an arbitrator in default and it is not, for instance, the procedure which was adopted by the UNCITRAL Model Law on International Commercial Arbitrations. However, the departmental advisory committee expressly rejected the implementation of the Model Law, and in considering Article 11 of the Model Law which deals with appointment of arbitrators, the committee, under the chairmanship of the right honourable Lord Justice Mustill, commented at page 24 of the report: This article is inconsistent with the present law, under which default in the appointment of a second arbitrator may result in the first being appointed sole arbitrator: this is a valuable provision in cases where the respondent has no real wish to see progress made with the arbitration. It would appear therefore that the departmental advisory committee sees considerable value in the existing provisions of Section 7 of the Arbitration Act, and I would pray this in aid in support of my amendment to extend Section 7 to deal with the position where the reference is to three arbitrators.

Finally, perhaps I may make a point which I did not raise in my letter to the noble and learned Lord. If it is thought for some reason that the provisions of Section 10(3) should remain —that is the procedure whereby an application to court is required —consideration could still be given to amending Section 7 in the way that I have suggested.

There is a precedent for a dual right. The power of the court under Section 7 applies not only to the failure by one party to appoint any arbitrator at all, but also to a failure to replace an arbitrator who has refused to act, is incapable of acting, or dies. This means that where there is an argument for two arbitrators, and there is a refusal, incapacity, or death of one arbitrator, the party who appointed the other arbitrator has a choice of two procedures. He can apply to the court under Section 10 for the vacancy to be filled, the result being a renewed tribunal consisting of two arbitrators. Alternatively, without the assistance of the court, he can appoint his own arbitrator to act as sole arbitrator.

Perhaps I may quote from a leading authority on arbitration, Mustill and Boyd say: The second alternative is plainly cheaper and more advantageous for the appointing party, and it is the one which in practice is almost always employed".

If this route were to be taken, the claimant could either appoint his arbitrator as sole arbitrator, or if he had reservations about problems of enforceability then he could adopt the Section 10 procedure. I appreciate that the amendment, which is my own, may be capable of improvement. I realise that this is a matter of which the noble and learned Lord has not had much notice. He will wish to take proper advice on it. I beg to move.

Lord Ackner

I have had an opportunity of discussing this matter shortly with my noble and learned friend Lord Goff of Chieveley. As Members of the Committee know, he is perhaps the Law Lord most acquainted with the complications of arbitration. He would have been here tonight but for the lateness of the hour. Members of the Committee may find his view helpful. It is that the departmental committee on arbitration law reform to which the noble Lord, Lord Byron, referred, formerly known as the Mustill Committee and now the Steyn Committee, after Mr. Justice Steyn, is considering the consolidation of the whole of statutory arbitration law at the moment.

This is a technical matter, as has been very fairly conceded by the noble Lord, Lord Byron. Its technicalities may be such that it would be more appropriate, assuming that it has much merit (as is no doubt the case), for it to be referred to that committee rather than dealt with in legislation in the Bill in this way. I merely offer that as a view for the Committee's consideration.

The Lord Chancellor

I am very grateful to my noble and learned friend for giving us the opinion of my noble and learned friend Lord Goff of Chieveley, and to the noble Lord, Lord Byron, for raising the matter. I can see the attraction of what the noble Lord has suggested. The course I propose to take is that I should have an opportunity of consulting the departmental advisory committee on arbitration. Depending on its attitude to the matter, we might be able to deal with the point during the course of the Bill. If there is great difficulty about it we should have to leave it over. If the noble Lord would care to leave it with me on that basis, I undertake to bring it to the committee's attention and see what its attitude to the matter is.

Lord Donaldson of Lymington

I support the alternative of dealing with it in this Bill after taking advice. All experience shows that a missed legislative opportunity tends not to recur until much later than people expect when they postpone a matter.

The Lord Chancellor

I shall do that if I possibly can.

Lord Byron

I am very grateful for what the noble and learned Lord has said. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 68 agreed to.

Clause 69 [Specific powers of arbitrator exercisable by High Court]:

Lord Donaldson of Lymington moved Amendment No. 207ZAA: Page 53, line 29, leave out ("section 11 of the Act of 1950") and insert ("section 35 of the Supreme Court Act 1981").

The noble and learned Lord said: This is not a point upon which I think anybody will need to take advice. It is a simple point. When one looks at Clause 69 in Part V which relates to arbitration one finds that the clause does not relate to arbitration at all. It relates to litigation and the powers of the High Court exercisable in litigation and not in arbitration. It is true that by reference it will derive those powers from an arbitration agreement but as regards logic it could equally have provided that the High Court should have any powers which the parties chose to agree upon. That would equally have worked and have had nothing to do with arbitration.

If I may say so with respect, the right Act for this amendment —an amendment with which I am in complete sympathy and one required by the official referees for a number of reasons—is the Supreme Court Act 1981. That is the Act which regulates the jurisdiction of the High Court in general and the official referees in particular. I have looked at the Supreme Court Act to find an appropriate spot in which to lodge the amendment. I believe that that would be immediately following Section 35. However, I agree that there may be other views on the matter. I have listened, as the Committee has wound its weary way through this stage of the Bill, to variations on the theme of the words, "I shall give consideration", "I shall give favourable consideration", "I shall give very favourable consideration". I shall accept any such formula of words as I realise that on Report I can alter the place where the provision should be inserted or even the Act into which it should be inserted. However, quite plainly, it has no business to be in the Arbitration Act 1950.

A further point, apart from that of logic, is that in terms of the marketability of arbitration, which is of some importance to this country in the context of foreign commercial arbitration, the fewer references which appear in the Arbitration Act to the High Court the more acceptable, I am advised, it is to foreigners. As a judge of the High Court, or at any rate of the Supreme Court, I must accept, although I am ashamed to do so, that we may like to think of ourselves as an ornament but we are certainly not that in terms of those who wish to indulge in arbitration from abroad. I beg to move.

Lord Ackner

This is not a de minimis interjection. I hope it is a minuscule one but there is already a Section 35A of the Supreme Court Act 1981 so perhaps, mutatis mutandis, some change might be made.

The Lord Chancellor

That demonstrates the wisdom of the formula I was going to use. I accept this amendment in principle. I shall check with the draftsman on its detail and hope to include it in an acceptable form to all of us on Report.

Lord Donaldson of Lymington

In the light of that helpful reply, albeit not quite as helpful as I had hoped for, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman of Committees (Lord Aberdare)

I call Amendment No. 207ZAB.

Lord Donaldson of Lymington

That matter does not arise now. I do not move the amendment.

[Amendment No. 207ZAB not moved.]

The Lord Chancellor moved Amendment No. 207ZB: Page 53, line 33, leave out ("clause") and insert ("agreement").

The noble and learned Lord said: This amendment substitutes a reference to an arbitration agreement for the present wording of "an arbitration clause" in order to be consistent with the statutory language presently used. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 207ZC: Page 53, line 35, leave out ("proceedings") and insert ("agreement").

The noble and learned Lord said: This amendment has the effect of requiring the agreement of the parties to the arbitration agreement, rather than that of the parties to the court proceedings, before the court can exercise the powers conferred in the new Section 11 A of the Arbitration Act 1950. I beg to move.

On Question, amendment agreed to.

Clause 69, as amended, agreed to.

12.30 a.m.

Clause 70 [Want of prosecution]:

[Amendment No. 207ZCA not moved.]

The Earl of Lytton moved Amendment No. 207A: Page 53, line 40, after ("claim") insert ("defence or counterclaim").

The noble Earl said: It may be for the convenience of the Committee if in moving Amendment No. 207A I speak to Amendments Nos. 207B, 207C, 207D and 207E, which are all interrelated.

The series of amendments attempts to ensure that where there is a failure to prosecute a case before an arbitrator the failure to prosecute will attract the attention of the Bill not only at the point of the initial claim but also where it falls into the realms of counterclaim. I feel very strongly that if we are not careful the case will go merely from the initial claim to the counterclaim and will stick there. The purpose of the amendments is to try to overcome that.

The noble and learned Lord the Lord Chancellor may tell me that for procedural reasons the amendments are unnecessary. I should be grateful for his assurance on the matter. I beg to move.

Lord Hacking

I believe that the amendments should be supported in principle. A horrendous delay may equally be caused by a defendant in proceedings as by a claimant.

Lord Donaldson of Lymington

Subject to anything that my noble and learned friend the Lord Chancellor may say, I should have thought that for this purpose claim would include counterclaim because it is the claim of the defendant. It may be clearer to refer to counterclaim. However, I am quite sure that one cannot include defence because one cannot dismiss a defence for want of prosecution, much as we should like to on many occasions.

Lord Mishcon

I believe that it is also right to say that an arbitrator has complete power, if a defence has not been filed, to hear the claim or the counterclaim.

The Lord Chancellor

In principle I accept the view that the provision ought to apply to a counterclaim. I should like to check to be sure whether or not the amendment is necessary in that respect.

So far as concerns the defence, I do not believe that it would be right to apply that system. There are other obstacles to a late defence, such as those that have been mentioned. In principle, counterclaim could be included if necessary, but not defence. I hope that that is a sufficient answer to the noble Earl. I am grateful to him for raising the matter.

The Earl of Lytton

I apologise to the Committee for trying to include something that should not properly be there. That must be put down to my lack of knowledge of the correct wording that applies in such cases. In the circumstances I believe that the noble and learned Lord the Lord Chancellor has given me as good an answer as I could possibly expect at this time of night. Perhaps I may leave the matter in his hands for the time being. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 207B and 207C not moved].

Lord Donaldson of Lymington moved Amendment No. 207CA: Page 53, line 47, leave out ("delay") and insert ("length of time which has elapsed since the cause of action arose").

The noble and learned Lord said: This is an important point which has to be seen in the context not only of the amendment but also of Amendment No. 207EB, which I shall mention shortly.

The House of Lords in its judicial capacity held that an arbitrator had no power to dismiss a claim in circumstances analogous to the power possessed by the High Court to dismiss a claim in which there has been inordinate and inexcusable delay and the delay has given rise to a substantial risk that it is not possible to have a fair resolution of the issues in that claim or has caused, or is likely to cause or to have caused, serious prejudice to the opposite party. In putting forward the Bill, the Government have obviously taken the view, with which I entirely agree, that it is right that arbitrators should have that power.

However, two problems have arisen. First, the High Court power is a judge-made power and it will always be possible for the judges to alter it. It might require the House in its judicial capacity to exercise the power of flexibility under the practice direction whose year I forget, but it could be done. However, once the analogous power for an arbitrator is enshrined in primary legislation, we are stuck with the present rule in relation to litigation unless the two powers are to diverge, which is highly undesirable.

I am therefore forced at this stage to look carefully at the judicial rule which applies in the High Court. I must tell the Committee that for those who —I again use the phrase that I used earlier —labour at the judicial coalface, that rule is highly unsatisfactory. I have not met a Lord Justice who is prepared to begin to defend it.

Let me explain why it is unsatisfactory. It is well settled and no one would quarrel with the fact that, Parliament having said that one has three years in the case of a personal injuries claim and six years in most other claims in which to issue one's writ, one's delay in issuing the writ over that period cannot be described as inordinate, still less as inexcusable, because Parliament has given one the right so to delay. So none of that problem arises within whatever time the claimant or plaintiff chooses to take issuing his writ, provided it is within the statutory period. However, it has been said over and over again by this House in its judicial capacity that, when one issues one's writ, one should get a move on with the action or the arbitration. The later one issues the writ, the more of a move on one should get. I know that that is not good English, but I hope that it at least expresses my view.

Perhaps I may now describe the problem that has arisen. A typical scenario is six years to issue a writ and an additional year to serve it, but let us leave that aside as a complication. The action then starts with an enormous amount of gusto. A statement of claim is served; a defence is served and sometimes one even gets around to discovery or the beginnings of discovery. At that stage the action goes to sleep. Three years later, by which time we have reached year nine or ten, the defendant says, "Enough is enough" and applies to strike out the action for failure to prosecute him.

The plaintiff usually wraps it up a bit, but stripped down to its essentials he says at that point, "I did not delay inexcusably or at all inordinately up to the end of the six years". That is right. He then goes on to say, "I got quite a move on for the next 12 months" and the judge says, "That's right". The plaintiff goes on to say, "For the next three years I delayed inordinately and inexcusably, but you cannot strike my claim out". The judge says, "Why can't I?" Although it is no doubt true that there is by now a substantial risk that it will not be possible to have a fair resolution of the issues in the claim and that there has been serious prejudice to the defendant, all that prejudice and that lost opportunity to have a fair trial arose before he started delaying. It is not therefore that delay which created the impossible situation.

The plaintiff wraps it up a little, but when one has heard that excuse three times a week for all the sitting weeks of the year, one gets a little fed up with the wrapping and wants to undo the parcel and do something about the contents. Hence this amendment that I put forward. If there is inordinate and inexcusable delay after the expiration of the limitation period —and before then I accept that delay must be excusable —the claimant should be at mercy and the courts be able to look at the whole period of delay and ask itself what I should have thought would be the central question at that time: "Sitting here now, 10 years, eight years or whatever after the cause of action arose, can we fairly try this action?" If the answer is no, the court ought to be entitled to throw it out. That should apply similarly but with less emphasis to the case of prejudice.

It is a very simple amendment that I propose; namely, to remove the word "delay" from the last line on page 53 and substitute: length of time which has elapsed since the cause of action arose".

I have no doubt that this amendment will achieve the object that I have outlined. The Committee will find that in a subsequent amendment similar, almost identical words are used in order to bring the High Court into a similar position to that which an arbitrator would have when this Bill becomes an Act. There have to be one or two very minor alterations merely to fit the different language of the High Court. I have talked about a respondent to that claim to make it clearer. But subject to that, the principle that I have sought to follow is exactly the same for both the High Court and for arbitration.

If I might beseech the Committee, my form of beseeching would be that you do not enshrine in primary legislation a judicial rule which, with all respect to this Chamber and its judicial capacity, is wholly wrong in practice and largely unworkable. In fact, if the truth had to be told —and this is not a matter upon which I care to tell the truth —a good deal of judicial cheating goes on to make the thing work at all. I beg to move.

Lord Mishcon

I rise at once in support of this very sensible amendment. With great respect I also bring to the attention of the Committee that it is not just the practitioners who sometimes produce a case in which there is prejudice to both parties by virtue of the length of time taken in the action coming on to trial. It ought to be known to the Committee —and I am sure that the noble and learned Lords the Master of the Rolls and the Lord Chancellor know it —that if an action is set down for trial now in the Queen's Bench Division, or indeed in the Chancery Division, one will be told that there is no chance of that case being heard until 1992.

That is the position that I can state factually to be true with regard to a Chancery case in which a plaintiff has been defrauded by one of the partners of a firm of solicitors. The gentleman concerned has been extremely naughty and is now in prison —but I shall say no more about the firm or the person in question. It is dreadful to have to tell a client —as had to be done —that an action set down and dealt with with promptitude all the way along, so far as the practitioners were concerned, stands no chance of being heard in the Chancery Division until some time in 1992. It may be half way through 1992 or even late in that year. So it is not just a matter that concerns the practitioners; it is delay in the hearing of cases.

I know that the noble and learned Lords the Master of the Rolls, the Lord Chief Justice and the Lord Chancellor are all doing their best. But I assure the Committee that this is as difficult for public consumption as indeed is the case of the delay.

Lord Donaldson of Lymington

Perhaps I may intervene before the noble Lord sits down. Of course that is right. It is very often the litigants and not the practitioners who are responsible for the delay. But the other reason that I wished to intervene is because I can speak for the Civil Division of the Court of Appeal. I can tell the noble Lord that if he had an urgent appeal I would put it on tomorrow morning —no, this morning—or at whatever notice was required by the justice of the case. However, I think that he has done an injustice to my noble and learned friend the Lord Chief Justice. On the Queen's Bench Division, the time intervals between trials and setting down are, or can be, shorter in appropriate cases than the example referred to of 1992. But I am not informed about it. It is merely an impression that I have that times of delay have been very substantially reduced within the past few months.

12.45 a.m.

Lord Ackner

I should like to add to that. I had details and I gave the Committee some of those details during the course of the debates. My recollection is that in a Queen's Bench action the lead time is now 10 weeks. I instanced a case where it was less than that. I had the periods for the Chancery Division and the other divisions. They are nothing like the noble Lord, Lord Mishcon indicated. I can give them to him at a later stage. I have the deails in my room upstairs.

Lord Mishcon

I am most grateful to the noble and learned Lord. He will have noticed, I hope, that I quoted an actual example, and stated what the case was. I can tell him with all reliability and very great carefulness about what I say, that the anticipation is that the case in question set down a couple of weeks ago cannot come into the list until half way through 1992. I am sure that the noble and learned Lord will accept that from me.

The Lord Chancellor

The amendment that my noble and learned friend has proposed is a very interesting solution to the problem of delay. I know that the rules set out by this Chamber in its judicial capacity have proved to be somewhat difficult in application in the day-to-day work of dealing with these matters.

I am in a certain difficulty. I believe that it would be right to have fairly wide consultation on the question of what the rules should be in the High Court. That is not what I have addressed in this clause. On the other hand, this clause is put into the Bill as a result of advice given by the departmental advisory committee. It takes the view that it would be right to set out in the legislation the High Court's jurisdiction in this matter in order that it may be applied to arbitration, and that it will not be good enough simply to say that arbitrators have the same powers as the High Court. The arbitrators and the parties may not be familiar with the High Court practice in this regard. The advice of the advisory committee was that if we did not put this provision on the face of the Bill, the result was likely to be long and costly hearings between the parties which would not in the nature of things be an advantage, and that we ought to put it on the face of the Bill.

Putting such a provision on the face of the Bill requires one to know what it is. It is therefore difficult to achieve both these aims within the timescale that we have. If my noble and learned friend is prepared to leave it with me, I would wish to obtain as quick an impression as I can from the Supreme Court Procedure Committee and possibly also from the departmental committee about whether this proposal is generally regarded as acceptable. I have no doubt that it merits consideration. I have had some comments of a preliminary kind made about it by some of my colleagues which suggest possible refinements. I am sure that my noble and learned friend would like us to have the best rule we can. I believe he would also agree that it is right, if at all possible, that we should express on the face of the statute what the rule for arbitration is to be.

Lord Donaldson of Lymington

I accept entirely what the noble and learned Lord the Lord Chancellor has said. It is correct that the departmental committee wanted the law to be set out on the face of the Bill and I should not dream of disagreeing with its expert view. However, the chairman of the committee said that in that capacity he did not feel free to consider what the High Court rule should be, and that must be right. All he was considering was how to convey that to the arbitration fraternity whatever the rule. It may well be that if he was free to consider the matter and apply his mind to it, he would take the view that I have been putting forward.

There is no doubt that the Supreme Court Procedure Committee can meet quickly and supply my noble and learned friend with whatever advice it thinks appropriate. There is also no doubt that every member of the Civil Division of the Court of Appeal can meet quickly and supply their opinion. I cannot influence or convene a meeting of the judicial Members of your Lordships' House, but the Lord Chancellor can do so easily and receive their answer. The Bar Council could probably produce a quick answer but, unfortunately, the Law Society would take longer because it is such a large organisation. However, I am sure that the president's action could cover that in an appropriate case.

In all the circumstances, it is appropriate that I should withdraw the amendment. I hope to see something in its likeness appearing early in the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 207D and 207E not moved.]

Clause 70 agreed to.

Lord Byron moved Amendment No. 207EA: After Clause 70, insert the following new clause:

("Service of proceedings on an oversea party.

. After section 25 of the Act of 1950 there shall be inserted—

"Provision for service on oversea parties.

25A. —(1) Unless a contrary intention is expressed in the Arbitration Agreement, any process or notice required to be served, on a relevant party in connection with any application concerning the conduct or regulation of a reference or any award made therein, to the High Court, under this Act or any other enactment making provision with respect to Arbitration (whenever passed), may be served, notwithstanding any rule of Court to the contrary, by leaving it at or sending it by post to the business address of the solicitor or other person or body —

1. (a) who is acting for the party in the reference in connection with which service of the process or notice in question is to be effected; or
2. (b) in the case where any award has been made, acted for that party in the reference in connection with which service of the process or notice in question is to be effected.

(2) In this section a "relevant party" means either —

1. (a) an individual who is a national or habitually resident in any State other than the United Kingdom; or
661
2. (b) is a body corporate incorporated in, or whose central management and control is exercised in any State other than the United Kingdom.

at the time service is effected.

(3) Nothing in this section shall affect any application for the appointment of any Arbitrator or Umpire or to extend the time for making any such appointment, other than by way of substitution or the enforcement of any award." ").

The noble Lord said: The amendment is another to the Arbitration Act. It is of a technical nature although it has even greater value than the previous amendment. Its purpose is to facilitate on parties resident abroad service of the originating process by which applications to the court are made in connection with arbitration proceedings and subsequent appeals.

Under the Arbitration Acts of 1950 and 1979 the High Court is entrusted with wide powers to supplement the powers of arbitrators in the conduct of a reference; for example, Section 12 of the 1950 Act. Equally important are the powers entrusted to the High Court to monitor and regulate the conduct of the reference, including the power to entertain an appeal on points of law.

In order to invoke any of the supervisory powers of the High Court it is currently necessary to arrange for the issue of originating process which, in turn, requires compliance with the strict rules as to the service of such process. That can be particularly time consuming and expensive in the case of parties resident abroad.

Often in practice there are two solicitors almost next door to each other, perhaps in the City of London, conducting arbitrations vigorously against each other for a long period of time. One of them wishes to invoke the powers of the High Court and is unable to serve the necessary originating summons, or whatever is required, on the solicitor next door. He must then ask whether that solicitor has leave to accept the service. If he does not receive a favourable response, he must then go to the High Court either to seek an order for leave to serve out of the jurisdiction or for substituted service.

The opportunities for tactical delay and prevarication, which the requirement for strict compliance with the rules for service provide, were recognised in the working paper dated 1st February, 1985, produced by the sub-committee on arbitration which is a sub-committee of the Commercial Court Committee. Paragraph 64 states: the efficacy of many procedures offered by the 1950 and 1979 Acts would be improved if provision were made facilitating service of the originating process by which application to the court is made, this is particularly so in relation to those applications which are typically made at a relatively late stage in an arbitration (e.g. for security for costs or for an 'extension order' under Section 5 of the 1979 Act), where it is commonplace to encounter a tactical refusal to authorise solicitors to accept service, despite the fact that they may have had the conduct of the arbitration on their Clients' behalf for a considerable time".

I believe that all those engaged in arbitration would find this a useful amendment. It has not been possible to bring in something along these lines. I believe that the difficulties which have been encountered are perhaps two-fold. First, as the authors of the 1st February working paper recognise, the solicitor or other representatives of a party in a reference are not technically on the record. I do not consider that there is any need for the special provision on this aspect. In practice, there is rarely any doubt as to who has conduct of an arbitration on behalf of a party. In the rare case where a doubt arises, the type of inquiry with which a court will be faced will not differ in essence from that which arises in relation to any contested service issue.

The second right which the amendment seeks to give could be nullified if a party withdraws instructions from the solicitor or other representative. In practice, that is likely to be rare in the context of applications and ongoing reference.

I recognise that it may be said that this matter is more appropriate for the rules committee, and that seems to have been the view of the sub-committee on arbitration. In my view, this issue is appropriate for statutory provision and the present Bill is an appropriate vehicle for such an amendment. Matters of service are not exclusively dealt with by the rules and, indeed, arguably most service is regulated by statute by virtue of the provisions of the Companies Act which now overrides the rules as to service on corporations. It also appears that the rules committee has not been able to find a solution to the problem since the recommendation to which I referred was made in 1985.

Finally, I was grateful to the noble and learned Lord, Lord Ackner, for what he said. The noble and learned Lord, Lord Goff of Chieveley, has also written to me in relation to this amendment. I beg to move.

Lord Mishcon

I can well understand the difficulty which the noble Lord brings before the Committee and it is right that he should do so. However, since I do not disagree with the principle, I ask only that the practical aspects of this matter are considered by the Committee, and especially by the noble and learned Lord, before this becomes part of an enactment.

I say that because of the very difficulty which the noble Lord correctly pointed out; namely, that in court litigation, a solicitor is on the record and until he is removed from it he is deemed to be there as the solicitor, agent and representative of the party in respect of whom he is acting, as is shown on the record. Therefore, service is a perfectly simple matter to effect. You effect it upon the solicitor concerned.

That is not the position in arbitration proceedings. Especially when the person to be served is abroad, it may very well be a disputed matter of fact as to whether or not, at the time of service, the solicitor is actually the solicitor for the party.

After the arbitration has been completed by an award, it is an even more difficult question of fact to know that the solicitor is still acting for the party concerned. Therefore, I merely rise to point out the difficulties while at once accepting from the noble Lord, Lord Byron, that there is a difficulty here which perhaps should be looked at. In principle it sounds all right but there are practical problems.

The Lord Chancellor

I believe that there are quite important practical problems although I see the force of the noble Lord's amendment. I am happy to consider it. I think it may be difficult to have adequate consultation on this very quickly but I shall see what can be done, if the noble Lord is prepared to leave it on that basis.

Lord Byron

I am grateful for what the noble and learned Lord said. I hope this matter can be considered reasonably quickly. It is a matter which was considered in 1985 by the sub-committee to which I referred. There will be very little dispute about the desirability of finding a solution to the problem. It may be that my amendment is not perfectly drafted in that respect; but to answer the point made by the noble Lord, Lord Mishcon, there certainly could be difficulties as to whether a solicitor, for example, was still acting for a party. Similar problems arise under the Companies Act as to whether a company is still carrying on business within a jurisdiction and similar problems arise under other legislation.

In relation to withdrawal of instructions, I doubt whether it is desirable that a party who has participated in a reference through a solicitor within the jurisdiction should be able to avoid service of appeal procedure simply by withdrawing those instructions. Ultimately the only hardship that could accrue to the solicitor concerned would be simply the obligation to pass on documents to his former client. However, in view of what the noble and learned Lord said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Donaldson of Lymington had given notice of his intention to move Amendment No. 207EB: After Clause 70, insert the following new clause:

("Want of Prosecution.

.After section 35 of the Supreme Court Act 1981, there shall be inserted— 35B. —(1) The High Court shall have power, whether of its own motion or on application by a party to the proceedings, to dismiss any claim in those proceedings where it appears to it that the two conditions mentioned in subsection (2) are satisfied.

(2) The conditions are —

1. (a) that there has been inordinate and inexcusable delay on the part of the claimant in pursuing the claim; and
2. (b) that the length of time which has elapsed since the cause of action arose —
1. (i) will give rise to a substantial risk that it is not possible to have a fair resolution of the issues in that claim; or
2. (ii) has caused, or is likely to cause or to have caused, serious prejudice to the respondent to that claim." ")

The noble and learned Lord said: This amendment related to an earlier amendment and accordingly I do not move it.

[Amendment No. 207 EB not moved.]

Clause 71 agreed to.

Clause 72 [Tying-in arrangements]:

The Earl of Lytton moved Amendment No. 207F: Page 54, line 14, after first ("land") insert ("and buildings").

The noble Earl said: I shall be extremely brief on this point. The purpose of this amendment and the two which follow is merely to seek clarification that the term "land" in the context of this Bill includes the buildings which may be on that land. I know that this is regarded as automatic in terms of judicial understanding, but I felt it wise to have the point specifically clarified. I beg to move.

The Lord Chancellor

These amendments are not necessary because of the existing general law. Under the Law of Property Act 1925, as applied in the Interpretation Act 1978, the definition of "land" already includes buildings and other structures. In this context, and in this clause, it is therefore unnecessary to require the addition of the words "and buildings". I believe that to be the position. If the noble Earl will be kind enough to check this for himself, perhaps in the meantime he will feel able to withdraw the amendment.

The Earl of Lytton

I am greatly heartened by what the noble and learned Lord said. In the circumstances, while thanking him for that, with the permission of the Committee I withdraw the amendment.

Amendment, by leave, withddrawn.

[Amendments Nos. 207G and 207H not moved.]

The Earl of Lytton moved Amendment No. 207J: Page 54, line 20, after ("condition") insert ("express or implied").

The noble Earl said: In moving this amendment I speak also to Amendments Nos. 207K, 207KA, 207KB, 207KC and 207L, as they are all interrelated.

Lord Mishcon

Perhaps I may intervene to say that the noble Earl said he was speaking to one of my amendments. It is kind of him, but perhaps he did not intend to say so.

The Earl of Lytton

I beg the noble Lord's pardon. I am not sure to which amendment he refers.

Lord Mishcon

I refer to Amendment No. 207KA.

The Earl of Lytton

Thank you. I am not speaking to that amendment. I am speaking to Amendments Nos. 207J, 207K, 207KB, 207KC and 207L, I ask the Committee's pardon.

The reason behind the amendments is that there is a perceived abuse that has crept in, particularly to some of the larger organisations on our high streets which offer combined services such as estate agency services, mortgages, pensions, insurance and many other services. It is an abuse that is creeping in because certain types of service are being made implicitly, or sometimes explicitly, dependent on a person taking out other services offered by the same concern. In its simplest terms, somebody may make an offer on a house which he has seen for sale in an estate agents and be left in no doubt —I put it no more strongly than that —that his offer will not be forwarded to the vendor unless he agrees to organise his financial affairs through the company which is selling the property.

Another abuse which is certainly not in the public interest concerns instances which have come to my notice where people have been talked out of their existing endowment policies in favour of taking out different types of insurance. A member of the public may be relying on the information that he has been given by the person offering the services and it may cause the policyholder to change his policy to his very considerable financial detriment.

All these amendments are intended to reinforce subsection (3). I shall be delighted if the noble and learned Lord could tell me that that subsection caters for all the points about which I am concerned. I apologise to the Committee for lumping together these various amendments, but I believe that it will save time at this late hour. I feel that they are sufficiently related for me to deal with them together.

I shall divide them into the three categories into which they most conveniently fall. Amendments Nos. 207J, 207K and 207KB are intended to cover any sort of pressure or influence that may be brought to bear, whether it is explicit or implied. I think the current wording of the Bill is a little relaxed about that. Sometimes an explicit inference cannot be drawn, but often it is something which is not said or put into writing.

Amendment No. 207L is intended to define the categories of persons who could be brought into the net by the provisions of the Bill. I believe that the term "associate" is not clear or strong enough. As regards Amendment No. 207KB, it specifically prevents an abuse of the failure to pass on an offer of purchase to a vendor. I beg to move.

Lord Morris

In so far as these amendments clarify Clause 72(3) I strongly support them. I particularly support the inclusion of the words "express or implied", the argument for which was eloquently put by the noble Earl, Lord Lytton. I shall be grateful to hear what my noble and learned friend has to say about the efficacy of the inclusion of those words.

Baroness Gardner of Parkes

I oppose these amendments. I hope that my noble and learned friend the Lord Chancellor will not accept them. I intend to speak later on clause stand part and I shall go into greater detail then.

The Lord Chancellor

I believe that the word "condition" includes any condition whether express or implied, written or oral. I refer to Amendments Nos. 207J and 207K.

Amendment No. 207KB is in a somewhat different category. It seeks to insert the words: No person shall make the passing on to a vendor of a borrower's offer subject to a condition, express or implied, that any services required by the borrower are to be provided by that person or by an associate of his". We all understand what the amendment is aiming at and that the wider it is cast the better. The practice of an estate agent refusing to pass on a prospective purchaser's offer to a vendor unless the prospective purchaser agrees to take services from the agent is obviously utterly wrong. I have a great deal of sympathy with the sentiments behind the amendment and would point out that where a mortgage is involved, the estate agent's behaviour is likely to be caught by Clause 72. This is because we have deliberately left "services" undefined to make the ambit of the clause as wide as possible. The term could therefore be taken to include the service of passing on an offer.

Where a residential property loan is not involved, however, the abuse addressed by the amendment is properly a matter for the Director General of Fair Trading, not the Bill. Indeed, in the consultation paper on estate agency published last September, the director general suggested that this particular abuse should constitute an undesirable practice. This could lead to the issue of a warning and ultimately a prohibition order under the Estate Agents Act. Although we do not know the ultimate result of the consultation exercise, the director clearly has the matter in hand and I think that we should leave it to him to pursue.

The matter is a fundamental question of agency. I believe it right that the director general should be the authority responsible for ensuring that proper practice prevails. In the light of that explanation, I hope that the noble Earl may feel able to withdraw the amendment.

The Earl of Lytton

I am heartened by what the noble and learned Lord has said. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mishcon moved Amendment No. 207JA: Page 54, line 21, leave out ("an associate of his") and insert ("any other person nominated by him.").

The noble Lord said: I should like to speak at the same time to Amendment No. 207KA. At this stage of the Bill we are dealing with the most sensitive issue of residential loans and tying-in provisions. The Committee will recollect that the noble and learned Lord was extremely careful in his Second Reading speech to make it clear that he wished to see that the borrower in these circumstances was properly protected against undue tying-in arrangements.

The purpose of the amendment is to substitute for "associate" the words "any other person nominated by him". It may be difficult to prove that someone is an associate. The reference should be to a person who is nominated by the lender. In those circumstances it would be clear that he should not nominate in regard to a tying-in arrangement. I beg to move.

The Lord Chancellor

I am grateful to the noble Lord for the suggestion in the amendment. If he will allow me I should like to consider it carefully. This is a difficult area in which to operate. The Building Societies Act has a provision like this but I am anxious to get the provision right. The noble Lord's suggestion is extremely valuable and may enable us to simplify the clause. I am happy to consider it further. I believe that it may indicate a good way forward.

Lord Mishcon

The noble and learned Lord has been very gracious. In view of what he has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 207K to 207KC not moved.]

Lord Mishcon moved Amendment No. 207KD: Page 54, line 32, at end insert— ("(5A) No lender, or any associate of a lender, shall require a greater consideration to be payable by the borrower for any service which either of them provide or offer to provide to the borrower than the consideration which the lender, or (as the case may be) associate of the lender, would have required if the borrower had been provided with combined services. (5B) For the purposes of subsection (5A)—

• "services" includes making or offering to make a residential property loan; and
• "combined services" means any combination of services whether provided or offered by the lender or any associate of his or partly by the lender and partly by the associate.")

The noble Lord said: Again, I can be brief. The purpose of the amendment is obvious. It prevents a lender or any—I should not use the word "associate"—person nominated by him charging more for a particular service to a borrower who does not require other services—for example, financial services—than would be charged to a borrower who also obtained other services from the lender or an associate. I beg to move.

1.15 a.m.

The Lord Chancellor

The idea of the clause is to provide customer protection against tying in so that the customer can insist that each service involved in a transaction should be priced separately and be available separately. Separate pricing enables the customer to choose which services, if any, he wants, and discourages the person offering the services from offering them at a loss. Separate pricing is achieved by Clause 72(5). The amendment seeks to discourage lenders from offering a package of services to a customer at a discount. At first sight, that does not appear to be in the interests of the customer or client.

It is also essential that the various services offered should be available separately. That is the whole point of the tying-in provision. Clause 72 does not, and so far as I have been able to consider the matter, should not, prevent packages provided—this is an important proviso—that there is no element of coercion or conditionality involved in the customer's decision to take all the services offered rather than some or none.

Packages of services can benefit both the pocket of the lender and the pocket of the borrower. It is not unknown for solicitors to offer a reduced rate if, for example, they are acting for a number of purchasers all of whom are buying leases in the same block of flats. I do not believe that the amendment is in the interests of the customer. I believe that my noble friend Lady Gardner of Parkes is thinking of making a point related to this matter on clause stand apart. While I am happy to consider what was proposed in the previous group of amendments, this seems to be counter to the idea of the interests of the customer when one understands the purpose of the clause.

Lord Mishcon

At this hour I should sensibly say that I shall consider carefully what the noble and learned Lord has said, and consider my position at a later stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 207L not moved.]

Lord Mishcon moved Amendment No. 207LA: Page 54, line 41, at end insert ("and

1. (f) any body corporate which is a holding company or subsidiary of the lender within the meaning of section 144 of the Companies Act 1989;
2. (g) any person who has an arrangement with the lender relating to the making of loans or the provision of other services to borrowers; and
3. (h) any person nominated by him to provide any service.").

The noble Lord said: With the Committee's permission, I propose to speak also to Amendments Nos. 207LB, 207LC, and 207LD, and to do so briefly.

The first amendment would also extend the descriptions of persons connected with the lender who would be treated as associates—again I think the better term is "nominated by the lender" —in connection with tying-in arrangements.

The second amendment would make it clear that the provision of insurance is covered by the clause. The third amendment would place a duty on the Director General of Fair Trading and local trading standards officers to enforce the provisions of the clause, and give them the necessary search and seizure powers. The fourth amendment would ensure that the clause applied to insurance companies. I beg to move.

The Lord Chancellor

The line that the noble Lord has suggested on the earlier amendments might make it unnecessary to pursue Amendment No. 207LA. The amendment which defines services to include the provision of or arranging of insurance of any class whatsoever". is not necessary because we have tried to make the word "services" as general as possible. To focus on a particular type of service might limit the scope of the word "services". It is wise in the clause to have the scope of "services" as wide as possible. One cannot be certain of how people will seek to deal with the clause if it becomes law. It is right therefore not to confine the word "services" in any way.

I do not believe that the Director General of Fair Trading, so far as I understand his attitude, would welcome responsibility for enforcement, but local trading standards officers might be appropriate, if the noble Lord will allow me to consider that matter further.

So far as concerns Amendment No. 207LD, under Section 16 of the Insurance Companies Act 1982 insurance companies have to be specially treated. That section, implementing two EC directives, prohibits insurance companies from offering services unconnected with their insurance business. One such unconnected service which insurance companies may in the future wish to offer conveyancing. However, because of Section 16 an insurance company could do so only if, at the same time, the customer took on an insurance service, such as a residential property loan from the company. It is because of that difficulty, which is entirely due to a statutory provision passed by Parliament to enable us to honour our Community obligations, that special provision has been made for insurance companies in Clause 72 of the Bill.

It is fair to say, however, that although it is clearly necessary to make specific provision for insurance companies, it may be possible to limit, in the light of what the noble Lord has proposed, exactly how that should be done. I shall undertake to look into this matter further in the light of what the noble Lord has said.

Lord Mishcon

I appear to have scored two "half-goals" out of four attempts, and in those circumstances I feel I ought to say how grateful I am that at least those scores are achieved. If the noble and learned Lord will kindly consider these matters, I think the object of moving the amendments will have largely been achieved.

I am sure he will appreciate by tabling these amendments we are trying to eradicate the abuses which arise from the imposition of tying-in arrangements on borrowers. That is the whole purpose of the amendments. Having regard to what the noble and learned Lord said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 207LB, 207LC and 207LD not moved.]

On Question, Whether Clause 72 shall stand part of the Bill?

Baroness Gardner of Parkes

These are problems with this clause as drafted. I consider that it is based on an incorrect supposition, which is that the mortgage-lending institutions have it within their power to force borrowers to use related services, such as estate agency, conveyancing, surveying, insurance broking, house removals, etc.

That might have been the case five or 10 years ago when there was a permanent shortage of mortgage funds when lenders were able to dictate terms. But over recent years the mortgage market has become highly competitive, and any lender wishing to impose an unreasonable term is not likely to get the business. Power has shifted very dramatically from the lenders to the intermediaries like the insurance and mortgage brokers.

I have been asked to make these points on behalf of the Council of Mortgage Lenders, and I should also declare that I am one of the vice-presidents of the Building Societies Association.

However, perhaps the major policy objection is that as drafted the clause would, as the noble and learned Lord the Lord Chancellor has suggested, seem to prevent a lender from offering a package deal. Here I entirely agree with the noble Earl, Lord Lytton, that it would be wrong to force people not to have choice. However if this ends up the other way, and people will lose out on the benefit of some cheap deal because there is a package, that would be very wrong. I think that this clause needs to be looked at again in its entirety. In fact subsection (2) looks as if it prohibits the packages.

I appreciate that it is not a simple matter to draft primary legislation and to ensure that such very common practices are permitted. But if the Government wish to proceed with the proposal, it is very important that appropriate consultation should take place to ensure that what emerges is right for the consumer and fair to the mortgage lenders.

An alternative would be for the Lord Chancellor to retain power to make appropriate regulations to encapsulate a code of practice. A code of practice has, as I am sure he knows already, been very effective in Section 35 of the Building Societies Act 1986. This change would replace that clause, as I understand it, and that is a good thing.

It is important to realise the other side of the coin to which the noble Lord, Lord Mishcon, referred. That is that by insisting that someone should not obtain a better deal we do not want someone to have a worse deal through the provision. Provided there is no compulsion whatever on the parties, I believe that it is right that there should be a free market. If people wish to avail themselves of all services from one source, they should be able to do so.

The Lord Chancellor

The clause only requires that it cannot be made a condition of accepting one service that somebody must accept some other service from the nominated person, if I understood the suggestion of the noble Lord, Lord Mishcon. Certainly that will do for a summary. One does not have to do that unless one wishes. A person is free to take one service by itself or two or more, depending on what he wants.

My noble friend asked whether the clause prevented people from offering favourable package deals to the customer. The answer is no, it does not do that. But the amendment which the noble Lord, Lord Mishcon, proposed—Amendment No. 207KD —was intended to effect that. That is the reason I do not feel able to go along with the amendment. My noble friend may be assured that the clause does not have the unfavourable effect that she had in mind: preventing the customer from obtaining a favourable package if more than one service is taken.

My noble friend also suggested that this is perhaps best dealt with by regulations. She will be aware that this problem arises continually as to whether we should do one or the other. I have chosen here to follow the lead given in the Building Societies Act and make this primary legislation. The relevant section was not brought into the Building Societies Act. Instead, a voluntary code was provided for. That is always possible but I should like to be sure that this was right so that if I had to bring it in it would be the right provision to regulate the position.

I have taken the view that in this case we should go for primary legislation. I hope that by doing so I have at least found favour in some quarters. Although my noble friend would prefer it to be done differently, I have to try to preserve the balance. I hope that Members of the Committee will allow Clause 72 to stand part of the Bill.

Clause 72 agreed to.

Clause 73 [Liability of magistrates for damages and costs]:

Lord Renton moved Amendment No. 207LDA: Page 55, line 39, at end insert— ("(3A) For the purposes of sections 44 and 45 the term "justice of the peace" includes Stipendiary Magistrate, Metropolitan Stipendiary Magistrate, acting Stipendiary Magistrate and acting Metropolitan Stipendiary Magistrate.").

The noble Lord said: Clause 73 amends Sections 44 and 45 of the Justices of the Peace Act 1979. It has been brought to my attention that in doing so it has created a certain amount of doubt as to whether the term "justice of the peace" includes all the people mentioned in the amendment: stipendiary magistrate, metropolitan stipendiary magistrate, acting stipendiary magistrate and acting metropolitan stipendiary magistrate. I can give the reasons for these doubts quite fully if necessary. However, if my noble and learned friend will accept the amendment, I should not wish to waste the time of the Committee in doing so. I beg to move.

The Lord Chancellor

There is no difference between us on intention. I intend to include all these people and we believe that we may have done so. But if there is doubt about it, perhaps my noble friend will be kind enough in due course—not at the moment—to tell me the detail of the doubts and, I shall take them up with the draftsman. The intention is quite plain that the various persons he has mentioned, all of whom are justices of the peace in some shape or form, should be included in the protection.

1.30 a.m.

Lord Renton

I can assure my noble and learned friend that there are real doubts. I shall bring them to the attention of his department. In the meanwhile I am grateful for his response and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 73 agreed to.

Clause 74 agreed to.

Clause 75 [Time when action brought for purposes of limitation enactments]:

On Question, Whether Clause 75 shall stand part of the Bill?

Lord Mishcon

It is a tragedy that at this hour, when one is dealing with an attempted and very fundamental alteration in the law, I should have to argue that this clause should not stand part of the Bill. Clause 75 seeks to alter the rule which has stood for a very long time that the limitation period involves the issue of a writ —that is a matter of certainty of date. The clause attempts to alter that by stating that it shall be the service of the writ. This occasions extreme difficulty. I shall try hard not to weary the Committee with too many examples of why this is a bad provision.

I start with the three-year rule which, as regards the statute of limitations, concerns personal accidents. Often a plaintiff will neglect to go to a solicitor in regard to a personal injury, whether it occurred at work or resulted from an accident, until, all of a sudden, some time afterwards a doctor tells the person, having examined him, that he has discovered a rather serious complaint which arises out of the accident. Before the solicitor has time to look into the question of whether there has been negligence and whether therefore there is a course of action which is likely to succeed, he has to look at the limitation period. Often what he does is to issue a writ in order to be sure that it comes within the statutory period and therefore he will not be statute barred, and he puts it, as the saying goes, in the drawer. Then he looks into the facts and the evidence that might be available. It is not an easy job if some period of time had elapsed since the accident occurred. The solicitor, having considered the evidence, then advises that he believes the client has a good course of action and that he will go ahead with it. Alternatively, he may say that sufficient evidence to take an action is not available and he may discourage the client from continuing with any action.

Once a writ is served an action has already started; it is in being. A statement of claim must follow pretty soon. If the statement of claim is not served pretty soon an agile defendant, if I can use that adjective, will immediately apply to have the action struck out by virtue of the fact that the statement of claim has not been served. Therefore there was good reason for the writ issue date, quite apart from the question of certainty which I have already mentioned, being the operative date, and that the service of the writ was not. That is the alteration in the law which Clause 75 suggests. What it really does is to cut down the limitation period; that is the effective purpose of it. That is not the only reason why this is a bad clause.

The Committee will have noticed that the clause is a wide one. It begins with the words: For the purposes of the Limitation Act 1980, and of any other enactment relating to the limitation of actions (whenever passed)". That can only mean that it will bring in the very short limits that exist at the moment; namely, the one-year time limit on the international carriage of goods by road and sea, and the two-year time limits on collisions at sea and in air carriage cases. That must be highly unsatisfactory.

As I said, it is a pity that an alteration as vital as this should be discussed in Committee with such a small attendance. I express my admiration for fellow Members of your Lordships' Committee who have stayed here until five and twenty to two in the morning, and I hope that I may take a little scrap of admiration myself for having done so as well.

I hope that at least the noble and learned Lord will say that, bearing in mind the importance of the matter and the views that have been strongly expressed by the Law Society and, I believe, by the Bar Council, and many other organisations which are vitally interested, he will give more consideration to the views that are now being put forward before saying that he intends to abide by Clause 75 of the Bill. It is in such temperate language that I oppose the Motion, That Clause 75 shall stand part of the Bill.

The Lord Chancellor

Clause 75 implements the recommendation of the Civil Justice Review that for the purposes of the Limitation Act 1980 an action should be brought at the time when process is served. That is one of a number of proposals designed to reduce pre-trial delay—particularly in personal injury cases—with which the review was principally concerned. A related procedural change, which will come into effect by rules of court on 1st June this year, will reduce from 12 to four months the maximum permitted interval between issue and service of process.

As the noble Lord has said, the present position under the Limitation Act 1980 is that originating process must be issued within a specified period. That is not a matter that needs to come to the attention of the defendant. For personal injury cases the limitation period, as specified in Section 11(4) of the Act, is three years from the date of the incident or knowledge of the cause of action. Detailed rules apply. A further 12 months is allowed to elapse, with the result that the maximum period between the date of the incident and the process being served on the defendant is four years. The rule change would reduce that to three years four months. The effect of Clause 75 would be to reduce the period to a maximum of three years, as proposed by the Civil Justice Review.

One of the purposes of the law of limitation is to give potential defendants complete assurance that after a stated period has elapsed, the action will not proceed unless there are exceptions to the application of the stated period. Our present system does not achieve that. If originating process in a personal injury case is served at the end of the three-year limitation period, the defendant may have a further year of uncertainty as to whether or not the action is to proceed. The matters that require to be established in relation to service are matters that are capable of proof. I am not sure that real difficulty arises because the present rule of court requires that service has to take place within the year of issue. The date of service is still important.

One of the problems to which the noble Lord referred relates to short limitation periods under a variety of statutes, most of which have a foreign element having been set up under international conventions to which the United Kingdom is a signatory. The provision may well be simplified in consequence of that point because the Limitation Act 1980 is principally in issue. That is what the recommendation of the Civil Justice Review has in mind and what I am considering at the moment and shall consider even further in the light of the matters that the noble Lord has brought to my attention; namely, to restrict the clause to the Limitation Act 1980 and leave the other enactments out of account altogether.

I am considering that matter and shall consider further what the noble Lord has said, but the recommendation of the Civil Justice Review was made after considering practical difficulties, so a good deal of the matter has already been given thought. In the light of that explanation perhaps the noble Lord will feel able to withdraw his amendment.

Lord Hacking

Before the noble and learned Lord sits down, will he be kind enough to consider the international implications? Practices in London often have to serve proceedings overseas. In some countries overseas service can be effected only through the diplomatic service. I recently had a case which has serious complications concerning the law of limitation and required a consideration of service in a number of countries in South America. We were advised that in some of those countries it would take as long as 10 months to serve the process.

The Lord Chancellor

I shall certainly consider the matter.

Lord Mishcon

It is obvious that the noble and learned Lord is prepared to consider the matter especially in regard to international implications and the examples that I gave of periods that are included by virtue of international conventions.

Perhaps I may briefly add another practice difficulty which I hope the noble and learned Lord will consider when looking at Clause 75. Some defendants ingeniously manage to evade service. There is a procedure, well known to the noble and learned Lord, by which one applies to the court for substituted service. It will be an extraordinary situation when one goes before a master of the High Court and says to him, "Please, for heaven's sake will you make your order for substituted service tomorrow because otherwise I shall not be able to comply with your order for substituted service, as you allowed the application that, in view of the obvious evasive tactics of the defendant, an order for substituted service should be made?". All those practical difficulties must be considered. The noble and learned Lord has been gracious enough to say that he will consider those matters.

Clause 75 agreed to.

Clause 76 [Costs against legal representatives in magistrates' courts]:

The Chairman of Committees

If Amendment No. 207LE is agreed to, I cannot call Amendment No. 207M.

Lord Mishcon moved Amendment No. 207LE: Page 57, leave out lines 7 to 26 and insert— (" .—(1) Without prejudice to the generality of the power to make rules under section 144 above, any such rules may make provision empowering a magistrates' court, where —

1. (a) there has been a serious dereliction of duty to the court on the part of any legal representative or employee of such representative; and
2. (b) as a result a party of the proceedings has incurred costs, to disallow, or (as the case may be) to order the legal representative concerned to meet, the whole of those costs or such part of them as may be determined in accordance with the rules.").

The noble Lord said: I hope that the noble and learned Lord will take it from me that I have no more time than any other Member of the Committee for advocates who behave in an unseemly manner, whether in magistrates' courts or anywhere else. However, I believe that some considerations should be taken into account.

As noble Lords will see, the amendment makes it clear that, for magistrates' courts, the test to order legal representatives to pay costs will be a test of serious dereliction of duty to the court on the part of the legal representative. If it were not for the amendment, it would be a most peculiar fact that magistrates would have a greater power to penalise a solicitor in costs than has the High Court. The test in the High Court and in the Crown Court is that the solicitor has been guilty of a serious dereliction of duty. Those are exactly the words that my amendment proposes to put in this Bill.

I am sure that it will be in the recollection of the noble and learned Lord, the Master of the Rolls, and it would perhaps assist the noble and learned Lord to recall that as recently as 10th November last year the Court of Appeal gave judgment in five appeals which came before it concerning costs orders made against solicitors in Crown Court cases. The Court of Appeal considered the nature and degree of fault on the part of a solicitor sufficient to justify the exercise of the court's inherent jurisdiction to award costs. The court clearly stated as follows: The locus classicus is Myers v. Elman"— that was a 1940 case in Appeal Court Cases 282 — We would define the conduct which gives rise to this jurisdiction as any conduct of a solicitor which involves a serious dereliction on the part of the solicitor of his duty to the court".

The court also stated that it took into account the dictum of the noble and learned Lord, Lord Denning (who was then, I believe, Master of the Rolls) in the case of Thew v. Reeves Ltd., (1982, 1QB) that jurisdiction is not available in cases of mistake, error of judgment or mere negligence, but is only available when the conduct of a solicitor is inexcusable and such as to merit reproof.

With this amendment I simply try to put the magistrates' court on a level with the High Court with regard to the language that is used. I hope that the noble and learned Lord will consider this a proper amendment. I beg to move.

1.45 a.m.

Lord Donaldson of Lymington

In dealing with this matter, I hope that the noble and learned Lord will also take into account the fact that many of these cases are rather better dealt with by the professional disciplinary bodies concerned. Certainly in the Civil Division of the Court of Appeal, unless there is a glaring case, if there is any investigation to be done we prefer to refer it to the Bar Council or the solicitors' complaints bureau, as the case may be, which are much better able to investigate what really went on.

The Lord Chancellor

I agree with my noble and learned friend in so far as the matter is intended to deal with disciplinary powers, as it were, over legal representatives. That is the power which preserves the inherent jurisdiction of the Supreme Court over solicitors, as provided in Section 50 of the Solicitors Act 1974. But the idea behind this clause is to provide in the magistrates' court a power parallel to that in the High Court under Rule 11 of Order 62 of the Rules of the Supreme Court, deriving from Section 51 of the Supreme Court Act and, by extension, the county courts, which itself is to be re-enacted in the form of Clause 4 of this Bill. So there is a distinction between those two types of power, and I believe that that is a proper distinction.

Where the primary purpose is compensatory—that is, that the court should have power to shift the loss from where it has fallen to the person whose fault has occasioned it —the appropriate test is of the kind contained in the clause as drafted and in Order 62, Rule 11, rather than the other, more restricted kind appropriate where the primary purpose is to enforce the duties of officers of the court.

I believe that that is very often a disciplinary matter and that my noble and learned friend advises wisely that the court generally should leave it to the disciplinary authorities which can investigate it in a way that may not be easy for the court to do —not very quickly anyway. The other matter concerns the nature of compensation in respect of loss which the court appreciates has occurred. The idea is to shift the loss from where it has fallen to the person whose fault has occasioned it.

In the light of that explanation, I hope that the noble Lord will feel that the clause as drafted is appropriate.

Lord Mishcon

If I may say so, that still does not deal with the point about language; namely, that of severe dereliction of duty as against the words used in regard to the High Court. The noble and learned Lord did not appear to me to deal with that specific matter. If I misheard him due to the lateness of the hour or did not take in what he said when I should have done, I apologise to him.

The Lord Chancellor

I endeavoured to suggest that this wording came from Order 62, Rule 11, and that that wording is reflected in this clause. The wording to which the noble Lord referred relates to the exercise of the court's powers as preserved by Secton 50 of the Solicitors Act.

Lord Donaldson of Lymington

If I may say so, the noble and learned Lord the Lord Chancellor is correct. Serious dereliction of duty does not occur in Order 62.

Lord Mishcon

Having received that reproof from two such learned sources, I must ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 207M not moved.]

Clause 76 agreed to.

Lord Mishcon moved Amendment No. 207MA: After Clause 76, insert the following new Clause:

("Costs against solicitors.

The following subsection shall be inserted in the Solicitors Act 1974 after subsection (3) of section 50 — (4) Where an appeal by a solicitor under subsection (3) is successful in whole or in part the Court of Appeal may make an order in favour of the solicitor for payment to be made out of central funds in respect of his costs of the original hearing and the appeal, such costs to be taxed in the Supreme Court." ").

The noble Lord said: I hope to be able to take the amendment briefly. Section 50(3) of the Solicitors Act provides that an appeal shall lie to the Court of Appeal from any order made against a solicitor by the High Court or the Crown Court in the exercise of its jurisdiction in respect of solicitors. The proposed amendment would provide that where a solicitor is successful on such an appeal, the Court of Appeal may make an order of payment to be made out of central funds in respect of a solicitor's costs.

It seems to be to be just and proper that that should be so provided for. I beg to move.

The Lord Chancellor

The effect of this clause would be to have the payment made out of central funds, if I have understood the objective correctly.

Lord Mishcon

Yes.

The Lord Chancellor

That is a considerable novelty. I find it hard to see why central funds should be involved in matters that arise between parties. There is a different question in relation to such disciplinary provisions as Section 50 of the Solicitors Act 1974. As a result of a request from one of my judicial colleagues, I am presently considering what can be done about that because it is in the nature of a disciplinary provision.

However, this is different. I do not believe that it would be right to make such a provision in relation to decisions which are an allocation of costs between parties before the court.

Lord Mishcon

Will the noble and learned Lord permit me to elaborate very quickly on what he has just said, and on my original submission? We are dealing with a case where an officer of the court, a solicitor, has been penalised. He goes to the Court of Appeal, having obviously incurred the costs of a hearing in the court below. The Court of Appeal sets aside the order that was made against him as being unjustified either in whole or in part.

It may be that I am wrong in suggesting that the costs should come out of the common purse. But is the noble and learned Lord saying it is just that a solicitor in those circumstances, who has proved that the penalising order should not have been made and has the endorsement of the Court of Appeal that that is so, should have no remedy in regard to recovery of his costs? It is quite obvious that in such a serious case no man is his own best representative. He obviously would be represented by another professional man. It appears quite wrong, if I may say so, that the noble and learned Lord is suggesting that he shall have no remedy in regard to costs even though he has been successful in the Court of Appeal.

Will the noble and learned Lord at least be prepared to say that he will consider the justice of this matter, and whether the costs should come out of another fund, if he feels that I have taken them out of the wrong fund?

The Lord Chancellor

There may be a question of costs against the other party but at present I see no justification for the public purse incurring the cost of what has occurred.

Lord Donaldson of Lymington

I have a slight difficulty in that the copy of Adamson's Solicitors Act 1974 does not include subsection (3). However, the point of principle which I understand is being raised by the noble Lord, Lord Mishcon, is that where one is exercising the inherent jurisdiction of the High Court in relation to a solicitor, the court may well be acting on its own motion. It may not be penalising the solicitor at the request of the other party.

The question arises in two stages. The first stage, with which perhaps all will agree, is that if on appeal it is held that the solicitor should never have been penalised in the first place and that he has incurred costs in establishing that position, he ought to be reimbursed those costs in plain fairness. However, if the other side had no part in putting the solicitor in the position of peril in which he stood at the end of the proceedings of first instance, it is a little hard that that party should be expected to foot the bill.

I can well imagine some situations in which, if I had been a trial judge and taken a particular view of a solicitor's conduct but had been wrong, wild horses would not have stopped me from penalising him. I believe that the situation needs investigating.

The Lord Chancellor

Fairly fundamental questions are involved. At one level, it is the consequence of a judicial act that has produced the costs. Normally, public funds do not bear such costs; otherwise there would be a large demand on public funds. Therefore, substantial difficulties stand in the way of making awards in this area out of public funds. For that reason I wanted to be sure that that was precisely what the noble Lord had in mind. I understand from him that it was. In those circumstances, I have great difficulty in giving effect to the amendment.

Lord Mishcon

It will not surprise the noble and learned Lord or any Member of the Committee if I state boldly that I have no intention of dividing the Committee on this amendment and at this hour. However, being serious, the noble and learned Lord the Master of the Rolls put the matter so much better than I did. If it is not a question of public funds it may be that there is another way of compensating the solicitor who has been found to have been wronged. If he dislikes the idea of public funds being mulcted in this way, I ask only whether the noble and learned Lord will consider whether there is another source from which the costs could come.

The noble and learned Lord has said that where somebody has suffered as a result of court procedures going wrong and where somebody has suffered an injustice by way of loss, in certain circumstances there could be a claim, be it to the ombudsman or to someone of a similar nature. One cannot have a damnum sine injuria in these circumstances; that is a loss without a remedy.

Will the noble and learned Lord at least consider the situation, which is unjust, and see whether there is an alternative source from which the costs can be made to somebody who has been wronged in that way?

2 a.m.

Lord Donaldson of Lymington

Before the noble and learned Lord the Lord Chancellor responds, perhaps I may make what I hope is a helpful suggestion both to the noble Lord, Lord Mischon, and to the noble and learned Lord the Lord Chancellor; namely, that we cannot possibly go down the road suggested, that we are compensating for a judicial error. If we once go down that road, the consequences need no spelling out.

However, the point could be put in this way, and perhaps the Lord Chancellor could consider it on that footing. Where a disciplinary power is being exercised in this way, on occasion at the instigation of the court, the true analogy is a criminal proceeding. It is the state taking action against one of its officers. Of course, in the criminal field, costs out of public funds are common where the accused is acquitted. That analogy might fit the bill. In my submission, the other line of argument should be rejected very swiftly.

The Lord Chancellor

When I first spoke on this I indicated that, at the invitation of one of my judicial colleagues, I was considering the question of Section 50 costs. I have not yet completed that. Therefore, if it can be called a benefit, the noble Lord will have the benefit of the same consideration.

Lord Mishcon

I am most grateful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 77 [Bail applications]:

The Lord Chancellor moved Amendment No. 207MB: Page 58, line 9, leave out ("a Crown Prosecutor") and insert ("the Director").

The noble and learned Lord said: This amendment is designed to clarify who will give instructions in relation to bail applications. It is intended that it should be the director personally and this amendment makes that plain. I beg to move.

Lord Hutchinson of Lullington

I presume that the noble and learned Lord brought forward this amendment as a result of our debate on Amendment No. 139A on this very question. The noble and learned Lord will remember that the matter was discussed at some length on the basis of whether it was right that the Director of Public Prosecutions should be permitted to employ unqualified staff to conduct bail application proceedings before Supreme Court judges.

The view was expressed in all parts of the Chamber that, having regard to the crucial importance of the matter both in relation to the liberty of the subject and to the safety of the public, that was quite unacceptable. Having heard what was said, the noble and learned Lord agreed to reconsider the situation in relation to Clause 77 which is now under discussion.

I hope that I am right in my presumption that this amendment was brought forward as a result of that debate. If that is so, then I cannot for myself see how this makes any improvement at all on the situation. The position is that the person dealing with the bail application is an unqualified person designated by the Director of Public Prosecutions. I am at a loss to understand the difference between being designated by the Crown prosecutor, and the Director of Public Prosecutions. Presumably, it does not mean that in every single bail application all over the country when an unqualified person is sent to deal with it he receives his instructions from the director personally. It cannot mean that. Presumably, it means that he will receive his instructions from a Crown prosecutor acting on behalf of the director.

I ask the noble and learned Lord: what is the difference between those two situations? Does it mean that ultimately it is exactly as was realised when we had our previous debate: that the person who deals with the application is an unqualified person dealing with a matter of supreme importance in regard to the liberty of the subject and the safety of the public?

The Lord Chancellor

That point of principle remains and presumably that is what we will discuss on Clause 77 stand part. The purpose of this amendment is to ensure that the director himself can give instructions to the people who will handle the bail applications if this clause is allowed to stand part of the Bill. Therefore, he can give instructions to which they must conform. The result of that is not to make it any less objectionable from the point of view of the noble Lord. We shall argue about that on clause stand part.

On Question, amendment agreed to.

On Question, Whether Clause 77, as amended, shall stand part of the Bill?

Lord Hutchinson of Lullington

Having taken part in these proceedings for over 10 hours, I do not now intend to press my opposition to the clause standing part of the Bill. The result of going on so late is that it merely piles up matters for a later stage.

However, I am bound to remind the Committee that this subject was debated at some length and, as I have already said, the general feeling of those who took part in the debate under Amendment No. 139A was that it was quite unacceptable for unqualified persons to deal with bail applications which are held in private and which are of the greatest possible importance to the liberty of the subject and to the safety of the public. The noble and learned Lord said that as a result of that debate he would reconsider the matter. I should be most grateful to hear whether he has in fact done so.

Lord Renton

On the question of whether Clause 77 should stand part of the Bill, I support the noble Lord, Lord Hutchinson of Lullington. I simply ask: is it not a matter of having high enough standards of professional advocacy to enable justice to be done and to appear to be done? It is essential for the prosecution to be represented by a qualified lawyer, barrister or solicitor; somebody who understands the law and the implication of the Bail Act and who is prepared and brought up to serve the court in accordance with the rule of law. There is a danger, if we have someone not so qualified, of his thinking that his only duty is to oppose bail by all possible means. We do not want that to happen because that is not justice.

Lord Hacking

Perhaps I may also support the noble Lord, Lord Hutchinson, on this point. Indeed, I have some side notes on my copy of the Bill which read, "Law Society and Bar Council united; House to be divided".

The Lord Chancellor

I should not like it to be thought that simply because the Bar Council and the Law Society had taken a particular view that that necessarily was a view that ought to prevail.

I should like to say a few words about this, though the noble Lord has indicated how he views the position. In the case of Re Director of Public Prosecutions ex parte The Association of First Division Civil Servants (1988), the Divisional Court held that only the DPP himself and Crown prosecutors (that is, qualified lawyers) have power under the Prosecution of Offences Act 1985 to conduct proceedings. The point at issue in the case was whether the DPP could delegate to staff who are not legally qualified the function of screening cases to decide whether prosecutions can proceed. The court held that such delegation was ultra vires as screening constituted "conduct of proceedings" which can only be carried out by the DPP or by the Crown prosecutor.

It is not intended to reverse this decision by allowing unqualified staff to screen cases. The decision did, however, cast doubt on the legality of another practice involving CPS officials who did not possess legal qualifications; namely, the making of representations for the prosecution in respect of bail applications before a judge in Chambers in the High Court and in the Crown Court. In Section 15(3) of the 1985 Act, "conduct of proceedings" is defined as including the making of representations in respect of applications for bail.

The purpose of this clause is to allow the Director of Public Prosecutions to designate any member of the Crown Prosecution Service, though not a barrister or a solicitor, to appear before a judge in Chambers in the High Court or a Crown Court for the purpose of making representations on behalf of the CPS in respect of any application for bail or to vary the conditions of bail or impose conditions in respect of bail which has been granted unconditionally.

As I said, the person appointed to have this function would be somebody selected for the purpose by the Director of Public Prosecutions. My understanding is that the situation which prevailed, until the decision in the case to which I have referred, was that experienced non-lawyers in the Crown Prosecution Service dealt with bail applications and that they had done so to the satisfaction of the court.

The view was taken, and that is why this clause is proposed, that the practice should continue. My understanding is that this decision was welcomed by the members of the judiciary at the time. Since then the CPS has received representations from a number of judges about how well that work was handled by law clerks. In the areas in which they did appear I understand that the judiciary never called into question their independence or competence.

Since the CPS stopped this practice in the light of doubt about legality flowing from the decision, a number of judges have made it known that they regret the change. I believe it right that the cases should be dealt with at the appropriate level. Provided that the person handling this kind of application is competent and adequately trained, and provided that the appropriate controls are there, it is clear that an unqualified person can provide the service that the courts require. That is what we are trying to achieve here.

That does not mean that that procedure will be followed in every case. It means that in a case where the Crown Prosecution Service judge it appropriate, this possibility should arise. It seems a reasonable situation which prevailed in the past without any damage or difficulty as far as I can judge.

I have just been referred to what I said as regards the earlier amendment. I do not think that I gave any particular undertaking about this matter. It is an issue of considerable importance. The noble Lord has indicated the course of action that he proposes to take. I shall have an opportunity to consider further what he has said tonight in preparation for what he may say if he raises the matter again. I have looked into the matter more fully since he raised the question and the information which I have is one of the results of that.

Lord Hutchinson of Lullington

I am grateful to the noble and learned Lord for what he has said.

Clause 77, as amended, agreed to.

Clause 78 [Law reports]:

[Amendments Nos. 207N to 207Q not moved.]

Clause 78 agreed to.

Clause 79 agreed to.

Schedule 10 agreed to.

Clause 80 agreed to.

Clause 81 [Interpretation]:

[Amendments Nos. 208 and 209 not moved.]

2.15 a.m.

The Lord Chancellor moved Amendment No.209A: Page 60, leave out lines 33 and 34.

The noble and learned Lord said: I spoke to this amendment with Amendments Nos. 137B and 141A. It is designed to split the definition of "recognised body", to which I referred before. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No.209B: Page 61, line 7, at end insert — ("(3) In this Act any reference (including those in sections 24(7) and 25(4)) to rules of conduct includes a reference to rules of practice.").

The noble and learned Lord said: This is one of the amendments that I proposed in relation to the earlier amendments. It makes it clear that rules of conduct includes a reference to rules of practice. I beg to move.

On Question, amendment agreed to.

On Question, Whether Clause 81, as amended, shall stand part of the Bill?

Lord Hacking

The noble and learned Lord said after interventions by the noble and learned Lord the Master of the Rolls and I that he would have another look at the definition of "court" which is to be found at the bottom of page 59.

The Lord Chancellor

I did indeed.

Clause 81, as amended, agreed to.

Clause 82 [Regulations and orders]:

[Amendment No. 209BA had been withdrawn from the Marshalled List.]

Lord Simon of Glaisdale moved Amendment No. 209BB: Page 61, line 12, after ("1(1)") insert ("1(4), 9(5)").

The noble and learned Lord said: With the leave of the Committee, I shall speak to Amendments Nos. 209CA and 209CB. These amendments are a matter of considerable parliamentary and constitutional moment; and as noble Lords will see, they have support from all parts of the Committee.

I rise to move Amendment No. 209BB at 2.15 a.m. That was always predictable and was predicted. We are now in the sixth day of Committee stage. On only one of those days has the Committee adjourned before 10.30 p.m. On another day besides this we went on past midnight. It was always predictable that, if noble Lords sat at reasonable hours to do the job that had to be done on this Bill, seven or eight days would be needed for the Committee stage.

The amendments all relate to the changing of procedure in the clauses and subsections to which they refer from the negative procedure to the affirmative procedure. All but two of the subsections relate to Henry VIII clauses. When I moved a similar amendment at the Report stage of the Children Bill my noble and learned friend accepted it with alacrity. If he is prepared to indicate that he accepts this group of amendments, I shall sit down at once.

The Lord Chancellor

Before the noble and learned Lord sits down, I should say that I am willing to consider for affirmative resolution procedure the subject matters that he has raised. Clause 1(4) is the one which we discussed in relation to Clause 1. I indicated then that I would endeavour to make it clear what I was seeking to say. I know that my noble and learned friend does not agree with me. He said that although I said it thrice, I had not persuaded him. I am sorry that I said it thrice if I did not have that effect. I intend to deal with that point. I am minded to delete Clause 9(5) in the light of the considerations brought forward by my noble and learned friend. Clause 23(1) and (2) are in much the same position as Clause 1(1) and (4). So far as the rule-making powers for conditional fees and the rights of Scottish and Northern Ireland lawyers are concerned, I am content that the basic rule should be under the affirmative resolution procedure. The only matter about which I am a little concerned —perhaps my noble and learned friend will allow me to consider it —is whether all the regulations under Clause 45 require to be dealt in that way.

I am prepared to deal with Clause 44 by affirmative resolution. I am more doubtful about Clause 45 because it is an EC method. I do not have a strong view about it, but that is my present feeling. I hope that that is sufficient indication to enable my noble and learned friend to decide what he is going to do. I am inclined to do my best to accommodate the views put forward earlier by my noble and learned friend on that aspect of the matter.

Lord Simon of Glaisdale

I am very much obliged to my noble and learned friend. I am not sure that I have taken in everything that he said. So far as Clause 1(1) and (4) are concerned, it is not only that I do not agree with my noble and learned friend —that would be neither here nor there —but no other Member of the Committee agrees with him. However, I understand that he is going to amend that provision and it may be better to wait to see how that turns out.

Clause 45(4) is a Henry VIII clause. Perhaps my noble and learned friend will allow me to discuss the details with him. In the meantime, if the noble Lords, Lord Rippon and Lord Mishcon agree, I shall beg leave to withdraw the amendment.

Lord Rippon of Hexham

My Lords, I wonder whether my noble and learned friend the Lord Chancellor might consider agreeing (so that we do not have to have this discussion too often) that in any case where the Henry VIII clause is employed —that is to say, where there is a power to amend or repeal the primary legislation —there will always be the affirmative resolution procedure. If we received that undertaking it would save a great deal of time because that point has come up time and again in recent legislation.

The Lord Chancellor

I am appreciative of the length of time for which my noble friends and my noble and learned friends have waited to put their point. I am disposed to do everything that I possibly can to meet what they have said. In the circumstances, agreeing with my noble friend Lord Rippon is perhaps the least that I can do. I understand the concerns and, while I am not sure that I entirely accept his description of the amendments, where the power to amend primary legislation is conferred, even in a limited sense, I shall see that the affirmative resolution procedure is followed.

Amendment, by leave, withdrawn.

[Amendments Nos. 209C to 209E not moved.]

The Lord Chancellor moved Amendment No. 209F: Page 61, line 18, after ("Act") insert ("other than one under section 86(2)").

The noble and learned Lord said: This amendment is designed to make it clear that we do not need the negative resolution procedure in relation to commencement orders. As currently drafted all statutory instruments under the Bill are subject to the affirmative or the negative procedure, which should not be necessary for simple commencement orders and is not the general practice. I beg to move.

On Question, amendment agreed to.

Clause 82, as amended, agreed to.

Lord Mishcon moved Amendment 209G: After Clause 82, insert the following new clause:

("Saving for legal aid.

.—(1) Nothing in this Act concerning rights of audience for lay persons or for solicitors shall prejudice any application for or grant of representation under the Legal Aid Act 1988.

(2) When the Legal Aid Board is performing its functions under section 15(3) of the Legal Aid Act 1988 and it appears to the Board that all or some solicitors have rights of audience before the court in which the proceedings are taking place or are likely to take place, that circumstance shall not be taken into account by the Board when deciding whether to grant representation and whether to permit the instruction of counsel.

(3) When a competent court under sections 20, 27 or 29 of the Legal Aid Act 1988 is performing its functions under sections 21, 22, 28 or 29, and it appears to the court that all or some solicitors have rights of audience before the court in which the proceedings are taking place or are likely to take place, that circumstance shall not be taken into account by the court when deciding whether to grant representation and whether to assign counsel.").

The noble Lord said: I ought to point out to the Committee that we have achieved a defeat for the Leader of the House, who I believe has heard what I have said, and the Chief Whip, who I believe has heard what I have said. The defeat is on the following basis. They were insistent that we were only allowed six days for this Committee stage. I have to inform them that we have now gone almost through the seventh day. In those circumstances, I regard that as a victory.

Amendment No. 209G does just this. It seeks to ensure that the extension of rights of audience to lay persons under Clause 8 of the Bill, and to solicitors under Part II, is not used as a reason to restrict eligibility for legal aid or to deny representation by counsel in appropriate cases. I do not have to make a long speech on this amendment, because the noble and learned Lord conceded the point very generously and very frankly when I moved an amendment for incorporation in the Bill of a clause which saw to it that these extensions of right generally were not meant to be an invasion of rights under legal aid.

The client must have the right to say to the legal aid authorities, "I should like to have counsel in this case", and the legal aid authorities should not be in a position to say, "We are very sorry, but there was a solicitor who conducted the general preparation of the case, and we think that as that solicitor has a right of audience he should be the person who conducts the case and not counsel". The Law Society is very keen to see that this position is maintained as under this amendment, and so is the Bar Council.

I believe that the noble and learned Lord will want to carry out what he has always said, which is that the whole purpose of many provisions of this Bill is to preserve the client's choice. This is what this amendment does and I hope that the noble and learned Lord will be able to agree to it. I beg to move.

Lord Renton

Perhaps I may very briefly say that I support this amendment. It is only right that somebody on the government side should make that clear.

The Lord Chancellor

I entirely go along with the point of view that the mere fact that we are seeking to increase choice, which is what this Bill is about, is not to be taken as a cost-cutting exercise so far as concerns legal aid. I am also anxious to preserve the point that the level of representation appropriate to a particular case is something that the Legal Aid Board has statutory responsibility for already; and of course the judges also have in criminal matters a power in this situation to say at what level representation should be.

For example, the legal aid authorities can say whether counsel should be instructed in a particular case where legal aid is available, and a solicitor or counsel might be appropriate depending on the nature of the case. The legal aid authorities have discretion of that kind and, again, the legal aid authorities —legal aid authorities includes for this purpose the courts in appropriate cases —have power to say whether the case justifies the employment of leading counsel rather than just a junior counsel. I should want to continue to provide that kind of flexibility. I do not think there is much between us; it is a question of how it should be phrased. I am sure that the noble Lord would not suggest that in a trivial case the client on legal aid should have the right to employ a very expensive counsel.

The general idea that increasing choice will be frustrated by not giving the client an appropriate level of choice is not a provision that I wish to see under the Bill. I believe that this is also the aim of the noble Lord.

Lord Mishcon

Indeed it is. I hope that that is clear from the wording of the amendment. I hope that the noble and learned Lord will agree that I have been rather careful in the wording that I have employed. Of course any discretion which the Legal Aid Board had before the passing of the Bill must remain. I have specifically provided in subsection (1) that, Nothing in this Act concerning rights of audience for lay persons or for solicitors shall prejudice any application for or grant of representation under the Legal Aid Act 1988". Therefore the amendment merely states that none of the changes in the Act can be used as a reason for depriving a client or applicant for legal aid of what would have been his rights had the Act not been passed. That is what the amendment says and I should have thought the noble and learned Lord agrees with it. If he tells me that the wording can be tightened up and it is a matter of drafting but the principle is right, of course I shall ask leave to withdraw the amendment. Alternatively, in his generosity, since this is almost the final amendment, he could say to the Committee that he accepts the amendment but reserves the right to "clean it up", if I may use that expression, in drafting when we come to a later stage. That would be a very generous gesture.

The Lord Chancellor

I should like to read carefully what the noble Lord has said. I believe there is not very much between us and that we should be able to reach a form of words which accurately reflects what we wish. In any case, I should like to try to deal with the question of the other authorised litigators and advocates under the new framework in relation to legal aid. Perhaps the noble Lord will be kind enough to allow me time to consider that matter and I shall see whether we can achieve a form of words to which we can both agree.

Lord Mishcon

I shall use the expression which has been used before. This appears, as the noble and learned Lord has said, to merit his favourable consideration with a view to a clause which carries out the principle. On that clear understanding I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 83 to 87 agreed to.

schedule 11[consequential Amendments]

The Lord Chancellor moved Amendment No. 209GA: Page 10, line 11, leave out from ("section") to ("money"), in line 12, and insert ("and section 33 references to clients' money and money of a kind mentioned in subsection (1)(b) of this section or (1)(a) of section 33 include references to").

The noble and learned Lord said: This is a technical amendment. The Government proposed in the White Paper to make provision to allow solicitors, who held money as stakeholders, to pass to their clients any interest earned on that money. In addition, they proposed that all money held as a stakeholder must be put on deposit, and interest paid to the client, unless the amount is de minimis. This proposal required amendments to Sections 32 and 33 of the Solicitors Act; these deal with the council's power to make accounts and trust account rules, and rules as to the payment of interest on clients' money. As there was some doubt that the amendment as drafted in paragraph 5 extended to Section 33 of the Act, I move this amendment to the Bill to make that intention clear. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 209H: Page 109, line 40, after ("inserted") insert (" "or").

The noble and learned Lord said: In moving this amendment I wish to speak also to Amendments Nos. 209JA and 209L. Paragraphs 9 to 17 of Schedule 11 set out consequential amendments to the Judicial Pensions Act 1981 arising mainly from Clause 55 of the Bill, which extends the dependant's benefits scheme to female judges and their widowers. They insert references to female judges and their dependants where appropriate in the Act. Amendment No. 209H picks up one reference which was missed when the Bill was drafted. The others are purely drafting amendments which make no changes of substance. I beg to move.

On Question, amendment agreed to.

[Amendment No. 209J had been withdrawn from the Marshalled List.]

The Lord Chancellor moved Amendment No. 209JA: Page 110, line 3, leave out from ("words") to the end of line 4 and insert (" "widow or child of his" there shall be substituted "widow, widower or child of that person"; and").

On Question, amendment agreed to.

[Amendment No. 209K had been withdrawn from the Marshalled List.]

The Lord Chancellor moved Amendment No. 209L: Page 110, line 6, leave out ("person" ") and insert ("person's" ").

On Question, amendment agreed to.

Schedule 11, as amended, agreed to.

Schedule 12 [Transitionals and savings]:

The Lord Chancellor moved Amendment No. 209M: Page 112, line 4, leave out ("or other instrument") and insert ("instrument or other document").

The noble and learned Lord said: Amendment No. 209M broadens slightly the scope of paragraph 1 of Schedule 12. This paragraph construes references to registrars as references to district judges, and presently applies only to references found in enactments or other instruments. This amendment applies the construing provision to references in "documents" as well.

The purpose of this amendment is to include references in practice forms. These are documents prepared by the court service for the encouragement of uniformity and consistency in communications with the public. They do not, however, have any legislative force and are thus not covered by the term "instrument" or "enactment". I beg to move.

On Question, amendment agreed to.

[Amendment No. 210 not moved.]

The Lord Chancellor moved Amendment No. 210A: Page 113, line 12, at end insert — ("(3) The definition of "replacement date", inserted in section 87(1) of the Solicitors Act 1974 by paragraph 7 of Schedule 11 shall have effect subject to the provision made by this paragraph.").

The noble and learned Lord said: The purpose of this amendment is to clarify the workings of the transitional provisions for the new system of solicitors' practising certificates set out in Clause 61 of the Bill. At present all practising certificates expire on 31st October each year. Under the new system the noble and learned Lord the Master of the Rolls is to be empowered, with the concurrence of the Lord Chancellor and the Lord Chief Justice, to make regulations prescribing a replacement date by which a solicitor must apply for a new practising certificate.

On the coming into force of Clause 61, the transitional provisions provide that all practising certificates then in force shall automatically have replacement dates of the following 31st October. This ensures that there is a smooth transition into the new system, and that the transitional arrangements will take precedence. I beg to move.

On Question, amendment agreed to.

Schedule 12, as amended, agreed to.

Schedule 13 [Repeals]:

Lord Hutchinson of Lullington moved Amendment No. 211: Page 114, line 52, column 3, at end insert—

("Section 83.").

The noble Lord said: I have the doubtful honour of going in last in very poor light. I hope the noble and learned Lord will obey the convention that fast bowlers do not bowl at tail enders. In moving this amendment, I wish also to speak to Amendment No. 212. This is a repealing schedule and it would seem that two important repeals have not been included in the schedule.

Clause 24(1) states: The question whether a person has a right of audience before a court, or in relation to any proceedings, shall be determined solely in accordance with the provisions of this Part".

Under Section 83(1) of the Supreme Court Act 1981 the noble and learned Lord the Lord Chancellor may direct that, solicitors may appear in, conduct, defend and address the court in any proceedings in the Crown Court". In Section 83(2) a direction, may have effect as respects all places where the Crown Court sits", or as specified earlier.

In Section 83(3) the Lord Chancellor, shall have regard to any shortage of counsel in the area in question … and to any other circumstances affecting the public interest".

When I raised this matter earlier in the proceedings the noble and learned Lord said that in his view that power referred only to curious places such as Bodmin where there was a shortage of barristers and where solicitors might be appointed under this clause. However, the noble and learned Lord's predecessor made directions under that section regarding solicitors having rights of audience in appeals and committals for sentence in all Crown Courts. Therefore it would not seem to have been operated only in regard to curious places such as Bodmin.

In those circumstances it appears that the Lord Chancellor may bestow rights of audience in all Crown Courts by direction in any circumstances which he considers affect the public interest. I wonder how that can sit with the terms of Clause 24.

Equally, under Section 4(3) of the Prosecution of Offences Act 1985, for the purpose of giving Crown prosecutors additional rights of audience in the Crown Court, the Lord Chancellor may give any such direction as he could give under Section 83 in respect of solicitors. Therefore, under that statute, the Lord Chancellor appears to have power to grant similar rights of audience in Crown Courts to solicitors in the employ of the Crown Prosecution Service.

Those two powers seem to ride through the provisions of Part II of this Bill. Therefore, I suggest that both should appear in the repeal schedule to the Bill. I beg to move.

The Lord Chancellor

The fundamental section is Section 83 of the Supreme Court Act 1981. The provision in the Prosecution of Offences Act uses that section.

The view that I have taken of the provision, since I have had to operate it, is that it is intended for special situations. So far as I can recall, the only use that I have made of it is the one that I mentioned. I am not sure that I used the phrase "curious places like Bodmin". If I did, I had best be careful. I referred to Bodmin as somewhere from where I had to move an existing practice direction and transfer it to Truro when the Crown Court moved from Bodmin to Truro.

I have taken the view that the section deals with special situations rather than general situations. I agree that it refers to, all places where the Crown Court sits". However, when one looks at the considerations to which the Lord Chancellor is supposed to have regard I believe that the intention is that it be special.

There is also the point that practice directions have been made under that section. If there is saving for them they would fall on any repeal. I am sure that the noble Lord will be aware that any suggestion that we should take away existing rights of audience in Caernarvon would not be wise. The principle embodied in the Bill is that existing rights of audience are not to be taken away. There is a practice direction which refers to Caernarvon, Barnstaple, Bodmin, Doncaster and Lincoln as well as one referring to Truro.

The second, more general, direction was made some time ago in respect of criminal proceedings in the Crown Court. It provided that in some cases the same firm which appeared for the defendant in the magistrates' court could appear in civil proceedings on appeal from the magistrates' court on the basis of the special circumstances that it had appeared in the proceedings in the magistrates' courts. I understand that the provisions of the second practice direction are widely used. I wish to maintain those provisions.

I have taken the view of Section 83 is not a general provision that would enable me to override the general law in that area. I should not wish to lose the existing practice directions. For that reason, I should not like to repeal Section 83 in the repeals schedule. The noble Lord is perfectly right to say that from the enactment of the new system rights of audience will be determined solely in respect of that method. Accordingly, I hope that he will feel able to withdraw his amendment and the section relating to prosecution offences which stands in it.

2.45 a.m.

Lord Hutchinson of Lullington

Does the noble and learned Lord agree that the power has been used not only in the way that he undertakes to use it, but broadly to give those rights in all Crown Courts? That is what makes one nervous of leaving those powers unrepealed.

The Lord Chancellor

I see that. I agree that the provisions of the second practice direction about appeals to the Crown Court from magistrates' courts in civil proceedings and in criminal proceedings in the Crown Court in some cases where the same firm appeared in the magistrates' courts are fairly general. They are based on the circumstances that the solicitor appeared in the magistrates' court. In that way they are somewhat special.

However, my view of the section has been the more narrow one. It may be wise for me to consider in what form the section might continue in view of what the noble Lord has said, but I think that the general words that we have used in Clause 24, to the effect that rights of audience should be determined only in respect of that, would make it clear that from now on Section 83 applies only to special circumstances. If the noble Lord is prepared to leave the matter with me, I shall certainly consider it. I do not want to lose the existing rights created under Section 83 because those are important rights which it would not be correct to try to remove.

Lord Hutchinson of Lullington

Having regard to the medium pace at which the noble and learned Lord has bowled, I am perfectly happy to withdraw the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Lord Chancellor moved Amendment No. 211ZA: Page 114, column 3, leave out lines 53 and 54.

The noble and learned Lord said: This is a drafting amendment to delete from Schedule 13 the provision for the repeal of paragraph 3(2) of Schedule 6 of the Supreme Court Act 1981. That provision has in fact already been repealed by the Statute Law (Repeal) Act 1989. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 211ZB: Page 115, column 3, leave out lines 9 and 10.

The noble and learned Lord said: This is a consequential drafting amendment to an earlier amendment removing the subsection in Clause 3 which would have repealed Sections 50 and 51 of the County Courts Act 1984. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 211A: Page 115, line 15, column 3, at end insert —

("Section 89(3).").

The noble and learned Lord said: This amendment repeals Section 89(3) of the County Courts Act 1984 and is entirely consequential upon Clause 12 which updates the list of articles which are exempt from seizure under warrants of execution in the county courts. It substitutes for the concept of a prescribed value below which articles are protected the test of whether or not those articles are necessary. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 212 and 212A not moved.]

Schedule 13, as amended, agreed to.

House resumed; Bill reported with amendments.

House adjourned at ten minutes before three o'clock.