HL Deb 15 March 1990 vol 516 cc1718-71

8.32 p.m.

Proceedings after Third Reading resumed.

Lord Boardman moved Amendment No. 20: After Clause 35, insert the following new clause:

("Conveyancing fiduciary relationships. .—(1) A fiduciary relationship shall be deemed to exist between an authorised practitioner and any person for whom the authorised practitioner provides any conveyancing services. (2) The extent of the fiduciary relationship imposed by subsection (1) shall be the same as would exist between a solicitor and his client for whom similar services were being provided.").

The noble Lord said: My Lords, on Report stage we had an amendment in the same terms as Amendment No. 20 which I now move. The principle was in part accepted by my noble and learned friend. The intention of the amendment was to establish a fiduciary relationship between the authorised practitioners, similar to that which would apply to a practising solicitor in the same circumstances. In response to the debate, my noble and learned friend the Lord Chancellor stated at col. 469 of the Official Report: I believe that I can favourably consider bringing forward an amendment to make it clear that where the authorised practitioner is providing the services, the person who is responsible for the transaction at the professional level shall have the responsibility to the client in carrying out the transaction that a solicitor would have in relation to the ordinary practice".

My noble and learned friend went on to say that there might be difficulties in drafting that. But I understood that the principle was accepted. Unfortunately, we have not had an amendment from my noble and learned friend covering that point. No doubt we shall hear more about whether one will be possible or what has happened to make it impossible.

The amendment covers a somewhat wider field. My amendment sought to make a fiduciary relationship apply not just to a professional person who was conducting the conveyancing part of the transaction but to the authorised practitioner covering the whole range of the services covered by that authorised practitioner which were connected with the particular conveyancing transaction. The purpose of the present amendment is to make it clear that it is the authorised practitioner who owes the fiduciary duty to any person for whom he is providing conveyancing services.

It is not enough for an employee alone, carrying out conveyancing, to have a fiduciary duty. That duty must pass to the employer. The analogy with a firm of solicitors in private practice is perhaps helpful. A principal of a firm of solicitors cannot escape his fiduciary responsibilities by arguing that it was his employee—even if the employee were a solicitor—who carried out the work. The law imposes a fiduciary duty on the firm as a whole.

Similarly, I believe it must be the authorised practitioner who is under that fiduciary duty. Indeed, on Amendment No. 19 in connection with a point raised by my noble friend Lord Coleraine, my noble and learned friend said that a solicitor employed by a building society, for example, owes a duty to that society just as an employee employed by a firm of solitors owes a duty to the firm of solicitors. It must therefore be that employer who has the fiduciary duty similar to that which is employed between a firm of solicitors and its client. That is important in the case of a lending institution. A solicitor who lends money on mortgage to his clients has very strict obligations placed upon him. A financial institution which also undertakes related conveyancing to the client should be placed under no less a fiduciary duty.

The authority on this with regard to solicitors is a book called Cordery on Solicitors. I quote an extract. It states: The relationship existing between a solicitor and his client is recognised in equity as a fiduciary one imposing on the solicitor special obligations. In his dealings with his client the solicitor must exercise the utmost good faith and in any financial transaction … with his client there will be a presumption that such transaction should not be upheld unless the solicitor can establish that it was effected by the free exercise of the client's will and without any influence", and so on.

I urge and argue that the same duty applies to an authorised practitioner who has employed a solicitor in house in order to carry out conveyancing transactions which may be associated with the lending of money or with the placing of insurance. A solicitor who lends money on mortage to his client is under a very special duty. There are many authorities. Perhaps I may mention one. It is Nocton v. Lord Asburton which laid down the grounds of the duties and the responsibilities that apply when a solicitor lends money to his client. I ask: why should that relationship between the firm of solicitors lending money and, as part of that, also undertaking the conveyancing, be different from that of a building society lending money and also, as part of that, undertaking the conveyancing? There must be a duty on the part of those employing the solicitors to their client. It is the same duty that applies between the solicitor and his client.

My view is that where a financial institution is both providing a loan on mortage and providing related conveyancing services, it should be placed in the same position as a solicitor who is providing a loan on mortgage to his client and providing related conveyancing services. In other words, the authorised practitioner should have a fiduciary relationship with his client. If that is not so, we shall have an impossible position in the competition between the high street firm of solicitors which will be faced with special duties and obligations to its clients and the next-door building society or insurance company (or whatever it is) which is offering the same conveyancing services. Both are free to lend money to people who cross their thresholds and both are free to place insurance. The solicitor is in a position to give independent advice but the other is not. However, a fiduciary duty should be the same in both instances. There must be level playing fields in the competition which my noble and learned friend wishes to create.

It means that in a fiduciary relationship a solicitor is under a duty to disclose any secret profits which are made. The building society or bank which receives commissions from endowment policies and so forth must be in no different a position to that of solicitors who also arrange endowment policies for clients whose conveyancing work they carry out. A different set of rules would mean two standards and that would be quite unacceptable.

My noble and learned friend may say that at the end of the day it should be left to the courts to establish whether there is a fiduciary relationship in such circumstances. I hope that that will not be his reply. It is right that the relationship should be clearly established in the Bill. It should not be delayed until litigation raises the question in years to come as to the duties of the building societies and banks carrying out conveyancing, offering services and retaining commissions and so forth which are undisclosed and unaccounted for. We should not wait for the courts then to decide whether they were in a fiduciary relationship and must account for those profits in the same way as must a high street firm of solicitors discharging such duties.

I hope that, following on from what he said on Report, my noble and learned friend will go a little further and extend the relationship which he accepted for the professional element of the financial institution. I hope that he can extend the relationship to the authorised practitioner who should have the same duty as the high street solicitor with whom he competes. I beg to move.

Lord Prys-Davies

My Lords, I wish to support the principle of the amendment. It would establish a fiduciary relationship between the authorised conveyancing practitioner and his customer. In plain language it would mean that in the exercise of his duties towards the customer the conveyancing practitioner must act with utmost good faith. That is the significance of the term "fiduciary relationship". It is the highest standard of conduct known to English jurisprudence. It is a high standard developed by the courts of Chancery over the centuries. The noble Lord, Lord Boardman, has indicated that it is the standard expected of a solicitor in his dealings with his client. Thus it requires that the solicitor must not exercise undue influence and that he must give disinterested advice and make full disclosure of all the relevant facts.

It is difficult to see why a financial institution which provides a loan on mortgage and a related conveyancing service should not be expected to be guided by the same high standards. Therefore, it is right that the conveyancing practitioner should observe the standards of utmost good faith and that it should be spelt out in the Bill.

Lord Byron

My Lords, I support the amendment for the reasons given by the noble Lord, Lord Boardman. It is not enough for the employees carrying out the conveyance to have a fiduciary duty to the client; the provider of the service, the employer, must also be under a fiduciary duty.

It is helpful to have the analogy of a firm of solicitors in private practice. A principal in a firm of solicitors could not escape his fiduciary responsibilities by arguing that his employee, even if he is a solicitor in a branch office, was carrying out the work. The law imposes a clear fiduciary duty on the principal in a firm of solicitors. Similarly, the authorised practitioner should be under such a fiduciary duty. I support the amendment.

8.45 p.m.

The Lord Chancellor

My Lords, we discussed a similar amendment on Report. It is not an easy area in which to operate. I understood my noble friend to suggest that the existence of the fiduciary duty determines the terms on which a solicitor may act. However, I believe that the precise terms on which a solicitor may act require to be determined with a good deal more precision than simply saying that he or she is subject to a fiduciary duty.

The passage from Cordery to which my noble friend referred states that, in any financial transaction with his client (save as to costs for work done) there will be a presumption that such transaction should not be upheld unless the solicitor can establish that it was effected by the free exercise of the client's will and without any influence on the part of the solicitor. Thus a solicitor is bound to give his client disinterested advice". In relation to the conveyancing transaction that is one thing. To give disinterested advice on matters outside the conveyancing transaction is another. If the service given by the authorised practitioner is related to conveyancing the advice would be disinterested. However, it would be impractical to think of a solicitor in a building society being asked to give independent advice on whether the terms of the mortgage offered by his building society were better for the client than those of another. That would not be sensible because, as I made clear in earlier discussions, the solicitor or professional person in charge of the transaction must make clear to the client the service that he is offering. That would not be one of the services.

That is highlighted in an amendment which I moved earlier and which accepted an amendment tabled on Report by the noble Lord, Lord Mishcon, about indpendent advice for an independent solicitor. In addition to conveyancing services he can give independent financial advice. I have accepted an amendment that there should be no possible prohibition against him doing so. The Law Society should be able to make rules to prevent him being muzzled in respect of independent advice over and above the conveyancing service.

In the context of this situation a solicitor employed by a building society would be giving only the expertise necessary properly to complete the conveyancing transaction. His remit from the building society would be to complete the title of the building society to secure the mortgage. It would be unreasonable to expect him to do anything more.

Cordery goes on to state: Thus a solicitor is bound to give his client disinterested advice, and the mere fact that the solicitor, by becoming personally interested in a transaction of the client's, has put it out of his power to give that advice, will entitle the client, as against the solicitor, to have that transaction set aside unless the solicitor has disclosed his interest to his client". If the solicitor employed to carry out the conveyancing tells the client, "I am an employee of this building society", that is immediate notice to the client that he cannot give independent advice where a conflict is concerned. Of course, he can give independent advice in respect of matters without conflict. That is why I have said that there must be an interview at the beginning in which those matters are determined. The solicitor, the building society's employee, can only act for a client if he is satisfied on his professional judgment that there is no conflict of interest between the service required by the client for himself and the service which the solicitor is to give to the building society.

When advising a client, a solicitor will be bound to make full and honest disclosure of the facts within his knowledge, and he cannot excuse the failure to discharge a duty to one client by showing that a due discharge would have constituted a breach of duty to another. A lawyer is under a duty to his client not to disclose to third parties any information confidentially revealed to him, and that duty continues.

As a consequence of those rules, transactions between a solicitor and a stranger would be unobjectionable. As made between a solicitor and his client, they are neither enforceable by the solicitor nor subject to consideration of delay in confirmation sustainable by him when impeached by the client.

On the matter of disclosure of information about commissions and the like, which I understood to be an important aspect of my noble friend's amendment, the general rule does not specify precisely what he must do in that connection. The Law Society in England and Wales has rules in respect of that but those are special rules. They are rules which the Law Society has made.

I think I can illustrate this best by pointing to one of the cases which is referred to in the footnote of the passage from Nocton v. Lord Ashburton to which my noble friend referred. Immediately after that is a very famous Scottish case called Brown v. The Inland Revenue Commissioners in which I had the honour of appearing in this House a considerable time ago. From that case it is quite clear that the English and Scottish law in this respect is the same.

If I take that as the foundation, there is the same sort of relationship in law between the solicitor and his client in Scotland and the solicitor and his client in England. Rule 10(1) of the 1988 practice rules of the Law Society of England and Wales provide as follows: A solicitor shall account to his client for any commission received of more than £10 unless, having disclosed to the client the amount of the commission or, if the amount cannot be ascertained, the basis of calculation of the commission, he has the client's agreement to retain it". That is the English rule. The Scottish conduct of investment business practice rules 1989 make it quite clear that there is no duty on the solicitor recommending to or effecting for a client a transaction relating to a life policy or unit in a regulated collective investment scheme to account for commission although he must disclose that fact that he has received commission and, if asked by the client, the amount.

That shows that the precise relationship and obligations are matters for regulation. Therefore, I believe that the correct way to deal with this matter is to provide for them in the terms of the transactions and to do that in detail in terms of the regulation making power which the Lord Chancellor has in Clause 38(2)(e). There the Lord Chancellor has power to make regulations as to the terms and conditions on which authorised practitioners may provide conveyancing services. The right way to go about the matter to which my noble friend has referred is to make terms and conditions of that kind under the regulation-making power with precision, saying exactly what is to be done.

Perhaps I may give one more illustration of why I believe that must be right. My noble friend referred to the position of a building society and commissions which it may receive from an insurance company. For example, let us take as an example an insurance company to which the building society is a tied agent. The building society may expect to receive commission from the insurance company in respect of business made with that insurance company although it may not be in the form of discrete commission for particular transactions but it may be in more complicated form. If the building society provides the conveyancing services, one result will follow. If the insurance company provides the conveyancing service, the results will be quite different, on the way in which my noble friend looks at the matter.

If the insurance company provides the conveyancing services, it will receive no commission of any sort in respect of that. If the building society does it, the situation will be different. That is why I say that those two situations, as regards a very generalised fiduciary duty, may well be different. That is why I believe that the right way to cope with this matter is to deal with it very precisely in the regulations in order to ensure that what is desired is accomplished, with precision, in that way. It is only in that way that one could effectively avoid litigation on that sort of question.

Lord Boardman

My Lords, I am very disappointed with the response of my noble and learned friend. I suggest that it goes right against the trend of current legislation, and indeed of current Government philosophy on consumer protection. We spent many days in this Chamber discussing the Financial Services Bill. In that Bill we spent a great deal of time on consumer protection, on polarisation, and on Chinese walls being established in order to prevent any conflicts of interest arising.

As the Bill is now, we are playing on very unlevel playing fields as between a solicitor practising in one High Street firm and next door a building society offering the same services on very different terms and deluding the customer into believing, because the customer is being seen by a solicitor (as the Bill provides he should be), that he will be receiving the same independent advice and standards of fiduciary relationships and so on as if he went to the High Street solicitor practising next door. I find it very disappointing that that distinction is not recognised and that the Bill is not amended to place the same duty on both.

If you are having a quite different standard as between the authorised practitioner and the High Street solicitor then there should be something like a health warning put on the building society or financial institution's name plate outside saying, "You will not get independent advice here, we shall keep to ourselves any side profits we make and please do not smoke this particular packet unless you want to take a risk". I believe that it is as serious as that. A customer visiting and seeing a solicitor, although employed by a building society, will receive the firm impression that he is getting the standard of integrity and independent advice which I hope that he rightly associates with a solicitor. The fact that that solicitor is an employee of the building society should not lower that obligation any more than if he was a solicitor employed by a firm of solicitors next door. That is unfortunate.

My noble and learned friend referred to a difference between the insurance company arranging conveyancing and providing an insurance policy where there would be no direct commission and the building society doing the same thing, where there would be a commission. I suggest that if an insurance company is providing financial services, then I hope it is required to make it clear to the client for whom it is providing the conveyancing services that it is receiving side benefits from the sale of its own insurance policies to that client. There must be benefits there. If the policies were placed through a building society, the insurance company would pay the building society commission. I would hope that that would lead to a disclosure of interest. It certainly would be in the case of a practising high street solicitor who managed to make some side benefit by virtue of the office that he was carrying out as part of or as adjunct to a conveyancing transaction.

Although there is a distinction in the quantification of it—building society commission can be quantified but it is difficult to quantify what an insurance company makes by placing its own insurance policy with its captive customer—nevertheless, there must be a side benefit which should be caught up by a fiduciary duty owing by that particular authorised practitioner to the customer.

I am very sorry that my noble and learned friend has not felt able to give more encouragement to this amendment. I note that he says that it will be a matter which will be taken care of in the regulations. The right place for what is a fundamental part of our whole system of consumer protection which we have spent so many hours debating—that essential plank—should be in the Bill. It should not be left to regulation. It is one which I very much regret will not appear. However, at this time, with such a thin House which, if I should divide, will not have been persuaded by listening to arguments on both sides—perhaps that would be to my advantage—I feel I cannot press the matter any further. I express my deep regret and ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9 p.m.

Clause 38 [Regulations about competence and conduct of authorised practitioners]:

The Lord Chancellor moved Amendment No. 21:

Page 32, line 9, after ("services") insert— ("(aa) that in providing such services (and in particular in fixing their charges) they act in a manner which is consistent with the maintenance of fair competition between authorised practitioners and others providing conveyancing services;").

The noble and learned Lord said: My Lords, I have to a certain extent already spoken to this amendment when discussing the earlier amendment moved by the noble Lord, Lord Mishcon. I bring this amendment forward in response to a question raised by the noble Lord, Lord Mishcon, and his colleagues at the earlier stages and to put beyond doubt the regulation-making power to enable the Lord Chancellor to make regulations with a view to securing that authorised practitioners, when providing conveyancing services and in particular when fixing their charges, act in a manner which is consistent with the maintenance of fair competition between themselves and others, such as solicitors and licensed conveyancers, who supply conveyancing services. I beg to move.

Lord Prys-Davies

My Lords, from these Benches I should like to welcome this amendment. It is more or less in line with the amendment moved by my noble friend Lord Mishcon at Report stage and so we welcome it.

On Question, amendment agreed to.

Clause 47 [Conditional fee agreements]:

Lord Ackner moved Amendment No. 22:

Page 38, line 13, leave out subsection (2) and insert— ("(2A) A conditional fee agreement shall be unenforceable so far as it provides for the amount of any fees to which it applies to be increased above the amount which would be payable if it were not a conditional fee agreement.").

The noble and learned Lord said: My Lords, the subject matter of this amendment is contingency fees. I know that my noble friend Lord Mishcon, whose absence from the Chamber I note with a genuine sense of deprivation, cavils at the word "contingency". That is because, as he said, many of us recognise it as being evil. I adhere to the use of the word because it is a wholly proper description of what is proposed, the true and ordinary meaning of "contingent" being "dependent upon something else" or "liable but not certain to happen"; hence the phrase "contingency plans".

I derive further support, if I need it, from the Lord Chancellor's Green Paper headed "Contingency Fees" and in particular Chapter IV which is headed "How Contingency Fees Might Operate". In that chapter, at page 10, under the heading "Speculative Basis" is described that which, in this Bill for obvious cosmetic purposes, is given a brand new name; namely, "Conditional Fees". Even its Scottish name—"Speculative Action"—is not used since to our profession that has a distinctly disreputable flavour.

Perhaps I may make it quite clear that my proposed amendment signals no partial conversion to the Lord Chancellor's proposal on this subject, since I wholeheartedly join with my noble and learned friend Lord Hailsham in condemning it as being inherently immoral.

At Committee stage, when it was Clause 44 and the Motion was put that it should stand part of the Bill, four Lords of Appeal in Ordinary, three retired Law Lords, the former Lord Chancellor—my noble and learned friend Lord Hailsham—and the Master of the Rolls all voted against it in its entirety. My amendment merely signifies my acknowledgement of the power of what my noble and learned friend Lord Hailsham calls "the elective dictatorship".

Lord Justice Buckley, in explaining the nature of the public policy which condemns contingency fees, said in 1975 in Walersteiner v Moir as follows: It can, I think, be summarised in two statements. First, in litigation a professional lawyer's role is to advise his client with a clear eye, and an unbiased judgment. Secondly a solicitor retained to conduct litigation is not merely the agent and adviser to his client but also an officer of the court, with a duty to the court to ensure that his client's case, which he must of course present and conduct with the utmost care of his client's interest, is also presented and conducted with scrupulous fairness and integrity. A barrister owes similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations".

That quotation may be found on page 4 in the memorandum entitled Contingency Fees, being the Law Commissioners' response to the Green Papers, the wisdom of which the Lord Chancellor has seen fit to ignore. I quote but two of the eight conclusions to be found on page 32 of that memorandum. Conclusion (vi) states: Any type of contingency fee agreement creates the potential conflict of interest either between the lawyer and his client or between the lawyer and the court. Protection against these conflicts requires careful consideration".

I interpolate to say that the Bill provides no such protection. Conclusion 7. It seems most inadvisable to repeal the existing rule of law at a time when it is proposed to change radically not only the organisation of the legal profession but to widen the scope of those who may give advice to and present cases of litigants".

During the debate my noble and learned friend the Lord Chancellor made what I describe, with deep respect, were I sitting in a judicial capacity, as a good jury point; that is, a point which appeals to the emotions rather than to the intellect. He said: My noble and learned friends Lord Hailsham and Lord Ackner referred to the Scottish position; namely, that these arrangements—that is to say, speculative actions as we call them, in which the lawyer takes on the client on the basis that he will be paid the taxed costs if he wins and not if he loses—have been lawful for many generations, although the percentage related to the amount of damages has not. The question of the extent to which such an arrangement is taken up is a separate or different matter. The first question is: is it moral, or is there anything immoral about it? I cannot believe that the distinguished lawyers who have operated the Scottish system over many years regard it as in the slightest degree immoral".—[0fficial Report, 5/2/90; col. 553.]

Very well. If that is my noble and learned friend's best point—I am bound to say I can find no other—that is precisely what my amendment proposes to do; to introduce the Scottish system (no more, no less) which distinguished Scots lawyers have apparently operated over so many years, although I believe to a negligible extent.

However, that is not what my noble and learned friend the Lord Chancellor proposes. He is proposing something radically different. Towards the end of my noble and learned friend's speech at this stage in the debate, when referring to the agreement which he was proposing to permit, he said: If this clause goes forward, it is to be related to the work done and not related to the amount of damages".—[col. 554.]

Perhaps that was his answer to the Law Commission's paper, from which I quoted, which reads as follows: To require the litigant to pay any significant sum out of his damages does, of course, detract from the fundamental principle of English law that courts strive to put a wronged person back into the position he would have been in had he not been wronged".

A further extract reads: Any time a litigant has to pay representation expenses from his award, justice is not done".

That, of course, is precisely what will be done when the uplift—to use current jargon—of this significant addition to the taxed costs is permitted. That is the real prize if the speculation is to succeed. It is by this new and potentially corrupting process that I believe it is hoped to reduce the pressure to extend—not to take away—state legal aid.

In his final contribution to the debate, referring yet again to the Scottish system, my noble and learned friend the Lord Chancellor said: It is quite difficult to have such a public policy—which is the policy of the legislature of the United Kingdom—which allows them in one jurisdiction"—

that is, the Scottish jurisdiction— but not in another".—[col. 555].

That is, in England and Wales.

However, the amendment I now put forward is designed to achieve precisely the position for which the Lord Chancellor was then contending.

I am proposing that my noble and learned friend's understandable sympathy and affection for the Scottish system be fully satisfied, but no more. There is absolutely no warrant for substantially altering the nature of that system, thus giving the legal adviser for the plaintiff a stake, by virtue of this uplift in the taxed costs, in the very damages which justice has decreed should belong to the successful litigant and not to his lawyer. I beg to move.

Lord Renton

My Lords, I support the noble and learned Lord, Lord Ackner. It is regrettable that yet again this important and highly controversial matter of conditional fees should come before your Lordships' House at such a late hour. I find that there are fewer than 20 of us in the Chamber. The legal aid advisory committee whose report was discussed yesterday criticised the conditional fee agreements in the Bill, and did so in general. One is entitled to an answer to the questions: why was there no uplift in Scotland, although this scheme has operated in Scotland we are told for generations, and why is there no mention in the Scottish Bill of the possibility of a percentage uplift? Why should Scotland and England and Wales have different ways of applying that extremely controversial practice?

I also ask my noble and learned friend the Lord Chancellor: why should we in England and Wales have inflicted upon us at all the only questionable part—as my noble and learned friend knows well—of the Scottish system of justice which we all admire so much? Despite the denial at an earlier stage by my noble and learned friend the Lord Chancellor that that had nothing to do with legal aid, or the lack of it, we are left with the conclusion that the main reason for its insertion into the Bill is that it is intended to fill part of the gap—a gap in which so many people in this country formerly were able to have legal aid but who do not have it now and may not have it for some time to come. It looks as though we must accept that there will be conditional fee agreements in England and Wales, but for goodness sake let us have them on an even plane and not with that percentage uplift.

Lord Donaldson of Lymington

My Lords, it is important not to be bemused by the extent of the uplift which may well be a small percentage, because, as I see it, there is a fundamental difference between a conditional fee agreement without uplift and one with uplift. It is not entirely a question of the percentage. Perhaps I may illustrate that point. Barristers, and I do not doubt solicitors, have, from time immemorial, followed the same course as is followed by doctors of acting for their fellow professionals for nothing. They may receive a small present or something of that kind. However, basically they are working for nothing.

It is one thing for a lawyer to act for another lawyer in a litigious context, and work for nothing, which will be the straightforward position if that lawyer client loses. It is another thing if the lawyer client wins because the beneficiary then will not be the lawyer client but the other party, because one cannot obtain one's costs out of the other party if one is not liable to pay them in the first instance. If one is acting for the plaintiff for nothing and the plaintiff wins, the plaintiff, when he comes to claim his costs from the defendent, cannot include the costs for which he is not liable.

The conditional fee agreement without uplift meets that situation. Let me not mislead noble Lords into thinking that arises only in the context of lawyer working for lawyer. There can well be a situation in which a lawyer, be he solicitor or barrister, is impressed by the hardship of his client, and perhaps the merits of his client's claim, who thinks, "Well, as an act of charity, an act pro bono, an act in the best tradition of the profession, I am prepared to act for this man for nothing, or at a reduced fee, in the hope of assisting in seeing justice done." The same problem then arises. If justice is done and his client succeeds, it goes only to relieve the burden of costs which would otherwise fall on the by definition, rogue defendant.

Once one starts adding a percentage one is in a different league altogether. It is not a question of the percentage. The lawyer is then looking at the matter, not as a matter of professional comity, not as a matter of charity, not as a matter of pro bono, or public interest; he is making a hard-nosed calculation as to whether it is worth gambling, losing and getting nothing, against the possibility of succeeding and getting his normal costs plus x per cent.

It is not a question of the x per cent. It is a fundamental difference. I very much support the amendment. It would prevent barristers and solicitors becoming involved in a market-place approach to the basis on which they charge fees in a litigious context, which I think is wholly lamentable.

Lord Renton

My Lords, I hope I may have the leave of the House to make a correction to what I said just now. It has been pointed out to me that there is in the Scottish Bill an opportunity for percentage uplift. But it will be arranged not by the Lord Chancellor or any other member of the Government but by the court.

Lord Simon of Glaisdale

My Lords, this is the most important amendment to be considered on the Bill. This debate is even more important than the debate on what is called the cab rank rule. I echo what has been said: that it is a scandal that the most important issue of the Bill has to be debated in an empty House at this hour of night. One has only to look around to note the absence of my noble and learned friend Lord Hailsham, who made powerful speeches both at Second Reading and in Committee. He is not present, very naturally, at this hour, just as many other noble Lords are not present.

The amendment is important because not even the most cross-brained critic of the law can complain that lawyers, in objecting as they do strongly to this provision, are other than completely disinterested. Your Lordships have heard three notable speeches.

I first entered the other place in 1951. The speech of my noble and learned friend Lord Ackner was one of the most powerful I have ever heard in Parliament.

A further reason why this is so important is that the main arguments at an earlier stage were never answered by my noble and learned friend. Perhaps I may summarise them briefly. The first is that the proposal involves a conflict of interest. The noble Lords, Lord Mishcon, Lord Boardman and Lord Coleraine, have referred to that matter as of great importance in other connections. I am sure they would agree that it is equally important in this connection. The second argument is that there is no provision for independent advice to the client as to whether a contingency fee agreement is in his interests generally or whether the terms are in his interest. Again, the noble Lord, Lord Mishcon, has emphasised on other occasions with great force the importance of independent advice.

The last argument is, as the noble and learned Lord the Master of the Rolls and previous speakers have shown, that the provision imports into a Bill which is intended to promote justice the very principle of injustice. Instead of the court being able to compensate for a wrong by reinstating so far as money can do the plaintiff into the position of which he has been deprived, part of that compensation is lost to the uplift. I say to my noble and learned friend with profound respect that I hope he will specifically address himself to those three points, as well as to the other points raised by my noble and learned friend and by the noble Lord.

Lord Coleraine

My Lords, I had not intended to intervene in the debates taking place at the other end of the Chamber, but the speech of the noble and learned Lord, Lord Simon of Glaisdale, in which he referred to my interests and those of my noble friend Lord Boardman and the noble Lord, Lord Mishcon, in questions of conflict of interest prompts me to say that it has never been held that such issues arose where it was a question of the lawyer fixing the fee with his client. There obviously cannot be an entire situation where there are mutually compatible interests, but certainly questions of conflict of interest do not arise in this respect.

I should like to comment on the conditional fee agreement as contained in the Bill at present. In my view there is always bound to be a point at which legal aid does not reach potential litigants who nevertheless cannot afford the costs of litigation—the fees—and the uncertainties. The Bill has the position right at present in that it gives a potential litigant the opportunity to come to an arrangement with his legal advisers whereby he will have a conditional fee agreement which will mean that he will possibly pay nothing if he loses and possibly an uplift if he wins.

Litigants in such situations would consider it most curious if they had to go to their advisers and try to push the Scottish system upon them by saying, "Look, I have quite a good case but I cannot afford to fight it. Will you take me on on the basis that you will receive your normal fee if I win but nothing if I lose?" That does not seem to me to make sense and I do not think that any member of the public would see it as such. Far from being a corrupt arrangement, I think that this is a wholesome extension of the availability of litigation and advocacy services to the general public.

The Lord Chancellor

My Lords, we debated the principle of this clause in Committee and at that time it was affirmed by a substantial majority in a fairly full Chamber. Therefore I do not propose to go back over the main arguments of principle in connection with the allowance of conditional fees in this clause. I shall deal with the amendments which have been proposed and which have the effect of removing the possibility of uplift.

The purpose of the uplift and its possibility is to make this a practical arrangement. There is no doubt that, apart from anything else, these days the lawyer conducting the litigation can expect to encounter outlays quite a while before he would be likely to be paid under these arrangements. In the ordinary case he would have to make such outlays and stand out of the money for that period. It seems to me to be right that some arrangements should be made to cover the situation.

At an earlier stage I considered whether it would be practical to distinguish between outlays and other matters. However, I think that it is extremely difficult and not very practical and therefore it is better to permit a more rounded system in which a percentage uplift is allowed. I suggest that that uplift would be of fairly modest proportions and would be fixed under the subordinate legislation powers which have been confirmed.

A good deal has been said about Scotland. Of course I am very happy to talk about it. I used the argument in relation to Scotland that was being developed because it was said that the principle of the system was immoral and that it involved a conflict of interest.

I use the Scottish position to demonstrate that it certainly had not been so regarded in that jurisdiction. If this is a matter of public policy, it seems to me that a common public policy is desirable in the United Kingdom.

The arrangement so far as I can see involves no conflict of interest in a proper sense. Where a solicitor has a wealthy client who can afford the fees that would be required for continuing a litigation, a solicitor or counsel is accustomed to considering the question of whether the case should be settled. An offer may come in near the borderline and he considers it. If the case continues, further fees will be payable to the lawyer. However, I have never heard it suggested that our profession does not apply a proper consideration to these matters. The lawyer often advises a settlement even though it is against his interest in obtaining these continued fees.

The next point I wish to make is in relation to the second point of my noble and learned friend Lord Simon of Glaisdale that justice is denied by the possibility of an uplift. That depends, first, on whether the action would get under way at all. Secondly, all your Lordships who have experience of the law will know that where a client succeeds against a defendant the costs are taxed against the defendant on a scale which is now referred to as the standard scale. On the other hand, the client has to pay his own lawyer the indemnity scale which may well be considerably higher. What is more, the lawyer has a lien over the proceeds of the action for the payment of that difference. The law has, I believe, recognised that as a proper right in the solicitor to claim his fees—so far as they are not met by the other side—out of the proceeds of the action.

The possibility of uplift could not take place without the agreement of the client. The question is whether the client thinks it worth while to allow that—which is related to the work done, not the amount of damages—in order to bring his case.

The third matter referred to is in relation to legal aid. I made it perfectly plain in answer to the noble Lord, Lord Mishcon—and there is a clause in the Bill immediately after this one based on an amendment which the noble Lord proposed—that this is not to be used as a test. The availability in a particular case of a conditional fee arrangement is not to be used as a substitute for or obstacle to legal aid.

My noble friend Lord Coleraine took up the point that, as I also explained, unless we are in the ideal world to which the noble Viscount, Lord Hanworth, referred yesterday where everybody is entitled to legal aid, there is bound to be an area not covered by legal aid. That is possibly an area where the person who wishes to raise the action does not have money ready to hand but has a good case which he would like to pursue.

My noble friend Lord Renton referred to the report of the advisory committee. I shall not read it all, but paragraph 74 states: This committee has always opposed, on the grounds of conflict of interest, the introduction of contingency fees whereby a lawyer is paid only if the client's case is won, with payment fixed by reference to a percentage or share of the award that is made. We are therefore pleased to note that the Government has rejected any type of fee involving a proportion of whatever damages are obtained. We remain somewhat apprehensive, however, regarding the proposal to allow conditional fees with a percentage addition to the normal costs. Although the possibility of serious conflicts of interest arising in such cases is probably remote, it should be ensured that any uplift of this type is unlikely to impair impartiality in the conduct of a case". In other words, it should not be seen as in the nature of a prize but rather in the nature of compensation in respect of expenses incurred. That is precisely what I am proposing to do.

Lord Renton

My Lords, if the noble and learned Lord will allow me to intervene, I should say that if he reads on to paragraph 76 he will find a further elaboration of the committee's views.

The Lord Chancellor

My Lords, I was proposing to read a good deal more of the report. I was merely making the point that we are seeking power to set an uplift of the type that the committee has in mind. The next part of paragraph 74 is important. It states: Nonetheless, we believe that such conditional arrangements might occasionally prove helpful in cases where legal aid is not available, where the client is ineligible or where he or she would be required to make a substantial contribution. On the other hand, we doubt whether such arrangements will have any major impact on financing litigation, first because lawyers will only be prepared to undertake cases on such a basis if they are reasonably certain of success, and secondly because of the disincentive effect of the costs rule". That is, as against the client. Paragraph 75 states: There are, however, two considerations specifically relevant to legal aid which we would wish the Government to address before releasing the present bar on conditional fees. The first is to ensure that conditional fees are seen as a supplement to legal aid, not as an alternative". I dealt with that matter in the amendment that I accepted from the noble Lord, Lord Mishcon. My noble friend will be pleased to know that I shall now deal with paragraph 76. However, I have skipped a little bit of the final part of paragraph 75.

Lord Ackner

My Lords, I hope that my noble and learned friend will complete the reading of that paragraph before going on to paragraph 76.

The Lord Chancellor

Yes, my Lords, I shall do that with pleasure, but I thought that I had dealt with it. Paragraph 75 continues by stating: Where a client is eligible for legal aid, particularly if no contribution is required, he or she may be well advised to make use of it rather than engaging a lawyer on a conditional basis because with legal aid he or she will usually be protected from paying his or her opponent's costs. We would therefore attach a particular importance to ensuring that the availability of conditional funding in no way affects the present duty on solicitors, whether participating in the legal aid scheme or not, to consider whether a client would be best advised to apply for legal aid". I certainly do not propose anything contrary to that. As I said, I accepted the amendment which embodies the principle of it. I now come to Paragraph 76. I apologise to my noble and learned friend for the slight delay in coming to that paragraph. Paragraph 76 states: We are also concerned to ensure that the availability of conditional fees is not perceived as a reason for not maintaining legal aid eligibility levels, and for not extending legal aid to those areas where it is presently unavailable but much needed. For the reasons outlined above, we do not regard the arrangements for conditional fees as a realistic alternative to legal aid". I accept all that.

Lord Simon of Glaisdale

My Lords, I am sorry to prevent my noble and learned friend from finally settling down, but he argued that it is up to the client whether or not he enters into a conditional fee agreement. I hope my noble and learned friend will see fit to deal with the second point I made; namely, that no provision is made for independent advice for a client on the matter. Does not my noble and learned friend consider that it is inherently desirable that the client should have such independent advice?

The Lord Chancellor

My Lords, I thought that my noble friend Lord Coleraine had made that point. I certainly dealt with it in Committee in answer to my noble and learned friend the Master of the Rolls. I believe that when a client goes to his solicitor to make arrangements for taking his case on, it is not normal to require the client to take independent advice. If he did, he would have to go to another solicitor to obtain it and there would have to be an arrangement of terms on which it was obtained and so on ad infinitum. Therefore, I see no particular reason why independent advice should be required in this case.

I would say, however, that the noble Lord, Lord Hacking, proposed an amendment as to the form in which the conditional fee arrangement should be couched. That gives the opportunity to standardise the arrangements in such a way as to make independent advice even less necessary. As we know from what we have heard, the lawyer has a duty to give independent advice, independent even of his own interest, in a matter of this kind.

In my submission that point has been adequately dealt with in the argument. The amendment of the noble Lord, Lord Hacking, enables one to deal with it even more fully by means of the form in which the conditional fee agreements might be couched.

Lord Ackner

My Lords, I shall make three very brief comments. My noble and learned friend the Lord Chancellor's reference to outlay at the outset of his speech seems to me to be totally irrelevant. The Scottish system, which it is sought to export with this substantial alteration, of course applied to outlay. If one got one's costs back if one was successful, part of those costs were the outlay. That was self-contained. Otherwise the scheme in Scotland, which was said to have been used over the years, would never have worked at all.

Secondly, as regards legal aid, I made it very clear that I believe that this will be used as an excuse, not for granting legal aid which is covered by an amendment which my noble friend Lord Mishcon achieved, but for extending legal aid, which was the subject of so many speeches yesterday.

Thirdly, I fully concur with what my noble and learned friend Lord Simon said with regard to the need for protection of the client. That was the very point made by the Law Commission, which has been totally disregarded by the Government. Protection against conflicts should be carefully provided for. No protecton at all is provided.

I know that it is late and I know that the House is sparse. I share my noble and learned friend Lord Simon's views about the seriousness of the matter, and I therefore wish the House to pronounce upon it.

9.42 p.m.

On Question, Whether the said amendment (No. 22) shall be agreed to?

Their Lordships divided: Contents, 10; Not-Contents, 45.

DIVISION NO. 2
CONTENTS
Ackner, L. [Teller.] Hutchinson of Lullington, L.
Benson, L. Renton, L. [Teller.]
Donaldson of Lymington, L. Seear, B.
Hacking, L. Selkirk, E.
Hooson, L. Simon of Glaisdale, L.
NON-CONTENTS
Abinger, L. Blatch, B.
Ampthill, L. Boardman, L.
Arran, E. Boston, L.
Balfour, E. Brabazon of Tara, L.
Belstead, L. Brougham and Vaux, L.
Byron, L. Home of the Hirsel, L.
Caithness, E. Long, V.
Carnegy of Lour, B. Lucas of Chilworth, L.
Carnock, L. McColl of Dulwich, L.
Coleraine, L. Mackay of Clashfern, L.
Colnbrook, L. Mishcon, L.
Crickhowell, L. Mountevans, L.
Davidson, V. [Teller.] Prys-Davies, L.
Denham, L. [Teller.] Reay, L.
Elton, L. Saltoun of Abernethy, Ly.
Faithfull, B. Sanderson of Bowden, L.
Ferrers, E. Skelmersdale, L.
Fraser of Carmyllie, L. Strathclyde, L.
Gray, L. Strathmore and Kinghorne, E.
Henley, L.
Hesketh, L. Trumpington, B.
Hives, L. Ullswater, V.
Holderness, L. Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

9.49 p.m.

[Amendment No. 23 not moved.]

Lord Simon of Glaisdale had given notice of his intention to move Amendment No. 24: Page 38, line 19, after ("be") insert ("illegal or void or").

The noble and learned Lord said: My Lords, this amendment goes with Amendment No. 26. It concerns a rather obscure aspect of the law; namely, the difference between unenforceable, void and illegal contracts. It is rendered all the more difficult as there is great inconsistency of terminology both in judgments and among textbook writers.

I raised the point at an earlier stage and my noble and learned friend was good enough to let me enter into correspondecne with him about it. I believe that we have come much closer together as a result. When I wrote a letter to him yesterday I thought that I had convinced him. However, I received back a letter about midday today and found that my hopes were a little premature.

I left the amendment on the Marshalled List in case it should be picked up in the other place if so wished by one of the many able lawyers there. Perhaps I should indicate my areas of concern. Although I shall not move the amendment, I asked my noble and learned friend whether he would like me to do so and I think he would not want it moved at this stage. The point is that if there is a conditional fee agreement where the uplift in the agreement exceeds a specified percentage and the client makes a payment under that contract but subsequently repudiates the contract, can he get his money back? He cannot if it is unenforceable; he cannot if it is illegal; but he can if it is void. That is the whole point.

Having indicated that point in case anybody in another place wishes to take it up, I shall not move the amendment.

[Amendment No. 24 not moved.]

[Amendments Nos. 25 and 26 not moved.]

The Lord Chancellor moved Amendment No. 27: Page 38, line 31, after ("consult") insert ("the designated judges,").

The noble and learned Lord said: My Lords, Clause 47 already provides that the Lord Chancellor shall consult the General Council of the Bar, the Law Society and such other authorised bodies, if any, as he considers appropriate. I believe that the designated judges should properly be consulted. I wish therefore specifically to provide under the clause for them to be consulted. I am grateful to my noble and learned friend the Master of the Rolls for having raised this matter with me. I beg to move.

On Question, amendment agreed to. [Amendment No. 28 not moved.]

Clause 52 [Multi-disciplinary and multi-national practices]:

Lord Renton moved Amendment No. 29:

Page 40, line 32, at end insert— ("() Alterations in the existing rules of the General Council of the Bar relating to the formation of a legal relationship by a barrister with another barrister, with a solicitor or with any other person for the purpose of their jointly offering professional services to the public shall have no effect unless approved under Part II of Schedule 4.").

The noble Lord said: My Lords, at Report stage I moved this amendment as a probing amendment because it seemed that there was a good deal of confusion in the Bill through the overlapping of what were then Clauses 26, 28 and 50 and the second part of the fourth schedule in relation to multidisciplinary practices, which is a matter now covered by Clause 52. It is of course a new departure in our law and in the rules, conveyances and practices of the Bar of England and Wales.

It is important—and the noble and learned Lord the Lord Chancellor has on several occasions said so—that where feasible the new machinery introduced by the Bill should apply unless there is some better way of dealing with the matter. For that reason I suggested, as reported at col. 853 of the Official Report of 1st March, that the machinery of the Bill whereby the Lord Chancellor and the designated judges have the last word should apply in particular in this matter.

The point at issue was where the Bar Council found that as a result of the introduction of multidisciplinary practices it has to alter its rules. It is felt that when it has to do so in a way which relates to the formation of a legal relationship by a barrister with another barrister, with a solicitor or with any other person for the purpose of jointly offering professional services to the public, the matter shall in the last resort be covered by the provisions of Part II of Schedule 4. That is what the amendment provides.

I hope that my noble and learned friend the Lord Chancellor will feel that it is consistent with what he has proposed for the Bill as a whole. We have not always agreed with him. However, on this occasion we believe it is important that that is what should occur. I therefore beg to move.

Lord Mishcon

My Lords, it may be for the convenience of the House at this hour if I am permitted to speak to Amendment No. 30 after the noble Lord, Lord Renton, has just introduced his Amendment No. 29.

As I pointed out at previous stages of the Bill, the Law Society is very concerned indeed, not in regard to multi-national practices (where discussions of the usual friendly and warm nature are taking place with the noble and learned Lord the Lord Chancellor) but in regard to multi-disciplinary practices where the public in its view would not be safeguarded by the same professional rigidity of discipline as the Law Society imposes very properly on its members and where many conflicts could arise between solicitors and members of other callings, professions or trades. The noble and learned Lord said that my anxiety on behalf of the Law Society need not be as great as I thought it was because the Law Society would still be in charge of its rules. It can continue to say that its rules prohibit such (if I may use the phrase) improper partnerships.

I then said, "Please, Lord Chancellor, be aware that there is a Director of Fair Trading. There are competition laws". I do not know what the competition law will be in the future. For all one knows the Law Society may literally be made to alter its rules if one leaves the provision at that.

Amendment No. 30 provides two factors. First, it brings under one umbrella rules relating to multi-national and multi-disciplinary partnerships in the sense that the rule alteration on both cases comes through one procedure instead of a mixed procedure. They go through the procedure in Part II at Schedule 4. It means that before the Law Society can alter its rules in regard to such matters the alteration must go through that procedure and obtain the sanction of the designated judges and the Lord Chancellor.

I and the Law Society have sufficient faith in the designated judges and the Lord Chancellor to realise that they would not give their permission in improper cases. Therefore, if Amendment No. 30 is agreed to the Law Society has its way, as does the noble and learned Lord the Lord Chancellor, and everyone ought to be happy. On that note, and in order to make everyone happy, I shall move my Amendment No. 30 when we come to it.

10 p.m.

Lord Donaldson of Lymington

My Lords, I hate to disturb a happy note. However, I have a nasty feeling that my noble and learned friend the Lord Chancellor will say that this is already governed by Part II, Schedule 4, in relation to rights of audience and the provision of litigation services. I shall not have a right to reply so I shall point out now what I believe to be the fundamental fallacy of my noble and learned friend's reply when he makes it.

The amendment deals with partnership. It is not possible to have a rule which states that it is all right to have, for example, a multi-disciplinary partnership in relation to non-litigious matters but not in relation to litigious matters. Whatever the technicalities, if two people are in partnership to provide legal services they will be in partership for all purposes. In reality one cannot have Messrs. Bloggins, Bloggins, Bloggins and Company in a litigation partnership and the same partners in a non-litigation partnership. There will be the same staff, the same premises, the same loyalties and effectively there will be a single partnership.

Therefore, I support both amendments. They face the reality that if people are in partnership in the giving of legal services, unless they are confined to non-litigious services, which is a rare bird, everything must go through the same channel.

Lord Hacking

My Lords, the noble and learned Lord leads me well into the point that I wish to make. In Committee I moved an amendment and argued the advantages and importance of the one regime. I again adopted that argument when the noble Lord, Lord Renton, moved his amendment on Report.

Your Lordships will know that Clauses 25 and 26 and Schedule 4 are restricted to regulation of rights of audience and rights to conduct litigation. The mandate of the advisory committee is much wider and is set out in Clause 18. It states: The Advisory Committee shall have the general duty of assisting in the maintenance and development of standards in the education, training and conduct of those offering legal services". If noble Lords are in any doubt about the width of that mandate, at Schedule 2, paragraph 5(3), they will see: The Advisory Committee may from time to time give advice to the General Council of the Bar, the Law Society and other authorised bodies on all aspects of their qualification regulations and rules of conduct, whether or not relating to advocacy or the conduct of litigation". Therefore, it is quite clear that the advisory committee has a full mandate to deal with that. I suggest that the reality is that when matters concerning the rules of either the Bar or the Law Society come before the advisory committee, very prudently and wisely the advisory committee will look at it with the wider mandate and not simply the limited mandate of rights of audience and rights to conduct litigation.

If I recall correctly—and I do—another function of the advisory committee is to be found at Clause 18(3) relating to the practices and procedures of other member states. It reads as follows: In discharging its functions, the advisory committee shall … where it considers it appropriate, have regard to the practices and procedures of other member States in relation to the provision of legal services". Again, your Lordships will note the width of the mandate which is proposed to be given in this Bill to the advisory committee. That all leads logically, in my submission, to the conclusion that there should be one regime and that that regime should be protected from further investigation by competition authorities or otherwise.

The Lord Chancellor

My Lords, the mandate to give advice, as the noble Lord, Lord Hacking, has pointed out, is extremely wide. I believe that that is advantageous. However, when it comes to requiring approval from the Lord Chancellor and the designated judges, the terms of reference for that approval, as laid out in Clause 27(3) in relation to alterations, are that, those alterations shall not have effect, so far as they relate to any right of audience or any right to conduct litigation granted by that body". That is the only approval function which the judges have because they are concerned with the courts. It is in relation to the courts—rights of audience and right to conduct litigation—that this approval is required. Otherwise there would be an unwarranted interference, perhaps by the Lord Chancellor, in arrangements of this sort if his approval was required, if it did not relate to those two matters.

My noble and learned friend the Master of the Rolls said that it would be very difficult to separate out those matters. In a sense, that makes the amendment less necessary. If, in reality, anyone who wishes to practise fully as a solicitor wants to have a right to conduct litigation, then he must conform to the rules as approved by the designated judges and the Lord Chancellor. However, for example, if a solicitor did not want to do any litigation but wanted purely to give advice, there is no reason why the Lord Chancellor and the designated judges should be concerned. Of course, as your Lordships know, barristers are already in partnership in relation to work in Europe, although when they appear and practise in the court in The Strand, they cannot be so.

It is very important that the judges and the Lord Chancellor in this connection should be dealing with matters which concern the court and only matters which concern the court. Therefore, the provision is for approval in so far as it relates to any right of audience or any right to conduct litigation granted by that body.

I agree with my noble and learned friend the Master of the Rolls that the question of partnership or not in that connection may well settle the matter for the particular individuals altogether. If they do not want to do something which is only outside the court, they will have to conform with the rules approved by the judges. If they are prepared to confine their activities to other matters altogether, then they would be entitled to do that, as illustrated by what I have already said.

This is an important matter in that the jurisdiction of the judges and of the Lord Chancellor is properly confined to matters relating to rights of audience and right to conduct litigation. The phrase: relate to any right of audience or any right to conduct litigation is fairly wide. It casts the net, or protection of approval, depending on how one looks at it. I think the movers of the amendment at this stage look upon this approval as a protection; if so, that casts protection of approval as widely as it seems to me appropriate. In the light of that explanation, I hope that my noble and learned friend will feel able to withdraw his amendment.

Lord Renton

My Lords, I am grateful to my noble and learned friend for that explanation. In the light of it I certainly do not wish to press this amendment. I take some comfort from the terms of subsection (3) of Clause 27, to which he referred, which is somewhat wider in its terms than I was given to understand and wider than I understood from what he has just said. Where an authorised body alters any of its qualification regulations"— I am sure that my noble and learned friend would say that "qualification" is the operative word— "or"— and this is much wider— any of its rules of conduct, those alterations shall not have effect … unless they have been approved under Part II of Schedule 4". I hope and believe—and I wonder whether the noble Lord, Lord Mishcon, agrees—that if we accept the broad interpretation of subsection (3) it carries us a long way towards what we are seeking in our amendments. I put my amendment first because it appears first on the Marshalled List. However, in the circumstances I feel obliged to beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Mishcon moved Amendment No. 30:

Page 40, line 32, at end insert— ("() Alterations to the existing rules of the Law Society relating to the formation of a legal relationship by a solicitor with any person who is not a solicitor for the purposes of their jointly offering professional services to the public shall have no effect unless approved under Part 11 of Schedule 4.").

The noble Lord said: My Lords, I wish that I could share with the noble Lord, Lord Renton, the joy that I wanted to share with the noble and learned Lord the Lord Chancellor. However, I believe the remarks which fell from the noble and learned Lord the Master of the Rolls were all too relevant, even though he sought to agree with the spirit of the amendment and the practical way in which it might work out. He forecast absolutely accurately the answer that might be given by the noble and learned Lord the Lord Chancellor.

The reason I cannot share the joy of the noble Lord, Lord Renton, is that he omitted to read aloud—I am sure that he read them to himself—the limiting words to the qualification regulation alteration and the rules of conduct; namely: So far as they relate to any right of audience or any right to conduct litigation".

There is therefore a very severe limitation on the ambit of Clause 27.

Lord Renton

My Lords, perhaps the noble Lord will allow me to intervene to say, yes, that is so, but the Bar Council and the Law Society are entitled to limit respectively, in relation to their own numbers, the right of audience or the right to conduct litigation if they are linked with multi-disciplinary practices. It is true that I did not read out the whole of that subsection, but it is necessarily part of the scenario which will be before them on each occasion.

Lord Mishcon

My Lords, I am quite sure that the Bar may take a degree of comfort from what the noble Lord, Lord Renton, has just said and from the ambit of Clause 27. However, the fear that my side of the profession has is in regard to those who conduct conveyancing practices, and conveyancing practices and probate only, and trust work only, and merging in partnership with those whom it would not be seemly, as some of us think, to be in partnership, both in protection of the public and in regard to the way in which a disciplinary body can exercise proper control over its members. Possibly the ambit is wider on my side of the profession than it would be with the Bar. I beg to move.

Lord Donaldson of Lymington

My Lords, I hope that this is a convenient moment to endeavour to increase the happiness—notably absent at the moment—of the noble Lord, Lord Mishcon. Unless I have misunderstood the situation greatly, where four designated judges and the Lord Chancellor stop work under the fourth schedule there is a residual designated judge who remains under the Solicitors Act doing his best to support the noble Lord's branch of the profession. Approval is required for any changes in the rules.

Lord Mishcon

My Lords, my happiness with the present designated judge is complete, whatever the hour of the day at which I say that. I was about to go on to refer to the fact that obviously any alteration in the rules would need to have the approval of the Master of the Rolls. That is the one comfort that I am left with. It is a substantial comfort but it would have been very good if we could have written into the Bill a safeguard against, as I put it, the inroads that competition law may make into the jurisdiction, whether it be of the Law Society itself or indeed of the Master of the Rolls in certain circumstances.

However, bearing in mind the fortitude and strength of the present Master of the Rolls, which I hope future holders of the office will inherit from him, I must repose my faith in whoever those persons may be in the future. I have no doubt about reposing my faith in the present holder of the office. In the circumstances, I must ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 53 [Rights of audience for solicitors in certain Crown Courts]:

The Lord Chancellor moved Amendment No. 31: Page 40, line 45, at end insert— ("(3A) Any direction under this section may be revoked by direction of the Lord Chancellor.")

The noble and learned Lord said: My Lords, I tabled these grouped amendments, Amendments Nos. 31, 32 and 66, as a result of discussion on the third day of Report concerning the provision I then brought forward to replace the existing Section 83 of the Supreme Court Act 1981, in response to a problem raised in Committee by the noble Lord, Lord Hutchinson. Your Lordships agreed to the amendment which now forms Clause 53 of the Bill, subject to my undertaking that I would bring forward an amendment at Third Reading to make directions under the new clause subject to the concurrence of the four heads of division. The second of these grouped amendments represents the fulfilment of that undertaking, by inserting the requirement for that concurrence into Clause 53.

The first of these grouped amendments provides that any direction under the new Section 83 may be revoked by direction of the Lord Chancellor. As I understand the old Section 83 the simple revocation of a direction was not possible. It is clear, however, that if, for example, a temporary shortage of counsel at a particular court ceased, or a court changed its location, then revocation of such a direction might well be appropriate. That emerged in our discussions and it is right to provide for it.

The third amendment of this grouping is a saving provision for the existing directions that have been made under the existing Section 83. I have made clear throughout the discussions we have had on Section 83 that my firm view is that the existing directions must be preserved. I understood your Lordships agreed with that. Indeed, the noble Lord, Lord Hutchinson, proposed an amendment to do just that. Amendment No. 31 achieves that aim. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 32: Page 41, line 3, at end insert— ("(5) Any exercise by the Lord Chancellor of his power to give a direction under this section shall be with the concurrence of the Lord Chief Justice, the Master of the Rolls, the President of the Family Division and the Vice-Chancellor." ").

The noble and learned Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 33: After Clause 53, insert the following new clause: ("Exemption from liability for damages etc. .—(1) Neither the Lord Chancellor nor any of the designated judges shall be liable in damages for anything done or omitted in the discharge or purported discharge of any of their functions under this Part. (2) For the purposes of the law of defamation, the publication by the Lord Chancellor, or by a designated judge, of any advice or reasons given by him in the exercise of functions under this Part shall be absolutely privileged.").

The noble and learned Lord said: My Lords, I spoke to this amendment with Amendment No. 7. I beg to move.

On Question, amendment agreed to.

Clause 79 [Tying-in arrangements]:

Lord Prys-Davies moved Amendment No. 34: Page 58, line 43, at end insert— ("(5A) No supplier nor any associate shall offer to provide combined services for a specified consideration for those combined services or separate considerations for each of them unless the offeror—

  1. (a) specifies the apportionment of the consideration between the several services, and
  2. (b) offers to provide any of the services separately for the part of the consideration apportioned to that service.
(5B) For the purpose of subsection (5A)— (5C) No offence shall be committed under subsection (5A) where it can be proved—
  1. (a) that the offer was in writing and included clear notice of—
    1. (i) those considerations which did not apply unless combined services were provided; and
    2. (ii) the combined services which were to be provided; and
  2. (b) that where the consideration for each separate service was greater than it would have been if that service had been provided as part of combined services, the difference was justified because of the greater cost to the supplier or associate of providing services separately.
 (5D) The Director General of Fair Trading shall investigate any complaint that an offence under this section may have been committed and take such further action as he considers appropriate. (5E) Subsection (5D) shall not apply where the Director General of Fair Trading is satisfied that the complaint is being or has been investigated by any other public authority with power to prosecute for the offence.").

The noble Lord said: My Lords, subsections (5A) and (5B) of the amendment reproduce the precise wording of an amendment which was discussed on Report and which was aimed at tightening the prohibition on tying-in arrangements contained in Clause 79; but in the course of discussing that amendment it was felt that it went too far, and that a supplier offering a combination of services should have the opportunity to offer to the consumer a rebate of a proportion of the profit. The amendment seeks to remedy the defect in the amendment which was discussed on Report.

The remedy is to be found in subsection (5C). That subsection accepts that it may be in the purchaser's interest to allow the supplier to offer a package of services where the conditions contained in subsection (5C) arc complied with. That subsection requires that the offer should be in writing; that it should make clear the linked nature of the transaction; that it should specify the costs related to the combined services and those related to each of the separate services, provided, however, that the rebate offered for a combined service is justified because of the greater true costs of providing the services separately.

Without the safeguard of subsection (5C)(b) of the amendment it would be open to the supplier to embark upon a price cut which did not cover the costs of the service to the purchaser.

Finally, the amendment also requires the Director General of Fair Trading to oversee the enforcement of the provision. I hope and trust that the amendment, containing as it does new material in subsection (5C), will be acceptable to the House. The amendment is supported by the Law Society and the National Consumer Council. I beg to move.

The Lord Chancellor

My Lords, we have discussed the amendment in different forms during the various stages of the Bill. I am bound to say that the addition of subsection (5C) makes it a little nearer what I believe might be right. However it is unfortunate that the provision should be expressed in the way in which it is.

The clause does not appear to me to be necessarily in the consumer's interest. I am not sure in whose interest it is proposed, but I understand from the noble Lord that it is supported by the NCC. I find it a little hard to see how it is in the consumer's interests. It may be so. In which case I have not completely understood it.

The clause sets out a more complex regime for offering packages than is strictly necessary. That creates extra work for the supplier of the services, which means that the terms of the package may not be as generous as they may have been without that additional work. I do not see how that can be in the consumer's interest.

The clause as drafted already provides much of what this amendment seeks. For example, it makes for transparency of pricing. Subsection (5) already provides for separate pricing by requiring that separate details shall be given in writing in respect of each service. Where a consumer is being offered a package of services which includes a mortgage, he will of necessity be told of the cost or terms of that package and, as I have explained, by virtue of subsection (5) he will be given separate details in respect of each additional service. This will enable him to determine whether he is being given a fair deal.

Another similarity between the clause and the amendment is that the present clause already by implication provides that the supplier will have to be prepared to offer any of the services separately in that he cannot make the taking of one conditional on the taking of another. I accept that the clause does not require an apportionment of the consideration. This requirement that the service be offered on these terms, while superficially appearing to be in the interests of the customer, overlooks the way that business pricing works.

What we are trying to do is to prevent the consumer being forced to take services he does not want. Forcing businesses to change their pricing system plays no part in this. It may be said that the mere offering of a package of services at a reduced price is of itself an inducement to take unwanted services. As I read the amendment, this is one of the ills it seeks to cure. If that is the effect of offering a package, and I am not sure that it is, we should perhaps ask ourselves whether we should deny to the consumer the benefit of that financial package. Does it not make the cure worse than the illness? Any matter that is in the consumer's interest as well as perhaps being a matter of fair competition could appropriately be dealt with in the regulations under the earlier clause which specifies the conditions on which the authorised practitioners would be allowed to offer their services.

Perhaps I may turn to the last two subsections in the amendment which provide that the Director General of Fair Trading shall investigate offences under this section unless he is satisfied that some other public authority was investigating them. I accept that there needs to be some specific provision as to enforcement of this clause. It may be, however, that enforcement should not be the responsibility of the Director General of Fair Trading but should be perhaps for local trading standards officers. I am seeking to obtain views on this. It is important to get an effective mechanism. The local trading standards officers seem to provide the most likely one. I had hoped to be able to bring forward proposals in this connection but I shall not be able to do so. However, the matter will be for consideration in another place. In the light of these explanations, I hope that the noble Lord will not press the amendment.

Lord Prys-Davies

My Lords, I am grateful to the noble and learned Lord for his sympathetic response to the principle of the amendment. He has gone a long way to meeting the concern of the National Consumer Council and of the Law Society. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 80 [Liability of magistrates for damages and costs]:

Lord Renton moved Amendment No. 35: Page 59, line 40, 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: My Lords, I raised this purely technical matter in Committee and my noble and learned friend agreed to deal with it. He has kindly written to me saying that he will consider it. Perhaps I may move the amendment in the hope that my noble and learned friend will accept it.

The Lord Chancellor

My Lords, I have had the matter looked into with a view to bringing forward an amendment. There has never been a policy difference between us on this point. The amendment is acceptable in principle. My noble friend is right as regards metropolitan and acting metropolitan stipendiary magistrates. I believe, however, that provincial and acting provincial stipendiary magistrates are already covered by the terms of the Justices of the Peace Act 1979. I had a little difficulty in accepting that that was the position but it appears to be so. I therefore suspect that a slightly different form of words from that proposed by my noble friend may be preferable. If he will allow me I shall have the matter dealt with in another place. We are now in a position to do so but I was not able to put down an amendment in good time for Third Reading. Therefore, if my noble friend will allow me to do so, we shall put forward an amendment which exactly covers the area of difficulty.

Lord Renton

My Lords, I am much obliged to my noble and learned friend. The matter is quite important in practice because it affects the immunity of acting magistrates and those acting outside their immediately authorised jurisdiction. In view of what my noble and learned friend has undertaken to do, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.30 p.m.

Clause 85 [Administration of oaths and taking of affidavits]:

Lord Byron moved Amendment No. 36: Page 63, line 14, at end insert: ("(10) Every—

  1. (a) solicitor who holds a practising certificate which is in force;
  2. (b) authorised person;
  3. (c) general notary; and
  4. (d) member of the Incorporated Company of Scriveners ("the Company") who has been admitted to practise as a public notary within the jurisdiction of the Company,
shall have the right to use the title "Commissioner for Oaths".")

The noble Lord said: My Lords, this amendment arises out of another amendment introduced by the noble and learned Lord the Lord Chancellor on the last day of the Report stage of the Bill. That amendment, which is now Clause 85, repeals the powers of the Lord Chancellor to appoint commissioners for oaths. They will therefore in the fullness of time become an extinct species.

Under the Solicitors Act 1974, every solicitor with a practising certificate has the powers of a commissioner for oaths. For some time there has been an important distinction between an ordinary practising solicitor and one who has been given the title of commissioner for oaths. The only difference between me and the noble Lord, Lord Mishcon—and I hope he will forgive me for using him as an example—in administering an oath is that he would be entitled to describe himself as a commissioner for oaths and I would describe myself as a solicitor empowered to administer oaths.

Clause 85 confers on a wider group of people the powers of a commissioner for oaths—that is, a new category of authorised persons. The intention is no doubt very sensible in view of the other changes in the Bill. However, I venture to disagree with the noble and learned Lord the Lord Chancellor when, in introducing the original amendment, he said: It will certainly be less confusing to the public."—[Official Report, 1/3/90; col. 936.]

To have solicitors, notaries, authorised litigators and authorised advocates all exercising the powers of a species which in due course will become extinct, cannot in my submission be anything but confusing to the public.

The purpose of the amendment—which I should point out is supported by the Law Society—is to confer on all these various bodies the title of commissioner for oaths. It is not simply a matter of nomenclature or title; there is some practical importance in what is proposed. Many documents have to be sworn before commissioners for oaths for proceedings in this country and abroad. It is somewhat confusing, even at the present time, if a document has to be sworn before a commissioner to say, "Well, this person is not actually a commissioner, but he has all the powers of a commissioner".

In my view it will become doubly confusing in the future when commissioners will have disappeared altogether but a whole body of people continue to exercise their powers. It would be very much easier for those who exercise this power to do so using the simple title of commissioner for oaths rather than a more elaborate title such as authorised person empowered to administer oaths pursuant to Section 85 of the Courts and Legal Services Act. It is a small but practical amendment. I beg to move.

Lord Hacking

My Lords, I rise to express my support for the amendment. There are an increasing number of documents which have to be authenticated for overseas jurisdictions. Sometimes the machinery is extremely complicated. Therefore it greatly assists people to have a clearly identifiable person in the other jurisdiction—and for these purposes our jurisdiction—who is a named person like a commissioner for oaths, because that person is identifiable. It helps to avoid the complications which can arise in satisfactorily authenticating documents of other jurisdictions.

Lord Mishcon

My Lords, I am proud to share the dignified title which I hold and to which the noble Lord was kind enough to refer, with anybody who is empowered to take oaths. However, perhaps I may point out one possible difficulty, even though I may be wrong about it. Internationally, a notary is required to attest documents. The word "notary" is known abroad as a requirement. If this means, as it seems to do, that in future notaries describe themselves as commissioners for oaths, I am afraid that quite a lot of international difficulty might arise, with the document being sent back with the requirement that it must be signed before a notary, not before a commissioner for oaths. Provided the notary was intelligent enough when taking oaths within the jurisdiction of the United Kingdom to sign, "Commissioner for Oaths" and when he attested documents which had to go abroad as "notary", all would be well. I thought I ought to raise the point in case it had any relevance.

The Lord Chancellor

My Lords, as I said when I moved the amendment on Report, I have no desire to remove from the noble Lord, Lord Mishcon, the noble title of "Commissioner for Oaths". I think it is a title dignified by antiquity as well as by nobility; therefore I can well understand people having a desire to use it. I think the point made by the noble Lord, Lord Mishcon, may have to be addressed. The amendment says: shall have the right to use the title 'Commissioner for Oaths'". As the noble Lord has said, an intelligent notary should be able to use the correct title for this situation and one would hope that that would be a qualification for being a notary—that one had the necessary level of intelligence.

The noble Baroness suggests that she does not accept that as necessarily true without further evidence. I do not think I should go further into that point at this juncture.

I should be content to accept the amendment—it seems a fairly small point—so long as the noble Lord, Lord Byron, will not think that I am defeating him if I were to come along with some emendation of the amendment in the course of proceedings through another place. I have no reason to believe that I would require to do that, but we have not had a chance to examine it in the light of the point made by the noble Lord, Lord Mishcon, for example. I should just like to be sure that it is all right. Subject to that, I am content that this amendment should be accepted.

Lord Byron

My Lords, I am grateful for what the noble and learned Lord has said. I do not claim authorship of the amendment, and if it can be improved, so be it; I shall be content.

On Question, amendment agreed to.

Clause 86 [Bail applications]:

Lord Hacking moved Amendment No. 37: Leave out Clause 86.

The noble Lord said: My Lords, it appears that the torch has passed from the noble Lord, Lord Hutchinson, to me. This amendment relates to bail applications, and your Lordships may recall—and it is only the faithful among your Lordships who are still here now—that we debated this matter at 2.15 a.m. on 5th February. We again debated the matter very late at night at Report stage, at something like 20 minutes before midnight.

The reason why I bring the matter again before your Lordships—and I was hoping to do so at an earlier hour of the evening, but that has already been defeated—is not in any way to criticise the Crown Prosecution Service. It is right that the noble Lord, Lord Hutchinson, has not in any of his submissions relating to the amendment or elsewhere suggested that he was making any criticism of the Crown Prosecution Service. I hope I may briefly remind your Lordships of what I said on the last day of Report, at col. 941 of Hansard for 1st March: Bail applications must not be seen as a mere formality which can be presented by an unqualified person. The outcome determines, on the one hand, whether an unconvicted person nevertheless spends time in custody before trial; on the other hand, whether somebody who may be a danger to the public is to be allowed to remain free prior to trial. It is an extremely sensitive balance between the rights of the individual and the right to protect the public at large. It lies at the very heart of all contested bail applications.

My wife is a qualified doctor. In the medical profession, that judgment is always used when matching the qualifications of the doctor against the task that is to be performed. To transfer that to the legal profession, for the reasons I advanced on Report and which I read out again to your Lordships just now, is a matter which is in the higher rather than in the lower realms of skill and judgment of a lawyer. Therefore it follows that this is not a matter that should be handled by unqualified people. That is the simple point that I seek to make. I beg to move.

Lord Hutchinson of Lullington

My Lords, I moved a similar amendment on two previous occasions. The noble and learned Lord showed no signs whatever of accepting the principle on which I moved those amendments. In those circumstances, I took the view that it would not be appropriate to put the same amendment down on Third Reading as this is a non-elected House. Those are the circumstances in which I do not add my name to the amendment. Nevertheless, I am sympathetic to it.

The Lord Chancellor

My Lords, the eloquence of the noble Lord, Lord Hutchinson, drew out of me everything I had to say on this amendment on the two previous occasions that we discussed it. I do not have anything to add. My understanding is that this practice was widespread until the decision of the Divisional Court in R v. DPP ex parte FDA. That case was primarily concerned with the rather different question of who should screen prosecutions and advise on whether they should continue. That is the vital decision that has to be taken by the Crown Prosecution Service. A side effect of the decision on that was to make illegal the use of law clerks in bail applications. That was the cause of the definition of the vital phrase in the Act. All that I have seen suggests to me that this practice is perfectly acceptable. The decision ultimately is one for the judge who has the proper qualifications for the situation that he has to deal with. I said earlier, and I believe it to be the case, that the senior presiding judge gives his support to this proposal. The practice has also been found acceptable to a good number of circuit judges. The matter is one of judgment. I have nothing to add to what was said before. I think it right to allow this to be restored as a side effect of the judgment which does not need in practice to be continued.

Lord Hacking

My Lords, we have debated this amendment late at night. I moved my amendment briefly, and I shall now briefly withdraw it.

Amendment, by leave, withdrawn.

Clause 90 [Interpretation]: Page 65, line 37, at end insert ("or in respect of whom the body makes rules or regulations").

Lord Hacking

My Lords, I shall move Amendment No. 38. I had a private agreement with the noble Lord, Lord Mishcon, that I would take over this banner from him.

The amendment is a technical amendment but it also affects the Institute of Legal Executives.

Your Lordships will know from Clause 25(2) of the Bill that the structure for rights of audience is based upon rights of audience granted by the appropriate authorised body. In Clause 25(9) your Lordships will find the definition of an appropriate authorised body, which is as follows: 'appropriate authorised body', in relation to any person claiming to be entitled to any right of audience by virtue of subsection (2)(a), means the authorised body—

  1. (a) granting that right; and
  2. (b) of which that person is a member"
In the case of the Law Society—and I believe also of the Bar Council although I have had only a short time to consider the matter in relation to the Bar Council—the solicitors' disciplinary tribunal, which is the body responsible for discipline over solicitors, applies to both paid-up members of the Law Society and those who are not members of the Law Society. I think that the position is the same with the Bar and that it is possible to practise at the Bar without paying subscriptions to the Bar Council and being a member of that body. Nonetheless, I am quite sure that, under Part 8 of the new disciplinary proceedings under the code of conduct which the Bar adopted on 27th January to take effect at 31st March this year, whether or not a member of the Bar has paid his subscription and is therefore a member of an authorised body within the meaning of Clause 25 he will be subject to discipline.

It therefore follows that persons who are not members of either the Law Society or the Bar Council will not fall into the category that I have identified under Clause 25. It is for that technical reason that I ask the noble and learned Lord to consider favourably the thrust of the amendment.

We have already debated at some length the position of legal executives and solicitors' clerks and the mechanism under which they can be granted, under this Bill, extensions to their current rights of audience. The noble and learned Lord has taken the rather firm position that in future any persons who wish to achieve extensions or new rights of audience can only do so under the operation of the Bill, and if they are members of either the Bar Council or the Law Society they must be members of a body which has been authorised under the provisions of the Bill. The effect of that position would be that if legal executives are to achieve further rights of audience they can only do so as a result of the Institute of Legal Executives, for example, becoming an authorised body and granting those rights.

I should like to say to the noble and learned Lord that that creates an anomalous position because of the relationship of the legal executive to the member of the Law Society. That is the relationship of employee and employer—an employer, incidentally, who has considerable disciplinary powers, which every employer is entitled to have, over his employees. If a legal executive or solicitor's clerk should misbehave, the Law Society can visit its discipline on the solicitor who employs that clerk or legal executive who has for one reason or another misbehaved himself.

I merely mention all that to noble Lords because the amendment would also have the desirable result of enabling the Law Society to grant rights of extension to solicitors' clerks as it is thought right, both by the Law Society and the institute, to serve the best interests of the profession and, more significantly, the public at large. The central purpose of moving the amendment is the technical one that I have just addressed. I beg to move.

The Lord Chancellor

My Lords, on the first part of the noble Lord's submission in support of the amendment, I shall be happy to consider whether we should look at the definitions to ensure that all those that we wish to cover are covered. On the noble Lord's second point, I should not be content to accept the principle of that suggestion because I believe it right that, if the Institute of Legal Executives is to have rights of audience, it should do so directly. With that explanation, perhaps the noble Lord will feel able to withdraw his amendment.

Lord Hacking

My Lords, indeed I do. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 94 [Extent]:

The Lord Chancellor moved Amendment No. 39: Page 67, line 12, leave out ("and").

The noble and learned Lord said: My Lords, this amendment together with Amendment No. 40 extends to Scotland the provision contained in Schedule 13 (the schedule of minor amendments) removing the prohibition on a solicitor being able to act as a ship's agent or sub-agent. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 40: Page 67, line 14, at end insert ("; and (h) paragraph I of Schedule 13.").

The noble and learned Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Schedule 1 [The Advisory Committee]:

The Lord Chancellor moved Amendment No. 41: Page 71, line 25, at end insert— ("Immunity for advice and reports

11A. For the purposes of the law of defamation, the publication of any advice or report by the Advisory Committee in the exercise of any of its functions shall be absolutely privileged.").

The noble and learned Lord said: My Lords, I have already spoken to this amendment with Amendment No. 7.

On Question, amendment agreed to.

Schedule 4 [Authorisation and Approval]:

The Lord Chancellor moved Amendments Nos. 42 to 62: Page 76, line 32, leave out from ("shall") to ("ask") in line 33 and insert— ("(a) send a copy of the application and of any documents provided under sub-paragraph (2)(c) or (3) to the Advisory Committee and to each of the designated judges; and (b) "). Page 76, line 37, leave out from second ("the") to ("to") in line 38 and insert ("documents mentioned in paragraph (2)(4)(a)"). Page 77, line 1, leave out ("of any advice or report") and insert ("by the Lord Chancellor or the Director of any advice given"). Page 77, line 8, leave out from ("shall") to the end and insert ("send a copy of the advice to the applicant. (1A) The applicant shall be allowed a period of 28 days, beginning with the day on which the copy is sent to him, to make representations about the advice—

  1. (a) to the Lord Chancellor; or
  2. (b) where the Lord Chancellor appoints a person for the purposes of this sub-paragraph, to that person.
(1B) When the period of 28 days has expired the Lord Chancellor shall consider, in the light of the advice and of any representations duly made by the applicant under sub-paragraph (1A)—"). Page 77, line 12, leave out ("(1)") and insert ("(1B"). Page 77, line 14, leave out from ("judge") to end of line 20 and insert ("a copy of— (i) the advice; and (ii) any representations duly made by the applicant under sub-paragraph (1A); and"). Page 77, line 22, leave out ("(1)") and insert ("(1B)"). Page 77, line 26, leave out ("(1)") and insert ("(1B)"). Page 77, line 29, leave out paragraph (5). Page 77, line 35, after ("principle") insert ("(whether because of any provision of the regulations or rules, or for any other reason)"). Page 77, line 37, leave out from ("Chancellor") to end of line 40 and insert ("in writing both of his decision and of his reasons for reaching it."). Page 77, line 42, leave out ("sub-paragraph (1)") and insert ("this paragraph"). Page 78, leave out lines 2 to 9 and insert ("refused to approve the application it shall fail. (10) The Lord Chancellor shall, if the applicant applies to him in writing, notify the applicant of—
  1. (a) his reasons for reaching his decision; and
  2. (b) the reasons given by each designated judge for reaching his decision.").
 Page 79, line 16, leave out from ("shall") to end of line 17 and insert— ("(a) send a copy of the application and of any documents provided under sub-paragraph (2)(c) or (3) to the Advisory Committee and to each of the designated judges; and (b) refer the application to the Committee for advice."). Page 79, line 19, leave out from second ("the") to ("to") in line 21 and insert ("documents mentioned in paragraph (8)(4)(a)".). Page 79, line 32, leave out ("of any advice or report") and insert ("by the Lord Chancellor or the Director of any advice given".). Page 79, line 39, leave out from ("shall") to the end and insert ("send a copy of the advice to the applicant. (1A) The applicant shall be allowed a period of 28 days, beginning with the day on which the copy is sent to him, to make representations about the advice—
  1. (a) to the Lord Chancellor; or
  2. (b) where the Lord Chancellor appoints a person for the purposes of this sub-paragraph, to that person.
 (1B) When the period of 28 days has expired the Lord Chancellor shall consider, in the light of the advice and of any representations duly made by the applicant under sub-paragraph (1A)"). Page 79, line 41, leave out ("(1)") and insert ("(1B)"). Page 79, line 43, leave out from ("judge") to end of line 4 on page 80 and insert ("a copy of—
  1. (i) the advice; and
  2. (ii) any representations duly made by the applicant under sub-paragaph (1A);").
 Page 80, line 18, leave out from ("Chancellor") to end of line 19 and insert ("in writing both of his decision and of his reasons for reaching it. (6A) When—
  1. (a) the Lord Chancellor has discharged his duties under this paragraph; and
  2. (b) the dsignated judges have notified him of their decisions, the Lord Chancellor shall notify the applicant of the result of its application.").
 Page 80, line 22, leave out sub-paragraph (8) and insert— ("(8) The Lord Chancellor shall, if the applicant applies to him in writing, notify the applicant of—
  1. (a) his reasons for reaching his decision; and
  2. (b) the reasons given by each designated judge for reaching his decision.").

The noble and learned Lord said: My Lords, I have already spoken to Amendment Nos. 42 to 62 inclusive with Amendment No. 11. I beg to move.

On Question, amendments agreed to.

Lord Ackner moved Amendment No. 63: Page 80, line 30, after ("28(2)(c)") insert ("or is advised by one or more of the designated judges that there are grounds for making such a recommendation").

The noble and learned Lord said: My Lords, my noble and learned friend the Lord Chancellor was kind enough much earlier in the evening to indicate that the amendment was acceptable to him. It completes the batch of amendments that we sought to Schedule 4. It brings the designated judges into the issue of revocation of an order, thereby enabling them, if they wish, to take that step to have their representations considered at the same time as my noble and learned friend considers whether he will exercise his powers under Clause 28(2)(c) which will be found on page 23 of the Bill. I beg to move.

The Lord Chancellor

As my noble and learned friend said, I have already indicated that I commend the amendment to the House for acceptance.

On Question, amendment agreed to.

Schedule 7 [Probate]:

The Lord Chancellor moved Amendment No. 64: Page 86, line 7, after ("case,") insert ("they").

The noble and learned Lord said: My Lords, this is a minor drafting amendment to improve the grammar of subparagraph 4(b). I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 65: Transpose Schedule 7 to after Schedule 8.

The noble and learned Lord said: My Lords, this amendment puts the schedules in a slightly better order than they were in at the end of the Report stage. I hope that noble Lords will agree to the amendment.

On Question, amendment agreed to.

Schedule 15 [Transitionals and Savings]:

The Lord Chancellor moved Amendment No. 66: Page 124, line 19, at end insert— ("Directions under section 83 of the Supreme Court Act 1981 (c.54) 2A.—(1) Any direction given under section 83 of the Supreme Court Act 1981 (right of audience for solicitors in Crown Courts) and in force immediately before the commencement of section 53 shall have effect as if validly made under section 83 as substituted by section 53. (2) This paragraph is without prejudice to section 17(2)(b) of the Interpretation Act 1978.").

The noble and learned Lord said: My Lords, I have spoken to this amendment with Amendment No. 31. I beg to move.

On Question, amendment agreed to.

Schedule 16 [Repeals]:

The Lord Chancellor moved Amendment No. 67: Page 127, line 34, at end insert—

(1975 c.27. The Ministerial and other Salaries Act 1975. In section 1(2), the words from "but" to the end.")

The noble and learned Lord said: My Lords, this indicates that the Lord Chancellor thinks of himself last. This amendment adds to the list of statutory provisions providing for the abatement of judicial salaries which was repealed by Schedule 16 so that the Lord Chancellor's salary will not be subject to abatement any more than the other judges'. I beg to move.

On Question, amendment agreed to.

An amendment (privilege) made.

The Lord Chancellor

My Lords, I beg to move that this Bill do now pass.

Moved, That the Bill do now pass.—(The Lord Chancellor.)

Lord Mishcon

My Lords, if anyone at this stage were to make a speech incorporating all that he felt had been done by the House to improve the Bill and the defects which he felt were still left, he would be the most unpopular Member of your Lordships' House. I therefore do not intend to do any such thing.

I merely say that this is a Bill in which I know the noble and learned Lord has a great deal of confidence. His aim was always to get a better and more economical system of justice for our citizens. Many of us have approved of the aim but disagreed with the means.

However, by and large we know that there are many provisions in the Bill which bode well for the future. We can only hope that some of our forebodings are not fulfilled in the future as facts.

I want to say one thing more. I am deeply indebted to my colleagues, and to the noble Lord, Lord Prys-Davies, in particular, who have helped me in regard to this important Bill. I want to close with a very sincere expression of admiration, which I believe is shared throughout the House, for the patience, courtesy and physical and mental endurance of someone who will go clown in history as a great but extremely obstinate Lord Chancellor.

Lord Renton

My Lords, I, too, would not wish to turn this session into an all-night sitting. But there are a few words that I should like to say. First, I should like to endorse the praise so felicitously expressed by the noble Lord, Lord Mishcon, about the way in which my noble and learned friend the Lord Chancellor has handled the Bill. On numerous matters of detail and drafting in this excessively complex and detailed Bill he has enabled us to help him to improve it.

On some matters of principle he has made some useful concessions. Alas, he has refused to accept our proposal that only barristers and solicitors should be judges of the Supreme Court, a decision that was made late at night with few Peers present. Members of the public will not understand that. It is very hard to understand the Government's altitude on it. I hope that my noble and learned friend is capable of changing his mind on some important matters, including this one, and that in another place there may be further thoughts on the matter.

The main purpose of the Bill is to give solicitors and some members of other professions the right of audience as advocates in all our courts of law and to enable them to become judges even in the higher courts. The barristers and judges who have taken part and those who have advised us from the outside have not opposed the main purpose of the Bill.

In order to achieve it, however, the Bill creates an unnecessarily elaborate, complicated, cumbersome and expensive administrative system. I suggest that it would have been much better to have a short Bill which said in effect: "Solicitors and certain members of other professions shall have the right to appear as advocates in any court of law subject to the cab rank rule and to certain simple safeguards to ensure their competence, and they shall be eligible for appointment as judges in any part of the judiciary." That is simple enough, capable—with the usual British good sense and understanding—of being implemented without the great palaver that is introduced by the Bill.

Under the Bill the advisory committee, the legal services ombudsman, the Director of Fair Trading and others, are given functions which I suggest are quite unsuited to the administration of justice. But the Government say, "But all of that is necessary to ensure competition." But will it? The Bar is extremely competitive as it is, and the number of solicitors seeking rights of audience in the higher courts in the first few years will make scarcely any difference to competitors.

In the long term, however, the Bill will lead to there being less competition because most of the larger solicitors' firms, especially in London and the large cities, will establish their own advocacy departments and will expect them to keep their advocacy work in the firm instead of going outside it by briefing barristers. That will be a big step in the long run towards fusion of the two branches of the legal professions and that will be a denial of competition. They have fusion in the United States and elsewhere and they find it impossible to break it up.

There will have to be great vigilance on the part of those people who are given responsibility under the Bill to see that it does not lead to the kind of unacceptable situations to which it could lead.

Lord Boardman

My Lords, I join with the noble Lords who have spoken in congratulating my noble and learned friend on the ability, courtesy and stamina—the pure staying power—that he has shown during the long days that the Bill has been before the House. I have found in almost all cases that the lucidity of his answers to points raised has been convincing. As he knows, I have certain reservations on a couple of matters which I shall not detain the House by raising again except to say that I hope that they will be looked at in another place and considered again.

I think it right that I pay tribute to the noble Lord, Lord Mishcon, who has also shown great stamina, displayed great clarity, and has done a great deal for the Law Society in the presentation of his case. I hope that the Bill achieves all that my noble and learned friend desires. I believe that in view of his diligence and patience it deserves the outcome that I am sure he expects and I hope that that will be so.

Lord Hutchinson of Lullington

My Lords, the greatest asset of an advocate is courage. I am afraid that I shall show courage and be extremely unpopular in the view of my noble friend Lord Mishcon, because there are a number of matters that I wish to raise despite it being five minutes past eleven, on the last day of our deliberations on this Bill.

I also should like to pay tribute to the stamina, patience and unfailing courtesy of the noble and learned Lord. His Lone Ranger performance, if I may put it in that way, has certainly been remarkable in conducting our deliberations on this Bill.

Despite that asset, I must admit that I have found our debates somewhat depressing. I end by expressing the gravest doubts as to the eventual impact of the Bill on the provision of legal services in England and Wales. It is to those doubts that I should like to turn.

As a lawyer, I can think of no finer purpose than to make justice more accessible, cheaper, quicker, comprehensible and rigorously honest. I fear that the Bill will achieve none of those things. My greatest sadness is the narrowness, the small-mindedness, of Part II.

When the concept of justice is under discussion great matters of principle inevitably arise because justice is the basis of our civilisation. I am proud that lawyers in this House raised such matters during our debates and insisted on them being discussed, even though it was not a course which found favour with those noble Lords whose only interest was the next business of the House.

In general, the noble and learned Lord avoided discussion of those great issues. The Royal Commission of the noble Lord, Lord Benson, wrestled with such matters for four years. Yet the Government have resolutely refused to refer to, criticise, reject or accept the conclusions of that enormously conscientious commission. Such matters have been consigned by the noble and learned Lord the Lord Chancellor to be discussed hereafter by his advisory committee of appointees with its lay majority, operating what hitherto has been known as "the administration of justice" but what will now be known as "the mechanism".

Ironically, the Bill replaces the relatively simple restrictions which have controlled the conduct and practice of advocates with bureaucratic machinery of a complexity and density which could have been devised only in the darkest caverns of the Civil Service, with codes of conduct to be policed by an unknown number of authorised bodies from whose ranks will spring a new race of para-legals, none of whom needs to be a professional lawyer.

At an early stage I expressed the view which has been referred to this evening by the noble and learned Lord; that one of the central but unadmitted aims of the Bill was to cut the cost of legal aid by gradually removing the independent barrister from the Crown Courts, restricting representation there through the Legal Aid Bill 1988. Although a dozen or so of the more ridiculous ideas in the Green Paper find no place in the Bill—something for which we can all be thankful—our deliberations on Part II have served only to confirm my original suspicions.

It is quite clear that the Government accept the situation in which all prosecutions will ultimately be conducted by salaried state employees of the Crown Prosecution Service. They accept the situation in which defences will be conducted by para-legals certified as competent to handle limited types of cases in appropriately designated courts and that legal-aided cases will be prepared, investigated and conducted by part-time advocates clustered round the Crown Courts, directly approached by uninformed members of the public, and strictly controlled under the provisions of the new Legal Aid Act.

Therefore, in my opinion, the Bill will produce polarisation to the detriment of the public and of justice. The independent, full-time sole practitioner advocate, free from conflicts of interest, engaged through informed professionals with no interest in the outcome of the case, will no longer have a role. That too will be to the detriment of the public and of justice. The efficient, delicately adjusted relationship of high street solicitor and universally available barrister—in my opinion the best and cheapest legal service which has yet been devised—will also have no place.

As regards the mechanism, the only independent voice in the new executive bureaucracy will come from the now appropriately named designated judges, of whom, pre-eminently, will be the judge we prefer at present to know as the Lord Chief Justice of England. On Second Reading the noble and learned Lord said: the … 'designated judges' among whom, to my surprise, I find myself".—[Official Report, 19/12/89; col. 146.] That is a remarkable comment on the manner in which this Bill has been prepared. The Lord Chief Justice has been conspicuous by his absence from our debates, as the Master of the Rolls has been conspicuous by his presence in them.

The office of Lord Chief Justice is overwhelmingly arduous and time-consuming and, speaking for myself, I can only pray that somehow the noble and learned Lord, Lord Lane, will find time to play his major part in oiling the dry works of the executively controlled mechanism. He alone, of the five members of the judiciary involved, has first-hand experience of the criminal courts, knows of the pressures upon the advocate, the vital role of the independent prosecutor, the need for responsible professionalism whenever the liberty of the subject is in issue and the disasters which come from polarisation.

Uncharacteristically, I am pessimistic about this Bill, the publication of which I looked forward to with such expectations. I fear that it will restrict access, increase costs, lower standards, create confusion among the uninformed public and do nothing to simplify legal procedures. It will deprofessionalise the role of the advocate and bring what will now be but a trade or an occupation under executive control. The tradition of the legal profession has always been to serve the public and I know that when the Bill becomes an Act professional lawyers will strive to make it work to that end. However, I fear that that will be an immensely difficult task.

11.15 p.m.

Lord Ackner

My Lords, "An event has happened upon which it is difficult to speak and impossible to be silent". Part I of this Bill was to herald a bright new dawn. Delay and cost, the two great bugbears of our legal system, would be alleviated by the transfer down of civil work from the High Court to the county court. But Part I, which alone in this convoluted Bill was to achieve this end arrived, as the noble and learned Lord the Lord Chief Justice said: unfinished, sent before its time into this breathing work, scarce half made up … It is fantasy and misleading fantasy to suggest that Part I of this Bill can be implemented when the infrastructure of the county court is already crumbling".—[Official Report, 19/12/89; col. 149.] … if Part I … were put into effect tomorrow the result would be a total shambles. I think it will be a matter of years rather than months before it is in place."—[col. 151.] So said my noble and learned friend Lord Hailsham in the same debate.

At Report stage there was produced the usual run of statistics to muddy our understanding of the situation. The awful truth, as was so eloquently established by the judge's letter which was read out by the noble and learned Lord the Lord Chief Justice during Second Reading, is that during the past two years, when the Lord Chancellor's Department should have been earnestly preparing for this very transfer, matters have gone from bad to worse. Cash limits have become more and more unrealistic, with the result that the legitimate demands of a vital service—the administration of justice—have been and are being seriously neglected.

As regards Part II of this Bill, I entirely share the view of my noble and learned friend Lord Hailsham that almost every principle of methodology which law reform ought to attract has been disregarded by the Government. Recommendations of a Royal Commission, which reported a decade ago and which consistently thereafter were accepted by this Government, have been overturned without prior consultation, research or explanation.

This Bill has given the lie to the proposition that this Government "are not for turning". So far from improving access to justice for all who require it and making the system more cost effective, precisely the opposite will be the consequences.

I am firmly of the opinion that the long-term—and not all that long term—collective effects of this litigation will be to inflict serious damage on the quality of justice in this country. The small firms of solicitors, the so-called "high street" solicitors, who, with fewer than four partners, form 80 per cent. of the solicitors' profession, will be crippled by the twin effects of the loss of conveyancing work to the money lenders and the money lending institutions and the lack of access to the specialist independent Bar.

As I previously stated, the ever-increasing mega-firms of solicitors, with their growing litigation departments—growing both in size and costs—with full rights of audience in all courts, will cause the Bar, whose continued vigorous existence the Government have accepted as being of great importance to the public interest, to whither away.

The much vaunted free-play of market forces will be of no use to a continually rising proportion of the public who will be unable to afford to enter the so-called "market place" for legal services and who will be denied state legal aid. The very dogma upon which so much of the justification of this Bill has been based will prove self-destructive to the very great prejudice of the so-called "Consumer" of legal services.

In addition to this, the American district attorney system will take over criminal prosecutions previously conducted by a strong and independent Bar. The corrupt philosophy of the contingency fee will pervade the whole system. The existing strong and independent judiciary, acknowledged by the Government to be one of the central supports upon which our liberties are based and upon which the rule of law depends, will be weakened by the diminishing quality of available recruits; by the use of laymen instead of lawyers, and by the growing political influence in their appointments.

In the limited time available I take but two crucial points, the Lord Chancellor's advisory committee and the appointment of laymen as judges to all courts from the House of Lords downwards. I invite your Lordships very briefly to consider the quality of my noble and learned friend the Lord Chancellor's defence of these two radical proposals, bearing in mind the outstanding powers of advocacy at his command, to which I paid special tribute in the course of this debate.

I refer now to the Lord Chancellor's advisory committee. The idea that an independent profession should effectively be governed by such a ludicrous body, of which we have seen only too many examples in the past 25 years of my experience of Parliament, is one too terrifying to imagine". So said my noble and learned friend Lord Hailsham in the debate on 25th January at col. 1251. It was stressed again and again during the debates that the insistence on the domination of this committee by laymen is but a process by which the Civil Service will exercise control over what has hitherto been an independent and separate part of our national life. Such laymen, it was observed, may simply be the political appointees of the day. Such a committee, in the words of my noble and learned friend Lord Oliver of Aylmerton, at col. 1247 of the debate of 25th January, is, an instrument by which the executive can, in a very large measure, control a legal profession which until now has been self-regulatory, and by which it can, by the creation of new classes of practitioners in the courts, secure an even greater control than it enjoys at the moment over the composition and of course, ultimately, the conduct of the judiciary at all levels". I turn now to the reply of my noble and learned friend the Lord Chancellor to these criticisms. It is to be found in the debate of 25th January at col. 1259. His defence of the lay majority appears to be based solely upon our system of criminal trial by jury. He said: They are the ultimate consumers of legal services. If the judge receives legal services those people have the responsibility of judging in criminal trials. They are lay people who above all are said to be concerned in relation to the provision of advocacy services by the Royal Commission on Legal Services. Jury trials are particularly inappropriate for solicitors. The lay element in our system of justice in this country is extremely strong and it is not the same as the navigation of a ship to which my noble friend referred". That is the sum total of the defence. The nautical reference was, as your Lordships will remember, to the observation, at col. 1252, by the much travelled noble Lord, Lord Beloff, who said: Passengers in a liner have an enormous interest in the safe navigation of the vessel. Yet when I have travelled in a liner, I have always found a notice saying, 'Access to the bridge is not permitted to passengers'". With the deepest respect to my noble and learned friend, I found his reply so unsatisfactory as to be almost unintelligible. And in making that observation I am not alone.

Finally, and briefly, I come to laymen as judges and the proposals to be found in Clause 55 and Schedule 9 to appoint laymen to all judicial positions from the House of Lords downwards. In Committee the Lord Chancellor was asked three times to answer the simple question: why, if this is such a desirable proposal, no such provisions are to be found in the Scottish Bill? I had to ask the same question twice on the final day of the Report stage before I had his answer. This, at col. 902, was apparently the best that he could do: I believe that the question of which qualifications are appropriate is a matter which may well relate to the size of the jursidiction". I believe that to be a most revealing answer. What this Government are seeking to achieve by this Bill is increased control—increased control of the independent legal profession and, ultimately, the judiciary. In Scotland, because of its size, there was not enough at stake to justify the inevitable further serious loss of popularity that this would achieve. Time bath, my Lords, a wallet at his back, wherein he puts alms for oblivion", but, I fear, not alms enough. The proponents of the Bill, or some of them, will live to see the integrity of our system of justice, which has been developed over the centuries, heavily undermined, and its quality seriously diminished. The fruits of that folly will be most bitter.

Lord Donaldson of Lymington

My Lords, I shall not detain the House for more than a minute or two. I mean that. I am driven to stand up by the sense of doom and gloom in which we are being enveloped.

There is a clear need for Part I of the Bill which deals with the Civil Justice Review. I express no view as to whether there was such a crisis of confidence in the legal profession as to call for Part II. That is a matter of political judgment; and, whatever political judgment I may or may not have, it is part of my professional approach never to express a view. But assuming that there was such a requirement, I believe in all sincerity that the machinery will work. I believe that most of the arguments that my noble and learned friend Lord Ackner has deployed, and all the arguments that the noble Lords, Lord Hutchinson of Lullington and Lord Renton, have deployed, will be redeployed before the Schedule 4 tribunal—if I may call it that—together with other arguments for other interests and other views of the public interest, in an atmosphere which will be much more conducive to arriving at the true answer in the interests of the administration of justice. So I do not fear the future. I am convinced that it will work out all right in the end. I believe that the end in that sense will come quickly. It will be an end which is neither filled with gloom nor with doom.

I conclude on a personal note. I have been a maiden participant in the life of the Bill in terms of speaking in the House. I should like to thank all noble Lords who have borne with me as I found and lost my way through the procedures of the House. I should like to thank my noble and learned friend the Lord Chancellor for his receptiveness to some of my less inspired contributions and to others of my contributions. If he was not as receptive as I should have liked, that merely illustrates my greed. I have found the whole experience highly addictive: it is a great regret to me that I must now return to The Strand for a prolonged period of detoxification.

11.30 p.m.

Lord Simon of Glaisdale

My Lords, earlier this evening I quoted the observation of Disraeli on Lord Hartington's speech after the Berlin treaty: A string of congratulatory regrets". I indicated that that was the normal tone of a debate on the Motion, That the Bill do now pass.

I hope to be allowed to pay tribute to the various noble Lords to whom we are so indebted as regards the Bill and most of all to my noble and learned friend the Lord Chancellor. It would be idle to stifle the regrets. Indeed, that term is inadequate to express my feeling of foreboding at what the Bill portends. I entirely agree with what the noble Lord, Lord Hutchinson, and my noble and learned friend Lord Ackner said. I hope that even though their speeches were delivered late at night they may nevertheless have the publicity which it has been sought to deny them, and I hope that they will endure as a message for the future. I shall endeavour not to cover the same ground as they have covered so well.

I should like to say a brief word about the way in which this Bill has been flogged through the House and also about its general style and tone which are indicative of its conduct and of the ideology that lies behind it. I shall leave aside the effect of the Bill almost entirely because that has been dealt with already. I merely say that the Legal Aid Advisory Committee, whose report we debated last night thanks to the noble Lord, Lord Mishcon, expressed the same misgivings as to the effect of the Bill on the junior Bar and therefore on the availability of independent advice, particularly legal aid advice, and as to its effect on the high street solicitor. I cannot do better than surrender to the committee the judgment on these matters.

I should like to say a word on the conduct of the Bill in being driven through the House. It is extraordinary that such has been the breathless haste of the Government's business managers that time and again they have overtaken my noble and learned friend the Lord Chancellor. He fully intended to make his amendments to Schedule 4 at Report stage but he did not have time. Instead, they came up again this evening. That was the case with one amendment after another. My noble and learned friend said several times this evening that he had wished to make certain amendments but that they would now have to be reserved to the decision of another place.

This important debate on the Motion, That the Bill do now pass, did not start until eleven o'clock tonight. I regard that as a constitutional outrage. But it is really more serious than that. One aspect should be mentioned. I refer to the effect on your Lordships' House. The House rightly purports to be a revising Chamber which closely scrutinises legislation. That has been denied over this Bill. Instead, the Bill has been hustled through, with comment being stifled or muffled. Time and again noble Lords have curtailed their speeches.

I have already indicated the nature of the debate on the Green Papers. The same happened at Second Reading. More than 40 noble Lords wished to speak and others removed their names from the speakers' list as a result. But only one day was given for Second Reading. The noble Lord the Leader of the House sought to derive credit from the fact that two extra days were given for the Committee stage. We had the ludicrous decision to allow only four days for Committee when little more than Clause 1, raising very serious issues, took the whole of the first day. On all but one of those six days your]Lordships were kept sitting after 10.30 p.m., and on two occasions after midnight. The same happened at Report stage, and the same has happened tonight. If I can manage to see so far, it is now twenty-five minutes to midnight. So much then for the way in which the Bill has been driven through.

I now turn to the style of the Bill which is so indicative. Clause 1(1) begins with the words, The Lord Chancellor may by order make provision". Those words are repeated well over a hundred times in the Bill. Then, time and again, we had the Henry VIII clauses which were all the more extraordinary because of my noble and learned friend's very close knowledge of the Bill, supervision of all its details and the fact that he had responsibility for the conduct last Session of the Children Bill where such clauses ran into serious trouble, where the Donoughmore Committee reports were cited at length and where the Government hastened to make concessions. Yet, here again, in this Session, we have this Bill which is full of Henry VIII clauses together with the Education (Student Loans) Bill which also incorporates one such clause. It is indicative of the authoritarian character of the Bill and, I fear I must say, the authoritarian character of this Government.

That is all I have to say about the style of the Bill. The ideology is easy to identify: it is the consumer competition, free market and free enterprise ideology. In other words, the market will decide. My noble friend Lord Benson made a notable speech indicating how inappropriate that was to a profession and that was echoed in the report of the Legal Aid Advisory Committee. However, what is odd is not only the fact it is alien to a profession such as is regulated by the Bill; it is also utterly alien to all that I have understood in the way of Tory and Conservative philosophy. Indeed that laissez-faire, free contract ideology was the ideology of Bright and Cobden in opposing the proposals of Ostler, Sadler, Shaftesbury and Disraeli on the 12-hour Bill seeking to limit children under the age of nine from working in factories and those over nine working more than 12 hours. They were Tory wets, every one of them. That is the ideology—and a wholly alien one—which has been applied to the Bill.

I turn more agreeably to pay the tributes which I feel are due. First and foremost there is my noble and learned friend. He started under very great difficulties. In the first place, as has been pointed out, the Bill is in contradistinction—indeed, in contradiction—of the report of the Royal Commission which took evidence over three or four years, reported only a decade ago and much less time ago had its recommendations accepted by the Government.

My noble and learned friend also had the views already quoted this evening of the senior members of the judiciary disapproving almost entirely of what he was doing. However, he had two advantages: one was unusual and one was carried to an unusual degree. The unusual advantage was that the noble Lord, Lord Mishcon, with his formidable debating powers was fundamentally in favour of the Bill. The advantage to an unusual degree was the way in which the government business managers put their shoulders behind the Bill in such a way as to stifle and muffle debate. Even discounting those two advantages, my noble and learned friend faced formidable disadvantages. It is a great tribute to his skill in debate, his power to think quickly on his feet, his versatility and his astonishing physical and mental stamina that he has seen the Bill through to this stage.

I mentioned the noble Lord, Lord Mishcon, last night, and I shall not embarrass him by repeating what I said by way of encomium. I wish, however, to mention the contribution that has been made by my noble and learned friend Lord Ackner, who has worked fantastically hard. He had no research organisation behind him, no great department of state. Yet he has come with his cogently argued and well-documented speeches to remind your Lordships of what is at stake, culminating in his notable speech this evening.

It would be invidious to mention every noble Lord who has made so good a contribution to the Bill. I hope that I can mention the noble Lord, Lord Renton, because he has been party leader and chief whip of the frondeurs. We owe a great deal to him.

I confess that I feel almost unrelieved gloom and foreboding at what the Bill portends. If there is any relief from it, it lies in a speech made by the noble Lord, Lord Mishcon, on the cab rank rule in which he said, I thought with great nobility and departing from the Law Society brief, that if solicitors are to accept the privileges that the Bar has enjoyed heretofore they must also accept the burdens. If I may say so, I thought that was a noble pronouncement which gives some gleam of hope for the future.

The other gleam of hope is what has been done by my noble and learned friend Lord Ackner, fighting to the last. We cannot really say that Admiral Duncan's fleet going under the waterline with all its guns firing was suffering a total defeat. From those two matters I sustain a gleam of hope, though I cannot see at the moment where it will work out. On the whole, realism makes me think that we are in for a bad time in our system of justice.

11.45 p.m.

Lord Benson

My Lords, as we see the Bill leave the Chamber, I watch it with great distress because I believe that it will do great damage to a great profession. But even worse than that, I am afraid that it will set a standard for the other professions and will destroy a proud privilege we have had in this country for so many years—the high quality of all our professions.

The proponents of the Bill have claimed that it will develop new ways of providing legal services. That is not a true and fair description of the Bill. A fair description of the Bill would be to say that it enables persons who have not been trained as lawyers to carry out legal services for reward. We must remember that those persons are virtually self-elected. Those para-legals will elect themselves through the medium of their para-legal societies.

Some of your Lordships may feel that this Bill is a great achievement. I do not share that view. If the same lack of principle is to be applied to other professionals such as surgeons, physicians, veterinary surgeons, chemists, accountants, airline pilots and others, the quality of the professions in this country will inevitably fall into the standards of a third world country.

One would expect in reforming a profession that the first thing to do would be to define the principles on which a profession should be governed and administered. They are well known and have been well documented for some years. However, noble Lords will notice that the Government have never, neither in the green papers nor in the White Paper, nor in anything said in this Chamber, at one single point referred to the principles which should govern the administration of a profession and on which one would expect them to base legislation.

All the professions in this country are committed to improving quality. They seek to serve the public to the best advantage. That process is well established. It involves higher and higher thresholds for the admission of students in education and training and longer periods of theoretical and practical training and research. It also involves greater post-qualification experience, training and education and higher and higher standards of discipline. However, those aims are not the theme of this Bill.

The Bill moves in the opposite direction. It seeks to establish para-legals who can carry out legal services for reward and who are not subjected to that process. As they are para-legals and are not practising the law generally they are not capable of being subject to that same process. I cannot imagine a system better designed to damage the cause of justice.

The principle of good administration is simplicity and a clear channel of authority. Both have been abandoned. The Bill sets up a ponderous and disjointed machinery which will be slow in operation and extremely costly. One could go on indefinitely putting forward the deficiencies of the Bill. However, I do not wish to weary the House any longer. The matter comes down to this: we shall now have to wait and watch the deficiencies in the Bill become manifest in practice. When they have established themselves, I can only hope that the legal profession will be replanned on principle instead of the Government seeking to placate a populous clamour for reform.

Lord Hacking

My Lords, I feel as if I am a rather junior member of the school at the end of a rather long term. It is certainly a term which has had plenty of "banco". Those noble and learned Lords who may recall what "banco" was, unlike the noble and learned Lord, Lord Donaldson—will know that I am referring to long evening preps.

Despite the length and tiring nature of this term, I certainly go away from it with enormous admiration for, and memories of, the intellectual and physical stamina of the noble and learned Lord the Lord Chancellor. I include in my admiration of that intellectual and physical stamina the noble Lords, Lord Mishcon and Lord Renton, who, from their respective positions, have borne the brunt of the work on behalf of the Law Society and the Bar respectively.

I shall also remember the contributions made by the noble and learned Lord, Lord Simon of Glaisdale. I shall remember not only the contributions but also the presence of the noble and learned Lord who, despite his heavy responsibilities in The Strand, as he refers to it, has been with your Lordships for every minute of our debate.

I shall certainly also remember at the end of term those of the pupils who are still in the school—the noble Lords, Lord Boardman, Lord Coleraine, Lord Hutchinson and Lord Byron. I shall also remember those members of the school who have not spoken during the debate. The noble Lord, Lord Carnock, for example, who is still in your Lordships' House, has faithfully attended every one of your Lordships' debates on the Bill and listened to the argument. So, indeed, until a few moments ago has the noble Viscount, Lord Ullswater, also listened for so long to your Lordships.

The headmaster, who is still here and has kept us in school so long—and I refer to the noble Lord the Leader of the House—has also been kind enough not only to keep us in school but to listen to us in debate throughout.

Perhaps my memories will be—as will the memories of the noble and learned Lord, Lord Simon—of the contributions of the noble and learned Lord, Lord Ackner. As I reminded the noble and learned Lord at dinner this evening, when I was first called to the Bar he was a leading member of the Bar and a leading advocate. I had little opportunity then to hear the noble and learned Lord as an advocate in court. It is quite clear to me that all the years that he has spent on the bench have not diminished the vigour of his argument or the cogency of his reasoning. Unlike the nob le Lord, Lord Mishcon, I have never had an opportunity to instruct the noble and learned Lord, Lord Ackner. I hope therefore that he will make early arrangements to free himself from what other difficulties may be in the way and be available again to be instructed by my side of the profession.

As the Bill goes from your Lordships' House there is still much to be done. It is one of my regrets that your Lordships have not been able to complete the work on the Bill while it has been in your Lordships' House. Indeed, the noble and learned Lord the Lord Chancellor in one of the many letters that he was kind enough to send me—and I know that he sent many other letters to other noble Lords—mentioned many further measures that he proposes to have introduced in another place concerning, for example, multinational practices. I have promised him a letter concerning limitations of actions for his consideration so that the matter can continue to be under review in another place.

As the Bill passes to another place I should particularly like to mention the rights of audience debate. I hope that in the other place this great debate will not continue. Although I much admire the advocacy of the noble and learned Lord, Lord Ackner, I do not agree with his pessimistic view of the prospective greed of the mega-firms of solicitors and of the Bar fading away. Throughout the debate I have supported the extension of rights of audience to all lawyers, and particularly to lawyers on my side of the profession. At no time in the debates—and I go back to the Green Paper debate of last April—have I been an advocate of fusion. On the contrary, I have always advocated that there should be a separate, independent, discipline of advocates. I should like to see that in the Bar in its reformed existence under the structure of this Bill.

Therefore I hope that the opportunities will now be seized by both sides of the profession. I hope that they will desist—and indeed that is one of the central thrusts of the Bill—from further debates and disputes on rights of audience and come together on such matters as common education and training. I hope that one of the of the products of the Bill will be that young law students will move into the legal profession without having to decide prior to entry into it whether they wish to be a barrister or solicitor.

Furthermore, I hope that as part of the common training young solicitor articled clerks will be permitted to have six months pupillage in chambers. Equally, I hope that young members of the Bar will be offered the same facility of spending some of their pupillage time in solicitors' firms.

Lord Renton

My Lords, I did so before being called to the Bar.

Lord Hacking

My Lords, I am interested to hear that, but I am anxious to see the structure for that common training. I believe that there will be so many advantages with it, but first and foremost would be the advantage of opening up to all lawyers the higher skills of advocacy whether they are motivated to my side of the profession or the barristers' side of the profession. I hope that out of that will come a process in which both the young lawyer will be able to test his skills better as an advocate and the advocates who supervise the young aspirants to the Bar or advocacy will have a better opportunity to judge those skills.

The Bill should not leave noble Lords, certainly on my side of the profession, without a considerable word of praise for the leading members of the Bar and the Chairman of the Bar Council who is listening to the debate as he has our debates throughout all the proceedings on the Bill.

In the debate on the Green Paper, I was critical of the Bar holding on to practices long after they could reasonably be defended. There have been tremendous changes at the Bar during the past 10 years and during the last few years, nay few months. Only recently, under the chairmanship of David Latham, Queen's Counsel, the whole new conduct has been adopted by the Bar Council, effective, as I said, from 31st March this year. Rumbling matters such as pupillages and tenancies have all received a tremendous amount of attention. There is now far greater access to members of the Bar and removal of all those restrictive practices which not only worked against the public interest but impeded the Bar in its own growth.

We have had long sessions and we are just about to complete the Third Reading after yet another long session. Two views could be held about the cause of those long sessions. The first is that lawyers and judges talk too much. The other view is the one that I put forward; namely, that the Bill is not only of great interest and importance to noble Lords, but it is a Bill in which noble Lords have great expertise and a great opportunity to make a real contribution. If there has been a down side on the long hours, it is that we have not made as great a contribution as I feel we are capable of doing, and that is a pity.

With that, the upper side should also be examined. It should be recognised that noble Lords have made a considerable contribution. It is therefore upon that note that I end my comments to noble Lords. One of the refreshing aspects of the passage of the Bill through the House, particularly during this final stage of Third Reading, is how the noble and learned Lord the Lord Chancellor has increasingly responded to noble Lords' submissions. He responded for example, to a major matter of concern—the composition of the advisory committee—and gave a most favourable response earlier today on that issue. That is one of many examples of the way in which he has responded. I like to think that if we had not had these long sessions but had had a few extra days, the noble and learned Lord would have been able to respond further to our pleasure.

12 Midnight.

The Lord Chancellor

My Lords, I think it would be inappropriate for me to speak long on the Motion that this Bill do now pass. However, I should like to say one or two words.

First, I believe that this Bill will make a considerable contribution to the improvement of legal services and to the structure of the courts in this country. Part I of the Bill is a set of provisions which I think contains almost all the primary legislation necessary to give effect to the Civil Justice Review set up by my noble and learned friend Lord Hailsham when he was Lord Chancellor. I believe that that arrangement under Part I will be extremely effective. Perhaps the best testimony to it is the fact that the judges of the High Court are already sending down to the county court considerable numbers of cases and have continued to do so right up to the present time.

So far as concerns Part II, in that area we have been in more controversy. But I thoroughly believe that Part II of the Bill contains an arrangement under which the legal profession can develop and continue to prosper. The suggestion that the market philosophy underlies this Bill is true only to the extent that it is a philosophy which it is appropriate to apply only within proper limits when one is dealing with professional matters. That is why it is necessary, in allowing for any development in legal services, to have a proper safeguard for the competence and conduct of the profession, which after all is a central part of professional discipline.

I cannot accept the suggestion made by the noble Lord, Lord Benson, that this Bill does not properly take account of the fact that rights of audience and the right to conduct litigation are matters which require proper qualification and proper conduct.

I believe that the arrangements in the Bill are designed very aptly to secure those standards for the future. The control is in the hands of the professional bodies, the General Council of the Bar and the Law Society, with the approval of the judges and also that of the Lord Chancellor being necessary for any change. The advisory committee is there in order to give advice on these matters. I believe that this is a well-balanced arrangement which will have extremely beneficial effects.

This afternoon my noble and learned friend Lord Griffiths spoke of his experience in a lay-dominated or lay-majority committee; so did my noble and learned friend Lord Roskill. The matter of conveyancing by institutions such as building societies, banks and insurance companies has been on the statute book since 1986. We have sought to modify the arrangements for that and introduce more detailed arrangements for proper protection of the persons who use the service and also to ensure fair competition in that area. I have every confidence in that, as had the previous president of the Law Society who I think said that he believed that in fair competition the solicitors would have a very good chance.

There are other detailed provisions in the Bill to which I do not need to devote particular attention. This Bill is designed to improve access to justice. It is intended to assist the development of the whole legal profession, the Bar and the Law Society. It provides a mechanism for resolving matters of long-standing dispute between the Bar and the Law Society which cannot but be in the interests of the profession.

I hope that these arrangements will work very well. I have said before, and I say again, that I believe this Bill will do nothing in any way to damage the Bar. On the contrary, I believe that it will help to stimulate and open for the Bar even further opportunities.

I should like to pay tribute to all your Lordships who have taken part in these debates and proceedings. There are a great number of noble Lords who have done so and I do not wish to leave anyone out. On the other hand, I cannot be sure that I shall include everyone. Therefore, I should like generally to thank everyone who has taken part.

I should like to begin with my noble and learned friends the Law Lords and in particular my noble and learned friend Lord Ackner, because I appreciate as much as anyone here the great work that he has done in bringing before your Lordships the point of view that he desires to advocate. It will not have escaped your Lordships entirely that I have not been able to agree with him completely in all the points that he has made. However, I always appreciate the force of his advocacy and do my best to accommodate him so far as I can. I have endeavoured to do so in a number of the amendments, for example, that were passed today.

Others of our colleagues, my noble and learned friends, have participated and I am grateful to them. I should like to mention my noble and learned friend Lord Simon of Glaisdale who has been a regular contributor and attender throughout these proceedings and who has been very courteous in bringing his concerns to my notice in private so that we were able often to save your Lordships' time by resolving differences between us by such consultation.

I should also like to thank my noble and learned friend the Lord Chief Justice for his participation. As your Lordships know, he has many heavy responsibilities and it is the wish of all of us that lie will have every possible success in the heavy responsibilities that he carries.

I should also like to thank my noble and learned friend the Master of the Rolls who has been with us so helpfully during nearly all our discussions. I am extremely grateful to him.

The noble Lord, Lord Benson, has taken a great interest in our proceedings. Again, although I have not been able to agree with him in everything, I appreciate the fact that he has given us the benefit of his great experience. The noble Lords, Lord Hacking, Lord Byron and Lord Allen of Abbeydale, have all contributed to our debates from the Cross-Benches, as has the noble Lord, Lord Shaughnessy. I should like to thank all of them for their participation which I am sure has been extremely useful to us.

I should in particular like to pay tribute to the noble Lords, Lord Mishcon, Lord Prys-Davies and Lord Irvine of Lairg, who have shared the burden of the Opposition Front-Bench during these debates.

Perhaps it is not a burden. I have no doubt it is a great pleasure. It is a pleasure to work with them and I should like to thank all of them for their part in these debates.

Noble Lords on the Benches immediately on my left have contributed a great number of speakers and have made a number of contributions. The noble Lord, Lord Hutchinson of Lullington, has made his usual very lucid and (if I may say without any feeling of being patronising) well-delivered salvoes at the Bill. Again, I cannot say that I have always fully agreed with him, but I believe that there is more between us of agreement than perhaps he would recognise because I share many of the values that he has expressed. The only difference between us is that he does not see them enshrined in the Bill quite so clearly as I do.

The noble Lord, Lord Hooson, gave us the benefit of his experience for which we are grateful. The noble Lord, Lord Meston, was with us for a good part of the time. The noble Lord, Lord Lloyd of Kilgerran, brought to our notice the interest of intellectual property, patent agents and trademark agents. We always appreciate his help in these important but recondite areas.

The noble Lord, Lord Evans of Claughton, spoke from the point of the high street solicitor and we appreciated what he said. He has not been present because of other commitments but he made extremely useful contributions. I was happy to respond to some of his concerns.

My noble friend the Leader of the House has already been mentioned for keeping us going. I thank him for the arrangements that he made. My noble friend Lord Renton has been described as the leader, chief whip and so forth in the debates. He carried out those duties in a most friendly and constructive manner, and I thank him.

My noble friend Lord Ullswater has been with me almost continuously trying to keep me on the right track. In so far as I have been able to do so, he must take a great deal of the credit. My noble friend Lord Alexander of Weedon played a leading part in many of the debates. I thank him for his participation. My noble friend Lord Peyton of Yeovil told us of his conversion. My noble friend Lord Harmar-Nicholls was extremely helpful in bringing into the discussions the lay point of view. One can illustrate the way in which a lay involvement can resolve difficulties between lawyers by turning to the good example he gave this afternoon. My noble friend Lady Faithfull also participated with her usual knowledge and experience of the background to the legal system and that is always valued.

My noble friends Lord Boardman and Lord Coleraine were notable in bringing to our attention problems associated with the detail of the conveyancing arrangements. I am grateful to them because I am most concerned that these matters are dealt with properly. One result of our discussions on the Green Paper and the Bill has been to direct more attention to concerns in the area of house buying and the possible difficulties for people operating in it than has previously been the case. One result of the stimulation was the recent activity of the Director General of Fair Trading in respect of estate agents, as was announced. That is all to the good of those whom we seek to serve; that is, those who are buying and selling their property.

I should also like to mention the noble Baroness, Lady Phillips, who made some fairly vigorous comments at an early stage in our debates. She helped to ensure that the matter was not left to the lawyers.

I express my gratitude to all noble Lords. As the Bill goes to another place for consideration I hope that ultimately it will prove to be what I claim for it and that the gloomy prognostications which some noble Lords have expressed will be disproved by the result. I commend the Bill to the House.

On Question, Bill passed, and sent to the Commons.