COMMONS AMENDMENT (Hansard, 24 October 1990)

§ The Lord Chancellor

My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 138. I should like to speak also to Amendments Nos. 140, 216, 265, 279, 280, 296, 297 and 299. These are important amendments to the Solicitors Act 1974. All except Amendment No. 140 extend the Law Society's jurisdiction in cases of inadequate professional services or, as it is sometimes called, shoddy work. I had hoped to introduce these powers at Report stage in this House but they are rather detailed and it did not prove possible to bring them forward until the Bill reached another place.

Section 44A of the Solicitors Act 1974 gave the society power to reduce fees; to order a solicitor, at his or her own expense, to take action rectifying an error; or to take other action in the interests of the client. These powers have served a useful purpose but they are to be extended now to enable the society to take action, and direct the payment of compensation, to enable a client's clearly justified "small claim" to be satisfied.

It may help the House if I briefly outline the effect of these amendments. First, by revising the relevant structure of the Solicitors Act, they draw a clear distinction between the society's disciplinary functions, dealing with matters of professional misconduct, and its powers to deal with complaints about the quality of service provided. That is an important distinction. Secondly, the amendments give the Law Society power to direct a solicitor to pay compensation up to £1,000 where it is satisfied that the services provided by the solicitor were not of the quality that could reasonably have been expected. The Lord Chancellor is to have power to vary the £1,000 limit by statutory instrument after consultation with the Law Society, and the intention is that it should move in broad equivalence to the small claims limit.

The council will also be able to charge a fee once a complainant has decided that he or she wishes the society to adjudicate formally on a complaint of shoddy work. The charge will be refunded if any of the powers are exercised in the applicant's favour. The society will also have the power to recover costs from the solicitor.

The new provisions will fit very closely with the powers of the legal services ombudsman and I hope that they place the Law Society in a better position to maintain standards and to resolve many of the public's grievances against solicitors.

Finally, the new clause at Amendment No. 140 is a modest but welcome amendment, also made at the request of the Law Society, which will provide that an agreement between the solicitor and his client as to the solicitor's hourly charging rate may constitute a contentious or non-contentious business agreement. Such agreements benefit both solicitor and client by providing some certainty at the outset as to what the solicitor will charge the client. The agreement must he in writing and may be set aside if the court considers it to be unfair or unreasonable. An important safeguard in the new clause is the provision which 1445 retains the client's right to taxation of the number of hours actually worked and inquiry as to whether the total was excessive.

I consider this a useful contribution to a package of measures on matters of considerable concern to the client public.

Moved, That the House do agree with the Commons in their Amendment No. 138.—(The Lord Chancellor.)