BAR PRACTISING CERTIFICATES (Hansard, 14 July 1999)

§ The Lord Chancellor

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 80. With your Lordships' leave, I shall speak also to Amendment No. 81.

These amendments relate to practising certificates for barristers and solicitors. Solicitors are already required to hold practising certificates under the Solicitors Act 1974. The certificates, which are renewed annually, show that the solicitor is properly qualified, has abided by the various requirements imposed on solicitors—such as having satisfactory insurance arrangements—and has paid his or her dues to the Law Society.

Amendment No. 80 enables the General Council of the Bar, for the first time ever, to require banisters to hold and pay for practising certificates on a similar basis. It also defines the purposes for which the Bar Council may apply the income that it receives from practising certificates, income from what will effectively be compulsory subscriptions. The Law Society already has a statutory power under the Solicitors Act 1974 to levy fees for practising certificates, but there is currently no statutory restriction on the society's use of its compulsory fee income. Amendment No. 81 enables me to limit the purposes for which the Law Society may apply fee income from practising certificates.

The Government believe that it is right for a regulatory body to be able to charge compulsory fees to those it regulates. The Bar Council carries out a regulatory function in relation to barristers which is comparable to that exercised by the Law Society in 457 relation to solicitors. The Government believe that it is unfair that some barristers should not contribute to the costs of the regulation from which all barristers benefit.

Amendment No. 80 will also enable the Bar Council to require barristers to pay what amounts to a training levy to support pupil barristers or to provide other training. At present, many new barristers, after attending the Bar vocational course and being called to the Bar, find that they are unable to obtain pupillages and their careers therefore fall at the first fence.

The Government hope that the Bar Council will choose to exercise its new power. It should be a potent means of ensuring more meritocratic entry to the Bar, which is rightly perceived as a profession dominated by the middle class. This clause should help to ensure for the future that more people not from privileged backgrounds are able to rise to success at the Bar.

Amendment No. 80 provides that the total amount of money generated from the payment of these fees should not exceed the Bar Council's total expenditure on the regulation, education and training of barristers and would-be barristers. The Government's firm view is that this compulsory fee income should not be available for what might be described as the Bar Council's trade union activities. The Government have no intention of creating a "closed shop", requiring individual barristers to fund activities which they may not support and may in fact be contrary to their interests. Of course, it will be open to the Bar Council to raise money from barristers on a voluntary basis for these purposes. But the days of pre-entry closed shops are ended for trade unions and should not apply to other bodies either.

Still, the Government accept that there may be other purposes for which it would be appropriate for the Bar Council to use money generated from subscriptions. The clause therefore contains a power to enable me to add to the purposes of regulation, training and education. The order would be subject to prior consultation with the council and to affirmative resolution of each House of Parliament. In considering the possibility of using this power, the Government would be guided in particular by the wider public interest.

The Chairman of the Bar Council, Mr Dan Brennan, QC, has welcomed the proposed introduction of Amendment No. 80. I should like to place on record the thanks of the Government to Mr Brennan and the Bar Council for all the work they have done to facilitate the formulation of this change. With your Lordships' leave, I shall deal with Amendment No. 80A in the name of the noble and learned Lord, Lord Ackner, in a few moments. It raises issues similar to Amendment No. 81A tabled by my noble friend Lord Mishcon and the noble Lord, Lord Hunt.

I turn to Amendment No. 81. At present, under Section 11(3) of the Solicitors Act 1974, practising certificate fee income may be applied in any manner the Law Society may think fit. At Committee stage in the other place, an amendment was laid which sought to apply the same restrictions to the Law Society as the Government intend to apply to the Bar. This would have had the effect that practising certificate fees could be used only for the regulation, education and training of solicitors.

458 The Government's initial view, which they conveyed to the Law Society, was that the same restrictions should be imposed as for the Bar Council. As I have explained, our belief is that it is right in principle that a professional body should be able to spend money generated from compulsory subscriptions only on certain activities. I am aware that many solicitors welcome this proposal and feel that it would help to ensure that the society remained answerable to the profession.

Also, there is a strong argument that the Law Society should be placed on an equal basis to the Bar Council. I subsequently met the President of the Law Society, Mr Michael Mathews, to discuss the Government's position. I should like to place on record my appreciation for Mr Mathews' service as President of the Law Society on what I believe to be this, his last full day in office.

The Government have not always seen eye to eye with the Law Society over the past year, especially on aspects of this Bill. That is completely unsurprising. However, throughout his term of office Mr Mathews has served the solicitors' profession with courtesy, energy and great integrity. At our meeting he made some extremely important and useful points. I listened to the points and they have been reflected in Amendment No. 81. The Government have accepted that immediate change could be disruptive for the established procedures and structures within the Law Society which have existed for a long time in reliance on its right to exact compulsory fees being unrestricted in the sense of its being free to expend the income from the fees exacted in this way as it chooses.

This amendment, therefore, makes no immediate change to the position of the Law Society but enables Parliament to decide what restriction might be appropriate when the Government and the Law Society have had time to consider the issues fully. The Law Society will also no doubt want to consult its members. We have asked the Law Society to set out, within 18 months of Royal Assent, any further activities that in its view should be financed by compulsory fee income and which of its activities should be funded only on a voluntary basis.

Subject to the qualifications I make, I intend to resist Amendment No. 81 tabled in the name of my noble friend Lord Mishcon and the noble Lord, Lord Hunt. However, perhaps I may say that I am grateful to them for tabling it. It helps me to illustrate the types of activities which the Law Society and the Bar might properly fund from compulsory fees. I make it clear to the House that "practice support" or practice management and the, raising and maintenance of standards will be covered by compulsory fees for both the Bar and the Law Society. These activities are entirely compatible with the role of a regulatory body and should be included in any order made under any of these amendments. The noble Lord, Lord Mishcon, will therefore appreciate that I accept and support much of the thinking behind his helpful amendment.

However, my concern lies with the words work in the public interest".

459 The same expression is used in Amendment No. 80A tabled by the noble and learned Lord, Lord Ackner, in relation to Bar practising certificates. I do not think that it is satisfactory to include those words on the face of the Bill. They are not readily justiciable, although they will be capable of giving rise to litigation. I prefer certainty, and I do not think that we should have any difficulty agreeing with the Law Society in the course of 18 months a list of specific activities that are in the wider public interest. I much prefer agreeing activities that justify compulsory fees on a case-by-case basis to creating a rather vague and problematic category. However, I assure both the noble Lord and the noble and learned Lord that those functions of the Law Society and the Bar Council that we can agree are in the public interest will qualify for funding from compulsory subscriptions. On that basis, I invite the noble Lord and the noble and learned Lord to withdraw their Amendments Nos. 81A and 80A.

The Government cannot support a state of affairs where solicitors and barristers are compelled to join a closed shop in order to practise. However, at the same time, we have no wish whatsoever to stifle the many useful functions in the public interest that both bodies currently perform and from which both the public and the Government benefit. I commend the new clauses as successfully balancing these concerns.

The Bill in its present form empowers the Lord Chancellor to limit the purposes for which the Law Society may accept compulsory fees for regulation, education and training and other appropriate purposes in the public interest about which I have given details in response to the amendment standing in the name of the noble Lords, Lord Mishcon and Lord Hunt. The Lord Chancellor is to consult the Master of the Rolls and the Law Society before exercising these powers, and I intend to do so very thoroughly indeed. Thereafter Parliament will decide by affirmative resolution.

The amendment of the noble Lord, Lord Phillips of Sudbury, would give the Master of the Rolls the power of veto so that no change could be put to Parliament without his concurrence. I do not think that that is acceptable: it is ultimately and properly for Parliament to determine these matters. The Master of the Rolls has never sought a power of veto and, when informed that there would be a statutory duty to consult him, he expressed his support for that provision. I have, of course, informed the Master of the Rolls of the Government's intentions and I will have full regard to any advice that he provides to me on practising certificates. He will also be able, should he wish, to make this advice public. On that basis, I invite the noble Lord, Lord Phillips of Sudbury, to withdraw his amendment. I beg to move.