POWERS OF OMBUDSMAN (Hansard, 14 July 1999)

§ The Lord Chancellor

I beg to move that the House do agree with the Commons in Amendment No. 83. With your Lordships' leave I shall speak also to amendments Nos. 84, 85, 86, 181 and 218.

465 The amendments amend the powers of the legal services ombudsman and cater for the establishment of a new post of legal services complaints commissioner. The new clause added by Amendment No. 83 will allow the ombudsman to make a binding order rather than a recommendation in respect of a complaint if he thinks that it is more appropriate. Before making a binding determination, the person or professional body concerned would be entitled to appear before the ombudsman to make representations about the order proposed.

That extension of powers will be a welcome addition to the ombudsman's armoury for dealing with those who are not providing an adequate service to their clients. It should assist clients to recover compensation that they would not otherwise receive. The ombudsman will not be obliged to use that power, but it will be available and will be of value in some cases.

Amendment No. 85 inserts a new clause giving the Lord Chancellor the power to appoint a legal services complaints commissioner if that proves to be necessary. The commissioner will have powers to intervene to improve the standard of complaints handling by the legal professional bodies where it proves inadequate.

The new clause inserted by Amendment No. 86 and the schedule inserted by Amendment No. 181 set out in detail the functions and powers of the commissioner, who will have the power to set targets and require a professional body to produce a plan setting out how it intends to improve its complaints handling performance to meet the targets. If a professional body fails to submit an adequate plan or to follow its plan, the commissioner will have power to fine it. The new post will be financed by a levy on those authorised bodies that it is appointed to oversee. It is only right that if the commissioner is appointed, the professional body that is failing should be required to cover the costs of the commissioner overseeing its complaints handling, not least because his appointment will have arisen out of the inadequacies of the profession's self-regulation.

The principal reason for the provisions is the poor and deteriorating performance on complaints against solicitors at the Office for the Supervision of Solicitors. The backlog of cases at the OSS is large and growing. The time taken to deal with complaints is unacceptable. The confidence of the public in our legal system depends in part on there being effective redress. The Government could not have stood idly by watching matters deteriorating when we had a legislative opportunity in the Bill to address the issue.

The provisions on the legal services complaints commissioner will be brought into force only if it appears that complaints about members of any professional body are not being handled effectively and efficiently. I would use the powers only after much thought and with a great deal of reluctance. In any event, I shall not use them within 18 months of Royal Assent. They are reserve powers and we wish to give the OSS in particular the opportunity to put its house in order.

466 The Law Society recently published and adopted a report by Ernst and Young mat set out a blueprint for a more efficient system for dealing with complaints against solicitors. I acknowledge that more resources have been allocated to complaints handling. Those are steps in the right direction. But much remains to be done. We shall watch developments carefully and indicate to the Law Society in particular what performance is necessary to be achieved if the commissioner is not to be introduced.

Amendment No. 84 gives me power to require any professional body to make payments to the legal services ombudsman in respect of some or all of the expenses of the ombudsman. I do not intend to use that power unless I appoint the legal services complaints commissioner, who will be financed by the failing professional bodies he is appointed to oversee.

The practice elsewhere is for ombudsman schemes to be financed directly by the professions concerned. Any payments required from a professional body will be proportionate to the size of the body and the number and nature of complaints generated. Those new powers will help to achieve better performance in the handling of complaints which I know is the aim of the Law Society and the other professional bodies. I believe that they are proportionate; they are certainly timely; and I have no doubt that they will be welcome to the public.