HL Deb 21 July 2004 vol 664 cc297-9

Baroness Amos rose to move, That the draft order laid before the House on 24 June be approved.

The noble Baroness said: My Lords, the purpose of this short order is to increase the existing borrowing power of which the Law Society of Northern Ireland can avail itself in relation to its compensation fund from £100,000 to £1 million. The existing level was set in 1976 and no longer reflects the needs of the Law Society. The figure of £1 million has been arrived at as representing a much more satisfactory borrowing limit.

In order to allow reviews of the limit to take place without the need to amend the primary legislation, reviews may be undertaken in future by the use of secondary legislation. The order will be beneficial to the Law Society of Northern Ireland in its management of this important fund. I beg to move.

Moved, That the draft order laid before the House on 24 June be approved.—(Baroness Amos.)

Lord Glentoran

My Lords, I thank the noble Baroness the Lord President of the Council for outlining this order. Based on a quick calculation, it appears that to jump from £100,000 in 1976 to £1 million in 2004 is to do little more than keep up with inflation. I thought at first that perhaps the use of the society's fund had grown so much that there was a serious problem, but when I did some elementary mathematics I found myself quite content with the order.

Lord Smith of Clifton

My Lords, I, too, thank the noble Baroness the Lord President of the Council for outlining this brief order. I have three questions. Why are government funds used for this purpose? I do not believe that they are used for that purpose in England and Wales, although I am prepared to be corrected on that. Why is insurance not used? The noble Lord, Lord Glentoran, says that the increase is keeping pace with inflation; I respectfully suggest that it is keeping pace with legal inflation. If I am reincarnated, I hope that I return as a lawyer in Ireland because I will be as rich as Croesus. Such legal inflation is unbelievable. Why are the Government funding this in the first place? Why cannot insurance be used? What is the position in England and Wales?

Lord Rogan

My Lords, I have no objection to the order in principle but I am slightly concerned that it will change the procedure for dealing with this kind of proposal from an affirmative to a negative resolution. Why is such change necessary? We suffer from a deficit of governance in Northern Ireland. Surely this further change by the Department of Finance and Personnel will make that deficit even worse.

Baroness Amos

My Lords, perhaps I may clarify that this is not government funding. The fund is made up from contributions from solicitors themselves. Perhaps I can give the noble Lord, Lord Smith of Clifton, an example of the way in which the fund is used, which would help to explain it.

The fund is used to provide grants in circumstances of loss arising from a solicitor's dishonesty. A common example would be during a house purchase transaction. A solicitor might have a large amount of his or her client's funds in a client account during the purchase. If that is misappropriated, the client could be placed in an extremely difficult financial situation if immediate redress is not effected. The fund is then used in that way.

With respect to the negative resolution procedure, which was raised by the noble Lord, Lord Rogan, it is normal practice for primary legislation—which is in effect what this order is—to contain powers to vary monetary limits placed on them. This is a sensible measure that allows reasonably straightforward changes to be made in circumstances where limits become outdated, without the need to produce another piece of primary legislation. I think that that was just overlooked in 1976, when the original legislation was enacted. It would not normally be the case that with respect to something that had monetary implications and monetary limits placed on it, there was no ability to review without going through the whole primary legislation process.

There is a similar fund for England and Wales. There are a lot more solicitors on the roll in England and Wales, and there is a higher levy than in Northern Ireland. The limit in England and Wales is much smaller. I do not need to address the point on insurance, because I have already addressed it.

On Question, Motion agreed to.