Restrictions in the Professions (Hansard, 6 November 1986)

§ Mr. Howard

In the past few weeks, the Director General of Fair Trading has published three reports covering respectively: restrictions on the kinds of organisation through which members of professions may offer their services; restrictions on the patent agents' profession; and remaining significant advertising restrictions. With that on advertising and charging rules of the professions serving the construction industry, published earlier this year, they complete the programme of reviews of restrictions in the professions which my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher) announced on 23 July 1985.

The report on advertising restrictions concludes that there has been significant liberalisation in this area, particularly in the past four or five years. It concentrates on those professions whose rules have not otherwise been subject to detailed scrutiny. In particular, it recommends that three professions allied to medicine-chiropodists, physiotherapists and osteopaths - remove their present restrictions on advertising. The removal of a minor restriction by the Institution of Mining and Metallurgy is also recommended. The Director General saw no need for a formal recommendation on four accountancy and notaries' bodies, but assumes that their already permissive advertising rules will continue to be relaxed in line with those of the main bodies for their professions. In endorsing these recommendations, I have asked the Director General to discuss their implementation with the bodies concerned.

The report on patent agents recommends the ending of the exclusive right which patent agents, together with solicitors, have to represent inventors in dealing with the Patent Office, and the removal of restrictions on the use of the title "patent agent" and on the form of business in 564W which a patent agent can practise. These recommendations are intended to open the profession to greater competition, and to allow patent agents to enter into partnership with members of other professions to offer a range of protection and exploitation services. The Government are considering these recommendations and, if accepted, they will be included in the legislation implementing the proposals in the White Paper "Intellectual Property and Innovation" (Cmnd. 9712) published in April, which will be introduced as soon as parliamentary time permits. In addition, the report recommends that the Chartered Institute of Patent Agents should end its prohibition of practice through a limited liability company and its severe restriction of advertising by its members, and discontinue its annual charging guide. I have endorsed these recommendations and have asked the director general to discuss the necessary changes with the chartered institute.

The report on restrictions on the kind of organisation through which members of professions may offer their services makes three recommendations directed at Government. One is that Ministers should consider amending any legal restrictions which prevent solicitors from entering into partnership or other forms of association with members of other professions, as a precursor to corresponding alteration of the practice rules of the Law Societies. As regards England and Wales this recommendation is being considered in connection with work on implementing the provisions of the Building Societies Act 1986, for recognised institutions to offer conveyancing. The second, that Ministers should consider whether to permit company auditors to practise in corporate form, is one of the proposals canvassed in the consultative document on the implementtion of the European Communities' 8th company law directive, published on 12 August. Finally, the report that my Department should review the operation of section 716 of the Companies Act 1985 and consider whether any amendment would be justified to avoid unnecessary impediments to multidisciplinary professional partnerships. Under this section, partnerships, with certain exceptions, are limited to 20 persons. However, section 716(3) enables the Secretary of State to exempt from his prohibition partnerships of a specified purpose and description. The Department is prepared in principle to consider application to exempt partnerships consisting of more than one profession. Applications would he examined to ascertain whether a need had been establised for exemption, bearing in mind the possible alternative solutions (such as unlimited companies), and whether the disciplines of the professions concerned would provide adequate protection for clients of such partnerships. I welcome these three reports, which together with that published earlier, make an important contribution to the continuing work of removing unjustifiable restrictions in the professions.

Copies of the reports have been placed in the Libraries of both Houses.