Law firms have four years to prepare for the introduction of alternative business structures (ABSs), it emerged last week.


Speaking during the latest day of the Legal Services Bill's committee stage in the House of Lords, Department for Constitutional Affairs minister Baroness Ashton said the government was working towards the licensing framework being in place to allow the start of ABSs in 2011.



She also accepted the thrust of an amendment laid by Conservative solicitor Lord Hunt of Wirral to give Parliament the opportunity to review the development of ABSs after five years. However, she rejected inclusion of a sunset clause on the ABS provisions. Lord Hunt's amendment called for monitoring of and research into the operation of ABSs once they are allowed, a report after three years, and a sunset clause bringing them to an end after five years to ensure a proper review.



Baroness Ashton said she was 'happy to consider the study and report', but suggested that the latter should happen after five years. She agreed with other peers that the sunset clause could cause major difficulties for consumers and investors in ABSs.



'If necessary, legislative changes could then be proposed [after the report]... that is better for the long-term planning of ABSs and gives greater certainty while dealing with the point that Parliament should be given a chance to review how the development is working,' she said.



However, the minister rejected a Liberal Democrat call for an ABS pilot, on the ground that it would be hard to ensure that services stay within the boundaries of a particular geographical area.



Meanwhile, Parliament's joint committee on human rights has expressed concern over whether aspects of the Bill comply with the European Convention on Human Rights, in particular the reliance on judicial review - rather than a formal appeals process - to challenge decisions by the proposed oversight regulator, the legal services board, and by ombudsmen at the proposed office for legal complaints.



Neil Rose