PARLIAMENT: government set to make concessions over trade unions and light-touch regulation


The Legal Services Bill headed towards its end-game this week in the wake of the House of Lords defeating the government on three key issues, two of which look likely to lead to concessions.



The Lords considered, last week, the changes to the Bill made in the Commons. Peers supported amendments then laid by Conservative shadow justice minister Lord Kingsland that limited the exemption given to trade unions from the alternative business structure (ABS) licensing requirements, and that sought to ensure the proposed Legal Services Board (LSB) can only intervene in the work of a frontline regulator like the Solicitors Regulation Authority (SRA) where it has acted unreasonably.



The aim of the latter was to ensure that the LSB remains a 'light-touch' oversight regulator, rather than use its powers to become interventionist. The opposition secured comfortable majorities in both votes.



Meanwhile, the Lords also approved an amendment laid by cross-bencher Lord Neill of Bladen, a one-time chairman of the Bar Council, which in turn rejected a Commons amendment that would require the Lord Chancellor only to consult with the Lord Chief Justice in appointing members of the LSB. There has been a long-running campaign to require the Lord Chief Justice's concurrence so as to ward off any perception of government interference with the independence of the profession in appointing the LSB.



However, in the fourth vote held last week, Lord Neill failed to persuade his fellow peers to compel a further investigation and report into ABSs before they are brought into force.



The stand-off between the Lords and Commons should be resolved this week, and the Gazette understands that the government will make concessions on the Conservative amendments. The outstanding issues are all matters over which the Ministry of Justice has appeared determined to get its way. Once these points are agreed, the Bill should receive Royal Assent.



The first commencement order is expected by the end of January 2008 and to provide for the setting-up of the LSB. It might also permit the Law Society Council to delegate rule-making powers to the board of the SRA.



A second commencement order is expected by the end of July 2008. This could give the SRA the powers needed to regulate legal disciplinary partnerships and to introduce entity regulation of partnerships. The SRA should then have the rules in place to begin regulating such partnerships in early 2009. ABSs will not be introduced until 2011 or 2012.



See also Editorial



Neil Rose