Reform: solicitors vow to challenge key elements of 'dangerous' Legal Services Bill


Solicitors this week promised to fight the 'dangerous' Legal Services Bill published last week, which they claim could damage the reputation of the UK legal profession abroad.



The Bill, which is starting its parliamentary journey in the House of Lords, will press on with a radical reform agenda, including the creation of a legal services board (LSB) to take overall responsibility for regulation of the profession, an independent office for legal complaints (OLC), the development of multidisciplinary alternative business structures (ABS), and outside ownership of law firms.



Members of the LSB will be appointed by the secretary of state, despite calls by the joint parliamentary committee that scrutinised the draft Bill, and others, such as the Law Society, to curtail government involvement in the process.



Solicitor Lord Hunt of Wirral, who chaired the committee, told the Gazette: 'Allowing the perception - real or otherwise - of government control of the independent legal profession is very dangerous and contrary to the public interest.



'A lot of jurisdictions across the world use English law as a benchmark for justice. We damage our inheritance at our peril. This will be fought by solicitors, as will the system of regulation. It is agreed that the LSB will have oversight, but the select committee was very much against the micro-management [of frontline regulators such as the Law Society] that we see in this Bill.'



The Lord Chancellor insisted the appointment of the LSB by the secretary of state was no different to, for example, the appointment of the Financial Services Authority by the Chancellor of the Exchequer.



City of London Law Society chairman David McIntosh said: 'It's all very well for [the government] to tell us there is no problem because procedures compare with the FSA. The truth is there are certainly perceived problems of independence on the part of the competitors of major law firms and bar associations abroad, who seldom welcome the outside competition which we rightly provide.'



Government minister Bridget Prentice said it had accepted three-quarters of the committee's recommendations - although it did not act on key issues such as caution in developing ABSs. She noted that the Bill's regulatory objectives had been amended to include the 'encouragement' of an 'independent' profession. The Bill will also extend the legal professional privilege that applies to lawyers to accountants working in the same ABS firm.



Lord Falconer said it was 'difficult to predict' what the effect of the Bill on high street firms will be, but added that 'it could make some firms less profitable.'



Law Society President Fiona Woolf said the Bill was 'much improved' from the draft version, but there were 'still a number of important issues where amendments are needed'.



Speaking to the Motor Accident Solicitors Society annual conference last week, the Conservatives' shadow constitutional affairs secretary, Oliver Heald, said his party would focus on three issues as the Bill proceeds: the LSB appointments process, which he said 'must take place at arm's length from government'; the threat to high street law firms through new entrants cherry- picking the best work; and ensuring the OLC is more than a rebadged Consumer Complaints Service.



Mr Heald said the OLC will be based in Coventry, but the Department for Constitutional Affairs said no decision has yet been taken, beyond locating it in the West Midlands.



Rachel Rothwell and Neil Rose