House of Lords: minister rejects Tory call for government to pay start-up costs




The £27 million start-up costs of the new system of regulating legal services will be levied on the profession in instalments, the government said last week as it refused to move on the principle of not contributing itself.



In the final day of the Legal Services Bill's committee stage in the House of Lords, Department for Constitutional Affairs minister Baroness Ashton rejected Conservative amendments that the government pay all the start-up costs, and a third of the running costs.



Shadow Lord Chancellor Lord Kingsland said: 'There should continue to be, at the very least, a taxpayer contribution to start-up and running costs to reflect the costs that would have fallen on the public purse had the present regulatory arrangements been retained.'



He added that as the proposed legal services board has a wider public interest role than just overseeing the conduct of practitioners - such as in ensuring access to justice - it should not be left to lawyers alone to bear the cost.



He was supported by the Liberal Democrats, for whom Lord Maclennan said: 'It is not self-evidently true that those being regulated should bear the cost of regulation. Regulation is being introduced... to protect the public interest and, if the full costs of establishment are to be met by the professions, there must be a concern that those costs would be lumped on to those who have to purchase the services of the professions.'



Former Conservative Lord Chancellor Lord Mackay emphasised this point. 'It is worth recalling that, in so far as cash burdens are imposed on the legal profession, these will be charges on access to justice for those who are consumers of legal services,' he argued.



Baroness Ashton would not be moved, however. 'We believe that legal services providers enjoy exclusive access in the provision of reserved legal services, which can lead to them providing ancillary legal services,' she said. 'We hope and expect the profession will gain from the increased consumer confidence that these reforms will generate and that consumers will enjoy greater access to justice when things have gone wrong for them. We hold to the view that the costs should be met by the professions.'



She added, however, that 'to minimise any potential pressure on approved regulators, the recovery of [start-up] expenditure will be done on a phased basis, rather than in a single year'. The Law Society has to add around £10 to the practising certificate fee to raise £1 million.



The Bill will now move to its report stage, at which the government will make concessions on various points. It is expected that these will be tabled before the Easter recess.



Neil Rose