In the Media

Minister denies 'tyranny' of Bill

PUBLISHED July 1, 2006

The minister responsible for the Legal Services Bill this week vehemently denied that the Bill is a ?short step to tyranny? as she faced a grilling by the joint parliamentary committee scrutinising the proposed legislation.

Liberal Democrat committee member John Hemming MP questioned whether the ?hire and fire power? that the government will hold over members of the proposed legal services board (LSB) could threaten the independence of the profession ? a concern voiced by many lawyers in their evidence to the committee.

Department for Constitutional Affairs minister Bridget Prentice said that the Bill is not just about making sure that the legal professions are independent of government, but also addressing consumers? concerns that regulation of legal services should be independent of the profession.

She said LSB appointments would be in keeping with the Commissioner for Public Appointments? rules, noting that members of other regulatory boards, such as the Financial Services Authority, are appointed by a secretary of state.

In an earlier evidence session last week, David McIntosh, chairman of the City of London Law Society, warned that the lack of independence from government in the appointments process would be an ?own goal? affecting the international standing of City firms, and would ?play into the hands of overprotective foreign bar associations? that did not want to grant solicitors practice rights.

Ms Prentice also fended off criticism that the decision not to appoint one single regulator for alternative business structure (ABS) firms could lead to competing regulatory bodies dropping their standards to attract firms. Instead, she said ABS firms would benefit from having a choice of regulator.

She said: ?ABS firms will look at which regulator is best suited to regulate them. I do not believe that by having competition between regulators, they will in any way lower their standards. If anything, it will give them the opportunity to be more inventive in the way they interact with members.?

She added that while regulators like the Council for Licensed Conveyancers may be able to offer a lower-priced service because they would only be regulating one type of service, other bodies, such as the Bar Council, may prefer to offer a ?top-notch service across a wide range [of legal services], and will charge more. It will be like choosing between Debenhams or Harrods.?

Meanwhile, head of AA Law James Molloy predicted that the legal market under the government?s proposed new regime would ?look like the market for opticians?, which was deregulated in the 1980s.

He told the committee: ?If you draw an analysis with deregulated opticians, there are now four major brands with a large number of small independent providers. That draws a nice picture [of] what the legal services sector will look like.

?There will be a number with a significant market share doing will writing, conveyancing, personal injury, then there will be niche boutique practices in other areas not catered for by others.?

He added: ?Access to justice will be protected, because providers will step in to address every legal need that presents itself. The big [players] will have invested heavily in IT and customer services. They will win market share by giving the best offering [to consumers].?