Legal Services (Scotland) (Bill)
The next item of business is a debate on motion S3M-7105, in the name of Fergus Ewing, on the Legal Services (Scotland) Bill.
16:53
I am delighted to open the final debate on the bill, and I thank members for their contributions this afternoon. I especially thank members of the Justice Committee, which was so ably convened by Bill Aitken. They bore the brunt of the work and we are grateful. We are also grateful for the discussions that have taken place during the past several days and which have allowed the relatively swift transaction of business this afternoon, although that swiftness might not have been evident to all members who were here.
When the bill was introduced in the Scottish Parliament last year, I recall one member saying that it would be a straightforward, simple and uncontroversial bill. How wrong he was. It turned out to be more complicated than that, and the debate in the legal profession has been heartfelt, especially during the past year.
When I took responsibility for the bill it seemed to me necessary, reasonable and fair to meet the people who had strong objections to and reservations about the bill on grounds of principle as well as pragmatic argument. I met those people and I respect their views.
The debate has been turbulent and bruising at times, but it has always been conducted by those who are ultimately concerned for the continued success and independence of the legal profession in Scotland, and for the importance of Scots law and the Scottish legal system—a view that we all hold.
The late Donald Dewar, who was remembered earlier this week in a marvellous piece of work, said that Scotland was the only country in the world that had a legal system but lacked its own Parliament. I think that as a proud Scottish solicitor he would have been interested in taking part in this debate.
The debate has been difficult and has aroused strong emotions that have not waned entirely. Discussion will no doubt continue after the bill is passed, but I believe that a measure of consensus on the compromise position that was so long fought for has been reached today by the Parliament and the Law Society of Scotland. The legislative process can perhaps be viewed as an informal, unwritten partnership between the Parliament and the Law Society acting in tandem, as well as involving other professions and individuals.
It could be said—and some believe—that the profession has driven the legislation, as it reached a compromise that we adopted as our own. Richard Baker and Robert Brown have today rightly expressed strong strands of argument and views that are no doubt still held and argued among significant minority sections of the legal profession. It was right, and I am pleased, that we debated those today. I am somewhat pleased, not to say relieved, about the outcome for those particular amendments, but I pay tribute to everyone who played a part in drafting them.
The bill has the potential to modernise the legal profession, and it will expand the opportunities that are available to solicitors, especially, as I have said on many occasions, to young solicitors in the generations to come. I am entirely confident that solicitors in Scotland—mainly, although not exclusively, those from larger firms—will take advantage of the opportunities that will, if the bill is passed, be available to them. I firmly and fervently believe that those opportunities would not be available if it was not for the bill.
I am particularly pleased that the creation of those opportunities costs very little in taxpayers’ money. The bill will allow business to create business, and will enable the business ingenuity of the Scottish legal profession to be employed to that end. It will enable Scottish solicitors to compete with ever greater success with their counterparts south of the border, especially if we as an institution go on—as I hope, believe and expect that we will—to reform the courts in Scotland and deliver a civil court system that is capable of acting more swiftly and involves less expense.
There are huge advantages to be obtained from the bill, and I hope that businesses will embrace rather than fear the changes. In addition to allowing the big firms to deploy opportunities at that end of the market in commercial and technical areas of law, and in significant bodies of law in which the profession has perhaps lost out to England, I fervently believe that the bill will benefit high-street solicitors. They will be able to join with chartered accountants—provided they are approved, as they will be—and other professionals to share premises and costs, and to offer an improved service to their clients and to new clients. I believe that that is all to the good.
I will say in closing that the bill makes other provisions—subordinate but significant—for the regulation of non-lawyer will writers. That was given overwhelming support in our public consultation and I am pleased to say we have taken a lead on England in that area. The bill gives new and important functions to the Scottish Legal Aid Board, which has been praised by, for example, Scottish Women’s Aid, and it also makes provision that will allow court rules to be made to permit lay representatives, or McKenzie friends, to make oral submissions in court.
I am pleased to speak in support of the bill, which I commend to the chamber.
I move,
That the Parliament agrees that the Legal Services (Scotland) Bill be passed.
17:00
This has not been straightforward process. It has been a rather arduous one, and the reforms, while important, have been subject to much greater debate than we might have anticipated. Like the minister, I thank for their work the Justice Committee and all those who have worked on the bill or been involved in making representations on it.
As the minister said, a great deal of effort has gone into the work to improve the bill and to try to forge a greater consensus between those with differing views on it, who see it as either a threat or an opportunity for the legal services industry in Scotland. As I stated earlier, the problem is that we are working on predictions of how we hope the reforms will work. The evidence does not exist at the moment because the long-anticipated movement to 100 per cent external ownership of legal services businesses south of the border will not now come into effect until the end of next year at the earliest.
The key for us has been to try to move to allowing new investment into our legal services sector, which has been through challenging conditions due to the global recession, while assuaging some of the concerns that have been expressed about how the system can be effectively regulated and about potential negative impacts on access to justice for consumers.
That is why we, like Robert Brown, have supported an incremental approach and sought to achieve a balance in setting in the bill a structure for legal services providers that allows for multidisciplinary firms and external investment and, in advance of potentially varying the percentages on ownership on the basis of evidence of the reforms’ success, provisions that enable ministers to introduce regulations to do just that.
Far from falling behind the situation in England and Wales, we have now moved to a position in which non-solicitors can own greater percentages of legal services firms than is currently the case south of the border. That was the case not only with the position reached at stage 2, which as the minister rightly said was a concession from the Government’s previous position, but in the amendments that Robert Brown and I pursued today.
I could not take Dave Thompson’s intervention because of a lack of time—nothing else, I assure him. Much as he may have thought that he was going to ask me a good question, I was not particularly troubled or intimidated. I say to him that it is important to acknowledge the Law Society’s current position and welcome the input that we have had from it, but its position has been a moveable feast and a hotly debated issue. I am sure that the Law Society will be pleased that the bill has come to a resolution—we have all heard from Michael Clancy, who has worked hard on it—but I am sure that there will be a lot of debate on how it will be implemented.
We have always said that, in reforming our legal services sector in Scotland, the first principle must be to maintain and improve access to justice. We must now be vigilant about whether that comes to pass with the new framework for the sector that will be implemented as a result of the bill.
I am pleased that the minister supported my amendments on the number of regulators, which allayed my fears. Robert Brown and Bill Aitken did not share them, but they were fears for me so the minister’s move was welcome and important.
I concede again that the minister made concessions at stage 2. Although the bill is not in the form for which we have argued, I hope that it proves to be the case that access to legal advice and representation in small and rural communities is not disadvantaged. I hope that benefits from new capital in existing firms will accrue to the sector, and that there will be benefits for social enterprise. However, we must monitor developments carefully so that the issues about which concerns have been raised do not come to pass.
In the final analysis, instead of objecting to the principle of the bill, we have sought a consensus position, whereby the reforms can be agreed to, but they will start at a more cautious level. On that basis, albeit with the reservations to which I have referred, we will support the passing of the bill at decision time. An issue that is crucial in giving us comfort in doing so is the potential that exists to vary the percentages of ownership through regulation, which was agreed to at stage 2. I make it clear that if we were to form the Administration after the election, we would look at the situation as it developed and would have one eye on developments in England and Wales.
The fact that we will enable the bill to go through does not mean that we concede the argument on majority ownership that we pursued through my amendment on the issue earlier today. We stand ready to bring regulations back to Parliament in the next session that would give effect to that proposal, should we conclude that the circumstances suggest that that is necessary. However, the important caveat, as I have said, is that we will allow the bill to be enacted. We can but hope that it will bring the benefits that the minister is bullish about. The consideration process has at times been difficult because of the technical and complicated nature of what is an important bill, but Parliament has undoubtedly devoted significant energy to its scrutiny, as the minister said.
We may have different views on how best to reach the goal of ensuring access to justice and a thriving legal profession in this country, but that is what we all want, and we recognise that it is the intention behind the minister’s approach to the bill. Despite the reservations that I have expressed, we hope that that will be achieved once the bill is passed.
17:06
As the member who was somewhat optimistic about how the debate would proceed, it is with some inhibition that I rise to speak.
Matters were made particularly difficult because the legal profession was—for the best of all possible reasons—deeply divided, and we were not able, until comparatively recently, to get a consensus view. That is why I took the view that the 51 per cent/49 per cent restriction on the ownership of licensed providers would provide a degree of reassurance, and I am pleased that that reassurance has been provided in respect of certain members of the legal profession.
Although the lobbying has been relentless, it has been done in an entirely appropriate manner, with great courtesy and moderation. Everyone who gave evidence to the Justice Committee or who approached party spokesmen and party representatives directly did so in a highly courteous and constructive manner, and I congratulate them on that.
Of course, the bulk of the work on the bill came to the Justice Committee, and I thank my colleagues on the committee, who looked at the bill remarkably thoroughly and achieved a degree of compromise as the legislative process proceeded. That does them a great deal of credit.
There are certain aspects of the bill that should be stressed. The first is its permissive nature. No one requires to avail themselves of the benefits of the bill unless they wish to do so; no one is compelling law firms to go down the alternative business structure route. However, I have absolutely no doubt that it will make business easier and that it might make viable businesses that might not otherwise be viable—particularly those in rural areas and smaller towns, where joint operational working, which can be done at the moment by sharing the back-room facilities, would not provide what is required.
In addition, the bill is flexible, as Richard Baker said. In the years ahead, Governments may look at the arrangements for which it provides and say that they are working well; if they are not working, the percentages can be adjusted accordingly. That flexibility exists.
The bill offers tremendous opportunities. Every business nowadays requires to look at the opportunities and to deal with the threats that confront it.
There can be no doubt that, if we do not pass the bill, some of Scotland’s law firms could find themselves in difficulty and at a serious disadvantage to firms down south as they seek to avail themselves of the provisions in the Legal Services Act 2007, which was passed by the Westminster Parliament. The Scottish legal profession is a significant contributor to the Scottish economy and we could not take that risk. However, because of the permissive nature of the bill, those who do not wish to go down that route need not do so.
The process has been long, complex and convoluted. Some members now know much more about the running of law firms than they did—with the exception of Robert Brown, who ran one. The debate has been carried out entirely appropriately. The legislation is worth while, and the law profession in Scotland, of which we are rightly proud, can now move forward with confidence.
17:11
As everyone has agreed, the bill, which began as a technical bill, became increasingly more convoluted as it progressed, but it has been significantly improved by input from witnesses and following parliamentary scrutiny.
Most significantly, we now have a simple, non-bureaucratic solution that allows citizens advice bureaux and other advice agencies to employ a solicitor if they wish without getting entangled in the main provisions of the bill.
The regulatory and professional principles have been tightened up and improved, as have the role of the Lord President, protections against fraud, penalties on defaulting entities and individuals, and the fitness test for investors. The definition of a designated person has been sorted out. Provision has been made to regulate will writers, and the Scottish Legal Aid Board has a more comprehensive role in providing information about, monitoring and ensuring access to justice, which, as everyone has said, is a key issue across Scotland. All those provisions are good and worthy of support at stage 3.
At stage 1, I reserved the Liberal Democrat position on our attitude to the bill. I am aware that there was a considerable furore when it became known that we had doubts about the attitude that we should take to the bill at stage 3. If Michael Clancy, who is in the public gallery, did not already have grey hairs, he will have them as a result of the bill’s progress. I make no apologies for that, because in many ways, the bill goes to the heart of the legal profession in which I and others in the chamber spent many years of our professional careers.
Undoubtedly, the climate in which the debate was conducted has become much frostier since the banking crisis. We saw the downside when cautious bankers with 300 years of Scottish prudence and banking ethics in their genes were replaced by whizz-kid salesmen whose job was to sell financial products as if they were cans of beans. To be quite honest, at stages 1 and 2, no one on the Justice Committee would have supported the bill had such arrangements not already been approved in England. That is, of course, part of the backcloth to the bill.
The case for the bill was less than overwhelming. It is not enough to aver baldly that competition is a good thing or that we need to have a level playing field with England. Competition can lead to monopoly and entities that are too large or dominant, and there can be interference with the ethics and independence of the profession. The level playing field could mean not just Scottish firms advancing in England, but Scottish firms being swallowed up by larger English predators. It is worth noting that McGrigors, one of the large firms that supported the bill, now has more lawyers in London than it has in Glasgow, which is a trend that it anticipates will accelerate. That has come about under the current arrangements. In August, out of a total of 420, McGrigors had 160 lawyers in London and 140 lawyers in Glasgow.
That reflects a general trend. Research by IFSL Research in 2009 identified that Scottish law firms have grown in recent years, not only consolidating their hold over the domestic market, which is a good thing, but increasingly becoming involved in international work. It is interesting to note that the largest international firms in London base between 45 and 65 per cent of their lawyers outside the United Kingdom, which is a reflection of the dominance of English law in international commerce and dispute resolution. Again, all that is part of the backcloth to the bill.
Parliament’s job is to do its best to get the structures right to maximise opportunities for the Scottish economy and to get higher standards, more efficient practice and more satisfaction for clients. We want firms to remain headquartered in Scotland, so that Scottish lawyers have maximum business and job opportunities, and so that the brand of the Scottish solicitor is a top one that can straddle the English common law and the continental civil law systems to best effect. The bill should be judged on those criteria, but that judgment is surrounded by unpredictability. However, ultimately, and with the caveats and restrictions that are in the bill, Liberal Democrats have concluded that we should support it.
The dominant view of the large firms must be taken into account. In the public interest, we have subjected the proposition to close examination, and we are persuaded that cautious movement in that direction is appropriate.
The bill makes provision to adjust the ownership percentages up or down, and the regulatory powers should be enough, in principle, to control and monitor untoward development. The motivation, however, must be advantage to the Scottish economy, not the interests of individual firms. Central to that argument remain the issues of independence and professional ethics. The large firms and the Law Society of Scotland have taken on a considerable responsibility. They and the Government must show that the new flexibilities will be used wisely and in the public interest. There is a very large element of suck it and see in this debate.
17:15
I am grateful to Robert Brown for that summary of the bill’s provisions, as it saves me having to say one or two things that I would otherwise have said. I will pick over some of the issues that members have not said much about.
I reinforce the view that the bill is a facilitating piece of legislation and remind the profession that there is no requirement for anybody to do anything at all. I commend the minister for ensuring that—in his own words—the bill
“will not have a significant impact on traditional firms”
and for generally resisting the temptation to lodge further amendments. That is good in principle. Although I understand why the Law Society would have liked to have had lots of amendments lodged along the way, I think that we have the right things separated out in the bill. Nevertheless, we must be prepared to return to the issue at some stage, to give the Law Society the help that it has been looking for.
Like the minister, I acknowledge the concerns of some folk within the profession about the competence and appropriateness of the bill. Some of those people are in the public gallery this afternoon, seriously outnumbering the press. Perhaps that reflects the fact that they understand what we have been doing and the press do not.
I am glad that we have sorted out the guarantee fund, which should be open to all. I am particularly pleased that we have established that it does not cover the non-legal services that businesses may provide. I can see some difficulty—even the odd court case arising—in sorting out what are legal services and what are not, but at least we have made that principle clear.
I turn to the Law Society’s powers of inspection, the powers of regulators themselves and all the issues of external ownership and how the businesses might work. However well we have drafted the provisions in the bill—let us do ourselves the honour of assuming that we have framed the powers in it perfectly—it is only as good as the use that people make of those powers to reflect what is going on around them, to regulate, to inspect and to control. I say that partly because, in recent crises, institutions such as the Financial Services Authority have had the powers to do all sorts of things but have somehow failed to use them. We must ensure that the powers that the bill invests in folk are properly used and that soft-touch regulation is used only where a soft touch is appropriate. It is hugely important that we have the right people doing that.
My final point has been raised on several occasions but has been ducked. As far as I can see, there is no specification regarding the description of the new organisations. If a firm is predominantly lawyers but happens to have an accountant and a surveyor, what will it call itself? If a firm is predominantly accountants but happens to have a lawyer and a surveyor, what will it call itself? If a firm is a bunch of surveyors who have taken on a lawyer and an accountant, what will it call itself? I suspect that common sense will come up with some decent answers in those cases. However, when firms are composed of very mixed combinations of professions, I wonder whether the public will get confused and whether there will be an opportunity for sleight-of-hand representation. Perhaps we should think about having proper descriptions somehow or other.
17:19
Like other members, I would like to thank everyone who has taken part in the parliamentary process of the bill, including the clerks and all the people who gave written and oral evidence to the committee. As our convener Bill Aitken said, all the members of the committee know more about legal services now than they did at the start. In fact, it is a pity that we have only four minutes each in which to speak, as we could all go on and on, sharing our detailed knowledge.
A great deal of bartering has gone on in the Justice Committee, and every party that is represented on the committee has made concessions. That is what the Parliament was supposed to be about: discussion and an attempt to reach consensus where possible, as well as recognising when you are beaten and accepting what the majority says.
Throughout this process, I have attempted to widen access to legal services that are available to the constituents whom we all represent, while maintaining the independence and security of solicitors firms, particularly small and well-established independent solicitors firms that have roots in their local communities.
Tonight, I want to focus on two areas that will come as no surprise to anyone. The first is the issue of citizens advice bureaux now being able directly to employ solicitors, and the second is the issue of external investors staking a claim in solicitors firms.
I welcome the proposals that will, if the bill is passed tonight, apply in relation to the legal options for organisations such as citizens advice bureaux, the Cumbernauld unemployed workers centre, which I talked about last week, and other organisations that give advice to our constituents. Those organisations provide a valuable service across our constituencies by offering our constituents an independent, accessible and effective service on a wide variety of subjects.
However, despite dealing with more than 24,000 legal issues last year, citizens advice bureaux are limited when it comes to giving comprehensive legal advice to the people who knock on their doors. The changes that the bill will introduce will permit citizens advice bureaux and other advice and law centres to employ solicitors. That is a good way forward. I just hope that the citizens advice bureaux and other organisations do not lose the links that enable them to benefit from the pro bono work that local solicitors do for them.
I know that we are short of time, so I will throw away some of my speaking notes.
The other part of the bill that I am interested in relates to external ownership of solicitors firms. There was a question about whether solicitors firms should be able to be completely owned by non-solicitors, whether they be individuals or larger organisations. Everyone in the committee and the chamber knows the concerns that I have in that regard. I have expressed my fears about the groups or individuals who might seek to infiltrate the legal firms and the fact that we might be opening the door to them. I still have concerns about what will happen if the bill is voted through tonight. However, because there are many good things in the bill, I will support it, but I am entitled to state my concerns.
I acknowledge that the minister has come a long way from a position of allowing 100 per cent non-solicitor ownership to allowing only 49 per cent non-solicitor ownership, and I believe that he has handled the bill in the way in which the Scottish Parliament should be dealing with legislation, but I still hae ma doots about the matter, and I take comfort from the fact that the bill contains powers to adjust that percentage. As I said, the bill contains so many good things that the concerns that I have about that element will not stop me supporting it at decision time.
17:25
The Legal Services (Scotland) Bill will introduce a long-needed change to allow Scotland’s legal professionals to compete on a level playing field in the international marketplace. That is to be welcomed. In recent years, our law firms have been hampered by an inability to present potential customers with the same complete package of professional services that rival firms from other European nations are able to offer.
The changes that are set out in the bill will help our lawyers to join forces with accountants, estate agents, property surveyors and other professionals to present potential clients with the complete package of professional services that is needed for any major business deal. That co-ordinated approach is far more attractive to any major company from overseas that wants to do business in Scotland and it is the type of service that they are used to being offered in the majority of countries in which they operate. However, it is not just big business that stands to benefit from the changes that the bill seeks to introduce; consumers will also benefit. The new way of delivering a wider range of professional services will also bring welcome benefits for smaller private clients.
At present, unless a business is big enough to be able to employ its own in-house team of solicitors, actuaries, management accountants, architects and taxation specialists, it is at a disadvantage. When Scotland’s small businesses are pursuing a major project, they are forced to put together a group of professionals who then have to work together as an ad-hoc team. Any football manager will tell you that that is not a recipe for success. With the introduction of the changes that are contained in the bill, our small businesses and private clients will, for the first time, be able to access in their local communities the same comprehensive range of advice and services that their larger competitors have long been able to draw upon.
Mr Thompson makes the point that our firms here in Scotland will be able to compete with firms overseas on the same basis. What other country in Europe has the structure of legal services providers that is proposed in the bill? Where is it operating at present, as far as Mr Thompson knows? As I understand it, it does not operate anywhere else in Europe.
The point is that we are creating a structure that will allow solicitors, lawyers and others to work together for the benefit of consumers, small businesses and others. The bill will give us a real competitive advantage in that.
The advantages of the changes in the bill do not end there. Buying or selling a home is probably the most important transaction that most private citizens will ever undertake, and the bill will allow the public access to a wider range of professional services from a single provider. Many of those services would not have been available through a traditional lawyer’s office.
Will the member take an intervention?
No, thanks.
I am pleased to note that the bill also includes proposals for the Scottish Government to appoint regulators to oversee the sector and guarantee the good conduct of those involved. I and other members of the Justice Committee will, I am sure, take great interest in watching to ensure that the arrangements are sufficiently robust to ensure that the good name of Scotland’s legal establishment is undiminished by the new arrangements.
I have been encouraged to hear that organisations that represent the interests of the public, and also the Law Society of Scotland, have given their support to the changes. Consumer Focus Scotland has taken a close interest in the formulation of the bill and its director Marieke Dwarshuis today urged members to back the bill, which, in her words,
“will support the development of a more open, innovative and competitive legal services market in Scotland, which better meets the needs of those using legal services.”
That appears to me to be good advice from an independent but informed source.
I am pleased that the Opposition now plans to support the bill. I am sure that the minister, Fergus Ewing, is looking forward to introducing various regulations under the new legislation after the next election.
17:29
I say to Mr Thompson that I think we will leave the next election to the electorate.
My colleagues on the Justice Committee will recall that, at first sight, the bill’s policy objectives appeared to be worthy and relatively uncontroversial, not to say somewhat dry and even esoteric. How wrong we all were.
The bill has excited passionate debate in the legal profession—particularly relating to outside investment and ownership—the like of which has not been seen in modern times. The controversy provoked a referendum and a number of special general meetings, which demonstrated the depth of feeling and division of opinion within the legal profession. It even moved Mr Michael Clancy, in his letter of 26 April this year to members of the Law Society, to note with admirable diplomacy and restraint that
“these expressions of democracy ... show ... there is no consensus in the profession on two important areas—external ownership; and solicitor participation in a minority role in an entity with other professional participants.”
Quite so.
One of the most prominent opponents of the bill, Mr Mike Dailly of the Govan Law Centre, put it rather more robustly. Members will recall his briefing in April this year, which said:
“We do not believe the Bill as presently drafted contains appropriate safeguards”.
He went on to say that
“the particular concept of Alternative Business Structures adopted in the Bill does not lend itself to acceptable safeguards for those citizens requiring access to justice or a legal service.”
Indeed, according to Mr Dailly, safeguards need to be put in place to
“protect the public interest and the independence and professional ethics of solicitors subject to ABS.”
That division of opinion in the legal profession in respect of that fundamental but controversial provision has been understandably mirrored throughout the bill’s parliamentary consideration. At stage 2, given that I had—and still have, to some degree—real sympathy for the concerns of those who adopt Mr Dailly’s argument, I lodged amendment 227 and 77 consequential amendments, the effect of which would have been to limit to 25 per cent non-solicitor ownership of a law firm. The discussion that followed was robust, considered and worth while. However, I accept that the majority of my colleagues felt that such a limit would be too restrictive, and incompatible with the policy intention of the bill. My amendment was disagreed to. Given my respect for my colleagues on the Justice Committee, I did not move the 77 consequential amendments in the group. I considered that it was merciful not to do so.
In the end, the committee agreed to amendment 317, in the name of Robert Brown, which would create a cap of 49 per cent on external ownership of a licensed legal services provider. Despite the minister’s robust arguments in favour of 100 per cent ownership by external investors, in order that firms could more easily develop innovative new business models, go into partnership with other professionals and raise external capital, the committee—correctly, in my view—supported Robert Brown’s compromise.
Today, we have debated fairly energetically further refinements in respect of that provision. Although my clear preference was for the compromise in amendment 46A, in the name of Richard Baker, and my fallback position was for amendment 123, in the name of Robert Brown, both amendments were disagreed to. So be it. As a democrat, I accept the will of Parliament. Given the welcome movement in the Government’s stance at stage 2, we have at least arrived at a rational compromise on the matter, especially since the Government’s amendment 378, which was agreed to at stage 2, will allow Scottish ministers to amend, by statutory instrument, the percentage of majority ownership that is permissible, and to repeal the threshold requirement, if circumstances change. That is an entirely sensible position.
I hope that when we come to decision time shortly, Parliament will accept that we have arrived, at long last, at journey’s end, and agree to the bill as amended today.
We come to closing speeches. Decision time will be at 6 o’clock, so members can have slightly longer than was indicated. I call Mike Pringle. You have about 6 minutes, Mr Pringle.
17:34
I am not sure that I will need it, Presiding Officer.
I am pleased to confirm what my colleague Robert Brown said in his conclusion, which is that the Liberal Democrats will support the bill when we vote tonight.
I add to the congratulations to Bill Aitken and the Justice Committee. I have no doubt that the bill was a marathon. Bill Butler referred to that, too. I think that committee members thought that they were all in for a bit of a canter. My colleague Robert Brown spent a huge amount of time on the bill, so it is perhaps a relief that we have only one justice committee in this session of Parliament or it might have been a justice committee such as I was on in the previous session that considered the bill. I congratulate Robert Brown on the huge amount of work that he did during the progress of the bill.
At stage 1, the Justice Committee concluded that the advantages of the bill are less clear for smaller Scottish firms and consumers, so we were concerned at the outset that the bill might benefit larger firms at the expense of smaller practices and of consumer access. However, we were and are aware of the view that, due to the changes that have occurred in England and Wales, the bill is necessary to allow Scottish firms to innovate and compete in the modern market.
Many representations from all sides have been made to all members about the merits or otherwise of the bill. Bill Aitken was absolutely right to say that the arguments have been short, long, varied and well argued. I congratulate everybody who lobbied members, because that was the right thing to do.
Members have alluded to the fact that the Law Society of Scotland has been divided over external ownership and solicitor participation in a minority role in an entity with other professional participants. As we have heard, the society has taken a number of votes on the alternative business structure as proposed in the bill. The vote went one way, then the other and then back again. The society finally agreed to adopt a compromise position: it supported majority ownership, with 51 per cent of a law firm having to remain with solicitors or solicitors with other regulated professionals. Of course, I preferred, perhaps like Bill Butler, the Liberal Democrat position, which Robert Brown has exposed at stage 3. However, as Bill Aitken said, we all live in a democracy, and we are where we are. I hope that the progress towards ABS proves to be a success. I am sure that many people, including in the Law Society, will keep a close eye on that progress.
Of course, the bill is not just about ABS. There are other good things in it, which I will come back to later.
It was generally agreed by the committee and by those who gave evidence to it, including the minister and the Law Society, that the main opportunities that the bill will provide will be for the larger firms in Scotland, or at least three or four of them. I understand that one firm—perhaps the biggest in Scotland—is still against the bill. It is clear that there could be benefits in ABS for the larger Scottish law firms, as outlined by the minister. Bill Aitken was right that legal firms do not have to go down the ABS line, but I hope that the aspirations of larger firms that have lobbied hard for the bill and ABS will be realised.
It is much less clear that there will be obvious benefits for other users or smaller Scottish law firms, for which the bill could create more risk as a consequence of other competitors being able to enter the market. The committee concluded that, although the bill may be of significant importance for the larger Scottish law firms, the advantages for smaller Scottish law firms and, indeed, for consumers are less clear.
As I said, the bill is not just about ABS; it successfully tackles a number of other issues. Perhaps the argument about ABS has meant that those issues seem to have got lost. Because of lack of time, I will briefly mention just a few of them.
On access to justice, in the light of concerns that rural areas will be disproportionately affected by increasing competition, a Scottish Government amendment that aimed to strengthen the duty of the Scottish Legal Aid Board to monitor the availability and accessibility of legal services in Scotland was agreed to. The bill will, of course, allow for the employment of solicitors by charities—I congratulate Cathie Craigie on going into that matter in considerable detail. That will allow solicitors who are employed by citizens advice bodies and others to give advice directly to third parties.
The bill includes the first regulated framework for will-writing services. Two constituents of mine lobbied me on that, and I welcome that framework. Finally, I am pleased about the acceptance of McKenzie friends, which have been available south of the border for a considerable time. Many of us have been lobbied on McKenzie friends for a considerable time, from well before the Justice Committee dealt with the bill. I think that many people will benefit from McKenzie friends. That is an excellent provision.
The bill is important and, as Robert Brown rightly said, it is much about what will happen—he used the term “suck it and see”. The bill has tackled a number of important issues, and I am pleased to confirm that the Liberal Democrats will support it at decision time tonight.
17:40
This small debate ends a long and convoluted process, but there have been a number of worthwhile comments, some of which I will refer to. Nigel Don stressed the importance of regulation and the very real duties that will fall on the Law Society, the Institute of Chartered Accountants of Scotland or any other body that is appointed as a regulator. Members are well aware of the problems of ill-considered regulation and the approach that was adopted to the regulation of the banks, which has had the most appalling consequences. I am certain that those who regulate the legal profession and legal services will ensure that nothing of that type happens.
Mr Don also raised the issue of designation, which is a matter that must be addressed. People who go into a shop on a main street in any of Scotland’s communities must know what they are going to get, and there must be no subterfuge. The bill should certainly assist us in travelling in that direction.
Cathie Craigie referred to the fact that the bill will enable citizens advice bureaux, for the first time, to have legal representatives on their staff, which is entirely worth while. Throughout the process, she has rightly been concerned about the danger of criminal elements becoming involved in the legal profession. I have no basis in fact for saying this, but it would not be impossible for that to happen under the existing system. Certainly, we must safeguard against that, which is why I was particularly keen to ensure that the bill was as tight as possible, a view that was shared by all members of the Justice Committee and which has been reflected in the will of the Parliament.
Bill Butler took some responsibility for the initial view that the bill would not be controversial. He was proved to be significantly wrong. However, as he always does, he pursued the democratic process in a remarkably fair and measured manner. He lodged an amendment for consideration by the committee that would have lowered the allowed proportion of outside investment in firms. Having lost that argument, he sportingly eschewed the opportunity to move the 77 consequential amendments. I assure members that that left him in high regard with his convener and other committee members.
Mr Butler stated that we are now at the end of the process. Like all democrats, he accepts that the arguments that were canvassed well by Mr Baker and Mr Brown did not succeed. I know that those in the legal profession who fought robustly in opposition to the bill will now realise that we have come to the end of the process. They will continue to serve the legal profession of Scotland in the manner that they have done, in some cases for many years, and they will continue to be a credit to that profession.
The Scottish legal profession has an opportunity to move on from the divisions that have arisen in the past couple of years. The profession, like every section of the economy, faces challenging times. I return to the point that the profession would have been extremely exposed if we had not introduced legislation. That has been a major concern to us. I hope that the profession can now build on the provisions in the bill.
Mike Pringle was correct to point out that, although ABS was the predominant issue in the deliberations, the bill has other important aspects. He highlighted the enlightened McKenzie friend provision, which will enable persons—sometimes very vulnerable persons—to attend court with much more confidence than they might otherwise have done.
The McKenzie friend provision is one of many provisions that were in the Lord Justice Clerk’s recommendations on the civil justice system. I make the worthy suggestion—although it might not be entirely relevant to the debate—that we must get moving with the civil justice reforms. Unless we do so, dissatisfaction will continue with the number of days involved and the inappropriate procedures that are being followed.
The afternoon has been long and the process has been very long, but we have reached a satisfactory conclusion. We are justifiably proud of the Scottish legal profession, which makes an outstanding and important contribution not only to the Scottish economy but to Scottish civic life. It can now move forward with confidence, in the knowledge that it has the opportunity to organise its business systems to enable it to continue to succeed.
17:46
I am delighted to make the closing speech for the Scottish Labour Party. As other members have said, the process has been long and arduous. I pay tribute to the Justice Committee clerks, the Government’s bill team and all those who have worked on the passage of the bill, which is complicated and technical—and that is before we get to the politics.
As I said in the stage 1 debate, the start of the process last November was my first outing as a member of the Justice Committee. A couple of people—perhaps even the committee’s convener, Bill Aitken—told me privately that the bill would not be controversial, although we would see how it went. That did not turn out to be the case.
As many members have said, the Law Society has had heated discussions, annual general meetings, special general meetings and extraordinary motions. At times, I thought that I had been transported back to the Labour Party in the 1980s.
Hear, hear. [Laughter.]
So much so that when Bill Aitken moved amendment 141, to allow associate membership of the Law Society, I was tempted to support it on the basis that I could join up and join in.
To be serious, the situation has been difficult for the Law Society. We must record our admiration for its past president Ian Smart, and for people such as Michael Clancy, who have put in an enormous amount of work to try to heal the wounds, reach a compromise solution that the Law Society can support and have a bridge to Parliament, to keep the process going—the minister touched on that. That has helped us to reach where we are.
The big issue that divided us in the Parliament—although I am sure that we will not be divided at decision time—was ownership. It is recognised that the Government has moved from its original position of allowing 100 per cent ownership of ABSs by others to 51 per cent ownership by regulated professionals and 49 per cent by others. Other members, including my colleague Richard Baker and Robert Brown, have promoted other positions and advanced the arguments articulately. However, as Bill Butler said, we are democrats and we need to accept the will of Parliament. The Labour Party will support the bill at decision time. It is recognised that the Government has moved from allowing 100 per cent ABS ownership by others and tried to address the concerns of lawyers and individuals throughout communities in Scotland.
I also recognise the move that has been made to enhance the role of the Lord President. One of the early concerns was that the bill vested too much power in the hands of ministers. The enhanced role for the Lord President in the bill will ensure that there is a counterbalance, which I am sure will help Government ministers, whether the current team or another that is elected in future.
I welcome the fact that the number of regulators has been limited to three. I agree with Robert Brown, who said earlier that there is the potential for too much complexity. We do not want to be overburdened with regulators, which could make the system too cumbersome and not effective for good market processes.
I support the fact that the arrangements around the guarantee fund have been resolved. There will be a guarantee fund administered by the Law Society, but there will also be the option of a compensation fund for other regulators that enter the field. That will address some of the concerns. The guarantee fund, which provides guarantees to customers who suffer wrongdoing at the hands of unscrupulous solicitors, is held in high esteem in the Scottish legal system.
I agree with the points that my colleague Cathie Craigie made about citizens advice bureaux and unemployed workers centres being able to take on solicitors. That is a positive aspect of the bill. She managed to mention the Cumbernauld and Kilsyth unemployed workers centre for the second week in a row, for which she is to be commended. That shows what a doughty fighter she is for her constituency, which I am sure will lead to her re-election next May.
One concern that I have raised throughout the process relates to the financial memorandum—I see the minister smiling. The sums in the financial memorandum, of £37,000 for the approval of regulators and £29,000 for monitoring, are not really adequate. At one point, someone pointed out—I do not know whether it was the minister—that, on the Legal Services Bill in England, the £6 million for regulation was like an overpriced Rolls-Royce. It seems to me that we have a 1970s Hillman Imp for our regulation and monitoring, which is not adequate.
Where does the process leave us? Let us hope that as we move forward, legal firms throughout Scotland will be able to take advantage of the bill in order to grow, enhance their services, build the Scottish economy, create jobs throughout Scotland and enhance the role of Scottish legal firms on the international stage. Let us also hope that we will deliver an enhanced service and access to justice for legal services customers throughout Scotland.
17:53
As members will appreciate, I have absolutely no desire to repeat myself and repeat the arguments that I made in opening the debate. Instead, I will start by paying tribute to the fact that, throughout the chamber, members have mentioned the other parts of the bill—the parts that concern not the future regulation of solicitors but other matters, all of which are important. Mr Pringle, Cathie Craigie, Bill Butler and most other members covered some of those areas.
I will mention one measure that I do not think was referred to specifically: the duty that section 96 imposes on the Scottish Legal Aid Board to monitor the availability of legal services. That was included at my suggestion, because, among other reasons, I attended a Scottish Women’s Aid conference recently and heard Sheriff Mackie make the impassioned and effective argument that there are gaps in legal provision for women who are subjected to violence in this country, which is an absolute scandal. Those women do not have access to legal aid, and the solicitors who do the work do not have sufficient training, expertise or experience. The Scottish Legal Aid Board will now have a duty to monitor those gaps, and Scottish Women’s Aid will be on the access forum that will help to inform advice to ministers. My late wife, Margaret Ewing, played a huge part in the campaign to address domestic abuse, which still goes on today. The good work that is being done in this country to tackle that scourge that we all deplore should not pass unremarked.
I will respond to one or two points that have been raised—I do not really have to, but I am that kind of minister. [Laughter.] Nigel Don always asks the questions that ministers hope will not be posed in debates. That is a rare talent, which we are grateful that he possesses. His question was, “What will they be called?” I reassure him that we have thought about that. Under section 90(3), LLSPs will not be able to call themselves solicitors without clearance from the Law Society, but they will be able to do so with its agreement. I hope that Mr Don’s mind is now at rest.
I will not repeat my earlier points on ABSs, but I will address questions that were raised on the subject. Sporadic references were made to whether ABSs are in operation in other countries, particularly other European countries. My information is that the introduction of ABSs is not limited to England, Wales and Australia as was suggested. I understand that ABSs are part of an international trend. Indeed, across Europe they are being considered in some form—albeit, I concede, mostly limited—or they already exist. I have much more detail on that. Happily, I will spare members an exposition of the detail.
Members: Hear, hear.
It seems that that is another very popular move on my part.
Many members fairly expressed their reservations about the bill that we will pass today, which we recognise. I know of Cathie Craigie’s hard work on the Justice Committee. She articulated the views that many have expressed. Likewise, Robert Brown and Mr Aitken expressed the common view that none of us has the divine prescience that would enable us to predict how the provisions of the bill will operate. Ministers are most certainly not complacent in thinking that we have produced a work of total perfection and that the bill will help the Scottish legal profession to reach the sunny uplands of business opportunity. However, I am convinced that we have produced a Scottish solution to an issue that needs to be dealt with right now. Mr Aitken was absolutely right to say that if we had not dealt with the matter now, Scottish solicitors could have been at severe disadvantage. I think that all members recognised that from the Justice Committee’s stage 1 report.
As I said, we are not complacent; we understand the reservations. We cannot predict with certainty how the bill will turn out. That said, we are convinced that it will create many new opportunities, jobs and employment, particularly for young Scottish lawyers in the generations to come.
I thank all the members who took part in the debate, particularly the party spokespeople: Richard Baker and James Kelly, Robert Brown and Mike Pringle, Bill Aitken and John Lamont, and Patrick Harvie. I have to say that Robert Brown kept us very busy over the past fortnight. We are very grateful to him for all the additional work, which we had not entirely anticipated would be necessary, but that is parliamentary scrutiny, that is why we are here, and that is the lot of ministers.
I thank my officials who have produced a system that will not—as in England—cost several million pounds with a new quango. We may have produced a regulatory model that is not a Rolls-Royce but a Hillman Imp. I had a Hillman Imp once; it was a marvellous car. It broke down only once, on the way to catch the ferry to Mull. The system will cost only a very small amount of money. That is a good thing, particularly when money is tight. I am proud that that Scottish solution has been applied.
I thank the Law Society; its current president Jamie Millar; its past president Ian Smart; and last, but certainly not least, Michael Clancy, who has spent so much time in the Scottish Parliament that we might make him an honorary MSP, had we the powers so to do. I commend the bill to the chamber and thank all members for the courteous and constructive way in which they have participated in its consideration.