In the Scottish Government Debate at the Scottish Parliametn on : Competition, Regulation and Business Structures in the Scottish Legal Services Market, Justice Secretary and former solicitor Kenny MacAskill indicates he will follow the Law Society of Scotland's plans for access to justice - and deny it.
The public in Scotland are not to be allowed free choice of legal representatives and Mr MacAskill indicates SNP policy is to obstruct anyone who may feel they have limited choice in accessing legal services.
The debate from the Scottish Parliament website - indicating a vote for SNP is a vote for the Law Society ? ... some will definitely not be happy with this ...
Official Report 15 November 2007
Thursday 15 November 2007
[THE PRESIDING OFFICER opened the meeting at 09:15]
Scottish Legal Services Market
The Presiding Officer (Alex Fergusson): Good morning. The first item of business today is a debate on motion S3M-847, in the name of Kenny MacAskill, on competition, regulation and business structures in the Scottish legal services market.
I invite members who wish to speak in the debate—and perhaps even those who do not—to press their request-to-speak buttons. We have a little time in hand, so I am happy to be flexible with opening speakers. We will see how the debate goes.
The Cabinet Secretary for Justice (Kenny MacAskill): I appreciate that the level of excitement about today's debate is not quite on all fours with the anticipation for Saturday's 5 pm kick-off at Hampden Park, but I am grateful to all members who have agreed to participate.
In a democracy, the rule of law is often said to be so fundamental that it is the most important matter that a Government can deliver. Clearly, a regulated, appropriate and integral legal profession is a fundamental aspect of that. For that reason, whatever view some might have about a debate that is very much related to legal matters, the issue is fundamentally important. Therefore, I welcome the opportunity to introduce today's debate on the structure and regulation of the Scottish legal profession.
As many members know, I was proud to serve in that profession for 20 years, but I have now moved on to another calling. Some might call that jumping out of the frying pan into the fire given that, in a 2004 poll, politicians were ranked higher than lawyers—somewhere between public relations agents and reality television show contestants—in the list of most hated professions.
Joking apart, the profession has served Scotland well. Alongside the church and the education system, the legal profession has formed one of the fundamental pillars of Scottish identity within an incorporating union for more than 300 years. It is perhaps not going too far to say that, were it not for the strength and independence of the Scottish legal profession, we would not be
having today's debate. That immense debt will not be forgotten by the Scottish Government.
That is not just an historic debt. In the budget document that we published yesterday, we set out our strategic objectives for Scotland. Two of our most important objectives are that Scotland should be wealthier and fairer and that it should be safer and stronger. A flourishing and independent legal profession is a fundamental underpinning of both those objectives.
The legal profession is a key part of our institutional framework, not just as a point of constitutional theory but because it does vital work. Lawyers help people at times of crisis and bereavement, they protect the rights of the vulnerable, and they support business and economic growth. When people buy their first house, get into matrimonial difficulties or become involved in the criminal justice system, lawyers and the legal profession come to their aid. Therefore, I will defend the legal profession against those who malign and misrepresent it. The Government will work with the profession to ensure that the challenges of the future can be met within a reformed and improved legal system.
Reform and improvement are needed because the world is changing—fast. An ordinary family today faces legal issues that would have been unknown to our grandparents' generation. Such issues include advice on financial services, resolving disputes with education authorities and taking action against antisocial neighbours. In addition, businesses may not use Scottish lawyers or the Scottish courts if they can get a faster and better service elsewhere. We need to address that. I know that Scottish lawyers can deliver excellent services in new areas of law as well as old and that they can compete with the best in the world. We need to ensure that they are not held back by inappropriate restrictions and regulations that do not meet modern needs.
The United Kingdom Parliament has just passed the Legal Services Act 2007, which creates a new legal services regulator, opens the door to mixed practices of lawyers and other professions and allows third-party ownership of law firms. That is an English act, but it has fundamental effects on Scottish firms.
Our major law firms compete internationally—it is good for Scotland that they aspire to reflect, and go above and beyond, the daily practice of other sections of Scottish business such as financial services and accountancy—and Scots have always been prepared to think big and to think globally. One of the world's biggest accountancy practices—Ernst & Young—still bears the name of Arthur Young, the Scot who set up the practice a century ago. Today, we can be proud of the success of businesses such as the Royal Bank of
Scotland, which proves that we can compete with the best. We must not hold back those in our legal profession who aspire to similar success.
The pressures of change affect not only the big commercial firms but our high street firms. Many of them find it difficult to recruit trainees or to pass on their business to new partners. Firms that offer a broad range of legal services struggle to compete with firms that specialise in high-value work such as corporate business or high-volume work such as remortgaging. Many of the core business activities of law firms are not restricted to solicitors, so alternative providers and English firms are entering the market.
I can understand why some in the profession might feel concerned about those changes and that the profession is under threat, but that is not how I see it. As I told the Law Society of Scotland conference, I was impressed by how Bob Ayling, of British Airways, warned a group of travel agents some years ago that the internet was coming and that only those who adapted to it would survive. I know that many in the industry heeded that advice, developed new products—in specialised in-bound and out-bound tourism markets, for example—and prospered as a result. For me, the issue is not to wonder whether alternative business structures will change things but to respond to the changes that are already happening.
The debate is already under way. In 2006, the previous Administration published its "Report of the Research Working Group on the Legal Services Market in Scotland", which identified the need for further policy development by the Scottish Government, working with interested parties. In July, the Office of Fair Trading published its response to the super-complaint that Which?—the Consumers Association—had submitted. The OFT report argues that many of the current restrictions on business structures that affect solicitors' firms and advocates should be lifted.
Currently, all solicitors' practices operate under a partnership model. Only solicitors can be partners and no one else can own a firm of solicitors that offers services to the public. All advocates operate as sole traders and cannot enter into any form of partnership with solicitors or other professionals. There are restrictions on advocates taking instructions directly from clients and on their appearing with solicitor advocates in the same case. The OFT believes that lifting those restrictions could offer consumers a better choice and has asked the Scottish Government to set out a policy statement before the end of the year.
Pauline McNeill (Glasgow Kelvin) (Lab): The Law Society of Scotland has suggested that, in its assumptions about the Scottish legal system, the
Consumers Association made a number of errors, which the OFT has replicated. Will the cabinet secretary confirm whether the Government was consulted before the OFT produced its response to the Consumers Association?
Kenny MacAskill: We have been in regular contact with the OFT. We have always been at pains to point out that we accept the need for consumers' rights to be preserved and protected. As I made clear at the Law Society conference, which the convener of the Justice Committee also attended, we also recognise that, at the end of the day, we are not simply consumers but part of a community, so we must also bear in mind our responsibilities in that regard. Our position is that we are happy to continue to liaise with and speak to the OFT. On the particular issue that the member raised, I will come back to her at a later stage. If I do not, I am sure that my colleague Fergus Ewing will mention the issue.
We are considering carefully everything that the OFT has said. We agree that change needs to happen, but I have no intention of adopting a model that is unsuited to our needs as a country. Our geography, demography and topography are different from those of England. We are a country of small towns, islands and archipelagos rather than a series of large urban metropolitan areas. The English bar has 14,000 members, whereas the Scottish bar has 470. An SNP Government will do what is right for Scotland. We will not preside over any diminution in the quality and integrity of the Scottish legal profession.
In September, I set out a challenge to the profession to lead the debate on how reform should be taken forward in Scotland. I am pleased to report that it has responded to that challenge. Two weeks ago, the Law Society published a consultation on alternative business structures. The Faculty of Advocates has also initiated a debate within the bar about how its rules might be amended. I pay tribute to the Law Society for the leadership and courage that it has demonstrated. It is difficult for a membership organisation to lead its members through radical change, especially when no clear or consistent view prevails among an overwhelming majority of its members.
However, the Law Society's consultation rightly makes clear why the status quo is not an option and sets out a timetable for rapid change. The society aims to present detailed proposals early in the new year, following the conclusion of its consultation on 31 January. I anticipate that the bar should be able to match and even improve on that timescale.
That urgency is not a response to a timetable set by the OFT, but a response to the practical issues faced by the profession and, even more important, by those who use our legal services.
We cannot build a wall against specialisation, commodification or competition from outside the profession—those are already happening. Senior and respected figures in the profession are already identifying how reforms might create new opportunities. At this stage I do not intend to limit their thinking, but I will set out the tests that I will apply to determine whether the proposals that come forward meet Scotland's needs.
In short, it is our ambition that everyone in Scotland should have access to good-quality legal services when they need them. The word quality is fundamental—the right level of service at the right price. The badge of Scottish solicitor or advocate has always carried an assurance of professionalism, which I am determined to maintain. A key test for me will be whether our large financial institutions, which are able to choose where to take their legal business, increasingly choose to do that business in Scotland. There is something fundamentally wrong if key players in the Scottish economy choose to litigate in another jurisdiction. It is fundamental that we ensure that they make their home jurisdiction their jurisdiction of choice.
As well as ensuring quality, we need to expand access. That means maintaining viable legal services in local communities. New business structures may be helpful—for example, if they allow a firm to offer a wider range of services. However, there are dangers in moving in a single step to a wholly open market, and we should not allow new entrants from outside the profession unless access and quality can be maintained.
We need to deliver quality and access, and we will be able to do so if we strike the right balance between competition and regulation. If we act quickly, we can get ahead of the game. England's reforms are massive and will take several years to implement. As a small country, we can do what any good small business would do—we can be flexible and innovative, test out new ideas quickly and build on those that have potential.
Of course, there are things that we must safeguard and difficult issues that we must resolve. I strongly believe in the value of an independent referral bar and will do all that I can to help the high street firms that offer vital services to our local communities. We need to ensure that the core values of the profession are not diminished and to consider how reform might affect important consumer safeguards such as the solicitors guarantee fund. I look forward to hearing Parliament's views on those issues, which will inform the response that we make to the OFT later this year.
I hope that members will support our motion, but I am happy to accept the amendment that Pauline McNeill has lodged. In this and previous debates, I
have indicated that, although this may not be the most flamboyant or interesting subject for members, the general public or the press corps—representatives of which are entirely absent today—it is fundamental. I pay tribute to those who are participating in the debate and those on the Opposition front benches who are addressing the matter constructively, to ensure that the Parliament gets it right.
We accept that this is a difficult time for our legal profession. That is understandable when people are afraid for their livelihood, because they fear that change may undermine their situation and damage their economic position. The Law Society is doing an excellent job of trying to allay understandable fears, at the same time as making it quite clear that the status quo is not and cannot be an option—not because the desire for change is driven from here in Scotland, but because there is change in our society and elsewhere in the world. We must adapt. If we do so, the profession that has served us well, not only through 300 years of an incorporating union but over the centuries prior to that, will be able to deliver.
We are at one with Pauline McNeill in the desire to enhance justice at grass-roots level, through new forms of provision, where appropriate, and through continued support for those members of the profession who have served local communities over the years, often for modest rewards. We will remain a candid and supportive friend of the legal profession, helping it to continue to serve Scotland well in the years to come.
We will doubtless have to return to the chamber on the issue. Whether there will be greater interest on the part of the media and others is a matter on which we will have to comment at that stage, but the issue is fundamental. Today's debate is taking place at an early juncture, but we can lay out what we envisage for the legal profession. It must maintain quality of service, continue to assure value, through regulation, and continue to ensure, as the Labour amendment makes clear, that it serves not only itself and those who have the appropriate financial means, but all our communities in as many ways as it can.
The way in which the law serves its community is changing. The changes in our society mean that the legal profession must change substantially. Today we are taking a significant stride forward. I pay tribute to all members who are participating in the debate, which will be on-going and cannot simply be left to the legal profession. Given the importance and pivotal role of the legal profession in our society, everyone in our community—especially those who have been given the privilege of speaking in the chamber—should participate in the debate.
The Law Society has also taken a significant stride forward, and we should support it in its efforts. I hope that when we return to the chamber on the issue, the profession will be united on the direction that it wishes us to take. Ultimately, it is the Government's desire to work with the Law Society to deliver the appropriate legislative changes that the society wants, rather than to impose directions. We are making it clear that the status quo cannot be retained and that there must be change, because of matters beyond our or the profession's control. Together we can ensure that a legal profession that has served us well continues to do so and, as Pauline McNeill has rightly said, continues to serve our communities. However, as a Government with ambition for Scotland, we also look forward to firms that aspire to compete pan-UK, if not internationally, being able to do so, as we are now in a global world.
That the Parliament notes the Office of Fair Trading's response to the super-complaint by Which? on restrictions on business structures and direct access in the Scottish legal profession and the Law Society of Scotland's consultation on alternative business structures; believes that the regulatory and business structures of the Scottish legal profession should reflect Scottish circumstances and support improved access to high-quality legal services in a competitive and appropriately regulated market in accordance with competition law, and notes the Scottish Government's approach of working closely with the legal profession to secure reforms that will allow the Scottish legal profession to compete internationally while enhancing access to justice in local communities.
Paul Martin (Glasgow Springburn) (Lab): I note that at your request, Presiding Officer, the minister extended his speech. I hope that you do not receive a fee note for that, given that he previously worked as a solicitor.
We are entering into a debate—not just today, but in the future—that will take some time to reach a conclusion. We know that a number of aspects of the legislation relating to business models in England and Wales will not be implemented for some time. We have time both today and in the future to develop a model that will improve the quality of the services that the legal profession provides.
We welcome the Government's commitment to working closely with the legal profession to ensure that we deliver reforms. It is right for any Government to work with the profession to deliver a business model that can compete internationally. That is true of any business, not just the provision of legal services. Any successful Government—or any Government that wanted to be successful—would make the same case for any business model. At the same time, the Government must be
more specific about how it wishes to enhance the services that are delivered at local level. As with John Swinney's budget statement yesterday, the devil is in the detail.
We welcome the fact that the cabinet secretary has accepted the amendment in the name of Pauline McNeill, but he must be clearer and more specific about how he will ensure that local access to legal services improves. Labour and, I am sure, other members have seen that in many of our communities access to justice is patchy and must be improved; many back benchers will have had experience of that. We must make clear how improvements will be made, and Labour will bring forward proposals in that area. Pauline McNeill's amendment is intended to ensure that the issue is debated in greater detail.
Many aspects of today's motion were influenced by the Which? super-complaint. Although the complaint refers mostly to the advocate-client relationship, it offers us an opportunity to modernise the legal profession to ensure that we improve the service that the consumer receives. Whatever the chamber's views about the Which? super-complaint, we need to recognise that it was the result of a detailed analysis of the consumer experience. The Government needs to work closely with consumer organisations to ensure that, whatever business model is developed, the consumer experience is improved. Although I do not expect any disagreement about that from the Government—the minister might wish to intervene, however—I seek assurances that the Government will work not only with the legal profession but with consumer organisations to ensure that we—
Kenny MacAskill: I intervene at Mr Martin's request. We accept that although the Law Society and the Faculty of Advocates each perform a pivotal role for their professions, they do not operate in isolation. Consumers groups are also important, as are individuals who are not represented by them and whose complaints have to be picked up and aired in the chamber by MSPs. We will listen to all those people.
The member can rest assured that we will not simply process what comes through from the Law Society; our input into the changes that the profession makes to its fundamental structures will be pivotal. I give the member a complete assurance that we will listen to input from anywhere to ensure the provision of the legal services that we need in a changing world. It is not simply the legal profession that is changing but the nature of our communities, and that has to be factored in. We are more than happy to give the member that undertaking.
Paul Martin: I welcome that commitment from the cabinet secretary and agree with that way forward.
A number of key issues are worth raising today, some of which were mentioned in the Which? super-complaint. We must recognise that we live in the age of the one-stop shop. It is evident that consumers want commodities to be available at one point of contact, and I do not think that anybody would advocate that we should change an arrangement that consumers have demanded. The idea that solicitors, accountants, surveyors and others operate to a new business model that makes them available at a single point of contact is appealing. The majority of consumers out there would probably welcome such a model and the opportunities that would arise from a much clearer pricing policy and a more tailored service.
There is a need for caution, however. The merging of services in such a business model could allow the integrity and independence of solicitors to be questioned. How solicitors would interact with other professions would need to be made clear. Unlike some members I am not legally qualified, but as a lay person, I am well aware of the high value that is attached to the independence of solicitors when they go about their daily business. That is why that proposed business model should be interrogated carefully.
Moreover, a number of press and media reports—I do not know whether there is other detailed intelligence—have told how members of the criminal underworld take the opportunities offered by that business model to infiltrate legal practices. Such concerns were raised about the situation in England and Wales. I welcome the clear commitment from the minister to deliver a Scottish model that is based on the Scottish legal system. He rightly sets us apart from other parts of the United Kingdom because of the demographics of our communities. That point should be given serious consideration. Let us not be distracted by the model that has been delivered in England and Wales, although there might be opportunities to learn from experience there.
We need to balance our approach to the proposed model with listening to some of the concerns that have been raised by legal professionals. A concern that has been raised with me is that people who are not qualified in the legal arena are providing legal advice. Under any new business model, we must be clear that anybody who provides legal advice must have a legal qualification. I seek assurances from the Government that it will deal with that genuine concern from legal professionals about unqualified people on the periphery of the legal arena.
Another concern that was raised in the Which? super-complaint was about competition. Most of us would argue that competition is a good thing for consumers. We all like a bargain—whether it is Pauline McNeill on her many visits to Buchanan
Galleries in Glasgow or people who trawl through the price comparison sites on the internet to find a cheap holiday or cheap insurance. I am not sure whether there will ever be a price comparison site for legal services—perhaps there already is one, or perhaps somebody has thought about developing one. Although I am not legally qualified, I argue that comparing prices on the internet for legal advice is probably more complex than comparing Asda's grocery prices with those of Tesco and others.
We must ensure that competition works in the consumer's favour and that our communities benefit from it. Although many of the arguments for the proposed business model are probably well meant, that model might not provide genuine competition. A number of sole traders provide a valuable legal service and we must ensure both that they are able to continue to do so under any new arrangements and that competition remains.
In the cabinet secretary's speech to the Law Society, he said that Tesco already has internet advertisements for a £199 conveyancing service in England and Wales. Perhaps the price appeals to the consumer, but will they get the same quality of service? Another concern is that many public limited companies with aggressive and robust business plans would not want to be involved in some of the more detailed work that sole traders carry out, which could lead to cherry picking. Perhaps some sole practitioners already cherry pick—I am not sure—but we must interrogate such arguments carefully.
In conclusion, the Law Society said in its consultation document that, of course, there will be rigorous debate on the subject in the Law Society. There is always rigorous debate in the Law Society—what better people to have such debate than legal practitioners? That is a good thing. Although today's debate is perhaps undersubscribed, when we reach the more detailed stages of the debate on the proposed business model for the legal profession and various organisations have made their representations to Parliament, there will be more rigorous debate in the chamber.
We welcome the fact that the Law Society has said that the status quo is not an option. That is a mature way to approach the debate. It is also a welcome response to the various reviews that have taken place and to the Which? super-complaint. The legal profession has a responsibility to take the issue forward.
The Presiding Officer is gesturing that I can go on for as long as I like, which is unusual, but I will finally conclude by saying that we need to have a rigorous debate in the Parliament. It is important that whatever model we deliver makes a genuine difference in communities throughout Scotland.
For far too long, many of our communities have not enjoyed the access to justice that they should have enjoyed and we must ensure that the legal profession provides a high-quality service in that respect.
I move amendment S3M-847.1, to insert at end:
"and considers that this approach should also widen choice, provide easier access to legal services and create the conditions for more affordable services so that social justice will be at the heart of future changes."
The Presiding Officer: I call Bill Aitken. Mr Aitken, as you have picked up, you basically have as long as you like.
Bill Aitken (Glasgow) (Con): Gee, thanks.
The Cabinet Secretary for Justice and I have exchanged some harsh words this week, but he will no doubt be relieved to learn that that is highly unlikely to happen this morning because practically everything that he had to say was common sense and was in line with what he said at the Law Society conference that he and I attended some weeks ago.
Scotland has been well served by its legal profession and any debate on its regulation must be had against that background. However, as the cabinet secretary and Paul Martin have already said, that does not mean that change is not necessary.
An examination of the Scottish legal profession's current format is interesting but, at the same time, demonstrates why such change may be necessary. There are 1,247 legal firms practising in Scotland at the moment and I was astonished to discover that 46 per cent of those are sole practitioners. The rest vary from two-partner firms to mega-sized operations with partnerships that sometimes extend to 80.
The private legal profession contributes £1.2 billion to the Scottish economy. Obviously, against that background, we must be careful with what we are doing because we do not wish to prejudice that contribution in any circumstances. It is to be hoped that, if we play our cards right, we could greatly expand on that £1.2 billion and bring in much-needed resources from elsewhere. I am sure that the legal profession will be keen to go down that route. With every threat, there is an opportunity.
David Whitton (Strathkelvin and Bearsden) (Lab): Okay, so the legal profession contributes £1.2 billion to the Scottish economy, but is Bill Aitken saying that legal fees should go up instead of some way being found to make law more affordable?
Bill Aitken: No. Mr Whitton will be relieved to learn that I am saying that we should expand the market and bring in more business. As a good public relations man, he should realise that that does not necessarily mean that the per capita fee will increase because, if there is a bigger volume of customers, more money will come in. I am sure that he would applaud that.
We have great variety within the Scottish legal profession—from the small high street solicitors in country towns to the large, almost multinational conglomerates in the cities of Edinburgh and Glasgow. Against that background, we need to consider how our legal profession needs to change. To do that, we should also consider what we expect of legal practitioners. We naturally expect integrity. Also, they should always act in the client's interests, confidentiality is vital and practitioners should always be available.
Any alternative structure must not move away from those basic tenets and I am sure that no one would wish it to. I accept that it is early days for the debate but I am a little bit worried that, if we are to have alternative business structures that enable non-legal practitioners to play a role in legal firms, ideas that other people might wish to introduce at some stage might not be consistent with some of those tenets, particularly confidentiality. We must consider that.
To some extent, our discussions have been pre-empted by the fact that the UK Legal Services Act 2007 has been through the parliamentary process down south. Like every other piece of legislation, parts of that act are eminently sensible and others are a little bit questionable but, in general, it was not a bad piece of legislation. We would have broadly welcomed the act had it applied in Scotland as, indeed, we would broadly welcome changes that may come about here. However, although we recognise that the increased flexibility that the act allows is of benefit, the down side is that the legal services board will be appointed by the Lord Chancellor as an oversight regulator. That puts me on inquiry as to whether, if we were to implement a similar structure in Scotland—obviously with another august body than the Lord Chancellor involved—there might be some interference in the legal profession's independence. We would have to oppose that.
Change that is imposed upon one is hard to take, but change in the legal services market is necessary. The way in which the Scottish legal profession has recognised the necessity of change has been encouraging. Although it is not committing itself to any specific direction at this stage and the matter is one for consultation, the legal profession is due considerable praise for the way in which it has adapted. It is to be congratulated on making a virtue of the necessity
of proceeding as the Parliament would wish it to proceed. However, if some members of the profession think that there are threats, I stress the opportunities of attracting further business from previously untapped markets.
Scottish lawyers have an excellent reputation. Members of the Law Society, such as Douglas Mill, have contributed to the International Institute of Law Association Chief Executives. That is indicative of the way in which Scots lawyers are regarded elsewhere. Other distinguished members of the Law Society staff have played international roles, which is to be encouraged.
As the process of change continues, I have little fear that there will be anything other than a genuine attempt to recognise the changing business world in which we all—not only the legal profession—operate and that what will emerge at the end will be eminently sensible and totally acceptable to the Parliament. It is early days and we need to think everything through. We do not wish to rock a particularly stable boat that has served Scotland well over generations and centuries. However, alternative business structures must be considered closely.
Sometimes, consumers feel that there is great duplication of services. For example, a lawyer is obviously necessary in the purchase of a house, as is a surveyor. Sometimes, a financial adviser is also necessary to fix the mortgage and the financial payments that have to be made. The public asks why that cannot all be done under one roof, which is a difficult question to answer satisfactorily. We must consider to what extent alternative business structures can resolve the public's disquiet, if not unease, at being asked to pay fees to three or four individual businesses when doing everything under one roof would be cheaper and would provide a more cohesive service.
I am confident that this debate is going in the right direction. There is unanimous will in the chamber to ensure that whatever emerges at the end of the day will be acceptable to the people of Scotland and to those who work in the legal profession and, indeed, will satisfy the differing political approaches that those in the Parliament inevitably take. As a result, I do not think that there is anything in the motion that should divide the chamber.
The Presiding Officer: I now call Mike Pringle, to whom the instructions that I gave Mr Aitken also apply.
Mike Pringle (Edinburgh South) (LD): That is probably a first.
Although this subject is important, the English 2007 act that covers these issues does not become effective until 2011, so we are discussing a long-term process. Earlier, Mr MacAskill mentioned the budget. The time set aside for this debate—important though the subject is—should have been used to debate the budget and the time that we had for yesterday's budget debate should have been used for this one.
This is the second debate in only three weeks on an issue that, for practical reasons, I will sum up—using the Government's own words—as "access to justice". Although a short phrase, it holds more meaning than one might discern at first glance. Justice has historically been and must remain a core principle on which society is constructed and by which it is governed. The previous debate was on alternative dispute resolution, which is essentially a commonsense approach to reducing pressures on our legal system. The mechanism is simple for the consumer and requires little regulation; it represents a win-win situation for Scotland's citizens and legal services.
Former Associate Justice of the United States Supreme Court, William O. Douglas, once said that "Common sense makes good law". That is not always true. Would that common sense always prevailed—indeed, would that it were always capable of prevailing—but, as we all know from experience, that is simply not the case. Instead, we have a highly specialised and developed legal services industry to deal with disputes. It is necessarily heavily regulated, although we cannot hide from the information that the Which? super-complaint has uncovered. Indeed, it is unquestionable that, as far as accessibility is concerned, Scotland's legal system is failing consumers. However, we must not allow the pressing need for accessibility and the almost inarguable need for reform to taint the integrity or dilute the quality of the legal profession.
There are three questions at the crux of this complex issue. First, how can we provide a widely accessible legal service to the people of Scotland? Secondly, how can we ensure that the standard of the service remains consistent and well regulated? Thirdly, what structure is best suited to fulfilling those conditions? My question to the Parliament is whether we have three answers to those questions and, indeed, whether we can we move forward without them. Because those questions remain unanswered, I welcome today's debate.
As the three questions are intrinsically linked, I will look at the first: how we can provide a widely accessible legal service to the people of Scotland. Initially, the answer might appear to lie in the opening up of legal services, as advocated by Which?, to pave the way for a multitude of
alternative business structures such as legal disciplinary partnerships, as favoured in Sir David Clementi's report on the regulatory framework for legal services in England and Wales; multidisciplinary partnerships, which would allow a wider range of services; a shareholder option; or the complete opening-up of our legal services to the private sector in what has notionally been termed Tesco law.
All those proposals come with advantages and pitfalls. Of course, any structure that is open to competition raises several pertinent questions about consumer protection. For example, what would become of the guarantee fund that at the moment not only finances part of the legal system's stringent internal regulation programme but protects consumers against legal fraud? All lawyers pay into the fund; indeed, my family lawyer told me that each of the partners in his legal firm pay £600 per annum to cover the very rigorous inspections that the Law Society of Scotland carries out on every legal firm every two years.
Lawyers also face the costs of any claim on top of that payment. I believe that there is a small fund for such eventualities, but it will not cover claims made against a particular lawyer. What would happen to the insurance that is currently provided by the master policy, which is the compulsory professional indemnity insurance arrangement that covers all Scottish solicitors working in private practice? The Law Society arranges the master policy for professional indemnity insurance; claims are handled by the master policy insurers; and the insurance itself provides cover of up to £1.5 million for any one claim.
How would an MDP be regulated? Under a deregulated system that included MDPs, what would happen to the guarantee fund that at the moment helps clients who claim against solicitors? Would the fund still exist? Would non-solicitors be forced to pay into it? Can several different professionals be regulated by their individual bodies and would they be subservient to the legal regulations that govern the principal function of the practice?
As for Tesco law, in Wednesday's Scotsman Mr MacAskill said that alcohol should not be available for purchase in shops like a
"pint of milk or packet of tattie scones".
Setting aside the rights and wrongs of alcohol licensing, I wonder whether we want our legal services to be sold in the same way. I suppose that the answer, to a certain extent, is yes; the Liberal Democrats are committed to and will continue to work towards a freely accessible legal structure. However, I question whether any regulatory structure exists at the moment to
ensure that anything provided under Tesco law can maintain the high standards that are currently enforced by the legal services' internal practices. The idea of a super-regulatory commission might appear sensible but it is untested and has not been thoroughly examined.
This remains very much a question of consumer rights; we must seek to provide not just access to the legal system, but access to justice. To continue the supermarket analogy, we must avoid having a watered-down legal system—or what might be described as a "Sainsbury's basics" legal structure—that is torn between the citizen who pays for it and the shareholders who seek to make a profit from it.
At the Law Society conference, Kenny MacAskill gave an assurance that the SNP would not preside over a diminution in the quality and integrity of the legal profession. I am sure that he will hold to that promise. However, I was more worried by his comment that, if we could complete our reforms by 2011, we would beat England to it. I know that we all enjoy a victory over England—I will for the moment put to one side the upcoming match with Italy—but I do not believe that this matter can or should be rushed.
Kenny MacAskill also said at the Law Society conference that if the legal profession came up with the right solution the Government would back it. I say to him that if the Government comes up with the correct bill to deal with this issue, my party will back it. However, in order to provide access to justice, any such legislation must carefully examine all the options and maintain the Scottish legal system's integrity and high standards.
John Wilson (Central Scotland) (SNP): I congratulate the Cabinet Secretary for Justice on the motion and Pauline McNeill on her amendment. The Scottish Government is clearly attempting to develop a realistic approach to the Scottish legal services market. I certainly welcome this debate, as some people might be under the impression that this issue has raised its head only in the past couple of months, especially if the letters pages of some of our older newspaper titles are to be believed. That is not the case. The issue, in fact, goes back to the first session of Parliament, when the Justice 1 Committee held an inquiry into regulation of the legal profession.
Sir David Clementi's report on business structures and legal services in England and Wales advances the prospect of legal organisations raising external capital in order to expand. Although Sir David has in certain quarters been demonised for stating that it is perfectly acceptable for Tesco, for example, to gain entry
into the legal services market, the fact is that his report, which was published in December 2004, argued that the fit to own test should be applied to any company that seeks to move into the legal profession.
Although I do not hail from a professional legal background, I have some knowledge of legal issues with regard to the modern workplace—in particular, employment law—and to housing law.
There is an issue about the provision of legal services, and I would argue that, in certain cases, people who are not professionals can deliver legal advice.
On the main issues identified with regard to competition in and regulation of Scottish legal services, some hold the view that any change in the current structures will lead to a dumbing down and dilution of services, which will strike at the heart of the unique Scottish legal system. Others might say that there are vested interests and restrictive practices at work in modern Scotland.
Part of the reason for today's debate is the fact that the OFT received a super-complaint from the Consumers Association—more commonly known as Which?—on 8 May 2007. The super-complaint arose from the commencement of the Enterprise Act 2002, section 11 of which allows a designated consumer body to raise a matter that it thinks harms significantly the interests of the consumer. In its role as super-complainer, Which? asked the OFT to consider whether certain restrictions were preventing consumers from getting the legal services that they needed.
"Consumer" is not an abstract term; it means all of us in the chamber and people in wider society in Scotland who are provided with legal services by the two professional bodies, the Law Society of Scotland and the Faculty of Advocates, which regulate the legal profession. I confess that one of my oldest friends is an advocate, although I did not seek counsel from him on this debate—nor did he offer any. At least my bank balance is higher than it would have been if I had asked for his opinion.
As other members have said, the Law Society does not allow non-lawyers to own or be a partner in a legal firm. It prevents solicitors from forming a legal partnership with non-lawyers, such as accountants or engineers, with a view to offering professional services.
The Faculty of Advocates compels its members to practice as sole traders; it prevents them from working in partnership with other advocates, solicitors or others to provide legal services. Rules of the faculty mean that individuals cannot instruct an advocate without first instructing a solicitor. Some might argue—perhaps validly—that consumer rights are therefore limited. As a
consumer, I cannot instruct an advocate directly and have to go through a solicitor acting as a middleman.
Which? stated clearly that it felt that the interests of the consumer were being harmed. It thought that the present arrangements prevent lawyers from introducing innovations to meet the needs and aspirations of their customers. More to the point, service providers are unable to use new business structures to become more efficient, which could lead to lower prices in the legal services market.
Restrictions can be removed without the need for new legislation, although Which? acknowledges that allowing non-lawyers to get involved in Scottish legal services would require new legal frameworks to be introduced.
Which?, in its role as the consumer champion, has said that a new Scottish legal services board, which is independent of the legal profession and Government and which has responsibility for regulating the legal services market, should be established.
The OFT, in its response of 31 July 2007 to the super-complaint, made recommendations to the present Government broadly supporting the complaint that restrictions are a feature of the legal marketplace in Scotland and that action is needed to remove them. Furthermore, the response indicated that efficiency gains and more innovation are required in the provision of legal services in Scotland. Kyla Brand, the OFT representative in Scotland, said that individuals and businesses are hugely important to growth prospects because "they underpin economic success".
There are practical examples of how the present system is failing the consumer. For instance, people are sometimes loth to get legal representation if they are working because the benefits taper kicks in and they are unable to get legal aid, so they have to pay for services. Some say that they are not getting value for money.
Alistair Morris, chief executive of Pagan Osborne has criticised the Scottish Government's approach as "protectionism" in the desire to buck the market over Tesco law. Others have said that we should set our face against choice and change, such as allowing third-party entries into the market place, as that would lead to cherry picking of the best customers.
There is a growing demand for change from within the legal profession, as Richard Henderson, president of the Law Society of Scotland, acknowledges.
Change is inevitable. The alternative is that in future the market will be introspective, with the usual suspects dictating to the consumer.
As Bill Aitken said, in 2004 the bill for Scottish legal services was almost £1 billion and it has now increased to £1.2 billion. Modernisation should be welcomed. The commodification of legal services is already a factor in the marketplace structure. If anyone goes for a mortgage or a remortgage these days, the banks and building societies usually include a legal panel for conveyancing purposes.
I welcome the motion and the amendment. I look forward to the additional opportunities for the legal profession to raise finance to ensure that our existing legal firms have the capacity to grow.
The global environment is tough and business structures within the legal marketplace are changing, whether by design or stealth. That is typified by the recent example of Australian law firm Slater & Gordon, a class action specialist, which was floated on the Australian stock exchange in May 2007 and which is now valued at 150 million Australian dollars, which is £62 million.
The motion is about the delivery of Scottish solutions for Scottish problems.
In no debate on the legal services market in Scotland could we fail to mention legal aid. Under the Legal Profession and Legal Aid (Scotland) Act 2007, the Scottish Legal Aid Board's work will include registering advisers and agencies other than lawyers and ensuring that they meet the code of practice.
There were 119,293 grants of civil legal assistance in 2006-07—a reduction of 7 per cent—although within that total, the number of civil aid grants rose by 3 per cent, reversing the trend in the past three years.
We should introduce innovation and access to new finance to assist existing legal structures to expand, but that must not be at the expense of the provision of legal advice at the point of need for the majority of the population. All concerned must see this is an opportunity, not a threat.
Rhoda Grant (Highlands and Islands) (Lab): When we are debating legal structures, it is important that we focus on the people who require access to the legal system. Their needs must inform our decision making.
The legal system is here to protect and serve the public and must be fit for purpose. People must be able to access the system for their own protection and we need to take this opportunity to remove barriers for them.
The previous Government recognised the need for fair access for all. It recognised that people in rural areas had difficulty finding a defence solicitor
funded by legal aid. To widen access, it set up the Public Defence Solicitors Office, to provide legal assistance and representation to those who faced criminal charges and who were eligible for legal aid.
In rural areas it is much more difficult for people to access solicitors who will undertake legal aid court work. That is because travelling time can mean that solicitors are limited to undertaking one case a day. Therefore, it is not financially feasible for a solicitor in private practice to provide the service because the cost to their business is not covered. In contrast, a court solicitor in a city can undertake several court cases on the same day. For example, a solicitor working in Inverness would be reluctant to deal with a case that would be heard in Portree sheriff court because that would take them away from their office for the time taken to deal with the case and an additional five or six hours travelling time. Although payment is available for travel time, it does not truly reflect the cost to the practice.
People in rural areas seeking civil legal aid face the same situation. The previous Government's decision to build on the good practice of the Public Defence Solicitors Office by initiating a public civil office to provide civil legal aid services in a similar manner was, therefore, a welcome development. The first such office will be set up in Inverness and will be hugely valuable to the surrounding rural areas. I am glad that this Government has continued to progress the development and is now appointing staff for the office. That will make it easier for people in rural areas to access civil legal aid services.
The lack of access in rural areas causes a great deal of inconvenience and harm to people who cannot afford to pay for their own legal services and to people who need access to family courts or interdicts to protect them from abusers. I therefore urge the minister to roll out other such offices in rural areas to ensure that everyone has access to civil legal aid and to provide equality of access to legal services regardless of where people live.
Kenny MacAskill: I am grateful for the points made about civil legal aid. The Government's position has always been that we are happy to provide facilities for civil legal aid. In Inverness, we did so with the consent of the profession. Is the member suggesting that we should expand civil legal aid into other rural areas even if the profession says that it is capable of providing legal aid? The Government's position has been that we should expand into areas where the profession admits that it cannot provide legal aid. We should move only at a pace that has the consent of the profession.
Rhoda Grant: I understand the minister's point, but we have to consider the consumer—the
person who needs the service. If they are saying that they are unable to access services, we need to listen to them. The profession may say, "Yes, we are able to provide services at that rural court, if enough cases come up"—but we still have to consider how people can access those services.
If there is provision in a particular area, I am not suggesting that the Government should provide it. However, in Inverness and the surrounding areas there was no provision and people really struggled to get access. That was why services were set up. I therefore urge the Government to ensure that people in other rural areas also have access to services. If they do not have access to services, the Government should step in to provide them.
We need to go further than public civil offices to ensure access to legal services. We need to look at the financial barriers. Civil legal aid is means tested. People who wish to get an interdict to protect them from abuse can apply for civil legal aid, but they are often prohibited by the means test.
The Government acknowledges that abuse can take the form of financial abuse. It accepts that the abused person can often have no access to their own funds. If, on paper, a person appears to have an annual income exceeding the amount set down in the regulation, they cannot access civil legal aid. That means that one aspect of their abuse prevents them from getting assistance and then protection from the other aspects of their abuse. We need to allow anyone who is applying for an interdict with power of arrest against an abuser to qualify automatically for civil legal aid. Anything less would not work. How can a person prove that they have no access to funds when those funds are controlled by somebody else? How could the person access proof if their life has changed dramatically because they have had to flee abuse? In some cases, people have left their home, job and family. Their annual income may exceed the limit, but they no longer have any income because they have had to give up their job.
Claiming civil legal aid has the added complication that the applicant's opponent can object to the application and to the granting of legal aid. In cases of abuse, that provides the abuser with another route to continue their abusive and controlling behaviour. The abuser can appeal against the victim receiving civil legal aid. We need to stop that happening.
The counter argument to extending civil legal aid to all who need an interdict to protect them from abuse is that it would open the floodgates for other such cases. However, that would not happen, because this type of interdict is unique. It is the only civil action that, if breached, leads immediately to arrest and criminal proceedings,
meaning that the offender can access legal aid while the victim cannot.
Another anomaly of the system is that some benefits are taken into account when calculating income. Benefits should never be counted as additional income. It is anomalous to take account of them in that way, regardless of the reason why legal aid is sought. Some benefits are available to everyone, regardless of their income. For example, child benefit is specifically for the child; it is not for seeking any legal representation.
I ask the minister to address the following points. He should ensure that benefits are not calculated as part of income; he should roll out a series of public civil offices so that everyone in rural areas has equality of access to civil legal aid; he should remove the right of objection from opponents whose victims are fleeing abuse; and he should give an automatic right to civil legal aid to all those who require an interdict to protect them from abuse.
Stuart McMillan (West of Scotland) (SNP): I am sure that many members in the chamber are as delighted as I am at being dragooned into being here this morning.
Scotland has a unique situation regarding law and the legal profession, and for that reason the large-scale liberalisation of the English legal services market is not really appropriate for Scotland. The focus on large cities and dense urban areas in England does not really apply to Scotland's geography and small-town communities, as has been highlighted by the cabinet secretary this morning. For example, England has a mass of legal services in Temple Bar in the west of London. That accumulation works well for the 7 million people in the London area, but what about the other 45 million people in the rest of that country?
Having said that, restraining legal firms would be counterproductive when we consider expansive legal services and their positive impact on the economy. Our challenge is to encourage the large firms in Scotland while ensuring that individuals who require legal services are not ignored. That is why I am happy that the Scottish Government will continue to work with the industry to develop a distinctly Scottish regulatory approach that recognises specific Scottish needs, while balancing the need for small communities to have access to justice and while enabling large firms to compete at the international level, much as the Royal Bank of Scotland Group is currently doing. Allowing the free market to have complete control of the legal services market would be devastating
to many organisations and individuals in our communities.
Access to justice means ensuring that those who live in Scotland can expect fair and equal access to independent legal advice, regardless of their ability to pay and their location. As the debate about centralising larger firms persists, we must always keep in mind what access to justice means.
Several organisations currently provide legal advice or services to individuals who seek assistance. Although citizens advice bureaux, welfare rights advisers and community law centres provide services and assistance, many Scots still miss out. The reasons why people do not use those organisations and services vary, but people's lack of exposure to them certainly persists. People may often be unaware of the services that are available to them until it is too late.
Ignorance of the organisations and services can, unfortunately, be at the root of many very sad stories. Just the other day, I dealt with a constituent who was about to be evicted from their home. Many problems surround the eviction, some of which appear to relate to the housing association. Although various reasons lie behind the impending eviction, one burning question remains: what would have been the situation had my constituent received accurate information and assistance much earlier in the process? Without even considering all the specifics, it is obvious that the situation would probably not be the same as it currently is. It is therefore extremely important that the current free legal services unit of the Faculty of Advocates—which provides free advice and representation through Citizens Advice Scotland—is widely known about, but that is not the case. Information simply was not available for my constituent.
I have never been about to be evicted from a property that I stayed in. I am sure that everyone in the chamber agrees that no one should have to endure that situation. If assistance is available, people should have the opportunity to receive proper legal advice, so that evictions can be prevented.
Let us assume that the constituent was a council tenant and had obtained early legal assistance from a community law centre, which had received funding from the local authority. The local authority would then be paying for the defence of the tenant who was threatened with eviction, while at the same time trying to evict that tenant. If such a case were to reach the courts, how would the local authority sort out the paradox? [Interruption.]
The Deputy Presiding Officer (Trish Godman): Excuse me, Mr McMillan.
I do not know how many times I have to say this to members, but phones have to be switched off. Off.
Stuart McMillan: Of course, funding problems are not solely related to community law centres. The Scottish Legal Aid Board's legal funds have been significantly drained thanks to criminal cases. I welcome the fact that normal citizens can obtain legal aid, but I am sure that everyone in the chamber feels as I do when they pick up a newspaper and read about big-time crooks obtaining legal aid. That money funds their defence, instead of funding the normal citizens whom we represent. There is a big argument to be had about that, and we will have to look into it during the coming four years.
On another aspect of legal aid, we must recognise that legal aid funding has increased by 7 per cent.
To conclude, I reiterate the importance of legal advice and of service organisations in supplying information to individuals. However, we need to focus on raising awareness of such organisations. Helpful organisations are effectively stripped of their power to assist the public when individuals do not know that information and support exists. On that note, as I highlighted a moment ago when I mentioned a paradox, local authority funding for such organisations should be examined. When a local authority helps to fund both the prosecution and the defence, more than an eyebrow is raised. I hope that we will be able to resolve those issues and provide the Scottish public with the services and access to justice that they require. I welcome the motion, and I welcome the amendment in the name of Pauline McNeill.
David Whitton (Strathkelvin and Bearsden) (Lab): I speak to the amendment in the name of my colleague Pauline McNeill, with particular emphasis on widening choice and on easier access to more affordable legal services. I will confine my remarks to one particular aspect, which is the implementation of sections 25 to 29 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, which abolish the ban on non-lawyers applying for rights of audience in Scotland's courtrooms.
While it is all very well to debate the merits of major law firms forming alliances to compete in a national or global marketplace, we must tackle the question of how the law can help the ordinary man or woman in the street who needs legal representation but who cannot get it or, indeed, afford it. Is there really a desire in Scotland to end the monopoly that is enjoyed by members of the Law Society of Scotland and the Faculty of
Advocates over paid advocacy in Scotland's courts? I ask the question because an inquiry that the previous Scottish Executive instigated decided that it was time to end that monopoly. However, the monopoly has not yet been broken.
It falls to the current Cabinet Secretary for Justice to make that decision, along with the Lord President. However, I fear that Mr MacAskill's mind may already be made up on the issue. As he reminded us today, he is a former practising solicitor, so at one time he was a beneficiary of that monopoly for paid advocacy. Indeed, in an article in The Scotsman in February 2006, Mr MacAskill commented on sections 25 to 29 of the 1990 act, saying that he was
"yet to be convinced that the move would benefit the legal service, rather than make the situation worse".
He went further, adding:
"There are good reasons for having a monopoly-regulated profession; otherwise, how do you regulate those not part of the organisation?"
As he is fond of football analogies, he finished by saying:
"If I watch a football match I want the referee to be SFA-standard, not Joe Smith from off the street."
I am sure that the cabinet secretary will take the opportunity to tell us whether his views on that issue have changed since he took up his present position.
Kenny MacAskill: No, they have not. What the member says seems rather to contradict Mr Martin's points. Is Mr Whitton telling the chamber that he supports Tesco law?
David Whitton: I support the move to make the law more affordable and more accessible to ordinary people in the street. One of the reasons why people want to introduce what Mr MacAskill describes in a derogatory fashion as "Tesco law" is that it would allow that to happen.
If, as Mr MacAskill has just said, he has not changed his views, perhaps he should let someone else in his department make the decision on the matter, for he is obviously prejudiced against it. He is saying on the one hand that we cannot build a wall against competition, and on the other that he will not allow new entrants access unless quality can be maintained. However, there is no point in relaxing the rules at the top end of the market when—crucially—at the bottom end people are finding that access to legal representation is being priced out of their reach.
I raise these points because of a long-running campaign that has been conducted over many years by a constituent, who is the current chair of the Association of Commercial Attorneys. The association's application for paid advocacy rights was submitted in July. My constituent and the
association have been trying for many years to win such rights in Scotland's courts.
The enactment of legislation to free up the advocacy market has lain dormant on the statute books for 17 years. Sections 25 to 29 of the 1990 act abolish the ban on non-lawyers applying for rights of audience in Scotland's courtrooms. At the time of the legislation's passage, ministers said that they would not implement those sections until other reforms in the 1990 act, such as the introduction of solicitor advocates, had been given time to settle. Mr MacAskill will be well aware that legal services in England and Wales got rid of that legal closed shop many years ago, so why the delay here in Scotland? His predecessor as justice minister, Cathy Jamieson, wanted that to happen, but it has not.
Guidance notes for those wishing to apply for advocacy rights were issued in March, but they seem subsequently to have got lost. It is certainly true that the wheels of the legal profession grind slowly, but the Law Society and the Faculty of Advocates, whose members currently enjoy the benefits of the monopoly situation, say that they are relaxed about ending their unique position, providing that non-members who are allowed to represent others in court are subject to the regulatory safeguards. However, section 25 of the 1990 act clearly states that a code of practice would be imposed on those who wish to exercise the right to conduct litigation.
As highlighted by my colleague Rhoda Grant, it is well known that accessing legal aid for civil cases is particularly difficult. Getting legal representation if one happens to have a dispute with another solicitor is nigh on impossible. Allowing a qualified third party to break the monopoly can only assist the legal process and make Scotland's courts more accountable and accessible. I urge the cabinet secretary to put aside his earlier prejudice, think again about the issue and give the people of Scotland the affordable choices that currently are enjoyed in the rest of the United Kingdom.
Aileen Campbell (South of Scotland) (SNP): Like the previous speakers, I welcome the debate. It gives the Scottish Government the opportunity to respond to the super-complaint from the consumer group Which? and the Office of Fair Trading's findings. I sincerely hope that it will allow us to develop and kick-start further discussions on ways to improve Scotland's legal system.
As has been mentioned by other members, including John Wilson, Which? believes that removing the restrictions on solicitors providing joint services with advocates would provide a
much better service to consumers, with savings on overheads and better economies of scale being passed on to those consumers. In general, Which? believes that multidisciplinary practices would enhance services and bring costs down for clients.
Whether or not there is agreement on the Which? proposals, it is clear that there is a need for change, but we must ensure that any change is carefully considered. As we move forward to do that, it is important that the Parliament and the Government work with industry to ensure that we find a regulatory framework that is fair and appropriate to Scotland's specific circumstances, as has been acknowledged by the cabinet secretary. Indeed, in its response to the Which? complaint, the OFT—despite regarding the current regulation of legal services as restrictive—said:
"the OFT notes that the legal services market in Scotland is different from that in England and Wales. The OFT also considers that it is important to develop an appropriate Scottish solution to any perceived problems ... the OFT has not assumed that the changes currently being made in England and Wales will be automatically suitable for the Scottish market."
Of course, the debate is not just about ensuring service delivery, or whether there should be regulation. As Pauline McNeill's amendment shows, it is about the kind of regulation that we should have and equal access to justice, especially for those who need it most and those who would be most at risk of losing that access in an unregulated market. As highlighted by Rhoda Grant, with her experience of the Highlands and Islands, that is particularly important in rural communities. It is also true of the areas that make up the South of Scotland region. We must not leave the industry to the whims of the free market, as that would be bad not only for practitioners but for consumers.
I spoke to a local solicitor in Carluke, who told me that, like every other industry, solicitors have witnessed a lot of changes to their working practices over the years. I was told that it was becoming increasingly difficult for rural offices to recruit new trainees—and to recruit people, full stop—and that more and more small, individual firms are being merged and amalgamated. The Law Society of Scotland concurred with that when it said:
"Rural practices report difficulty in attracting staff and family law practices may be withdrawing from legal aid provision."
In addition, when small firms try to concentrate on and specialise in specific areas, such as conveyancing, there is a latent fear that, eventually, the bigger, amalgamated firms will take away their business. Given that that is the fear now, the situation can only get worse, especially if the free market is allowed to prevail, so careful
consideration must be given not only to supporting small firms but to allowing bigger firms to use their expertise to compete in a growing international arena. At present, Scottish solicitors work in 44 countries throughout the world. It is clear that a balance needs to be struck.
The situation demonstrates the importance of ensuring that any regulations are appropriate, that they meet the particular needs of our dispersed communities, and that they recognise the distinctiveness of the Scottish legal practice and its growing international influence. However, no one is saying that the status quo should remain. That is the view not only of the small firm in Carluke but of the Law Society of Scotland, as expressed in its consultation on alternative business structures. The consultation is a useful document that excellently and thoughtfully gets across what we must strive to obtain from people in the legal world. The Law Society acknowledges that things need to change, but it urges us to be mindful that change must never come at the cost of quality or of the much-cherished independence of our legal system. Independence is one of the most important elements of the system's operation; the independence of advocates and of solicitor firms is fundamental to the legal profession.
I am no legal expert, but I know what I do not want as a consumer: I do not want to be ripped off or given legal advice that discloses confidential information about me or that is not in my best interest. Instead, I want any solicitor whom I hire to respect me and the rule of law, and to behave with honesty and integrity. It is encouraging that the Law Society's council shares those views and is conscious that any changes in business delivery models must protect not just the core values but the client.
Smaller Scottish legal practices should have the opportunity to expand and innovate in a way that provides communities and individuals who have recourse to the law with the access that they need.
We must protect our legal system. I think that there is agreement that while the quasi-liberalisation practices that have recently been endorsed in the UK's other legal jurisdictions—England and Wales—may be suitable for those countries, they are certainly not suitable for Scotland. We need only look at what is happening to the Post Office to realise what happens when industries that provide vital and specialised public services are forced to deregulate and open up to the wrong kinds of competition. Thousands of local post offices are being closed or are proposed for closure, and the range of services that is provided by the few, increasingly centralised branches that remain is being reduced.
We can learn lessons from such an approach to regulatory reform. I have no doubt that the Scottish Government will listen carefully to the points that have been made in the debate and will work closely with the Scottish legal profession to ensure that it is in the best state to serve 21st century Scotland.
Nigel Don (North East Scotland) (SNP): In the context of an extensive debate, I will address one specific issue that has not been mentioned much—advocates. The argument is made that it is uneconomic for advocates to be self-employed. I struggle to see why that should be the case, and so do advocates. The argument goes that if they worked in partnership, either with each other or with solicitors, it would be more economical. I do not see the logic in that, and neither do they.
I am not an advocate, as members will appreciate. It appears to be the case that advocates' overheads are very small, because of the highly specialised nature of what they do. Essentially, all that an advocate needs is a good clerk, an office and time in court. I have been told that the overheads amount to less than 10 per cent of the total fees and contribute to collective activities that might comprise 15 per cent of their costs. I am also told that solicitors have to run an overhead of about 66 per cent—they are doing very well if they can beat that. Given such numbers, it is extremely difficult to see how advocates could possibly benefit by merging with each other, or how the legal profession in general would benefit if they were to join solicitors in partnerships.
Although the OFT might take the view that there are economies to be made, I get the impression that it has simply not looked at the numbers. It would be useful if someone looked at the numbers and demonstrated what has not yet been demonstrated—that there are indeed efficiencies to be made. My analysis suggests that there is no such scope for efficiencies.
Advocates are not barristers not simply because they work in different jurisdictions, as we all know, but because the Scottish and English legal systems have different histories. Historically, in England solicitors never had a right of audience, although they have acquired some such rights; only barristers had a right of access to courts. Proportionately, there are far more barristers in England than there are advocates in Scotland. We have somewhere between 400 and 500 advocates in Scotland. The cabinet secretary suggested that the figure is 470. I will not argue with that. The precise figure depends on how many of the people on the list are retired, and we are not sure about that.
Advocates are specialists. The huge advantage of having a referral bar of specialists is that they can take part in proceedings from different sides of the argument: one week they can appear for the defence, and the next they can appear in a different case for the prosecution. Their specialist skills can be deployed by either party in a case, depending on the circumstances. If advocates were to join a firm of solicitors or were contracted to a public body, they would necessarily always be on one side of a case. It is difficult to see how that would benefit the profession, the development of law or justice.
On the basis of my analysis over the past few days of what advocates do, how they see themselves and how the system works, it does not seem that their being able to form partnerships with each other or with solicitors would bring much benefit. Although it might be fair that they should be able to form such partnerships, it seems that their doing so would not help much. The only effect of the proposal would be to restrict the number of advocates who were available for referral, which, on balance, is probably not a good thing, given how few advocates we have.
However, it seems that a few restrictions might need to be eased, or perhaps even removed. The restrictions that prevent movements by qualified advocates and qualified solicitors between different branches of the profession could and should be removed. I appreciate that the debate is about what the issues might be, and that we are not really looking for answers, but I am an awkward soul, and I will bung in one of the possible answers: the restrictions—in both directions—should be removed as rapidly as possible.
I also suggest that it is probably no longer appropriate for advocates to say that they should not be on the same team as solicitor advocates. Quite frankly, that seems to be restrictive and a tad difficult to defend, so it might be better if the advocates simply get rid of that rule before someone forces them to do so. Leaving aside the restrictions on drift between the solicitor and advocate sides of the profession, which should be lifted, the existing system works well.
It has been argued that citizens should have direct access to advocates. In principle, the present arrangement for relationships with advocates seems to be restrictive but, again, I am struggling to see where there is a difficulty. Advocates are good at taking the legal issues and facts that have been teased out by solicitors and applying their skills and experience to what are often specialist cases. They can provide advice and, if necessary, appear in court. If everyone were to have direct access to advocates, advocates would simply have to develop the wide-
ranging skills that solicitors already have, which would dilute their specialisation. The result would be that we would simply have one amorphous profession, and it is difficult to see how that would benefit anyone.
I understand that professionals such as surveyors have direct access to advocates, which is perfectly reasonable. It is not obvious why any professional who can work out precisely what the issues are should not have direct access to advocates. I hope that there are no restrictions on that but, if there are, I suggest that they be removed promptly. However, the suggestion that the public—even those of us who have law degrees or similar qualifications—should have direct access to advocates does not make much sense. Of course, it is incumbent on solicitors to ensure that if the teasing-out process is short and sweet, it should be undertaken swiftly and at little expense.
The problem with multidisciplinary partnerships is regulation. Conceptually, there seems to be no problem in having a regulator for the individual professionals in a partnership. For example, chartered accountants have a regulatory body and surveyors have a regulatory body. If, in some specialised markets, the relevant professional happens to be an engineer like me, they have a professional body. The Law Society regulates solicitors.
Any amalgamation of the professions in a multidisciplinary partnership would not incur a problem with regulating individual partners, but it is plain that the difficulty would be in regulating the total firm if its partners were not all lawyers. That question must be addressed. It does not have a simple answer, but we need to sort it out. A legal services board to cover everything might be the only way to go, but I am not sure whether that would be a good answer. Making the Law Society responsible for all the other professionals might be better—they would just have to sign up to the same confidentiality rules. That might be the way to go, but I offer no suggestion. Regulating whole firms would be the issue, as individual professionals would not be difficult to regulate.
I toss in the fact that lawyers currently have personal responsibility for their staff. Confidentiality applies not merely to lawyers but to everybody who is involved in the business train that deals with legal information, so, conceptually, it is difficult to see why other members of staff should not be bound by similar rules.
I have covered the two issues that I wanted to deal with, so I will stop there.
Christopher Harvie (Mid Scotland and Fife) (SNP): Presiding Officer, I crave your indulgence for my late arrival in the chamber.
We are sentimental about the law and Scotland, because the law and the office of Lord Advocate were the devolved Government of Scotland for so long. Law is one of the nation's great estates and its temporal power has outlasted the formal union. Not long ago, all the then leaders of the Scottish political parties—Donald Dewar, Malcolm Rifkind, Gordon Wilson and David Steel—were lawyers. I wrote about that in a Scotsman essay, in which I quoted Sir Walter Scott—the arch lawyer—who called the law "the most mighty of goddesses."
As a deal-making nation, we have always needed lawyers commercially. The circumstances of the present day might mean that lawyers, as well as lay people, have qualms about the economic future. Perhaps that justifies non-specialists such as me participating in the debate, which has got me thinking.
I am not altogether reassured, as I once was, by the name Which? The publication did great things in the days when local oligarchies of retailers and other worthies held communities to ransom, but its market-driven image of reform was the supermarket, which is not very comforting. We can imagine the impact on the local solicitor who has handled the local store's business in a Scottish rural town when the inevitable occurs and the big supermarket moves in offshore, so to speak. What happens to the solicitor's business and to the middle-class element of small and medium-sized legal industry?
The legal profession was part of the glue that held small-town Scotland together. It held the Liberal Party together—in a way, the fall of the local solicitor contributed after the first world war to the fall of the Liberals. We now know that the notion of Tesco justice—of coming out of the big store with a legal opinion in a shopping trolley—has its downside. I would worry about asking Tesco for legal advice, because slotting in its customer card involves an intelligence system that makes Big Brother look like a boy scout doing his espionage and intelligence badge.
The issue is not just the big store's dominance. Another problem is that the legal profession, possibly as a reaction, is greatly involved in house purchases and sales. Recent years have been great for the housing and retail-driven economy, but I do not think that that will be the case for much longer. At the other end of society, lawyers often find themselves compromised in the policing and regulation of areas of a country that has a huge drug problem—it is three times the European
average—and a commensurately large black economy.
In that context, is the professionalisation of the legal system into joint bodies that sell specialist services a welcome approach? It has attractive elements and precedent exists in housing. Law might be combined with urban planning, conservation and housing provision. However, we must remember that on the continent, those professional specialisations usually answer to specialised administrative courts, which is not the case in this country. The problem always exists that a corporate, oath-driven and oath-commanded profession will conflict with the market. One of the less attractive sides of Scottish 18th century society was that some lawyers took an overtly political line: one recollects the expressions of opinion from Lord Braxfield that caused Charles James Fox to say, "God help the country that has such lawyers in it."
There is the difference between what the American social philosopher Jeremy Rifkin calls the third sector—for which we are aiming—in which we collaborate voluntarily to extend public good, and his fourth sector, which is driven by criminal greed and to which I have referred. It was slightly strange that immediately after the heist of the century—the theft of the Buccleuch Leonardo—a member of the legal profession had his shoulder tapped by the boys in blue. I can think of not a few places in Scotland in which such a black economy is the whole economy.
Another aspect to address is the very large law firms. It is interesting that two of the biggest firms in London—Hetheringtons and Linklaters—bear Scottish names. If we added in Peat Marwick, they would be predominantly Orkney names. In the scenario that I have described, where are such firms? They are huge and their reputation runs back 100 to 150 years. They are not new phenomena—in the 1880s, the huge expansion in Scottish overseas investments, particularly in the United States, was driven by Charlotte Square as much as it was by Dundee jute barons. There is ambiguity when big business is international, because it often tends to take its political morality from the further extensions of globalisation.
I draw members' attention to a book that is worth reading, which appeared in the same year as did the "The Red Paper on Scotland"—I suppose that the Prime Minister has been seen going round the bookshops of Edinburgh trying to buy the remaining copies of that book, to cover his radical flaming tracks. However, a much more interesting book that was also produced in 1975 is "The Crime Industry" by the late John Mack, a sociologist at the University of Glasgow, and my Tübingen colleague Hans-Ju¨rgen Kerner. It concentrated on the extent to which tax havens,
globalisation and computers could totally blur the distinction between sharp business practice and outright criminal activity. That involves a huge amount of transactional money, which has been valued at $1.3 trillion—it is probably more, if we allow for the dollar's depreciation in recent years. For the corporate legal sector of Scotland, which can be of enormous use to us—particularly in securing the legal framework for tasks such as extending renewables production and enhancing that globally—we must think of a regulatory body that is sensitive not just to domestic activities, but to complex international and European facts.
We must also think of the relationship with Europe that we will enjoy in the future. We should not have a defensive attitude—we should find out what we can learn from, for example, the notariat system in Europe as a means of simplifying domestic law.
I thank members for their indulgence in listening to me.
Margaret Smith (Edinburgh West) (LD): Again, we have had an interesting debate. It has been interesting listening to colleagues trying to fill not only their time, but that of other members. I enjoyed Paul Martin's speech in particular. He used the words "finally" and "in conclusion" so many times and made so many final conclusions that I thought that we were watching "Paul Martin: The Director's Cut".
I welcome the cabinet secretary's assurance that, in responding to the OFT by next month, the Scottish Government will take on board the comments and views that have been expressed in the debate. I am also reassured by his saying that proposals will fit Scotland's needs and focus on quality.
In recent years, issues relating to competition, regulation and business structures in the legal services market have been considered on a number of occasions north and south of the border, as we have heard. That consideration led earlier this year in England to the passage of the Legal Services Act 2007.
We have heard that the OFT's interest in Scottish legal services this time around has been driven by a super-complaint by Which?, which stated that there had been a distortion of the market that had had an adverse impact on consumers. It wants deregulation of the market in order to open up services, and it has asked ministers and the legal profession to suggest how restrictions could be lifted. The passage of the legislation in the south and the OFT's request to the Scottish Government to publish a statement that details its policy views on regulation of legal
services and how restrictions can be lifted clearly mean that change is on the way. The status quo is not acceptable—indeed, I do not think any member has said that it is. As Bill Aitken said, the situation must be seen as much as anything as an opportunity for the legal profession in Scotland.
Many members, including David Whitton, outlined the restrictive practices that are currently in place. The Law Society of Scotland does not allow non-lawyers to own legal firms and the Faculty of Advocates does not allow its members to take direct instruction from clients as opposed to through instructed solicitors. I share the view of many members that the aim of increasing access to justice for the people of Scotland should be at the heart of deregulation and should be a guiding principle behind any changes to the legal services market.
However, I also agree with Mike Pringle that we must not lose sight of the core values of legal services provision. We need quality legal services, however they are structured and regulated, and Scotland's people must be confident about the independence and integrity of those services, wherever they are found. Modernisation must not mean deterioration. The core values that clients have come to expect from Scottish legal services, such as confidentiality, independence, avoidance of conflicts of interest, safeguarding of assets, support for the rule of law and duty to the court, must remain central to services. The Government and Parliament should not support any solution that compromises those core values.
Members have been right to congratulate the legal profession on the approach that it has taken. We welcome the fact that the Law Society, the Society of Writers to Her Majesty's Signet and the Faculty of Advocates are consulting their members on the best way forward. I am pleased that the cabinet secretary has had meetings with professionals and that he has given a reassurance that he will take on board consumers' views. However, if Scotland's law firms are to compete in the UK and the wider world—which is important—it seems clear that deregulation to some degree is necessary.
I support the view that to relax restrictions could have benefits, but at issue is the extent and form of such relaxation—many comments have been made about that. There could, for example, be advantages in allowing the formation of legal disciplinary partnerships of solicitors, advocates and others so that they would practise in the same firm. Nigel Don made a good job of advocating on behalf of advocates in relation to the economies of that approach, the development of legal judgments and the number of advocates who would ultimately be available. However, some people argue that the rising numbers of solicitor advocates means
that such an approach would be unnecessary for consumer choice.
From experience, I know that one-stop shops for multiple professional services already exist in many firms and that they are being sought out by clients. I chose a solicitors firm recently not only on the basis of access to legal services but on the basis of the financial advice that it provides. Benefits for consumers, in time and cost savings could be and are being realised as a result of different professionals sharing facilities.
However, a company's ability to attract and, crucially, to retain quality multidisciplinary professionals may be impeded at present by the lack of freedom to enter them into partnership and ownership of the firm. It could be argued that it is likely that consumer demand for such a convenient approach will lead to the expansion of such operations without legislative changes being needed. In some rural areas, for example, such an approach may well make a firm more viable to solicitors or others by introducing economies of scale. Aileen Campbell's comments on recruitment issues in rural practices were well made, as was her point about post offices post-deregulation. We should bear in mind what she said. However, concern exists that one-stop shops that merge legal and other services could become monopoly shops, which would directly contradict the aims of deregulation by removing competition in certain areas.
As we have heard, opening up partnership and ownership of legal companies raises issues relating to how regulatory bodies would deal with such entities. MDPs that are made up of professionals who are all subject to their own forms of regulatory control might be a good way forward but, as Nigel Don said, doubt has been expressed about whether, for example, the Law Society would continue to regulate firms overall as it currently does, and whether there should be percentage limits on the number of partners who could be non-lawyers.
Mike Pringle highlighted a crucial question. What would be the impact on the master insurance policy and the guarantee fund, which currently give comfort to clients if solicitors have been negligent or have done a bunk with their money, for example? Would the guarantee fund cover a non-lawyer? It seems that that would be unlikely. Proper regulation is vital to safeguard consumers in such a complex industry and to provide them with assurances of a certain standard of service that are enforceable by sanctions.
There is an issue about how we can satisfy the need to have people who own law firms continue to face fitness-to-own tests. In that regard, Paul Martin was right to mention money-laundering, for example. It might be more difficult to satisfy that
need if shareholding were to be allowed among non-lawyers in the so-called Tesco law model. England and Wales have gone down that route, although it seems to me that they have done so without having worked through in advance much of the detail on multidisciplinary regulation. We know that the Government is keen to move quickly—given its ability to get a step ahead of England, which I would never discourage—but I urge it to ensure that we get things right. We must ensure that enough time is taken to get the model right.
A new market structure could lead to the end of many small community lawyers and local firms and could leave in place mainly large legal services corporations. A concern that is related particularly to the Tesco law scenario is that large businesses will choose to take on only the most profitable legal work but will leave less lucrative cases behind. It is true that certain aspects of law lend themselves more easily to being treated as another commodity for sale at a supermarket check-out or online. I share Christopher Harvie's concern about the prospect of asking Tesco for legal advice, although, given its success at getting stores built throughout Scotland, asking it for planning advice might be worth while.
In respect of some services, prices for the customer might be expected to come down and access could be made easier, but we must ensure that people still receive quality services, given the importance of many of the issues that are covered, such as probate cases, making of wills, remortgaging of homes and personal injury cases. It is crucial that financial considerations for shareholders or whoever do not become the sole priority for service providers at the expense of consumers' legal needs.
I am sure that the larger Scottish firms have made the case for being able to access outside capital so that they can compete in the international marketplace. It is entirely reasonable that they do so, and the scenario in question no doubt appeals to them and the Government. However, I urge the Government to make access to justice for the average member of the public central to its thinking.
Many members, including Rhoda Grant, have said that legal services professionals are turning their backs on legal aid cases because of financial concerns. The Law Society of Scotland's research has indicated that the number of solicitors who are prepared to undertake civil legal work is falling, and it is not hard to see that that willingness could diminish further in a more deregulated market. I shared my limited research with colleagues a couple of weeks ago: I found recently, when I tried to make representations on behalf of a client in a tragic case, that only three law firms in Edinburgh
that undertake civil legal aid work were prepared, without having had regard to the case itself, to take on a civil legal aid case. We hear all the time about the difficulties that many people face in accessing representation in, for example, family and matrimonial cases. Let us try to ensure that whatever structure is chosen delivers greater access, not less.
Legislation needs to be carefully considered in the context of Scots law. We must increase access to justice while maintaining the essential elements and core values that underpin the work of our legal professions. If we get it right, consumers could get greater choice and cheaper services; if we get it wrong, it could have a devastating impact on the professions and the protections that currently underpin the relationship between lawyer and client. I am sure that we are all committed to finding the commonsense solution that Mike Pringle seeks and to taking the process forward. As many members have said, it is early days in the debate—although anyone who has listened to this morning's long debate might feel otherwise.
John Lamont (Roxburgh and Berwickshire) (Con): I declare an interest as a member of the Law Society of England and Wales. I was a practising solicitor with Brodies until June 2007.
Like many others who have taken part in the debate, the Scottish Conservatives congratulate the Law Society of Scotland on recognising the need for change in an increasingly competitive environment. We—as is the Government—are attracted by the idea that Scotland could market its legal services on the world stage. Scots law and Scottish lawyers have a sound international reputation, so there are definite grounds for thinking that such moves would be successful.
However, we must recognise that the existing business structures would not necessarily be conducive to that in all cases. It has also been noted that smaller and, in many cases, well-established practices have no desire to go down that particular route. Any legislation would need to recognise that a one-cap-fits-all approach would be doomed to failure.
The Scottish Conservatives support the existence of an independent Scottish legal profession that is effectively regulated and which provides good-quality and effective services to clients throughout Scotland. As Rhoda Grant and others do, we support the principle that a free democratic society can flourish only if its members have access to independent legal advice, especially on issues involving Government or that require Government procedures or decisions to be
challenged. That will not happen if people have restricted access to such advice or if the providers of the advice are under the control of the Government.
As we heard from Bill Aitken, the legal sector is an important part of the Scottish economy—it contributes £1.2 billion to the national economy. There is also great variation in the characteristics of the legal market: for example, some areas—financial services and tax sectors, residential conveyancing and commercial law, for example—demonstrate a high level of competition, while other areas, such as family law, welfare debt and housing matters, demonstrate a low level of competition.
The focus of today's debate has been on alternative business structures as a means of freeing up the Scottish legal market. However, there are other controls that restrict the legal market in Scotland, notably the restrictions on individuals who want to enter the profession on which I will touch briefly. As Clementi noted in his report on the regulatory framework in England and Wales, setting of entry standards requires a careful judgement between setting the standard too high and restricting entry and setting the standard too low and not maintaining proper levels of competency. That is the challenge to the legal profession and the Government, and it must be a concern with the prospect of Tesco law.
In Scotland, as in England, the legal profession has grown substantially in recent decades. That has been most evident in the dramatic rise in the number of law school places. The normal route to becoming a Scottish solicitor is to complete a bachelor of law degree, followed by a diploma in legal practice. There is then a two-year training contract that includes further competency courses. Advocates go through a similar process, requiring the diploma, a five-week foundation course and a six-month pupillage. Minimum standards of quality are enforced during that training process, but there are no specific statutory or other regulatory barriers to entry. However, as anyone who has been through the system will know, there are bottlenecks in the system that work in a similar way to barriers to entry. Whether it be in gaining a place at university, a place on the diploma course or a training contract, at every stage potential solicitors and advocates have difficulty in getting into the profession.
Another barrier that I have come across is that which restricts the ability of solicitors who are not qualified in Scots law to come to Scotland to practise. Despite the fact that I held a University of Glasgow law degree and qualified in London, I had to sit several meaty examinations to become a qualified solicitor in Scotland. It felt as though it would have been easier for me to become
qualified in New York state than in my home country. That differs greatly from the situation in England, where Scots-law qualified solicitors do not face the same barriers to becoming qualified as English solicitors. I urge the Government, as part of its reform package and review, to examine such barriers to entry to the Scottish legal profession. Unless our legal profession can be accessed by the most able lawyers from throughout Scotland and around the world, we will not fulfil our ambition to enable our legal profession to compete on the international stage.
A number of members, including Aileen Campbell, talked about business structures. There are several restrictions on the ways in which Scottish legal firms can organise themselves. Advocates must be sole practitioners: they cannot form partnerships with anyone, not even other advocates. The justification for that—a point that was made by Nigel Don—is that it allows advocates to focus entirely on the work of advocacy and frees them from other demands. However, there could surely be significant advantages, through economies of scale, if that restriction were relaxed. Removal of the restriction would enable advocates to spread risks more efficiently and, potentially, to take advantage of economies of scale by meeting a range of clients' legal needs within one firm.
In relation to solicitors' practices, non-lawyers are not allowed to own legal firms and employed solicitors are not allowed to act for any third party. That is justified on the ground that it avoids any conflict of interests, maintains lawyers' independence and continues to respect client confidentiality. Although reform is required in that area, there must be some concern—as we heard from Paul Martin—that big businesses would muscle their way on to our high streets and cherry pick the most profitable legal work. We have heard throughout the debate that smaller local law firms that offer a wide range of services are vital in many communities.
In the light of recent initiatives, the Scottish Conservatives acknowledge the need for a change in the legal services profession in an increasingly competitive environment—the idea of marketing Scotland's legal services internationally, for example, is definitely appealing. In addition, although Scots law and Scottish lawyers have a respectable international reputation, it is important to note that existing business structures are not in all cases conducive to that. In order for Scotland to maintain its international reputation, the legal services market must recognise that a one-cap-fits-all approach will not be attractive. The Scottish Conservatives support the existence of an independent Scottish legal profession that is effectively regulated and which provides quality services to all clients throughout Scotland. We are
happy to support the Government's motion and the Labour Party's amendment.
Pauline McNeill (Glasgow Kelvin) (Lab): I declare an interest in that my husband is a practising advocate. However, competition, regulation and alternative business structures are not often the subject across the dinner table.
Why are we debating this issue this morning? My theory is that, after Kenny MacAskill has had a hard week, we have a debate such as this to cheer him up, as we did a couple of weeks ago. However, we are really here because it is an important debate following a trigger super-complaint to the OFT by the Consumers Association and the OFT's response. So what should our terms of reference be? I make it clear that the Labour group is not setting out policy positions—in fact, I do not think that anyone in the chamber is setting out a policy position. Rather, we are exploring the complex and important issues arising from the debate.
From what I have heard, there is consensus that the status quo is not an option and that there might be business advantages in change but that we must strive to ensure that any changes benefit the ordinary person, and that quality and regulation, over which the Parliament has control, are maintained.
We in Scotland should continue to take our own approach. It has served us well in the past and, although the procedure that we have been talking about might have provoked the need for change, our response should be distinctly Scottish. An independent regulatory framework that lies within our democratic control and not just market control will mean that we can balance the interests of firms and businesses with those of the consumer and of standards.
I agree with Kenny MacAskill that the balance should be between competition and regulation; that is the right approach. We need the right level of competition to achieve what is sought. We must not improve access just hypothetically; we must demonstrate that we can improve access for the ordinary person in the street. The language of the super-complaint is not strong enough in saying that change must result in better services.
Our starting point is that the previous Government has presided over substantial change. Indeed, we went beyond the Law Society's wishes in the way in which we dealt with regulation and professional conduct. It must be recognised that there has already been quite a lot of change.
To summarise what other members have said,
the issues raised by the super-complaint include direct access to advocates; multidisciplinary practices that involve more than one profession; legal disciplinary practices in which lawyers and advocates work together in the same firm; third parties owning law firms, thereby removing the bar that only lawyers can own practices; and changing the definition of a solicitor's services so that it is not distinguishable from that of another person who provides advice.
The Law Society set out its response to the super-complaint. Although it is a very lengthy document to read through, it is important because it sets out what the Law Society believes are inaccuracies about the Scottish system, as well as some fundamental errors. The Law Society response says that the OFT did not consult the Law Society before it arrived at its conclusion and also suggests that the OFT did not consult the Government, even just to check that its understanding of the Scottish legal system and the regulation of the Scottish system was correct. I would therefore welcome clarification from the Cabinet Secretary for Justice of whether he was consulted before the OFT arrived at its conclusion, although I understand that he is in regular contact with the OFT. I would like to think that the OFT would have checked that its understanding of our regulatory system was correct and that it was using the correct language.
Protecting the public means that we have to ensure standards and quality. That is Parliament's job regardless of who uses the system.
John Wilson eloquently outlined the process: the Clementi review in England; the Consumer Association's super-complaint; the OFT report; and the Law Society's response. The process culminated in the Cabinet Secretary for Justice's speech in July, which signalled that there would be no status quo. However, I fear that we might be being pushed into a timescale. Although this morning's debate has given us a chance to air the issues, I whole-heartedly agree with Mike Pringle's call for us to proceed at our own pace. The most important issue of the debate is that we should be allowed to take our time to get through this complex issue. The Law Society also points out that the change cannot be enacted under the powers of the enterprise legislation; it can be enacted only under the devolved powers of the Scottish Parliament.
Social justice issues and widening access for consumers should be at the heart of the debate. I will mention some of those issues. Transparency in legal fees is very important. We forced the Law Society to make changes to ensure that when its members discuss the terms of a case with a client, they issue letters of engagement. In other words, when someone instructs a lawyer, they should
have a rough idea of what it is going to cost them. Parliament forced the Law Society into applying its own rules on that. Transparency in legal fees is a very important issue for the ordinary person. As David Whitton mentioned, we have to ensure that we do what we can to make legal services affordable.
Some concerns have been raised about law firms and civil legal aid. Margaret Smith and Aileen Campbell have spoken about firms simply giving up and removing that choice for individuals. I want to dwell on Rhoda Grant's contribution about the importance of getting the civil legal aid rules right. She made an important point about women who are seeking an interdict to protect themselves from violence: if they receive certain benefits, those are counted when it is being decided whether they will get full legal aid, so getting the interdict may become too costly. Parliament pointed that out almost four years ago—Margaret Smith might remember whether it was the Justice 1 or Justice 2 Committee—and asked for a solution. I call on the Government to look at the issue again and come to an acceptable conclusion.
Law centres are very important to the debate about providing accessible law for ordinary citizens. Legal aid rules need to be reformed and the public needs to be given choice.
A sensitive issue for the Law Society is the suing of other lawyers. Members might have had experience of that through their constituents. There seems to be no framework for doing that. In all fairness, we need to be clear about the rules, so that people do not have to shop around, being refused access to lawyers because they believe that they have had defective representation in the past.
Has anyone heard of the auditor of court? It is an important aspect of the legal system. Anyone who disputes their legal bill sends it to the auditor of court. Some people struggle to understand how even the auditor arrives at an amount. We need transparency so that the ordinary person can understand whether they have been treated fairly in the application of legal fees.
Bill Aitken made the important point that legal firms contribute £1.2 billion to the economy, so opening up the market is a fine balancing act to ensure that we do not reduce that contribution to the general economy.
Paul Martin talked about the one-stop shop, which seemed to be very attractive to consumers. It will probably feature in future change, notwithstanding some of the important dimensions that Nigel Don mentioned. Multidisciplinary practices have to consider the regulation of the different professions and ensure that there is no conflict of interest; the firm that employs the
surveyor to work alongside the lawyer needs to be sure that members of both professions are true to their oaths, as Christopher Harvie said, and not simply loyal to the firm.
Forcing Scotland to go down the same road as England for its own sake is not the best approach. The English bar operates quite differently. I have no experience of that, but I watch "Judge John Deed" and, if that is anything to go by, the English bar is very different from the Scottish bar.
The Scottish bar has unique quirks and some very strange conventions. When I introduced my husband, who is an advocate, to Des Brown, who is also an advocate, they shook hands. Des Brown then said to my husband, "We will not be shaking hands again." I questioned that and learned that it is a Faculty of Advocates convention that if an advocate shakes hands with a very learned colleague, they should never shake hands again. There is also the devilling system and, just to show that there is no hierarchy in the legal system—not—a lawyer is a friend, an advocate is a learned friend, and a Queen's counsel, such as Gordon Jackson, is a very learned friend. So our Scottish Faculty of Advocates has some interesting historical quirks that make it very different.
Mike Pringle, as an Englishman, can say that we should not rush to beat England on the timescale, and I whole-heartedly agree. John Wilson talked about the fit-to-own test; that is crucial if we are to discuss whether third parties will be able to own law firms. Paul Martin also made the point that opportunities for those whom we might not want to own legal firms would be opened up if we relaxed that rule, so we would need to be careful to apply such a test if we were to go down that road.
It has been suggested that we should set up a legal services board independent from Government, but I fear that it would be another quango—perhaps one for the bonfire—that would be distant from democratic control. In fact, all the OFT recommendations are beginning to sound like proposals for a completely free market. Having considered the matter, I am almost certain that that is the wrong approach to take. Although the independence of the legal profession is important, there should be democratic control over that framework. If we were to go down the road that some are recommending, we would lose the opportunity to have that democratic control.
There may be a case for relaxation of the rules on employing advocates by allowing direct access, and we need to learn more about how that would operate, but there are finely balanced principles that make the system work, as Margaret Smith has said.
The Deputy Presiding Officer (Alasdair Morgan): Order. The member may wish to draw her remarks to a conclusion, to allow the minister adequate time to respond.
Pauline McNeill: Oh, right. I am amazed. I must apologise; I did not realise that I had been speaking for so long.
Many other speakers have made important points, including Stuart McMillan and Nigel Don. Aileen Campbell said that the kind of regulation that we want to have is also important.
In conclusion, Presiding Officer, and so as to ensure that the minister has ample time to respond, I will end by saying that we need core principles to guide us. The social justice dimension that the Labour amendment addresses is fundamental to ensuring that that is a strong theme in any change. I am sure that, although we are a small group of enthusiasts poring over an important motion, there are others—sad people, probably—who are listening to the debate. I look forward to moving it forward with consensus.
The Minister for Community Safety (Fergus Ewing): I hope that I will be able to cover all the many issues raised in the debate in the limited time that now remains. [Laughter.]
I am a solicitor, if that is a declarable interest, and I am of such vintage, dating back to 1976 at the University of Glasgow, as to have been a contemporary of Michael Clancy, director of law reform at the Law Society of Scotland, who is here today listening to the debate. In fact, we are now in such a state of veteranship and vintage that most of our contemporaries no longer aspire to be president of the Law Society, but already have been.
Today's debate is an important one. It has been consensual, and I do not believe that there will be a division at the end of the day. We welcome the contributions that have been made. Matters started from what I suppose we would call the terminus a quo, from the super-complaint of Which?. I am not aware of just how many of my constituents urged Which? to make that super-complaint; certainly nobody I met in the 700 surgeries that I have held over the past eight years has raised the topic, but perhaps it is the talk of the steamie in the Which? offices. Nonetheless, a super-complaint was made and the OFT has opined.
Let us remind ourselves of the super-complaint. It stated that there have been restrictions that
"significantly harm the interests of consumers",
"the restrictions on advocates' business structures... the restrictions on solicitors and advocates providing services jointly ... the restrictions on third party entry, and ... the restrictions on direct access to advocates."
All those matters have been touched on by various speakers in today's debate. There was united support for inviting the Law Society to take the matter forward by consultation, which it has done, publishing a paper the first part of whose title is "Delivering Scottish Legal Services"—not serving lawyers or looking after their own interests but delivering legal services for the public, which many speakers today have said should be the starting point. It is the starting point for the Law Society, and we welcome that.
The Law Society is balancing different interests, between large firms and sole practitioners and between rural and urban practices. Many members have referred to that balancing act. We welcome the fact that the Law Society has taken a lead and we look forward to continuing to work with it and to reading its report. The Law Society has recently consulted on shaping the future of legal education and training in Scotland, which is important if we are to widen audiences and remove monopolies, because whoever appears in court requires some sort of rudimentary training, even if they are employed by Tesco. It has been a major consultation; we await its results with interest and our work will be informed by it.
Great changes have taken place since I was admitted as a member of the Law Society some generations ago. Some barriers have been removed, which has helped consumers. For example, it used to be the case that in order to obtain a divorce one had to raise the action in the Court of Session. That was an incredibly outmoded and old-fashioned, not to mention extraordinarily expensive, procedure. Until fairly recently, one had to raise various bankruptcy issues in the Court of Session. Again, that was completely unjustifiable. The biggest barrier to access to justice has been expense and I would argue that that has been caused by the privative jurisdiction of the Court of Session. The work that Lord Gill is now doing to reform the Court of Session further might well make as significant a contribution to serving Scotland as anything that emerges from the process that we are discussing today, so we welcome Lord Gill's work.
Much has been made of the arguments about whether there should be MDPs and how they should be regulated. Members were quite right to point out, as Bill Aitken did, that the starting point for anyone practising law must be the standards of scrupulous integrity and high quality, and of attending to the client, responding to the client and keeping the client involved and informed. The failure to do that has been the greatest source of complaints to the Law Society over the years. High
standards will always be the key. Other members, including Mike Pringle, dwelt at some length on the importance of the guarantee fund to protect against fraud and of the master indemnity policy, which provides the consumer with fairly substantial protection against negligence.
If there is any complaint against a lawyer, it tends to be an extremely difficult and harrowing experience for the complainer. The complainer is not always right, of course, but whether they are right or wrong, no one can gainsay that it is an extremely long and painstaking process. The complaints commission is being established and should be in place next year. That is arguably a step forward and I hope that it works out well. Solicitors will continue to fund dealing with complaints about their own members. That is quite right. It is a financial burden, but it is one that solicitors have borne over the years, although we enjoy grumbling about it.
The argument for having a one-stop shop has illusory attractions. There are few solicitors I would wish to see complete a tax return, and few chartered accountants I would wish to see conduct litigation. I do not think that I am maligning either profession when I make that general, sweeping observation. I would have run a marathon rather than fill in a tax return for a client who had any business of any complexity. The attractions of a one-stop shop can be overstated. We heard from Paul Martin that Pauline McNeill pays regular visits to the Buchanan Galleries shopping emporium; I very much doubt that she would prefer to have an amalgamation of all those shops into one. I do not think that we can argue that specialisms are interchangeable, because they are not. However, there are strong arguments for having practices where a range of services can be obtained within one business from men or women who profess the expertise that one requires for one's affairs.
Rightly, the debate's other main focus has been on the arguments that are raised in principle in the amendment. Many members mentioned the importance of access to justice. Call me a nit-picker, but perhaps it is really access to the possibility of justice. I do not want to be unduly gloomy, but it is an undeniable fact that, when there are two parties to a litigation, at least one of them—perhaps both—will emerge unhappy after the experience is over.
Serious points have been raised about access to a lawyer to take on one's case, particularly in family cases and in rural parts of Scotland. A comparison can be made conceptually—we are not really getting into specifics in the debate—between the provision of legal services and the provision of dental services. The dental profession has the same difficulties, in a different way. A gulf is growing between private fees and fees for state-
funded dental treatment. Similarly, in the legal profession, a gulf has been growing over a very long time between private fees and legal aid fees. Legal aid fees have been almost static over the past two decades, with few increases having been granted—I state for the record that I make no complaint about that. The gulf means that it is difficult for anyone, whether he or she has a law degree or whether he or she is a member of a commercial attorney organisation, to conduct a case at legal aid rates and make a living out of it.
With respect to Mr Whitton, the average newscaster probably earns a great deal more than the average civil legal aid lawyer and the average plumber probably also earns a great deal more. If one is looking for a career these days, one would make far more money as an electrician or a plumber than as a civil legal aid lawyer. That is a fact of life; it is not something that we can change.
I agree with Rhoda Grant's point that it is particularly important that victims of domestic abuse should have access to justice. That is a principle on which we can all agree. We are considering that complex topic carefully. It is fair to point out that the vast majority of individuals who are the victim of domestic abuse and are in an horrendous situation obtain legal aid, if the abuse is provable—very few do not.
I will raise one issue for members to consider. Let us assume that the victim of the domestic abuse is the spouse or partner of a pop star or—I will not name any names—of a newspaper magnate who faces trial for fraud. Let us also assume that the newspaper magnate or pop star happens to be a multimillionaire. Are we saying that we would extend legal aid to them? I think not. Some means testing must be available.
Rhoda Grant: Just because someone is being abused by a multimillionaire does not mean that they have access to the money—indeed, quite the opposite may be true.
Fergus Ewing: If they had no money, they would qualify for legal aid. My point is that it seems rather unlikely that that would be the case. Those who can afford legal fees should not have them paid for by the state. However, of course, if the Opposition wants to amend our budget in that respect, we could consider the matter in due course.
Other members pointed to the important role of other players. I pay tribute to the work of citizens advice bureaux and all those involved in mediation and alternative dispute resolution, which we debated a couple of weeks ago. That includes organisations such as Sacro, whose Inverness office I visited on Monday. I was impressed by the range of mediation that it provides in various ways. There are therefore many others who provide
advocacy—they do not necessarily do so in court, but they help people to solve problems. That will rightly remain the case.
I should bring my speech to a close. I am disappointed about that, because I would have liked to make a great deal of other comments over the next hour or so to respond in full to members who have made helpful and valuable contributions to the debate.
Pauline McNeill referred to arcane and quaint legal practices. As a notary public, I had to have a Latin motto when I took the oath. My Latin motto is nunc aut nunquam—now or never. I fear that the end of my speech is nunc, not nunquam.
The Presiding Officer (Alex Fergusson): That brings us to the end of the debate. I commend members, who have filled the time extremely successfully.