Richard Baker MSP

Speech in the Scottish Parliament

Legal Services (Scotland) Bill

28 April 2010

In reforming our legal services sector in Scotland, the first principle must be access to justice—maintaining it and improving it. In changing the law with a view to extending the availability of legal services, we must not unintentionally restrict access to justice for some people in our society. There are important questions about how we strike the right balance in making the changes.

The case for alternative business structures was first considered in the previous session. We acknowledge that the finding of the Office of Fair Trading requires a response from the Scottish Government and that changes be made in our legal services industry. There can be benefits to consumers if change brings more co-location of legal and related services—a one-stop shop model, as it is being called—but there are important questions about how, in opening up the potential for new business structures, we can maintain current valued legal services.

We can use the legislative process to improve access to justice and give our law firms a competitive edge, but we are not persuaded that the bill will necessarily achieve that. There are big questions about the timing of the legislation and the scope of the changes. We do not argue that changes to legal services in England and Wales should simply be imported north of the border. Our system is part of an international legal services industry, but we must ensure that changes that are made in Scotland are right for our legal services here. The changes down south were made before the global banking crisis and it will take time to see what effect they will have.

Let us acknowledge that, as both Bill Aitken and the minister said, there are genuinely and passionately held views within the Law Society on both sides of the debate, particularly about the independence of the profession. I note that the minister has sought to give reassurances on some of those points. Labour members have met people on both sides of the debate and we benefited throughout stage 1 from advice from some of those who have expressed their concerns about the proposed changes. We valued the input of Ian Smart, whom Bill Aitken mentioned, and the evidence that he gave to the committee represented the strongest case that was put in favour of the bill.

The Law Society's referendum showed that there is great interest among its members on the issue and that views on it are divided. I hope that Parliament and, indeed, ministers will now play a role in moving the debate forward.

I say in favour of the bill that we know that, in challenging economic times, new investment in legal services is welcome. We all want our law graduates to move on to practice in successful Scottish firms. However, concerns have been raised about how access to legal services that are provided by small firms, often in rural areas, can be maintained if a move to alternative business structures threatens their survival.

As Bill Aitken said, Frank Maguire of Thompsons and others have expressed their fear that, under the proposals, there is potential for organised crime to become involved in ownership of firms. The minister stated again that the regulatory regime around the reforms will be adequate to address that concern. That makes the issue of regulation vital, but the bill allows any number of regulators, even if the Law Society and ICAS are the two organisations that are expected to apply. No legal services board of the type that exists in England and Wales has been proposed.

I still have concerns about how, in that context, there will be uniformity of regulation. Moreover, the financial memorandum's claim that regulation will cost less than £100,000 does not strike me as being realistic.

At least we have stage 2 for proposing changes not only in that area but in others. I am, for example, disappointed that the Cabinet Secretary for Justice did not agree to regulation of no-win, no-fee companies, which has been introduced down south. We will lodge amendments on that and on the regulatory framework at stage 2.

We must also look to make progress on the vexed question of external ownership or investment, so I am pleased that the minister has met people on both sides of the debate and that those who have expressed concerns have made constructive proposals.

For example, members will have seen the proposal from Mike Dailly of the Govan Law Centre for a co-ownership model with a 75:25 per cent split. It is good that Parliament, the committee and the Scottish Government will have a range of proposals to decide on.

These matters are not simple; they are technical and often complex, so I urge ministers to take adequate time to ensure that they are properly considered. The saying "More haste, less speed" might well apply here. As the convener said, anyone who thought that these matters were uncontroversial and merely technical will have been thoroughly disabused of that misconception.

That is because our legal services industry and the principle of access to justice in a legal system that we rightly cherish and are proud of are important in Scotland, and that is why, in proceeding with the bill, we will need an extensive debate about the changes that must be made at stage 2.

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