Hansard

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.