Cable on Solicitors (Conduct)

12.43.38pm BST (GMT +0100) Thu 24th Jul 2008

• ' . . LAST year Citizens Advice had 300,000 cases with a legal dimension referred to it, a quarter of which involved the conduct of the solicitors involved.'

[Jul 22] Vincent Cable (Deputy Party Leader; Twickenham, Liberal Democrat): It is a privilege to introduce one of the last debates before the recess. It relates to an issue that has preoccupied me pretty much since I became an MP 11 years ago. At our weekly surgeries, we all see people with legal problems which those of us who are not legally qualified struggle with. Many involve unhappiness about the treatment provided by solicitors.

To give an idea of the order of magnitude, last year Citizens Advice had 300,000 cases with a legal dimension referred to it, a quarter of which involved the conduct of the solicitors involved. That conduct was not necessarily wrong, but the figures show the magnitude of the problem. I acknowledge that not all the complaints that we hear about solicitors are valid, however strongly expressed. In many cases, people believe that they have been cheated by the legal system, and that may have been so on grounds of common sense or natural justice, but they may have lost on a point of law and find that difficult to accept, particularly as it is so difficult to obtain legal aid funding. We are coming increasingly close to do-it-yourself law with people pursuing their own cases in complex areas and feeling a sense of grievance about the process when they lose. Many people blame their solicitors when the problems lie with the HM Courts Service, judges or elsewhere, but in many cases there is a genuine complaint.

Another qualification that I want to make at the outset is that I recognise that, as with accountants, architects and Members of Parliament, I am sure that the vast majority of solicitors are entirely honest, competent and admirable professionals, but some are not and it is those with which we are concerned. During the Government's period of office attempts have been made to strengthen the profession's self-regulating processes, particularly that covering solicitors. The Government have been active in that and I am not criticising their approach, but there are some loose ends that I shall refer to.

Citizens Advice sent me a brief for this debate, which is worth quoting. Its considered judgment-it probably hears about more such cases than anyone else-is:

"We support recent reforms to legal services regulation, and have long argued that consumers...are not sufficiently protected from poor or negligent services by the traditional systems of...self-regulation within the legal profession. Too often we see cases in which clients have been very poorly advised and serviced by their solicitor, and costs have been vastly disproportionate to the issues involved. The consequences of poor conduct by solicitors can be devastating for their clients. Therefore we welcome this debate."

I have just been at a meeting in Committee Room 6 with an organisation called Complaints Against Solicitors, action for Independent Adjudication-CASIA-which was established 13 years ago; I seem to remember that Mr. Mitchell was actively involved with it. It is a network of people who have had terrible experiences, not just with solicitors, but with the legal system. Many of the people I have just met had appalling stories to tell of ruin caused by negligence or, in some cases, worse treatment by their solicitors.

To provide a perspective on the matter, it may be helpful if I review the continuous process of change that has characterised the legal complaints process. I am not sure what happened before 1997, but I believe that there was something called the Solicitors Complaints Bureau within the Law Society which dealt with complaints. It evolved into the office for the supervision of solicitors, which most of us remember dealing with and which was notorious for delays, evasion and administrative failures. I believe that the Government shared that assessment and were critical of it.

The Minister's predecessor, David Lock, talked about self-regulation of the legal profession as a privilege and not a right, and on the back of that the Government initiated various changes with the Law Society, including establishment of the legal complaints commission-the Office of the Legal Service Complaints Commissioner-and, in 2006, the splitting of the various regulatory processes within the legal profession, one branch leading to the Solicitors Regulation Authority and another leading to the legal complaints commission, which is interrelated with an ombudsman, who happens to be the same individual as the legal complaints commissioner. In 2010 and 2011, we shall move into a new environment in which there will be an overarching Legal Services Board split into two subsidiary roles-the SRA and the Office of Legal Complaints, which will have the OLSCC and the ombudsman folded into it. Merely reciting that list of organisations indicates a rapid and continuous process of organisational flux, which may have been necessary, but has been enormously confusing to people pursuing long and complex complaints.

To evaluate where the matter is heading, it is worth quoting Which? The Consumers Association acknowledges that in the past few years, the changes have

"meant that since 2006 the LCS has much improved, while the SRA has made much of its independence".

Clearly, there has been action, and there is statistical evidence that the SRA has been striking off or suspending more solicitors. The number rose from 32 to 45 between 2006 and 2007, but the OLSCC fined the Legal Complaints Service for an inadequate plan.

I have two questions for the Minister. Will the OLSCC, which has established itself as a genuinely independent and often outspoken voice for consumers, continue to have oversight of the arrangements until the new set of institutions comes into effect in two years? My second question concerns a point that the consumer bodies are anxious to pursue. What is the Government's position on the proposal that complaints data should be published? It is obviously important that when someone approaches a new solicitor they have some indication of that solicitor's past record and whether complaints have been upheld. Consumer groups are anxious that there should be full and transparent publication. I know that the Law Society is going out to consultation, but do the Government have a view, and are they actively promoting it?

Before coming to my two key issues, I must digress a little into a case that has established my interest in the matter. I do not want to go too far into the details of a complex case that goes back over a number of years, but I shall give the background. It relates to one of my constituents, Dr. Oraki, who is Iranian by origin, with whom I first became involved when she was fighting a compensation claim over a post office that was closing in Whitton in my constituency. We eventually secured compensation, largely due to the intervention of the National Federation of SubPostmasters and me, but during the course of the battle, she sought legal advice from a firm called Dean and Dean. Its senior partner was Mr. Tehrani, and Mr. Mireskandari was a trainee solicitor. They provided her with legal services on a subsidiary issue relating to the tenancy of the property and the landlord, which was described as a fairly simple matter. Dr. Oraki entered a fixed-fee arrangement for £1,000, but something went wrong in court. I was not there, but the solicitor probably did not secure the result that Dr. Oraki wanted and there was a good deal of frustration.

Some time later, the solicitor presented a bill for more than £19,000, which has become a cause célèbre within the legal complaints process. My constituent alleged two serious failings, one of which was breach of professional care or client care, and was subsequently admitted in court-I cannot comment on whether that was correct, but that was the allegation. The second, more seriously, was that one of the gentlemen involved, Mr. Mireskandari, had charged a full fee as a fully qualified solicitor when he was an assistant trainee. My constituent went to considerable lengths to demonstrate that he was not fully qualified at the time.

On the basis of her allegations, my constituent refused to pay the bill. The matter was referred to the legal complaints process, and she sought action in respect of professional negligence. However, in the course of that prolonged dispute, the solicitor threatened her with bankruptcy and the initiation of bankruptcy proceedings. She was advised-including by me-that bankruptcy is not a good place to be, even if one happens to be in the right. She therefore offered to pay the outstanding bill, but that was refused. She offered a second time with witnesses present and the solicitor refused to accept it again, and insisted on taking her to the bankruptcy court. She was a solvent-indeed highly solvent-bankrupt, but nevertheless she was made bankrupt and has been so now for three years while the legal complaints processes have rattled through the system. She has gone backwards and forwards between the Legal Complaints Service-

Hugh Bayley (York, City of, Labour): Order. I obviously do not know the outcome of the story that the hon. Gentleman is telling, but if it is a matter that is still before the courts, I should remind him that the sub judicerule prevents it being discussed on the Floor of Westminster Hall.

Vincent Cable (Deputy Party Leader; Twickenham, Liberal Democrat): I do not think it is before the courts any longer, Mr. Bayley, but I accept your ruling. In any event, I do not wish to proceed with providing more details of the case; I simply want to extract two generic public policy issues from the matter and to do that I felt that I needed to provide the background to the case.

The first public policy issue is whether it is right and proper that solicitors should be able to use bankruptcy as a means of pursuing a financial claim with their clients. I have written on that subject to the Solicitor-General, who has sent me a thorough and helpful reply. I do not fully agree with it, but at least she has set out the Government's case. Her argument is that solicitors should be able to pursue a bankruptcy case just like anyone else. However, there is an obvious problem in that there is an asymmetry of knowledge. A solicitor clearly has access to much more sophisticated legal information and knows the court procedures and staff, which means it is clearly a highly one-sided encounter.

The Solicitor-General also said that my constituent could get another lawyer to defend her in the process. The problem with that is that when someone has become bankrupt and their assets are in a trusteeship, no solicitor will take on the case. Indeed, there is a great deal of reluctance to do so-not just by her, but by others. I have come across several other cases of this kind where it has become virtually impossible for people to defend themselves effectively when a solicitor-especially a powerful solicitor-takes bankruptcy proceedings against them.

I wish to ask a fairly open-ended question: is it possible to explore with the Law Society a mechanism whereby solicitors can pursue legitimate financial claims? Of course, like any other business, they must be able to do so-I am not suggesting otherwise-but it should be done in a way that prevents possible conflicts of interest and unfairness. Let me make an analogy. The situation is a bit like a dispute at a private school in which a pupil has not paid their fees because their parents will not pay them. The parents might be right or they might be wrong, but instead of simply resorting to expulsion the head teacher of the school decides to administer corporal punishment to the pupil. There is an element of that situation in this sort of treatment, so I ask the Government to think about that.

Finally, the second very important issue that I wish to raise-the other issues are important to the individuals concerned, but this is an important matter of public policy-is whether the legal authorities have sovereign immunity. In the past few days, it has been announced in the newspapers that the solicitor to whom I referred-Mr. Mireskandari-is issuing a £10 million defamation claim against the head of the Solicitors Regulation Authority. That was announced in the newspapers. Although I am not familiar with the individual case and cannot comment on it, I wish to ask the Minister whether the head of that organisation enjoys legal immunity from that or any other source.

That is a public policy issue for the following reason. If the head of that body does not enjoy legal immunity, how can we be fully confident that he can do his job in the way he is required to? Imagine what would happen if the head of Ofgem could be sued by a gas company that was angry because an inquiry was being pursued. That would be an analogous problem. Are the head of the legal regulatory body and his staff protected by legal immunity?

The same question extends to the legal services ombudsman; does it enjoy legal immunity? I am sure that the Minister understands the problem. If a powerful solicitor feels threatened by an inquiry and they feel that they have the right to issue legal proceedings against the head of the regulatory body, it is difficult to see how the integrity of the system and public confidence in it can be maintained. I am not a lawyer, but I am essentially asking the Minister about a matter of fact: are the organisations that she has quite properly established to protect the public themselves protected from legal claims?