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Legal Services Bill: Clause 15: Carrying on of a reserved legal activity (Trade Unions exemption)


24th October 2007

Jonathan Djanogly welcomes concessions made in respect of trade unions, but still questions the necessity to grant them special status in the first place.

Mr. Jonathan Djanogly (Huntingdon) (Con): I declare my interests as a member of the Law Society and of the corporate finance faculty of the Institute of Chartered Accountants. Putting aside the mechanical complexities of the ping-pong process, the issue that we are dealing with first today is straightforward. That issue is whether the trade unions deserve exemption under the Bill and, if so, to what degree. We recognise that the Government have made significant movement on the issue.

The Government's original amendment, tabled in Committee, attempted to exclude trade unions entirely from the requirement, under part 5, to become licensed alternative business structure firms when providing reserved legal services to their members. Unsurprisingly, that wide-ranging amendment, which would have allowed a trade union that operated entirely outside the regulatory structure to provide, say, conveyancing services or representation in divorce proceedings, was rejected in the other place when the Lords were belatedly given the opportunity to examine it. A proposal was then put forward by my noble Friend Lord Kingsland, limiting the trade union exemption to those legal services ancillary or incidental to the trade unions' main employment-related function, and it was accepted in the other place.

The Government have now tabled a compromise amendment, which attempts to broaden our narrowing of the union exemption to cover membership services which relate to what they describe as the "relevant activities" of a member or former member of an independent trade union. But, taking a step back, it still remains unclear to me why the Government were prepared to expose union members who receive legal services to a potentially lower level of regulation and protection than that which other people receive when accessing similar legal services from bodies other than unions.

We are at least thankful that the Government have now accepted, however grudgingly, the absurdity of a blanket exemption for trade unions. We do, however, maintain that as a matter of principle the trade unions should not be granted that special treatment. Why should mutual societies, voluntary and not-for-profit bodies such as Citizens Advice, and small legal entities such as trade mark and patent attorney bodies, which have operated as companies without significant complaint against them for many years, all be required to be regulated alternative business structures if unions are not? Why should trade unions receive special treatment?

Who is prepared to speak out for the bodies that I mentioned, and to recognise the unequal way in which the Government are dealing with bodies that will be affected by the Bill? It is the Conservative party that is prepared to speak out, and it is the Conservative party that is prepared to question the trade unions' unjust influence over the Government, which the unions have levered to ensure that their circumstances, and only theirs, were thought worthy of a blanket exemption and now a partial exemption. Could that be something to do with the fact that 73 per cent. of cash donations to the Labour party in 2006 came from trade unions? Perhaps the Minister would like to comment on that.

The Government should be thinking about the interests of trade union members, and not the interests of trade union bosses. We will be watching to see whether the union privileges granted under the Bill are abused. On Report, various Labour Members maintained that unions were regulated by the certification officer. The role of the certification officer is a matter for another debate, and we should have that debate, but why should trade union members be exposed to poor, inadequately regulated legal services from trade unions? The result of the union exemption, if it goes through, will surely be to make necessary a thorough review of the certification officer's role.

Mr. Kevan Jones (North Durham) (Lab): I know that the hon. Gentleman has a paranoia about trade unions, but does he not realise that millions of people in this country who get access to justice would not do so if it were not for the legal services provided by trade unions?

Mr. Djanogly: I totally accept that, but when we last debated the subject on Report, the hon. Gentleman said, when referring to the certification officer:

"I have some criticisms about the system's lack of teeth".-[ Official Report, 15 October 2007; Vol. 464, c. 610.]

I agree with him, and we should review that.

Furthermore, it must be highlighted once again that under the amendment it will still be up to the unions to determine who is classed as a member, and therefore to whom they can extend reserved legal activities without needing to be licensed under part 5. That still creates the proven possibility of unions bringing in non-connected associate members and providing a poor service to them. I would be grateful if the Minister could outline how the Lord Chancellor would consult on what are the "relevant services". In particular, would that need to be confirmed in a statutory instrument?

The Government should be aware that the provision, together with the role of the certification officer, represents unfinished business. The compromise reached remains far from ideal, even though we accept that the Government have made a dramatic concession on the issue. The exemption would be limited to the relevant activities of the union members, but what does that mean? How would that be regulated by the Lord Chancellor? On this matter of principle, we are not yet satisfied, and we will press the amendment to a Division.

1.00 pm



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