Compensation Bill [HL]

It is for the convenience of the Committee that we take Amendment No. 53, which stands in my name, with Amendment No. 52 because it is very close to the points that the noble Lord, Lord Goodhart, has just mentioned. However, in many ways, it goes wider than just the Law Society, and perhaps I may explain. The amendment seeks to introduce a simple test providing for the exemption of persons already authorised or regulated by a specified body but only if that body’s standards measure up to the requirements of the Bill. It would leave out the words,"““regulated claims management services by a person who is a member of a specified body””," and insert,"““claims management services by a person or persons who are already authorised or regulated by a specified body””." It would also insert a further paragraph:"““A body may only be so specified if the Secretary of State is satisfied that the body is likely to regulate that person or persons to at least the same standards as those set by regulations under this Act””." My contention is that there should be no gaps or different standards in the regulatory process. In many ways, this is a robust, ““level playing field”” amendment designed to raise standards to the required level, not to reduce them to the lowest common denominator. To the words of the noble Lord, Lord Goodhart, I would add that at the moment the Government’s provision fails to deal adequately with the FSA, which regulates firms rather than members. That is an important distinction and the present draft appears to confuse the issue. The FSA is a regulator, and of course the Bill is designed to set up a regulator. The parallel with membership bodies such as the Law Society—or even the Claims Standards Council, for that matter—is not helpful or promising. Two fundamental questions remain to be answered. The first is that the Minister clearly intends to exempt certain suppliers of claims management services. As we are dealing for the first time with exemptions, it might be helpful if the Minister were to let us know precisely who she has in mind and to what standards she is satisfied these bodies already adhere. Does each body have its own effective regulatory regime, and does she accept that it must have to qualify for exemption? The second is a question that runs through the Bill. It is the implication that, once the Bill is enacted, there will be both regulated and unregulated claims management services in England and Wales. That is the implication of a number of these provisions and I invite the Minister to take the opportunity to clear up the matter once and for all. Are we seeking to regulate across the entire sector with no exceptions and no loopholes, or are we attempting merely to create a new regulated sector with which the consumer may deal with a certain amount of confidence, while also foreseeing the continuing existence of an unregulated, ““cowboy”” sector with which consumers would have to deal at their own risk? In those circumstances, how on earth would the consumer know who to choose? At Second Reading, the Minister said,"““we intend to exempt members of the Law Society””—" which follows the points made by the noble Lord, Lord Goodhart—"““the General Council of the Bar and the Institute of Legal Executives, where they are already regulated in the provision of claims management services by those bodies and those who are subject to full regulation by the Financial Services Authority””." I presume that none of those is covered by the 500 figure which the Minister gave us before. The Minister then went on to say:"““So we also intend to exempt charitable organisations which provide claims advice and other statutory organisations such as the ombudsmen. We also intend to exempt trade unions””.—[Official Report, 28/11/05; col. 84.]" It would be helpful to pause and allow the Minister to tell us what criteria she has utilised for each of those particular exemptions. It would also be helpful to know what standards the Minister expects those who have been exempted to conform to. What sort of codes of practice, rules and regulations will be observed by those who will fall outside regulation? I declare an interest as having been for several years a solicitor for the Transport and General Workers Union. I know of the exceedingly valuable work that that union does and trade unions do in looking after their members. I am also a partner in a firm of solicitors that deals mainly with claims brought against public bodies, defendants, corporations and insurance companies, so I have seen both sides. It is important for the Minister to set out for us all the standards that she would expect, not only from the regulated sector, but from those who will fall outside regulation, either because they are not covered or because they are specifically exempted. That is why I am pleased that the noble Lord, Lord Goodhart, has moved his amendment. I have added mine in the hope that the Minister will be able to answer those points.