Compensation Bill [HL]

I respond in the context of the report of the Delegated Powers and Regulatory Reform Committee. The noble Lord, Lord Hunt, will recognise that I take the committee’s recommendations very seriously. I have undertaken to ensure that we consider them properly and I will bring forward appropriate amendments on Report. As I say, I frame my remarks within the context of that report. The amendments that I shall bring forward will focus on developing the provisions in the schedule on the grant of authorisation, appeals and compensation. This group of amendments deals with grants of authorisation. We have the subjective criteria as legal advisers were concerned that simply having objective criteria did not allow for the fact that, having taken clear evidence, the regulator may need to make a judgment. Although I recognise—I discussed the issue this morning—that this is an unusual way of approaching the matter, none the less I want to think very carefully about whether to remove that provision completely on the basis that there may be circumstances where we are asking the regulator to look at objective evidence and then to make a decision one way or the other on that basis. While I recognise entirely what the noble Lord said about not wanting arbitrary judgments to be made, whoever the regulator is, none the less I do not want to remove completely the ability of the regulatory body to think about the issues and to make judgments where that is necessary within the framework that we establish. However, I take the point entirely about whether we have this right. Of course, it must be a transparent process with the regulator making decisions on the basis of published criteria and with a right of appeal on the part of the person seeking authorisation if their application is refused. The amendments that I will bring forward on Report will set out the minimum criteria for authorisation. As I have explained, we intend to bring forward amendments to paragraph 5 that will make the criteria clearer. That relates specifically to Amendments Nos. 82 and 85. I am currently discussing with parliamentary counsel precisely what we will do. I will, of course, take into account what the noble Lord has said. The range of matters that the regulator should—I emphasise the word ““should””—be required to take into account are, as the noble Lord said, criminal record and previous findings of professional misconduct, financial probity, governance and accounting arrangements, transparency of fee structure, arrangements for holding clients’ money, arrangements for professional indemnity insurance and appropriate training and skills. Those are the areas that we shall look to as we bring forward our amendments. I hope that in so doing I will be able to meet the underlying points that the noble Lord has raised. As regards Amendments Nos. 86 and 87, I hope that I have reassured the Committee to some extent that we shall be looking more fully to consider the authorisation provisions, taking into account the suggestions that the noble Lord has made. As regards Amendment No. 87, I believe that there would be only a small number of cases where consideration of findings of professional misconduct would be relevant, for the simple reason that we suspect most of those applying will not be professionally qualified. I see the value of the measure in some cases, for example where a solicitor who has been banned from practising seeks authorisation to provide claims management services. Therefore, I am grateful to the noble Lord for raising those points. As he is aware, it is my intention to bring forward amendments—I will certainly take into account the comments that have been made in so doing—and to share those with him before Report.