The Lord Chancellor’s plans for an overhaul of the legal profession to bring in "Tesco law" will lead to a state-controlled legal profession, a committee of peers and MPs warn today.

In a strongly worded report on the Government’s Legal Services Bill, the committee says that the Lord Chancellor has taken a series of powers that will seriously undermine the profession’s independence.

Lord Hunt of Wirral, the chairman of the committee, said: "We have unanimously warned of the damage that these proposals in their present form could do to the legal profession."

The Government, he added, must not be allowed to "annexe the legal profession."

"This is all about the Government wanting to control the legal profession and we have pointed out the great dangers in allowing it to do that."

The committee, which has produced a 177-page report on the Bill, is concerned that the Legal Services Bill radically departs from the recommendations of Sir David Clement,i on whose report it was based.

The Bill will provide for a new over-arching regulatory board over the whole of the legal profession; a new independent complaints system and allow lawyers to set up in mixed partnerships with other professionals.

It also allows law firms to be owned or part owned by business, a proposal that has become known as "Tesco Law" because big retailers or supermarkets could own law firms.

But the committee says that the proposals go much further than Clementi and have a serious constitutional impact, weakening the independence of the profession and its global reputation. They also threaten legal professional privilege and allow conflicts of interest within the new business partnerships that lawyers can set up, the committee claims.

In particular, the peers and MPs say that the chairman and members of the proposed new Legal Services Board, the new regulatory body for the whole legal profession, should not be appointed by the Secretary of State without full consultation with the Lord Chief Justice.

It also questions the host of new powers taken by the Lord Chancellor in the bill, which give him power to abolish the profession’s own frontline regulators such as the Law Society and the Bar and regulate the profession itself.

Lord Hunt said: "The Secretary of State gets no fewer than 111 mentions in this bill. The legal system must not only be independent, it must be perceived as being independent. To command general support and confidence, regulation must be proportionate and genuinely arms-length."

The proposed new business structures, allowing lawyers to set up in partnership with other professionals, carried the potential for conflict of interest, he added.



The committee was also concerned that the estimate of costs and efficiency savings were speculative and unconvincing.

The committee is also calling for the Bill to be redrafted to reinstate the "public interest" objective alongside the present "consumer interest"; to provide a right of appeal to the High Court against regulatory decisions of the new Board and provide a "fitness to own" test for anyone wanting to own a substantial share in a law firm.



The Government has two months within which to respond. Lord Hunt said he was expecting amendments to be made in line with the committee’s report. "It ignores them at its peril," he added.

The Bill has also come under fire from Fiona Woolf, the new president of the Law society.

In an interview in The Times law section, she warns that that the new wide and "unnecessary" powers taken by the Lord Chancellor will allow him to intervene in law firms - or even dictate that "every solicitor should have a blue-screen saver", if he wanted.

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