PAYMENT OF CHARGES OR FEES OTHER WISE THAN THROUGH CLIENT'S CONTRIBUTION (Hansard, 18 May 1972)

§ Mr. John Fraser
I beg to move Amendment No. 17, in page 5, line 30.
826 leave out from 'any' to 'which' in line 31 and insert: 'money or valuable security coming into the possession of the solicitor (other than a benefit payable by the State) and'.

§ Mr. Speaker
It will be convenient also to discuss Amendment No. 18, in page 5, line 32, leave out from 'matter' to end of line 35.

§ Mr. Fraser
The Bill as drafted incorporates in its structure the provisions which are in the main legal aid legislation about charges upon property recovered, being a first charge for the cost of the proceedings, negotiations or work done for the client. This has been grafted on to the Bill despite any recommendation to that effect by the advisory committee or the Law Society.
Under the Bill as drafted, if a solicitor recovers or preserves property (of whatever nature and wherever situated) that property is to be subject to a charge in favour of the solicitor for the balance of his fee up to a limit of £25 but after taking account of the contribution which the client will have made to the solicitor. I wish to give an example of how this provision will work.
Suppose that a solicitor accepts a case under the scheme. He charges £10 and he has to pay a disbursement of £5 and under the Schedule to the Bill his client pays him a contribution of £10. In other words, the solicitor's costs are covered by the contribution but he expends £5. Assume that the case he is conducting involves the recovery of a typewriter from a vendor which has been detained by the vendor on account of the cost of repairs and the purchaser of the typewriter is alleging that the repairs should be done free of charge because the purchaser has the benefit of a warranty under the Sale of Goods Act and the £5 disbursement is incurred for an expert's report to advise the client about whether his claim is justified.
Assume that the solicitor recovered the detained typewriter, the matter never went to court, there was no award of costs and the solicitor's costs are paid by the contribution but there is left £5 to pay to the mechanic or expert who examined the typewriter. In those circumstances it is wholly impracticable for the solicitor to have a charge on the typewriter to the extent of raising £5 to 827 pay the expert's fee. If that practice were pursued it would put the scheme into disrepute.
The Amendment proposes that the charge shall apply only to property which never comes into the possession of the solicitor, and even then only to money or valuable security. If the charge is to apply to property which never comes into the possession of the solicitor, the solicitor will forgo his fee, have to sue his client for the recovery of the property or enforce a charge upon it. That is wholly impractical.
Under the Amendment the charge would not apply to chattels or to assets which were not readily realisable—whether they be deeds of a house, an heirloom or a second-hand television set. The Amendment would remove practical difficulties about recovering contributions out of property. It would also exclude State benefits—redundancy payments, compensation for unfair dismissal, sickness and unemployment benefit and even maternity grants.
As reported at column 214 of the Committee proceedings, the Lord Advocate said that he contemplated making regulations to exclude certain State benefits. I hope that the third limb of the Amendment will commend itself to the Lord Advocate on those grounds. We are anxious that the scheme should be simple in operation, that it should have the support of the public and that it should remove the barrier, whether real or imaginary, which exists between some sections of the public and the legal profession.
If a solicitor is expected to raise a charge upon a television set, a typewriter or property which he recovers, and if he is intended to enforce that charge against his own client, particularly where the property has never come into his possession, and is not in the form of cash, a cheque or other valuable security, either he will take a loss or the scheme will be put into disrepute.
For reasons of practicality the Amendment should be seriously considered. If the wording is not right, I shall be glad to withdraw the Amendment and the matter can be considered in another place, but I am sure that the principle is right and that it will benefit the scheme.

§ The Lord Advocate
I would never reject an Amendment on the technical ground of drafting. The essential purpose of the Amendment is to exclude from the charge benefits payable by the State—the third limb of the Amendment which means a great deal to the hon. Member for Norwood (Mr. John Fraser).
I said in Committee that I hoped to be able to say something more at this stage about the use which would be made of the regulation-making power which I sought and obtained in Committee and I put on record the following observations on exclusion from charge.
The regulations which will be made will exclude moneys payable under any maintenance or separation agreement or under any affiliation agreement. This follows the equivalent regulations under the legal aid scheme.
Secondly, moneys paid by way of supplementary benefit, unemployment or sickness benefit, industrial injury benefit and other benefits under the National Insurance Acts will also be excluded. All these benefits are at present inalienable by Statute, and it is obviously desirable to maintain that principle.
Thirdly, moneys recoverable in circumstances equivalent to those which were canvassed in the case to which the hon. Member for Hackney, Central (Mr. Clinton Davis) referred will also be excluded. The regulations will exclude from the incidence of the charge any capital assets which are excluded in determining disposable capital.
Payments in the industrial tribunals sphere—and I am thinking here of redundancy payments—

§ Mr. John Fraser
If items which are disregarded for capital purposes are to be left out of account, would goods like television sets and radiograms, which are part of the personal furniture and belongings of the applicant be excluded?

§ The Lord Advocate
Yes, I think so, but I would not like to be committed on That. I will write to the hon. Gentleman if there is any doubt about it.
There has not yet been time fully to consider the question of redundancy payments and payments recovered in respect of proceedings before an industrial tribunal for wrongful dismissal. What may 829 come out of our discussions is that an allowance of 50 per cent. should be made as being excluded from the charge, but, as I say, no final decision has been reached.
Those are the matters with which the hon. Gentleman was most concerned, but there are objections to the Amendment in so far as it narrows down considerably the property which could be subject to a charge in the sense that it could put the person who is in receipt of this type of assistance in a better position than an ordinary private litigant. To the extent that it does that it will not be acceptable.
In the light of what I have said on benefits, particularly supplementary benefit and unemployment and sickness benefit, and in the light of the undertakings I have given which will be implemented by the regulations, the hon. Gentleman may feel disposed to withdraw the Amendment.

§ Mr. John Fraser
We find that reply encouraging, and we would like to ex- 830 amine its implications. As I understand it, this will extend to all the chattels which caused the Committee some concern. We reserve the right to consult our colleagues in another place if this provision is not satisfactory, but, subject to that, I beg to ask leave to withdraw the Amendment.