§ Order for Second Reading read.
§ 1.51 p.m.
§ The Solicitor-General (Mr. Peter Archer)
I beg to move, That the Bill be now read a Second time.
I am grateful to all those who have made it possible for the House to consider the Bill before Dissolution. I am especially grateful to my right hon. Friend the Lord President and to the hon. and learned Member for Southport (Mr. Percival). In the near future we shall all be deploying our respective cases on the hustings. I shall try to restrain myself from beginning this afternoon.
The Bill will be welcomed by all those concerned with the administration of justice. After making such progress without controversy, it would be tragic if the Bill were now delayed until time could be found for it in the next Parliament.
We have all known for many years that a number of aspects of our legal aid system are less than satisfactory. The system is no longer wide enough in scope to include many of those whom it was designed to assist in asserting and defending their rights. And there are many who are entitled to be included who may be discouraged from availing themselves of it by reason of the large financial contributions that they are required to make. It is a serious criticism of our law that some of our citizens might be denied justice because they do not have access to advice or to representation in the courts. It is not a question of principle. I know of no one who argues that others should be denied justice. It is merely a matter of resources.
It is true that for the past few years we have been keeping abreast of inflation in relation to the limits of eligibility for legal advice, assistance and entitlement without contribution. That was running to stay in the same place. It did not improve our position, which had already fallen behind when that practice began. However, it would be misleading to say that expenditure on legal aid has not risen. It has been rising alarmingly year by year. That has not represented vast increases in fees to the legal profession; it has represented an 836 increase in the amount of litigation, especially so if we include criminal cases.
When two years ago my right hon. and noble Friend the Lord Chancellor extended the special procedure to all undefended divorces and thus dispensed with a hearing on the granting of a decree nisi, we knew that as a result there would be some savings to the legal aid fund. My right hon. and noble Friend said at that time—I repeated it in the House—that it was hoped that there would be some release of resources for other purposes. We said that those resources would not become available at once because there would be a period when money would continue to be paid out of the fund in respect of work done in the past while there would be no inflow of new contributions. But the time has arrived when some savings have been effected and some resources are available. My right hon. and noble Friend has decided that the first priority is to effect certain improvements to the legal aid system.
The package that is proposed falls into two parts. On 20 March my hon. and learned Friend the Parliamentary Secretary to the Law Officers' Department introduced to the House the appropriate regulations, which increased the eligibility Financial Conditions 1979, which increased the upper income limit for eligibility to legal aid and increased the lower disposable income limit, the limit of entitlement to free legal aid. At the same time he introduced the Legal Aid and Assistance Financial Conditions (No. 2) regulations, which increased the eligibility limits for what has come to be called the green form scheme. The effect of those regulations was to bring about a substantial increase in the number of those entitled to legal aid within the scheme.
The Bill is the second part of the package. It seeks to improve the scheme principally in three ways. First, it seeks to extend the advice and assistance scheme to include assistance by way of representation in certain cases. At present, broadly, there are two schemes. There is one scheme for the provision of advice and assistance and a second scheme for legal representation. That has meant that when a client receives advice and assistance from a solicitor in bringing a matter to court and the question of representation arises in the proceedings, 837 he must make an application for a legal aid certificate under the other scheme with all the consequent delay.
The proposal in the Bill would mean that the solicitor would continue the service he was offering to the client without interruption. It would have a further effect. At present when an application is made for a certificate for representation, the applicant's means are assessed by the Supplementary Benefits Commission. That is a process which itself costs money. It may be worth that expenditure when the proceedings are likely to cost many hundreds of pounds, but when the cost of representation is quite modest it does not make sense to embark on a process of assessment the cost of which may equal the contribution that is being assessed. For advice and assistance a client's means are assessed by the solicitor. That works satisfactorily, especially when small sums are involved.
It is proposed to include representation in that system where costs are likely to be limited. The Bill would empower the Lord Chancellor—I use the term"Lord Chancellor" in the impersonal sense as I am determined not to be provocative—to make appropriate regulations. If it were to fall to my right hon. and noble Friend to consider what regulations should be made, he would propose to begin by making representation available for matrimonial proceedings at magistrates' courts. But that would obviously be a matter for whoever was in office.
The effect of the Bill would be that that sort of representation would require only the approval of the appropriate authority in the same way as expenditure on advice and assistance in excess of £25 or £45, as the case may be. For civil proceedings the appropriate authority is now the area legal aid committee or, for magistrates' courts and county courts, the court itself. But there are proposals to make available to the Lord Chancellor the power to vary this by regulations. That is the first proposal. It is to be found in clause 1 for England and in clause 6 for Scotland.
The second improvement that the Bill seeks to make is to empower the Lord Chancellor to vary the maximum contribution payable by a recipient of legal aid. One of the present shortcomings 838 of the scheme is that those who may be entitled to legal aid are discouraged from litigating by the size of the contribution required of them. The formula is set out in section 9 of the 1974 Act. A calculation is made of the assisted person's disposable income. Broadly, that means his income after deducting tax, rent, mortgage payments, cost of travel to work and other such expenses.
I know that there are those who fully understand the rules for calculating disposable income but, speaking personally, I have never yet met anyone who admits to understanding them.
When the disposable income is calculated, from that figure is deducted the amount of the free limit. The maximum contribution is one-third of the difference. It is one-third of the amount by which the disposable income exceeds the free limit. The Lord Chancellor would be given power in clause 4 for England and clause 9 for Scotland to make regulations to prescribe what the fraction should be which is at present one-third. My right hon. and noble Friend would propose, if it fell to him to make the regulations, to reduce the fraction from one-third to one-quarter. This is in general accordance with the recommendations of the 27th annual report of the advisory committee on legal aid, 1976–77. The recommendation is contained in paragraph 42.
Thirdly, the Bill proposes to confer power on the Lord Chancellor to prescribe different maximum contributions for different classes of cases. That power is contained in clause 4 in respect of England and in clause 6 in respect of Scotland. My noble friend has in mind proceedings such as personal injury cases. In 90 per cent, of personal injury cases, since either there is an order for costs against the other party or there are damages from which the costs may be found, the contribution is ultimately returned to the assisted person. It seems to be a waste of time and money solemnly to collect the contribution and ultimately return it.
§ Mr. John Prescott (Kingston upon Hull, East)
I am interested in that point. One of my constituents was awarded £70,000 damages. However, it was found that the legal aid system had first claim on the money as the person whom the damages were found against could not afford to 839 pay anything towards the damages. I wonder whether there is any possibility of assisting such unfortunate cases who have damages properly found by the courts but who find that the legal aid system has first claim on the limited income available to pay for such damages.
§ The Solicitor-General
I am aware of the tragic case that my hon. Friend has in mind. We are paying attention to see whether something may be done to help the assisted person in that class of case. Such provision is not included in this Bill. It if were sought to include it, there might be some difficulties at this late stage in the life of Parliament. However, I shall bear the matter in mind in the next Parliament. If it falls to me to have any powers in the matter, it will not be overlooked. The charge to which my hon. Friend referred is retained within the framework of the scheme as amended by the Bill, although there are amendments to it under clause 5.
At present the prospect of making a substantial contribution may deter people from bringing proceedings. My noble Friend envisages that the power may be used to vary the contributions in personal injury cases, in the categories to which I referred.
I have referred to clauses 1, 4 and 6. I do not propose to delay the House by referring seriatim to each clause. But, I shall refer to clause 2, which empowers the Lord Chancellor to prescribe limits on the value of work that may be carried out under the green form scheme without obtaining the specific approval of the legal aid committee. For most purposes the present limit is £25. For undefended divorces the limit is £45. It is sometimes desirable to have a limit for certain categories of cases so that the work does not have to be interrupted while an application is made to the committee for special consent in a particular case. Clause 2 is intended to simplify that procedure.
Clause 3 enables the Lord Chancellor to prescribe the maximum contribution payable by those receiving advice and assistance in the same way as clause 4 confers powers, to which I have referred, in respect of those receiving legal aid. That enables the Lord Chancellor to substitute a different formula for the some- 840 what cumbersome table that is at present found in section 4 of the Legal Aid Act 1974.
The House may wish to know the cost to public funds of these improvements. In the debate last week in the Standing Committee on Statutory Instruments my hon. and learned Friend told the Committee that the total annual estimated cost of the package was £6 million. Of that figure about £1 million is attributable to the improvements suggested in the Bill. The only measure that is likely seriously to cost money is the variation of the formula for calculating the maximum contribution. The Bill gives the Lord Chancellor power to make regulations. The cost will depend upon what regulations are made. But, the assumption that he did, as my noble Friend had in mind, alter the formula to reduce the fraction from one-third to one-quarter, the anticipated cost would be about £1 million per year.
There was full consultation with the Law Society in drawing up the Bill. I go so far as to say that the Law Society approves the Bill. It is very much in mind that in any regulations made under the Bill there will also be the fullest consultation with the interests involved.
This is a modest cost for a measure that will alleviate hardship and help to increase confidence in the ability of our legal system to provide a redress for grievances. The importance of maximising public confidence in the legal system is not an issue that divides the House. I commend the Bill to the House.
§ 2.7 p.m.
§ Mr. Ian Percival (Southport)
I assure the Solicitor-General that the Opposition welcome the Bill. Like him, I shall resist the temptation to be provocative.
The Bill will add to the amount of money that we must find to finance the scheme. There are some aspects of costs about which we are not entirely happy. It is difficult to obtain accurate estimates. Even so, this is a burden that we shall not object to inheriting from the Government in the early future. We wish the Bill well and want to see it pass all its stages now. We shall do everything we can to facilitate that.
When the Legal Advice and Assistance Act was passed, it was described by the then Attorney-General as the charter of the little man to the British courts of 841 justice. We have all been proud of that. The parliamentary relations sub-committee of the Law Society expressed the desire to have such a charter in these words:Just as it was unthinkable that an accident victim's injuries should be untreated through inability to pay his doctor, so he should not be prevented through lack of funds from pursuing his just remedies at law.Hon. Members on both sides of the House will wholeheartedly subscribe to the principles that are defined in those words.
It is sometimes suggested that people cannot obtain access to the courts as lawyers make too much profit. I thought it was interesting that the parliamentary relations sub-committee referred to experiments carried out to see whether legal aid work was reasonably remunerative and found in two cases that it was being done at a loss. I mention that not out of feeling for the lawyers involved, but for this reason. If we allow that situation to continue, people will be deprived of the opportunity to obtain legal assistance, because if services must be operated at a loss there will be a time limit to the period in which they will be provided.
When the scheme was introduced we were proud of it. At that stage it was estimated that 80 per cent, of the population would be eligible for legal aid. That does not mean free legal aid. Rather, it means legal aid with some contribution.
Will the Solicitor-General tell us in a little more detail how far we shall have caught up by the time we have the package represented by the Bill and the financial regulations that were approved last week? I give that specification as I realise that there will be room under the Act for taking further steps forward by regulation. Will the Solicitor-General indicate where we shall have got to when the Bill is passed into law? I do not say that to denigrate or minimise my welcome to the Bill. I welcome this measure, as do many others. However, we must be careful not to give too optimistic a view of the outcome of a piece of legislation. We must not build up people's hopes unduly. We should always be very careful not to do that.
Secondly, one of the few ways in which we can judge what the cost is likely to be is by having some sort of estimate of 842 how many more people will come in. I do not underestimate the difficulty of getting comparative figures, but at the moment we are not considering like with like. I take the figure of 80 per cent, as being the one that was generally accepted at the time as being the percentage of the whole population which would be entitled to legal aid at the time when the legal scheme was first introduced. Now the best estimate we have is that 70 per cent, of two-parent/two-children families would be eligible for legal aid.
I would think that that is a different basis of calculation and would produce the result not only that we would have a shortfall between the 70 per cent, and the 80 per cent, but that, if we are talking about two-parent/two-children families, that is a smaller section of the community than taking the community as a whole. If I am right about that, I think that the conclusion is that we still have quite a way to go in order to catch up with where we started, and it is as well that we should have the clearest possible indication on that.
Thirdly, perhaps the Solicitor-General could help us on the question of the disregards in relation to capital. The parliamentary relations sub-committee of the Law Society referred to the small nest-eggs that many people have. They have built them up over a long period of time. I am not talking of wealthy people with large capital resources but of the little nest-egg that everyone likes to have, the little something to fall back on, whether it is to pay for a decent burial or to leave to children, or to a husband or wife. For far too long, sums that were far too small have been brought into account in arriving at the contribution.
For a long time, under the legal aid system the amount of capital disregards has been smaller when considering legal aid than when considering supplementary benefit. Perhaps the Solicitor-General will tell us how far we shall have gone with this package towards catching up with those deficiencies. I am also told that there are still cases in which persons with families on supplementary benefit find themselves having to make not only some contribution but a substantial one. Have we caught up with the position where those who are in receipt of supplementary benefit will be entitled to free legal aid? Can we say as a general proposition that 843 we have now reached that position? If so, so much the better.
I am sorry that the hon. Member for Kingston upon Hull, East (Mr. Prescott) is not here. On one occasion I had the pleasure of having him as my opponent in Southport. He so often makes a very useful and practical contribution to our debates in this House. I just want to say that on the Conservative Benches also we are very conscious that there are many situations of the kind that he mentioned. On whichever side of the House we may be, it will always be our wish to endeavour to remove anomalies.
On behalf of the—for the time being—Opposition, I welcome the Bill.
§ 2.14 p.m.
§ Mr. David Weitzman (Hackney, North and Stoke Newington)
Perhaps I may be permitted, Mr. Deputy Speaker, to add just a few words, as my swan song in this House, in support of the Bill. Everybody recognises the need to assist a litigant as much as possible, and we all know how very necessary it was that the provisions of legal aid should be increased as much as possible in order to achieve that object. I am extremely pleased that the Government have been able to introduce the Bill, improving those provisions and giving us the opportunity of allowing the litigant to have his remedy in a proper manner.
I am delighted to have seen my right hon. and learned Friend the Solicitor-General introducing the Bill today, at a time when the Government's demise is about to become a fact. I hope that he will have very many future opportunities to act in this way in a Labour Government.
§ 2.15 p.m.
§ The Solicitor-General
With the leave of the House, Mr. Deputy Speaker, it would be very remiss of me if I did not thank my hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) for his very kind words. On behalf of the whole House, I wish him well in his forthcoming retirement. His contributions to our discussions in this House over a long period of years are on record, and they will not easily be forgotten. I hope that we shall still see him and his contributions in other connections in the years to come.
844 I am grateful to the hon. and learned Member for Southport (Mr. Percival) for the welcome that he gave to the Bill. He asked three pertinent questions. He asked, first, how far the total package of the Bill, plus the regulations introduced last week, has brought the position back to what it was originally intended to be and to what it was assessed as being in 1950. The best comparative figures that we have relate to individuals. I understand that that is not necessarily the most clear indication. It would probably be better to have families, for if we compare individuals, something turns on the proportion at any given time of the very young and the very old in society, and the number of married couples, and so forth. If we are to have the comparative figures, they are probably best derived from individuals, if only because at different times the other figures do not always seem to be available.
In 1950, as the hon. and learned Gentleman said, it was estimated that about 80 per cent, of the population was eligible for inclusion within the legal aid scheme, irrespective of what a person's contribution might be. It seems that by 1973 that proportion had fallen to about 40 per cent, of individuals. It will be recollected that in 1973 the practice began of keeping the limits abreast of inflation, so that after that time the fall was to a great extent arrested. As far as we know, the proportion now is about 40 per cent. It is estimated that the package will raise that again to something over 70 per cent., and it could be as high as 80 per cent. But if we are to be accurate and not raise expectations too high, it would be fairer to say something over 70 per cent.
The hon. and learned Gentleman's second question was whether the capital limits for legal aid are now broadly in line with the capital limits for supplementary benefit. I understand that the answer is that they are, and that the two are about on a level.
Thirdly, the hon. and learned Gentleman asked whether all those who are eligible for supplementary benefit are, broadly speaking, eligible for legal aid. I understand that the answer to that question is "Yes". Certainly it would be very disturbing if the answer were in any doubt. I understand that the answer after this package would be "Yes". We all start off if not with a clean sheet at least 845 with a fresh start and, to whomever it falls to implement the intentions in this package, there is a great deal of hope for the future of those who have to avail themselves of the legal system in order to assert or defend their rights. They will have the opportunity of legal advice and, where necessary, legal representation, and they will not be precluded on financial grounds.
§ Mr. Percival
In addition to thanking the Solicitor-General, I should just like to ask leave of the House to join in the tribute which the Solicitor-General paid to the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman). I do so most warmly.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House.—[Mr. Thomas Cox].
§ Further proceedings postponed, pursuant to Order this day.