§ Mr. WallaceI beg to move, amendment No. 8, in page 13, leave out lines 1 to 5.
Clause 19 concerns the circumstances in which a court may make an award out of the legal aid fund to an unassisted party to defray, in whole or in part, expenses incurred when the other party to the action has been legally aided. One of the preconditions is that the unassisted party would be entitled to expenses against the legally assisted person in any event.
The Bill provides, in clause 19 (3)(b):
in the case of expenses of proceedings in a court of first instance, those proceedings were instituted by the legally assisted person, and the court is satisfied that the unassisted party will suffer severe financial hardship unless the order is made".That provision is what the amendment would exclude.The argument falls into two parts. The first relates to the basic unfairness of the unassisted party being in a relatively advantageous position if proceedings are instituted by someone on legal aid but having no right to have expenses awarded to him out of the fund if he raised the proceedings and they were defended by someone on legal aid when it is unlikely that there would have been any action or defence, if legal aid had not been made available to the defendant. If the unassisted party receives assistance out of the fund, it seems only fair that he should do so if he is a pursuer or a defender.
This matter was raised in another place by Lord Denning, which is perhaps not a name that brings music 788 to Minister's ears. One of the cases that he cited to the other place was an English one — Mr. Thews v. Mr Reeves—which was reported in the 1982 Queen's Bench Division reports. It was a simple case. Mr. Thews had built up a business and agreed to sell it to Mr. Reeves for £50,000 — £5,000 to be paid immediately and regular instalments of £800 to follow. The £5,000 was paid, but there was default on the instalments. Mr. Thews raised a straightforward action for payment.
The action was defended—the commission of some fraud was put forward as the defence. The claim was found to be spurious, but the defendant was given legal aid to pursue that defence. The defence was thrown out, but because the case was instituted by a non-assisted party and it was dealt with at first instance, there was no way in which the court, although it thought that the plaintiff should be awarded out of the fund, could make such an award because the matter had been brought by an unassisted party. It is to get away from that basic unfairness that I propose this amendment. Indeed, paragraph 243 of the report of the Lord Chancellor's Advisory Committee stated:
We continue to support broadening the provisions of the Act to permit successful plaintiffs to receive costs from the fund".That is an English advisory committee, but in a case such as this the basic fairness also applies in Scotland.11.30 pm
The clause also states that the unassisted party will have to suffer financial hardship before the order is made. That in itself goes too far. Subsection (c) allows the court to make an award if it is felt to be
just and equitable in all the circumstances".That is the proper test. The criterion of the unassisted party suffering severe financial hardship is unduly restrictive. Anomalies can arise. A case could go through the Inner House of the Court of Session to the House of Lords, which may feel that some payment should have been made from public funds to the unassisted person. The House of Lords could award expenses for proceedings in the House of Lords, but could not do so in respect of the expenses at first instance because of this clause. That could also lead to anomalies.Here we have an opportunity to make a constructive change in the law that will lead to a fairer system. On two occasions in recent months constituents have told me that they have been the unassisted parties in litigation and have been unsuccessful in obtaining expenses. It can cost people a lot of money, either to pursue their right or to defend it. There is a feeling that if one party is in receipt of legal aid, in some respects that party can hold the other party to ransom. Such a party knows that he has nothing to lose if the action continues to run, whereas the unassisted person, however right his cause, must look over his shoulder at the mounting expenses. Indeed, it could get to the ludicrous position where it is costing a person more to defend his right than it would be if he accepted the case brought against him.
For these reasons, I move the amendment. It will introduce greater equity into the law on legal aid, particularly in relation to unassisted parties.
§ Mr. John MacKayThe circumstances in which a non-legally-aided litigant who is successful against a legally-aided party can obtain payment on his expenses from the legal aid fund are limited, and always have been, since the possibility of such payment was introduced in 1964.
789 The amendment would remove some of these limitations, in particular those which relate to the expenses of first instance proceedings. Succesive Governments have taken the view that where an unassisted person has been brought into court not of his own will, but to defend an action against him raised by an assisted person, then he should be able, if successful, to obtain his expenses from the fund — if otherwise eligible. This seems only fair, since in assisting the pursuer from the fund the board would have taken the view that the pursuer had probabilis causa litigandi — that is, a reasonable prospect of success. If it accepted its share of the responsibility for instituting the action, it should accept liability. However, the position is rather different if the unassisted party instituted proceedings, since then he must take responsibility for the risks of proceeding. Given the continuing need to make the best possible use of resources available for legal aid, I continue to think it is proper to distinguish the two cases.
The amendment would also abolish the provision that an unassisted person's expenses would be met only if he would otherwise suffer severe financial hardship. While I have some sympathy for the position of many unassisted parties, again I do not think the resources of the legal aid fund should be available in cases where there is no real financial need. I hope that with that explanation, the hon. Gentleman will withdraw his amendment.
§ Mr. WallaceI am not convinced by what the Minister said. There is a basic question of equity at stake. The Minister said that an unassisted party which is a defender is entitled in some circumstances to have his expenses covered by the fund, but that if, through obtaining legal help, he incurs considerable expense to pursue his right and does so successfully, he is not entitled to claim expenses from the fund. That seems inequitable and I am not convinced by the Minister's explanation that in some way it is equitable.
§ Amendment negatived.