§ 3.37 p.m.
§ LORD ROCHDALE rose to draw attention to the increased responsibilities of employers of labour in respect of accidental injury to employees, to the increase in Common Law actions in respect of such accidents, and in particular to the effects of certain provisions of the Legal Aid and Advice Act, 1949; and to move for Papers. The noble Lord said: My Lords, the Motion that I put before you this afternoon concerns industrial accidents. As I shall try to put to your Lordships later on, there are certain wider aspects of this matter, but before I embark on what I want to say I would make my own position clear. I hope that nothing I say can possibly be construed by anyone as suggesting that I am trying to protect employers of labour who do not deserve to be protected, or to make it easier for employers of labour to evade their full and proper responsibilities. By exactly the same token, my purpose is not to deny to employees who for one reason or another, probably through no fault of their own, have suffered injury their proper compensation, which will help to make amends for the injury they have suffered. My Motion is not of that kind and I want to underline that point from the very beginning. What I want to do is to focus the attention of your Lordships on what seems to me to be a definite injustice that needs to be put right. I speak with some diffidence, because the Motion is concerned largely with legal matters and I am a complete layman in the law; but I hope that my legal friends will bear with me if I make mistakes in their sphere.
§ This matter is not something that has come into existence in the last month or two. For some time there has been a growing concern amongst employers of labour at the increased burden laid upon them by the claims of employees in respect of accidents met with in the course of their employment. I am well aware that there should be no accidents at all, and that they could be minimised by appropriate expenditure on proper appliances and by having the best forms of management and so on, and that a great contribution can be made by responsible and careful employees. But here, as in everything else, we are still a long way from perfection. The result, therefore, is 130 that we have accidents, and we have to deal with them.
§ If your Lordships have read the last Report of the Chief Inspector of Factories, that for the year 1954 (Command Paper 9605), published in November of last year, you will probably have noticed that although, comparing 1954 with 1953, there was an increase of 1.8 per cent. in the number of factory accidents, over the last five years there has been a small net decrease in the number of accidents; and in the same period of five years there was a small decrease in the number of accidents per thousand employees. That is not an unsatisfactory position, bearing in mind the tremendous increase in activity in industry as a whole. Taking the same period of five years, however, according to the best information that I have been able to obtain—and it comes from a very authoritative source—the increase in claims against employers has been of the order of 75 per cent., which compares very differently with the slight decrease in actual accidents.
In number. There seems to be a real danger that the National Insurance (Industrial Injuries) Act, 1946, may come to be regarded not as the normal remedy for the victims of industrial accidents but as a mere adjunct to a claim pressed directly against the employer under the threat of civil action for damages. There has been recent legislation, and the decisions of the courts arising out of that legislation seem to me to have established the position that the employer to-day is responsible, wholly or in part, for virtually all the risks to which an employee may be exposed during t he course of his employment. There can be few cases where an accident is not in some way originally due to some person's negligence; but unless that negligence can be proved to be wholly or solely that of a third party not employed by the employer in question, or that of the injured employee himself, the employer is new held responsible and must cover by private insurance at his own expense all the risks involved.
I am aware that whereas previously, under the Workmen's Compensation Acts, it was a question of an employee 131 choosing whether he would claim under the Acts, on the one hand, or make a claim under Common Law, on the other, under the Act of 1946, to which I have referred, he can now employ both. What he usually does is to get all he possibly can under National Insurance, and then follow on with a claim for damages as well. I am also aware that the Act provides that in assessing damages, if there are any, the court can disallow part of the compensation that the man has received under National Insurance. So far is it goes, that is all right. But the most important thing there, as I shall show in a moment, is that the vast majority of these cases never get into court at all, with the result that that part of the Act does not apply in the context to which I am referring. As a result, National Insurance benefit, which was presumably meant to be a comprehensive cover, has become subsidiary and in no way relieves the employer of the responsibility which, as I have said, now rests entirely upon him.
When I referred a moment ago to recent legislation I had in mind, first, the Law Reform (Personal Injuries) Act, 1943, and, secondly the Law Reform (Contributory Negligence) Act, 1945. I am not going to say much about the Act of 1943, which of course abolished the old doctrine of common employment, except this: that with the present high demand for labour, which we all know exists in the industrial world, it is almost inconceivable that an employer, however careful he may be in the selection of those whom he takes on to work for him, may not at some time, perhaps unwittingly, employ someone—either the very old, or perhaps the very young, or someone in between—who, if not to be regarded as entirely careless or irresponsible, at any rate, has not had experience of industrial hazards and is unsuitable for employment anywhere where the exercise of care and common sense is necessary for the safety of his colleagues. Yet if one of those people, by his action, becomes the sole cause of an accident to a fellow-employee, responsibility rests wholly on the employer of both of them; and that is a risk which no employer can reasonably foresee or wholly guard against.
The Law Reform (Contributory Negligence) Act, 1945, was concerned with the negligence of the injured employee 132 himself. Until then, if the employee's own negligence was even partly the cause of the accident the employer could not be held responsible for the injury suffered. But the effect of this Act is that the court must decide to what extent the employee's negligence was to blame, and the balance of responsibility lies at the door of the employer. I would say that that is fair enough, and I certainly do not wish to impugn either of these Acts to which I have referred—obviously, on balance, they are beneficial, and they are with us to stay. But by accepting the possibility that an employer could be held even partly responsible for an accident due primarily to the negligence of an injured employee, surely the Act of 1945 opened the door for claims; and in the present circumstances the mere existence of a claim (as I hope to show) results in damage to the employer which may be far from just, but which he has little or no opportunity of avoiding.
There is another factor which has greatly extended the responsibility of the employers. That is the increasing tendency to found claims not on the employer's duties and obligations as defined by the Factories Acts but on his more general obligations under Common Law. I suppose every responsible and conscientious employer (and I should like to make it quite clear that I hold no brief for any employer who does not come within that category) will do all he can, with the advice and assistance of the factory inspectorate—and I should like to pay tribute to them for the work and help that they give—to equip himself to meet all his obligations under the Factories Acts. If he is a good employer he will probably, to his own advantage, do a great deal more. Indeed, I think it would be fair to say that it would be folly if he did not, especially when one considers the tremendous competition for labour in the present circumstance of full or overfull employment. But if an accident happens which can fairly be attributed to his neglect of these regulations, then it is obviously his own fault, and he is not entitled to any particular sympathy.
When we come to the Common Law claims, however, the position is obviously entirely different. Here there is only a general obligation, and how that general obligation may apply on his particular factory floor it is almost impossible for 133 an employer to foresee. Take the platform off which no one has ever slipped; the step over which no one has ever stumbled. No employer or no employee could possibly think that the platform or the step constituted a risk, any more than any of us would think that his front door step constituted a risk. They are certainly not covered by any provision of the Factories Acts. But once an employee has slipped over the step or slipped off the platform a risk has been demonstrated, and if the court—should it come to a court action—so decides, he may be held responsible for something which in practice he could not possibly have foreseen or guarded against.
Nearly every injured employee making a claim these days does so, at least in the alternative, under Common Law. It may easily be a case which the best of employers, with the very best intentions, finds it almost impossible to defend. That puts the employers in an extremely difficult position, and I have often heard it said, perhaps in exasperation, how much better it would have been for them if it had been possible to have some precise statutory code covering all the employers' obligations in this sphere. But attractive as that idea may sound on the face of things, I recognise that it is obviously impossible. In the first place, it would have to overrule the Common Law, which wipes it out straight away; and in the second place, if it were going to be really comprehensive it would be so complicated that it would not help the employer at all.
We are therefore left with this situation. So long as an accident is attributable in any degree to negligence—as, of course, in one way or another, nearly all accidents are—and unless that negligence can be shown to be wholly and solely that of a total outsider or of the injured employee himself, the employer, whether or not there was anything that could possibly be construed as negligence on his part, is responsible and may be faced with a claim for damages. A claim for damages obviously implies the threat of action in the civil courts; that is the only sanction underlying such a claim. Once an employee decides to make a claim directly against his employer, the employee at that moment is a potential plaintiff, and his employer a potential defendant. In the vast majority of cases the matter will never come to court at 134 all; it is settled by negotiation long before. I have it from one big insurance company that something like 95 per cent. of these claims are settled without being brought into court. But, of course, the strength of the claimant's position in negotiating such a settlement out of court depends on, and in fact equals, his potential strength as a plaintiff in the civil courts.
That brings me to what I believe is perhaps the core of the whole matter. An industrial employee suing his employer will apply for assistance under the Legal Aid and Advice Act, and will sue, if he has to come to court, as an assisted person. The employer, or his insurance company acting on his behalf, will defend without such assistance. I want to make it absolutely clear that I am not in any way questioning the need for the Act, nor its value in securing justice for great numbers of people whose chance would have been slight or non-existent. Nor am I questioning or trying to repeat or add to criticism which one has heard from time to time of the way in which the Act is administered, or the way in which local committees have sometimes exercised their judgment in the granting or withholding of legal aid to applicants. Nor is it my particular wish to draw attention to what might be regarded as frivolous cases which are, by the operation of the Act, maintained by the State at the expense of the taxpayer. But there are other aspects of the Act, the working of which I believe is open to serious criticism and which are particularly relevant to the point that I have in mind.
The liability of an assisted person under the Act is strictly limited—indeed, the whole purpose of the Act is that no-one need be deterred from seeking justice for fear of incurring expenditure which he cannot reasonably sustain. An assisted person, therefore, goes into his case knowing that, win or lose, he will not be required to pay out a sum which he cannot afford. But this is far from being the case with the defendant who is not assisted under the Act. His risks in the action are not only those of the ordinary defendant but are much greater, because, even if his defence is successful and he is not ordered to pay any damages, he knows that he cannot, in practice, recover his costs against an unsuccessful plaintiff who, by definition, 135 is unable to pay. So for that employer it really is a case of, "Heads you win, tails I lose". The result of that is that, whatever the intrinsic merits of the threatened action, the claimant is, to say the least of it, in an extremely strong bargaining position, whereas the employer or his insurance company—and I want to underline that little word "or" to which I will come back in a minute—unless the claim is a very large one or almost totally lacking in merit, is obviously tempted to cut his losses and to settle out of court a claim which might cost him in any event a great deal to defend. Can we therefore wonder that a great number—I mentioned 95 per cent.—of these claims are settled out of court?
I want now to come back to what I said just now—"the employer or his insurance company"—because, in point of fact, every employer, having inevitably covered himself by his private insurance against the risk of these claims, has surrendered to the insurance company the right to settle or defend on his behalf any claims made against him. The insurance company, being a commercial concern, very rightly cannot be blamed for taking what might be regarded as a hard-headed view of the matter. The insurance company cannot be expected to share the righteous indignation of the employer against an outrageous claim, nor is the insurance company concerned with the adverse effect which an admission of liability—and I should have thought that a settlement out of court was tantamount to some admission of liability—may have on the reputation of the employer, who may, in fact, be an exemplary employer in his care of his employees.
The insurance company is concerned with only one thing: to weigh the financial advantages or disadvantages to itself of each case. For the reason I have given, over and over again the advantage lies in settling out of court without much regard to the legal merits of the claim. I hope my noble friends who are in the insurance business will not think I am being unfair to them—that is not my intention at all. Of course, we cannot do without insurance companies, who are a great source of strength and support to us; but the fact remains that that situation is the subject of almost universal complaint among industrial employers. I could cite a great many examples to 136 illustrate that, but I will confine myself to one or two.
I should like to cite the case of an employee working in a mill who sustained rather severe injuries to one hand whilst lubricating moving parts of a machine—a very common occurrence. Unfortunately—and, of course, one's sympathies obviously go entirely to the man—his hand had to be amputated. The important part of this case was that the machinery was correctly guarded and there was a prominent notice beside the machine warning employees not to lubricate while the machinery was in motion. More important still, the factory inspector was completely satisfied that everything that the employer had done was correct under the Factories Act, but, unfortunately, the man disregarded his instructions; he oiled the machine when it was running and his hand was caught in the machine.
What happened? I am not certain of the original amount of the claim but, after very long negotiations, the insurance company paid out the sum of £750 without going to the court, and the question of liability—this is an important point—was never legally decided. It may be said, "That is too bad, but the insurance company paid; so that is that". But, of course, the matter does not finish there. As I have already reminded your Lordships, insurance companies are commercial concerns and cannot go on incurring increased risks without requiring, obviously, increased premiums. Also, do not let us forget that even in successfully defended cases insurance companies themselves have considerable costs to meet.
I should like to give your Lordships another example. This is a case that started about three years ago. A man was injured and he first of all applied through his union—and they put him on to the union's solicitors—for a legal aid certificate. It was disputed, the solicitors realised that there were no grounds for a claim and they dropped it. A little later on the man again applied through other solicitors for a legal aid certificate. He was not granted the certificate and those solicitors dropped it. The third time he applied through another lot of solicitors, and on that particular occasion he managed to get a legal aid certificate. The case was brought into court 137 and the action was lost. I will not go into all the other details of the case except to say that the judge, to mark his severe disapproval of certain aspects of the case, ordered the claimant, who incidentally at that time was earning £15 a week, to pay £60 towards the insurance company's costs. That £60 yet has to be paid to the insurance company. But the point of this particular example is that the actual costs incurred by the insurance company will certainly be of the order of £400. The obvious result is that premium charges for this type of insurance have risen and are still rising.
Let me give your Lordships some idea of the order of magnitude by which premiums rise. I have a case here of a firm which was paying a premium of £60 a year. It was subjected to a claim for £3,000. While that claim was pending, the next premium fell due and the firm was required to pay as an annual premium not £60 but £400, a very substantial increase indeed. During the following year the claim was settled eventually for £1,000, and the next time the premium fell due it was raised again to £475. So there was an increase in premium from £60 to £475. In another case, a firm was subjected to no claims at all during a five-year period, and yet at the end of that period the premium which that company was paying for this form of insurance had gone up by 80 per cent. I have another important case in which an insurance company refused altogether to meet risks. In 1952, a most responsible company, which had for thirty years insured the whole of an industry in the Midlands, in view of its experience with claims expressed its inability at that time to cover the industry any longer against Common Law liability.
In another and very recent case, one of the big insurance companies had covered a certain North country firm for every kind of risk for the past five years and was then for the first time presented with a Common Law claim by an injured employee. The claim is still undecided; but at the next renewal date the insurance company has refused to renew on any terms its cover on employers' liability. That may be an exceptional case, but it illustrates the point I am making—namely, the position of the employer. He must insure and he must do so on the 138 terms offered him by the insurance company. He has little say in the handling of claims, but suffers doubly as a result of them: first, by the payment of steadily increasing premiums for insurance; and, secondly, as I have already said, by the damage to his reputation as an employer which necessarily results from the implied admission of liability. In these days of very full employment, this is a matter which is of no little concern to any industrial company. It may be vital to it. These are real and growing burdens with which employers of labour and industry are saddled.
I should possibly be criticised by some as not giving the full picture if I did not make some reference to the position of the trade unions in this matter. I have heard it said by some employers that the unions must bear some share of the responsibility for the present position. One sometimes hears that irresponsible claims are put forward with union backing, or perhaps on the advice of a union's solicitors. My own opinion is that a matter of this type has to be approached with the greatest caution. After all, a trade union is a voluntary body pledged to help its members in every way. A voluntary body, whether of employers or employees, lives and retains the loyalty of its members by the individual service it can give to them, quite apart from its own collective responsibility in a wider sphere. I think it is therefore unquestionably reasonable to expect a union, if one of its members feels that he has a grievance of this sort, to support him in an effort to obtain redress. All I want to add to that is that I think we should also remember that the unions were helping their members in this way long before anyone thought of legal aid; and in fact substantial sums of money have been paid out of union funds in payment of heavy costs awarded to employers who have successfully defended actions in the courts. So far as the position of the unions goes in this matter I should prefer to leave it at that.
My Lords, the question is, what are the remedies? Before I make any precise suggestions as to the remedies in this matter, I would say that I believe that, in part, the trouble is one which can be cured only by the education of public opinion. What one may perhaps call claim-mindedness, the urge to make a good thing out of a chance misfortune, 139 is perhaps a disease of the age. A man feels, with a greater or less degree of justice, that he has suffered and is entitled to some compensation; and he is not particular on whom, or with what justice, the liability is laid—somebody has got to find the money, whether it is the insurance company or the employer. This attitude of mind is one from which not only employers of labour suffer today; I believe that probably doctors suffer from it; perhaps local authorities suffer from it; the authorities of the National Health Service probably suffer from it, perhaps more heavily than even employers of labour. It may be that the only real cure is a change in public opinion reflected in a stiffening attitude in the courts. That is a wide and a not very tangible remedy, but I believe that there are some specific remedies which it is within the power of Parliament to carry out and which would help to minimise these troubles.
The last thing that any one of us would want to do is to undo what is the essential purpose of the Legal Aid and Advice Act: that is, to enable every man to seek justice in the courts undeterred by the threat of expenditure which he cannot afford. But I believe there are changes that could be made: first, still further to ensure that unworthy cases did not go forward with the assistance of State funds; and secondly, to ensure that where a case goes forward and fails, the successful defendant should not be allowed to suffer from the action of the State which, however well-intentioned, has in fact supported unsuccessfully a case against him—and, indeed, has done so with taxes which he himself has contributed.
The first purpose, to limit still further the possibility of the State supporting unworthy cases, is, in a way, perhaps the least important in the present context—for two reasons. Whatever may have been the case previously, my information is that there is little reason to suppose that to-day legal aid is often granted without a thorough scrutiny of the merits of the case. On the other hand, and perhaps more important, an employee does not generally apply for legal aid until he has decided to go to the court; and in the great majority of cases, as I have already said, the matter does not go that far, because the claim is settled by negotiation, and though the employee negotiates 140 as a potentially assisted plaintiff, he may not yet have applied for assistance under the Act. While, therefore, it is obviously desirable to ensure that unworthy cases do not go forward with State assistance, action directed to this end may not do very much to ease the lot of the employer.
I should like to ask, however—and perhaps the noble and learned Viscount the Lord Chancellor may be able to answer this question—why, when a person applies to the legal aid committee for assistance under the Act, the other party, the potential defendant, should not be given notice of the application and allowed to show cause against it. As your Lordships no doubt know, there is precedent for this, because such a provision is included in the Scottish Act, and I can see no objection on principle to it. Nor can I see any reason why a right granted to a defendant in Scotland should not also be accorded to his brother employer on this side of the Border. I should have thought that it would have been welcomed by the legal aid committees in their sometimes difficult task of deciding whether or not assistance should be granted. Many of the cases and examples that I have seen when looking into this matter would seem to bear out that point.
The other possibility which might help is one to which my noble friend Lord Hailsham, referred in a supplementary question that he asked the Lord Chancellor on January 31 of this year, when he asked whether it would be possible for the legal advice part of the Act to be implemented. I read the reply of the noble and learned Viscount, and I was much encouraged. I gather that Her Majesty's Government are under pledge to introduce that part of the Act during the life of the present Parliament. But it may be that my noble friend Lord Hailsham may have something further to say on that later in the debate.
This brings me to my main objective, which I think is the key to the problem. Is it right that an unassisted party should be penalised by a case unsuccessfully brought against him with State aid? I should have thought that this would be regarded as a palpable injustice. I was interested to see that it was an injustice which was pointed out at the time that the Act (then the Bill) was going through another place in 1949, and the then 141 Attorney-General described the existing provisions of the Act asthe solution which will result, I do not say in no injustice, but in the least injustice.My Lords, I would suggest that this injustice has, in fact, attained proportions, directly, in the courts, and indirectly, in the cases that have never come into the courts, which were never contemplated when the matter was being considered in 1949; and it should now be put right. If, as we all agree, it is true that no person should be deterred from seeking justice by the fear of incurring expenses which he cannot afford, surely it must also be equally true that no person, whatever his means, should be deterred from entering a just defence by the knowledge that his defence, even if successful, will cost him more than an unjust admission of liability. As I see it, that is really the position to-day.
I agree that the plaintiff, whom the State has assisted in his case, cannot and should not be required to find the defendant's costs if the defendant wins his case; and the only logical answer, therefore, is that the State, having assisted the unsuccessful plaintiff, must also be chargeable with costs if he fails. I am going to ask the noble and learned Viscount the Lord Chancellor to consider whether it would not be possible for the court to be given power to award costs to a successful unassisted defendant against the fund which has paid the costs of the unsuccessful plaintiff. I realise that there are difficulties in the way, and that many people in different parts have canvassed this possibility from time to time. I submit, however, that here is something to which a solution really must be found. As I have said, it is a matter to which I attach the greatest importance. Nothing is further from my mind than to try to weaken the working of the Legal Aid and Advice Act. All I want to do is to try to strengthen it and make it more complete; but I cannot believe that any such measure of public justice is the stronger if the justice which is procures is partial, and if it leaves in the minds of any of Her Majesty's subjects a feeling of having suffered injustice, or, as one employer wrote to me two days ago, a feeling of suffering from something almost amounting to blackmail, by the deliberate act of the State.
142 My Lords, I am afraid that I have taken a very long time, and come a very long way from the narrow subject of employers' liability; but I believe that a solution lies in the direction to which I have pointed. I realise that it may have very much wider implications in other spheres and if that is so I hope that it will be discussed on the widest possible basis. I beg to move for Papers.
§ 4.22 p.m.
§ LORD MILNER OF LEEDS
My Lords, the noble Lord, Lord Rochdale, has raised a number of questions of some importance which this House might well discuss, as your Lordships will agree. Needless to say, we accept the assurances of the noble Lord, Lord Rochdale, in his opening passage and concluding words, that he has no wish to deter those who have just rights from pursuing them; nor, as I understand it, has he any wish to deter those whose means do not otherwise permit them to pursue their rights from doing so through lack of means.
The noble Lord has quoted a number of figures. Frankly, I am not in a position to deal with them, but there are one or two points which perhaps I might deal with in preliminary fashion. I understood the noble Lord to say that industrial injury benefit was now subsidiary to the Common Law claim. I really cannot accept that. There must, surely, be a great many more injured persons, some of whom may have claims for negligence, drawing industrial injury benefit, than those who pursue a claim for negligence; at least, I should certainly have thought so. Then the noble Lord raised the question of costs being made payable by unsuccessful plaintiffs to successful defendants. It is within the province of the court to order an unsuccessful plaintiff to pay costs or to pay such proportion of the costs as the court thinks he might properly be ordered to pay, having regard to his means. Admittedly ex hypo-thesi, the applicant for legal aid is a person of small means who has to have a disposable income of less than £420 a year, and no doubt courts have regard to that fact, and in my experience they do not frequently make an order for payment of costs by an unsuccessful plaintiff.
The noble Lord then raised the point that insurance companies prefer to settle rather than fight a case. I know of insurance companies who do not adopt that 143 practice, although there may be some who, on economic grounds, think it might prove cheaper to settle some cases out of court where, in their view, they have an adequate defence. Other insurance companies of which I know make a stand against that kind of thing, as they are perfectly entitled to do. Where, in their view, there is a reasonable chance of a successful defence, they do not hesitate to fight a case rather than settle it in the fashion described by the noble Lord. It is quite impossible to draw any general principle from the cases which the noble Lord indicated, as the facts are not wholly before us; but the noble Lord appeared to be criticising the decision of the courts in some of the cases rather than criticising the procedure or the law, which is a matter for Parliament.
Owing to the undoubted increase in Common Law actions, it is true that increased responsibilities are being placed upon employers. As we all know, and as Her Majesty's Government rightly claim, there are now more people employed in this country in one capacity or another than has ever before been the case in our history. Obviously, with more people in employment more responsibility must fall on employers, who, either themselves or through insurance companies, have to provide cover for claims from that increased number of employees. Secondly, as the noble Lord himself said, there is much greater activity, much more machinery and possibly much greater danger of accidental injury than there was in former days. To that extent, therefore, the facts make it certain that, other things being equal, there may be more claims.
My Lords, I hesitate to interrupt the noble Lord—he did not interrupt me—but, to complete the picture he drew I should like to remind him that though, as he said, there is more of "this and that," there are fewer accidents.
§ LORD MILNER OF LEEDS
My Lords, if that be so, so much the better, and I am very glad to hear it. To some extent that seems to have disposed of the noble Lord's claim. I was going on to say that, as the noble Lord said, the Law Reform (Contributory Negligence) Act provided for an apportionment of liability in cases of contributory negligence. That may have resulted in more 144 cases being brought. On the other hand, it may well have reduced the liability of employers. In the old days, when there was the defence of contributory negligence, perhaps there was a tendency for courts to give a verdict for a substantial amount and to disregard the contributory element. Nowadays, thanks to that particular Act, the responsibility may be divided, in such proportion as the court may think fit, between the plaintiff who has contributed to his own injury and the employer. To that extent, therefore, the responsibility on the employer may be less than formerly was the case.
The noble Lord also mentioned that the Law Reform (Personal Injuries) Act abolished the defence of common employment. I doubt whether that has had much effect, as I do not believe that that defence was put up very much in former days. It may be that, to some extent, successful actions are now brought where previously that defence might have prevailed. Apart from those factual or legislative provisions, it is not at all clear that there is an increase in Common Law actions in respect of accidents to employees; and, in my submission, it is still less clear that the Legal Aid and Advice Act has contributed very materially to any such increase. The total proceedings in the King's Bench Division in 1938 numbered some 83,000, whereas in 1954 and 1955 the figures were 115,000 and 116,000 respectively. So it will be seen that those actions in rather less than twenty years have increased by less than 50 per cent. I should have thought that having regard to the many developments that have taken place in so many different directions, that was not an undue increase. There appear to be no figures indicating what proportion of the increase is due to the increased number—if there be an increase in the number—of Common Law actions against employers. As we all know, there has been a great increase in running down cases and actions of that kind, which may well make up the difference.
Since January of this year, the Law Society (who have been good enough to give me these figures, and who, of course, have a responsibility under the ægis of the noble and learned Viscount who sits on the Woolsack for the Legal Aid Scheme) have endeavoured to separate claims in respect of alleged negligence leading to accidents at work from other 145 Common Law claims. There were 383 such cases—that is to say, claims in respect of injuries received in accidents arising from alleged negligence at work—between January 1, 1956, and March 31, out of a total number of 4,832 legal aid certificates granted throughout the country. Those are the figures for the whole of the three months in respect of certificates granted to applicants who desired to bring actions for damages resulting from injuries caused by alleged negligence while at work. Out of a total of 4,832 certificates granted there were 383 such cases in the three months I have mentioned.
§ VISCOUNT HAILSHAM
Could the noble Lord say how many of the 4,800 certificates he has mentioned were certificates granted in matrimonial causes? If he can do that, I think it would enable us to evaluate his figures more precisely.
§ LORD MILNER OF LEEDS
It is true that there were a great number of certificates granted in respect of matrimonial cases. But does that affect the number?
§ VISCOUNT HAILSHAM
If I may say so, it clearly affects the mathematical proportion between employers' liability claims and other Common Law claims in respect of which certificates are granted. My impression is—and I wondered whether the noble Lord's figures would support it—that legal aid certificates are given in an outstandingly large proportion of cases relating to matrimonial disputes, and I suggest that these ought really to be excluded from the figure if a just proportion is to be arrived at.
§ LORD MILNER OF LEEDS
The noble Viscount may be right in that view. Let us take the figure of 383. That represents the number of cases throughout the country in three months. I would submit to your Lordships that that is not a very large number. It means something like 1,500 in the course of the year—1,500 legal aid certificates granted in respect of claims for damages arising out of injuries sustained in accidents at work. I suggest that that is comparatively a very small number indeed.
Furthermore, the total number of all kinds of certificates which were being granted, curiously enough, is decreasing year by year. Whereas in 1951–52 some 38,000 such certificates were granted (including, I agree, certificates in respect 146 of matrimonial causes) only 28,000 were granted in 1953–54 and 25,000 in 1954–55. This indicates a considerable falling off of applications for such certificates. And, of course, such applications shortly after the war were very numerous. It may be that the extension of the Legal Aid Act to the county courts will result in an increase in the total number of such certificates, but that is not at all certain, because a number of the actions which were formerly brought in the High Court may conceivably now be brought in the county court. We can only wait and see the results.
I do not know whether or not the noble Lord intended—indeed I am sure he did not—to reflect in any way on the operation of the Legal Aid and Advice Act. He mentioned the work of the certifying committees. I have sat on more than one of these committees. Without question, these committees look into the facts as put before them, and it is their duly to determine whether it is reasonable on the facts that a certificate should be granted. The noble Lord suggested that the prospective defendant, if I may so call him—that is to say, the employer—should have the opportunity also to put forward his side of the case. I do not really think that that would be very practical. It would mean that the certifying committee were to some extent prejudging the whole issue. In point of fact, 91 per cent. of actions in respect of which certificates are granted are successful. That would appear to indicate that local committees give serious consideration to the applicants' claims and that their judgment in the majority of cases is correct. It is also worthy of note—and the noble Lord referred to the position of trade unions—that the form a person has to fill up to obtain legal aid contains a paragraph in which the applicant must give particulars of his trade union, his friendly society, his ex-Service organisation, or whatever other body it might be, or any other authority which might conceivably give him financial aid; and it is only on the Committee being satisfied that, every reasonable effort having been made, help is not coming from any of those quarters, that they are entitled to give an applicant aid under the Legal Aid Scheme.
I really think one ought to try to look at this from another angle. Admittedly, none of us would dispute that the present 147 figures of accidents in industry are far too high, and that there is a real challenge to employers, to trade unions, to the Government Departments concerned, particularly to the Factory Department of the Ministry of Labour, and to employees, to endeavour to minimise these accidents. In the latest figures given in the Report which the noble Lord mentioned, accidents reported under the Factories Act alone account for 700 men and women killed in industry in the year ended March 31, 1954, and 180,000 injured. The total number of days lost to industry through industrial injuries is little short of 20 million man-days a year—a very great loss to the nation. The accident rate has changed very little in recent years.
For many years past, and from many quarters, particularly from the Trades Union Congress, a number of points have been pressed which might help materially to reduce accidents at work and hence reduce the responsibility of employers. For example, it has been urged—I think with justification—that there is great need for increasing the resources of the Factory Department of the Ministry of Labour, including a substantial increase in the strength of the factory inspectorate. According to the Factories Act Report, the strength of that inspectorate a year ago was 361 inspectors for the whole of the country. Obviously, that number is inadequate. Factory inspectors have many other duties to perform in connection with public health and conditions of one sort and another, and 361 is quite an inadequate number of inspectors. It is unreasonable to expect them to examine the vast quantity of machinery which is now to be found in our factories throughout the country. That is one step which the Government might well take: to increase substantially—to double, at least—the number of factory inspectors.
Then there is the need for increasing the number of joint works safety committees. They, of course, exist on a voluntary basis. There is also a great need for better training and supervision of young persons entering industry. Apparently there is a high accident rate among young persons and that is a matter for particular concern. I believe that at present there is a special committee of the Ministry of Labour sitting on the general question of greater freedom from 148 industrial accidents. I hope that when it reports its report may be of value. It is in the interests of employers to ensure the safest possible working conditions. That would decrease their responsibility both financially and otherwise, and would obviously reduce the necessity for legal proceedings or for recourse to the Legal Aid Act.
That is almost all that I can usefully say at this juncture. I was not fully aware of what the noble Lord, Lord Rochdale, was going to deal with, and I should like to mention one other matter. There is considerable complaint that the court lists in the Queen's Bench Division are run in such a way as to cause a great deal of inconvenience and expense, which in these cases might be an expense to employers, because of an apparent difficulty or lack of system in fixing cases on a definite day. In the Divorce Division it is generally possible to ascertain the approximate date on which a case is to be heard. Frequently, indeed, one can fix that date many weeks beforehand. In the Queen's Bench Division that does not seem to be so, and in the majority of cases it is impossible to fix hearing dates. If something could be done in that direction—and I call the attention of the noble and learned Viscount who sits on the Woolsack particularly to this point—it would result in some alleviation of the expense to which the present system frequently gives rise. The noble Lord, Lord Rochdale, has rendered a service in raising this subject to-day, and I hope that the matters to which he has referred will attract the attention they deserve and will result in the taking of some action in some of the directions I have indicated.
§ 4.43 p.m.
My Lords, the noble Lord who has moved this Motion is to be congratulated on having raised a matter of considerable importance. It is a difficult matter to speak upon because it cannot be discussed within a narrow compass: on the contrary, it covers a wide field. Therefore, I will comment on only one or two aspects of the subject. So far as these unfortunate accidents are concerned, no words of mine or of anyone else will have any effect upon them. These accidents will be minimised, in number and in gravity, only if people take more care and when better and more 149 scientific safety devices are invented. It may be that Acts of Parliament and regulations will have some small effect, but, generally speaking, it is acts and not words that will count.
So far as the Legal Aid and Advice Act is concerned, this is a matter of almost universal interest. The noble Lord raised an important point when he talked about the unfortunate position of successful defendants who are not legally aided by the State. I feel that that raises the whole question of justice in this country. From time to time all of us have attended functions at which speeches have been made about the impartiality and greatness of British justice, and we have been told that justice is open to everyone. I think that we are all proud of the courts in this country, but does that show the whole picture? An eminent man once said that justice in England was open to everyone, like the Ritz Hotel. I think to-day that this should be phrased in another way: justice is open to everyone who cannot afford to pay for it.
Let us look at this matter from a practical point of view, from the layman's point of view, and not from the point of view of some other Members of your Lordships' House whom I will not identify but whom I see with great pleasure. Going to law is one of the misfortunes of mankind. If you break your neck, you go to Harley Street, and you will hew passed on from one surgeon to another surgeon, to a physician, to a radiologist and then to an X-ray specialist; and eventually you will come round to the medical man who saw you in the first instance. That is a very amateur way of spending money compared to getting involved with the law. I want to make it clear that when I am talking about the law in this debate, I am referring to contentious actions and not to non-contentious actions.
What is the remedy? I do not know, but I am going to make a suggestion which will probably qualify me for the lunatic asylum. There are 23.53 million people in this country who are insurable under the National Health Scheme. If we insure against ill-health, why should we not insure against the equal peril of getting involved with the law? Even making a handsome allowance for those people who are sick or unemployed, there are still over 20 million insurance cards 150 in active operation—that is to say, 20 million stamps are affixed every week. I suggest that a penny a week should be added compulsorily to the charge for every stamp, to protect us against getting into the hands of the law. A penny a week is 4s. 4d. a year, and if we multiply 4s. 4d. by 20 million, the answer is about £4½ million a year. I am not in favour of restricting legal aid: I want it largely expanded and made available, either entirely or partly, to everyone who gets into the hands of the law.
There are certain objections which I can foresee. In the first place, it is said that there would be a flood of unworthy applications. But there always are these nervous fears beforehand. When I was a young, man, a great many years ago—more years ago than I care to remember, and more years than many noble Lords can remember—a Bill was introduced whereby a man was to be allowed to marry his deceased wife's sister. People then said that in no circumstances must that Bill be allowed to become law, because after it became an Act husbands all over the country would be murdering their wives to marry their more attractive sisters-in-law. That Act has been on the Statute Book for nearly fifty years, and I am not aware of anybody who has been induced to murder his wife for that reason, though no doubt many men have murdered their wives, or would like to murder them, for other reasons. No doubt if we have an enormous extension of legal aid there will be a great flood of applications in the early stages. Later on, that will be smoothed out and everything will work quite happily.
Then it may be said that if we make insurance against getting into the hands of the law compulsory, there will be many people who will never get any benefit from it. But they ought to be very glad of that. Many millions of people who buy insurance stamps to-day get no medical benefits at all, for the simple reason that, by the grace of Providence, they enjoy good health and find no necessity either to call in the doctor or to go to hospital. That is merely a suggestion that I brow out. We are insuring this country against ill-health, unemployment and old age. Why should we not insure against one of the greatest misfortunes of mankind—namely, getting into the hands of the law?
§ 5.0 p.m.
My Lords, I do not think there is much that I can add to what has been said by the noble Lord who moved this Motion, but there are one or two points I should like to make on the insurance side, and I should tell your Lordships that I am closely associated with insurance in this country and therefore have an interest in what I say. I am sorry in some ways that the noble Lord has raised, as I think, two subjects in one Motion. The two subjects are that which he spoke of in the first part of his speech, namely, the rise in claims for compensation under Common Law generally, and the cost of those claims on the economy of the country, as a whole, as I understood it, by reason of the rise in premiums to which people who had suffered these claims were subjected by insurance companies—I will come to that point in a moment—and secondly, in the latter part of his speech the noble Lord raised the question of legal aid, and legal aid, in particular, in that context.
The claims made on employers, and therefore on their insurance companies, in respect of compensation are, of course, long-standing, and it is difficult to say that they have increased greatly by reason of legal aid having been provided to successful plaintiffs, whether those cases got into court or whether they were settled out of court. The fact of the matter is that the compensation was granted by courts, and therefore, as a measure of that, the compensations for which insurance companies will settle out of court have grown both in size and in number, for many of the reasons that the noble Lord, Lord Milner of Leeds, mentioned. But it is not at all clear that those claims, either in volume or in number, have been substantially increased by reason of legal aid being provided to plaintiffs.
It is perfectly manifest (and here I should like to emphasise what the noble Lord, Lord Rochdale, began his speech by saying) that the insurance world in this country welcomes the provision of legal aid for impecunious plaintiffs, both for compensation and, of course, for any of the other cases to which legal aid is applied, notably the very large proportion of matrimonial cases which figure in the certificates. But the claims on insurance companies, and their settlement of those 152 claims out of court, have not been influenced by the unfairness of the fact that the Legal Aid Scheme does not provide for the award of costs to successful defendants. It is no new thing for an insurance company to be under pressure to settle out of court, or to take the case into court. It is clear that there must be times when an insurance company is in some doubt about the liability of the insured person and prefers to settle for a sum rather than indulge in a long argument, irrespective of who pays the costs. There may be a number of cases which it is undesirable, for commercial and other reasons, to have heard in court, and where it is much more desirable in the public interest of insurance that they should be settled out of court without argument. There are many cases where, in particular, an employee may be liable, but where it is such a hard case that, for obvious reasons, and perfectly rightly, no insurance company would wish to fight it in court. It does not, however, follow that that has any connection with the risk that the insurance company might feel itself incurring of winning a case and not having its costs paid.
Therefore, I should like to see this debate divided into two parts. If it is desired by other noble Lords to continue this question of the amount of compensation, and how far National Insurance ought to cover it, that is one subject; but I should prefer not to have it involved in the injustice or otherwise of the application of legal aid, whereunder a successful defendant cannot recover costs. On the latter point, there is obviously something to be said, as various noble Lords have indicated—notably the noble Lord, Lord Rochdale, and I think, by implication, the noble Lord, Lord Meston—about the operation of legal aid being a little one-sided: where it is "Heads I win, and tails you lose," so far as the plaintiff is concerned, because if he wins the case, that is fine, and if he loses, he does not have to pay. There is an obvious remedy there, and I do not quite see the force of the argument of the noble Lord, Lord Milner of Leeds, that to allow a prospective defendant to consider with the committee before legal aid is granted is in a sense pre-judging the case, inasmuch as that is already the practice, I believe, in Scotland; and if it does mean pre-judging the case, then they are pre-judging cases in Scotland. It 153 seems to me very arguable that defendants should be allowed to put a case and to claim that to grant legal aid in respect of a certain cause for compensation is, in their view, frivolous and that the committee should decide.
§ LORD MILNER OF LEEDS
The noble Lord will forgive me for interrupting. I did indicate that 91 per cent. of the cases in which legal aid was granted in respect of negligence cases occurring at work—I think I am right in limiting it to that—were successful. If that be so, the defendants would have full opportunity in those cases to put forward their cases to the courts, and it would not appear that any great advantage would accrue to them by having the opportunity of putting their version before the certifying committee.
Leaving out for the moment the noble Lord's odd 9 per cent., I think it would, at any rate, remove a sense of injustice on the part of a prospective defendant, which undoubtedly does exist, if he were allowed to state his case when legal aid is sought. That is not to say that insurance companies, or the insurance world as a whole, feel that this legal award, as such, and the certificates granted have had any material effect or consequence on actions brought for compensation. They were as much subject to pressure, both to pay as the result of a court finding, or to pay out of court, before the situation to which the noble Lord, Lord Rochdale, has referred was created.
I should like to add only one point to that, and it concerns the rise in premiums for compensation. I do not think it is fair to leave the impression in anybody's mind that, because certain companies have decided to go out of the compensation business altogether, or because premiums have been raised against a particular trade or industry, or indeed, a particular employee, that that is unfair. The rise in premiums for all types of insurance has taken place, and is taking place throughout this and other countries. An increase in the risk or experience from floods or fire in any one year, above all from motor car accidents to third parties and motor cars, will inevitably bring about a rise in premiums against sections of the country and people living there, against types of auto- 154 mobiles and against certain owners of automobiles. Insurance is, after all, purely a question of how much an insurance company can afford to pay against premiums received. If it has to pay more, it collects more premiums. It is merely a financial balance. If, therefore, in their wisdom, courts—and they are ultimately the measure of the price at which insurance companies will settle out of court—award a sum this year which is 2x as compared with what it was, say, five or ten years ago—x—it follows that the premiums must inevitably rise, because insurance companies, no more than other financial, commercial or industrial institutions, are not philanthropic organisations.
If, therefore, the noble Lord, Lord Rochdale, and other noble Lords feel that an undue burden is being placed on industry as a result of the rise in premiums due to larger claims being proffered and made in court and out of court, the remedy is to limit, or for the courts to limit, the amount of the compensation payable. If they were cut to smaller amounts, premiums would undoubtedly fall. Premiums are purely a reflection of experience and are not a penalty imposed on any person or any trade. They are, in exactly the same measure, a measure of risk of fire in a certain type of building or flood in a certain type of country. I should not like anybody to leave with the idea that there is any penalty or any imposition by insurance companies as a result of the rises in premiums that are being demanded for compensation policies.
§ LORD MILNER OF LEEDS
If the noble Lord will forgive my interrupting, would be not agree that the fact that large payments have to be made is really due to the increase in the cost of living and to the drop in the value of money? That is the main factor, surely, in the increased sums which have to be paid, resulting, quite naturally, in increased premiums.
I am not going to be drawn into an economic discussion by the noble Lord. We started one on Thursday and shall continue it on Tuesday, and I think that will be quite enough for your Lordships at the moment.
§ 5.3 p.m.
My Lords, my reason for asking your Lordships to listen to me for a few moments to-day is that on two separate occasions this year I have addressed Questions to the Government on this subject of legal aid. May I make it quite clear at the outset that I support the Motion which has been moved by the noble Lord, Lord Rochdale? I have no desire at all to advocate, in any sort of way, the limitation of a workman's right to pursue his legitimate claims for injury. All I want to do is to assist in making the Legal Aid Scheme as fair as possible for all concerned, in respect not only of the industrial cases which have been specifically drawn to your Lordships' attention to-day, but also of every kind of case that may be brought within the scope of the Scheme.
The noble Lord, Lord Rochdale, has given your Lordships an informative and illuminating speech on the subject of legal aid as it applies to industrial cases. He ended that part of his speech by suggesting certain remedies. As I understand it, the remedies to be achieved by legislative action or, it might be, by administrative order under the Legal Aid Administration Scheme, were, first, the lessening of the number of unworthy actions, and secondly, the lessening of the injustice resulting to the defendant even from reasonable actions. He proposed to do that, in the first case, by implementing the provisions contained in the Act for a Legal Advice Scheme and by adopting the Scottish practice of hearing the possible defendant before granting a certificate for legal aid. The second remedy would be to a large extent achieved by making the fund chargeable, in the discretion of the court, with the costs of a successful unassisted defendant.
With the indulgence of your Lordships, I propose to go back to the Questions which I put in your Lordships' House which dealt with these very remedies. On January 31, 1956, I addressed a Question to the Government dealing with a case to which Mr. Justice Roxburgh, on January 13, 1956, had made certain references in court. It was a case which he described as a most unreasonable action—indeed, a shocking action. I asked whether, in relation to that particular case, in which the defendants had to bear 156 the costs of the case (it was dropped by the plaintiff in the middle of the action) and having regard to the observations of the judge, the Government would introduce into the administration of the Legal Aid Schemes such changes as might preclude cases of that nature from being brought before the courts, in order to avoid the possibility of defendants in future being subjected to the same unfair results. The noble and learned Viscount on the Woolsack was kind enough to give me a detailed answer on the subject. The substance of his reply was this [OFFICIAL REPORT, Vol. 195 (No. 54), col. 635]:It does not seem to me to be possible to guard against occurrences of this kind. No-one with any experience of the law would ever guarantee the outcome of a case. All lawyers have experience of the most cast-iron case failing and the most unlikely succeeding. All that can be done in a Scheme of this kind is to attempt to ensure that no case is brought or continued unreasonably, and to bear in mind the consequences of a grant of legal aid on all the parties to the litigation. I think those principles were in the minds of those concerned in this case.Well, no doubt they were. But then I asked the noble and learned Viscount a supplementary question. I asked:In an action of this character, where the costs of the plaintiff are paid by the State and the plaintiff gets off scot-free, would it not be fair and equitable that the State should pay the costs of the defendant?I also asked the noble and learned Viscount this further question:Whether Her Majesty's Government will now consider the advisability, if necessary by an alteration of the law, of allowing Judges in these legal aid cases to use their discretion in ordering that the costs of defendants be borne by the State?To that, the noble and learned Viscount answered:… the first suggestion of the noble Viscount is one that was put forward during the Committee stage of the Bill in 1949 … at the moment I do not feel that, on balance, taking a purview of the whole operation of the Scheme, it would be right to put this additional burden on the State; but, as I told the noble Viscount. I am closely considering the working of the Scheme and I shall consider his advocacy of the suggestion with the other relevant material matters.May I continue the review of the subject—it deals with the point put by the noble Lord, Lord Rochdale? I came back again on March 27 of this year and asked Her Majesty's Government [OFFICIAL REPORT, Vol. 196, col. 788]:Whether it is the case that in Scotland before a legal aid committee can consider an 157 application for a legal aid certificate the applicant must have given notice to the intended defendants, whose letter in reply must be before the legal aid committee when considering the application; and, if so, or in any event, whether Her Majesty's Government will consider the advisability of introducing a provision of the foregoing nature into the administration of the Legal Aid Scheme in England?I do not want to repeat the whole of the noble and learned Viscount's Answer, but he gave reasons why there were differences, as he said, between the English and Scots law. Then he said:I think it would be an expensive innovation and doubt whether it would help assisted persons' opponents to any significant extent. May I remind the noble Viscount that a legally-aided person's opponent at present may at any time make representations to the legal aid committee to show why the legal aid certificate ought to be withdrawn.Then I asked the noble and learned Viscount on the Woolsack:whether this is not one of the things which is better in Scotland than in England?The noble and learned Viscount, with a twinkle in his always friendly eye, if I may say so with great respect, said:If I may put it colloquially, the noble Viscount has pulled a fast one' in phrasing his supplementary question in such terms as to appeal to a Scot's heart. Coming down to more pedestrian matters, I would remind the noble Viscount that if this suggestion were adopted in England, the expense which I mentioned would be incurred through serving every prospective opponent—perhaps some 30,000 a year, as compared with about 5,000 a year in Scotland—for an anticipated very small saving in applications refused.Is that a good reason? Is it fair and equitable that the Scottish system of administration should not be adopted on grounds of expense? That is the first point I put. The noble and learned Viscount went on to say [col. 789]:there are other reasons … and I am sure he will see the force of wanting to avoid that any pre-trial of the question should be conducted by the Committee.But surely the Scottish system does not, in effect, include a pre-trial system. I propose to ask the noble and learned Viscount to-day whether, in his reply, he will be good enough to deal again with the particular objections which he has to the Scottish scheme, and why, in his opinion, England cannot be brought up, if I may say so, to the same level as Scotland in this matter.
With great respect, I must say that I was not much impressed with the noble 158 and learned Viscount's further reason, which was that:advance notice of intended litigation might prejudice the applicant because the intended respondent might try to avoid service by leaving the country.I wonder in how many cases that would apply. Using that argument, would it not, in effect, be a case of legislating for the minority and not for the majority? With great respect, I do not think there is much in that argument.
I do not want to deal with any of the other aspects of the question with which other noble Lords have already dealt. All I want to say is that, whether it be right or whether it be wrong, it is quite clear that the Legal Aid Scheme has introduced a new mentality amongst the population in the approach to the courts; in other words, the changed mentality that I have in mind is the mentality of the person who, because he can pursue a case under the Legal Aid Scheme and possibly escape scot-free, even though he has lost his case, does not concern himself with the question of who is to be burdened with the costs of the case. I suggest that that mentality is obviously one which ought not to be fostered; it ought to he checked if a means can be found of checking it by fair aid equitable methods. It is to that objective that I hope that the efforts of Her Majesty's Government will be directed.
§ 5.17 p.m.
§ VISCOUNT HAILSHAM
My Lords, I feel that the whole House will agree with me when I say that my noble friend Lord Rochdale has performed a service in drawing what is a very important matter into public discussion. I apologise to the House for having made speeches on two successive days, but on this matter I think I can profess a certain interest. I am one of the very few Members of your Lordships' House who is a practising member of the Bar, unadorned with any type of judicial honour. I can claim honestly to have interested myself in accidents and their compensation for upwards now of nearly twenty-five years. Therefore, this debate is of peculiar interest to me.
I agree with my noble friend Lord Rennell that, in a sense, the debate has fallen into two parts—criticism of the Legal Aid Scheme and the more general 159 questions affecting the basis of compensation in accidents. To some extent, it is fortuitous that that division has taken place, but it would be convenient if I divided my own remarks into the same two categories. As the noble Viscount, Lord Elibank, knows, with one of his two proposals I am in almost whole-hearted agreement; but I venture to suggest, diffidently, because I have not had the opportunity of consulting the professional bodies concerned in this country, that there probably would be a certain amount of opposition on the part of the English profession to the introduction of the Scottish principle of serving a defendant with notice of an application for legal aid.
The objection I see to it is this, and I must say it was a matter of some surprise to me when I learned that the Scottish profession was taking a different view. When a case occurs, whether it is an accident case, a matrimonial case or any other kind of case (one cannot draw a distinction in this between these classes of case), when an applicant comes to the legal aid committee, he makes a statement which is, of its nature, a somewhat confidential one. I do not think it is protected by professional privilege in the same sense that the man's statement to his own solicitor is protected by professional privilege when he seeks advice as to whether he should initiate unassisted proceedings. But, whether or not it is protected by privilege in the strict sense, it is, in the first place, confidential; and, in the second place, it would, if seen by the potential opponent, afford a fairly reliable clue as to what the man had said to his own solicitor or what he was going to say to his own solicitor when he sought legal advice under the Scheme.
The objection which I see to the proposal that a defendant should be served with notice of a proposed application for legal aid is this: either the service of the notice would include particulars which would give the proposed opponent a fairly reliable clue as to the contents of confidential statements, in which case I think it would be objectionable, or it would not, in which case I think it would be useless. I do not for a moment suggest that my noble and learned friend on the Woolsack should, for that reason, turn down this proposal out of hand, but I hope that at the time when he considers the proposal he will also take into 160 account whether or not this objection which I feel in my own mind has any foundation in it. I cannot help feeling that there would be some objection from the English profession if, without consideration of that point and without meeting it, there were an attempt to bring it in here.
If the noble Viscount will forgive me, would that same objection not apply in Scotland?
§ VISCOUNT HAILSHAM
It would indeed. That is exactly why I said it occasioned me some surprise that the Scottish profession was taking a different line. There is, of course, a distinction between Scottish litigation and English litigation, based on the nature of the type of pleading involved; and it may be that that explains the difference in the outlook of the two professions. It may be that the Lord Chancellor will be able to tell us something about that. All I was saying was that I hoped my noble and learned friend on the Woolsack will look into the possibility that the English profession might find an objection to the introduction of such a system in England. I am not by any means saying that further investigation will not be favourable to the scheme.
The second thing that I should like to say is this. Hitherto, we have considered, I think rightly, the injustice which is done to the unassisted litigant who succeeds. I myself have always espoused that cause, and when I hear from the noble Lord, Lord Milner of Leeds, that out of the immense number of claims which are presented 91 per cent. are successful as against the unassisted litigant, it encourages me to think that if my noble and learned friend on the Woolsack were to go to the Treasury and say, rather sternly, "You are dealing only with 9 per cent. of the cases anyway; and of those 9 per cent., possibly some are abandoned before they reach the court," it may turn out, on investigation, that we could, at a relatively low cost, do substantial justice where now injustice is being done. At any rate, without pressing my noble and learned friend unduly on this matter at present, I rather wish he would investigate the possible cost to the Treasury of supporting the successful unassisted litigant, at any rate to some extent. Before he turns his back, on behalf of the Government, on this 161 suggestion I hope that he will cause further inquiries to be made.
But we also need to look at the matter from the point of view of the assisted party. Here there is a suggestion that I should like to make. In the course of my experience of the working of the scheme there have been some cases in which the assisted party is hit rather hard by the operation of the scheme, which in one respect is extremely rigid. The Treasury (no doubt it is the Treasury, because I do not think it would be the generous heart of my noble and learned friend or of his predecessor) has insisted that the money recovered, if arty is recovered, by an assisted litigant in the course of proceedings which are assisted, should bear as a first charge the cost of litigation in so far as it cannot be recovered from the unsuccessful party. In principle, that is a perfectly just rule, and I would not quarrel with it, but in the course of my experience of the scheme I have come across at least half a dozen cases where the rigidity of the rule has operated hardly on an assisted litigant; and my own view is that the Lord Chancellor should consider whether or not a certain degree of elasticity is possible.
I can remember a particular and rather ludicrous case in which both parties were assisted—they were suing one another about the possession of a house. One party won and it turned out that the house was then deemed or claimed to bear as a first charge the cost of the litigation. That, in fact, proved very hard, because the successful party was hardly used. My own feeling is that while nobody would criticise the Legal Aid Scheme in its essentials, in this respect a certain elasticity might be allowed.
There is one other point that I want to make to the Lord Chancellor as a possible means of improving the Scheme. Experience has shown in a number of different cases, one very prominently featured in a recent judgment of Mr. Justice Devlin, that a possible conflict can arise between the assisted person and his legal advisers. The particular reported decision that I have in mind arose on a review of taxation in which the counsel involved was put in an invidious position, both by his own professional body, which insisted on his taking the matter up, and by the artificial way in which reviews of taxation have to take place. I myself— 162 and I am sure I speak also for the profession—should be grateful if my noble and learned friend, in conjunction with the professional bodies concerned, would look into that case and allied cases and consider whether machinery for the review of taxation could not be introduced which would avoid the embarrassment that inevitably attends a conflict of interest between a professional man and his client. I myself should welcome some ruling on another matter which causes some conflict of interest—I refer to the occasional demand by a defendant that one should or should not accept a settlement without costs. My own feeling is that that puts the professional adviser in a most difficult position, where the client is assisted, and I should welcome it if the noble and learned Viscount the Lord Chancellor would consider that matter too.
I turn from this aspect of the case to the more general matter, with, I must say, an expression of delighted surprise that, despite the injustice which is at any rate theoretically, and in practice also, I think, involved, Lord Rennell, who knows so much about these matters, was able to assure the House that the injustice did not operate on the minds of insurance companies when they effected settlements. I must say that that came as a matter of surprise to me, but I never attend your Lordships' House without learning something interesting and something new from an acknowledged expert on the subject.
When one comes to look at the general aspect of the law relating to claims for compensation, it is not too much to say that there has been a complete revolution in the matter since I first studied the law nearly twenty-five years ago. In those days my noble friend Lord Rochdale was dealing only with employers' liability, but much of what one says has equal application to other types of accident claims. The occupiers of property, the users of the road, local authorities, and many other types of body are faced with the same kind of situation. But when I first came to the Bar, the law of employers' liability was somewhat rigidly divided into two categories—that of workmen's compensation, which was admittedly inadequate and which was supported by the employer, usually fortified by an insurance company, and the law of 163 Common Law liability, which was judge-made law almost in its entirety. The law of Common Law liability, both in its Factory Act aspect and in its negligence aspect, was purely judge-made. In passing I sometimes think that some of our trade union friends are a little unjust to the legal profession when they underestimate the extent to which judges came to the aid of injured workmen by judge-made law, at a time when injured workmen were receiving rather less than justice from other classes in the community.
But both aspects of judge-made law were limited by two important doctrines. The first was the doctrine of common employment, and the second was the law of contributory negligence as it then existed. Both these doctrines operated to take out of the sphere of employers' liability altogether a very large proportion of the potential numbers of claims, and, at least in my view, the increase in the number of claims in recent years to which my noble friend has rightly drawn attention is much more the consequence of the abolition of the rule of common employment and the modification of the rule of contributory negligence than of the Legal Aid and Advice Scheme; because even before that Scheme very large numbers of professional men assisted impoverished litigants in one way or another, and behind organised labour there was the force of trade unions who, with very great skill and generosity, undertook the best of the cases on behalf of their members.
So the situation now is that the judge-made law continues to operate without either of the judge-made limitations on that law. I feel that that is behind the very large increase—and I am sure that it is a very large increase, despite what the noble Lord, Lord Rennell, told us—in Common Law claims in respect of employers' liability. I do not think that very much can be done about it, on the assumption that Parliament was right to make those two modifications in the law which it has made in the last ten or eleven years, because, in my view at least, it is quite unlikely that Parliament would ever consent to a reversal of those two alterations.
I am beginning to wonder whether the time will not come when the insurance 164 principle will be applied more generally to the question of compensation for accidents. Litigation is always in the nature of a lottery, which we are told is inherently wicked. The best judges differ as to the measure of damages. When one comes to measure things like pain and suffering in terms of pounds, shillings and pence, one person's guess is as good as anybody else's. The only solid measure of damages about which prediction has hitherto been in the least possible is loss of earning capacity; and even that has now been thrown in the melting pot by the recent decision of your Lordships' House, in its Judicial capacity, that income tax has now to be taken into account in assessing the amount of compensation.
I am beginning to wonder (and perhaps my noble and learned friend can contemplate this possibility) whether loss of earning capacity could not be dealt with by the insurance principle, in which case liability would be predictable and not a matter of fallible human opinion. I also wonder whether the loss of amenity and pain and suffering, now dealt with, on an inadequate scale, by industrial injuries benefit, could not equally well be dealt with on the principle now recognised in the pensions field; that as between one man and another who is in need and suffering the same type of injury, rough justice can be done by regular scales of payment. If that were done, the employer of labour would at any rate know where he stood, and much money which is now diverted into the pockets of my own profession, to our considerable advantage, might be diverted into an insurance scheme. Frankly, I do not know what the financial consequences to anyone would be, but when I contemplate the vast changes that have taken place in the application of the law in the last twenty-five years, I am wondering whether we are not moving in that direction.
§ 5.35 p.m.
§ LORD AMULREE
My Lords, it is with some degree of diffidence that I rise to address a few words to your Lordships on this subject, because I do not feel capable of following noble Lords who have expressed such expert views on insurance and other matters this afternoon. When I saw that the noble Lord, Lord Rochdale, had put his Motion on the Paper, I wondered whether one could 165 get some light on or information of the workings of the Legal Aid and Advice Scheme by studying what has occurred under the National Health Service Act in regard to the number of legal actions brought by patients against doctors and hospitals. We are told that since the National Health Service Act came into force about nine years ago there has been a considerable increase in the number of legal actions brought against doctors and hospitals—I cannot give the total numbers, as they do not appear to have been recorded in any of the documents I have consulted. According to the last Report of the Ministry of Health, however, the peak of these actions appears to have come in 1954 and the Ministry do not expect any great increase on that figure.
The bulk of these legal actions were brought by people assisted under the Legal Aid and Advice Scheme—about 80 per cent. of the total number. I will pose a question to the noble and learned Viscount though I do not expect an answer now. I am wondering whether we may know what proportion of these actions were successful and what proportion were unsuccessful, because there has been a good deal of comment in the Press about the fact that a large number of these actions were stupid and frivolous and need not have been brought at all. Whatever be the facts, these actions, as reported in the Press, are notorious. I was impressed by what the noble Viscount, Lord Hailsham, said—that about 90 per cent. of the actions brought were successful. That seems to be a considerable justification for the continuance, and perhaps the expansion of, the Legal Aid and Advice Scheme.
By looking at published figures, I tried to find out whether we could get comparable figures showing what is occurring on the medical side. One of the medical defence societies(there are two in England and one in Scotland), covering a majority of qualified doctors who are practising, states that the number of requests for information and assistance have gone up from 1,600 before the passing of the National Health Service Act to 2,100 now. Not all these were from people threatened with legal action—their cases may have been on other matters—but the figures showed that there was a real increase. There was another point on which I tried to find information. From the Report of 166 the Ministry of Health I got some idea of the amount of money which is being paid in compensation. It has gone up, rather startlingly, from about £24,000 in the first financial year of the Act to almost £160,000 in the year ended March, 1954. That figure includes third party cases. One has to look at this figure carefully, because it does not necessarily mean a vast n umber of cases. As the noble Lord, Lord Rennell, pointed out, a certain amount of the increase arises from the fact that the courts are now apparently giving bigger damages than before. In the first financial year under review, the largest amount of damages given was £1,000; and according to the report, in the year 1954 the largest sum was £17,500. There, again, one cannot really compare the two amounts, because one does not know the circumstances; but it looks as though some of the increase in compensation was due to the fact that courts are recognising that the value of money is not what it was, and accordingly, the sums awarded are going up in that way.
The fact that these sums of money are being awarded and that, as the noble Viscount, Lord Hailsham, said, 91 per cent. of the actions were successful, shows that the Legal Aid and Advice Scheme, certainly under the National Health Act, is working rather well, and that people who should get money for damage, either by a doctor or by a hospital, appear to be getting the money they deserve. I should like to conclude by joining in the plea of other noble Lords, that something should be done for the defendant, whether he be a hospital, an employer, or a doctor—and that includes a doctor consulted under one of the trade societies. If the action brought against him is proved to be frivolous, he should get something; otherwise the plaintiff loses the action and the defendant is left to pay the quite substantial costs of the defence.
§ 5.40 p.m.
§ LORD CHORLEY
My Lords, before the noble and learned Viscount who sits on the Woolsack replies, I should just like to add my plea to those which have been put forward by other noble Lords that something should be done for the successful defendant in these assisted cases. Undoubtedly this weakness in the scheme which was, as I think Lord Rochdale said, observed as being there from the 167 start, has proved more serious than was anticipated. It might be thought that with only one case in ten failing it was not very serious. My own experience, however, suggests to me that while there may be defendants who are large business corporations, by whom the expense may be written down, in a sense, as a business expense, there are much smaller defendants—there have been several of them whose difficulties have come to my own knowledge—who have been hit very hard indeed as a result of this Legal Aid Scheme. The noble and learned Viscount knows that to fight an action, even a comparatively simple type of action, in the High Court is impossible without the expenditure of several hundreds of pounds, and for a small business man or a small professional man that may be very serious indeed. Over the last few years there have undoubtedly been a number of cases of this kind.
I think the Government should provide some small fund, or initiate some insurance scheme under which this type of hard case—and undoubtedly it can be very hard indeed—is met. I am sure that the whole amount involved would not be more than a few thousand pounds a year. It could, perhaps, be limited to a certain type of defendant who himself is often not so very much better off, if better off at all, than the assisted litigant. Unquestionably, that is the type of case where the shoe pinches. I think the Government owe it to the community and to the cause of justice to do something about this matter.
§ 5.42 p.m.
§ THE LORD CHANCELLOR
My Lords, I am sure that the first duty that falls upon me will receive the enthusiastic approval of all of your Lordships—that is, to thank my noble friend Lord Rochdale for introducing this Motion to the House, and, if he will allow me to say so, to express our admiration for the thoughtful, careful and moderate way in which he put the subject before us. There is no doubt that, as noble Lords have stated, the debate has tended naturally to fall into two parts, and I should like, if I may—and I think it is following the general feeling of the House—to deal with it in that way. I shall first deal with the general question of the increase in claims, and then proceed to the Legal 168 Aid Scheme. I hope the House will approve of that method.
My noble and learned friend Lord Hailsham has already drawn attention to the first problem—which I think ought to be stated and our views upon it expressed in consequence of this debate. And when one considers objectively and fairly the state of the law before the changes to which my noble and learned friend referred, and then considers the changes that have been made, I do not think any of your Lordships would seriously challenge that these changes have been immensely for the better. Indeed, I do not remember any suggestion in this debate to the contrary. But in view of the general point that my noble friend Lord Rochdale has made, I think it would be useful if I just stated very shortly my reasons for saying that.
I think it is true to say that until 1948 the scales in an action for damages for negligence brought by an employee against an employer were weighted in favour of the employer. The basic position at Common Law was, I think, sound and fair. The employer was under an obligation to take reasonable care and use reasonable skill, first, to provide and maintain proper machinery, plant, appliances and works; secondly, to select properly skilled persons to manage and superintend the business; and, thirdly, to provide a proper system of working. I am sure Lord Rochdale would agree that every good employer should do these three things. At least no one could complain—not even the noble Lord, Lord Meston—that in this case there is any divergence between common sense and Common Law. The difficulty was that they were limited by the two matters which have been mentioned—first, by the rule of contributory negligence—and I will quote Lord Blackburn:If there is blame for causing the accident on both sides, however small that blame may be on one side, the loss lies where it falls.That meant—and I ask your Lordships to realise this—that if an employer could satisfy a court that injuries caused to his employee were to the slightest degree attributable to the employee's own negligence, the employee could not recover any damages at all. That was the first point.
The second was the doctrine of common employment, under which an employer was held not to be responsible 169 for harm done to one of his employees by the negligence of a person engaged in common employment with the injured man. I think my noble and learned friend Lord Hailsham will agree that the extent to which that was carried, both vertically, between people who were in very different circumstances of life, and horizontally, between people who were in very different jobs, did make it something with which Parliament was ultimately compelled to deal. I would add a third point—I do not know whether your Lordships will agree with me, but in my view there was a third point which told very much against the workman. That arose out of the Workmen's Compensation Acts, by which an employee who accepted money under the Acts was debarred from proceeding at Common Law. Often, immediately after an accident, with the breadwinner taken away from his work, there was every temptation to take what was offered him at once. Then, when he had taken that as compensation, he was debarred from making a claim, though there might be the clearest evidence in the world that there had been negligence. I think that again was something which required putting right. Of course, the position was rather better when he could sue his employer for breach of statutory duty, because the defence of common employment then went out.
But those were the circumstances which had to be dealt with, and I hope that your Lordships will not think it too conceited if I inform your Lordships that the legislation which dealt first with this matter—the Act of 1945, which changed the law on contributory negligence and, instead of entirely depriving a workman, made his damages proportionate to the amount of negligence—was introduced by me into another place on February 22, 1945. That was followed by the Law Reform (Personal Injuries) Act, 1948, which abolished the doctrine of common employment; and workmen's compensation was replaced by the industrial injuries scheme. Also (and I assure your Lordships that this is my last personal reminiscence), I had the privilege of presenting Lord Beveridge's scheme to another place some eleven or twelve years ago. So I have been very much "in" on this change of law. But, trying to view it as objectively as I can, I think that, considering the law as it originally was and the mischiefs that were caused 170 by it, and considering the law as it is to-day, no one can deny that these changes were fair and just. I think that is the first conclusion to which we come.
My noble friend Lord Rochdale raised one point which rather surprised me. He said that whereas under the Factory Act or similar safety provisions the employer knew where he was, negligence under Common Law might be discovered only when an accident had occurred, so that the risk was one which could not in reason have been foreseen or prevented. I hope that my noble friend will accept from me that the last thing I desire to do is make debating points on this matter, but I suggest that he has put the matter in too formidable a way. To-day the employer has only to take reasonable care for the safety of his workmen, and there is no lack of reasonable care when an accident occurs from an unforeseeable risk. I hope that in that regard my noble friend has been too pessimistic, though no doubt he has found cases where it appeared in that way. The essence of the matter is that an employer should be liable for a danger that is reasonably foreseeable and should not be answerable beyond that point. I agree that the changes in the law, which I think were right, for the reasons I have explained, have produced a larger number of actions.
With regard to my noble friend's point on the Industrial Injuries Act, in which he said that he thought that it was being pushed into the background as a remedy, I well remember that at the time the Industrial Injuries Act was being considered (if my chronology is correct) a strong Committee was set up, under the chairmanship of my right honourable friend who is now the Minister of Defence (Sir Walter Monckton, Q.C., then practising at the Bar), in order to investigate whether there should be an alternative remedy in the strict sense. All except two members of the Committee decided that there should not be, and the provision to which my noble friend referred, that a workman can take industrial injury compensation and then bring an action later on, subject to bringing in half of what lie had been paid, was the result of the Report of that Committee. Again I think that that was right, and I do not think we should turn the clock back on that point. My noble friend will appreciate that a man must prove neglect, either 171 in Common Law or in the shape of a breach of statutory duty. If, having waited five years, leaning back and taking compensation during that time, he suddenly says that the accident was the result of a breach of statutory duty but that it had not occurred to him until a month or two earlier, his chances of recovering are pro tanto, even ipso facto, reduced. He has to prove the negligence; and that, of course, is a safeguard.
I am interested in what has been said in regard to insurance, first of all by my noble friend Lord Rochdale and then by my noble friend Lord Rennell. My noble friend Lord Rennell's exposition of a subject with which he is so familiar interested me immensely. I accept, as we all do, what he said: that it is the assessment of what the courts are likely to do which primarily determines the premium. Without getting involved in next Tuesday's debate, I think it would be right to say that in assessing damages (and this applies equally if the party is an insurance company who think that the damages are likely to be assessed against them), the court estimate the annual loss and then multiply it by whatever period they think is right, in the usual way. Undoubtedly, in reaching a result the change in the value of money comes in, and how much it costs people to live. That, in turn, is bound to be reflected in the premium. But with regard to the general point of whether a company would desire to cover this form of risk, that must be a matter for them and the class of business into which they want to go.
It would be interesting to know more on the point which my noble friend Lord Rochdale mentioned about settlement. May I give my noble friend Lord Rennell a converse example? In the case of solicitors who insure against negligence on their own part, or on the part of their employees, there is often a provision that they will be entitled to dictate the settlement of an action—it is, as I say, the converse of Lord Rochdale's position—because they do not want the action to come into court. The noble Lord, Lord Rochdale, puts the other side, where they want an action to be fought when the insurance company desire to settle it. I should have thought that that was a matter which would also be reflected in the amount of the premium, if it was 172 desired to keep such a right. That is one side of it.
As to the other side, that the workman might think he was a bad employer because there had been a settlement, again, with great respect to the noble Lord, and simply giving him my own experience of many years when I was dealing with that class of case, I think that he was overstating the fears. To take one of the cases he gave, where someone has lost an arm, or to take the case of a boy who has lost a leg. I should have thought that the fact that in cases where there is obviously some extreme doubt as to liability—because in these cases there is usually some evidence of carelessness on the part of the person using the machine, as well as what is alleged about the lack of guard and so on—the reasonable sum in compensation which a company pays through an insurance company for the injury would be held as grace on their part and not as evil in their employment methods. There is that side of it. I appreciate the point the noble Lord made, but there is the other difficulty: that the mere fact that the employer takes the responsibility for something that is outside his hands may involve him in difficulties one way or the other. I see the point, but I cannot see any answer to it. I am sure the noble Lord, Lord Rochdale, would agree that for any company of moderate size to try to carry their own risks in this regard would be something that he, as a business man, would not contemplate for a moment.
I come now to the point which the noble Lord, Lord Amulree, raised about the question of injuries in hospitals and the damage suffered by patients in hospitals. There the pendulum swung in favour of the patient. Again, if it is not boring your Lordships, I should like to quote one passage from the judgment of Lord Justice Denning in the case of Cassidy v. The Minister of Health. Lord Justice Denning said:For over thirty years, from 1905 to 1942, it was the general opinion of the profession that hospital authorities were not liable for the negligence of their staff in the course of their professional duties.That case decided that a hospital was liable for the negligence of medical officers and house surgeons, where the circumstances showed that one of them was responsible, even if it could not be identified which one it was. That case 173 was in 1951. But three years before that case the Health Scheme came into operation, and that led to a different attitude towards litigation against hospital authorities.
There then came the Legal Aid and Advice Scheme, with which I shall deal in a moment. The changed situation of hospital authorities led to a similar complaint to that which has been advanced in some portions of our debate to-day. I do not know whether the noble Lord, Lord Amulree, knows it, but these complaints were investigated in the autumn of 1955, when it was found that the number of claims against hospitals was falling, it may be as the result of the activities not only of the Minister of Health but of the two associations in England and the one in Scotland that the noble Lord mentioned. I am not saying this in a critical way at all; they are carrying out what they have to do. So it may well be—and I think the noble Lord, Lord Amulree, would incline to this view from his own researches—that the pendulum had swung, and was beginning to swing back. That is the position, as I see it, and I thought it might be useful to the noble Lord to know that I had considered it. It is, at any rate, slightly more optimistic from his point of view than it might have looked a year or two ago.
Before I come to the question of the Legal Aid and Advice Act I want to say a word or two on what one might call an intermediate subject—namely, the matter of the Factories Acts, which was raised by the noble Lord, Lord Milner of Leeds, in his interesting contribution to the debate. I was interested to note that the noble Lord, Lord Rochdale, was not so concerned about Factories Act cases. I confess that when I acted for a plaintiff at the Bar I always used to look for a breach of a statutory duty: from the plaintiff's point of view, it made the case so much easier. But I think it raises an important point. As the noble Lord, Lord Rochdale, will know, the scheme of the Factories Acts, and the scheme of most health and safety Acts, is to enact a skeleton and then put on the flesh and blood by regulations. Your Lordships' House has often shown suspicion of subsidiary legislation, but in this field I am quite certain that it is right (I am sure my friends know that I have been a stern critic of subsidiary legislation in my time) 174 because it gives two things. First of all, it gives an opportunity for consultation with the people affected. It is extremely important that you should consult both employers and employed before you make health or safety regulations. That is done. The second point is that it secures flexibility. The noble Lord, Lord Rochdale, gave an example where he thought there was the greatest difficulty in seeing any misconduct oil any kind on the part of the employer in regard to his guard. Of course, it is often discovered that a guard is not the best form of protection, and you can change your regulations in that way. This is a point about which I am very concerned.
I thought it might interest my noble friend to know that I made inquiries of the Ministry of Labour, not only with regard to the general practice which I have mentioned, but with regard to the practice of special regulations. With your Lordships' permission I will read it, because I think it is important:When making special regulations on safety and health under the Factories Act it is the Minister's established policy to ensure the fullest consultation with those affected on both sides of industry. The practice is to prepare a preliminary draft of the regulations which is sent to all interested organisations whose comments are invited, and if necessary discussions are then held with representatives of any organisations which have submitted comments. In the light of those discussions a revised preliminary report may be prepared and further discussions take place or a formal draft of the regulation may be published in accordance with the statutory procedure laid down by the second Schedule of the Factories Act, 1937. Under this procedure all special regulations must be published in draft and the persons affected by the regulations may make objections to them. The Minister is under an obligation to consider any objections and may, if he thinks fit, amend the draft regulations to meet them, republish and follow the same procedure with the original draft.I think that is important, because it achieves the two purposes which I mentioned. I thought your Lordships would be glad to know that that careful consultation was followed.
The noble Lord, Lord Milner of Leeds, raised the question of the factory inspectorate, and my right honourable friend the Minister of Labour and National Service expects to receive a report very shortly from a Working Party of officials who have reviewed the organisation and staffing of the factory inspectorate. So the noble Lord will be glad to know that 175 that matter is being considered. As he himself said, the other matter which he mentioned is also being investigated at this time.
I am sorry to take up so much of your Lordships' time, but the debate has interested me and, therefore, I want to deal with all the points. May I turn quite shortly to the questions arising under the Legal Aid Act? It is interesting that the consensus of opinion expressed by your Lordships, and certainly, if I understood him correctly, by my noble friend Lord Rennell, is that it is doubtful whether the incidence of legal aid has substantially increased the claims which we are considering to-day. Indeed, I should have thought so, because from my own experience, when I was a junior engaged in this class of work, very largely the cases were prepared and examined by the appropriate trade union, and they brought the matter forward. There are some cases where the trade union turned down the case and the plaintiff persuaded the Legal Aid Committee, but I should have thought that in the main they are trade union cases.
The other way in which the problem is affected is one which many of your Lordships have mentioned—namely, the effect of Section 2 (2) (e) of the Act, under which a losing assisted person is required to pay only such of the other side's costs as is reasonable in all the circumstances. As the main circumstance to be taken into account is the means of the assisted person, the vast majority of assisted cases brought by employees result in the employers having to find a large proportion of their own costs, whether they win or lose. I thought I was going to be the person to produce all the interesting figures on this point, but your Lordships have anticipated me. In fact, the figure which I had, which was up to the end of March, 1955, is not so striking as that of the noble Lord, Lord Milner of Leeds. Up to that year 86 per cent. of the cases were successful. But there is one aspect which I think is interesting; that is, that 85 per cent. of the assisted persons who lost their cases in the Queen's Bench Division were required to pay no costs at all. Of assisted persons, 36 per cent. are nil contributors. The interesting number we are left with is the 64 per cent. who were not nil con- 176 tributors and who were not ordered to pay any costs—of course, that is 64 per cent. of 14 per cent.
If my arithmetic is right, only 14 per cent. of the cases were lost; in only 12 per cent. of these was there no order as to costs and in only 8 per cent. did one come down to the question where there was no order for costs and where the plaintiff was making any contribution towards his own costs. So whichever way the argument goes, it is a very small section of litigation altogether. There is not a grave measure of injustice here. My noble friend Lord Hailsham I think realised that, and asked why, therefore, do I not go to the Treasury, because the baby is a small one and the paternity order ought to be paid. It is interesting to realise that we are dealing with quite a small problem on that point.
May I deal shortly with the three suggestions that were constructively made? The first one which my noble friend Lord Rochdale made—and he was supported in it—was to introduce as soon as possible the Legal Advice Scheme in the hope that that would mean greater consideration at an earlier time and in that way cases might not be brought if they were not properly based. There is this difficulty: as I said, we are under an obligation to introduce this Scheme, but at the present time your Lordships are in the middle of an economic debate and know why the moment is not propitious to get additional sums of money from the Treasury. But I do not want your Lordships to think that the matter is going to sleep. The Law Society, who have been most helpful in regard to this Scheme, are considering whether they cannot find a better and cheaper method than they thought of at first. Of course, the more they can reduce the cost, the more chance I have of receiving approval for getting the Scheme into operation as quickly as possible.
The second point is the one on which the noble Viscount, Lord Elibank, always tries to stir my Highland blood: why will we not introduce the Scottish system? May I put it very shortly and, if the noble Viscount is in any doubt, I am sure he will write to me and I will elaborate any matters with which he is still concerned. In fact—and this is a good point—the Scottish practice only 177 very rarely leads to the refusal of an application for legal aid. I agree with the point that was adumbrated by my noble friend Lord Hailsham, that the Scottish system, as I understand it, first considers the competence of the action—that is to say, whether, assuming that everything that the plaintiff has said is pro veritate, an action will lie—and only after that stage is reached does approval of the evidence come. That is broadly the Scottish system.
The English system is rather to come into the law after the facts of the particular case have been established. I have put that crudely but I think that is the difference between the systems. Therefore, on that basis one can see that the Scottish system might have attractions which it would not have in England. I still maintain, having considered the matter, that it would be expensive to send out 30,000 notices of this kind if it were to have the small effect that it has in Scotland. I agree with my noble friend Lord Hailsham that one would have to be very careful about the confidential side of this matter. I am not being legalistic; I am sure the noble Viscount will not misunderstand me.
§ THE LORD CHANCELLOR
I will simply consider it from the point of view that any man of honour would. If things are brought in confidence, one is not entitled to spread them abroad. The noble Viscount, Lord Hailsham, made a good point on that. Then there is a point to which I attach great importance, and I hope the noble Viscount, Lord Elibank, will consider it. I said in answer to him—and I will say it again—that in England there is the procedure by which the other party, when the matter is under way, can suggest to the committee that the certificate ought not to be continued. That is when people begin to know what is happening. I regard that as a live procedure and something which should be used in proper cases. I wanted to emphasise that to-day.
§ LORD MILNER OF LEEDS
May I say that it is also the practice of responsible solicitors, when they discover during the progress of a case that it is not so good as it was thought to be, to report accordingly, in which event the certificate may be withdrawn.
§ THE LORD CHANCELLOR
I am grateful to my noble friend, but the point I wanted the noble Viscount, Lord Elibank, especially to know was that defendants could do that and it would be considered in a proper case. Although nobody could have a higher opinion of Scottish justice than I have, I see a difficulty if one has a pre-trial at the earliest stage—I am only expressing my own difficulty. The noble Viscount, Lord Elibank, made a perfectly good answer to that. He said, "Anyway, they carry it out in Scotland." I see the noble Earl, Lord Selkirk, locking at me on this point. As I believe he is the only Scottish advocate present in your Lordships' House now, I will not go into any more details, in case I am wrong.
The noble Viscount, Lord Elibank, asked me to deal with advance notices. In this class that we are considering to-day there would not be much in it, but in the class that has been mentioned, where perhaps a wife is trying to get money or furniture from a recalcitrant husband—and the noble Viscount would be amazed if he had the experience of our profession of the ends to which husbands will go to resist their wives' claims—there is something in my point. That is the position.
The other point, of course, is whether the State should pay. Again, I should like to put my difficulties before the House. I think it was the noble Lord, Lord Rochdale, who suggested to-day that it should be left to the discretion of the judge. Of course, that the judge should have a discretion as to the expenditure of public money is a new suggestion, because this is not penalising a party or deciding who should bear the costs; this is a question of whether a public fund should bear them. I want to put my difficulties. The proposal does not state how that judicial discretion is to be exercised. Presumably, the judge would be asked to take into account the means of the defendant to pay his own costs (which is already done to a certain extent), and the means of the plaintiff. Or is it desired that the judge should pre-judge the question of the certificate and say at the end of the day: "I do not think this is a case where a certificate should have been given"? I think my noble friends who have considered it will see that that raises difficulties.
179 On the one hand, one may come to the conclusion that it would be difficult to refrain from charging the fund in all cases—and I put this seriously to my noble friend Lord Rochdale; I hope that, if he thinks that I am talking nonsense, he will say it with the privilege of an old friend—but it might mean that cases were fought which should have been settled, because parties to legal proceedings always have a most fanatical belief in their own case. There was the case which the noble Viscount, Lord Elibank, mentioned of a judge saying in the midst of his strictures that the plaintiff had a complete belief in his own case though he (the judge) did not think much of the case. The parties would expect an order to be made against the fund if they lost. It is really a serious point. They would be inclined to go on for that reason. It also might mean the issue of certificates which should be refused. There are all these serious points. As noble Lords know, the Select Committee on Estimates in another place have been considering the working of the scheme and I expect to get a report in the near future. Their views on these matters that have been raised by the noble Viscount and by my noble friends to-day I await with great interest. I shall consider carefully what they have to say, but I want to assure the House of this: that the Legal Aid Scheme is under continual and day-to-day examination and consideration. I think it has made an excellent start, considering that it was new ground. I want your Lordships to believe that I am constantly looking for improvements. I shall continue to do so; indeed, that is one reason why I am grateful for what has been said to-day.
I will consider the point of the assisted plaintiff, which has been put to me by my noble and learned friend Lord Hailsham, and by Lord Chorley. That shows an aspect of the whole problem that every Minister has always to consider—the whole tendency of human beneficence is defined as another opportunity for helping someone at the public expense. That tendency and to-day's debate has demonstrated it; but as I say, it is something that I shall consider and watch.
I was greatly interested by Lord Hailsham's philosophic discussion about damages in relation to the introduction 180 of insurance principles. I tell him that I shall treat the idea with great respect. I do not think we are very near it at the moment, but I can only tell him that I thought the original system of workmen's compensation was an admirable one. My opinion was completely changed on that point, as I have told the House to-day. It is, I feel, extremely valuable that we should keep an open mind and consider how these problems are affected by the changing conditions of the modern world. I do not think he would want me to go further than that, but I will certainly express my view.
My Lords, I apologise for taking such an unconscionable time in speaking to you, but I have tried to deal with the points involved. I think your Lordships will bear with me if, speaking in a circle, I return to where I began, and once again convey your Lordships' thanks to my noble friend Lord Rochdale for introducing this debate.
§ 6.22 p.m.
My Lords, at the end of the speech I made introducing this Motion I said that I felt sure the point I was raising had implications over a far wider field, and the course of this debate has proved, I think, that that was so. Not only has the debate ranged over a wide field, but as my noble friend Lord Rennell said, it fell into two distinct parts, and it was in that way that it was subsequently debated.
I suppose the length of a debate is some measure of the interest that is taken in the subject, and I can only say how extremely grateful I am to all noble Lords who have taken part and who have shown interest in this matter. I should like particularly to thank my noble and learned friend the Lord Chancellor. I am glad that I have landed on a subject which was evidently quite dear to his heart. I should also like to thank him for the immense amount of trouble that he has obviously taken in going into the various detailed points that I have raised. I would not for one moment at this stage mention any details of what he has said. I will say merely that I am sure that, when I come to read his speech, I shall still think that what he said was really sympathetic to many of the points that I made and not without some measure of encouragement. After all, in raising the matter I had no idea that we should be 181 able to arrive at any solution to this most complex and intangible problem. What I have achieved is that the subject has been aired; and when a subject is aired, it means that we have gone one stage further forward and that the situation will be improved.
I will conclude by saying most strongly that I entirely agree with what the noble and learned Viscount the Lord Chancellor said, that no one can deny that the changes (he was referring to the changes in the law) were right, and that none of us would wish to put the clock back. I would emphasise, at the end of the debate, that that was, in so many words, what I said at the beginning. I thank all your Lordships who have taken part in this debate, and I beg leave to withdraw the Motion.
§ Motion for Papers, by leave, withdrawn.