Administration of Justice Bill [H.L.]

HL Deb 19 March 1985 vol 461 cc404-75

3.3 p.m.

The Lord Chancellor (Lord Hailsham of Saint Marylebone)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(The Lord Chancellor.)

On Question, Motion agreed to.

Lord Denning moved Amendment No. 36:

After Clause 41, insert the following new clause:

(" . In section 9(6) of the Legal Aid Act 1974 at the end there shall be inserted— Provided that in the case of a matrimonial home, the charge shall only be for such amount as the court considers is just and equitable.".").

The noble and learned Lord said: My Lords, in this amendment I draw attention to the fact that over five years ago the judges found that the law was unjust and recommended that Parliament should reform it. Since that time nothing has come before Parliament to reform the law and so I have ventured to set down this amendment before your Lordships. However, I must first explain how it arises.

It arises, in legal aid matters, from what lawyers are inclined to call the "statutory charge". Let me explain the situation by giving the example of an ordinary accident case where a man without means wishes to bring a claim for an accident sustained at work, on a road or wherever. He has no money and so he seeks legal aid for the purpose. He puts his case—it may be quite a plausible one—to the area committee and he is granted legal aid. Thenceforward the legal aid fund will pay all his lawyer's expenses. So the action is started.

Then, in the course of the case, the defendants—who may have a good defence—say, "Well, it's no good fighting this case at great expense; we shall not get anything out of him or the legal aid fund. We shall settle". Let us suppose that they settle the case by paying £4,000. It is at this point that the statutory charge comes in. The legal aid fund then has a charge on the money recovered or preserved in those proceedings. If the legal expenses in the case which I have put forward amounted to £500, they could take that £500 out of the £4,000 which the man has been given. That is the charge which the legal aid fund has for the legal expenses against any property recovered or preserved. It is all very right and sensible in all ordinary cases. However, the matter to which I am drawing attention, and to which the judges have drawn attention, is the position as regards the matrimonial home.

Most couples have no other asset except the matrimonial home—it may be subject to a mortgage from a building society or the like—which may be worth £20,000, £30,000 or £40,000. It is their only asset. They both receive legal aid because neither of them has any means. Nearly all these cases are legally aided on both sides. The case will probably be brought out quite reasonably. One party may say that the house belongs to him or her and the other may say that it should be half and half or in different shares.

There is also the question of the custody of, and access to, the children. All those difficult matters are fought out with the legal aid fund paying the lawyers on both sides. The question which must be asked is: where does the charge come in? It may be that the house is sold and that the parties both agree to that course so as to enable each of them to buy another house or perhaps a flat. Therefore, the house is turned into money. It may be that one will pay out and will say, "Oh, I shall pay you £15,000 if you transfer your share of the house to me. You will have money in hand". That is money in hand which is recovered or preserved by the lawyers, by the legal aid fund. The legal aid fund has a statutory charge not only on the house—because that might be postponed—but whenever the house is turned into money in whole or in part it will have that charge.

Judges have drawn attention to this matter from time to time, and in a case which reached this House in March 1980—five years ago—my noble and learned friend Lord Simon of Glaisdale said: I presume to suggest that the appropriate executive and legislative authorities should urgently consider the problem raised in this appeal and make any consequent amendment of the Act or the regulations as may be desirable". That wish and desire has been repeated in case after case not only by the President of the Family Division but by the Court of Appeal on three separate occasions quite recently; and just last December Lord Justice Oliver in the Court of Appeal summarised the whole position when he said: In the vast majority of cases the matrimonial home constitutes the only family asset of any value. Time and again sensible division of property within the limits of the frequently slender resources available founders on the rock of the attachment of the charge for legal aid costs. That is no criticism at all of the Law Society which has to administer the legal aid scheme within the framework of the Act and the Regulations as they stand. But in Hanlon, Lord Simon described the desirability for reconsideration of these provisions as urgent. Now, over four years later, it is certainly no less urgent". That was said in December of last year.

My amendment is simply to provide that the charge should be such as the court should consider just and equitable in the circumstances, so that if there is a charge for legal costs against some of the money, or a certain amount of the charge, the judge can say what it is. I therefore put down this amendment. After I put it down we had the 34th annual report of the Law Society. I am afraid that it was most disappointing. They issued a consultation paper in which they made one or two suggestions, such as that the charge on the money could be postponed, and the like. Then they went on to say, in late January of this year, This paper is issued as a consultation paper to enable comments to be obtained from the profession, the courts, building societies and other interested parties before proposals are put to the Lord Chancellor's Department. A list of consultees is attached". There were then listed 15 bodies which still had to be consulted; and we know what that means. They all set up committees to do it; the committees will go into it. Those committees will report—whether it is the building society associations, the legal action group, or this, that and the other—and then the matter will go before the whole body. When does it ever get back to action? Indeed, in this very report it says: The responses and their consideration by the Legal Aid Committee fall outside the province of this year's annual report. It is hoped that during next year a full submission can be made to your Lordships for a change in the regulations".

It reminds me of our little nursery game of the stones of the plum, "This year, next year, sometime, never". We have "this year", "next year", and then "sometime during this parliament". That is why I put down this amendment. I am afraid that on Second Reading my noble and learned friend the Lord Chancellor suggested that it was not the time or the occasion to discuss these matters. This is a clause of the Bill which deals with legal aid. Five years ago it was described as urgent and I therefore put forward this amendment. It seems to me that we should cut all the cackle with all these committees and get down to the simple thing—a just and equitable charge. That is a sensible solution which I suggest. I do not know whether it will carry much weight in the quarters which really matter. I beg to move.

3.15 p.m.

Lord Simon of Glaisdale

My Lords, your Lordships have heard from my noble and learned friend that here is a source of injustice which has been outstanding in public gaze for five years and to the injustice and hardship involved there have been reiterated expressions by your Lordships' House, by the Court of Appeal, and by the Family Division of the High Court. It seems to me really unfortunate that the matter is now discussed for the first time on Report. It was put down by my noble and learned friend for discussion in Committee. Unfortunately what happened was this. It was immediately followed by a Motion by my noble and learned friend Lord Elwyn-Jones to leave out a highly contentious clause. That related to judicial review. My noble and learned friend knew, of course, that all his followers were passionately interested in judicial review and equally interested in the appellate procedure which related thereto. He also knew that "pallid ashes follow fire" and obviously he did not know how long that passion could be sustained. So he wanted his Motion to be discussed as the first item of the second day in Committee. He therefore persuaded my noble and learned friend Lord Denning to postpone his amendment, which is now before your Lordships, until Report stage.

What happened then may remind your Lordships of a passage from one of Fielding's novels which runs something like this. He forthwith, ravished this fair creature, or at least would have ravished her, if she had not, by a timely compliance, prevented him". My noble and learned friend on the Woolsack, recognising that the clause had aroused universal hostility, made a few protestations of virtue and then allowed it to be negatived on collection of voices. My noble and learned friend the Lord Chancellor therefore lost his clause. My noble and learned friend Lord Elwyn-Jones lost the chance of defeating the Government in the Division lobbies, and your Lordships lost the opportunity of discussing a matter of profound social interest in Committee when a difficult problem could have been far better identified than is possible on Report.

As my noble and learned friend Lord Denning pointed out, this provision arouses particular difficulty and hardship in relation to the ordinary, typical divorce suit. Thus one must remember this frequently. At the moment nearly one in three marriages is liable to end in divorce and one child in five under the age of 16 is liable to find his parents divorced. What happens to the matrimonial home therefore is of not only profound but also widespread significance.

The typical divorce case consists of three matters. The first is whether the marriage can be dissolved. That is comparatively simple now—all too simple—and comparatively uncostly. Then there is the question of custody of and access to the children. That is frequently contested, whatever conciliation procedures can be adopted, and is apt to be expensive.

The third matter relates to the matrimonial property and financial provision. That is very much influenced by the second matter, the question of the custody of the children, because the parent who has custody of the children will have a strong claim to occupation of the matrimonial home. Therefore when the matrimonial home is considered in a divorce case it comes into the case obliquely, quite unlike, say, a contest between landlord and tenant, or the question of who, under a will, ought to enjoy the ownership of the matrimonial home. It is because it comes into it obliquely, and almost inevitably in so many cases, that a provision which suits the normal case such as my noble and learned friend described is quite unsuitable in divorce.

In a normal case the solicitor has a charge for property recovered or preserved through his instrumentality. It is recovered if there is a claimant who is successful. It is preserved if there is a respondent who is successful. That charge by the solicitor of course only comes into effective operation if he is not paid by his client for the proper fees and disbursements that he made during the case. Therefore he is given a charge on property recovered or preserved.

My noble and learned friend has described the parallel in the legal aided action, and it is at the third stage after the proceedings are concluded that the charge comes into operation and into question. But perhaps I may just say this: at the initial stage of the assessment of resources and determination of what is a proper contribution by the legally-aided client, the matrimonial home is entirely left out of account. But, once the action is concluded, the legal aid fund, like the solicitor in unassisted litigation, has a charge. But, as I ventured to point out to your Lordships, in a divorce case the analogy with a private solicitor in a case, say, of landlord and tenant is quite unreal.

Up to 1976 the matrimonial home was entirely exonerated from charge. After 1976 the first £2.500 of any property recovered or preserved was exonerated, but otherwise the charge attached in favour of the Law Society as the custodian of the legal aid fund. My noble and learned friend has described the hardship which can arise. In the case that he mentioned, which came before your Lordships' House, it was decided that even though the matrimonial home only comes into the matter obliquely, if it is nevertheless in issue whether as to ownership or even as to occupation, then it is subject to the charge.

The second point which was decided was that all the costs, not merely of the property and the financial issues, were subject to the charge. The third point which was decided was that the Law Society could postpone enforcement, or could transfer the charge to some alternative home. But of course your Lordships will see that that merely postpones the problem: it does not dispose of it. In fact, in that case, the unfortunate wife would have been left homeless though she had the custody of the children.

The question of how the matter is to be dealt with is much more difficult. There is one obvious thing which should be done and that is to increase the £2,500 in line with inflation, but that merely tinkers with the problem. The second is to exempt the matrimonial home from the charge altogether. That was proposed by the Benson Committee. That was the position before 1976, and that was what was strongly endorsed by my noble and learned friend the Lord Chief Justice of Northern Ireland, who was sitting in the case that my noble and learned friend mentioned.

The disadvantage of that is that the matrimonial home may be of very great value, and it seems very unjust to the general body of poorer taxpayers if the matrimonial home is delivered unencumbered to a litigant. The third solution is to limit the charge to the costs of the property dispute. The one I recommended to my noble and learned friend on the Woolsack when I wrote to him about this was to give the Law Society a discretion provided one gave the Law Society guidelines such as the interests of children, or weighing the interests of the litigant against those of the general taxpayer.

However, there is a fifth possibility, and that is the one which is proposed in this amendment: it is to give the court an unlimited discretion. The difficulty about that, as I see it, is that the Law Society already has the discretion to postpone or to transfer to another home. It seems to me awkward to have the discretion exercised by two different bodies. The one thing which is certain is that here is an injustice and a social wrong which is clamant for redress. I therefore put my name to this amendment failing any better solution offered by my noble and learned friend on the Woolsack.

Lord Mishcon

My Lords, I propose to be extremely brief in endeavouring to put the view of my noble friends on this important amendment. The case for this amendment was put most succinctly by the noble and learned Lord, Lord Denning, and, if I may say so, in somewhat graphic terms but most feelingly by the noble and learned Lord, Lord Scarman, in the case of Hanlon v. Hanlon, when he described what your Lordships are considering at this moment as, a poverty trap set by the legal aid legislation in the very heartland of modern matrimonial law". If the noble and learned Lord, Lord Scarman, can say that; if the noble and learned Lord, Lord Denning, puts his weight behind an amendment of this kind and if it is supported by the noble and learned Lord, Lord Simon of Glaisdale, your Lordships will realise that you are dealing with something rather serious and something which ought to have your consideration.

I can only tell you in this brief resumé of, so far as I am concerned, the merits of this amendment that there is nothing—and I say this as a practising solicitor—so heartbreaking to a spouse at the end of what are usually themselves heartbreaking proceedings as to he told that, although the matrimonial home has been recovered, let us say for the wife, which is the more usual case, there is a charge which is going to be put upon that home in the amount of the costs involved, subject only to an allowance of £2,500, and that those costs have as their reason that they are the costs of recovery, or retention, of the property concerned.

3.30 p.m.

There is one argument that has not been put forward so far in the discussion, as I remember, and that is the only reason for my rising. It is that that argument does not stand up to the practice of the law, because although it is true that if any litigant endeavours to obtain or retain property he may well have to bear the costs in that connection, in matrimonial proceedings (as I am sure the noble and learned Lord the Lord Chancellor will in fairness, if he is opposing this amendment, concede) it is absolutely exceptional for the judge to award costs to one party. Always each party pays its own costs. Therefore it must be unjust for the costs of these proceedings to be levelled, because it is a legally-aided case, upon the property itself, and therefore upon the person who, as I have said, has gone through enough—usually the wife.

We have an opportunity, not of loading the legal aid fund with what may be an expenditure which is not justified because of the worth of the asset; nor are we saying in this amendment, moved so ably by the noble and learned Lord, Lord Denning, that in no circumstances should there be a loading of these costs. What is done absolutely justly is to leave it to the court to consider what is just and equitable. If your Lordships have faith in our judiciary, as I am sure the noble and learned Lord the Lord Chancellor has, what could be fairer than to leave this to the discretion of the judge, he knowing all the circumstances of the parties, the worth of the home and so on, to do that which is just and equitable? We from these Benches ask your Lordships to do what is just and equitable in relation to this amendment.

Lord Lloyd of Kilgerran

My Lords, it is with the greatest diffidence that I dare to intervene on this occasion, but when I hear the noble and learned Lord, Lord Simon of Glaisdale, speaking on this amendment and saying that here is a social wrong clamouring to be dealt with then this is a matter which must be dealt with by your Lordships with the greatest interest and attention.

The noble and learned Lord, Lord Simon of Glaisdale, disclosed to the House that he had written a letter to the noble and learned Lord who sits on the Woolsack and indicated that certain guidelines might be given to the courts in dealing with this social matter. The noble Lord, Lord Mishcon, has said that all these matters should be left to the discretion of the judge. I shall not in any way speak about the discretion of judges, but I should have thought that it might help the judiciary on this social matter to have some guidelines. I should like to hear the noble and learned Lord, Lord Simon of Glaisdale, tell us what guidelines he has suggested to the noble and learned Lord the Lord Chancellor on this important matter.

Lord Meston

My Lords, in practice I come across the legal aid charge in matrimonial litigation almost daily. I understand the sentiments of this amendment, but I do not find it easy to support it in its present form. There are cases in which the cake is small enough even if the parties remain married. It becomes almost impossibly small when they become divorced, even before they start running up the costs of litigation. The impact of typical costs of, let us say, £2,000 becomes an almost intolerable burden. Indeed, the system under which the legal charge is presently operated does not always allow the court to perform its basic task of meeting the fundamental need of the family for accommodation after the breakdown of the marriage.

Having said that, one must face several facts which lead me to suggest that this amendment in its present form is perhaps aimed at the wrong target, or targets. When secured against the matrimonial home the charge is already subject to postponement, which can be an indefinite postponement and is always free of interest. Therefore, matrimonial litigants are already in a better position than other legally-aided litigants. To allow the removal of the charge altogether would put matrimonial litigants in a better position still. To allow abatement of the amount secured would be to remove an important sanction—a sanction which presently encourages settlement of matrimonial litigation without the costs thereof.

There are still more matrimonial litigants who get or give the impression that they are in effect driving around in a taxi with the meter covered up, and they have to be reminded from time to time that the meter, although covered up, is still working. With due respect to the noble Lord, Lord Mishcon, it is important that they are reminded of that at the beginning of the litigation rather than at the end. To allow a discretionary abatement in the present form would be to introduce yet another uncertain factor into an area of matrimonial financial law in which Parliament has already imposed a great number of wide discretionary factors on the courts, making it very difficult for those who have to advise litigants.

One other feature of this amendment which leads me to suggest that it is directed at the wrong target is that it is limited to the matrimonial home. The real anomalies and hardships of the present system arise because although the charge is postponed (indefinitely if necessary) when it is imposed upon the matrimonial home if that is recovered in the form of bricks and mortar, it operates automatically and immediately if the spouse concerned recovers cash rather than property, although that cash may all be needed for a substitute home. The other anomaly arises if, having recovered a home as such, the spouse then wants to sell it and buy a substitute home and finds that he or she cannot do so because, subject to the discretion of the Law Society, a charge may operate.

Those are the restrictions which create false economies from the point of view of the taxpayer, who is one of the interested parties in this sort of litigation, because they can inhibit people from selling up their homes, which may lead them to having to remain there although the mortgage on that property is being paid wholly or in part by the Department of Health and Social Security. Alternatively, it can force them into the public housing sector. As I know all too well as a lawyer, it also encourages devices to avoid the impact of the charge.

This therefore leads me to suggest that this amendment in its present form will not help. But I thoroughly understand its spirit and echo the words of the noble and learned Lord, Lord Denning, that something must be done.

The Lord Chancellor

My Lords, I shall try to deal with what I fear is a rather more complex question than the three first speakers would lead us to suppose, but I am greatly helped in his practical knowledge of the subject by the speech that has just fallen from the noble Lord, Lord Meston, who seems to be very near the truth of the matter. I said, I think on Second Reading but possibly at another stage, that I have no authority from my colleagues to use this Bill as a vehicle for unlimited and open-ended commitments on the public purse. I must reiterate that.

It is very important for the purpose of the administration of the legal aid scheme—and I am deliberately approaching the thing from the opposite end from the noble Lord, Lord Meston—that two principles should be borne clearly in mind. The legal aid bill to the taxpayer is one of the most—indeed, I think actually the most—rapidly increasing calls upon the public purse. That is not the fault of the Law Society, nor of the Lord Chancellor nor perhaps even of the litigants—because I have to consider both the criminal legal aid scheme, in which many of those legally aided do not want to be there anyway and the civil legal aid scheme, many of whose users are involved in matrimonial disputes, although most probably are not. But it is absolutely vital from the point of view of the administration of the scheme that no one issue should be viewed in isolation from the others, and it is vital to bear in mind that this is one of the demand-led subjects of public expenditure which can only be satisfied wholly at the expense either of other demand-led subjects of expenditure, or, alternatively, of one of the cash-limited subjects of expenditure.

It really is vital that those responsible (and the Minister responsible, such as he is, is myself) for legal aid, whether civil or criminal, should be entitled to retain a certain degree of priority which can only be done if one subject is not taken out and disposed of irrespective of the other priorities. Otherwise, a number of disagreeable alternatives would inevitably face the House or, rather Parliament—because I suppose that, in matters of public expenditure the other place is of primary importance—one of which would be to fail to extend the financial limits available and another of which might be to fail to extend the range of services which could be covered by legal aid at all. This one subject, which cannot fail to affect very significantly the total expenditure on legal aid, is something which should be approached with at least caution from the top as with the practical considerations which the noble Lord, Lord Meston, has quite rightly brought to our attention. That is the first thing that I want to say.

Secondly, my noble and learned friend Lord Denning quite rightly referred to the thirty-fourth report of the Legal Aid Advisory Committee. He summarised what they said, but I should like to read out the actual words. Last year—and I am reading from the 1983–84 edition—they said: Both we and the Law Society considered at some length the operation of the statutory charge in matrimonial proceedings". That is the very statutory charge which is the subject matter of this amendment. They go on: Since then, the society has circulated a consultation paper to a number of organisations seeking views as to possible changes in the regulations". My noble and learned friend was a little contemptuous of the Law Society in making fun of a consultation paper issued by the Law Society on the very subject matter of his amendment. This year, next year, sometime, never, he said with great contempt. But really the Law Society and the Legal Aid Advisory Committee surely are entitled to a little more courtesy than that.

3.45 p.m.

The report goes on: Once the society has assimilated the results of its consultation exercise and produced firm proposals we shall consider the matter again". This is not the Law Society but the Legal Aid Advisory Committee, which is precisely my constitutional adviser, as to priorities in the expenditure of public money. To make fun of that and to ask when we shall expect action—and "Never at all!" was the clear implication—is, I think, disrespectful not only of the Law Society itself but also of the Legal Aid Advisory Committee which is the constitutional adviser of the Government in such matters; and to whose advice, of course, we would give the very greatest possible attention without necessarily being bound to it.

I come now to the merits of the matter. My noble and learned friend Lord Denning quite rightly started by considering the philosophy of what is called the statutory charge which is at the heart of our legal aid system and has been so from its start in 1949. I should like to add, respectfully, something about the philosophy of that charge. The legal aid scheme—and I am talking now only about civil legal aid—is not designed to provide a free service like the National Health Service or public education. It is designed in adversarial proceedings primarily to put a person without means in as good a position as an unassisted client paying his solicitor and counsel will be put into. That is the object of the scheme. It is therefore vital that the House should be aware of where the unassisted litigant would be in adversarial proceedings whether matrimonial or other.

The answer is this. Every plaintiff, or other claimant in civil proceedings, has to ask himself the question, at every stage of the proceedings, from their issue to the very end—unless he fights it to a judgment, which is the exception and not the rule, happily for our courts and happily for everyone else—whether the game is worth the candle, whether the costs will come to something more than the stake; and the stake as viewed not in the light of hindsight but in the light of prospective chances as to what he predicts (with the degree of uncertainty which, alas, accompanies all litigations) the litigation will cost. And when he does so, he is—I was about to say, "brought to his senses", but this would be something which I hope he has never lost—brought into confrontation with reality by the knowledge that his solicitor has a lien on the yield of anything that he may recover in the litigation.

So in the case of the unassisted litigant there is a first charge upon the proceeds of the litigation in favour of his own solicitor. This he must take into account at every stage of the case. The object of the legal aid scheme, as it exists, is to put the assisted litigant (who does not have to pay whereas the taxpayer does) in the same position as the unassisted litigant. Therefore, from the very first the legal aid scheme has provided for a statutory charge (which is what we are talking about) not in favour of the individual solicitor, because he is paid out of legal aid fund, but in favour of the legal aid fund itself.

That means that, like the unassisted litigant, the assisted litigant must pause before he presses on with his proceedings at any stage to ask himself how far the game is worth the candle. I use that popular language without any kind of pejorative implication for the assisted litigant. He must ask himself that question and he is forced to do so by the fact of the statutory charge. It is quite true, of course, that matrimonial proceedings are not quite the same as, let us say, a personal injury case arising out of a motor accident, which would be another typical type of civil litigation.

May I say—perhaps I should have made this point earlier—that of course the incentive in both cases ought to be to settle on reasonable terms. But that is something which shows part of the difference between the matrimonial case and the ordinary civil case. I think it is more, and not less, important in a matrimonial case to encourage the parties to settle on amicable terms. Indeed, when we were discussing a very different Bill last Session this was a point which was made very forcefully from every side of the House, and I think it is a sentiment which all of us who have practised would have very strongly in mind.

Therefore the statutory charge has an important, indeed an indispensable, part to play in matrimonial proceedings no less than in other adversarial proceedings, especially as—and here I say this sadly because I have been there myself personally as well as professionally—the parties to matrimonial proceedings are not unknown to each other and are very often at loggerheads with one another, embittered by the very cause out of which the matrimonial proceedings arise. So we must not approach the statutory charge in relation to matrimonial proceedings totally with starry eyes.

The fact is that the courts, the law and the profession already take account of the special nature of matrimonial proceedings. Existing legal aid arrangements take account of the possible hardship which can arise from them in relation to the matrimonial home in particular, by exempting the first £2,500 worth of property recovered—and of course it is not only the matrimonial home, but other types of property, which are involved—or preserved by an assisted person from the scope of a legal aid charge altogether; and that is a sum which can be viewed in relation to the capital limits in the limits for eligibility.

Moreover—and I think I am right in saying that the noble Lord, Lord Meston, for the first time adverted to this in the course of this discussion—where the property concerned is the former matrimonial home, enforcement of the charge may, as matters stand, be postponed in appropriate circumstances until its first sale to avoid undue difficulty and hardship being caused to the assisted person and—and these are most important and not necessarily taken account of in the amendment—the children of the family. In certain conditions such a postponed charge may even be transferred to a substituted property after sale for the same reasons and of course to the proceeds of the sale, which may be one of the options open to the court, as I think the noble Lord, Lord Meston, also pointed out.

I should have thought that to ask the court, without any guidelines or guidance—and here I am grateful to the noble Lord, Lord Lloyd of Kilgerran, for bringing our attention to the question—from the Government (who are, after all, the paymasters in the name of the taxpayer, and are using taxpayers' money) as to what the other priority charges on the legal aid fund may be, to decide simply as between the parties in a matrimonial case how far it is just and equitable for the charge to bite, in the light of the case, is to ask it to achieve the impossible. I was immensely impressed with what the noble Lord, Lord Meston, said on that very topic. There are many exceptions, and we shall be coming to one or two of them in the course of this afternoon's discussion, but it is not in the main for the judges to decide how to spend public money, and to decide it when they have before them only the rights and needs of two parties bitterly opposed to one another, at any rate in a minority of cases, and not to have to consider the whole scene in the light of the social priorities of the legal aid scheme itself.

I am not by any means saying that there is not something to be discussed here. I make no reproach to anyone; on the contrary, I think that the House is indebted to every noble Lord and every noble and learned Lord who has played a part in this debate. But at the end of the day I am bound to say that I come down on the side of the noble Lord, Lord Meston, in saying that the target aimed at is not the right one, that the method adopted is not appropriate and that the House would be better to take the advice of the constitutional body, the Legal Aid Advisory Committee, and wait for their firm proposals when they come out. Although this will involve a certain amount of delay, the House should take comfort from the fact that it is simply not correct to say that nothing has been done. What has been done is to differentiate the matrimonial case from the others and not to put hopes on this particular amendment which, as I say, is not well thought out and has not on the whole been justified on grounds which I feel are convincing.

My noble and learned friend Lord Simon of Glaisdale, whose experience in this particular branch of the law is I shall not say quite unrivalled, but almost unrivalled, and who was for many years President of the Family Division, quite rightly said that he had put his name to the amendment in the hope of getting something done. I am not in a position to make promises; otherwise I would make them. I have taken on board the urgency expressed by those who have spoken, who are perhaps better entitled than Ito speak because although for many years I practised in family law, it was under a dispensation prior to the 1969 Act. The fact of the matter is that those who have spoken have more recent and deeper experience than I, but I would respectfully say to my noble and learned friend Lord Simon of Glaisdale that I have taken full account of what has been said.

I hope that I should never be unsympathetic towards those who are involved in family breakdown, but I must say that there are two sets of people who, whoever else may be involved in family breakdown, are not responsible for it. One is the other postulants to having a share of legal aid, whose rights ought to be considered in this connection with the other ones, and the second is the taxpayer, who has nothing whatsoever to do with the dispute. Having said that, I would have no reproach for my noble and learned friend for having aired the matter, but I suggest that the noble Lord, Lord Meston, came to the right conclusion.

Lord Denning

My Lords, the problems have been with us since 1980. Five years ago, in March 1980, they were pointed out in the Hanlon case. The possible solutions have been with us since March 1980. My noble and learned friend Lord Simon of Glaisdale has gone through them. So we have the problems and we have the possible solutions. But over those five years we have not had any solution at all, and the solution which we now have offers further consultations with 15 representative bodies, with the hope of reporting at the end of the year and, after that, reporting to the Lord Chancellor, who will then have to consider it.

That is why I have put down this amendment—to get something done. The solution which I have suggested seems to me the one way to cut out all this cackle and delay. Let the judge decide it; he can take the interests of the charge or the Government in hand and he can take everybody's interest in hand. That is why I suggested this solution of getting rid of all this talk and getting something done. But there it is.

I know that my noble and learned friend the Lord Chancellor has strong forces behind him and I do not think it is any good my taking the matter further here today. However, I hope as a result of this discussion, and these matters having been brought into public debate, that some urgency will be introduced into the subject which I think was said to be urgent in this House judicially five years ago. A month ago, a Lord Justice of Appeal repeated that it was still urgent. So I hope that the urgency will have impressed itself upon all those who are responsible for legislation.

4 p.m.

Lord Shinwell

My Lords, may a layman knowing nothing of the subject be permitted to ask a question? I have been listening to some wonderful speeches; but may I ask a simple question? If a matter is left to the discretion of the judge or judges, will it not be subject immediately to an appeal on either legal or moral grounds and therefore with no validity at all, unless it has the statutory legal validity provided by legislation?

Lord Denning

My Lords, in answer to that question. I agree that it is difficult to have guidelines for judges and it will take years to work out what the guidelines are. No, my Lords, leave it to the judges. There may be an appeal, but you can trust our Family Division judges. Do not worry about the Court of Appeal.

The Lord Chancellor

My Lords, I do not think my noble and learned friend indicated whether he was pressing the amendment and wanted me to put the Question, or wanted to withdraw it.

Lord Denning

My Lords, in the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Denning moved Amendment No. 37:

After Clause 41, insert the following new clause: (" . In section 13 of the Legal Aid Act 1974 subsection (3) shall be omitted.").

The noble and learned Lord said: My Lords, I am afraid that I am on the same tack again. Here, five years ago, the judges suggested that the law was unjust and ought to be amended. Again, nothing whatever has been done about it, so I am on the same tack. Again, it has to do with legal aid, which to many people is a most important subject. Let me tell your Lordships what this is about and illustrate it by a case which came before us.

A lady in hospital in Birmingham—quite a poor lady—had a baby who was born deformed and she complained that it was all the fault of the surgeon. He was a first-class surgeon at Birmingham, but she said that he pulled too hard and too long, with the result that the baby's brain was said to be hurt. That case had to be contested through the courts right up to the House of Lords and it was held that the surgeon and the hospital authorities were not to blame. But there was all that expense running into £500,000 in legal costs, with great experts on each side.

What was to be done about the legal costs? Of course, the lady had legal aid. She could not pay anything and she did not get anything. But what about the Medical Defence Union or the hospital authorities? The costs in the Court of Appeal and in the House of Lords were ordered to be paid by the legal aid fund, which subsidised and financed this litigation, because there is a provision in the statute that the court can do what is "just and equitable".

What is to be done about the costs when the case is tried by the judge of first instance? The Legal Aid Act of 1974 stated that at first instance the position is different. If the case is brought by a legally aided person, he himself does not have to pay any costs but he gets them. What it stated was that if the case is brought by an unassisted person against a legally aided person and the unassisted person wins his case, he cannot get any costs at all against the legal aid fund, although he has been put to enormous expense.

I now go back to the report of the Legal Aid Committee in 1974 which stated: There is no logical justification for a distinction to be applied between cases tried at first instance and those on appeal. We, therefore, recommend that the same test be applied in all cases". In 1983, the committee stated: We maintain our support for the proposal that there should be no different test between courts of first instance and higher courts. We see no distinction between them". The statute has made the distinction.

I now want to deal with a case which goes back to 1979 and to what the judges said they thought about it. In that case, two coal miners had become television entertainers. They had been on "Opportunity Knocks" and they did jolly well out of it. They employed a manager or a managerial company to run their affairs and then an iniquitous transaction, as the judge called it, was forced upon these two miners. They were to get only £10 a week each. The profits were to go to the managers and there was a five-year contract. The miners won their case and they had the transaction set aside.

This is what Lord Justice Browne-Wilkinson said: In reality they had no option but to sue to get rid of those iniquitous transactions. Yet at the end of the day they are without the fruits of their success and burdened with a bill of many thousands of pounds as the price of their freedom. I express the hope that Parliament may look again generally at the case for giving an unsuccessful plaintiff wider rights to be paid his costs out of the legal aid fund". In 1979, the judges asked Parliament to look again at the matter; but it has not looked at it at all since then. That was concurred in by Lord Justice Buckley.

Then in my own court in 1981 we had a case where a small trader with a photographic business sold it to another man for £5,000 down and £15,000 payable by £1,000 every quarter, or something like that. The trader received his initial payment of £5,000, but the defendant did not pay the rest of the instalments. When the trader sued for them, the other man said: This is all fraud. The takings of the business were not properly stated". He resisted the claim with a charge of fraud. It was a cock-and-bull story and the judges said so when the case went before them. That man was putting up the charge of fraud simply as an excuse to get out of paying for the business. The case had to go to a court of law.

Of course, the plaintiff won his case, because it was a cock-and-bull story, as the judge found; yet he had to pay, I think, £8,000 costs. The defence had been aided all the time by the legal aid people; the case would not have been defended otherwise. The judge said: Mr. and Mrs. Theu will no doubt ascribe the disastrous consequences of their successful litigation to what in modem jargon might well be described as the 'unacceptable face of British justice' ". Those were cases where the plaintiffs were unassisted, the defendant had legal aid and fought them, and the plaintiffs had to pay all the costs without getting a penny. But I am going to add further to that. There are not only those statements by the judges; there also is the 33rd annual report of the committee which, in November 1983, stated: We continue to support broadening the provisions of the Act to permit unsuccessful plaintiffs to receive costs from the fund". So there we have not only the judges, but also the Legal Aid Committee itself. Why has not that injustice been remedied before in Parliament—the injustice of a plaintiff who is not aided suing one who receives legal aid?

But there is the reverse, much more frequent, position where a man with no money gets legal aid and sues a defendant who may be anyone; he may be a legal executive. A typical case was that of Mr. Kelly. I described it earlier and so I shall be very brief in dealing with it now. He was working for the London Transport Executive and he suffered a little cut to his head. He was not off work. He went on working for six months and then he became unemployed. Two or three years afterwards he went to his solicitors and told them a most plausible story, as some of these litigants do. He told them that he had had depression ever since the accident and that it was all due to the cut on the head he received when he was with the London Transport Executive. He got legal aid. The London Transport Executive felt that it would cost far more to fight as he was legally aided and so they offered him about £700. He would not take that. Nearer the trial they offered £4,000, but he would not take it. The case came before the judge and the judge said that Mr. Kelly was a chronic alcoholic. It was another cock-and-bull story and if he had been left on his own, he would never have brought the proceedings at all. His depression was all due to his chronic alcoholism.

The case came before the court over which I presided. The London Transport Executive said that they had been put to £8,000 in costs in fighting this man's claim, and that it was brought because of the legal aid fund. They said, "Can't we get some costs out of the legal aid fund because it is really they who are responsible for all this expense?" Although I was on the case I am afraid that I had to give way to the statute. The statute says that the defendant in a case such as that can get costs from the legal aid fund only if he suffers "severe financial hardship". The London Transport Executive were already about £8 million in the red and for them another £8,000 did not seem to be financial hardship. I am afraid I had to accede to that argument. I did not like doing it; but there we are.

What if that case had been before the Court of Appeal? As I have told your Lordships, the Court of Appeal can do whatever is just and equitable. Had we been able to do that, your Lordships can imagine what would have been the outcome in that case. The 33rd report of the Legal Aid Committee said: It is tempting to move forthwith to recompense out of the legal aid fund for the unsuccessful individual in all cases"— the same as the Court of Appeal— but it would be reckless to do so without counting the cost". Injustice is to be done because of the cost to the legal aid fund. I do not like that way of saving costs; I do not like that way of saving money; but there it is. They put it off: Your Lordships' officials should be asked to provide a realistic estimate of the cost to the legal aid fund". There it is; again put off, with calls for estimates of the cost and so forth. How much longer are we to go on with this?

4.15 p.m.

These are combined amendments. One concerns the unassisted plaintiff who sues the legally aided defendant. I have the recommendation of the Legal Aid Committee in my favour. I hope that the noble and learned Lord the Lord Chancellor will accept that at least the unassisted plaintiff as against the legally aided defendant should get his costs out of the fund. On the other one, I know that the legal aid fund has put it off, but I should like the same in the Court of Appeal and at first instance—whatever is just and equitable. I know it will be said, "What about these guidelines?" I think judges can do what is just and equitable without bothering about guidelines. I trust the judges. My Lords, I beg to move both these amendments.

The Lord Chancellor

My Lords, the Question is that Amendment No. 37 be agreed to? But in spite of what my noble and learned friend has just said, I must tell him from the Woolsack that if he carries this amendment, he cannot propose the next one.

Lord Denning

My Lords, I am much stronger on the next amendment I think because the Legal Aid Committee has put this one off. In other words, if that is the fit and proper ruling, I shall rely on my next amendment because I am on unassailable ground there.

Lord Simon of Glaisdale

My Lords, I do not know whether my noble and learned friend has put the Question.

Noble Lords

Yes, he has.

Lord Simon of Glaisdale

My Lords, I confess I put my name to this amendment in error. My noble and learned friend Lord Denning was ill; I wanted Amendment No. 38 discussed and so I put my name to it. But the umbrella seems to have gone over amendments Nos. 37 and 38. As my noble and learned friend on the Woolsack has said, we are dealing as much with Amendment No. 38 as with Amendment No. 37.

When I used to be responsible to an extent for the administration of the legal aid scheme what seemed to me most unjust was the requirement that a defendant who was defending an action funded by the public should show at first instance severe financial hardship before he could get costs out of the legal aid scheme. As my noble and learned friend has said, that is not the test on appeal; but one asks, if the public funds an action which causes hardship, why should not the public meet that hardship? Why should there be the requirement of severe financial hardship?

My noble and learned friend on the Woolsack will no doubt say that this would cost money and that he promised that the Bill will not involve any burden on public funds. I have considerable sympathy for my noble and learned friend on that point because once one has been a Treasury Minister one bears the mark of Cain on one's forehead throughout life. But I think that my noble and learned friend on the Woolsack should tell us how much this minor meeting of a major injustice would cost.

I also suggest that your Lordships cannot be absolutely bound by any assurance that the noble and learned Lord the Lord Chancellor may have given to his colleagues.

Naturally, your Lordships will want to take account of that not only because of the affection in which your Lordships hold the noble and learned Lord the Lord Chancellor, but also because we would not want to jeopardise his chance of getting a useful measure of law reform such as this in a subsequent Session. Nevertheless, your Lordships cannot be absolutely precluded by what has been said between my noble and learned friend the Lord Chancellor and his colleagues. Your Lordships are a House of Parliament, and when a grievance is brought to your Lordships' attention your Lordships are not only entitled but, indeed, bound to rectify it.

The Lord Chancellor

My Lords, speaking now not from the Woolsack but from my theoretical place in the House provided by statute of Henry VIII, and therefore making no pretence of being impartial, perhaps I had better begin by explaining what these two amendments are about. The purpose of Amendment No. 37 is to remove the whole of Section 13(3) of the Legal Aid Act 1974. Amendment No. 38, which has not yet been moved, would remove subsection (3)(a). The reason why I said that I could not call the second amendment were the first to be carried is that one cannot remove paragraph (a) from a subsection that no longer exists. I thought it right to draw the attention of my noble and learned friend to this simple piece of logic.

Coming down to the meat of the matter, again we have to think of the underlying purposes of legal aid in the light of what I said, and will not repeat in detail, about the constraints on the administration, which are that it is demand-led, and anything which is increased in the way of expenditure in one direction would have to be met out of the provision for other demands for legal aid from those who may be in greater need. Therefore, an absolute principle must be one of priority. This fact was recognised by the advisory committee in the report to which my noble and learned friend who proposed this amendment referred, but to which he did not appear to have given his own attention.

Let us consider how the matter would have worked if there had been no legal aid scheme. There has always been an injustice, and an injustice on both sides, where a relatively impoverished man or woman sues a relatively wealthy corporation or person. The relatively impoverished person may not have the means to take his case to court. On the other hand, the relatively wealthy person knows that if he brings a case against an improverished man, then he will not be able to get anything at the end of the day for the simple reason that one cannot get blood from a stone. The state does not guarantee either the solvency or the honesty of potential defendants.

Secondly, if that position is reversed, the relatively wealthy defendant, sued by a relatively impoverished plaintiff, may find it more profitable to settle an unjustified claim than he would to fight it all the way to extinction for exactly the same reason but with the roles reversed.

With the legal aid scheme, ever since 1949 Parliament has decided to assist the impoverished person. This means that he suffers no injustice if he is completely exempt from paying the costs: the relatively richer party suffers all the injustice, if there is any and if he wins. If he loses, the of course he suffers no injustice at all.

The legal aid scheme provides that there be two tests before a plaintiff can start an action. One test is a test of means. He can of course start an action if he starts it at his own expense, but before he can invoke legal aid he must justify, both on capital and on income, the means requirement. The other test is one of merits. The test of merits, which I adumbrated in reply to the previous amendment, is that the person will not receive legal aid unless a group of legal practitioners—barristers and solicitors—decide that an unassisted client would be advised either to proceed or defend as the case may be.

That group of committees, which forms a network over the entire country, is intended both to defend the public purse and to defend the unassisted party. Until 1964, I think it was, the unassisted party was not saved at all from the potential injustice of his winning a case, either as plaintiff or as defendant, to which the state had contributed the means to his unsuccessful opponent. In both this amendment and that which succeeds it, we are therefore debating what we are to do about successful but unassisted parties.

It has long been a hobby-horse (if he will forgive my describing it as such) of my noble and learned friend that if the state subsidises the unsuccessful party then it ought to pay the costs of the successful party. With great respect, I do not wholly go along with him in that, and I never have. Certainly I do not go along with the proposition he made, first, that a successful plaintiff is in the same position as a successful defendant; secondly, that the costs of the appellate proceedings are on exactly the same footing as the costs of first instance.

When legal aid committees decide whether to give or withhold legal aid on the merits test, they only have the potential client's—the applicant's—word for it as to what really happened. They have not seen the other side of the case. They are in no better and in no worse position to advise the potential litigant than an ordinary solicitor or barrister would be if an ordinary unassisted client came to him.

But when a case comes to appeal, the cards are face up on the table. If the assisted party then, at the expense of the state and on the advice of the legal aid committee, proceeds to appeal for any reason, or to resist an appeal for any other reason, then he knows what he is in for. It is legitimate in most cases for the legal aid fund to be made to bear the burden if he is not successful. It is right, once the cards are played face upwards, for the legal aid fund to take the responsibility, if they choose, to go to appeal or to resist an appeal. They know what they are in for and they are not in the position of the court of first instance.

Nor, with respect, do I accept the view that a plaintiff is in the same position as a defendant. A plaintiff chooses to bring his proceedings, whether he is assisted or unassisted. The defendant is brought to court whether he likes it or not—unless he wants judgment to be given against him by default. It was decided in 1964—and, broadly speaking, this is the current position—that the state comes to the aid in certain circumstances (and gives to the court a discretion thereby) of the successful appellant or respondent on appellate proceedings.

4.30 p.m.

It comes to the aid of a successful defendant in first instance proceedings—but only, of course, a defendant; in other words, quoting the subsection 3 which my noble and learned friend desires to omit, the proceedings in the court of first instance were instituted by the party receiving legal aid; and (b) the court is satisfied that the unassisted party will suffer severe financial hardship unless the order is made". In my submission, it is quite clear from what I have already said that the amendment now under discussion is not acceptable because it would remove both of the safeguards for the Legal Aid Fund that stand in the way of a successful litigant in a court of first instance. I think I have said that sufficiently plainly to make it clear that successful defendants are in a stronger moral position than successful plaintiffs, and that the successful party in appellate proceedings is in a stronger moral position than it would have been at first instance.

So far, so good. However, the amendment proposes that both safeguards should be removed. On that, I think I should draw attention to what the Legal Aid Advisory Committee said in its 1982–83 report. It would be difficult to quote a great deal, but I shall quote two short passages. Paragraph 226 states: Whatever the supervision exercised by the Law Society's committees through the merits test and the control of cases as they progress, there will always be some cases when the legally aided litigant loses. That is inevitable, given the lack of perfect foresight. If legal aid had a 100 per cent. success rate, it would be likely that there were people being refused legal aid who had a good case. That said, it has to be recognised that people who defend or assert their rights by means of civil litigation are put to considerable trouble and expense. The general principle of the courts is that, if successful, litigants are recompensed through the operation of the costs system. In legal aid cases, however, the cost rules are much more restrictive. It is to this feature of the legal aid scheme that we now turn". At paragraph 235 the report states: We conclude that the present legal aid costs restrictions can lead to injustice or hardship when people of moderate means who pay for their cases themselves and win against legally aided parties nevertheless find themselves having to bear all or almost all their costs. Furthermore, this injustice or hardship is a consequence of the legal aid system which was designed to give citizens equal opportunity before the law; it is primarily therefore one for the Legal Aid Fund to put right". The point to which I must come is in paragraph 236: But the resources available for legal aid are limited and must be used to best advantage. As remarked at the outset of this review, money should not be spent unnecessarily on the costs of successful parties while there is greater unmet need elsewhere". That, in much more succinct language, is what I said in reply to the earlier amendment. It is a matter of priorities. I continue quoting: As since noted, it is not at all clear from the data available what the level of the injustice or hardship is. Turning from analysis to recommendation, therefore, we are obliged to proceed with caution. The rightful disposition of the financial liabilities, where injustice or hardship is admitted, is clear enough. The Legal Aid Fund should itself bear the primary responsibility for meeting the costs of successful unassisted parties where it is deemed appropriate for these to be paid by the losing side. The Fund's right and ability then to recover from the unsuccessful legally aided party any part of sums paid under an award of costs should be a distinct and separate operation … The questions uncertain of answer are:

1. (i) when should it be appropriate for a successful unassisted party to receive payment for costs out of the Fund; and
2. (ii) how should this decision, and the amount of payment, be determined".

In my submission, it is clear that it would be altogether wrong to allow this Amendment, No. 37. The remaining amendment, which I will deal with when it is moved, deals with the question of successful unassisted defendants. At the moment we are dealing with both classes and I hope I have made it clear that this amendment is unsatisfactory in that it provides no sense of priorities; it tries to deal with an admitted problem out of context with all the others and all the questions of priorities; and it makes no distinction between appellate proceedings and first instance proceedings and proceedings begun by the assisted litigant and proceedings defended by the assisted litigant. I reserve what I have to say on the other point until the next amendment is moved.

Lord Denning

My Lords, I keep myself to the first part of my amendment; namely, that part dealing with unassisted defendants who have been sued by a plaintiff who is legally aided. The committee to which my noble and learned friend referred said there was to be no difference in principle between courts of first instance and courts of appeal. My noble and learned friend is rejecting that advice. He says that there is all the difference in the world. The next question of whether a successful defendant against a legally aided plaintiff has to prove severe financial hardship comes down to this. Justice should require that the plaintiff who is legally aided should pay the cost of the defendant. On the other hand, it does mean a cost to the Legal Aid Fund and a cost to the Exchequer. Indeed, the Legal Aid Advisory Committee said it could not make such a recommendation without counting the cost. Therefore, it is a case whether injustice is to continue because the cost of doing justice is too much. I do not accept that argument but, on the other hand, in view of the general discussion on this Amendment No. 37, I do not press it.

Amendment, by leave, withdrawn.

Lord Denning moved Amendment No. 38:

After clause 41, insert the following new clause: (" . In section 13 of the Legal Aid Act 1974 paragraph (a) of subsection (3) shall be omitted.").

The noble and learned Lord said: My Lords, I have spoken to this amendment. There is a much stronger case here. I have quoted the judges from 1974 and 1982 saying that when an unassisted plaintiff sues a defendant who is legally aided and wins, and the legally aided defendant has wrongfully resisted the claim, in those circumstances the unassisted plaintiff should receive costs from the Legal Aid Fund. That is endorsed by the Legal Aid Advisory Committee advising my noble and learned friend. Accordingly, I should like to know whether or not he is going to go by the advice of his own committee. I beg to move.

Lord Simon of Glaisdale

My Lords, I would say only this. As I made apparent on the last amendment, the paragraph I should most like to leave out would be (b), not (a). My noble and learned friend on the Woolsack dealt with (b). However, he did not say how much it would cost to put that right. In other words, when public funds promote an action which causes hardship, why should it be incumbent on the defendant not only to show hardship but to show exceptional hardship?

The Lord Chancellor

My Lords, the last question of my noble and learned friend Lord Simon of Glaisdale is somewhat bizarre. Having decided that we were not going to omit subsection (3) altogether, my noble and learned friend Lord Denning says, "Well, let us at least leave out paragraph (a)". My noble and learned friend Lord Simon of Glaisdale then said that he should far prefer to leave out paragraph (b), though the amendment proposes to leave out paragraph (a), and then he went on to ask me how much the omission of paragraph (b) would cost.

Lord Simon of Glaisdale

My Lords, with the leave of the House, perhaps I may point out that I asked my noble and learned friend that question on the last amendment, to which it was strictly relevant.

The Lord Chancellor

My Lords, I fully accept the rebuke. I shall now give an answer—the answer which I would have given. I think it depends on this. As we are given no kind of indication of the circumstances in which a court, without guidelines, would come to award costs against the legal aid fund on the basis of what is just and equitable, I think it would be quite impossible to make an estimate of what the charge on public funds would be. It would be equally impossible for me to say—and I should have to ask myself this, were this amendment passed—what other provisions for legal aid, criminal or civil, I would have to leave out to accommodate this particular amendment. We have had the agreement of my noble and learned friend Lord Simon of Glaisdale, though not the agreement of my noble and learned friend Lord Denning, as to what to leave out. I am really being put in an unfair position.

However, with respect I would say this. The injustice, to the extent that there is one, is very much less than is generally appreciated. We spoke in the last amendment but one about matrimonial proceedings where, I must confess, the common case is when both parties are legally assisted. Therefore, it does not particularly matter from the point of view of adversarial costs which side is made to pay, unless in the exceptional case they have to pay out of their own pocket. So that does not really arise in relation to this particular amendment.

As regards ordinary adversarial litigation, a very high proportion of it is either personal injuries litigation arising out of a road accident or contract litigation arising out of a debt. I am bound to remind the House that there is such a thing as income tax and there is such a thing as compulsory insurance. In so far as personal injury litigation arising out of a road accident is concerned, it is the insurance company which pays but charges it against tax as part of its expenses. So to that extent there is not very much advantage in omitting the words "severe financial hardship" from paragraph (b). In regard to contract cases the same is of course true. A firm which brings a contract case in the course of its business sets off its costs against tax. Therefore, I think it is possible to exaggerate the degree to which injustice is caused.

The view which Parliament has taken hitherto and to which I suggest that it ought properly to adhere is that the successful unassisted defendant should be recompensed out of the legal aid fund or should be entitled to apply for recompense out of the legal aid fund if, and to the extent which, he shows severe financial hardship. It has been held judicially that that will also apply to the relatively small corporations.

4.45 p.m.

However, I do not believe that we should accommodate the successful unassisted defendant by giving him priority in the legal aid fund over, for instance, a possible extension of the financial limits which has to be made if only to meet with inflation every year, or the extension of the spread of the availability of legal aid which I am also being constantly advised by the Legal Aid Committee to allow.

These are questions of priority and they should be dealt with under the subject of legal aid. I repeat that they should not be dealt with out of context, one by one, in the context of an Administration of Justice Bill, so that we can consider only unassisted legally aided defendants instead of potential litigants in civil and criminal proceedings who may, as a result of passing this amendment, be deprived of legal aid.

While I would fully agree with that part of the speech of my noble and learned friend Lord Simon of Glaisdale, in support of either this or the previous amendment, in which he said nobody is bound by any assurance that the Lord Chancellor might have made to his colleagues, I think we should remember that what I have said by way of argument indicates the reason I was able to give that assurance. I think it is also true that the lower House, another place, is the real place where the expenditure of public money should be evaluated. In this particular context it should be evaluated in terms of legal aid generally and not in terms of the Administration of Justice Bill.

Incidentally, I am supporting the Legal Aid Advisory Committee in its general approach to the matter, but I am not accepting advice—which it certainly did not give and which it would be contrary to the advice to accept—that I should deal with this matter out of context of legal aid as a whole and without consideration of the other priorities upon the public purse in regard to this particular pocket.

Lord Denning

My Lords, when I sat as a judge I always sought to do justice and to remedy injustice. Now that I am retired and in your Lordships' House I will always seek to do justice and to remedy injustice. In these amendments which I have put before the House today I have sought to remedy injustice. What is the answer?—it is too expensive, if you please, to remedy injustice, the injustice must remain as it is. I do not agree with it; but there it is. It is the Government against me and I cannot win; so I withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Elwyn-Jones moved Amendment No. 39: After Clause 41, insert the following new clause:

("Regional Legal Services Committees. In section 15 of the Legal Aid Act 1974 after subsection (9) there shall be inserted— (10) The Law Society may establish Regional Legal Services Committees to encourage, stimulate and co-ordinate the availability and provision of legal services and may employ solicitors or other persons as secretaries to such committees.").

The noble and learned Lord said: My Lords, this is an amendment which could have the effect of greatly improving the provision of legal services throughout the country as a whole. It has the great benefit of being comparatively inexpensive. Most of the day we have been talking largely about money. Well, this is a modest demand. Parliament, in 1949, when it set up the legal aid service scheme, imposed upon the Law Society the responsibility of administering it. That is a responsibility which it has honourably carried out.

The Law Society has been pressing since 1977 for the setting up of regional legal services committees to co-ordinate the work of legal aid and to make improvements and proposals in regard to it. One of the first practical steps it took in this direction occurred in 1977, when the Law Society announced the formation of the Greater Manchester Legal Services Committee under the chairmanship of Mr. Sachs, now a judge, with, as its first secretary, Mr. Knott, who was employed by the Law Society technically on the legal aid administrative staff—in other words, payable by the public. It was an arrangement which, if I may say so, I approved at the time. Since that time, the committee has taken on a wider geographical remit and is known as the North Western Legal Services Committee.

The work of that committee has been examined first by the Legal Aid Advisory Committee, to which the noble and learned Lord the Lord Chancellor paid a tribute earlier in our discussion today and whose advice carried very great weight. It recommended that there should be regional committees to co-ordinate the development of legal sevices; solicitors, law centres, legal advice schemes, CABs, the courts, police, prisons, the probation service, etc. It has recommended that on several occasions. Then, when the Benson Royal Commission, in its turn, examined the work of the North Western Legal Services Committee, it spoke highly of the committee's value.

The Royal Commission heard witnesses not only from the Law Society and the Legal Aid Advisory Committee but also from the Legal Action Group. Its report reads: We consider that regional committees should be established which can speak for the public at large as well as for barristers and solicitors in private practice", and the other bodies to which I have just referred. The Royal Commission reported that in its view the functions of the regional committees should include first, assessing the needs for legal and para-legal services in their regions and recommending how they should be met", and, secondly, co-ordinating regional services and agencies". It stressed that good collaboration is important because, at the end of the day, the provision of adequate services depends on co-operation between the legal profession and many other agencies and interests". Indeed, one of the criticisms of the present legal aid administration is that it is perhaps too much in the hands of lawyers. This would be a way of extending the remit.

That is therefore an authoritative view from a source which was charged with examining how legal services could be improved. What followed was a recommendation that there should next be an advisory committee for the North East. That, again, was strongly supported by the Legal Aid Advisory Committee through the legal services conference. It was anticipated, if I may say so, that the funds to pay for the full-time secretary would be approved as emanating from the public purse. The Legal Aid Advisory Committee again supported and recommended that. But, alas, the answer is "No". The refusal, I am bound to say, has been a serious blow to the morale of those who have campaigned for the gradual expansion, co-ordination and development of legal services.

The National Association of Citizens' Advice Bureaux entered the fray and passed a resolution calling for the establishment of regional legal advice centre committees. Experience has shown the value of these committees in the provision of legal services. The cost, as I say, is minimal. Accordingly, I hope that this time, at any rate, we shall receive an assurance from the noble and learned Lord. I am sure that his goodwill exists in regard to this. It is my hope that he can now translate that into action—if he does not mind my saying so, I hope not impertinently—with an assurance that in this matter, at any rate, he will give a blessing to this modest proposal. I beg to move.

Lord Hutchinson of Lullington

My Lords, perhaps I may support this amendment and have the temerity to remind the noble and learned Lord that his constitutional adviser, the Lord Chancellor's Advisory Committee, also stated in its last report that overall responsibility for legal services must rest with central government. The committee goes out of its way to deplore once again the lack of any coherent strategy for legal services, particularly in the funding of law centres. Law centres, as the noble and learned Lord will know, are going through a very difficult time at the moment concerned once again with the question of money.

The committee has repeatedly lent its support to the formation of these committees. It underlines again the outstanding work done by the pioneer committee in Manchester, to which the noble and learned Lord, Lord Elwyn-Jones, has referred.

I understand—I do not know whether rightly—that the noble and learned Lord welcomed the idea of the Durham committee and wished it every possible success but expressed the view that he lacked any clear statutory power to make the necessary provision. In those circumstances, this amendment, supported by the noble and learned Lord's constitutional adviser, will enable him to do something that he apparently wants to do.

The Lord Chancellor

My Lords, I must say, before I discuss the merits of the proposal, that the legal aid fund is primarily there to provide legal aid and advice to assisted litigants or those seeking legal advice. The question is really whether it would be an inappropriate use of that money, which is designed to help those who are entitled to legal aid, legal advice and legal assistance, to provide this network of committees whether or not it is desirable to do so. My own provisional view is that it would be. I should, however, like to go back to the beginning. The noble and learned Lord, in proposing the amendment, was right in reminding us that in 1977, as Lord Chancellor, he gave his approval for the Law Society to appoint a solicitor employed in the legal aid administration as a liaison officer to promote and co-ordinate legal services in the legal aid area centred on Manchester. That liaison officer was to act as secretary to the Greater Manchester Legal Services Committee, which had recently been formed with the same aims as a voluntary experiment. The Lord Chancellor's department has continued to take a close interest in the work of that committee and I have permitted the continuance of the modest funding of the committee through the legal aid fund on the basis that it was a one-off experiment. In so far as the noble and learned Lord gave me credit for goodwill, which I hope I have towards all endeavours to do good, I think that I can claim that since 1979, which is an increasingly long period of time, I have shown that good will by at any rate not discontinuing the one-off experiment which he initiated.

5 p.m.

I am bound to say, however, that the noble Lord, Lord Hutchinson of Lullington, was correct when he said that I have never considered that I had specific statutory authority to provide for the provision of permanent support of this kind to the Greater Manchester Committee, which, as the noble and learned Lord reminded us, is now the North Western Committee, nor the establishment of any other such committees. That was one reason at least why I felt myself unable to sanction the use of legal aid funds for the similar committee in the North-East last year.

Clearly, as the noble Lord, Lord Hutchinson of Lullington, has rightly said, the purpose of this amendment is to provide that missing statutory authority; he was well entitled to say that. But there are surely other considerations to be borne in mind. The Royal Commission on Legal Services, which reported in 1979, commended the work of the Manchester Committee and recommended the establishment of regional legal services committees in other legal aid areas. In the White Paper setting out the Government response to the report, in November 1983, this Government acknowledged that the experience of the Manchester Committee suggested that such committees might have a useful role to play in some areas in bringing together those concerned with the availability and delivery of legal services; so to that extent the issue is not contested.

But I must remind the House we then added—I now quote the Government response: In the Government's view the value of such committees must depend on local circumstances, and the initiative for developing them in any area must rest with those who are directly involved there in the provision of legal services". Against this background I feel that, as at present advised, this is another reason why it is not appropriate necessarily for the funding of such bodies to be provided by central Government, either through the legal aid fund, to whose purposes I have referred, or otherwise. Such gaps as there may be in the provision of legal and related services in a particular area are essentially matters of local concern, and in my judgment there should be a presumption that, at least at first instance, these needs should be met locally by and on behalf of the communities concerned.

Equally, the value of co-ordinating committees—this was the point made in the Government's response to the Royal Commission—must depend on local circumstances. The initiative for developing them in any area must rest with those who are directly involved in the provision of those services in those localities. I do not say that the efforts of the regional legal services committees are not worthwhile. I do not say that in the one case they have not proved effective—indeed, as the noble and learned Lord reminded me, I would commend the efforts of the Manchester Committee—but I do not believe they should necessarily thereby be held to be the responsibility of central Government.

Furthermore, as I have made abundantly clear on various amendments which have been tabled to this Bill, I do not have a licence from colleagues to increase public expenditure. It is an important part of my responsibility to Parliament to balance the many competing claims for additional expenditure from the legal services programme, which has in any event grown quite significantly in recent years; so that I feel constrained to say that I cannot agree to this amendment, and if ever I do so I must be in a position to decide my own priorities in the areas of greatest need. I hope I have not seemed wholly unappreciative of the work of these committees.

I should like to add something for the noble and learned Lord's own private consideration, though it be expressed publicly. I expect he has been concerned—certainly I have—about the nature of the Lord Chancellor's Office, which is a rather peculiar one, changing from time to time. It has even changed significantly in my own life-time, since my father held the post. It has become more and more remote from direct judicial work, which is in marked contrast to its history in the past, even as recently as 1936 to 1939. I am concerned myself, and I wonder whether the noble and learned Lord might not himself also feel concerned, that it should not divorce itself from what I have always believed to be its heartland responsibility, which is the preservation of the independence and impartiality of the administration of justice.

There have been a great number of suggestions to add to the administrative responsibilities of the office. Some of them have succeeded; others have not. If, as here, you get a totally new service, which is presented to us by this amendment, to be added to the responsibilities of the office through the means of the legal aid fund, which is not primarily designed for that purpose, I rather wonder what will become of the office in years to come. My own feeling is that advisory services are local, and I speak now not simply for the regional committees, to which this amendment is directed, but also for things like the Citizens' Advice Bureaux and the various law centres in the various localities. I have continued—again, I think I am entitled to remind the noble and learned Lord of this, as evidence of something of good will towards his work as Lord Chancellor—the seven law centres the funding of which he started when they were in deep financial trouble. I hope he will give me credit for that.

But at the same time I must tell him that I cannot myself see my way, as at present advised, to extend the services on a nation-wide basis, which I should have to do, with the aid of my noble and learned friend the Lord Advocate, throughout Great Britain and Northern Ireland. If they were to be so extended at all I should very much doubt the wisdom of placing it upon the shoulders of any Lord Chancellor's Office to administer that particular aspect of the matter. I hope I have not been too harsh, but so far as I am concerned the Government's answer is not to agree to this amendment.

Lord Elwyn-Jones

My Lords, I should like to express my gratitude for the fact that the noble and learned Lord the Lord Chancellor has maintained the commitment which I embarked upon (with of course no power to bind my successor) to sustain the law centres, which without that support would have foundered. The centres have given immensely valuable service in some of the worst deprived areas of London in particular, and in other areas as well. I make no apology for having initiated that, and I do not think the noble and learned Lord the Lord Chancellor apologises for continuing it.

The matters that the noble and learned Lord has characteristically raised give rise to important constitutional questions. I readily agree: the Lord Chancellor's Department has become a very high-spending department. At the moment the Commons has no control over it—not directly. I can see the moment coming. This is a danger and is a pointer to the Commons saying, "Right. It's time we took over; a nice Minister of Justice ought to take over this spending department". There could well be pressure that way.

But what is the alternative to what we have embarked upon? We decided in Parliament that the Law Society should accept the responsibility of administering the legal aid scheme. We did not thereby abdicate governmental responsibility; responsibility must lie in the Government somewhere. The question is: where? If I may say so, the present holder of that great office of Lord Chancellor has, in his term of office, extended the responsibilities by taking over criminal legal aid, and rightly. It used to be the Home Secretary's pigeon, now it is the Lord Chancellor's also. Therefore, he has been partly involved in the process, which was inescapable as I see it, of taking over more and more responsibilities for the provision of legal services. While it adds enormously to the burdens of the Lord Chancellor, I do not see that it in any way conflicts with his majestic position as the head of the judiciary with overall responsibility for the state of the law and its administration. It is a segment and a part of that. However, I shall not pretend that it has not given rise to various important and dangerous questions which perhaps we can discuss at greater length when there is not a long debate to follow this matter with about 20 speakers anxious to catch the ear of the House.

Suffice it to say that at this moment I shall not push the matter to a Division because obviously it needs further thought. I note the basically sympathetic approach of the noble and learned Lord the Lord Chancellor, but I am afraid that the difficulties that he has described must be faced; there is no escaping them. However, on that sombre note, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 42 [Remuneration for work done before making of legal aid order]:

The Lord Chancellor moved Amendment No. 40: Page 32, line 17, leave out ("by a court").

The noble and learned Lord said: My Lords, with the leave of the House, I shall move Amendment No. 40 and I shall also speak to Amendment No. 42 on the Marshalled List. Amendment No. 42: Page 32, line 21, leave out ("by the court") and insert ("to the legally assisted person").

These are drafting amendments, but it may be of assistance if I outline their background. Clause 42 enables the Lord Chancellor to make regulations prescribing the circumstances in which solicitors and counsel may be paid under a legal aid order for work done in, or in connection with, the proceedings before the application for legal aid is granted. Following the putting into effect of Section 6 of the Legal Aid Act 1982, legal aid orders can now be granted by criminal legal aid committees of the Law Society, following a review by such a committee of a refusal of legal aid by a magistrates' court. Some of your Lordships will remember the discussions which we had a year or two ago about that very subject.

The clause as drafted does not, in fact, allow for the regulations to include such orders. This amendment therefore removes reference to "a court" so that there is no limitation on regulations being made which relate to criminal legal aid committees. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 41: Page 32, line 20, leave out ("advice or representation previously given") and insert ("representation or advice of any prescribed description previously provided").

The noble and learned Lord said: My Lords, this is a drafting amendment and it ensures that Clause 42, which inserts a new provision in the Legal Aid Act, will reflect more closely the existing language of the 1974 Act. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 42:

[Printed above.]

The noble and learned Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Foot moved Amendment No. 43: After Clause 42, insert the following new clause:

("Legal Aid for proceedings for defamation . In Part II of Schedule 1 to the Legal Aid Act 1974, paragraph 1 (which excepts proceedings wholly or partly in respect of defamation from the proceedings for which legal aid is available) shall cease to have effect.").

The noble Lord said: My Lords, I should perhaps start by explaining why it is that I am moving only at the Report stage what I hope will be regarded as a fairly important amendment. The reason I did not move it in Committee was not that I had not put it down, but the same reason as the noble and learned Lord, Lord Simon of Glaisdale, gave earlier as the reason why the noble and learned Lord, Lord Denning, had forgone his amendment at that time.

5.15 p.m.

Originally, I had intended to deal with my Amendments Nos. 43 and 44 together. I thought that such a course would save the time of the House. However, on reflection I think that it may save time if I deal with the two amendments separately. I say that because the House may observe that on the face of it I do not have any support for my first amendment, but I have very useful and helpful support for my second amendment. Both amendments are concerned with the matter of whether legal aid should be available in actions of defamation. I hope that I may be allowed to give the House a very brief history of this matter, which has been the subject of controversy ever since the initiation and introduction of legal aid in 1949.

When the legal aid system was instituted at that time, I well remember—and I dare say that the House will well remember—the very large and very rightful claims that were made for it, particularly by Sir Hartley Shawcross (as he then was) the Attorney-General. He claimed, quite rightly, that it was a major social reform, and he claimed that from that time onwards we should be able to glory in the fact that nobody in this country would be denied access to the courts of this country and, indeed, to the fount of justice, simply on account of lack of means.

However, from the very beginning it was decided that defamation actions should be excluded from the legal aid scheme altogether. As I understand it, the reason for that or, at any rate, the main reason was that many people had expressed the view that if legal aid were available in defamation actions there might be a flood of unmeritorious actions arising out of quite trivial circumstances. In particular, it was thought that there might be a whole series of slander actions brought in cases of the type where there is an exchange of abuse between neighbours over the garden wall. At any rate, that fear prevailed and it was decided from the outset that defamation actions should be excluded.

However, one finds that even at that time, if one goes back and reads the debates that took place on that Bill, that argument was contested, and it was contested upon three particular grounds. First, it was said that the apprehensions that there would be a flood of unmeritorious litigation were really unfounded and could very easily be safeguarded against. The second argument—and it was a formidable argument—was that if you were going to deny legal aid to the parties to defamation proceedings it would inevitably and inescapably involve grave injustice; it would deny the parties to a defamation action the very right in which Sir Hartley Shawcross gloried—that is, the right of everyone to have access to the courts, whatever the cause of the action, if his means did not permit him to pay for that action himself.

With regard to the third ground on which the exclusion of defamation from the legal aid scheme was opposed, I should like to quote the words which were used later on by the Faulks Committee on defamation. The committee said: It seems to us that a proper claim in defamation is at least as important to the average plaintiff as a claim in personal injuries, and should be treated in the same way under the legal aid system".

The matter went from 1949 onwards. The question of whether legal aid ought to be available in defamation proceedings has been considered by a whole series of committees and authoritative organisations. The history of the matter and the way in which it has developed has been fairly remarkable because I think I am right in saying that the various committees which have examined this matter since the 1949 Act have, in the end, been almost unanimous in their conclusion that the exclusion from legal aid of parties to defamation actions was unjust and, indeed, indefensible.

Perhaps I may refer first to a joint committee of the Council of the Law Society and the General Council of the Bar which met in 1967. That committee came down unanimously in favour of extending legal aid to defamation proceedings. They said that they thought the so-called risk of a flood of trivial proceedings could be very easily avoided. What they proposed was that when an applicant applied either to be a plaintiff or a defendant in a defamation action, he should be required by the legal aid committee before whom the application came to produce an opinion from counsel that his claim had merit. They went on to say that they thought that would eliminate the unmeritorious proceedings. But, as an added safeguard, they suggested that in those cases, whether the plaintiff or the defendant was the applicant for legal aid, when the pleadings in the case had been concluded the applicant should then again be required to obtain the opinion of counsel as to whether his case was still one for which it would he proper for legal aid to be given. The Joint Committee came to the firm and unanimous conclusion that, subject to those safeguards, there was no serious risk that the legal aid system would be abused.

I go on now to the Faulks Committee. The Faulks Committee was specifically concerned with the whole matter of defamation. They came to a very clear conclusion. They came to the conclusion, as they put it, that the great preponderance of the evidence which had been submitted to them supported the giving of legal aid in defamation proceedings. They expressed themselves in the clearest possible terms.

What they then recommended has more recently been supported in the Benson Report. It has been supported, as I understand, by the present Master of the Rolls. Perhaps I may add one other organisation to that. Throughout the whole of these last 35 years—or whatever it is—the proposal that legal aid should be extended to defamation has been consistently supported by the society known as Justice, of the council of which I am, quite undeservedly, the chairman. It is, of course, with the wholehearted approval of Justice that I am submitting these two amendments to the House tonight.

Perhaps the most remarkable way in which this argument developed is this. The Lord Chancellor's Advisory Committee on Legal aid, in its 19th report, which covered 1966 to 1967, then advised against any change, except in one small particular with which I do not think we are concerned. But later on, in 1974, the Lord Chancellor of the time, who was not the noble and learned Lord who now sits on the Woolsack, set up a working party to investigate the workings of the legal aid system. The working party's report in due course not only supported the Faulks Committee's recommendations but, going even further than that, said that they did not think it was necessary for the precaution of having two counsel's opinions to be taken. They thought that the legal aid committees were perfectly capable of sorting out the meritorious from the unmeritorious applications. As a result of the report of the working party, the advisory committee, in their 25th report, which was for the year 1974–75, fully endorsed the conclusion of the working party and in fact completely reversed the opinion which they had expressed some seven years earlier. That therefore is the situation as it stands today.

Perhaps I may conclude by quoting to the House the conclusion to which the Advisory Committee came in their 25th report. They said at paragraph 30, We share the Working Party's view that it is unnecessary for there to be special limitations on the grant of legal aid for defamation proceedings. Our predecessors recognised the experience of legal aid committees but, in our view, they were unduly cautious in supposing that such committees would be unable to distinguish meritorious from unmeritorious applications … Our advice is that the Working Party's view should be accepted and that legal aid should be made available, without any special conditions, for defamation … If your Lordship accepts this advice and makes the necessary regulations for this purpose under Section 7(2) of the 1974 Act, we would propose to keep the position carefully under review and to report to you immediately should it appear that any special guidance needed to be given to committees, either by way of notes from the Law Society or by an amendment of the Legal Aid (General) regulations".

I listened very carefully at an earlier stage in the debate tonight when the noble and learned Lord was expounding upon the two principles which he thought ought to guide us when anybody is proposing that legal aid should be given where it had not been given before. If I understood him aright, he said that no particular form of legal aid should be preferred to another. That is a sentiment with which I entirely agree. Of course, the fact of the matter is that if legal aid is now extended to parties engaged in defamation proceedings, they will not be being preferred to anybody else. They will at long last be brought up to the same level as every other litigant over the last 35 years.

The second matter which, as I understood it, he said should be a guiding principle was that we should pay due regard to the advisory committee which is the body which advises the Lord Chancellor upon matters of this kind. I hope that I have made it perfectly clear that ever since 1975–10 years ago—it has been the firm recommendation of the advisory committee that this ought to be put right. I ask: how long have we to wait before the recommendations of all these important and powerful bodies are put into effect? I beg to move.

5.30 p.m.

Lord Denning

My Lords, although I recognise the force of what my noble friend Lord Foot has said referring to all the committees, including Mr. Justice Faulks' committee, in favour of legal aid in defamation cases, I hope your Lordships will not accept this amendment. I have had a great deal of experience of defamation cases. It is very easy for a plaintiff to say that he has been defamed, and once he says that it would be easy for him to get legal aid because the legal aid committee could hardly refuse it because the burden in all these cases is on the defendant. The words are presumed to be false and malicious. The defendant has to prove that they are true, or whatever other defence he may have, and that can operate very harshly against defendants.

The other reason I would give is the chaotic state of our law of libel at the moment, which involves tremendous expense and would involve great expense to the legal aid fund. We have had many cases in the courts. I shall just give the one instance. At an auction in Grantham, the auctioneers, Bagshaws, put up three little pigs for sale. A man who was smart looking and very countrified bid £100 for the three little pigs. They were knocked down to him, and the name he gave was Boston of Rugeley.

He took off the three little pigs and never paid for them. The auctioneers tried to find out who he was. They told the police, and they put advertisements in the paper for Mr. Boston of Rugeley. They never found him. Again, if you please, there was a real man, a Mr. Boston, a farmer of Rugeley, living 12 miles away. He said, "That is a libel on me", and he sued the auctioneers. "A simple case", Lord Diplock said. It took 15 days to try, with 13 separate questions put to the jury. "A tremendous waste of time and money" said Lord Diplock, and I would agree with him. The law of libel is in a chaotic state. I would suggest that defamation cases are not a fit case for legal aid to be given. Although I respect the opinions that have been given, they have been far too favourable to plaintiffs and far too hard on defendants. Although I say I respect the opinions, I would not support the amendment.

The Lord Chancellor

My Lords, we have heard two attractive speeches, one on each side. On this occasion I think it is a battle between logic and common sense, and I come down on the side of common sense on very much the same grounds as my noble and learned friend Lord Denning has just spoken about. I perfectly well agree that at first sight it looks anomalous, and in logic it must appear anomalous, to select one common law cause of action and say that it shall be outside the scope of the legal aid scheme.

But in addition to the points, to which I shall return, of my noble and learned friend Lord Denning, I point out that this is not part of the scheme as sanctioned by the Lord Chancellor, it is from the first, from 1949 onwards, embedded in the terms of the statute that it should be excluded. Therefore, it is not simply the Lord Chancellor speaking as the guardian of the public purse who says "No" to this. It is Parliament which has said "No" through successive Governments—Conservative, Labour, Conservative, Labour. None of them has thought it right to include defamation actions within the scope of the legal aid scheme. It should give one pause before one changes what has been the continuous view of Parliaments of different colours and led by different Governments over a period now of nearly 40 years.

I must say again what I said in a different connection a moment or two ago in response to another amendment, that I am personally convinced—not simply as a member of a team but personally—that if you are going to remodel the Legal Aid Act this is not the Bill to do it in. There may be minor improvements you can make to this Bill, but you have to look at the whole structure and not just at part of it out of context in the Administration of Justice Bill especially when, as a matter of fact, you are now being asked to expend a considerable sum of public money on something which Parliament has expressly prohibited Lord Chancellors from doing.

A number of distinguished bodies, catalogued by the noble Lord, Lord Foot, in his attractive speech, have taken another view. They have based themselves on logic. Most of them were composed of lawyers, or largely composed of lawyers. Well, I am bound to say, with the famous Mandy Rice-Davies, "Well, they would, wouldn't they?" To the cobbler nothing is quite so good as leather, and the legal aid scheme has been an immense advantage to my profession, and there is no logic in excluding defamation cases, there is only common sense.

I should like to underline the commonsensical remarks made by my noble and learned friend on the Cross-Benches. I believe that an immense flood of litigation against newspapers would inevitably ensue. I also believe that a number of totally trivial and unimportant cases would clutter up the courts between Lady Jemima Pot and Mr. Jeremiah Kettle. I fully agree that if they are able to litigate at their own expense there is, under the law as it now stands, no reason why they should not do so. But I can see every reason why they should not do it, both of them, assisted by legal aid, which is the effect of this amendment.

It is said that lawyers are very honest people, and so they are. "Lawyers can decide between the meritorious and the unmeritorious case of defamation". I wonder whether they can. What is a meritorious case of defamation? When does a case become trivial and litigatable out of one's own pocket, and when ought it to be done at the expense of the taxpayer? I do not know—and I speak quite honestly—on what basis counsel could possibly decide that, even if you had two counsel as was suggested in one of the valuable opinions we got.

I shall now go back to the second of the two points which was made by the noble and learned Lord, Lord Denning. I can only endorse what he said. I have not got anything like his experience, and certainly none of his experience on the Bench except what I have seen upstairs from here, but the law of defamation is in a chaotic state and it is most unpredictable in its results. That is quite certain.

It is all very well for the noble Lord, Lord Foot, to cite the Faulks committee. I owe the memory of Neville Faulks an apology. I promised, when I was in Opposition, to try to bring in a Private Member's Bill to implement—as the horrible word is now—the proposals of that committee. I am bound to say in humble apology to his shade that I found it quite impossible to do so.

I can only endorse what my noble and learned friend Lord Denning said. He cited the 1966 case of Boston v. Bagshaw. He will forgive me for not pursuing him very far down that road because I was the successful counsel in that case and, even when one is Lord Chancellor, one is not supposed to refer to cases in which one acted as counsel. I had a warning when he was Attorney-General from the noble and learned Lord, Lord Elwyn-Jones, many years ago, in another place, about that point of ethics. Thus I shall not pursue the 1966 case of Boston v. Bagshaw except that I think Lord Diplock in his pejorative remarks underestimated the cunning of the successful counsel in putting all 13 questions to the jury. There was one hidden among the chaff which carried a lethal bullet, which destroyed the plaintiff's case and which was unobserved among the rest of it. The jury found a verdict of £11,000 for the plaintiff; the judge entered the verdict for the defendant, the Court of Appeal upheld it.

Let us consider two other cases in the same year, because I was not counsel in those cases. One was that of a cruel libel on a schoolmaster brought against a litigant in person. I cannot remember the name, but it was a cruel libel to which there was no possible answer. The litigant in person, the defendant, pleaded justification and fair comment. He turned his back on the court from the start and would not argue at all because he was angry about something. When the jury came to bring in their verdict, they brought in a verdict in his favour. When counsel asked the jury (wrongly, as it turned out) why, they said "Justification", for which there had not been a jot or tittle of evidence. The poor unsuccessful party went to the Court of Appeal, who said to him unsympathetically, "Counsel should not have asked that question", so the verdict stood.

That was the second case in that year, 1966. Case number three was that of a plastic surgeon. That case involved three separate voyages to the Court of Appeal: before a jury and up to the Court of Appeal; new trial and up to the Court of Appeal; new trial and up to the Court of Appeal. Eventually, it was arranged after this immense expense that this man should receive £1,500 for damages. I should have thought that the costs of that case were ten or twenty times the award for damages.

No; if we are to amend the law on legal aid, let us not do it in this Bill. If we are to do that, I am bound to tell the House that one of the things which would have a low priority in my scale of values would be the addition of defamation cases to the catalogue of those which attract it.

Lord Foot

My Lords, it would obviously not be at all acceptable to the House that I should pursue this matter tonight. I will not attempt to answer what the noble and learned Lord has said, except to make one observation. We have heard of the possible proliferation of actions if legal aid were to become available for defamation, especially against newspapers. I take that illustration to demonstrate what the noble Lord says is contrary to common sense. Let us consider the case of a newspaper which makes an entirely false accusation of fraud against an individual of small means. That is about as damaging a thing as one could imagine happening to him—worse then being knocked down by a bus. The noble and learned Lord says, "No, we could not allow that applicant to have the advantage of legal aid even if it means that he will never be allowed to pursue his claim". That is an illustration which renders obvious the unsatisfactory nature of the argument.

However, I do not propose to pursue the matter, and with the leave of the House I withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

Lord Foot moved Amendment No. 44: After Clause 42, insert the following new clause:

("Legal aid for certain proceedings for defamation. . In paragraph 1 of Part II of Schedule 1 to the Legal Aid Act 1974 (which excepts proceedings wholly or partly in respect of defamation from the proceedings for which legal aid is available) after the first "that" there shall be inserted

1. "(i) where the costs of the plaintiff in any such proceedings are met wholly or partly from public funds legal aid may be granted to any other party to the proceedings; and
2. (ii) ".").

The noble Lord said: My Lords, I hope that I shall be able to deal with this amendment in a couple of minutes.

Noble Lords

Hear, hear!

Lord Foot

My Lords, I am glad to have support from one quarter of the House. This is a much narrower issue than the one we dealt with just now. It results from a case which was recently before the Court of Appeal called Conerny v. Jacklin. What happened in that case was that Mr. Jacklin had been before a bench of magistrates charged with certain road traffic offences. He was convicted and fined, and was aggrieved at what had happened. He made a complaint against the police constable who had been the chief witness for the prosecution, under the police complaints procedure that the police officer had been guilty of perjury. That complaint was considered by the Police Complaints Board. They rejected the complaint, and the policeman issued a writ against Mr. Jacklin for libel.

In the ordinary way, neither of those parties, neither the policeman nor Mr. Jacklin, would have had any claim to legal aid because it was a defamation action. But under a statutory instrument passed in 1977, SI No. 583, it was provided that in proper cases the Police Federation committee could use the funds of the federation for the purpose of supporting a policeman in a libel action in his capacity as a policeman. I understand that in this case the committee of the Police Federation gave its authority that the expenses of the policeman in these proceedings should be defrayed out of police funds.

The Police Federation fund consists partly of private contributions from members and partly from public funds by a grant from the Home Office. The object of my amendment is to provide that where a plaintiff in a defamation action is being supported partly or wholly by public funds, in those exceptional circumstances, the defendant ought to be given the advantage of legal aid to present his case. Unless this is done, I suggest that there are considerable risks involved for anybody who seeks to make a complaint against the police. He is faced with the possibility that if his complaint is rejected he may then be confronted with a libel action which he may be quite incapable of defending because he does not have the means to do it. I understand that there are some 20 similar cases in the pipeline where a policeman is taking such proceedings based upon the written complaint of an aggrieved person. In those circumstances, I beg to move.

Lord Mishcon

My Lords, I am going to be even more brief than the noble Lord, Lord Foot, who moved this amendment. The noble and learned Lord the Lord Chancellor referred in a previous debate to a division between logic and common sense. He came down on the side of common sense because in that amendment he felt that there was a different approach if one looked at the matter from a logical point of view from the approach of common sense. In my submission this is a case where logic applies, common sense applies and both lead to the same end. I hope that in those circumstances the noble and learned Lord the Lord Chancellor would not regard this as being an amendment that should not go into a Bill of this kind. It is a very small matter. It applies to a very few cases. It does this to protect (as the noble Lord, Lord Foot, has said) a very sensitive part of the administration of justice.

It is mainly little people who one finds oneself dealing with in the matter of complaints against the police—not by any means exclusively so, but quite often it is little people. They have been wrongly treated; they feel that the police went beyond their proper powers. If the Police Federation back a member, and quite properly so, with the sanction of the Home Office and out of public funds (because, largely, they come from public funds) to bring libel proceedings mainly against a complainant, that complainant will be robbed of the power to defend those proceedings properly because he cannot be granted legal aid. We are restricting this amendment—and I emphasise that—to those cases where the plaintiff is able to obtain the assistance of public funds; so that one matches public funds with police funds in a matter which is of general public interest because we are dealing with the proper administration of justice as between two people. I support this amendment, as do my noble friends.

Lord Denning

My Lords, I hope that your Lordships will not accept it. This is a tiny suggestion of altering a principle. I hope that your Lordships will not accept it at all.

The Lord Chancellor

My Lords, I am bound to tell both the noble Lord, Lord Foot, and the noble Lord, Lord Mishcon, that, in so far as they are relying upon funds provided by the Police Federation, my information is that the money used in connection with the defamation cases referred to is solely the product of members' subscriptions. If I am right in that, the amendment would be wholly useless for the purpose, and the only purpose, with which they supported the amendment. It is true, of course, and I must say in qualification, that the Home Office provides public funds by way of specific contribution towards the salaries of three officials of that organisation. But the money in defamation cases comes from the subscriptions of members and therefore the persons who are defendants in those proceedings, however many or however few they may be, are not in fact having to face public funds in order to defend the cases.

The second thing that I would say is this. Obviously, senior public officials (and senior police officers, I suppose, for that matter) can in principle be regarded as employed persons. There are occasions—and I do not think that there are many but there are some—in which public funds are put at the disposal of a public official of one sort or another for the purpose of bringing defamation proceedings. They do not happen to be the ones to which the noble Lord, Lord Foot, referred. I should be less than frank with the House if I did not say that such cases existed; but the answer to that is this. A good employer must, in certain circumstances, back a senior employee if he has been the subject of this kind of wrong. And that is true whether he is the employee of ICI or the employee of a Government department. The fact is that in such circumstances it is wholly illogical to say that if he is the employee of a Government department, the defendant can go on legal aid and if he is the employee of ICI he cannot. This is a purely anomalous proposition and one which I would not ask the House to accept.

Lord Foot

My Lords, of course, I shall not argue with the noble and learned Lord upon a mere matter of fact. I have not got the statutory instrument by me now to refer to but no doubt the noble and learned Lord has already referred to it himself and he will no doubt agree with me that there is not a word in that statutory instrument which authorises Police Federation funds to be used to support a policeman in a defamation proceeding. There is not a single word in that statutory instrument which limits the money to money which has been subscribed by the members. The terms of the statutory instrument are entirely at large. They enable the appropriate committee of the Police Federation to use Police Federation funds for the specific purpose of supporting a policeman in a libel action.

I do not want to get into an argument on a matter of fact but I would ask the House to consider once again the very serious implications, as I believe them to be, for the whole complaint procedure if a person is going to find himself in this position. He is contemplating making a complaint against the police. If he realises that, if he goes so far as to make a complaint and to put it into writing, he may before long be confronted with an action for libel which he is utterly incapable of defending because he has not got the means to do it, that is going to make a major inroad, as I think, into the whole system of complaints against the police. On that ground alone—and I would urge the House to support this amendment—I am at present minded to take the opinion of the House.

5.58 p.m.

On Question, Whether the said amendment (No. 44) shall be agreed to?

Their Lordships divided: Contents, 98; Not-Contents, 116.

DIVISION NO. 1
CONTENTS
Airedale, L.	Campbell of Eskan, L.
Amherst, E.	Caradon, L.
Attlee, E.	Carmichael of Kelvingrove, L.
Aylestone, L.	Cledwyn of Penrhos, L.
Barnett, L.	Collison, L.
Beaumont of Whitley, L.	David, B.
Beswick, L.	Davies of Leek, L.
Birk, B.	Dean of Beswick, L.
Blyton, L.	Delacourt-Smith of Alteryn, B.
Boston of Faversham, L.
Bottomley, L.	Denington, B.
Briginshaw, L.	Diamond, L.
Brockway, L.	Elwyn-Jones, L.
Brooks of Tremorfa, L.	Ennals, L.

Falkender, B.	Murray of Epping Forest, L.
Fisher of Rednal, B.	Nicol, B.
Foot, L.	Ogmore, L.
Gaitskell, B.	Oram, L.
Gallacher, L.	Pitt of Hampstead, L.
Galpern, L.	Ponsonby of Shulbrede, L. [Teller.]
Gladwyn, L.
Graham of Edmonton, L.	Prys-Davies, L.
Gregson, L.	Raglan, L.
Grey, E.	Rhodes, L.
Grimond, L.	Ritchie of Dundee, L.
Hampton, L.	Rochester, L.
Hanworth, V.	Ross of Marnock, L.
Hatch of Lusby, L.	Seear, B.
Hutchinson of Lullington, L.	Sefton of Garston, L.
Irving of Dartford, L.	Serota, B.
Jacques, L.	Shackleton, L.
Jeger, B.	Shepherd, L.
Jenkins of Putney, L.	Shinwell, L.
John-Mackie, L.	Simon, V.
Kilbracken, L.	Stedman, B.
Kilmarnock, L.	Stewart of Fulham, L.
Kirkhill, L.	Stoddart of Swindon, L.
Lawrence, L.	Stone, L.
Llewelyn-Davies of Hastoe, B.	Tordoff, L. [Teller.]
Lloyd of Kilgerran, L.	Wallace of Coslany, L.
Lockwood, B.	Wells-Pestell, L.
Longford, E.	Whaddon, L.
Lovell-Davis, L.	White, B.
Mais, L.	Wigoder, L.
Mar, C.	Willis, L.
Merrivale, L.	Wilson of Langside, L.
Milner of Leeds, L.	Winchilsea and Nottingham, E.
Mishcon, L.
Molloy, L.	Winstanley, L.
Monson, L.	Wootton of Abinger, B.
Mulley, L.

NOT-CONTENTS
Allerton, L.	Gridley, L.
Arran, E.	Hailsham of Saint Marylebone, L.
Auckland, L.
Avon, E.	Halsbury, E.
Baker, L.	Harmar-Nicholls, L.
Bauer, L.	Hayter, L.
Belhaven and Stenton, L.	Henderson of Brompton, L.
Belstead, L.	Henley, L.
Bessborough, E.	Hives, L.
Boardman, L.	Holderness, L.
Brabazon of Tara, L.	Home of the Hirsel, L.
Brougham and Vaux, L.	Hood, V.
Broxbourne, L.	Hornsby-Smith, B.
Bruce-Gardyne, L.	Hunter of Newington, L.
Caccia, L.	Hylton-Foster, B.
Caithness, E.	Inchyra, L.
Cameron of Lochbroom, L.	Ingrow, L.
Campbell of Alloway, L.	Kagan, L.
Cathcart, E.	Kinloss, Ly.
Coleraine, L.	Kinnaird, L.
Colville of Culross, V.	Kintore, E.
Cox, B.	Kitchener, E.
Craigavon, V.	Lane-Fox, B.
Davidson, V.	Lauderdale, E.
Denham, L. [Teller.]	Lindsey and Abingdon, E.
Denning, L.	Long, V.
Dilhorne, V.	Luke, L.
Drumalbyn, L.	Macleod of Borve, B.
Elibank, L.	Mancroft, L.
Elliot of Harwood, B.	Margadale, L.
Elton, L.	Marley, L.
Faithfull, B.	Marshall of Leeds, L.
Ferrers, E.	Maude of Stratford-upon-Avon, L.
Ferrier, L.
Fortescue, E.	Molson, L.
Fraser of Kilmorack, L.	Mottistone, L.
Gainford, L.	Munster, E.
Gibson-Watt, L.	Nathan, L.
Glanusk, L.	Norfolk, D.
Glenarthur, L.	Nugent of Guildford, L.
Gray, L.	Onslow, E.
Gray of Contin, L.	Orkney, E.

Orr-Ewing, L.	Simon of Glaisdale, L.
Perth, E.	Skelmersdale, L.
Peyton of Yeovil, L.	Stockton, E.
Plummer of St. Marylebone, L.	Strathspey, L.
	Sudeley, L.
Porritt, L.	Swinfen, L.
Portland, D.	Swinton, E. [Teller.]
Rankeillour, L.	Teviot, L.
Richardson, L.	Teynham, L.
Rodney, L.	Trumpington, B.
St. Davids, V.	Tryon, L.
Saltoun, Ly.	Vaux of Harrowden, L.
Sandys, L.	Vivian, L.
Savile, L.	Windlesham, L.
Selbourne, E.	Wynford, L.
Sempill, Ly.	Young, B.
Shannon, E.	Zouche of Haryngworth, L.
Shaughnessy, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.6 p.m.

[Amendment No. 45 not moved.]

The Lord Chancellor moved Amendment No. 46: Before Clause 43, insert the following new clause:

("Application for judicial review by High Court. .—(1) Section 31 of the Supreme Court Act 1981 (application for judicial review) shall be amended as follows. (2) In subsection (3) for "of the High Court has been obtained" there shall be substituted—

1. "(a) of the High Court; or
2. (b) in a case falling within subsection (3B), of the Court of Appeal,

has been obtained". (3) After subsection (3) there shall be inserted— (3A) Rules of court made for the purposes of subsection (3) shall provide that where an application to the High Court for leave to apply for judicial review has been refused, or granted on terms, by a single judge of that court (whether after a hearing or not, as the rules may in any case provide) the applicant shall be entitled to have the application heard and determined by a divisional court which includes among its members a judge of the Court of Appeal. (3B) An application for leave to apply for judicial review which has been refused, or granted on terms by the High Court may be renewed before the Court of Appeal if (but only if)—

1. (a) it was made otherwise than in a criminal cause or matter and was so refused or granted by such a divisional court as is mentioned in subsection (3A); and
2. (b) that court or the Court of Appeal grants leave to renew the application.".

(4) In subsection (6), for "the High Court" there shall be substituted "the court".").

The noble and learned Lord said: My Lords, if I may, I will speak to Amendment No. 46, which is the immediate one, and also to Amendments Nos. 63, 66 and 67, which are consequential. Amendment No. 63: Schedule 7, Page 62, line 3, leave out line 9. Amendment No. 66: Schedule 8, Page 63, line 29, leave out from ("Court)") to ("shall") in line 30. Amendment No. 67: Page 63, line 31, leave out ("decisions of the High Court pronounced") and insert ("applications for leave to apply for judicial review made to the High Court").

In the debate at Committee stage on the clause which was negatived, I told your Lordships what I proposed to do, and this new clause is the result of what I then told your Lordships I would do. We are discussing, just to remind the House, judicial review and we are discussing judicial review in civil proceedings and not in criminal proceedings. Broadly speaking, and without being held to accurate figures, about one-third of applications for judicial review are in criminal proceedings and the remaining two-thirds are in civil proceedings.

The original Clause 43, which was negatived, put a stopper on the recourse in a case where the High Court had refused leave to apply for judicial review. I then promised that I would introduce an amendment at this stage to provide that where the single judge of the High Court had refused an application for leave to apply for review the applicant should then be entitled to go to a Divisional Court. I further went on to say that the Divisional Court to which he could have recourse to renew his application (strictly speaking, it is a renewal of the application and not an appeal) should include among its members a judge of the Court of Appeal, who of course would be presiding.

I have in fact gone one better than that—better, that is to say, from the point of view of those who criticised the original Clause 43—and I have said that if the Divisional Court (and I am now looking at subsection (3A) of the new clause) refused leave to apply or granted it on terms, then by subsection (3B) of the new clause he has recourse to renew his application to the Court of Appeal. So I have done exactly what I have promised to do, and one better.

I explained at the Committee stage the need to save judicial time, and I need not repeat that. I have done what I promised to do and it is one better, I must add, in the case of an application for judicial review in a civil case than it is in a criminal case, because leave in a criminal case must stop at the Divisional Court, whereas I have allowed it to go one stage further, to the Court of Appeal. That may be thought to be anomalous: on reflection, I do not think it is, despite the fact that at any rate some of the criminal cases will involve the liberty of the subject.

The reason why I thought it was reasonable was not the very small minority of immigration cases, to which the noble Lord, Lord Hatch of Lusby, referred at the previous stage, but the fact that civil reviews have become in recent years of rather greater constitutional importance than the ordinary criminal reviews, which take place from very much lower jurisdictions. Therefore, civil cases can arouse more important issues. This is limited only to cases which, in the opinion of the courts adjudicating, are considered unarguable. If, of course, any one of the three courts—the High Court, the Divisional Court or the Court of Appeal—thinks it is arguable, the case will then be argued on its merits and can in the ordinary course go up to the House of Lords, as some of them have done. I think that this is a fair redemption of my pledge at the Committee stage. My Lords, I beg to move.

Lord Denning

My Lords—

Lord Campbell of Alloway

My Lords—

The Lord Chancellor

My Lords, I am to blame. If my noble and learned friend could just pause with me patiently, having put the Question I should have called the next amendment, which is an amendment to my amendment and which is in the name of the noble Lord, Lord Campbell of Alloway. I apologise to my noble and learned friend: the fault was entirely mine. I forgot the procedure.

Lord Campbell of Alloway moved, as an amendment to the amendment, Amendment No. 47: Line 7, at end insert ("or (c) of the House of Lords,").

The noble Lord said: My Lords, perhaps it is convenient to your Lordships for me to speak to Amendment No. 48 with this amendment. Amendment No. 48: Line 26, after ("Appeal") insert ("or the House of Lords").

The object of these amendments, both of which relate to the jurisdiction of the Appellate Committee of your Lordships' House, is to expose and identify that nest of potential injustice which would be entrenched, even enhanced, if Amendment No. 46 as it stands were to go through, unless there were access to the Appellate Committee of your Lordships' House in all cases of refusal of leave to proceed by judicial review as proposed by these amendments. It is appreciated that this raises a new dimension of safeguards. I use the word "entrenched" because at present such access is denied, and I say "enhanced" because Amendment No. 46, although assuredly going far better than was promised—and there is no question about that—restricts the right of access to the Court of Appeal and, for all one knows, and I make this point in ignorance, may restrict the Court of Appeal for this purpose to a single judge alone.

6.15 p.m.

Amendment No. 46 is a compromise between the old Clause 43 and the status quo. It proposes the introduction of a new single appellate procedure in all cases where a single judge has refused leave to apply for judicial review, which is much to be welcomed, save in so far as access to the Court of Appeal is restricted. But as Amendments Nos. 47 and 48, to which I speak, rest upon Amendment No. 46, it is surely germane to consider whether there is any need at all for compromise, or any justification for this compromise, on grounds of administrative convenience, as affording any substantial relief to the work load of the judges in the Court of Appeal.

At the Bar—and we are assuredly no legal grandees; we are the work horses of the profession and are a little suspect of what we find in our nosebag—we are content, for what it is worth, with the situation as it is so far as the High Court procedures are concerned, and many of us remember what the noble and learned Lord, Lord Atkins, said in one of these cases under the old régime: Convenience and justice are often not on speaking terms".

But subject to some assurance as to the restoration of access to the Appellate Committee of your Lordships' House, I support Amendment No. 46, for whatever else may be said about it there can then be no potential injustice. Without some assurance, there having been no Committee stage at which full discussion could ensue, I find myself in some difficulty; hence these probing amendments.

The curtailment of the right of access to the Court of Appeal brings into relief a decision of the Appellate Committee of your Lordships' House some two years ago in which, slightly contrary to a prior ruling in 1966, it was held that there was no jurisdiction to entertain any appeal against a refusal of leave by way of judicial review. In reaching this decision, reliance was placed on Section 3 of the Appellate Jurisdiction Act 1876, as interpreted by a decision of your Lordships' Appellate Committee in 1891. In consequence upon this decision which was made in December 1982, the Appellate Committee of your Lordships' House amended its own practice direction and standing orders applicable to civil appeals and judicial reviews of civil process, to rescind the old proviso to Standing Order 61A, which afforded access, and to deny all access. This was by the practice direction of 26th January 1983.

In order to identify the potential injustice, it proposed to use an immigration case decided by your Lordships' Appellate Committee in 1984 as an example—but it is only an example. It was a case in which your Lordships' Appellate Committee declined to follow its own decision in 1980 which stood as precedent. The fact that leave was granted in that case, contrary to that precedent, affords no sufficient, certain or satisfactory safeguard that the High Court or the Court of Appeal will not refuse leave and will, in all manner of cases, take a strict or narrow view of precedent. In one way or another, the liberty of the subject, as my noble and learned friend the Lord Chancellor has truly said, is often at stake in this type of case. The potential injustice arises because in all courts below the Appellate Committee of your Lordships' House there is an obligation to follow precedent in the grant or refusal of leave.

If a contention which goes to the substance of a complaint is bound to fail on the basis of established precedent, it would be entirely proper to refuse leave and so avoid the wasting of the time of the courts or a substantive hearing doomed to failure. Such a contention may relate to the nature and quality of a duty owed by an individual to the state or by the state to the individual, or both, which according to prior judicial decision has been defined with binding effect.

The scope for inherent error is manifest either because the Appellate Committee of your Lordships' House reverses a decision of the Court of Appeal which stood as precedent, or because the Appellate Committee declines to follow one of its own decisions which stood as precedent. This is exactly what happened in the case to which I referred, in relation to the nature and quality of the duty owed to the immigration officer which went to the substance of the complaint.

On the basis of precedent the Court of Appeal upheld the deportation order but the Appellate Committee declined to follow its own decision which has stood as precedent for about four years, quashed the deportation order and in the result reversed the decision of the Court of Appeal. If in that case—this is the potential injustice—leave had been refused on the basis of the old precedent, as might well have been the case, the applicant, instead of living in the United Kingdom with indefinite leave to remain as he does, would have been deported to somewhere or other.

Is it therefore not open to serious question whether the whole modern statutory process of judicial review such as it was introduced in 1977 should be fettered in any way by an Act of 1876 as interpreted in 1891? In this context, should it not also be pointed out that by the decision of the Appellate Committee in your Lordships' House—two of them, in fact, in 1982—the old alternative remedy of seeking an injunction and declaration, a remedy exercisable of right without any need to seek leave, has been virtually emasculated?

As Amendment No. 46 restricts right of access to the Court of Appeal the introduction of the compensatory safeguard against potential injustice is sought by these amendments for the restoration of ultimate access to the Appellate Committee of your Lordships' House. The hope, albeit perhaps forlorn, is that some assurance may be given as to the recision of that old 1983 practice direction and the introduction of appropriate practice directions to achieve this end. In that spirit, that these are probing amendments for the purpose of discussion, I beg to move.

The Lord Chancellor

My Lords, the original Question was that Amendment No. 46 should be agreed to. My noble friend Lord Campbell of Alloway has now moved Amendment No. 47 which is an amendment to Amendment No. 46. The Question now therefore which I have to put is that Amendment No. 47 be agreed to.

Lord Broxbourne

My Lords, I wish in a very few moments, at this late hour (that comforting phrase to one who spent so many years in the late hours and laborious processes of another place) to support the amendment moved in characteristically clear and cogent terms by my noble friend Lord Campbell of Alloway.

It would be ungrateful not to thank the noble and learned Lord the Lord Chancellor for his Amendment No. 46. He has, as he indicated, done even better than his word in improving the original concept; and that is to be welcomed in that it lessens the restrictive effect of the previous proposal. But it would be more welcome still if it went that little bit further as proposed in the amendment of my noble friend Lord Campbell of Alloway.

The effect of Amendment No. 47, as your Lordships will see, is that, in the last resort, there should be an appeal to the Appellate Committee of this House. Resort to that would of course be rare but it should be available as a last resort in what would only and inevitably be a minority of cases. Judicial review with which we are here concerned raises notoriously complex legal issues from which the final adjudication of the Appellate Committee of this House should not be excluded. Encouraged by the authoritative precedent of the noble and learned Lord the Lord Chancellor earlier in the afternoon, may I give an ounce of illustration derived from my own experience in earlier days as counsel?

Many years ago I was concerned in a case of what was then certiorari—this was long before the introduction of the nomenclature of judicial review. We went to the Divisional Court and there succeeded by three judges to nil—the Divisional Court presided over by the distinguished Lord Chief Justice of those days. When I say "the Distinguished Lord Chief Justice of those days", I am not of course praying in aid the concept of expressio unius; all Lord Chief Justices are distinguished, I hasten to say.

The other side took us to the Court of Appeal—the Court of Appeal was presided over by a distinguished Master of the Rolls—and a very distinguished court it was, as your Lordships will appreciate, when I say that it included my noble and learned friend Lord Denning, whom I am so glad to see is in his place today making such authoritative contributions to this debate. The Court of Appeal reversed the decision of the Divisional Court by three Lord Justices to nil.

We took the case to the Appellate Committee of this House and there we succeeded by three Lords to two. There, on a head count, as your Lordships will see with your characteristically quick mental arithmetic, we succeeded by six judges to five. It was a case, if I may say in passing, which made it easy for me to resist any temptation I might otherwise have had to regard law as an exact science.

One can envisage a hypothetical Lord Chancellor of those days, if he was confronted with the suggestion that an appeal to the House of Lords was a necessary safeguard of justice, and assuming that the law had then been as is now proposed and there was no such appeal, saying, "What is the need? Three Lord Justices and the distinguished noble and learned Lord, Lord Denning indeed, have said that this case should fail". But on the final decision that would have been wrong and justice would not have been done.

Your Lordships may say that that was an unusual case. Of course it was, but most cases on judicial review are unusual, and it is for those that we should cater here today. I would respectfully urge your Lordships to consider favourably the amendment moved by my noble friend.

Lord Elwyn-Jones

My Lords, as Amendment No. 47 proposes to amend an amendment which I, in due course, hope to have the opportunity to oppose, I have nothing further to say at this stage on this amendment.

The Lord Chancellor

My Lords, with great respect, two facts are quite certain in this tangled skein. The first is that the original amendment, and even the original Clause 43 which was deleted, had nothing to do with criminal cases which stop at the Divisional Court stage.

6.30 p.m.

The second fact is that the jurisdiction of the House of Lords, such as it is, is completely unaltered both by my amendment and by everything that has been proposed up to this stage. It is important to point out that my noble friends Lord Alloway and Lord Broxbourne must both have misunderstood the situation in which they find themselves. The 1983 case of In re Poh established that the House of Lords has no jurisdiction to hear this application as of now. We are debating not the appeal on its merits, but an application for leave to apply.

I have suggested in the original amendment, first, that the applicant should go to a single judge of the High Court. The single judge in the High Court says, "This is an unarguable case—no leave to apply". The applicant then goes to a Divisional Court consisting of one Lord Justice and two High Court judges and they say, "The case is unarguable—no leave to apply".

Then it is thought, as I have provided, that the applicant goes on to the Court of Appeal, having been refused on the basis that the case is unarguable, and applies to the Court of Appeal for leave to apply. The Court of Appeal then says, "The case is unarguable—no leave to apply".

What the amendment does is simply to say that the present position of the House of Lords remains as it has always been and as the case of In re. Poh established that it is. It establishes also that that has always been so since 1891. My noble friend's amendment would upset the status quo for the purpose of going back on the decision of 1891. He asks for a fourth bite at the cherry, not on the merits of the case but on whether the applicant should have leave to apply on the basis that his case is even arguable. That is one bridge too far.

The case cited by my noble friend Lord Broxbourne, though I did not follow it in all its intricacies, must have been decided on its merits. If a case is decided on its merits, it is decided on the following set of circumstances under modern procedure: at one stage under a single judge or, if my amendment is passed, at the Divisional Court stage or, if my amendment is passed, at the Appeal Court stage, the applicant is given leave to apply and then proceeds on the merits. He then goes back to the Divisional Court. The case is argued on its merits and then it goes up to the House of Lords.

Incidentally, my noble friend Lord Broxbourne is not, I think, right when he says that if the case went to the House of Lords on leave to apply, it would go to the Appellate Committee—no, I think that he is right and that it would go to the Appellate Committee.

I am really saying that the applicant should not have four bites at the cherry as to whether his case is arguable and then two more bites on the merits of the case. This is really one bridge too far. I respectfully suggest that Amendment No. 47 is not an improvement on Amendment No. 46.

Lord Campbell of Alloway

My Lords, I am very grateful to my noble and learned friend the Lord Chancellor for the care he has taken in considering my proposal. I shall not take up the time of your Lordships' House, save to say this. It is not a question of an appeal on the merits of a case. It is a question of an application for leave. As for being a bridge too far, it is the only bridge available to cross if one seeks to divide justice from potential injustice.

The delightful decision of In re Poh is, in my respectful submission, wrong today; not wrong because it relies on the Act of 1876 and not wrong because it relies on the old decision of 1891 which interprets Section 3 of the Act of 1876, but wrong because today our modern processes ought not to be shackled by those ancient fetters.

I am grateful to my noble friend Lord Broxbourne for his support for the spirit of my amendment. In some cases there would be a fourth bite at the cherry, but what sort of a Court of Appeal are we to have? Is there any assurance that it will be anything other than a mere single judge? If so, ought we not to have the safeguard of a fourth bite at the cherry?

I am grateful also to the noble and learned Lord, Lord Elwyn-Jones, as always. I understand wholly his position; that my amendment rests on Amendment No. 46. The noble and learned Lord opposes Amendment No. 46, and I wholly understand his position. In the circumstances I beg leave to withdraw the amendment.

Amendment to the amendment, by leave, withdrawn.

The Lord Chancellor

My Lords, I believe the correct procedure is for me now to call Amendment No. 48, which is consequential upon Amendment No. 47.

[Amendment No. 48 not moved.]

Lord Denning had given notice of his intention to move, as an amendment to Amendment No. 46, Amendment No. 49: Line 27, at end insert— ("(3C) In any case when a single Judge or the Divisional Court or the Court of Appeal grants leave, that Court may, if it thinks fit, in lieu of sending it back to the High Court, go on and grant or refuse the same relief as the High Court itself would have done under subsection (1).".").

The noble and learned Lord said: My Lords, I put down this amendment but I oppose Amendment No. 46 entirely. In the circumstances I do not propose to continue with this amendment. The case of Poh, to which reference has been made, established in 1983 the law as it is at the moment, but it dealt only with the appellate jurisdiction of this House. The noble and learned Lord, Lord Diplock, expressly stated that he was not dealing at all with the jurisdiction of the Court of Appeal, and so far as the jurisdiction of the Court of Appeal is concerned, it was established in a case in 1966, Regina v. The Industrial Injuries Commissioner, in [1966] 2 Q.B. That was not appealed from and it still stands as law. I challenge anyone to say to the contrary.

What does that case mean in a situation where there is an application or an appeal from a refusal to leave? There were many such cases and I will tell your Lordships what happened. One can take the example of an immigration case. The judge below, or the Divisional Court, would refuse leave to go ahead and challenge the decision of the immigration authorities. The case would come to us for leave. If I thought there was anything in it, I would ask the authorities to bring the Secretary of State—the Treasury devil—to see if they had any objection. I would hear the case then and there and decide it, and then I would send it back. That procedure is still good law and it was never appealed against in 1966. In the circumstances my amendment is unnecessary, because that is still the law of the land. I am therefore withdrawing that amendment so that we can get on with the matter we really want to discuss; that is, the clause itself.

The Lord Chancellor

My Lords, I assume that what the noble and learned Lord means is that Amendment No. 49, as an amendment to Amendment No. 46, is not moved.

[Amendment No. 49 not moved.]

The Lord Chancellor

My Lords, the Question is that Amendment No. 46 be agreed to.

Lord Denning

My Lords, this is a most important occasion. The amendment deals with the most important jurisdiction of what we now call judicial review. It is a jurisdiction in which the courts restrain and condemn the misuse or abuse of power by any public authority, whether it be the executive Government, a local authority, a police commissioner or any lower tribunal. We now have the remedy of judicial review. It is inherited from our old writs of certiorari, prohibition and mandamus for which there always had to be leave from a judge. If that leave was refused, you could always go, as of right, to the Court of Appeal and ask for the decision to be heard again. That is the old law. This new law brings it up to date. It is a remedy for the misuse or abuse of power.

Before this new law came in every person had a right, and we exercised it, to deal with it in a different way. We allowed actions to be brought for a declaration that a public authority was doing wrong. I think it was in 1953 in the case of Barnard v. National Dock Labour Board. Barnard was one of a group of lighter-men who did not want to work one shift but wanted to work another. The National Dock Labour Board suspended them from working. The men brought an action in the courts for a declaration that the NDLB had no right to do that and had not dealt with them with natural justice. It was rejected. We gave the remedy in the Court of Appeal.

That decision was followed with great cases in the House of Lords. There was the case of Padfields when by reason of an action for a declaration we declared that the Milk Marketing Board (I dissented, like Lord Parker, and the House of Lords for once affirmed it) was wrong in its allocation of quotas. In the great case of Anisminic, this was, again, an action for a declaration which went from the judge to the Court of Appeal and to the House of Lords. Again, we had the remedy for abuse of power which was done by an action for a declaration. Every person in the land had the right to bring such an action. If a judge turned him down, he had the right of appeal to the Court of Appeal. I have sat on many such cases, that is how the system originated and now it is being supplanted not by an action for a declaration, but by judicial review.

It is said by my noble and learned friend the Lord Chancellor that it is an excessive use of the judicial time of the Court of Appeal. It is said that one whole month of a three-judge court was wasted. But what figures does he give? In 1983 there were 27 cases. In 1984 there were 34 cases. That is about right, if you please, but what does it come to?—less than one a week. We sit 40 weeks in the year. How long did they take? We have it from the Law Commission. When we refused an application, as we often had to, it took up to 20 minutes. The great majority were refused. In the few that were granted they might have taken up to an hour. Is that such an outrage of judicial time that we should abolish the right of appeal to the Court of Appeal or restrict it?

As regards the use of judge power, what is suggested in this new clause is not just one appeal to the Court of Appeal, as we had, but first an application for leave to a Divisional Court of a Lord Justice and to other judges and then a further application to the Court of Appeal—two more hearings, when previously all we had was one.

6.45 p.m.

My objection to this amendment is far more serious than that. We are dealing with cases of the first importance. We are dealing with cases which concern the liberty of the subject. We are concerned with cases relating to the custody, education and welfare of children. Already, in the Supreme Court Act 1981, Section 18(1) (h), there is an absolute right of appeal; not by leave, but a right of appeal to the Court of Appeal. I refer to the immigration cases which we so often have. There was a youngster of 13 from Iran and it was arranged for him to be educated here at a public school and then go on to university. The immigration authorities refused him entry because he was going to stay for more than three years. They told him that the rules did not apply to him. He was detained and about to be deported. That case came before us in the Court of Appeal, as of right. We held that the immigration authorities had misconstrued the rules. The liberty of the subject was concerned and we allowed his appeal.

I can give many cases of that kind relating to the immigration authorities. So that is the first great step: there is already a right of appeal where the liberty of the subject and where custody of infants is concerned. That is what happened recently. Lord Justice Ackner had an adoption case where a little girl's mother had died when she was quite young. The girl was put out to foster parents, but the grandparents wanted custody of her and resisted the adoption order. The judges below would not interfere and on appeal to the Court of Appeal, Lord Justice Ackner, and the others, pointed out what an important case it was. They said how valuable it was that there should be the right of appeal in such cases.

I give the case which went to the House of Lords concerning one of these immigration matters. A boy aged 16 came to England with his parents with leave to come in for settlement. They had received permission in India, or wherever it was. He was here with his family for two years and then applied to bring his wife over because he had already been married—when under the age of 16. The immigration officer said, "He is guilty of fraud. He did not disclose to us that he was already married". Therefore, they held that he was an illegal entrant and they refused his appeal. The Court of Appeal refused his appeal.

The House of Lords heard the case and said, "Fraud must be proved against him. You cannot say he was guilty of fraud simply because he did not tell them he was married". So the House of Lords affirmed the principle that the liberty of the subject must prevail. That is just one instance of many—and most of them came about like this—where the immigration authorities have detained a person as being an illegal entrant. That is like the cases of the people who came in on the little boats and so forth. Such people have been detained as illegal entrants and have been about to be sent away. Their appeals have been refused by the Divisional Court and they have appealed to the Court of Appeal and the Court of Appeal have allowed their appeals.

A letter to The Times by the chairman of the Senate of the Bar, Mr. David Calcutt, said that the Court of Appeal has a different status altogether; it is stronger and it is authoritative and it can decide these matters without too much regard if the Divisional Court has gone wrong.

Let me tell your Lordships of the case which interests all the students, which is the kind of case with which we have to deal. This is the case of Mr. Hook. He was a street trader in Barnsley. After the market had closed one night he went into a side lane and relieved himself, passing water. The manager of the market said to him, "You can't do that kind of thing here". He said to the manager, "Oh, can't I? It is no business of yours. You b— off". That upset the manager a great deal. He took the matter before a committee of the council. The committee took away the man's licence. He went to a further committee of the council. They took away his licence. Therefore, he was deprived of his livelihood by this council.

He brought an application for judicial review. The Divisional Court refused it. They said, oh, it was an administrative matter, not a judicial matter. It came to the Court of Appeal and, as your Lordships can imagine, we were not going to let a man be deprived of his livelihood for just a tiny peccadillo of that kind and we restored that street trader's licence. That is the kind of case which we have and the kind of case which shows the importance of judicial review and the right of appeal to the Court of Appeal in it.

What do these new suggestions come to? They say, instead, this. When the judge in the first instance refuses an application, if you like you can renew it again to the Divisional Court of three judges—a presiding judge and two others. If they refuse it, that is the end of the matter unless you go to the Court of Appeal, or they give you leave to go to the Court of Appeal. You have to have leave every time. You have two distinct new hearings before a court of three judges. You have to have leave each time. That is, instead of what I suggest is the fundamental principle in our system: if a judge, even in the High Court or in the Divisional Court, refuses a man his remedy, then there is a right of appeal to the Court of Appeal, a court of standing, which will hear him give his arguments so that they can understand them, and then either refuse or grant his appeal as the case may be.

Therefore, it seems to me that this new procedure is wrong. It is wrong in this case to suggest that the court is overworked or that it needed a saving of time—less than one case a week, lasting a quarter of an hour. It is wrong to think that there will be any saving of judicial power by this amendment. It will mean going before two courts instead of one. The most fundamental principle of all is that there is a right of appeal—not by leave of anybody—from the judge to the Court of Appeal. Just the same as one had a right of appeal to the Court of Appeal in those old cases of the action for a declaration, so there should be in these cases under this new jurisdiction. It is a simple, expeditious remedy which should not be interfered with. I hope your Lordships will reject this proposal.

Lord Elwyn-Jones

My Lords, I join the noble and learned Lord, Lord Denning, in opposing this new clause. In my submission, it makes an adverse impact on a crucially important new right which has developed largely by the judges themselves, which gives strength and power to the individual citizen at a time of encroachment of executive power upon the lives of the citizen.

As has been indicated, a judicial review gives the power to the judges to correct abuse and misuse of power by any public authority, whether it be a Government department, the executive, a tribunal, an inferior court, a local authority or whatever the public authority may be. As the noble and learned Lord has said, an aggrieved person can come before the High Court judge to ask for leave to bring that body before the court to see whether there has been any misuse of power. The power depends upon leave being given by the judge. As the noble and learned Lord has said, at the present time, if that is refused, there is a right of appeal to the Court of Appeal.

With great respect, in my submission, no convincing reason has been produced for limiting or inhibiting or making greater difficulties for the enjoyment of that existing right. The reason that was given was to save judicial time. In my submission, the facts pointed to by the noble and learned Lord, Lord Denning, destroy that. The very basis of what was proposed has gone because under the proposal of this new clause there will actually be a greater use of judicial power than exists at the present time. Therefore, the purported reason for it has disappeared through the window.

In my submission, the safeguard that is given to the liberty of the subject at the present time should not be encroached upon or inhibited, as I submit this new clause would do. Therefore, I greatly hope that it will be rejected.

Lord Hutchinson of Lullington

My Lords, I too should like to oppose this amendment. I ask your Lordships to put your minds to considering why this amendment has been introduced at all. The view, certainly of the Bar, certainly of the noble and learned Lords who have spoken, and many others, is that this amendment is entirely unnecessary. It seems to have been introduced because the original clause, which was attacked in Committee and eventually abandoned, was introduced without any proper consultation, as the noble and learned Lord the Lord Chancellor conceded in Committee. It was introduced presumably and apparently simply for a matter of efficiency in order to save judge time. It had no other merit at all. As the noble and learned Lord who has just spoken has pointed out, this amendment on the face of it seems to take up more judge time and to involve a four-tier form of appeal instead of the perfectly straightforward and simple one which has obtained hitherto.

The only reason that one can see for this amendment is that it is in form a cosmetic amendment which has been introduced for some face saving reason. I should ask your Lordships simply not to support the amendment and let the situation remain as it was before. The Bar has expressed its view, as has already been mentioned, through the chairman's letter to The Times on 14th February. The point that he essentially made there was that a tribunal of the standing and independence of the Court of Appeal can take, and indeed has been seen to take, a line entirely different from that followed in the Queen's Bench.

The most worthy judges, versed in the complexities of administrative law, may have the same worthy approach to a deeply held grievance by a citizen but also, very likely, the same limited point of view as that taken by the single judge. The Court of Appeal brings fresh air and a wide approach together with its overwhelming authority. The ability to go to the Court of Appeal in these circumstances dispels any slightly incestuous air that may arise in these circumstances.

7 p.m.

Your Lordships will remember that a most distinguished Lord Justice ventured before the Committee stage of the Bill to draw attention in the Court of Appeal to two cases that would never have reached the court if the original clause had remained in the Bill. He was rebuked by the noble and learned Lord the Lord Chancellor for so speaking. I am, however, bound to say, if I may, that if the Bill here introduces a reform which affects a body such as the Court of Appeal, with wholly inadequate consultation with members of that body, it would seem, would it not, a little unfair to criticise a member of that body for speaking up in a most courteous and straightforward way, pointing out what the effect of bringing in the clause might be.

I should like to add—I do so with the permission of the learned judge concerned—that a further example, in addition to the two that were referred to by the Lord Justice who spoke up, has come about recently and since the time of the proceedings in Committee. An applicant before Mr. Justice Hodson sought to quash three decisions of the Legal Aid Committee. He refused leave. That was done in writing. The applicant went to another judge and had an oral hearing, as he is entitled to do, and that judge gave leave on two of the heads but not on the third, which was the crucial one. The applicant then went to the Court of Appeal, and the Court of Appeal gave leave on all three. The matter went back and was heard by the original judge, Mr. Justice Hodson. He quashed all three of the findings of the Legal Aid Committee. That was yet another example of the value of an applicant, who feels he has suffered an injustice by some superior authority, being able to go to the Court of Appeal, and the Court of Appeal seeing what the other two judges had not seen—that there was here an essentially arguable point.

The only other point I should like to make—I echo in some way the remark about time made by the noble and learned Lord, Lord Denning—is that the figure of one month of judge time, which was given to the House as the time spent by the Court of Appeal on these applications, comes as a somewhat astonishing figure to the Bar. As has been pointed out, they dealt with 37 applications in 1984. Twenty-nine were refused and four allowed. The refusals could not possibly have averaged, in the view of the Bar, more than 10 to 15 minutes, most of them being quite hopeless. So far as the other four were concerned, by the time the argument has gone on for 30 minutes, it will become perfectly clear that there is an arguable point. It would seem, on that calculation, that it would amount possibly to about eight or nine hours of judge time and could not conceivably amount to one month.

In those circumstances, I would ask your Lordships not to support the amendment and to say that this vital part of the law—the procedure of judicial review which is becoming more and more used by individuals who feel that, in some way, they have been sat upon or crushed by authority—should be left as it is. It works extremely well. The legal profession certainly would wish this amendment not to be passed. We have heard that the Court of Appeal does not object to the amendment, but we have not heard that the Court of Appeal supports it in any way.

Viscount Colville of Culross

My Lords, may I ask my noble and learned friend on the Woolsack one question that might assist me in my deliberations? It is this. Under subsection (3B) of the amendment, if the Court of Appeal is considering the question of leave to renew the application, will it not, in practice, at the same time, consider the question of whether the matter is arguable. If it does not do that, it will not know whether or not it is right to renew the application: So, in fact, it will be a single hearing before the Court of Appeal, effectively upon arguability, which will then decide whether or not the matter proceeds.

The Lord Chancellor

My Lords, I am not sure that I understand my noble friend's question. I shall, however, try to deal with it when I deal with the other arguments.

Lord Wilberforce

My Lords, with the deepest respect to my noble and learned friends and colleagues who have spoken, I venture to suggest that we are in danger of making too much of a pother about this matter. We had a great debate on Second Reading and points of view were expressed both ways. The noble and learned Lord on the Woolsack said that he wished to take the case away and bring forward another clause. He has brought another clause, elaborately drafted, in order to satisfy the objections made at the previous stage of the Bill. Here we have it in Amendment No. 46. It is not what I would have chosen, particularly because I happen to think that the proper route is quite a different one from that suggested in the Bill. Nevertheless, the noble and learned Lord, has, as he said, honoured his undertaking. In one respect he has more than honoured it. I do not feel that it is very profitable for us to be discussing in this forum the question of whether we are saving the time of one Lord Justice, two Lord Justices or half a Lord Justice. Those are matters which we should leave, I venture to suggest, to the noble and learned Lord and his advisers. We know that he has his constraints on manpower and finance. I am assured that he has taken them into account. For my part, I am not prepared to reject this package that he has offered us.

Having said that, there is one rough edge which the noble and learned Lord may be able to smooth down. That A the case to which some reference was made by the noble and learned Lord, Lord Denning, where the liberty of subjects is involved. One may often have cases, one does have cases, particularly immigration cases, where an illegal immigrant has been arrested prior to deportation. If that person wishes to challenge the order for his detention, he may do so in one of two ways. He can ask for a writ of habeas corpus or ask for judicial review. Some act one way; some another. If you go by habeas corpus, you can proceed all the way up the chain without leave. It is a right. If you go by judicial review, then, according to this clause, which would come before Clause 43, you have, at a certain stage, to get leave. It is an impossible position that if you chose one route you have to get leave, while if you chose another, you do not. Somehow or other this disparity has to be reconciled. It may be that it can be done by rules of court; I do not know. One way or another, I would be happier if, at some stage, the noble and learned Lord reassured me that there is not this difficulty of procedure according to the route you take.

I have just one other point. It has been said that the Bar is opposed to this clause. I do not believe there is any warrant for saying that. At the earlier stage, the chairman of the Bar wrote a letter to The Times objecting to the clause then before this House. He has not, so far as I believe—and this rests on a personal conversation—taken a similar position with regard to this clause. I do not expect he is enthusiastic about it, but for my part I do not believe there is any warrant for saying that the Bar as a whole, or through its accredited representatives, is opposed to this clause. I rather suspect that it adopts towards it an attitude something similar to mine: "Well, it's not what I would have chosen, but we ought to accept it in the spirit in which it's offered". I shall therefore be one of those who will not oppose the amendment. I hope that other noble Lords will be of like mind.

Lord Mishcon

My Lords, I am so glad that this matter is being approached in a completely non-controversial, non-hostile spirit and that your Lordships are in fact considering, perfectly quietly, the following question: should something which has stood the test of time, which has not been attacked in any way from the point of view of justice not being done, be altered unless there are overwhelming reasons for altering it? The question, in my submission, is as simple as that, although it does relate, obviously, to a most important subject, a most important procedure: namely, the one way, as a rule, in which the subject has the right to challenge the administrative decisions and other decisions of the executive.

The noble and learned Lord, Lord Wilberforce, whose voice is so much respected in this House, said that this is not the route he would have chosen. When he talks of the Bar Council, he says he imagines this is not the route that it would have chosen. Then why choose it? Why support an alteration to something that the Bar Council stands by? I can speak for the Law Society in this matter. I do not speak for it; I speak with the support of the Law Society in this matter. It wants the status quo, and the reason it wants the original arrangements to stand is that it wants the subject to have the right to go from one court to the other. It asks that so that there is no question of leave to do this. It wants to be able to obtain that leave, if not from the first judge in the court of first instance, to go as of right to the Court of Appeal.

It is right to say, with every courtesy to the noble and learned Lord, there was no deal done with this House on the last occasion. The noble and learned Lord brought forward an amendment, and did it with great ability and great clarity. This House decided that it did not want that amendment. It did not want this diminution of the right of the citizen. It did not want it merely because this was a way of reducing the work of the Court of Appeal. It was as simple as that, and this House dissented. This House did not dissent on any condition.

The noble and learned Lord, with his usual courtesy, said that as a result of hearing what was the opinion of the House he would consider the position and consider whether or not another amendment should be brought forward. The noble and learned Lord, with courtesy, with clarity, has brought forward another amendment, but this House has not undertaken to accept it. There was no contract entered into between the parties, not even as a matter of honour; and so this House now considers the noble and learned Lord's amendment.

Bearing in mind, as has been said, that the one reason for taking away a right of a subject in this important matter was the time that was going to be saved by the Court of Appeal, there are two short issues. The first is: should you in fact, only for the sake of saving the time of the Court of Appeal, take away a very vital right of a subject? The second thing is: is it realistic to think that this amendment saves the time of the Court of Appeal? This amendment provides that a judge of the Court of Appeal has got to sit on the Divisional Court; so you are taking away the time of a judge of the Court of Appeal. Then, if the Divisional Court decides, with the judge of the Court of Appeal there, not to grant leave, you make your application again before the same judge of the Court of Appeal and the remaining members of the Divisional Court. Then, if they refuse, you go to the Court of Appeal, even if it consists of one judge; so the time of another judge of the Court of Appeal is wasted.

Is it not sensible that what we do, if we cannot see a very good reason for altering a vital right, is leave the right where it stands at the moment and say to the noble and learned Lord who sits on the Woolsack, "Thank you for bringing forward another amendment and for thinking this out as an alternative to what you said last time, with which we didn't agree. But please forgive us. Even if we have to walk into the Division Lobby, we don't agree with you this time either".

7.15 p.m.

Lord Campbell of Alloway

My Lords, if I may intervene briefly, I should like to say that I find myself in some difficulty in supporting this amendment. There is the point that was made—and tellingly made —by the noble and learned Lord, Lord Wilberforce, about the quandary or the inequity that exists between habeas corpus and judicial review. I question how that could be cured by rules of court within the framework of Clause 46. Secondly, for the reasons already mentioned on the amendment to which I spoke earlier, there is no safeguard in the sense of the means of access to the Appellate Committee of your Lordships' House. That could be of importance.

I seek clarification of what "Court of Appeal" means in subsection (3B)(b) of the amendment. It says: that court or the Court of Appeal grants leave". Will that be a single-judge Court of Appeal? What is to stop it? It seems that anything may be done by rules of court. If that is a single-judge Court of Appeal refusing leave, in my submission that would not be satisfactory. I should like some form of assurance on these three questions, quite apart from the point about necessity which has been made by various noble Lords, and recently by the noble Lord, Lord Mishcon. It is a matter that warrants clarification. At the moment, as an ordinary member of the Bar, I find myself in a certain difficulty.

Lord Hatch of Lusby

My Lords, it seems right that in a debate of this nature there should be at least one layman speaking among the lawyers. I want to confine myself, very briefly, to the case of the immigrants, which I have advanced before in relation to this Bill. I was very pleased when the noble and learned Lord on the Woolsack withdrew his notorious Clause 43.

I must draw to your Lordships' attention the fact that an increasing number of immigrants and potential immigrants to this country have begun to feel that we do not want them, that they are not equal before the law, and, even more important, that they are not equal in the treatment they get from administrative officers. This is not just my opinion. I draw noble Lords' attention to the report of the statutory body—the Commission for Racial Equality—on practices in the immigration regulations. This demonstrates that there are abuses in the immigration procedure. They are abuses which can best be dealt with by the process of judicial review.

However, as we have seen throughout the debate on this clause, that form of judicial review has been under attack. I am glad that the noble and learned Lord on the Woolsack withdrew his original Clause 43, or had it negatived. However, I must say on behalf of the immigrant organisations in this country that the substitute which we are debating at present has brought even greater puzzlement to many immigrants in this country and to potential immigrants, and it has done so for three reasons. The first reason is that it would appear that the substitution as regards the Divisional Court with a Court of Appeal judge is at least a debasement of the authority of the Court of Appeal, to which previously the immigrant could apply for leave for judicial review.

Secondly, it would appear—and I do not know whether this is the case—that possibly one effect of the new subsection (3A) (and I should like the noble and learned Lord to address himself to this matter when winding up the debate) is to withdraw a present right. This matter has already been mentioned in the debate. Is it the case that subsection (3A) would take away the dual right which an applicant has at present of submitting a written plea and, if that is rejected, of going before another judge and submitting an oral plea?

Thirdly, subsection (3B) of the amendment leads to confusion in this House and to confusion among legally trained Members of this House and outside this House. If that is so, then what effect must it have on the immigrants who have to go through this process? Surely it is clear that this confusion—and it has been mentioned by other noble and learned Lords—caused by the increase in the number of stages in the application for appeal, will only make it much more difficult, much more complicated and much more worrying to immigrants who are trying to get justice as against what they consider to be the unfairness practised by the officers of the Government.

I suggest to the noble and learned Lord that, so far as subsection (3B) is concerned, he is making the situation so complicated that no normal immigrant will feel other than that this is another way in which to prevent him from getting a review of his case as against a Government official.

The Lord Chancellor

My Lords, I have been utterly bemused by some of the speeches to which I have listened because they can only be explained on the basis either that noble Lords have not read or that they have not understood Amendment No. 46. Anyone listening to this debate would have assumed that Amendment No. 46 reduces the right of the applicant for leave to apply for judicial review by the removal of something that he already possesses. That is contrary to the truth, and the most superficial reading of my amendment would tell them that quite plainly.

Under the present law, the application is made originally to the Divisional Court in the person of a single judge, and, if refused, it goes to the Court of Appeal for a renewal of the application. It is not an appeal to the Court of Appeal; it is the renewal of an application to the Court of Appeal on refusal. What the new clause does is to add an additional right, and it does not take anything away. It means that if the single judge refuses it the applicant can then go to a Divisional Court which is composed as provided for in subsection (3A); and, if he gets it there, it is tried on the merits. If the Divisional Court refuses it, then it goes to the Court of Appeal. Therefore, he has three rights of application to the court, and not two. That is the difference.

There is only one matter that I should like to add. Of course, when Mr. Calcutt wrote he had not seen the amendment at all because he wrote before the amendment had been put down. He wrote under the misapprehension (under which it appears that the noble Lord, Lord Hutchinson of Lullington, still suffers) that there was no access to the Court of Appeal. The contrary is true. All that is provided by the amendment is that he goes to the Divisional Court first, and therefore has another right of access to the court. The estimate that I had about the amount of judge time taken in the Court of Appeal was received from the Court of Appeal itself. It may be right, and I think that it is—their estimate is more likely to be right than that of anybody else—and I repeated it exactly as I was given it.

As regards habeas corpus (which is the only interesting point that has been made) it is quite true, as my noble and learned friend Lord Wilberforce said, that habeas corpus is not affected by this amendment at all. It proceeds under Order 54 on its merits from the moment it starts right up to the House of Lords. This amendment deals only with applications under the Rules of the Supreme Court Order 53, and it gives an additional right of access to the court and does not take one away. First, it gives the right of application to the judge: secondly, it gives the right to make an application to the Divisional Court composed of a Lord Justice and two puisnes of the High Court; thirdly, it gives a right of access to the Court of Appeal. At the moment there are only two rights and not three. If any one of those three give him the right to apply on the basis that his appeal is arguable, then he gets his case argued on the merits and it goes up to the House of Lords in the ordinary way if either party is discontented.

This is the most extraordinary debate in which I have taken part for a very long time, because the speeches of the noble and learned Lord, Lord Denning, and the noble and learned Lord, Lord Elwyn-Jones, can only be explained on the basis that they have not either read or understood what I have put down for amendment. Of course there was no bargain. I have not only done better than I promised to do at Committee stage: I have actually added an additional right to the existing rights of the applicant.

The idea that by being given an additional right the applicant if he is an immigrant, thinks that he has had something taken away from him—which was the suggestion of the noble Lord, Lord Hatch of Lusby—is too absurd to be taken seriously. He has one extra right, and not one less. All I can say is that the result of giving him this additional right will be to save a certain amount of time in the Court of Appeal, because if any case is allowed by the Divisional Court—and the assumption which noble Lords have made is that they will be rejected—it will not be necessary to go to the Court of Appeal. If it is rejected by the Divisional Court—which, if it is arguable, will not be very frequently—the applicant will have the same right as he has now to go to the Court of Appeal.

As for the noble and learned Lord, Lord Denning, I know that he hankers after his quite illegal assumption of a jurisdiction at first instance. That was illegal, and it was put an end to by the practice direction of 1983 which was signed by both the present Master of the Rolls and the present Lord Chief Justice. I know that the noble Lord, Lord Denning, thinks that he was not committing a constitutional monstrosity by making the Court of Appeal a court of first instance; but he was. What is more, he was depriving the losing party in the Divisional Court of the additional step of appeal which he would otherwise have had. That is the inevitable result of trying to turn the Court of Appeal into a court of first instance.

When we come to the end of it, I have added to the rights of the subject, and not reduced them. Judicial time has been saved by providing the Divisional Court as a means of granting leave as well as of rejecting it. If it rejects it, or puts it on terms, then there is the right of access to the Court of Appeal. When the noble Lord, Lord Mishcon, asks me why a system which has stood the test of time should be altered, the answer is that it has stood the test of 1983 and 1984 and it was altered at the behest of those who are operating the system.

Lord Mishcon

My Lords, the noble and learned Lord is so kind to give way. Would he explain to the House what these words mean if indeed they have been misunderstood? I am looking at subsection (3B) of his amendment, which says: An application for leave to apply for judicial review which has been refused, or granted on terms, by the High Court may be renewed before the Court of Appeal if (but only if)"— and I omit paragraph (a) and go on to (b): that court or the Court of Appeal grants leave to renew the application". Does that not mean, I ask the noble and learned Lord, that an application has to be made for leave before the Court of Appeal will hear it? And at the present moment that application is unnecessary?

The Lord Chancellor

My Lords, I quite see the noble Lord's question, but it is a purely drafting point. What it is intended to mean is that the Court of Appeal may give leave to renew the application and then grant it. If there is any point in that it is a purely drafting point. The effect of the amendment as proposed is I think perfectly plain. It is that you must first go to the judge, and, if you get leave, the case will be heard on its merits; if you do not get leave you have the additional right to go to the Divisional Court. I am afraid I must be allowed to say what I intended. You go to the Divisional Court and, if leave is granted, it is argued on its merits. If you do not, you renew your application to the Court of Appeal and, if it is granted, it is reviewed on its merits. That is what the amendment says. I think, and that is what it means. I do not think there is any ambiguity about it at all but, if there is, I will take it away for that purpose and consider any drafting which may be necessary.

But there is absolutely no value in the point whatever. An additional right is being given and the House should be under no misapprehension that if it votes against this amendment it is not accepting the additional rights.

Lord Mishcon

My Lords, by leave of the House, the noble and learned Lord is even more kind to give way a second time, but would he take it from me at all events—and I say this in all humility—that this is not a case of ambiguity. Many of us have been misled, I am sure unintentionally, by this wording. The wording is quite clear. It says, in clear terms, that the application for leave can only be renewed before the Court of Appeal "if—and it accentuates it— (but only if) … the Court of Appeal grants leave to renew the application". That means in ordinary English that you have to go to the Court of Appeal and say, "Please will you give me leave to renew the application?" If the Court of Appeal refuses it, you cannot; and that is not—if the noble and learned Lord will forgive me for saying so—the present procedure.

The Lord Chancellor

My Lords, it is not the present procedure only because I have added a right intermediate between the single judge and the Court of Appeal. That is the only deviation from the present procedure. What I think the noble Lord has failed to apprehend is that when you go up the chain on an application for leave to apply for a judicial review, what you do on each occasion is to ask leave to renew your application and it is either granted or refused. It is as simple as that.

If there is a drafting ambiguity, of course I will have it looked at. But I had explained the clause, which I think is plain. If it is not plain, then it shall be made plain.

7.35 p.m.

On Question, Whether the said amendment (No. 46) shall be agreed to?

Their Lordships divided: Contents, 82; Not-Contents, 97.

DIVISION NO. 2
CONTENTS
Airey of Abingdon, B.	Hood, V.
Aldington, L.	Hornsby-Smith, B.
Arran, E.	Hylton-Foster, B.
Auckland, L.	Ingrow, L.
Avon, E.	Keyes, L.
Bauer, L.	Kimberley, E.
Belhaven and Stenton, L.	Kintore, E.
Beloff, L.	Lane-Fox, B.
Belstead, L.	Lauderdale, E.
Brabazon of Tara, L.	Lindsey and Abingdon, E.
Brookeborough, V.	Macleod of Borve, B.
Brougham and Vaux, L.	Margadale, L.
Broxbourne, L.	Marley, L.
Caithness, E.	Marshall of Leeds, L.
Cameron of Lochbroom, L.	Maude of Stratford-upon-Avon, L.
Cathcart, E.
Chelwood, L.	Morris, L.
Coleraine, L.	Mottistone, L.
Colville of Culross, V.	Mountevans, L.
Colwyn, L.	Nugent of Guildford, L.
Cork and Orrery, E.	Onslow, E.
Cox, B.	Orkney, E,
Craigmyle, L.	Perth, E.
Davidson, V.	Rankeillour, L.
Denham, L. [Teller.]	Redesdale, L.
Drumalbyn, L.	Rodney, L.
Elibank, L.	Sandys, L.
Elton, L.	Savile, L.
Faithfull, B.	Selborne, E.
Ferrers, E.	Selsdon, L.
Ferrier, L.	Skelmersdale, L.
Fortescue, E.	Stamp, L.
Gibson-Watt, L.	Stockton, E.
Glanusk, L.	Swinton, E. [Teller.]
Glenarthur, L.	Teviot, L.
Gray, L.	Teynham, L.
Gray of Contin, L.	Trumpington, B.
Hailsham of Saint Marylebone, L.	Vaux of Harrowden, L.
	Westbury, L.
Henley, L.	Wilberforce, L.
Hives, L.	Wynford, L.
Home of the Hirsel, L.	Zouche of Haryngworth, L.

NOT-CONTENTS
Airedale, L.	David, B. [Teller.]
Amherst, E.	Davies of Leek, L.
Attlee, E.	Dean of Beswick, L.
Aylestone, L.	Delacourt-Smith of Alteryn, B.
Baker, L.
Barnett, L.	Denning, L.
Beaumont of Whitley, L.	Diamond, L.
Beswick, L.	Elwyn-Jones, L.
Birk, B.	Ennals, L.
Boston of Faversham, L.	Falkender, B.
Bottomley, L.	Feversham, L.
Briginshaw, L.	Fisher of Rednal, B.
Brooks of Tremorfa, L.	Foot, L.
Bruce of Donington, L.	Gaitskell, B.
Campbell of Eskan, L.	Gallacher, L.
Caradon, L.	Galpern, L.
Carmichael of Kelvingrove, L.	Gladwyn, L.
Cledwyn of Penrhos, L.	Graham of Edmonton, L.
Collison, L.	Grey, E.
Craigavon, V.	Hanworth, V.

Harris of Greenwich, L.	Nicol, B.
Hatch of Lusby, L.	Ogmore, L.
Henderson of Brompton, L.	Oram, L.
Heycock, L.	Pitt of Hampstead, L.
Houghton of Sowerby, L.	Ponsonby of Shulbrede, L. [Teller.]
Howie of Troon, L.
Hutchinson of Lullington, L.	Prys-Davies, L.
Irving of Dartford, L.	Raglan, L.
Jacques, L.	Rea, L.
Jeger, B.	Rhodes, L.
Jenkins of Putney, L.	Ritchie of Dundee, L.
John-Mackie, L.	Rochester, L.
Kennet, L.	Ross of Marnock, L.
Kilbracken, L.	Seear, B.
Kilmarnock, L.	Serota, B.
Kinloss, Ly.	Shackleton, L.
Kirkhill, L.	Shaughnessy, L.
Kissin, L.	Shepherd, L.
Lawrence, L.	Simon, V.
Llewelyn-Davies of Hastoe, B.	Simon of Glaisdale, L.
Lock wood, B.	Stedman, B.
Lovell-Davis, L.	Stewart of Fulham, L.
Mar, C.	Stoddart of Swindon, L.
Mishcon, L.	Taylor of Blackbum, L.
Molloy, L.	Taylor of Mansfield, L.
Molson, L.	Tordoff, L.
Mulley, L.	Wilson of Langside, L.
Munster, E.	Winchilsea and Nottingham, E.
Murray of Epping Forest, L.
Nathan, L.	Winstanley, L.

Resolved in the negative, and amendment disagreed to accordingly.

7.43 p.m.

Lord Mishcon had given notice of his intention to move Amendment No. 50: Before Clause 43, insert the following new clause:

("Reimbursement of costs incurred by reason of death or incapacity of judge. . Where in any proceedings—

1. (a) in the High Court or a county court; or
2. (b) in the civil division of the Court of Appeal in which the court consists of two judges,

it becomes necessary to hold a new trial or to re-hear the appeal by reason of the judge who presided at the original trial, or one of the judges in the Court of Appeal, dying or becoming incapacitated in the course of the trial or the hearing of the appeal or before judgment is delivered, every party to the proceedings shall be entitled to be reimbursed out of public funds in respect of any additional costs incurred by him in consequence thereof, any such costs to be taxed by the proper officer of the court.").

The noble Lord said: My Lords, I wonder whether I would save the time of the House by asking the noble and learned Lord whether, at this stage, this is an amendment that he can accept.

The Lord Chancellor

My Lords, I think that I can give it some quite favourable consideration on the basis of my letter to the noble Lord, but only in that sense.

Lord Mishcon

My Lords, the noble and learned Lord generously wrote to me and said that the spirit of this amendment was one that he could understand and might well consider favourably. I hope I am paraphrasing his letter correctly. It may not be that an amendment can be brought forward by the Government in this House, although that would be the attempt, but at least the spirit of this might well be met in another place. If that be the correct interpretation of what he said—and I notice that the noble and learned Lord is nodding—it would be quite wrong of me to waste the time of the House. I merely want to thank the noble and learned Lord for his consideration.

[Amendment No. 50 not moved.]

Clause 43 [Power of High Court to make judgments binding on certain persons who are not parties]:

The Lord Chancellor moved Amendment No. 51: Page 32, line 26, leave out first ("of") and insert ("relating to the estates of deceased persons or to trusts and falling within").

The noble and learned Lord said: My Lords, the amendments make it clear that persons who may be bound by the new notice procedure are limited to those affected by actions related to trusts or to the estates of deceased persons. May I take together the three amendments relating to Clause 43; namely, Amendments Nos. 51, 52, and 53? Amendment No. 52: Page 32, line 29, leave out from ("persons") to ("who") in line 30. Amendment No. 53: Page 33, line 4, leave out subsection (3).

These amendments are introduced as a consequence of my undertaking to the noble Lord, Lord Mishcon, at the Committee stage to introduce an amendment to this clause to make it clear that the persons who may be bound by the new notice procedure are limited to those affected by actions related to trusts or to the estates of deceased persons. These amendments achieve this effect by glossing subsection (1) so that the clause is confined to trusts and estates of deceased persons by removing subsection (3), which is no longer necessary since its effect is achieved by the new subsection (1), and by making a consequential amendment to subsection (2). I beg to move.

Lord Mischon

My Lords, I am most grateful to the noble and learned Lord.

On Question, amendment agreed to.

The Lord Chancellor moved Amendments No. 52 and 53:

[Printed above].

The noble and learned Lord said: My Lords, may move Amendments Nos. 52 and 53 together? They are both consequential. I beg to move.

On Question, amendments agreed to.

Lord Elwyn-Jones moved Amendment No. 54: After Clause 48 insert the following new clause:

("Goods subject to seizure in execution. .—(1) After section 137 of the Supreme Court Act 1981 there shall be inserted— Good protected from seizure in execution. 137A.—(1) The following shall not be liable to seizure under any execution or order of any court against the goods of any person—

1. (a) such tools, books, vehicles and other items of equipment as are necessary to that person for use personally by him in his employment, business or vocation; and
2. (b) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of that person and his family.

(2) For the purposes of this section "family", in relation to a person means the persons (if any) who are living with him and who are wholly or partially dependent on him. (3) Section 8 of the Small Debts Act 1845 is hereby repealed". (2) For section 89 of the County Courts Act 1984 there shall be substituted— Good which may be seized. 89.—(1) Every bailiff or officer executing any warrant of execution issued from a county court against the goods of any person may by virtue of it seize—

1. (a) any of the goods of that person except—
1. (i) such tools, books, vehicles and other items of equipment as are necessary to that person for use personally by him in his employment, business or vocation; and
2. (ii) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of that person and his family.
2. (b) any money, banknotes, bills of exchange, promissory notes, bonds, specialities or securities for money belonging to that person.

(2) Any reference to the goods of an execution debtor in this Part of this Act includes a reference to anything else of his that may be lawfully seized in execution. (3) For the purposes of this section "family", in relation to a person, means the persons (if any) who are living with him and who are wholly or partially dependent on him.".")

The noble and learned Lord said: My Lords, we discussed this at an earlier stage in the consideration of the Bill. It deals with what goods are subject to seizure in execution of an order of any court against the goods of any person. The language and the description of the permitted goods is consistent with that which is contained in Clause 110 of the Insolvency Bill. The substantial wording is identical.

The existing exemption speaks only of "the tools and implements of his trade". That is replaced, as the House will see, in the clause, by the more sensible words: such tools, books, vehicles and other items of equipment as are necessary … in his employment, business or vocation". This is wider and reflects modern conditions. In my submission it is ridiculous to deprive a debtor of anything that he needs to produce an income. It is a self-defeating operation in every sense.

The new clause refers to items which are necessary, as the House will see, for the, basic domestic needs of [the debtor] and his family". This is wider than the reference in the existing law to wearing apparel and bedding, but it does not serve anyone's interests to reduce a debtor below that standard by threatening to seize everything apart from clothing and bedding. This would seem to be a reasonable provision to which I invite the sympathetic consideration of the Lord Chancellor. I beg to move.

The Lord Chancellor

My Lords, we discussed what was very much the same amendment at the Committee stage. When the noble and learned Lord first moved this amendment, he quoted from the Payne Report. Since then that has been overtaken by the Cork Committee's report on insolvency law reform. On the specific point of the need to prescribe a list of exempt goods, the committee concluded that it would not only be difficult to compile such a list but would entail the trouble and expense of taking detailed inventories. The way forward that was adopted is admirably suited to the case of insolvency: instead of lists of exempt articles, the categories of exemption are broadened, the monetary limit of exemption (now £250) is dropped and all the exempt goods are made subject to the trustee's powers to claim them in certain circumstances.

However, the amendment attempts to import a part of that committee's recommendations on this matter without the counterbalancing safeguards which the committee realised were also necessary. In cases of bankruptcy, the careful attention of the trustee is the all-important factor enabling the more flexible approach of the bankrupt's needs to be adopted. In the general run of the enforcement of High Court and County Court orders by execution against goods, however, there is no trustee with the scope of authority and duties which that status confers. For example, neither sheriffs nor bailiffs who have to preside over executions would enjoy the power which it is envisaged that trustees should have under the insolvency legislation.

The wider definition of bankrupts' "exempt" property would be expressly subject to the trustee's power to sell any parts of that exempt property if he can find a cheaper substitute. For example, in the case of clothing, if he found a mink coat he might be entitled to sell the mink coat and to substitute a cheaper article of clothing. If he found a Rolls-Royce he might sell the Rolls-Royce and substitute a humbler kind of vehicle. So while a debtor's vehicles or wearing apparel would be excluded by the wider definition from his realisable estate, the trustee would have power to replace a Rolls-Royce with a Ford or a mink coat with a tweed. Thus, whilst the monetary limit, now £250, may be dispensed with under the insolvency legislation, the role of the trustee is the safeguard against abuse.

But if introduced into ordinary High Court and county court execution the amendment would have a quite different effect. It would confer extra protection on the debtor to the detriment of creditors. Sheriffs' officers and bailiffs need to know with certainty what can and what cannot be seized in execution. For them, the categories of goods which up to the monetary limit are not to be seized, is a necessary guide. It is no doubt imperfect, I grant, but, with the benefit of judicial interpretation and humane custom, the categories of exemption operate as an acceptable compromise between the conflicting wishes of creditors and debtors where there is no trustee in bankruptcy to act as umpire. By repealing Section 8 of the Small Debts Act 1845 and the existing Section 89(3) of the County Courts Act 1984 the amendment would repeal the monetary limits completely. Furthermore, the categories of those protected goods are greatly extended and would appear to protect many of the goods owned by debtors which could at present be seized and sold to pay off their debts.

Sheriffs' officers and bailiffs attempting to obtain payment on behalf of creditors within the strict limits of the law would be seriously hampered in their efforts by this amendment—bailiffs, perhaps even more so than sheriffs, as they are usually dealing with debtors who have few assets. Given fallible human nature, if debtors think they can avoid paying their debts, they will do so. What is more, this amendment would then protect such goods from being seized and sold.

As it stands, the amendment would be greatly detrimental to the interests of judgment creditors, and for this reason I hope that the noble and learned Lord will perhaps not pursue it further.

Lord Elwyn-Jones

My Lords, I will naturally read with care what the noble and learned Lord has just said. What I said seems so simple, fair and just, but on closer examination it appears that these quiddities of lawyers present difficulties in the way. Therefore in the circumstances I am content to read what the noble and learned Lord read to us with his customary clarity. Therefore I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Lord Chancellor moved Amendment No. 55: After Clause 49, insert the following new clause:—

("Power of county courts to grant relief from forfeiture for non-payment of rent. .—(1) Section 138 of the County Courts Act 1984 (provisions as to forfeiture for non-payment of rent) shall be amended as provided in subsections (2) to (4) of this section. (2) In subsection (5), the words "Subject to subsection (6)," shall be omitted. (3) In subsection (7)—

1. (a) for "enforced" there shall be substituted "enforceable"; and
2. (b) after "the lessee shall" there shall be inserted ", subject to subsections (8) and (9A).".

(4) After subsection (9) there shall be inserted— (9A) Where the lessor recovers possession of the land at any time after the making of the order under subsection (3) (whether as a result of the enforcement of the order or otherwise) the lessee may, at any time within six months from the date on which the lessor recovers possession, apply to the court for relief; and on any such application the court may, if it thinks fit, grant to the lessee such relief, subject to such terms and conditions, as it thinks fit. (9B) Where the lessee is granted relief on an application under subsection (9A) he shall hold the land according to the lease without any new lease. (9C) An application under subsection (9A) may be made by a person with an interest under a lease of the land derived (whether immediately or otherwise) from the lessee's interest therein in like manner as if he were the lessee; and on any such application the court may make an order which (subject to such terms and conditions as the court thinks fit) vests the land in such a person, as lessee of the lessor, for the remainder of the term of the lease under which he has any such interest as aforesaid, or for any lesser term. In this subsection any reference to the land includes a reference to a part of the land.". (5) In section 139 of the County Courts Act 1984 (service of summons and re-entry), after subsection (2) there shall be inserted— (3) Subsections (9B) and (9C) of section 138 shall have effect in relation to an application under subsection (2) of this section as they have effect in relation to an application under subsection (9A) of that section.".").

The noble and learned Lord said: My Lords, I should like to speak to this amendment with Amendments Nos. 59D, 64 and 68: Amendment No. 59D: Clause 60, page 43, line 23, at end insert—("except section (Power of county courts to grant relief from forfeiture for non-payment of rent)"). Amendment No. 64: Schedule 7, page 62, line 31, column 3, at end insert— ("In section 138(5), the words "Subject to subsection (6),"."). Amendment No. 68: Schedule 8, page 64, line 16, at end insert—

("Relief from forfeiture in county courts . The provisions inserted by subsections (4) and (5) of section (Power of county courts to grant relief from forfeiture for nonpayment of rent) shall not have effect in connection with any recovery of possession of land by a lessor which occurred before the commencement of that section.").

These amendments confer on the county courts jurisdiction to grant relief against forfeiture analogous to that which exists in the High Court. The county courts' lack of jurisdiction in this respect was criticised by judges in two recent High Court cases. The County Courts Act 1984 already contains provisions which enable a lessee to avoid forfeiture of his lease in cases where he has failed to pay rent and, which may be exercised right up to the time when the lessor regains possession of the lands under the court order. The amendment will confer a new and additional power on a county court to grant relief if the lessee or a person with interest under a lease, for instance a mortgagee or a sub-tenant, applies within six months after possession has been recovered.

The jurisdiction will not be quite identical to that of the High Court, whose jurisdiction derives partly from equity and partly from statute and precedent. Instead it builds upon the systematic code already contained in Section 138 of the County Courts Act 1984. Subsection (1) provides that Section 138 of the County Courts Act be amended in accordance with subsections (2) to (4) of this clause. The main substance of the amendment is in subsections (4) and (5). Subsection (2) corrects an error which occurred when the provisions of Section 191(1) of the County Courts Act 1959 and Section 23 of the Administration of Justice Act 1965 were consolidated and rearranged in the County Courts Act 1984. The associated amendments to Schedule 7 contain the necessary repeal.

Subsection (3)(a) substitutes "enforceable" for "enforced" in Section 138(7). The latter term does not take account of those cases where a lessor does not need to enforce his order for possession—for example, where he can re-enter peaceably after proceedings for possession have been brought. Subsection (3)(b) makes subsection (7), which at present bars a lessee from all further relief once a possession order has been enforced, subject to subsections (8) and (9A), which are the new subsections conferring the right to claim relief. Subsection (4) inserts new subsections (9A), (9B) and (9C) into Section 138 of the County Courts Act.

Subsection (9A) provides that where a lessor has taken county court proceedings for forfeiture against a lessee to obtain a possession order, and has thereafter recovered possession of the premises, the lessee can apply to the county court for relief. The application for relief must be made within six months after possession has been recovered and the court can impose such terms on the grant of relief as it thinks fit. These conditions reflect the High Court's powers under Section 210 of the Common Law Procedure Act 1852. The six-month period will enable the lessors to know with certainty that the period during which there is a possibility of the lessee applying for relief and the terms imposed—for example, the payment of all arrears and expenses incurred by the lessor—will protect the lessor's interests.

The words in parenthesis in subsection (9A) reflect the differing circumstances in which possession may be recovered. Some lessors may stay until a warrant for possession is executed and others may leave once a possession order is made or leave voluntarily so that the enforcement is unnecessary.

The new right is being conferred on all such categories of lessee. Subsection (9B) confirms that the effect of granting relief against forfeiture is that the lessee holds the property according to his original lease without a new lease. Subsection (9C) extends the right to apply for relief against forfeiture to persons with interests derived from leases—sub-lessees and mortgagees. At present, until possession is recovered by the lessor enforcing his right to forfeit, a sub-lessee or mortgagee can apply to the county court under Section 146(4) of the Law and Property Act 1925 for relief in the form of a new lease. Both the grant of relief and the terms are at the absolute discretion of the court. The court can also grant relief to a sub-lessee from demised premises. The only restriction is that the sub-lessee cannot obtain a term longer than that remaining under his original sub-lease.

8 p.m.

Subsection 9(c) does all the same things but is necessary because the protection of Section 146(4) of the Law of Property Act 1925 cannot extend beyond the recovery of possession by the lessor forfeiting the lessee's lease. Subsection (5) inserts a new subsection at the end of the present Section 139 of the County Courts Act 1984. The effect is to provide explicitly that the lessee who obtains relief in circumstances where the lease was forfeited without an action being brought will hold the land according to his original lease. In the case of the sub-lessee, the relief will take the form of the grant of a new lease.

The amendment to Schedule 8 contains the associated transitional provisions. Where the lessor has recovered possession of the premises in cases governed by Sections 138 and 139 before the commencement of the section, the lessee or sub-lessee will not be able to apply for relief. The amendment to Clause 60 removes the clause from the list of sections which came into force automatically two months after the Royal Assent. As some amendment to the rules will be required, it is desired to have an Appointed Day commencement. I beg to move Amendment No. 55 having spoken also to Amendments No. 59D, 64 and 68. I hope I have explained the thing with sufficient clarity, though not, perhaps, with sufficient brevity. I beg to move.

Lord Mishcon

My Lords, we entirely agree with the necessity and the advantageous nature of these amendments.

On Question, amendment agreed to.

Clause 52 [Power of High Court to appoint an arbitrator on behalf of party in default]:

The Lord Chancellor moved Amendment No. 56: Page 39, line 21, after ("parties") insert ("or in some other manner specified in the agreement").

The noble and learned Lord said: My Lords, I beg to move Amendment No. 56. At the same time, I would speak to Amendments Nos. 57 and 58. Amendment No. 57: Page 39, line 33, at end insert ("(if the case so requires)"). Amendment No. 58: Page 39, line 36, at end insert— ("(4) Except in a case where the arbitration agreement shows that it was intended that the vacancy should not be supplied, paragraph (b) of each of subsections (2) and (3) shall be construed as extending to any such refusal or failure by a person as is there mentioned arising in connection with the replacement of an arbitrator who was appointed by that person (or, in default of being so appointed, was appointed under that subsection) but who refuses to act, or is incapable of acting or has died.".").

These are technical amendments to Clause 52 which make minor and useful changes. Clause 52 is concerned with the power of the court to appoint an arbitrator for a party who has failed to appoint an arbitrator. The noble Lord, Lord Hacking, suggested in Committee an alternative manner of solving the problem of parties in default. For reasons which I gave then the large part of what he suggested was not acceptable. However, minor changes to Clause 52 have been suggested which would be useful and should be made. The first and second of these amendments bring within the scope of the clause references by two parties to three arbitrators where the third arbitrator is to be appointed otherwise than by the two arbitrators appointed by the parties, the only case covered at present by the clause. The third amendment will allow the court to appoint a substitute arbitrator on behalf of a party who refuses to make a substitute appointment where that party's original arbitrator refuses to act, is incapable of acting or has died. I beg to move.

Lord Mishcon

My Lords, I repeat the comment that I made on the last series of amendments. This, too, is very necessary and very sensible.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 57:

[Printed above.]

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 58:

[Printed above.]

On Question, amendment agreed to.

Clause 54 [Proceedings in connection with European patents]:

The Lord Chancellor moved Amendment No. 59: Page 40, line 44, at end insert— ("( ) In section 114 (restrictions on practice as patent agent), after subsection (2) there shall be inserted— (2A) Notwithstanding the definition of "patent agent" in section 130(1) below, subsections (1) and (2) above do not impose any prohibition in relation to the business of acting as agent for other persons for the purpose of conducting proceedings before the comptroller in connection with European patents (UK) to which section 77(1) above for the time being applies.".").

The noble and learned Lord said: My Lords, this is technical, to ensure that Section 84 of the Patents Act 1977, which is amended by Clause 54, will be the only provision restricting the carrying on for gain of the business of conducting proceedings before the controller in connection with granted European patents (UK). As Clause 54 is at present worded, the same facts would give rise to an offence under Section 84 and an offence under Section 114 of the Patents Act. The amendment will prevent this prospect which is perhaps not correctly described as "double jeopardy". The House will know what I mean. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendments Nos. 59A, 59B and 59C: After Clause 56, insert the following new clause:

("Northern Ireland rules of court with respect to disclosure of expert evidence etc. .—(1) Notwithstanding any enactment or rule of law by virtue of which documents prepared for the purpose of pending or contemplated civil proceedings, or in connection with the obtaining or giving of legal advice, are in certain circumstances privileged from disclosure, provision may be made by rules of court for requiring, in the case of civil proceedings of any description specified in the rules—

1. (a) a party who has been afforded a medical examination of another party to disclose to that other party the result of the examination;
2. (b) a party who proposes to adduce at the trial expert evidence with respect to medical matters, or matters of any other class specified in the rules, to disclose that evidence to every other party to the proceedings;

and any such disclosure shall be made by the furnishing of any such document or documents as may be specified in the rules, and shall be so made by such time as may be determined by or in accordance with the rules. (2) Provision may be made by rules of court as to the conditions subject to which expert evidence may be given in civil proceedings. (3) Without prejudice to the generality of subsection (2), rules of court made in pursuance of that subsection may make provision for prohibiting a party from adducing, except with the leave of the court, any expert evidence the contents of which were required to be, but have not been, disclosed by him in accordance with rules under subsection (1)(b). (4) Any rules of court made in pursuance of this section may make different provision for different classes of cases and for other different circumstances. (5) In this section "rules of court" means—

1. (a) rules of court made under section 55 of the Judicature (Northern Ireland) Act 1978; or
2. (b) county court rules made under Article 47 of the County Courts (Northern Ireland) Order 1980;

and nothing in this section shall prejudice the generality of either of those provisions. (6) Section 71 of the Administration of Justice Act 1982 (which is superseded by this section) shall cease to have effect."). Amendment No. 59B: Page 42, line 30, after ("56") insert ("and section (Northern Ireland rules of court with respect to disclosure of expert evidence etc.)"). Amendment No. 59C: Page 42, line 32, at end insert ("and the Administration of Justice Act 1982").

The noble and learned Lord said: My Lords, with the leave of the House I should like to move Amendments Nos. 59A, 59B and 59C together and to speak to Amendment No. 63A. Amendment No. 63A: Schedule 7, page 62, line 11, at end insert—

("1982 c. 53.

Administration of Justice Act 1982.

Section 71.")

Amendment No 59A, will allow the Northern Ireland Supreme Court Rules Committee to bring forward rules of court with respect to disclosure of medical evidence. The enactment two years ago of Section 71 of the Administration of Justice Act 1982 was intended to enable the Northern Ireland Supreme Court and County Courts Rules Committee to make rules of court on this matter on lines similar to those already operating in England and Wales.

For this reason, Section 71 of the 1982 Act was modelled on its English equivalent, Section 2 of the Civil Evidence Act 1972, and contained a dispensation from the common law rule that evidence obtained for the purpose of litigation is privileged from disclosure. The members of the Northern Ireland Supreme Court Rules Committee have given careful consideration to the form which rules on the pre-trial exchange of medical reports should take. Their wish to make rules suitable to Northern Ireland practice and procedure is, however, frustrated by the fact that Section 71 of the 1982 Act requires the court to give a specific pre-trial direction about the disclosure of expert evidence in every case.

In England and Wales, the corresponding statutory requirement has been met by having automatic directions for disclosure applicable to all actions for damages for personal injury as part of the rules of the Supreme Court. However, automatic directions is a form of procedure which has never been part of court practice in Northern Ireland, and it has been decided that the best way to deal with this difficulty is to replace Section 71 of the 1982 Act by a new provision enabling the rules committee to make rules which require pre-trial disclosure of expert evidence but free from the need for the specific court order in every case. Rules made under this new clause may provide, first, that a party who has been afforded a medical examination of another party must disclose the result of it to the party examined; and, second, a party who proposes to call expert evidence, medical or otherwise, must disclose that evidence to all other parties to the proceedings.

The new clause also allows the enactment of the rules under which the disclosure can be made by production of a copy of the original expert report or by a statement of evidence based on it. The Government regard the introduction of rules of court on the pretrial exchange of medical reports as likely to enhance the prospect of the early settlement of actions and to reduce the number of consultants attending to give evidence in court. Either of or both of these developments should reduce the course of personal injury litigation in Northern Ireland. I beg to move Amendments No. 59A, 59B, and 59C.

Lord Elwyn-Jones

My Lords, these amendments will be very welcome in Northern Ireland. They will effect considerable savings of time and effort and procedure. It is good that the noble and learned Lord has taken advantage of this all-embracing Bill to introduce this useful piece of reform.

On Question, amendments agreed to.

Schedule 1 [Amendments of Solicitors Act 1974]:

The Lord Chancellor moved Amendments Nos. 60 and 61:

Page 44, line 36, leave out ("discloses conduct such") and insert ("involved conduct on his part of such a nature").

Page 44, line 38, leave out ("as aforesaid") and insert ("by a solicitor in connection with his practice").

The noble and learned Lord said: My Lords, these are Government amendments and, if I may, I will take Nos. 60 and 61 together, with the permission of the House. They are both drafting amendments, expressing more clearly the circumstances in which the Law Society is able to apply to the Solicitors Disciplinary Tribunal for an order preventing the further employment of a clerk who has behaved improperly, or for imposing conditions on it. Since no point of substance is raised, I will not say any more unless noble Lords require it. I beg to move.

On Question, amendments agreed to.

Schedule 2 [The Council for Licensed Conveyancers: supplementary provisions]:

Lord Graham of Edmonton had given notice of his intention to move Amendment No. 61A: Page 46, line 8, after ("are") insert ("nominated or elected by").

The noble Lord said: My Lords, in view of the pressure of time on our agenda, I do not propose to move this amendment but would give notice that I intend to bring it forward at a later stage.

[Amendment No. 61A not moved.]

Lord Graham of Edmonton had given notice of his intention to move Amendment No. 62: Page 46, line 20, at end insert ("of whom at least two shall be persons who represent the interest of consumers.").

The noble Lord said: My Lords, the same considerations apply here as for Amendment No. 61A. I shall not move this amendment but will bring it forward at a later stage.

[Amendment No. 62 not moved.]

Schedule 7 [Repeals]:

The Lord Chancellor moved Amendment No. 63:

[Printed earlier: col. 443.]

The noble and learned Lord said: My Lords, this amendment is consequential upon certain amendments I have already spoken to. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 63A:

[Printed earlier: col. 472.]

The noble and learned Lord said: My Lords, this amendment is consequential upon Amendment No. 59A, and I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 64:

[Printed earlier: col. 468.]

The noble and learned Lord said: My Lords, I have to say that this amendment is consequential upon Amendment No. 55. I beg to move.

On Question, amendment agreed to.

Schedule 8 [Transitional provisions and savings]:

Lord Graham of Edmonton had given notice of his intention to move Amendment No. 65: Page 63, line 10, leave out sub-paragraph (a).

The noble Lord said: My Lords, I do not intend to move this amendment and I give notice that I intend to bring it forward at a later stage.

[Amendment No. 65 not moved.]

The Lord Chancellor moved Amendments Nos. 66 and 67:

[Printed earlier: col. 443.]

The noble and learned Lord said: My Lords, these amendments are consequential upon Amendments Nos. 46 and 63. I beg to move.

On Question, amendments agreed to.

The Lord Chancellor moved Amendment No. 68:

[Printed earlier: col. 468.]

The noble and learned Lord said: My Lords, I have already spoken to this amendment: it is consequential upon Amendment No. 55. I beg to move.

On Question, amendment agreed to.