Legal Aid Bill [H.L.]

HL Deb 08 February 1988 vol 493 cc11-32

3.6 p.m.

The Lord Chancellor (Lord Mackay of Clashfern)

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.

Clause 32 [Regulation]:

The Lord Chancellor moved Amendment No. 45: Page 27, line 27, leave out ("be entitled to").

The noble and learned Lord said: My Lords, I beg to move Amendment No. 45. We have moved on to Clause 32 and the Marshalled List promises an interesting diet of further debate in relation to this clause. I should like to deal with a matter which was first specifically raised by my noble and learned friend Lord Griffiths at Second Reading, and it was also referred to in our debates during Committee. In relation to remuneration provisions, as presently drafted Clause 32(6) provides that: The Lord Chancellor, in making regulations for the purposes mentioned in subsection (2)(e) above"— that is in respect of remuneration: as respects any description of legal aid work, shall be entitled to have regard, among the matters he considers appropriate, to—". There then follows a list of factors. The question was raised as to whether the words "be entitled to" were appropriate. I pointed out my concern that an annual full and detailed consideration of all aspects of remuneration may prove to be an impossible task to perform. I suggested that it may well be unnecessary to look at every aspect of each fee in relation to particular reviews.

I have taken further advice upon the matter and I am told that, subject to proper safeguards, the idea of a general uprating would not be prejudiced if the words "be entitled to" were left out. In the spirit of the considerations during the Committee stage, I accordingly beg to move Amendment No. 45.

Lord Elwyn-Jones

My Lords, on behalf of the Opposition I welcome the decision taken by the noble and learned Lord the Lord Chancellor to move this amendment. Indeed, it augurs well for the debate to follow. Clearly, it is necessary that it should be mandatory upon the Lord Chancellor to have regard to the matters which are listed from (a) to (g) in subsection (6) and that it should not be a mere permissive power. We welcome the willingness of the noble and learned Lord to make this concession at such an early stage in our proceedings today.

Lord Wigoder

My Lords, my colleagues on these Benches would also like me to welcome this amendment.

The Lord Chancellor

My Lords, I am grateful for this promising start and I hope that it augurs well for my securing the agreement of your Lordships to the rest of the amendments that I shall be proposing. I should like to mention that this point was raised in particular by the noble Baroness, Lady Seear, in Committee. I am grateful to the noble Lord, Lord Wigoder, for signifying his position with regard to it.

It will be obvious to your Lordships that the agreement of this amendment will have a small effect on Amendment No. 46 because in this amendment I follow the words of Amendment No. 46 only to a limited extent.

On Question, amendment agreed to.

Lord Ackner moved Amendment No. 46: Page 27, line 27, leave out ("be entitled to have regard, among the matters he considers appropriate") and insert ("have regard to the principle of allowing fair and reasonable remuneration according to the work actually and reasonably done or to be done and shall in particular have regard").

The noble and learned Lord said: My Lords, this is a very modest little amendment but at the same time is immensely important and I hope to satisfy your Lordships that it is an irresistible one. Perhaps I may deal with the amendment under those three headings. First of all, I deal with its modesty. This amendment seeks to do no more than to continue the statutory obligation which exists at the moment and was imposed by Parliament some 14 years ago in the Legal Aid Act 1974, Section 39(3), which so far as material, reads as follows. The Lord Chancellor: In making regulations … as to the amounts payable to counsel or a solicitor assigned to give legal aid … and any person by whom such amount falls to be assessed, taxed or reviewed under the regulations, shall have regard to the principle of allowing fair remuneration according to the work actually and reasonably done". It thus imposes an important dual obligation first upon the Lord Chancellor making the regulations and secondly, upon those obliged to carry them out.

The reason for the special provision was referred to by my noble and learned friend Lord Hailsham in Committee on 19th January when he pointed out that lawyers are in a separate position from nurses, doctors and others paid by the public because they are an independent profession paid by the piece, paid by fees; they are not paid by salary. The need for such a statutory obligation is quite simple. Some four years ago in Cmnd. Paper 9077 the Government were committed to the following view: The Government believes that legal aid should be available to assist those of small or moderate means, by giving them the same chance to pursue or defend their legal rights as those in a position to instruct lawyers privately.

My noble and learned friend the Lord Chancellor confirmed in Committee on 19th January that the Government's position is: still as stated in the Cmnd. Paper".

I do not need to spend time—certainly not at Report stage—to emphasise before your Lordships that you cannot achieve the same chance to pursue or defend legal rights as those in a position to instruct lawyers, unless there is an ability to pay a reasonable remuneration for those services.

Indeed, that was expressly accepted again by the Government in the same Cmnd. Paper in these terms: The Government accepts that legally aided work should be reasonably remunerated"; hence the absence of any novelty and the total modesty of the amendment proposed.

Now I turn to the importance of the amendment. A very large number of litigants are legally assisted; virtually all defendants in criminal cases; some 70 per cent. of litigants in matrimonial cases; no doubt a very high proportion in personal injury cases; in cases in which there is judicial review sought by the subject; and, in landlord and tenant litigation. Everybody agrees that it is essential that the legal aid service should not degenerate into a second-class or second-rate service. There are already strong warning signs that that is happening at the moment.

However, at present there are the following safeguards: first, the existing statutory obligation of fairness; and secondly, the assessment of proper remuneration done initially or by way of appeal by taxing masters who are qualified judicial officers with a right of appeal from them to a judge in chambers. The Lord Chancellor has fully acknowledged—and the White Paper and the scrutineer's report makes this clear—that in order to reduce expenditure there is a move towards establishing fixed or prescribed rates for work which is done.

As matters stand, prescribed rates have been agreed for a large amount of the criminal work because units of work—to use current jargon—can be easily identified. This process is occurring in relation to matrimonial work and the Lord Chancellor clearly hopes to spread that across the whole range of litigation.

In Committee I gave an indication of one prescribed rate which was £33 for all paperwork in matrimonial cases, whether it was a long opinion which took a week to write or a long affidavit which took 20 hours to draft. That prescribed rate of £33 is scarcely enough to induce a self-respecting plumber to cross the threshold. It means that in virtually every case that prescribed rate has to be looked at and inevitably up-rated. However, it is proposed that gradually the judicial process of taxing or assessing fees shall be moved over to the administrative process. The judicial officer is to be replaced in due course by a member of the Executive, a civil servant without qualifications called a taxation co-ordinator. Therefore, the whole assessment will leave the realm of the judicial process and become part of the administrative process.

The dangers are further mirrored by Clause 32. Other amendments will highlight them. However, I shall just give your Lordships an immediate indication. There is introduced for the first time in this sort of legislation Section 32(6)(f): the cost to the public fund of any provision made by the regulations: is to be considered when considering what the lawyer should receive.

I find paragraph (g) unintelligible, but it is the subject matter of an amendment and subsection (11) brings in another indication of Treasury control not to be found in Section 39(3), and we know from Committee that the noble and learned Lord the Lord Chancellor is resisting—and will continue to resist—that which is the subject matter of another amendment; namely an independent fees advisory committee. That is the importance of this amendment.

I come now to its irresistibility. In recent litigation by both branches of the legal profession for judicial review in 1986 of the Lord Chancellor's exercise of his statutory obligation under that same section, in long affidavits read out to the Divisional Court there was not the slightest suggestion that the obligation to pay fair remuneration was causing anyone the slightest problem or trouble. However, better still in a debate on 4th June 1986 (at col. 1008 of Hansard) the then Lord Chancellor (my noble and learned friend Lord Hailsham) used these clear terms: I am, of course, wholly wedded to an independent and vigorous legal profession, fairly remunerated. Secondly, I wholeheartedly accept the principle of fair remuneration according to work reasonably and actually performed. I should be wedded to that principle whether or not the words were embedded in statute. Otherwise I should be guilty of trying to defend work not reasonably remunerated in that manner.

The White Paper issued on 26th March 1987 said in terms that the Government will continue to have regard to the principle of fair remuneration. That statement was repeated by the noble and learned Lord the Lord Chancellor at Second Reading. He confirmed in that debate on 19th January (at col. 177 of Hansard): there is no question of my trying to depart from the basis on which we have worked.

One therefore asks the question: why is the statutory obligation to be suppressed? Why is it no longer to continue in the legislation?

I ventured a view which has been the view of many; namely, that it was designed to prevent access to the courts for judicial review, as occurred successfully two years ago. However, that was repulsed by the Lord Chancellor as being an unworthy suggestion, and of course I accept that that cannot be what is behind it.

The only two other grounds suggested by the Lord Chancellor were these. He suggested that the word "fair" was too vague and that it was difficult to apply—a problem which none of his predecessors had voiced. I have sought to alter that by adding the word "reasonable" after the word "fair" because there can be no suggestion that "reasonable" has any difficulty in its application, as it is the very word found in Order 62, which obliges the taxing master to operate in these terms—and I give your Lordships the exact words to indicate that those responsible for the drafting did not foresee any difficulty: On a taxation of costs on the standard basis there should be allowed a reasonable amount in respect of all costs reasonably incurred.

So much for that criticism. The second criticism, which is understandable, is this. The Lord Chancellor, as I have indicated, is anxious to lay down prescribed rates; a rate for the job before it is carried out. Accordingly, he said, fair remuneration for work actually and reasonably done did not appear to him to make very much sense when contemplating making regulations to provide rates for work before it is done. That is readily catered for and I have sought to do so by adding the words "to be done" so that the formula reads: Fair and reasonable remuneration according to the work actually and reasonably done"— the past tense— or to be done"— the future tense.

The Lord Chancellor has drawn attention to the small amendment that he has agreed to, which he has just moved, and the next amendment which follows. One should never be ungrateful for the cart even though it comes before the horse. One should not be ungrateful for the cart even if there is no horse at all, but that is exactly the position here. You have to define the obligation before using such terms or other circumstances that are relevant. You cannot determine relevance until you know to what obligation the relevance is directed.

I end by saying that, in my submission, the inevitable consequences of removing from this legislation the existing statutory obligation of fairness and reasonableness in relation to payment will, in the short or the long term, be simply that it will seriously undermine the strength, vitality and independence of the legal profession and public confidence in it. In the Command Paper to which I have referred the Government accepted that a legal profession having those qualities which I have spelt out is of fundamental importance to our freedom under the law. Therefore, I beg to move.

Lord Benson

My Lords, I support this amendment. The whole thrust of the debate in Committee on this topic was that the words "fair remuneration" should be included in the Bill so that the legal profession is properly paid. In his answer the Lord Chancellor said: As I have explained, the reason I have not put in the phrase 'fair remuneration' in that context is that it is meaningless as an addition to the factors. What does it mean? Many of us in this House listened to those words with incredulity, but having seen them in cold print they are no less astonishing. Every enterprise, large or small, must have an objective. Unless the objective is fairly stated there will be muddle and confusion. The objective to be stated in this case is extremely simple. It is that fair remuneration shall be paid out of the public purse for legal work properly done. That, in effect, is what is in the existing Act and that, in effect, is what this amendment seeks to do.

There are a great many factors which have to be taken into account in arriving at fair remuneration. Those factors are the nuts and bolts and they have to be put together to make the finished article and to arrive at the objective. When all of them have been considered they have to be weighed up and in the mind of an honest and independent person fair remuneration has to be fixed for payment out of the public purse. I make the comment for the removal of doubt that the Treasury is not honest and independent for this purpose because it is not independent. The Bill rather strangely goes out of its way to refer to the Treasury to make it clear that the Treasury is fighting a corner.

The Lord Chancellor asks what "fair remuneration" means. We should give some attention to those words, starting with the word "fair". Every single set of accounts for the past 40 years that has been submitted to the public or to taxing authorities has to be, by statute, fair. Fair is the cardinal principle in every arbitration and other tribunal proceedings. Fair is the very basis of the administration of justice in this country. Our taxing statutes are riddled with the word "fair".

Let us now look at the words "fair remuneration" together. Every employer in this country knows what fair remuneration involves. Every housewife who employs a daily lady or mother's help for an hour or two a week knows what fair remuneration is. Every teenager who gets his first job knows what those words mean.

Seventeen years ago the Top Salaries Review Body made its first report and laid down the principles on which all its subsequent reports should be written. The body made it absolutely clear in the text that it knew what fair remuneration meant. The whole of the legal profession, from Law Lords to the humblest practitioner, is asking for these words to be restored because the profession knows what fair remuneration means. Against that galaxy of talent, legislation, case law, experience and opinion the Lord Chancellor stands alone. He does not know what those words mean. All of us in this Chamber and the whole of the legal profession outside it will be distressed to know that the head of the judiciary in this country is in that predicament.

There has never been any difficulty in the past in knowing what "fair remuneration" means. The words have been on the statute book for 14 years. At this moment in time the Lord Chancellor of the day has, by statute, to know what the phrase means because he has to administer the existing Act as part of his responsibility. In the debate on 4th June 1986 the then Lord Chancellor the noble and learned Lord, Lord Hailsham, said that he was compelled by statute—the one to which I have just referred— to make regulations which have regard to the principle of fair remuneration for work actually and reasonably done". He added, I have already said that I wholeheartedly embrace that principle".—[Official Report, 4/6/86; col. 1011.] The noble and learned Lord Chancellor now in office, in the Second Reading debate reaffirmed that principle. He also drew attention to the White Paper in which the Government have committed themselves to that principle. In the face of those facts, how is it possible for this blanket of incomprehension suddenly to have enveloped the Woolsack and the Treasury; how is it possible for two well-known English words suddenly to have lost their meaning; how is it possible, when two Lord Chancellors and the Government have stated that they are irrevocably committed to a principle, it should now be discarded from this Bill?

In the light of those facts, it is difficult to speak in moderate terms. The gentlest language that I can use is to say that if these words are omitted it will be a shameful injustice deliberately imposed upon the legal profession. It will leave a stain that will last for many years to come. The only chemistry that will remove that stain—indeed the only chemistry which in this context will restore the credibility of the Government—is to transpose the words from the existing Act into this Bill.

3.30 p.m.

Lord Hailsham of Saint Marylebone

My Lords, I hope that there is no fundamental difference of philosophy between either of the two noble Lords who have just spoken and myself. My noble and learned friend Lord Ackner twice quoted me, once when I was explaining something to my noble friend Lord Trafford. I do not think he is here but I cannot quite see behind me. I was explaining about the particular nature of the problem with which we were confronted. I pointed out that what gives difficulty to this problem is the fact that virtually all lawyers are paid by the piece and by fee whereas most other publicly-remunerated persons are paid by salary or by time. That is much more easily defined and much more easily arrived at.

I did not mean thereby to rebuke my noble friend, Lord Trafford, for having expressed some anxiety as to whether lawyers were not perhaps overstating the case in relation to their remuneration. He meant to say that because he has since told me so. I expressly told him that I was not creating any kind of rebuke to him; I was explaining something which I thought he had not taken into account.

I remain, as I was when occupying the place of my noble and learned friend, entirely wedded to an independent legal profession and a vigorously independent legal profession. No civilised society can get on without one. In spite of the fact that we are not always popular, as one can see by reading the speech of Jack Cade in the second part of "King Henry VI", we perform indispensable functions in a free society. I am entirely wedded to a legal profession, as I was in 1986 in the passage now twice referred to, paid what is fair in the circumstances.

I view with rather less than enchantment the terms of the amendment moved by my noble and learned friend which, as the noble Lord, Lord Benson, candidly conceded, transposes the existing legislation framework with some alterations into the proposed statute we are now discussing. The first matter I wish to point out to both my noble and learned friend Lord Ackner and to the noble Lord, Lord Benson, is the phrase "have regard to". In the form which the Bill now takes, supported in Committee by my noble and learned friend on the Woolsack, the words "have regard to" have a fairly intelligible meaning. I should like to say to my noble and learned friend Lord Ackner that I was responsible for having to use these words and applying them before this Bill came for discussion in this House. In 1986, I said—unless I am vastly mistaken because I have not looked it up—that I wanted to pay remuneration which was fair. What is meant by "have regard to"? I have great regard for my noble and learned friend Lord Ackner and the noble Lord, Lord Benson, but I do not have to do exactly what they say. What does "having regard to" the principle of fair remuneration mean except that one does not always have to pay?

That is an insuperable objection to the wording of the existing legislation and therefore to the wording of the proposed "modest, irresistible and important amendment". If it had said that fair remuneration must be paid I could have understood at once what was meant although I should require—as did my noble and learned friend on the Woolsack when the matter was discussed in Committee—a little more indication of what other people thought were relevant considerations in assessing what is fair. If I may use the word again, I believe that the noble Lord, Lord Benson, was a little less than fair to my noble and learned friend on the Woolsack in the speech which fell from him a few moments ago. I assure him that I speak now from experience and not from prejudice. It is difficult to be told to be fair when different people hold different views as to what factors ought to be taken into account in estimating fairness. I ask my noble and learned friend Lord Ackner why he has added the words "and reasonable"? What is the difference between what is fair and what is reasonable?

Lord Ackner

My Lords, if that is intended as a question, then I can answer it. I thought that I had. I added the word "reasonable" because my noble and learned friend the Lord Chancellor had difficulty in understanding how it worked. I added the word "reasonable" because it is used by taxing masters as the basis for assessing fair remuneration, and I read out the terms of Order 62.

Lord Hailsham of Saint Marylebone

My Lords, with great respect to my noble and learned friend, he has jumped the gun because he has not met the point I was about to make. If you use the word "fair", subject to what I have said and what I am about to say, I understand that is what has to be paid; that is, if one can make out what is meant by "have regard to". If you say "fair and reasonable" one must either contemplate that what is fair may still not be reasonable or that what is reasonable may not be fair. To add "fair and reasonable" together must involve a conflict in the mind of any person seeking to interpret the amendment as to what kind of remuneration would be fair but not reasonable and what kind of remuneration would be reasonable and not fair. It makes the task of the Lord Chancellor more and not less difficult. If it means the same thing in both cases, then the addition of the words is undesirable. If you mean one thing, you should say one thing. Do I see the noble Lord rising?

Lord Somers

My Lords, I hesitate to interrupt the noble and learned Lord, but am I right or wrong in thinking that there is a difference between "having regard to" and "having regard for"?

Lord Hailsham of Saint Marylebone

My Lords, I do not believe I can answer that question offhand although I will contemplate it in the dark watches of tonight. If I can think of a solution I will try to communicate with the noble Lord.

One now comes to a point which needs to be discussed with a considerable degree of frankness. The legal profession is entitled to fair remuneration. Because the profession is remunerated by fee, remuneration has to be calculated in a different way as compared with those who are remunerated by salary. I should not like to be in the position of a Minister at the Home Office, the Ministry of Defence or the Department of Health and Social Security, who had to say that those who come under his statutory jurisdiction should have a remuneration which was not fair. I think that everybody in the public service should have fair remuneration, but in all cases it must be subject to negotiation and to some kind of common argument as to what factors enter into the conception of fairness.

In Clause 39 of the Bill the Lord Chancellor is bound to pay monies voted by Parliament. If the monies voted by Parliament are not sufficient to pay what is regarded under this clause as fair remuneration, the Lord Chancellor is in an impossible position. Therefore, I think he is entitled to be told in this clause what factors he should take into account.

Among those factors is one which my noble and learned friend Lord Ackner referred to in his criticism of the existing Bill. Apart from other things, it is the cost to public funds of any provision. If the Lord Chancellor is not entitled to take into account the cost of the provision, as he is entitled to do under the clause as it stands, how does he stand if Parliament under Section 39, when it is law, does not vote the funds which he has got to pay? We all know that the Lord Chancellor's department is a spending department just as much as the Department of Health and Social Security, the Home Office or the Ministry of Defence. His is a spending department and he has to negotiate with the Treasury.

I am not at all content with the kind of oblique and hostile references to the Treasury which were made by the two previous speakers. The Treasury is always the fall-guy in these debates, but the Treasury has two other factors to take into account. In the first place every penny that is paid under this Bill by way of remuneration to the legal profession will come out of something else. Secondly, the Treasury has to take into account the totality of public expenditure. It is an unpleasant fact of life, but one which should be taken into account, that everything we spend in Parliament on public services of any kind is made out of the product of either manufacturing industries or service industries which we provide for ourselves and other people.

You can kill the goose which lays the golden egg. The Treasury is given the unpleasant and unpopular task of keeping the goose alive because, if she is killed, there will not be any money for anybody to be paid anything. When one is making a fall-guy of the Treasury and putting it up as an Aunt Sally, one is neglecting the fact that, in spending money on the legal profession, the enemy of the Lord Chancellor's Department is just as likely to be the nurses or the defence forces and the generals as the Treasury. The fact is that one has to take into account what other people are getting.

My noble friend Lord Trafford was quite right when he made what I thought was not a particularly well-informed interruption the other day. He said that, like everybody else, the lawyers must stand with the other spending industries and see what can be done. I am wholly of the opinion that lawyers are entitled to fair remuneration, but I think the same about nurses, private soldiers or seamen. There is nothing special about this. However, to tell the Lord Chancellor that he must have regard to a principle—not that he must perform the principle—taken out of context of the total economic situation seems to me to put him in an impossible position. The Treasury has a legitimate part to play in this discussion and one should not try to make an Aunt Sally of it.

I have listened in this Parliament and in the previous Parliament to a very large number of these discussions. We hear people who want money from public funds; they are always the people who are interested in the particular service. It would not be in order for me to talk about the needs of the health service in this debate, and quite rightly nobody has spoken either in Committee or so far on Report about the health service. However, they are there, spectrally making equal demands on the public service. The Lord Chancellor is in an unenviable position. I think that the noble Lord, Lord Benson, was very much less than fair to him when he said that everyone, including nurses, doctors and air marshals, understands what fair remuneration means.

3.45 p.m.

Lord Benson

My Lords, I did point out that everybody knew except the noble and learned Lord Chancellor.

Lord Hailsham of Saint Marylebone

My Lords, that was precisely why I said that the noble Lord was being unfair to the Lord Chancellor, and I say so again. We do not know what it means in each of these cases, and our assessment of what is fair in relation to the armed services, the health service or the legal service, differs according to who we are. The lawyers have a different idea from air marshals as to what would be fair in the circumstances. It is the poor old Treasury that has to take the knock.

That brings me back to this "modest, irresistible and important" amendment moved by my noble and learned friend Lord Ackner with his persuasive advocacy, before which I have trembled on more than one occasion. I wonder why he thinks that it is necessary to put the hands of the clock back on this occasion in order to preserve the independence of the legal profession?

My noble and learned friend made a brief reference to the judicial review last year or the year before. A great deal of what went on during the course of those proceedings I am bound to keep in confidence. The case was settled on terms which I found perfectly agreeable. The legal profession, although perhaps less enthusiastic than I, certainly accepted them as fair. However, there is something that I must now say which is irrefutably true. If those proceedings had not been launched by the legal profession, I could have obtained exactly the same terms two months earlier, but because I was unable to negotiate either with the legal profession or with the Treasury during the currency of those proceedings, my hands were tied behind my back. All they did was to shoot themselves in the foot to the extent to getting what they wanted two months later.

I am standing by my noble and learned friend on the Woolsack. I have also had to sit there, and he has been given a very raw deal so far in this debate.

Lord Ackner

My Lords, the noble and learned Lord has justified his action in regard to the judicial proceedings. I do not want to turn the sword in the wound, but he said that the case was settled on terms agreeable to him. I wonder whether he will confirm that, despite strong resistance, an order was made by the Divisional Court for his department to pay the entire costs.

Lord Hailsham of Saint Marylebone

My Lords, I confirm it but withhold any comment in view of what I happen to know took place. I do not think that it would be proper to draw the attention of the House to exactly what happened, but I could tell noble Lords a tale whose merest word would make the hair of my noble and learned friend stand on end.

Baroness Faithfull

My Lords, as one who is not trained in the law but a lay person who has had to work with the law perhaps I may ask two questions on matters which puzzle me very much. What other profession has written into a Bill its terms of payment? If those are written into a Bill for the legal profession, then all the other professions—architects and so on—will take this as a precedent and will want their terms of payment written into an Act of Parliament. Where would we be? It would be a most awkward situation.

My second worry concerns a fair and reasonable service. Do I understand correctly that if the legal profession does not have its terms of payment written into an Act of Parliament, those who are in need of help will not receive a reasonable service? I should be grateful to have answers to those questions.

Lord Renton

My Lords, the greatest help we can give to my noble and learned friend the Lord Chancellor is to try to arrive at a scheme which will ensure the full co-operation of both branches of the legal profession. Without their full co-operation this new scheme, with its many fundamental changes, will fail to give that public service which all your Lordships hope that it will provide.

Until I heard my noble and learned friend Lord Hailsham just now I was quite convinced that an acceptance of the amendment of the noble and learned Lord, Lord Ackner, would be in the interests of all concerned. It would give confidence to the legal profession that it will be treated fairly and reasonably in this matter of fees. It would give confidence to the profession because when it sees the Bill it will not only try to understand it and its implications but it will be sensitive to changes which are to be made to the present law.

I do not think that either branch of the legal profession should be over-sensitive but we have to be realistic. We have to avoid the possibility that a number of the best and ablest members of the profession will say, "We have a duty to perform if we can but we in our turn have a right to be treated fairly and reasonably". My noble and learned friend Lord Hailsham said that the Bar is entitled to fair remuneration. My noble and learned friend is one of my oldest and best friends. I have heard him speak on, I suppose, a hundred occasions, from the days when we were at university together until he retired as Lord Chancellor and since. However, I must confess that, I think for the very first time, I was mystified by one of his speeches.

I do not share his difficulty about the use of the words "have regard to", because we must consider the context in which those words will be used. The context arises, first, in subsection (2)(e) of Clause 32, and, secondly, in Clause 6, which is the clause that the noble and learned Lord, Lord Ackner, seeks to amend. It is not unusual when a power or an obligation is placed upon a Minister of the Crown to make regulations that Parliament should give guidance or directions in the making of those regulations and in doing so shall use the words, which in any event we are going to have in the subsection, "have regard to". The Lord Chancellor will have to have regard anyway. One cannot get away from that. The question is whether: among the matters he considers appropriate"— I quote again from the subsection—there shall, in addition to the seven factors specifically mentioned, be this broad general principle.

We can argue endlessly about the subtle use of words. Goodness knows, in our statute law we can argue a great deal. If we are not careful we shall find that the words we use or fail to use will give rise to difficulties in the courts which in turn will make more money for the profession. Are we not making heavy weather about a phrase which has been used before and has not, as I understand it, given rise to any specific difficulty and which in the opinion of noble and learned Lords, and I am sure of other Members of your Lordships' House, will be applied by the Lord Chancellor in the sense in which it is intended and if necessary interpreted by the courts and by the taxing masters? I do not wish to labour these arguments, but if we are to have both branches of the profession united within themselves and doing their best to make the new scheme work in order to maintain the degree of continuity which it has been suggested should be maintained, it would be wise to establish the principle of fair and reasonable remuneration, and it is not something that we should ignore.

Lord Hailsham of Saint Marylebone

My Lords, before my noble friend sits down perhaps I may ask for his comment on this statement. He said that the phrase "have regard to" has never caused difficulty. I can assure him that not only did it cause me great difficulty, but I took counsel's lengthy opinion on it and I still did not understand it at the end. I want to ask him this brief question. Does "have regard to" mean "perform" or "pay", or does it mean something else; and if so, what?

Lord Renton

My Lords, with respect to my noble and learned friend, I think that that is a point which my noble and learned friend the Lord Chancellor would wish to argue. Those words are in the Bill whether or not the amendment is accepted, and we just have to take them as being there.

Lord Griffiths

My Lords, I support the amendment. The regulations under discussion are the regulations by which the Lord Chancellor will lay down the scale of fees which are to remunerate virtually the whole of the criminal Bar and that large portion of the solicitors' profession which conducts civil work and a great many of those who practise in the civil field at the Bar.

The Bill provides by subsection (7) that before making those regulations the noble and learned Lord the Lord Chancellor shall consult with the Law Society and the Bar. What is the purpose of those consultations? The purpose is that they should sit down as employers sit down with trade unions and try to arrive at a wage structure. But what sort of wage structure are they trying to arrive at? The answer must surely be a fair wage structure: fair on the one side to us in our capacity as taxpayers, who have to pay the bill for legal aid, and fair on the other side to those who have to work in the profession and whose livelihoods, for the most part, depend upon it.

The noble and learned Lord the Lord Chancellor has said that it is his intention that the result of the negotiations shall be "fair remuneration". His predecessor said likewise and the Government asserted that fact in their White Paper. When the matter was first raised I was sympathetic, and still am, to the view held by the noble and learned Lord the Lord Chancellor that it was preferable to spell out the content of what was considered fair insofar as it was possible. I accepted the fact, and still believe it to be right, that in Clause 6 he has attempted to spell out those factors which contribute towards fair remuneration. My initial objection to the way he did it was that he said that he was "entitled" to take into account fair remuneration. I do not much fancy negotiating with someone who is entitled to be fair; I would rather negotiate with someone who had to be fair. Therefore, I welcomed the amendment tabled by the noble and learned Lord the Lord Chancellor to correct that matter.

Ever since we have had legal aid, the overriding obligation to provide fair remuneration has been spelt out in the statute. The intention has been repeated over and over again. The noble Lord, Lord Benson, has pointed out the interpretation that removing that intention from the Bill may bear. Such delicate negotiations will be successful only if they are conducted in a spirit of complete mutual trust. If it is the intention to pay fair remuneration, for goodness sake, let us say so. The provision has been on the statute book since 1974. I do not accept that the presence of those words has given any trouble in the past. Let us have them again, filled out in the way that the noble and learned Lord the Lord Chancellor has proposed to give guidance on some of the ingredients that they embrace.

4 p.m.

Lord Wigoder

My Lords, I, too, support the amendment. I must make it clear that I have no interest to declare. I mention that fact simply because the last time I made a similar observation during the Bill's progress, it was inadvertently transposed in the Official Report that I did have such an interest to declare. I have no such interest.

What is in issue here is a point of principle and not a question of semantics. We are not concerned with the difference between "having regard to" and "having regard for". We are not concerned as to whether fair means reasonable or whether reasonable means fair and what each adjective may, or may not, add to the other. We are concerned with an elementary situation which I can put forward in this way: if I were to say point blank to the noble and learned Lord the Lord Chancellor, "Do you favour paying the legal profession for legally aided work fair and reasonable remuneration?", he would say, "Yes, of course". There is no other answer he could give or could possibly wish to give.

Let us start with that simple proposition. Let us go on to say that it is an obligation accepted by previous noble and learned Lords who have occupied the Woolsack for some 14 years. Let us realise that after those 14 years the principle has suddenly been abandoned in the Bill. The noble and learned Lord the Lord Chancellor must know the deep unhappiness that has spread throughout the whole of the legal profession—the Bar and the solicitors—as a result of its sudden and totally unexpected omission. Various reasons have been given for the omission. Conjecture has run rife, but no explanation has so far been given that has satisfied the legal profession.

The principle has been accepted for 14 years. I have no doubt that the noble and learned Lord the Lord Chancellor would accede to it at once and without any hesitation. I ask the noble and learned Lord what purpose is served by his beginning what we all know will be a distinguished tenure of office as Lord Chancellor at odds with a united legal profession on a principle which has existed for all that time? No purpose is achieved and nothing will be gained by such an omission.

I suspect that eventually there will be arguments about particular words in the Bill. If that is the view that the noble and learned Lord the Lord Chancellor takes, and it may well be, and if he were to indicate that he is willing to come back on Third Reading with an amendment that accepts the principle, but with the wording modified slightly to meet some of the points that have been made, I have no doubt that the noble and learned Lord, Lord Ackner, would accept that situation. That a widely accepted principle should disappear, causing such dissatisfaction among the whole profession, is something I am sure the noble and learned Lord the Lord Chancellor does not desire. Therefore I ask him to accept the amendment or to recognise, in principle at any rate, that the provision is acceptable and should be brought back at a later stage.

Lord Mishcon

My Lords, I rise briefly to emphasise one aspect possibly lost sight of during what the House may feel has been an argument on words. The noble and learned Lord, Lord Hailsham, to whom we always listen with delight—sometimes also with approval—said that he could not see the difference between the words "fair" and "reasonable". Much of the time of the House was taken in listening with enjoyment to that part of his speech on semantics. I would most respectfully say to the noble and learned Lord that although I thought his speech was fair, in that not one remark was aimed below the solar plexus, I did not think it was reasonable. Therefore, from my remarks, he may possibly detect that there is a slight difference between the meaning of those words.

Lord Hailsham of Saint Marylebone

My Lords, what I said was said in this context and not in some other context.

Lord Mishcon

My Lords, so be it. I should have thought that there was also some slight differentiation in this context. However, I hope that the House will not be misled into thinking about words and will return to thinking about principles. It is in that connection that I said that I wanted to emphasise something. The one result that the House would not want to see as a consequence of the Bill's passage is two classes of lawyers—first, the good and experienced ones who receive the type of fee mentioned in subsection (6)(a), the time and skill which it requires followed by subsection (6)(b), the general level of fee income arising from it". The second category would be those lawyers who do not have the experience and skill of the first class of lawyers, and who are prepared to accept (because they are not professionally busy) a lower standard of fee for the work which they do. It will mean not only two classes of lawyers but two classes of justice.

In those circumstances, I go back to the principle which has been emphasised and underlined by those who are much more eloquent and persuasive than I can be. Up till now, as has been said, we have been content with this standard. It was a standard which was dealt with by the noble and learned Lord, Lord Hailsham, in his own view about the proceedings which took place last year. I do not intend to comment on those proceedings. I was not privileged to be behind this curtain of mystery which appears to have overlaid the negotiations, nor the order for costs or whatever it was. I hope the House will not be beguiled into trying to peep behind that curtain.

If this amendment is passed, it is mandatory that fair and reasonable remuneration should be one of the factors which the noble and learned Lord the Lord Chancellor must take into account. The message to my profession is that if this amendment is passed, we shall, I hope, be a united profession in trying to make the legal aid system work with the best possible members of our professions dealing with it. If the amendment is not passed, another message goes out to my profession which I think would be deplorable.

4.15 p.m.

The Lord Chancellor

My Lords, in seeking to deal with this amendment as fairly as I can, I should like to make it abundantly plain that in my opinion a proper basis for negotiation with the legal profession on the remuneration to be paid to the profession for publicly-funded work under the legal aid fund is that the formula should be clear, should be plain and should be capable of application to the problems in hand.

Until now, first in relation to criminal legal aid (I think in 1967) and then in a consolidating statute in 1974 the phrase "fair remuneration for work actually and reasonably done" was used. It is immediately apparent to your Lordships that that formulation was in reference to work already done. The question had to be asked: first of all, had it actually been done? Strange that the legal profession should require a formula of that kind that remuneration might be demanded for work which had not been done. But that is in the formula; the work must actually be done first of all.

Then it must be reasonably done. Somebody must have thought that there was a possibility that the lawyer might do work which was not reasonably required. Why should the taxpayer pay for that? Therefore it said, "fair remuneration for work actually and reasonably done". That is in the nature of a formula which would be applied once the work was finished.

Of course, much depended on who was paying for the work. The question in issue in the particular decision was whether the client was paying for the work. It might be fair for the client to pay more than it would be fair to charge the opposing party. That is why there is a distinction between taxation determination as between party and party on the one hand, and as between solicitor and client on the other hand, the first of these now being replaced by the standard basis to which my noble and learned friend, Lord Ackner, referred. So this arises out of ex post facto judgment on fees actually charged in relation to work which was done. These questions arose in connection with it. These were matters for professional people to submit for judgment.

The noble Lord, Lord Benson, in his remarks (to which I listened with interest) was surprised that anyone should occupy the Woolsack who did not understand what was meant by "fair". In Committee I certainly asked the question: what is meant by "fair" in this context? I believe that I have some understanding—not as much as I should like —of what is meant by fairness in relation to judicial proceedings. I have endeavoured to act in accordance with that understanding and sought to improve it as years have gone on. But it is very important in this situation to have matters upon which we may be agreed as the foundation of successful negotiations. I believe there is nothing better as a foundation for successful negotiations with the Bar and the solicitors' branch of the legal profession than clear and precise formulation by Parliament of what should be in mind.

When I came into office I reviewed the situation which had existed in the years before I came about this matter. I discovered that before any progress could be made in these negotiations in the past, what had to be done was to identify factors to be taken into account for identification as the basis of progress. It was when these factors were isolated and determined as between the parties that progress in the negotiations started.

Perhaps I may put it in a simple example. Supposing the question is: what is fair remuneration for an hour of paperwork? The Bar, let us say, might suggest £40. I might think: Well, what about £30? What is the next step? The test is fairness. Is £30 or £40 the fair figure? We could argue about that for quite some time. But what we want to do is to make progress, therefore we see what it costs the person in question to give this service. He has to make arrangements to do the paperwork; he has to get some type of assistance; for example, in typing and that sort of thing. He has outlays. He has a cost which he must bear. When that is isolated, we have to think what is left for him. Has he anything left? Is there something left which can be identified in relation to that item? Then we say, "But there is more to it than that. How much paperwork can he be expected to get through? What will this give him in respect of his professional qualifications and the like?" These factors which I have set out fully in this Bill are derived from what took place in the past by way of negotiation.

I certainly intend that these regulations should, among other things, fix rates in advance of the work being done so that the profession will know plainly and clearly what the rates are to be in the vast majority of cases or at least in a sufficient amount of cases to make it worthwhile to proceed in this way. This I believe is very important: that the legal profession, like so many others, should know in advance what the rates are to be, and that the public purse paying for them, just as the private client, should know in advance at least to some extent what will be involved in instructing this work and in taking on this responsibility. Why should it all have to be left to be determined after the work is done, after the work is finished? Then and only then can we reach a figure for remuneration.

So the purposes for which this is applied are not only as a basis of taxation, ex post facto, for work done, but also in determining the rate for work to be done. My noble and learned friend Lord Ackner, with his customary courtesy, has recognised this point and has put it into his amendment, although I am not absolutely clear whether the words "actually and reasonably" apply for the future as well as the past. That must be a matter for clarification. It may be my fault, but it is a little difficult to apply that to the future, at least to be clear in relation to its future application as stated.

However, there is another point. I believe that it is an advance if we can move to standard fees, fees which are to comprehend a particular type of case, not necessarily by reference to the precise work done in each case: for example a standard fee for a criminal case in the Crown Court lasting not more than three days. We should be able to arrange a basic standard rate for the brief fee and for refreshers in such a case.

Now of course two cases in the Crown Court which are covered by that standard fee might in the nature of things involve different amounts of work but yet that would be reasonable because otherwise one has to have detailed examination of the fees in every case, and the result of that is that money which might otherwise go to the legal profession for maintenance of the service will be taken up in finding out whether the fees are right. Surely there is an advantage from the point of view of the profession in that. In so far as we have introduced this measure already under the initiative of my noble and learned friend Lord Hailsham of Saint Marylebone it has worked very satisfactorily.

The standard fee system in criminal trials is something like 18 months old. It is a little early to say exactly how it will work but it is necessary to maintain that kind of flexibility. The words: work actually and reasonably done". refer to actual detailed provision and specification of work. I doubt very much whether that formula is particularly apt for this particular situation. However the essential matter that I am putting forward to your Lordships and to which I attach a good deal of importance is that we want a clear formulation of the test to be applied to the remuneration.

My noble and learned friend Lord Ackner seeks to add to what I have done in the way of putting out factors. Those factors are open for consideration. There has not been a lot of criticism of them to date, with the exception of one to which I should like to draw particular attention. I shall do that in a moment. To those factors are to be added the words, shall: have regard to the principle of … fair … remuneration [for] work actually and reasonably done or to be done and shall in particular have regard". I was interested that the noble Lord. Lord Mishcon, interpreted that amendment in his remarks to your Lordships as meaning that the principle of fair remuneration is one of the factors which must be taken into account in the consideration of reasonable remuneration under these regulations. I think that I noted him correctly in that. That just goes to show how inappropriate it is to try to go back, as my noble and learned friend Lord Hailsham said, and put the clock back instead of trying to express in detail and analyse what is meant by "fair remuneration". One should not try to go back to adopting this very general expression which in a sense means all things to all men depending on which side of the negotiations one happens to be. That is the last thing that one wants if one wants a basis for negotiations which is likely to be successful.

The noble Lord, Lord Benson, said, and I accept, that the word "fair" arises in many contexts. The words "true and fair view" have appeared on certificates of accounts for generations, although one must add that that is hacked up by a very large number of detailed regulations which he knows much better than I do. But in this particular situation we are trying to set out in the statute plain, workable criteria for determining remuneration. In my view the words fair remuneration for work actually and reasonably done", were all very well as a general statement of principle. Indeed that is what the amendment claims for them. But when it comes to getting down to brass tacks and getting remuneration negotiations on foot one must apply the principle by determining what the factors are. That is what I have done. I am a stage past talking about the principle. I am seeking to apply that principle by isolating the important factors.

As I said on Second Reading and as I repeat now, I am very open to suggestions for improvement of these factors. We shall have some discussion on some of them in a moment. That is perhaps rather an underestimate but we shall have discussion in due course. I am very amenable to improving those factors, to making them as comprehensive, as accurate and as acceptable as possible. But I regard it as a sad step hack to return from the isolation of these factors, which constitute fairness, to setting out, as it were, a vague principle again as the basis for the remuneration of the legal profession.

There is one particular factor which I wish to mention because it is very important to this matter. That is the factor which I have described as: the cost to public funds of any provision made by the regulations". That is factor (f) in the Bill. As I understood it, although I shall be corrected no doubt if I am wrong, there was much question as to whether it was fair to introduce that provision. That is open to argument. Your Lordships will hear argument in the course of debate on a later amendment that it is not fair to include that factor. But the question of whether it is fair or not certainly exists. I maintain that in the circumstances with which we are dealing here it is fair. But there is certainly a question about that.

If one introduces the word "fair", which is the foundation of that argument, into the opening words of the provision, one immediately obscures and undercuts the decision that one has already taken about whether that particular factor is to be introduced. I say that the underlying principle by which these factors are determined is the principle of fairness. It is obscurantist to put the principle in when one has got past that stage and is seeking to apply it.

I certainly consider, as my noble and learned friend Lord Hailsham said, that the position of Lord Chancellor in this matter is not a particularly easy one. But I regard it as fundamental to the success of his position. I do not of course guarantee success for myself personally but I am thinking about the office and the position. It is fundamental to that to have a clear, precise, determinate list of factors as the basis for these remuneration regulations. It is for that reason that I resist and invite your Lordships not to accede to this particular amendment.

4.30 p.m.

Lord Ackner

My Lords, I wish to make it perfectly clear that I am not adding a factor or seeking to add a factor by my amendment. I am putting the horse where it should be by defining the obligation, and after the obligation is defined then, as is frequently the case, one identifies some of the major relevant factors.

If noble Lords will study Clause 32(6), it will be seen that the last few words refer to matters "he considers appropriate". Those words are to be omitted in the next amendment to be moved, and in their place are to be inserted the words, "which are relevant". How does one determine the relevance of anything without first defining the object? The words I seek to retain so that that statutory obligation continues are the current definition of the obligation.

I do not wish to decry anything that the noble and learned Lord the Lord Chancellor has done by setting out certain relevant criteria, but do not let us imagine that there is any novelty about it. In 1986 the Lord Chancellor's Department provided a definition in a document dated 8th April, under the heading: Matters to which the Lord Chancellor proposes to have regard in making the criminal legal aid regulations". It goes on: The Lord Chancellor's statutory duty is to have regard to the principle of allowing fair remuneration according to work actually and reasonably done". Now mark these words: In the exercise of that duty he considers it proper to have regard to various matters, including the following". One finds in the Bill the substance of what is in that document. So there was available to work (and they did work) side by side with the statutory obligation, properly defined, the various relevant factors identified two years ago but now put in on their own without first defining the obligation.

I have had the privilege of attending your Lordships' House at all stages of this Bill. I have appreciated, as most of us have, that the noble and learned Lord the Lord Chancellor is not in a giving vein. That is a criticism of his brief; it is totally inconsistent with his personality. Since that vein is going to continue, I have no alternative but to take the views of the House on what is a very important, albeit a very modest, amendment.

4.33 p.m.

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

Their Lordships divided: Contents, 85; Not-Contents, 115.

DIVISION NO. 1
CONTENTS
Ackner, L. [Teller.]	Llewelyn-Davies of Hastoe, B.
Ardwick, L.	Longford, E.
Attlee, E.	Lovell-Davis, L.
Aylestone, L.	McNair, L.
Basnett, L.	Mason of Barnsley, L.
Benson, L.	Milford, L.
Blease, L.	Mishcon, L.
Bonham-Carter, L.	Molloy, L.
Brightman, L.	Mulley, L.
Briginshaw, L.	Nicol, B. [Teller.]
Bruce of Donington, L.	Peston, L.
Carmichael of Kelvingrove, L.	Phillips, B.
Carter, L,	Pitt of Hampstead, L.
Cledwyn of Penrhos, L.	Rea, L.
Cocks of Hartcliffe, L.	Reilly, L.
David, B.	Renton, L.
Dean of Beswick, L.	Ritchie of Dundee, L.
Diamond, L.	Ross of Marnock, L.
Donaldson of Kingsbridge, L.	Seebohm, L.
Edmund-Davies, L.	Sefton of Garston, L.
Elwyn-Jones, L.	Serota, B.
Ezra, L.	Shackleton, L.
Falkland, V.	Shannon, E.
Fisher of Rednal, B.	Shepherd, L.
Fletcher, L.	Somers, L.
Foot, L.	Stallard, L.
Gallacher, L.	Stedman, B.
Galpern, L.	Stewart of Fulham, L.
Glenamara, L.	Stoddart of Swindon, L.
Greenhill of Harrow, L.	Strabolgi, L.
Grey, E.	Strauss, L.
Griffiths, L.	Taylor of Blackburn, L.
Hampton, L.	Taylor of Mansfield, L.
Hatch of Lusby, L.	Templeman, L.
Hirshfield, L.	Thomas of Gwydir, L.
Hylton-Foster, B.	Tordoff, L.
Irvine of Lairg, L.	Underhill, L.
Jeger, B.	Wallace of Coslany, L.
John-Mackie, L.	White, B.
Kilbracken, L.	Wigoder, L.
Kilmarnock, L.	Wilberforce, L.
Leatherland, L.	Wilson of Rievaulx, L.
Listowel, E.

NOT-CONTENTS
Ailesbury, M.	Hunter of Newington, L.
Allerton, L.	Jessel, L.
Alport, L.	Johnston of Rockport, L.
Ampthill, L.	Kearton, L.
Arran, E.	Killearn, L.
Auckland, L.	Kinloss, Ly.
Bauer, L.	Kinnaird, L.
Beaverbrook, L.	Lauderdale, E.
Belhaven and Stenton, L.	Long, V.
Beloff, L.	Lucas of Chilworth, L.
Belstead, L.	Mackay of Clashfern, L.
Bessborough, E.	Macleod of Borve, B.
Blatch, B.	Manton, L.
Blyth, L.	Mar, C.
Boyd-Carpenter, L.	Margadale, L.
Brabazon of Tara, L.	Marley, L.
Brougham and Vaux, L.	Marshall of Leeds, L.
Butterworth, L.	Merrivale, L.
Caccia, L.	Mersey, V.
Caithness, E.	Milverton, L.
Cameron of Lochbroom, L.	Minto, E.
Campbell of Alloway, L.	Morris, L.
Carnock, L.	Mountgarret, V.
Chelwood, L.	Mowbray and Stourton, L.
Coleraine, L.	Munster, E.
Colwyn, L.	Murton of Lindisfarne, L.
Cottesloe, L.	Nelson, E.
Crickhowell, L.	Nugent of Guildford, L.
Croft, L.	Orkney, E.
Cullen of Ashbourne, L.	Orr-Ewing, L.
Davidson, V. [Teller.]	Oxfuird, V.
Denham, L. [Teller.]	Pender, L.
Derwent, L.	Peyton of Yeovil, L.
Dundee, E.	Plummer of St Marylebone, L.
Eccles, V.	Porritt, L.
Elibank, L.	Pym, L.
Elliot of Harwood, B.	Rankeillour, L.
Elliott of Morpeth, L.	Reay, L.
Erroll of Hale, L.	Renwick, L.
Faithfull, B.	Richardson, L.
Ferrers, E.	Rodney, L.
Foley, L.	Saltoun of Abernethy, Ly.
Fortescue, E.	Sandys, L.
Fraser of Kilmorack, L.	Selkirk, E.
Gainford, L.	Skelmersdale, L.
Gardner of Parkes, B.	Southborough, L.
Glenarthur, L.	Stevens of Ludgate, L.
Gray of Contin, L.	Stockton, E.
Gridley, L.	Strange, B.
Grimthorpe, L.	Strathspey, L.
Hailsham of Saint	Swansea, L.
Marylebone, L.	Swinfen, L.
Havers, L.	Terrington, L.
Hayter, L.	Thurlow, L.
Henderson of Brompton, L.	Trumpington, B.
Hesketh, L.	Westbury, L.
Hood, V.	Wise, L.
Hooper, B.	Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.