HL Deb 18 January 1988 vol 492 cc11-60

3.6 p.m.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—( The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Lord Simon of Glaisdale

My Lords, before the noble Lord moves his amendment, I wonder whether there is a spare copy of the groupings of amendments, because I am anxious to follow the proceedings. I apologise to the noble Lord for my interruption.

Clause 7 [Scope fir this Part]:

Lord Mishcon moved Amendment No. 21: Page 6. line 36, leave out subsection (1) and insert— ("(1) Subject to the provisions of this section, advice and assistance under this Part shall he available to any person.").

The noble Lord said: In view of the request of the noble and learned Lord, Lord Simon of Glaisdale, it may be pertinent that in this section of the Bill we are dealing with the question of assistance. We have reached a very important amendment at the outset of our dealings with Part III of the Bill. I should like to refer the Committee to Clause 7. As the Bill now stands, this part is deemed to apply to any advice or assistance.

With the permission of the Committee, I intend to speak about subsections (3) and (4) while moving the amendment. In subsection (3) Members of the Committee will read that: Advice or assistance of all descriptions or advice or assistance of any prescribed description is excluded from this Part, or is so excluded as regards any area, if regulations so provide: and if regulations provide for all descriptions to be excluded as regards all areas then, so long as the reguations so provide, this Part (other than this subsection) shall not have effect.".

One sees immediately that regulations can provide not only for the total exclusion of any type of advice or assistance; they can equally provide for exclusion of areas in which that advice or assistance may be given.

At subsection (4) Members of the Committee will read that: Advice or assistance of any prescribed descriptions of persons is restricted to its provision as prescribed descriptions of persons if regulations so provide.". One not only has regulations provided for and as yet unknown which can limit what is given by way of advice or assistance, but there can also be a limit on the areas in which that advice or assistance is given; and under subsection (4) one can limit the persons who are entitled to the advice or assistance. In my submission, that is a very dangerous position in which to leave an Act of Parliament dealing with this very vital part of the Bill. These amendments are intended to ensure that the provision of advice and assistance under what is currently the green form scheme remains, as it was intended to be, comprehensive and that is the reason for the amendment.

If I may be allowed—and I am sorry if this takes a little time but it is a vital matter as I said at the outset of my remarks—I shall turn to the White Paper in order to see what can happen by way of regulations, because that is what is in the Government's mind. It is the Government's White Paper. That White Paper contains two proposals which we suggest would be a grave inroad into the present green form scheme. First, the White Paper states that there should be contracting out provision of advice and assistance and that would be done by tender. It then talks in terms of exclusion of certain areas of advice and assistance provision.

If I may, I turn immediately to the exclusion of areas of need and look at the present situation which is governed by Section 2(1) of the Legal Aid Act 1974. That subsection provides that advice and assistance is available: on the application of English law to any particular circumstances". The Committee will realise that that is a very broad provision indeed, as it was intended to be. Indeed, that broad definition is repeated in substance when one looks at Clause 1(2) and Clause 1(3) of the Bill.

However, it is the worrying exclusion by way of regulation under Clauses 7(3) and 7(4) of the Bill to which I am endeavouring to refer the Committee as a matter of grave concern, especially if one looks again at paragraph 28 of the White Paper which states that the Legal Aid Board will be required, as an early job, to consider what exclusions should be made other than those already mentioned in the White Paper. At the very least, the Committee may feel that there should be an authoritative declaration to the Committee at this stage as to what the Government have in mind by way of exclusion if, indeed, there is anything more than already stated in the White Paper.

I intend to analyse what the White Paper already talks about as being excluded. The Committee may well feel our concern in regard to those exclusions. Paragraph 28 of the White Paper recommends that legal advice and assistance should no longer be available for making a will or for conveyancing. At first sight the Committee may well think that there is no great injustice in that. If somebody wants to make a will, presumably that person has property and it must be meaningful property otherwise there is not much point in making a will. In those circumstances, should legal aid be available for such purposes? The Committee may feel that if somebody has property to convey then again, surely legal aid is not necessary when there is a shortage of funds especially for conveyancing purposes. That would be an immediate reaction but I suggest to the Committee that a little closer examination on the ground, so to speak, along with the experience of practitioners will show that that constitutes not only an injustice in many cases but, equally, eventually a great deal of extra expenditure for the legal aid fund.

I give some examples. When one talks about conveyancing and the injustice that might be perpetrated, one's first thought is that the term applies not just to houses and land, as one may generally feel, but also to freehold or long leasehold, to a leaseholder or tenant in occupation, including the right to buy. The long leaseholder, the private tenant or the local authority tenant who seeks to extend his lease or purchase the freehold by agreement, or under the variety of statutory provisions which now exist, would not be entitled to have legal assistance under this part of the Bill.

These statutory provisions include the Leasehold Reform Act 1967, the Housing Act 1985 and the Landlord and Tenant Act 1987. The importance attached to the availability of legal assistance in such circumstances is underlined by Section 170 of the 1985 Act which gives the Secretary of State for the Environment power to give assistance with proceedings but without any means test. The tenant or leaseholder in the examples given will, in many cases, have only had the benefit of 100 per cent. mortgage without the benefit of any money at his or her disposal; and in other cases the freehold may be sold for a purely nominal sum What is at issue is often not merely arranging one's affairs but avoiding the risk to the security of one's home.

I next turn to conveyancing which is consequent on property order or settlement on divorce or separation. That too will be excluded if the broad advice given by the White Paper is carried out. When one comes to wills, what about a will which is consequent on property order or settlement on divorce or separation, a will that is consequent on the severing of a joint tenancy—as very often happens in a matrimonial dispute—and a will appointing testamentary guardians of children?

With the permission of the Committee, I shall say a little about each of those categories. I do so because we are dealing with people's rights of a very essential nature which will not be properly covered if that broad recommendation goes through and if regulations as yet unseen and unheard of come into being and we do not have the all-pervading idea that legal aid and assistance under this part shall be available to any person.

Lord Hailsham of Saint Marylebone


3.15 p.m.

Lord Mishcon

I am grateful to the noble and learned Lord. I should have referred to legal aid and advice. These second, third and fourth exceptions which I read out—the conveyance consequent upon a property order, the will consequent upon a property order or on the severing of a joint tenancy—these mainly relate to the breakdown of a relationship. There will be some cases where these steps can be taken under a full legal aid certificate for ancillary proceedings. In other cases a certificate may be unnecessary; for example, where agreement has been reached between the parties. If it has and if the White Paper recommendation is carried out and the regulations follow, then there is no help under this part.

In the third and fourth cases concerning the will consequent upon a property order—settlement upon divorce or separation or a will consequent upon the severing of a joint tenancy—it will often be important to make the will as soon as possible in case an untimely death intervenes. Where a relationship has broken down and property is held by a couple as joint tenants, it is necessary to avoid the risk that the survivor will benefit unjustly from the death of the other. That is the reason for the conveyancing point that I mentioned in regard to the severance of the joint tenancy.

Lastly, I deal with the question of testamentary guardians appointed by will. There are three advantages to appointing a testamentary guardian. Provided the guardian is still able and willing to act when his or her own appointment takes effect, it prevents possible disputes between relatives and friends as to who should care for the child. One hopes that it will also prevent the need for local authority care. Secondly, it ensures that the person looking after the child following the death of the parents has the requisite legal responsibility and authority to take decisions. One example is to give consent for medical treatment. The automatic effect of a testamentary appointment means that a person caring for a child does not need to bring judicial proceedings in order to exercise parental rights and duties in relation to the child.

I hope it is appreciated that the main burden of what I am saying, apart from the question of the production of hardship, is aimed at avoiding all the proceedings and hardship that may occur hereafter, some parts of which may well fall wrongly on the legal aid fund itself.

One of the classes of person who may be affected and suffer hardship because of any one of these regulations or the operation of the recommendations in the White Paper is the person who is mentally ill or vulnerable in respect of age or physical infirmity unless a will makes appropriate financial provision. Here again, the state may find itself unnecessarily burdened financially if this is not done.

The whole burden of what I have been endeavouring to say to the Committee is this. We are faced with a limitation by way of the nature of advice and assistance; by way of the areas in which it is carried out; and by the way of the persons who may receive it. All are unknowns within the Bill that is now before us. This amendment ought to stand unless the noble and learned Lord the Lord Chancellor is able to give assurances which cover all the matters I have mentioned. Unless assurances can be given as to what these regulations may provide in the future—and here again the noble and learned Lord can only deal with what is in his own mind as Lord Chancellor and he cannot bind any successor—I feel that this is an amendment to which the Committee should give serious consideration and support. I beg to move.

Lord Meston

It would be most helpful if the noble and learned Lord the Lord Chancellor indicated the areas envisaged under subsection (3) and the persons envisaged under subsection (4). As regards the areas which might be excluded under subsection (3), I wonder whether it is intended or expected that there would be an abrogation of the rule that under a legal aid certificate solicitors can and indeed must complete the conveyancing work necessary to put a court order into effect? That is commonly the position after a matrimonial property case. Likewise as to subsection (4), what category of person is envisaged? Clearly, it is a matter of concern to the Committee before making up its mind on this amendment.

Lord Campbell of Alloway

The questions raised by the noble Lord, Lord Mishcon, are very serious and important ones. I hope they commend themselves to my noble and learned friend the Lord Chancellor.

The extent of the putative exclusions by regulation is so vast that no answer can be given to any of these questions until the regulations are laid. That also applies to some other questions but I shall not take time by raising them. Though my noble and learned friend the Lord Chancellor may be able to give some indication or assurance that would be helpful, it cannot have the effect that is requisite or be a substitute for a draft regulation tabled for consideration by the Committee today.

I ask the noble Lord, Lord Mishcon, whether, in a sense, we are not driven to accept his Amendment No. 26 and, if so, whether the important matters raised by the present amendment are not premature. The effective way to deal with this problem is to have an amendment along the lines of Amendment No. 26 in the names of the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Mishcon. On this very important matter there should be an Affirmative Resolution; then all the questions raised by the noble Lord, Lord Mishcon, and others could be considered and answered.

Lord Denning

I hope the Committee will not accept this amendment. I should be quite prepared to leave it to the noble and learned Lord the Lord Chancellor to produce the regulations and for the Committee to decide what they come to when it sees them.

Lord Mishcon

I wonder if I may rise before both the noble Lords sit down?

Lord Hailsham of Saint Marylebone

That is just not possible.

Lord Mishcon

I believe it is only fair to the noble and learned Lord the Lord Chancellor that I should try to answer those points before he addresses the Committee. I should love to leave this to the Affirmative Resolution procedure but the Committee will appreciate that there is no opportunity to amend when regulations come forward under that procedure. It is possible to list a whole host of things which cannot be amended; either they are thrown out or they are approved.

The proper thing to do—rightly or wrongly—is to say that the aid, assistance and advice under this part of the Bill, which really refers to the present green form scheme—we are not talking about proceedings—should in fact be available to any person. In my view that is the cheapest and most just way out for the legal aid system.

3.30 p.m.

Lord Simon of Glaisdale

The reason I ventured to ask for the grouping of amendments, at inconvenience, I fear, to the noble Lord, Lord Mishcon, was that it seemed that Amendment No. 21, which is the only one before the Committee at the moment, would have extremely limited, if any, effect unless considered with the other amendments. Indeed, the noble Lord, Lord Mishcon, dealt with the subsequent amendment and continued as far as Amendment No. 26 dealing with the affirmative resolution which is extremely important. So far as I can see, unless the other amendments are accepted, Amendment No. 21 has almost no effect at all. I can, with difficulty, spell out a very limited effect, which certainly would not satisfy the noble Lord, Lord Mishcon. But if we are on Amendment No. 21 alone, it seems to me that my noble and learned friend Lord Denning must be right and that the amendment is premature.

The questions that the noble Lord, Lord Mishcon, asked of my noble and learned friend the Lord Chancellor are important, and we are indeed anxious to hear what he has to say about them. But the formality on Amendment No. 21 seems very clear—that standing alone, it is not necessary. It is undesirable because it replaces something shorter. Nevertheless, we have strayed on to the subsequent amendments. And, no doubt, if my noble and learned friend the Lord Chancellor is prepared to reply to the questions asked by the noble Lord, Lord Mishcon, and the noble Lord, Lord Meston, we shall save time in subsequent amendments.

Lord Campbell of Alloway

Before the noble and learned Lord sits down, for the sake of the record, it was I who suggested that Amendment No. 21 was premature. It is for that reason that although I support the spirit of it, I could not support it as an amendment on its own. I hope that the Committee will be able to take a broader view, if procedure allows, and discuss a wider range of amendments as suggested by the noble and learned Lord, Lord Simon of Glaisdale.

Lord Mishcon

I hope I am not testing the patience and courtesy of the Committee in rising again. I do so merely to try to correct a misapprehension. I am not bound—nobody is bound—by the groupings that appear on a piece of paper except that, by tradition, we try to observe them. I have only just seen them. No doubt that is my fault; but I expressly said at the opening of my remarks that I was also speaking to Amendments Nos. 22 and 25.

The Lord Chancellor

First of all, with great respect, I think that my noble and learned friend Lord Simon of Glaisdale is perfectly right that Amendment No. 21 by itself does not appear to achieve anything much. Indeed, I am not sure that it is necessary at all in respect of the matters that the noble Lord, Lord Mishcon, addressed. I was proposing to reply in a more liberal spirit to the noble Lord's speech, making it clear that I could not possibly accept Amendment No. 21 as it stands as achieving anything at all. Therefore, I prefer my own subsection (1) to the one that is proposed in place of it.

On the other matters and more generally, what we have in mind in these later provisions of Clause 7 is to give the necessary powers to make what I would call the green form scheme, for short—the Part III legal advice and assistance, for long—available, subject to certain matters.

As the Committee knows, I have proposed that there should be power in the Legal Aid Board to contract out certain types of advice, for example, in relation to welfare benefits. It might well be that an advice bureau or a law centre would be in a position to accept a contract to advise on such matters on very reasonable terms. It would possibly be helpful to the agency in question to get that work, and it might be very advantageous to the people who would be beneficiaries of the advice because the quality of the advice might be high in relation to the nature of the subject matter.

It would obviously be wrong to continue the green form scheme so that people could get, at the same time, the same sort of advice at any solicitors of their choice. The theory would be that we would contract out only in a situation where this seemed the best option. It would be quite wrong in that situation to have a duplication between Part II and Part III.

That could apply to a particular area of law. I take welfare benefits as an example, not because any decision of any sort has been taken but purely for the purpose of illustration. It does not follow that there would be availability in every part of the country. There might be places where, as your Lordships were hearing last week, no suitable law centres existed. In that situation it would not be appropriate to exclude the green form scheme.

Therefore, it is necessary to have fairly general provisions on the lines described here for that purpose in order to marry the provisions for contracting out in Part II with the provisions for the green form scheme in Part III. That is one aspect. It is not the only aspect.

As the noble Lord, Lord Mishcon, said, it was suggested in the White Paper that it might not be appropriate for the green form scheme to cover wills and conveyancing. That is conveyancing from the green form scheme; it is not conveyancing in relation to legal representation which would be ancillary in the sort of situation to which the noble Lord, Lord Meston, referred. It was not intended to cover that. However, it was thought that on the whole it might not be advisable to continue the green form scheme in relation to the preparation of wills and conveyancing generally. If we wanted to target available funds on areas of most need, wills and conveyancing as general subjects might not occur to the Committee as likely to be the areas of most need.

Since the White Paper was published, we have had some responses raising a number of questions. I do not take all the questions that the noble Lord, Lord Mishcon has mentioned, but I take one of them just as an example: the provision of testamentary guardians to children. That is an area which might be of extreme importance; yet it might be that the person desiring to make the testamentary provision was not really a well-off person, not somebody who would have funds readily available to do so. Indeed, perhaps the case that would occur to one as the most likely might be that of a single parent, realising how much the child depended on that parent and realising that there was a great need, if anything happened to that parent, that the child's general welfare should be in the care of someone whom the parent trusted. That appears to me at the moment to be very much a case that one would want to except from the general provisions. I have no doubt that within at least the classes of case that the noble Lord, Lord Mishcon, mentioned there are other examples of that kind. I would certainly hope that the flexibility to consider these particular cases would be retained.

I have not personally been able to reach any conclusion on these matters as yet. The Committee will appreciate that there are a number of ongoing matters that require attention and if proper decisions are to be taken they cannot all be decided at once. Once your Lordships approve the general structure of this Bill, subject to such amendments as you think appropriate, it would then be right to look at the details of these matters. The general point that conveyancing and wills might be excluded from the green form scheme was appropriate at the stage of the White Paper, and I think it is still an appropriate declaration of general intention but very much subject to detailed consideration, to exception of particular cases and the like.

These particular cases are, in my submission, very much the matter that one would want to have in regulations. One has come across the fact—and I am sure that Members of the Committee will have had experience of this—that some particularly deserving case might not occur even to noble Lords. The Bill might be passed, Royal Assent given and then some deserving case that none of us has thought of might arise. I would think it right to have the necessary flexibility in the primary legislation to cope with that.

I conclude by reference to Amendment No. 26. The noble Lord, Lord Mishcon, did not expressly refer to this. Obviously this is a matter that can affect these regulations. As the Committee knows, what I said was that each of these requires to be considered in turn. I do not wish to anticipate the argument that may be advanced on this but I am certainly sympathetic to considering an amendment on these lines in relation to any particular regulation-making power. No doubt the Committee may want to say more about Amendment No. 26 than has yet been said because the noble Lord, Lord Mishcon, did not expressly refer to it in this list, but I certainly would have in mind to have a very open consideration of that point.

The main point of principle that arises at this stage is whether this clause needs flexible provision for regulations that would enable the system as a whole to operate well and to operate in a way which made it capable of improvement in the light of continuing experience. I would, as I said at the outset, hope that the Committee would not approve this amendment but may feel that what I have been able to say has a bearing on some of the later amendments to which reference has been made.

Lord Mishcon

As always, the noble and learned Lord has been both courteous and lucid, but I know that he will forgive me if I say, with deep respect, that I do not think that he has been convincing. I say this to the Committee for this reason: we are walking into dangerous parliamentary chapters in the history of legislation when we keep on saying, "Do not expect this in primary legislation. We are thinking the thing over. We want to be flexible. Minds might change. Do it all by regulation".

If we had a parliamentary procedure where, if a regulation came before the Houses of Parliament we were able to take it line by line, there could be an excuse because Parliament still has control. But what do we walk into on an amendment such as mine? The noble and learned Lord says, "It is perfectly true that the White Paper came out many months ago at the beginning of 1987". I think it came out in March of last year. "We have had all this time to think about the exceptions that we would want to make in the areas and nature of advice and so on on the green form scheme. We are not going to put it in primary legislation. We are going to wait until we have regulations to put before Parliament".

It would again be thoroughly logical and reasonable—although I would still hope that primary legislation kept its primary purpose and status—if, when such a regulation came before your Lordships' House, one could say to the Lord Chancellor, to take his own example, "You have not put in there, you know, an exception in regard to things that we approve of. That is very good. But you have excepted, in spite of the speech you made on the Committee stage of this Bill, testamentary provision for guardianship. This is dreadful. We do not agree. But we can't say so because all the other things you have put in, or most of them, we agree with".

Therefore, there is no ability, so far as your Lordships' House is concerned, to say what your Lordships feel should be the right position. This is the only time. It is on the Bill, when the Bill goes through its stages through your Lordships' House. Because I quoted so many examples—and the noble and learned Lord, in absolute courtesy, merely took one of them, and said, "Of course there may be others that I am thinking of"—and because your Lordships are made powerless in this matter which affects so many of our citizens on this very well working green form scheme, I must (and I hope that the Committee will not think that this is too strong a word) in sheer protest about legislative procedure of this kind, ask the Committee to give its opinion on this amendment in the light of what I have just said.

3.47 p.m.

On Question, Whether the said amendment (No. 21) shall be agreed to.

Their Lordships divided: Contents, 94; Not-Contents, 92.

Airedale, L. Kilmarnock, L.
Amherst, E. Kinloss, Ly.
Ampthill, L. Leatherland, L.
Ardwick, L. Listowel, E.
Attlee, E. Lloyd of Kilgerran, L.
Avebury, L. Lockwood, B.
Banks, L. Longford, E.
Basnett, L. Mackie of Benshie, L.
Blyth, L. McNair, L.
Bonham-Carter, L. Mar, C.
Briginshaw, L. Mason of Barnsley, L.
Brockway, L. Meston, L.
Bruce of Donington, L. Mishcon, L.
Buckmaster, V. Molloy, L.
Carmichael of Kelvingrove, L. Murray of Epping Forest, L.
Chitnis, L. Nicol, B.
David, B. Ogmore, L.
Davies of Penrhys, L. Peston, L.
Dean of Beswick, L. Phillips, B.
Diamond, L. Pitt of Hampstead, L.
Donaldson of Kingsbridge, L. Ponsonby of Shulbrede, L. [Teller.]
Dormand of Easington, L.
Elwyn-Jones, L. Porritt, L.
Ennals, L. Prys-Davies, L.
Ewart-Biggs, B. Rathcreedan, L.
Ezra, L. Rea, L.
Falkland, V. Ritchie of Dundee, L.
Fitt, L. Sainsbury, L.
Gallacher, L. Seear, B.
Galpern, L. Seebohm, L.
Graham of Edmonton, L. [Teller.] Serota, B.
Shaughnessy, L.
Gregson, L. Silkin of Dulwich, L.
Grimond, L. Somers, L.
Halsbury, E. Stallard, L.
Hampton, L. Stedman, B.
Hanworth, V. Stewart of Fulham, L.
Hayter, L. Stoddart of Swindon, L.
Hirshfield, L. Strabolgi, L.
Hooson, L. Taylor of Mansfield, L.
Hutchinson of Lullington, L. Thurlow, L.
Hylton-Foster, B. Tordoff, L.
Ilchester, E. Turner of Camden, B.
Jacques, L. Underhill, L.
Jay, L. Wallace of Coslany, L.
Jeger, B. White, B.
Kennet, L. Wigoder, L.
Kilbracken, L. Williams of Elvel, L.
Abinger, L. Cottesloe, L.
Alexander of Tunis, E. Cox, B.
Allerton, L. Craigmyle, L.
Arran, E. Crickhowell, L.
Bauer, L. Croft, L.
Belhaven and Stenton, L. Cullen of Ashbourne, L.
Beloff, L. Davidson, V. [Teller.]
Belstead, L. Denham, L. [Teller.]
Benson, L. Denning, L.
Birdwood, L. Dilhorne, V.
Boyd-Carpenter, L. Dudley, B.
Brabazon of Tara, L. Dundee, E.
Brougham and Vaux, L. Edmund-Davies, L.
Bruce-Gardyne, L. Effingham, E.
Butterworth, L. Ellenborough, L.
Caccia, L. Elliot of Harwood, B.
Campbell of Alloway, L. Faithfull, B.
Clifford of Chudleigh, L. Fanshawe of Richmond, L.
Constantine of Stanmore, L. Ferrers, E.
Foley, L. Murton of Lindisfarne, L.
Fortescue, E. Nelson, E.
Fraser of Kilmorack, L. Newall, L.
Gainford, L. Nugent of Guildford, L.
Glenarthur, L. Onslow, E.
Gray, L. Orkney, E.
Gray of Contin, L. Oxfuird, V.
Gridley, L. Peyton of Yeovil, L.
Hailsham of Saint Marylebone, L. Rankeillour, L.
Reay, L.
Harmar-Nicholls, L. Rodney, L.
Hesketh, L. St. Davids, V.
Hives, L. Simon of Glaisdale, L.
Hooper, B. Strange, B.
Jessel, L. Strathcarron, L.
Johnston of Rockport, L. Strathcona and Mount Royal, L.
Kaberry of Adel, L.
Kearton, L. Swinfen, L.
Lane-Fox, B. Torrington, L.
Long, V. Teviot, L.
Mackay of Clashfern, L. Thomas of Gwydir, L.
Macleod of Borve, B. Thorneycroft, L.
Margadale, L. Trafford, L.
Merrivale, L. Trumpington, B.
Mersey, V. Vaux of Harrowden, L.
Monckton of Brenchley, V. Westbury, L.
Mowbray and Stourton, L. Wigram, L.
Munster, E. Ypres, E.

Resolved in the affirmative, and amendment agreed to accordingly.

[Amendment No. 22 not moved.]

3.55 p.m.

Lord Silkin of Dulwich moved Amendment No. 23: Page 7, line 2, leave out from ("Part") to the first ("if") in line 3.

The noble and learned Lord said: It will probably be convenient for the Committee if I take with this Amendment No. 24. The purpose of the amendment is to find out the reason for the inclusion in subsection (3) of the power to exclude in respect of particular areas. That was touched upon by my noble friend Lord Mishcon in the course of opening his successful Amendment No. 21 and also by the noble and learned Lord the Lord Chancellor in reply.

I understand from what the noble and learned Lord said that the purpose is to cover the possibility that it may be desirable for certain powers to be contracted out in certain areas, in which case the green form would be duplicating matters and would not be necessary. If the sole or major purpose of this subsection is to provide in what we would regard as a proper and attractive way for the work of law centres in areas where they are needed, I would not wish to oppose it. If there are other specific purposes, we would want to look at them on their merits. If the position is that the noble and learned Lord the Lord Chancellor has explained fully the purpose of the subsection, I would not wish to detain the Committee very much further on the amendments. I beg to move.

The Lord Chancellor

I have endeavoured to explain the purpose of the provision in the general remarks that I made in answer to Amendment No. 21 of the noble Lord, Lord Mishcon, which the Committee has approved. I am accepting that for the time being. I construe what we are doing here in the light of that. I doubt whether in fact that makes any difference to the scope of this provision as the noble and learned Lord, Lord Silkin of Dulwich, proposes to amend it.

The idea is to enable us to advance by stages and in relation to particular parts of the country in the contracting out arrangements. The only way we could give effect to the noble and learned Lord's amendment would be by doing it nationally. I should very much prefer to move forward area by area and see how the matter worked. In making important changes in the legal aid system it is necessary not to try to do too much at once. There is good in caution, because it may be possible to learn from the advance what is proper to be done at the next stage. I do not think anybody could claim properly to know right from the start all the answers to these problems. As in science, experiment is considered good. This enables us to experiment and to move forward. I am therefore putting that forward as the reason why the provision was put into the Bill. I have no other purpose in mind for it than that. It was put forward in order to accomplish that.

Lord Silkin of Dulwich

I am grateful for that explanation and in the light of it I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 24 and 25 not moved.]

4 p.m.

Lord Elwyn-Jones moved Amendment No. 26: Page 7, line 12, at end insert— ("( ) Any regulations made for the purposes of this section shall not come into force unless or until approved by resolution of each House of Parliament.").

The noble and learned Lord said: This is a very significant amendment because it asserts firmly that, as regards the important matters that are affected by regulations in Clause 7, those regulations should all be subject to approval by resolution of each House of Parliament instead of depending upon the negative procedures.

If the Committee would be good enough to look at the subsections in question, subsection (2) states: This Part only applies to assistance by way of representation if, and to the extent that, regulations so provide.". So the regulations are the determining element. The subsection continues: and regulations may make such provision in relation to representation for the purposes of any proceedings before a court or tribunal or at a statutory inquiry". So the regulations go to the representation—who is to represent and in what conditions and circumstances before a court, a tribunal or a statutory inquiry.

Then in subsection (3) the whole corpus of regulations again comes into being if we approve it. It reads: Advice or assistance of all descriptions or advice or assistance of any prescribed description is excluded from this Part, or is so excluded as regards any area". So it goes to excluding parts of the country or kinds of advice or assistance, if regulations so provide. So there again an enormous cloud of doubt is cast over what is contemplated. All those matters that go to the root of legal advice and assistance are to be dealt with in regulations. Subsection (3) goes on: and if regulations provide for all descriptions to be excluded as regards all areas then, so long as the regulations so provide, this Part … shall not have effect". So it restricts it to that limited extent, at any rate.

So here there is a power given to make regulations. We do not at this stage of our consideration of the Bill know of their extent and their nature. The noble and learned Lord the Lord Chancellor has all along been very frank with the Committee about this matter: these points will have to be considered as matters develop and Parliament should really hope for the best—that is the best that is offered—that the regulations will be all right when the time comes.

It is not good enough when the regulations go to matters quite crucial to the operation of the legal advice and assistance scheme, which the noble and learned Lord my predecessor and I had a big hand in setting up. Indeed I am sure that he would not resile from their importance in spite of the fact that he and I were jointly responsible for them. But this is a serious matter going to an important part of the protection given to the citizen of modest means, who needs help in providing him with advice and assistance. Accordingly, I hope that the noble and learned Lord will approve and accept Amendment No. 26. I beg to move.

Lord Campbell of Alloway

I support the amendment, as I sought to indicate on Amendment No. 21. It is, having regard to the extent of exclusion by regulation, appropriate that the regulations should be approved by affirmative resolution in both Houses. As the noble and learned Lord, Lord Elwyn-Jones, rightly said, there are matters here which go to the root of legal advice and assistance.

I did not intervene before to answer the noble Lord, Lord Mishcon, on the question of procedure, but we are not powerless. The procedure does afford an adequate safeguard. In any debate where we pray against a regulation, note is taken of the content of the debate. It has happened more than once, certainly since I have had the privilege of being in the House, that the instrument has been withdrawn, the Government have considered the objections and matters raised in debate and then the Government have come back with a new instrument. We are not powerless. We are not muzzled. It may not be the procedure which the noble and learned Lord or perhaps I might wish, but it would be wrong to suggest that there would not be an adequate safeguard in the form of regulation proposed by the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Mishcon.

Lord Mishcon

Before the noble Lord sits down let me say that, of course I accept that the Government will, in courtesy, listen to any submission made orally to a civil servant, any letter that may be read to a Minister or indeed any speech made in this House. But Parliament is not supreme in these matters. It is at the discretion of the Government whether or not they take account of speeches made in a debate, and Parliament is supposed to be the body that legislates.

Lord Hooson

We on these Benches support the amendment. It seems to me that as regards this Bill a great deal of criticism has been rightly made of the fact that regulations are to be so relied upon. I can understand the benefit of secondary legislation when the principles or the guidelines are clearly set out in primary legislation. Here I think it can fairly be said that the principles that are to guide the Lord Chancellor are not clearly set out in this Bill. The least safeguard that can be hoped for is that at least there should be an affirmative resolution of the House for the regulations. I do not think it is a sufficient safeguard and it does not obviate the need for setting out plainly in the primary legislation the principles upon which the Lord Chancellor will frame his regulations. But we support the amendment on the grounds that it is at least a safeguard.

Lord Simon of Glaisdale

On an earlier clause relating to the constitution of the board the question of the regulatory powers arose, and I ventured to draw attention to the fact that proceeding by subordinate legislation was a serious inroad on your Lordships' constitutional duty to act as a revising Chamber. My noble and learned friend Lord Hailsham subsequently pointed out that there was a genuine distinction between matters of substantial importance which, if there were to be regulation, could go by negative resolution and others, more important, that ought to be dealt with by affirmative resolution. Not for the first time he convinced me, and I think my noble and learned friend the Lord Chancellor accepted that position.

As far as I can remember, the large constitutional position has not been looked at since the Donoughmore Report. With the enormous mass of regulations that are laid and come into force, drawn up, one must remember, not by parliamentary counsel but by legal advisers to the department, the time may have come when the large constitutional position ought to be re-examined. However, that does not arise on this amendment.

If one is to have subordinate legislation, there is a difference between the affirmative and negative resolution procedure. The noble Lord, Lord Campbell of Alloway, is right when he says that once regulations are before this place—there is a self-imposed limitation as regards procedure by negative resolution—they are subject to debate and the Minister can be apprised of the feeling about them. As the noble Lord correctly said there have been occasions when in view of parliamentary opinion regulations have been taken away and revised. But the big difference is that if there is to be affirmative resolution the Minister must himself lay the regulations on the Table of the Chamber and explain what they mean and what he intends to do about them. That does not apply to the negative resolution procedure.

Therefore, while I fully accept the distinction that was made by my noble and learned friend Lord Hailsham, it seems to me that the matters are of such importance and are so fundamental to the structure and operation of the legal aid scheme that they ought to be the subject of affirmative parliamentary approval.

4.15 p.m.

The Lord Chancellor

When moving this amendment the noble and learned Lord, Lord Elwyn-Jones, referred to the legal aid legislation which we have had for some time. I think I am right to say that from its inception the legal aid legislation has contained wide powers of regulation. Those powers have been exercised fully over the years, as the handbook, which is well known to legal practitioners, shows. Generally speaking, it is also true—I am subject to correction if the noble and learned Lord has a case in mind—that those have been subject to the negative resolution procedure. At the outset of the Bill's consideration in Committee I indicated that the thing to do would be to look at each exercise of the powers in question to see whether the affirmative or the negative resolution procedure was appropriate.

I am bound to say that the matters that are before the Committee on this clause are matters which it would be perfectly reasonable to deal with under the negative resolution procedure because the nature of the regulations required would be such as to make it plain that they should be opposed. In my judgment this is not comparable to the regulations which would be made under Clause 2, which I accepted at an earlier stage should he made subject to the affirmative resolution procedure.

The regulations in question are of a more subordinate character. It is a matter of degree and judgment and of the balance to be drawn between the various powers contained in the Bill as a whole. Therefore I suggest that this issue is one that I be allowed further to consider in the light of consideration of the whole Bill. I must have regard to the Bill as a whole when dealing with borderline matters.

However, there is one matter that I should like to raise before I sit down; that is, what effect, if any, the successful amendment moved by the noble Lord, Lord Mishcon, has on this point. I do not think that the noble and learned Lord, Lord Elwyn-Jones, dealt with that when introducing this amendment. It must be of some importance because it was indicated as having importance in relation to this clause. The effect of the amendment was said, as I understood it, in some way to restrict regulation-making powers. If that is so, no doubt the Committee would wish to know what that restriction amounted to before coming to a conclusion on this provision. I should also like to have the opportunity further to consider it. My submission is that that matter should be considered in the light of the Bill as a whole. I undertake to reconsider the position in that light if the Committee felt it appropriate.

Lord Mishcon

I wonder whether I may follow the noble and learned Lord into the pathways that he, if I may say so, correctly entered. This a matter for my noble and learned friend Lord Elwyn-Jones to deal with since it is his amendment. If the noble and learned Lord is putting to the Committee that one should look at the effect on the Bill as a whole of whether one has an affirmative or a negative resolution, I would respectfully have said that that negatives what he previously said; that each matter was to be taken on its own merits. I should have thought that the balance of view on that issue was made obvious.

However, I shall deal with the noble and learned Lord's remarks about the passing of the first amendment, which I had the privilege of moving. As I understood the matter, the passing of that amendment meant that it was the Committee's view that the provision of advice and assistance under this part of the Bill should be available to any person. That was the amendment that was passed. With it, I spoke to Amendments Nos. 22 and 25 and argued the point upon that basis. I hope that the noble and learned Lord will find it appropriate to have some discussions between now and the Report stage as to the precise effect of the passing of that amendment so that on Report both he and I, if I may humbly say so, know what the position is so that we can deal with it.

Lord Elwyn-Jones

On Second Reading the noble and learned Lord the Lord Chancellor said: I shall be entirely open to suggestions put forward in Committee that a regulation-making power is of particular significance and, exceptionally, requires the affirmative resolution procedure"— [Official Report, 15/12/87; col. 646.] Subsection (3) of Clause 7 says: Advice or assistance of all descriptions or advice or assistance of any prescribed description is excluded from this Part … if regulations so provide". Is there anything more sweeping and wide in its context than that? It could be used to drive a coach and four through the advice and assistance scheme altogether. It seems to me to be a classic case for the exercise of the exceptional power.

On any view it is clearly controversial. But in my view plainly this is a taking over by the Government of authority to set aside the wishes of Parliament, if what has been done already indicates that. I submit that it is a classic example where regulatory power is used in circumstances which defeat the purposes of this part of the Bill, if it is accepted. It is an abuse, if I may say so, of the regulation-making power if subsection (3) in particular is allowed to pass. I therefore feel that it is right to take the view of the Committee upon this matter.

Lord Hailsham of Saint Marylebone

Perhaps I may intervene for a moment. I had intended to say what I am now about to say on the Motion that the clause stand part of the Bill. My view, for what it is worth, is that the words which the noble and learned Lord has just quoted from the clause are probably badly drafted. If they were more correctly drafted much of the importance of this amendment would disappear.

If one takes a purely grammatical construction of subsection (3) as it now stands, it is that, as the noble and learned Lord said, if regulations provide for all descriptions (I suppose that all advice and descriptions should apply to all areas) it would of course, if one took the pedantic view, cover a set of regulations which put an end to advice and assistance altogether. I am sure this is not what my noble and learned friend intends to do.

Of course I was partly responsible at an earlier stage in the year for the White Paper. Certainly it did not enter my mind that this was what I might have done had my career protracted itself to the boredom of everybody in the world. However, I rather wonder whether the amendment in itself cures or is designed to cure something which may be inherent in the drafting of the clause rather than in the question as to whether we should have an affirmative or negative resolution.

It is therefore with some temerity that I suggest both to the noble and learned Lord who has just spoken and to my noble and learned friend that my noble and learned friend's suggestion is probably the right one. What we really need to do is to look at the drafting of the clause and then to carry out a rather more thorough categorisation of the regulatory powers conferred not only by this section, which is important, but in the Bill as a whole, which has given rise to so much controversy, both on Second Reading and subsequently no doubt as we proceed in Committee. Let us see whether we can categorise the regulatory powers in detail, those which do and those which do not require a negative rather than an affirmative resolution.

My reason for adding this is that I was very much of the same mind as my noble and learned friend on the Cross-Benches who addressed the Committee a few moments ago. I feel we need to think out, as we cannot do in general in a debate of this kind as we go through the legislative programme this Session, what are the true differentiae and descriptions of regulations which ought to follow the negative and which ought to follow the affirmative procedure.

One of the problems of the modern Parliament is that it has too much work to do. The great Parliament of 1911, which was during the time of a radical Liberal Government, the like of which I hope we shall never see again, passed, I think, 450 pages of public general regulations. A Conservative Government like the present one are doing very badly if they pass fewer than 3,000 pages of public general legislation; there are 10,000 pages of subordinate legislation to support those 3,000 pages.

One of the things about which Parliament must make up its mind is how we can control this fate, this Cloaca Maxima which passes through the two ends of the Palace year by year. It will not diminish under any possible alternative Government. One of the things we must do is to do less if we possibly can. Therefore I am not necessarily an enthusiast for making the affirmative resolution obligatory on any occasion when what the instrument contains is necessarily important. I do not think that that is the only matter to be taken into account.

One must remember that there are only 24 hours in the day. Every minute spent in the debate of an affirmative set of regulations will be taken away from something else. My feeling is that, despite what the noble and learned Lord has said, as usual with great persuasiveness and courtesy, about his intentions on the present amendment, my noble and learned friend's suggestion that we should look at this on Report in some greater detail and with greater knowledge of what will happen is probably a wise one for the Committee to take.

Lord Denning

Having heard the arguments on both sides, I would support the amendment.

Lord Campbell of Alloway

If this is to be put to a Division, perhaps I may seek assistance from any quarter of the House. I am a little confused because subsection (3) as it stands, with its exclusory effect, as accepted by the noble and learned Lord, Lord Simon of Glaisdale, could in effect render Amendment No. 21 otiose. That is because subsection (1) as amended is subject to subsection (3). It is this draconian or vast or unlimited exclusory effect in subsection (3) that drove me to say what I did and to support very firmly Amendment No. 26 in the name of the noble and learned Lord, Lord Elwyn-Jones, for an affirmative resolution of both Houses.

If subsection (3) does not mean what it says—and the noble and learned Lord says that it does not; therefore it does not—how do we approach the matter? I only seek some assistance because, irrespective of any party considerations, I attach considerable importance to the affirmative resolution applied to the Bill as it stands in this regard.

4.30 p.m.

Lord Simon of Glaisdale

I spoke in favour of the amendment, but having heard what my noble and learned friend the Lord Chancellor has said, it would seem extremely ungracious, to say the least, to press the matter. I agreed entirely with everything that my noble and learned friend Lord Hailsham of Saint Marylebone said. There may be a defect in the drafting. But my noble and learned friend the Lord Chancellor has shown an openness of mind in being willing to consider the matter further; this means that things not considered satisfactory can be proceeded with again on Report. I can only express the hope that my noble and learned friend Lord Elwyn-Jones will not divide the Committee on the amendment.

Lord Harmar-Nicholls

Having regard to the way in which the arguments have developed, I do not think that this matter should be left entirely to the lawyers. One understands that they approach this matter as lawyers but parliamentary procedures, as generally accepted, should also be taken into account. We should exclude what I shall call in a minute "gamesmanship". One could not have had a more reasonable and positive suggestion than that made by my noble and learned friend the Lord Chancellor when he answered us on this matter.

We are in Committee. There is a Report stage to follow, and amendments can also be tabled on Third Reading. There is plenty of room for amendments in the future according to normal parliamentary procedures. My noble and learned friend has said that he appreciates the arguments, the point and the special significance of negative and affirmative resolutions when dealing with the application of this group of regulations. However, as the Bill, as it stands, has already been amended by the vote that was taken only a minute or two ago, he is saying that he would like an opportunity of looking at the Bill as a whole in order to see in the light of what has happened and in the light of the arguments that have been adduced which side he comes down on. The noble and learned Lord the Lord Chancellor wants to decide whether he would recommend an affirmative or a negative resolution. That statement was positive and generous; and under the normal procedures of your Lordships' House it is an offer that is normally accepted in Committee.

As regards the decision taken in the Lobbies a few minutes ago I hope that the Committee will not have a feeling of gamesmanship that now is the time to push this amendment to a vote because it seems as if we might win it. I believe that this matter is much too important for such an attitude. The significance of the arguments, even coming from the lawyers, is so great that they should be taken into consideration. I hope that the noble and learned Lord, Lord Elwyn-Jones, who himself has occupied the Woolsack with distinction will not push the matter to a vote in the interests of the general acceptance of parliamentary procedures.

Lord Elwyn-Jones

It is in the interests of parliamentary procedure that we do what Parliament should be doing, and what it has done in the past. Where an amendment is tabled on any matter of a highly controversial character and when it goes to the root of a Bill or an important part of a Bill as this amendment does—namely, advice and assistance to the impoverished potential litigant—and when it contains a provision on that advice and assistance, which is to some extent to take the place of or amend the green form scheme which has been so beneficial and when the Bill contains the words: Advice or assistance of all decriptions or advice or assistance of any prescribed description is excluded from this Part…if regulations so provide we must decide the matter.

Those words in my submission, contain a very fundamental provision. They are fundamentally in breach of the intentions that were certainly indicated in subsection (1) and in breach of a Bill which should be providing legal advice and assistance. They state that if the regulations so provide, advice or assistance of any description can be excluded. That is really making a farce of the parliamentary procedure and driving a coach and four through the power of Parliament to make their decisions. We must decide this matter as it stands. I am sure that the noble and learned Lord will acquit me of ungraciousness. That is certainly not my intention; and this is of course in no way a personal matter. The provision goes to the root of this difference of procedure that Parliament has provided. It gives to the Secretary of State powers in certain circumstances to get changes which are not of first importance dealt with by a shortened procedure in the House; namely by negative resolution. However, it provides that where Parliament requires and needs the power, and where the proposed use of in this case the power of the noble and learned Lord the Lord Chancellor is of particular and fundamental importance, Parliament should have the power to decide the matter by affirmative resolution procedure. That would give this House then what it would not have on negative procedure; a full opportunity to debate the matter.

The Lord Chancellor

I wish to make my position absolutely plain. This part of the Bill has been amended by an amendment moved by the noble Lord, Lord Mishcon. I personally do not feel entirely satisfied that I understand the effect that that amendment has made on this Part of the Bill. I have indicated to the Committee that in the light of that, and in the light of all the circumstances, I am prepared to reconsider this matter and consider whether the affirmative rather than the negative resolution should be applied to regulations made under this particular Part of the Bill. That is my position. I am trying to be as reasonable as possible, but I do not at all dispute that the noble and learned Lord is quite entitled to take this matter to a Division if he wishes to. I should not regard that as in any way discourteous. That matter is entirely up to him. I merely wish to make it clear to the Committee what my position is. I am trying to be consistent with what I said on Second Reading.

Lord Elwyn-Jones

Few Members of the Committee have been more gracious than the noble and learned Lord who has just spoken. He has now given an undertaking that before Report he will consider the implications of the result of the Division which was carried against the Government. In view of his personal manner of putting that, I should be somewhat embarrassed almost to push this to a Division against him. It is only by reason of delicate considerations of that kind that on this occasion I shall hold my hand until we reach Report. In those wholly exceptional circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Elwyn-Jones moved Amendment No. 27: Page 7, line 12, at end insert— ("( ) Before making regulations for the purposes of this section, the Lord Chancellor shall consult the Board and the Law Society.").

The noble and learned Lord said: I trust that there will not be quite so much drama—if that is the right word—created by this next amendment. The amendment provides that: before making regulations for the purposes of this section, the Lord Chancellor shall consult the Board and the Law Society". The amendment refers to Clause 7 which we have already discussed at some length. The Board has been given overriding authority in this field. It has taken the place of the functions hitherto exercised by the Law Society. The Law Society itself has been and will continue to be involved and has a whole history of years of experience of applying the provisions of both legal aid generally and legal advice and assistance.

Therefore, what I propose—it is rather significant —has already been done by the Lord Chancellor in Clause 32(7) of the Bill on a matter of no greater importance. On page 27, dealing with regulation powers generally, Clause 32(7) provides: Before making regulations for the purposes mentioned in subsection 2(e) above"— I will come to those in a moment— the Lord Chancellor shall consult the General Council of the Bar and the Law Society". In subsection (2) there are listed a number of regulations in regard to diverse circumstances which could arise under the Bill. For instance, in paragraph (d) regulations may: provide for the cases in which a person may be refused advice, assistance or representation or have the grant of it withdrawn or revoked by reason of his conduct when seeking or receiving advice".

One sees that the matters that we have already traversed at length under subsection (2) are certainly equal in importance to the matters in Clause 32 about which it is thought right that provision should be included that the Lord Chancellor should consult the General Council of the Bar and the Law Society before the regulations are made. It is not such a painful experience after all. Indeed in the circumstances, this provision is essential if further error is not to be fallen into by misfortune or whatever the circumstances may be. I beg to move.

Lord Simon of Glaisdale

This amendment has been moved by my noble and learned friend Lord Elwyn-Jones but it stands in the name of the noble Lord, Lord Mishcon. It is a very sad business because it represents a recrudescence of a malaise on the part of the noble Lord which so distressed the Committee on the Prosecution of Offences Bill.

Of course the noble Lord, Lord Mishcon, and my noble and learned friend Lord Elwyn-Jones, with their methodical and well ordered minds, know perfectly well that when a Minister is ordered to make regulations he will make regulations which further the purpose of the Bill and which are intended to do justice. He will consult whoever is required and available to offer advice. They know this perfectly well in their waking moments. However, like Hamlet, they seem to suffer from bad dreams. As soon as the word "regulation" is mentioned, they go into a cataleptic trance and envisage appalling ogres taking over the government department in question and making regulations of unbelievable injustice, designed to frustrate the purpose of the Bill. They will do that, carefully turning their backs on any advice that may be available and appropriate.

When the Prosecution of Offences Bill was debated the noble Lord, Lord Mishcon, at first light, his face grey and drawn, the perspiration still on his brow, rushed down to this Chamber and tabled page upon page of amendments telling the Minister to do exactly what he could be relied on to do in any event. I am glad to say that noble Lords were very patient, although of course there was no question of accepting the amendments. Indeed, by Report stage the noble Lord was almost completely recovered and by Third Reading there were no further such amendments.

This is exactly such a provision. Of course the Lord Chancellor will consult whoever can offer appropriate advice. The mere fact that he is told to do so quite unnecessarily in a later provision of the Bill certainly does not justify the Committee in adding a completely unnecessary provision to a statute book which is already bursting at the seams. I hope that my noble and learned friend the Lord Chancellor will not accept this amendment.

4.45 p.m.

Lord Hailsham of Saint Marylebone

I do not quite have my noble and learned friend's power of graphic description but let me point out to the Committee very briefly that there is a great distinction between Clause 32, to which the noble and learned Lord referred, and the present clause which we are discussing.

Unless I am mistaken, and I almost always am when I make a cross-reference, Clause 32 relates to the remuneration of the two branches of the legal profession under this Bill; namely, the barristers and the solicitors. I can understand, therefore, what led the Government to provide in the Bill for a direct duty of consultation. However, this clause does not relate directly to the legal profession as such or its branches. As my noble and learned friend has just said, I am quite sure that whether the amendment is passed or rejected by the Committee the Lord Chancellor will consult both the bodies named in the amendment. I do not think there is any doubt about that.

However, there are also other bodies in this clause, whereas there are no other bodies in Clause 32. Just to reel off some of the obvious ones in this clause there is a sort of trade union of Citizens' Advice Bureaux and another for law centres; there are also local authority associations of one sort or another. All of them, I think, would require to be consulted before regulations under this provision were tabled in Parliament.

On the principle of which I am always eager to remind the Committee—expressio unius est exclusio alterius-I think these other quasi-trade union bodies, professional and local associations may very well be offended if the Law Society and the Bar Council were singled out in this clause, even accepting that it was perfectly proper to put them into Clause 32.

In agreement with my noble and learned friend on the Cross-Benches, I also regard the duty of consultation as an ordinary feature of good government and administration. I think it is a question of a code of conduct which Ministers ought always to follow in a very wide range of cases. One therefore has to consider whether one is doing the principle of good legislation a service by inserting in some clauses and not in others a duty to consult, when ordinary good administration would probably lead Ministers to consult in every case and might even render them liable to judicial review if they did not.

Lord Mishcon

With drawn face and with perspiration literally running from my forehead, and in some state of absolute confusion and ill health, I answer the tirade of the noble and learned Lord, Lord Simon of Glaisdale. He quoted "Hamlet". I thought that I was listening to a very vocal ghost as he was talking because I cannot recognise either the state of health in which I was supposed to be or the things that I was supposed to have said on a previous Bill. My recollection is that there were some amendments put down by the Law Society which I thought were perfectly proper to put before noble Lords and I did so. They were discussed in a manner that noble Lords have a habit of using in discussions: they were either passed or they failed; I cannot remember which happened.

On this occasion my noble friend and I did precisely the same. The Law Society felt that it was a very good provision to put forward on consultation, and I shall have a word to say about the amendment in a moment. The amendment was put forward. My noble and learned friend thought that he would add the considerable weight of his voice to such an amendment and he accordingly moved it. Why that drew the dramatic outburst from the noble and learned Lord, I know not.

However, let us consider the amendment. Perhaps I may say in answer to the noble and learned Lord the Lord Chancellor that I thought it was relevant that my noble and learned friend referred to the specific provision which appears later in the Bill that there should be consultation with the Law Society and the Bar Council when matters of remuneration are dealt with.

Lord Elwyn-Jones

The Law Society and the board.

Lord Mishcon

No. A later provision in the Bill refers to the Law Society and the Bar Council being consulted on matters of remuneration. Everyone is trying to make me ill today! If I were not in a state of good health I suppose I should not be able to resist this.

If one believes that professional people ought to be consulted only when it concerns their pockets, then I suppose there is an excuse for having such a provision alone in the Bill with regard to consultation. As a proud lawyer I should hope that my profession would never fall into merely wishing to be consulted on matters that affected its pocket. We have a wealth of experience and a little wisdom, having gone through the procedures which were praised by the noble and learned Lord the Lord Chancellor over the years in administering this service and the scheme which we are now discussing.

I shall not go into all the adjectives that have been used to describe the force, worth and importance of these regulations in Clause 7. But before one makes vital regulations there must, please, be an obligation to consult with the Law Society and the board before one limits this scheme in area, type, or persons, because this is so vital that it could kill the scheme. That is why the provision is inserted.

It was pertinent to point out that if one has got (and I underline the word "got") under a Bill to consult two professions with regard to their remunerations—and it is a matter of mandatory consultation—please consult them when they have behind them some 40 years' experience to date on what this clause may well affect.

I hope therefore that with calmness and with the utmost friendliness to the noble and learned Lord, Lord Simon of Glaisdale—whose concern for my health I so much appreciate—I support the amendment.

Lord Campbell of Alloway

I speak very briefly, hoping in no way further to endanger the noble Lord's well-being or health. It seems to me that it is wrong to give both branches of lawyers a semblance of a monopoly of consultation. It also seems wrong, with respect, to seek to impose such a duty on a Lord Chancellor in his very high, important and influential office. It seems to smack of a loss of confidence that the noble and learned Lord the Lord Chancellor would discharge his tremendously important duties in a way which it is unthinkable that he would discharge them. The noble and learned Lord the Lord Chancellor would always as a willing party have the widest consultations which would include no doubt both branches of the profession.

On the analogy that the noble and learned Lord, Lord Elwyn-Jones, drew on the question of remuneration, consultation on that aspect has a special history in view of recent legislation. I do not mean to impair the health of any noble Lord, but perhaps that could have had some effect on the drafting of this clause.

The Lord Chancellor

It would be part of good administration on the part of the Lord Chancellor to consult the Law Society on any changes that were being proposed by any regulation in relation to the green form scheme. I have already undertaken that the profession would be consulted over all such regulations. When I say "the profession" I include not only the Law Society which is mentioned in the amendment but also the General Council of the Bar. That would be the general intention in relation to all the provisions in the Bill on regulation-making power.

On the other hand, there are very specific proposals on remuneration in the Bill. As the noble and learned Lord, Lord Elwyn-Jones, has pointed out, Clause 32(7) provides that, before making regulations for the purposes mentioned in subsection (2)(e) above, the Lord Chancellor shall consult the General Council of the Bar and the Law Society". It is of interest that we single out subsection (2)(e) which is the regulation-making power that enables provision to be made, for the remuneration and payment of the expenses of solicitors and counsel and for the courts, persons or bodies by whom, and the manner in which, any determinations which may be required for those purposes are to be made, reviewed or appealed". There is a very special interest in the General Council of the Bar and the Law Society in respect of remuneration under these provisions. But the interest of the Law Society and the Bar in many of the other regulation-making powers is an interest backed by their very special expertise, but one which is shared by a great number of people including the general public and, for example, Citizens' Advice Bureaux, consumer organisations and the like.

As with an earlier amendment with which I dealt on the last occasion on which the Committee considered the Bill, it seems to me that it would be invidious, by a statutory provision of this kind, to single out the Law Society from all the other bodies that might have something to contribute for special consultation. I therefore hope that, in the light of that explanation, the noble Lord will feel able not to press the amendment.

The board referred to is in a special position. The Legal Aid Board set up under the Bill will have a very central responsibility for administering the provisions of the Bill. The Lord Chancellor would certainly wish to consult it and indeed to have its views before any changes were made. The obligation to consult it is so obvious in relation to all the provisions that in my view it it not right to state it expressly in the Bill in the shape of the amendment. I think that the amendment is objectionable in singling out the Law Society, with all its expertise—which I again acknowledge—and interest in these matters, for consultation when there are so many others who could contribute to helping the Lord Chancellor in deciding what he is to do in exercising his regulation-making powers. I hope that in the light of my explanation the noble and learned Lord will be able to withdraw his amendment.

Lord Elwyn-Jones

Most surely, in the light of that explanation, I am glad to do what is suggested. It is perhaps time that more light than heat was engendered in this discussion among lawyers previously conducted in such a good-tempered mood. I hope therefore that I may reduce the temperature but enlighten the scene by withdrawing my amendment.

Amendment, by leave, withdrawn.

Clause 7, as amended, agreed to.

5 p.m.

Clause 8 [Availability of, and payment for, advice and assistance]:

The Deputy Chairman of Committees (The Earl of Listowel)

Before I call the next amendment I must point out to the Committee that if it is agreed to, I cannot call Amendment No. 29.

Lord Silkin of Dulwich moved Amendment No. 28: Page 7, line 14, leave out from ("person") to end of line 15 and insert ("if he is (directly or indirectly) in receipt of income support or family credit under the Social Security Act 1986 or is eligible therefor, and his disposable capital is below the amount prescribed under section 22(6) of the Social Security Act 1986.").

The noble and learned Lord said: The amendment concerns the financial limits for the green form scheme. The present provision in Clause 8(1) is to the effect that the green form scheme shall be available to any person whose financial resources are such as, under regulations, make him eligible for advice or assistance under this Part".

There are three possible ways in which one could deal with the availability in the light of financial resources; the first by regulation as provided by subsection (1), the second by the provision in subsection (1) but taking account and advantage of the provisions of subsections (8) and (9). Those two subsections together make it possible for the regulations to be drawn with reference to social security benefits as defined in the Social Security Act 1986; that is, income related benefits.

The third possible method would be by direct provision in the Bill. The direct provision could be in relation to particular figures, but the Committee may feel that that is not a desirable course because the figures would necessarily have to be amended from time to time as would the provisions following the present framework of subsection (1) unless advantage is taken of subsections (8) and (9). That is to say, if regulations specify figures from time to time there will have to be new regulations to bring up to date the relevant figures.

The present position is that people who seek to take advantage of the green form scheme are very much financially disadvantaged compared with people taking advantage of the civil legal aid scheme generally. The civil legal aid scheme has upper and lower capital limits which currently are £3,000 and £4,850, so that an applicant with capital between those amounts will be entitled to legal aid on payment of a contribution subject to assessment of income. The green form scheme, however, as it is at the moment, has only one capital limit which currently is £825. A person with capital of less than £825 is entitled to assistance, subject to paying whatever contribution is required out of income. No contribution is payable out of capital, but a person with capital of more than £825 is not entitled to the benefit of the green form scheme.

If one looks at the position under supplementary benefit, the capital cut-off for entitlement to supplementary benefit is currently £3,000, so that by no means all supplementary benefit claimants are entitled to green form advice. The Committee may feel that that operates particularly hard against elderly claimants on supplementary pension since they are excluded from the legal aid scheme because of a small amount of savings which they may have accumulated. This discrepancy was referred to by the Legal Aid Advisory Committee as long ago as 1978 in its 27th annual report; it drew attention to this particular difficulty. The committee suggested that no smaller amount than that comparable to supplementary benefit should be the appropriate amount for the green form scheme.

The Committee knows that the Social Security Act 1986 established a new system of income-related benefits which will come into effect next April. Under that new scheme, higher capital limits for entitlement to the new income-related benefits will be introduced and will apply to income support, family credit and housing benefit. Those with capital over £6,000 will be excluded from entitlement to benefit. Capital under £3,000 will be ignored and capital between the two will be assessed as providing a tariff income of £1 per week for each £250 of capital between those amounts.

The problem of a low capital cut-off has therefore been recognised by the Government and Parliament in the social security system. It is more anomalous and unfair that a considerably lower limit should apply in the green form scheme. Even more claimants of the minimal income-related benefits will be excluded from the legal aid scheme when the new social security changes come into operation.

The purpose of the amendment is to equate the requirements for the green form scheme with the requirements under the social security legislation. It is difficult to see why, in principle, there should be any differences. I submit to the Committee that it is desirable, if at all possible, that there should be equality between those two systems. At the very least, we should avoid the necessity for constant changes in figures introduced by regulation.

The noble and learned Lord the Lord Chancellor quite properly can remind the Committee, as I already have, of the provisions of subsections (8) and (9) which enable the regulations themselves to carry out that process of equalisation. My question is: why wait for regulations? If it is right, why not include it in the Bill? It seems to me to be right and logical, and therefore it should be provided directly in the Bill rather than secondarily by a regulation.

Of course, the noble and learned Lord may have a reason for asking for that delay before regulations are made. At the moment it is not apparent why that should be, particularly as it is clearly in the mind of the Government that that method may be ultimately adopted. I hope that the noble and learned Lord will see the force of the view that the provision should be adopted now in the Bill and will give effect to the amendment. I beg to move.

The Lord Chancellor

As the noble and learned Lord, Lord Silkin of Dulwich, has pointed out, the Bill, as drafted, contemplates the possibility of the regulations with regard to eligibility for advice and assistance providing for entitlement by reference to receipt of the benefits. It is desirable to have that flexibility in the formulation of the regulations. However, at present the supplementary benefit capital limit is £3,000, whereas the green form capital limit is £825. For some time it has been felt that, as the average green form bill is approximately £50, it is not unreasonable to ask someone with capital of over £825 to pay towards legal advice. The purpose of the £3,000 capital limit for supplementary benefits is as a test of entitlement to income benefit. It is a different point from whether or not the claimant for advice should be entitled to have it free if the claimant has over £825 of capital in reserve. The present position would not be covered by the clause and I do not wish to restrict the regulation-making power for the future in such a way as to exclude the present position.

I am advised that the amendment, as drafted, has the power of restricting the eligibility to green form advice to persons who receive the benefits mentioned. I am not sure that the noble Lord would wish that because I believe that, from his point of view, it would be a restriction. My advice as to the meaning of the amendment as drafted suggests that that is the effect of it. Whether that be right or not, I would not invite Members of the Committee to approve the amendment for the reasons that I have given.

5.15 p.m.

Lord Silkin of Dulwich

I do not think that the last point made by the noble and learned Lord is correct because the phrase "always eligible therefore" has been inserted into the amendment in order to cover that point. It may be that it does not do so and if so, we should wish to reconsider the matter. However, that was the intention of the amendment.

The main point made by the noble and learned Lord the Lord Chancellor was that the capital figure for the green form scheme should be lower than that for legal aid generally. That is because people ought to be expected to pay if their capital reserve is above a particular figure—I do not think that he is wedding himself to a particular figure—which would be below the social security scheme. He rested that idea on the relatively low figure of £50—relatively low for some people—under the green form scheme. One of the difficulties with that idea is that the present scheme makes it necessary for the solicitor dealing with clients seeking advice under the green form scheme to undertake what in many cases might be thought to be unnecessary calculations of finance which one would wish to avoid so far as possible. Clearly it cannot be avoided entirely because if there is a limit there is a need for investigation up to a point.

The Law Society, which supports the proposed amendment, is anxious that the burden on solicitors giving the advice should be reduced as much as possible, particularly by avoiding wherever possible the need for the financial side, relative to resources, to be placed upon their shoulders. I heard nothing in what was said by the noble and learned Lord the Lord Chancellor which seemed to militate against the arguments that I and the Law Society put forward as regards the desirability of creating equality. However, we shall look at the noble and learned Lord's answer and may wish to return to the matter at a later stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Lord Elwyn-Jones moved Amendment No. 29: Page 7, line 15, at end insert— ("Provided that no person shall be excluded by reason of such regulations from obtaining advice or assistance from a law or advice centre.").

The noble and learned Lord said: Under Clause 8 of the Bill there are provisions for availability of and payment for advice and assistance. Subection (1) provides: Advice and assistance to which this Part applies shall be available to any person whose financial resources are such as, under regulations, make him eligible for advice or assistance under this Part.".

Subsection (2) provides: If regulations so provide, advice or assistance to which this Part applies shall be available, in prescribed circumstances and subject to any prescribed conditions, to persons without reference to their financial resources.".

We find troublesome the fact that it leaves the position in a way which may not be intended but which may result in many people who require advice and assistance being deterred from taking the step of going to a law or advice centre. The vast majority of those who go to law and advice centres are normally, by the nature of their problems, poor or of limited means.

Already many potential clients are deterred from approaching private practitioners because they are daunted by, or afraid of, the prospect of a means test; or because they may (wrongly, as I am sure will be the case) believe that they will have to pay for the solicitor's services. If law and advice centres were to conduct means tests, those people would be deterred from seeking any advice whatever. It seemed to us to be desirable to put the matter beyond peradventure by a specific provision, which is provided for in Amendment No. 29 and which states: Provided that no person shall be excluded by reason of such regulations from obtaining advice or assistance from a law or advice centre". It may be that the matter could be regulated by some redrafting. However, the purpose of the amendment is not to deter people who, with the language in the Bill as it stands, might be frightened of going to a law centre or an advice centre. I beg to move.

The Lord Chancellor

I am not absolutely certain that I have completely understood the problem to which the noble and learned Lord's amendment is directed. Clause 8(2) gives power in prescribed circumstances and subject to prescribed conditions for advice or assistance to be available to persons without reference to their financial resources. That is a general provision which might well have the effect in particular circumstances to which the noble and learned Lord has referred. However, this amendment, as I understand it, adds to Clause 8(1). Clause 8(1) deals with the financial resource limits for eligibility for advice or assistance under this part of this Act; the matters which the noble and learned Lord, Lord Silkin of Dulwich, considered in the last amendment and with which I endeavoured to answer.

It is possible that a law centre might be able to provide advice or assistance under this scheme. If so, there is no reason why a person who goes to a law centre should be entitled to have the advice free if receiving the same advice in the same circumstances from a solicitor involves some form of means test. It is true that the system that may operate if he goes to a law centre under Part II, because there has been a contract between the Legal Aid Board and the law centre for advice, may enable us to operate without the full conditions of the advice and assistance scheme. That is one of the possibilities and one of the reasons why we provided that advice and assistance might not be required where a person, as a result of a contract between the board and the law centre, went to the law centre.

However, it seems quite wrong that the question of whether or not financial limitations apply should depend solely on the question of whether advice is given by a private solicitor or by a law centre. That would mean that the very wealthiest person in the community, if he went along to a law centre, would receive advice for nothing whereas if he went to his solicitor, especially if he was not qualified for legal aid, he might be expected to pay perhaps substantially for it. Therefore, it would surely be an abuse of the law centre system that in all circumstances the wealthiest person could obtain publicly-funded legal help by that method.

It may be that that is not exactly the problem that this amendment addresses, but, so far as I have been able to understand the matter, there is that difficulty and I could not advise the Committee to accept this amendment in the light of the explanations of it that have been given.

Lord Mishcon

If I may say with respect to the noble and learned Lord, I believe that he has failed to understand, for very good reason, the purpose of this amendment and what really happens on the ground. I assure the noble and learned Lord that it would be an odd eccentric who wandered into a law centre, being possessed of funds, in order to obtain advice. It may happen but it is in the minority of cases. The average person who turns up at the law centre is usually poor, very often lacking in education and fearful of walking into a solicitor's office, and fearful of facing a means test. If there were to be some sort of means test that the law centre had to advertise and administer, then one can take it for granted on the experience of law centres—I am told this by many who run them now, and as I used to do it in days gone by I can well understand that that is the experience—that, if those people thought they would have questions addressed to them through some sort of means test, they would keep away.

I know that the noble and learned Lord has the ideals of law centres and those who attend them very much at heart and aims to see that they are properly looked after. It was for the purpose of bringing this to the attention of the noble and learned Lord and the Committee that this amendment was tabled. It is intended to ensure that there is no means test and no test at all which will frighten off that sort of person from attending a law centre.

The noble and learned Lord the Lord Chancellor may say that in principle he disagrees with this and thinks that there has to be some sort of means test or income examination, or something of that kind, in which case, if I may so express it, that is honest opposition to the amendment. We are saying that that should not be so. Therefore, it becomes a division of opinion. I hope that I have explained to the noble and learned Lord the reason for tabling this amendment.

The Lord Chancellor

I am grateful to the noble Lord for that further explanation. The situation, of course, is that advice given in a law centre as a result of arrangements made under Part II of the Bill—contract arrangements with the law centre—will not be covered by the advice and assistance provisions. Therefore, the contract arrangements may well be different from the eligibility for advice and assistance arrangements. That is really the problem that I have. Part III is dealing with advice and assistance under the ordinary system.

The noble Lord says that it would be an eccentric who went along to a law centre, if he was possessed of large means. I started off my life in the law in one of the early examples of something like a law centre, in the shape of the Edinburgh legal dispensary, where people who were not very wealthy came along for advice from relatively inexperienced people with, of course, experienced people among them who were trying to help these people.

I understand that it would be abnormal to have people of great wealth attending. On the other hand, if it were discovered that free legal advice of high quality was available at law centres, that pattern might change. That is not beyond the bounds of possibility. In any case, the arrangements under Part II and Part III are distinct arrangements and the Part II arrangements do not automatically cover or attract the Part III restrictions on eligibility. That may meet the point raised by the noble Lord and his noble and learned friend in this amendment.

Lord Harmar-Nicholls

If we approach it, as the noble Lord, Lord Mishcon, put it, from the point of view of how it happens on the ground—which means the practical approach as distinct from theory—I think my noble and learned friend is nearer what happens on the ground than is the noble Lord, Lord Mishcon; though he was presenting himself, perhaps with very good reasons, as one who could interpret the on-the-ground approach. In many cases people have become wealthy and retained their wealth because they are always eager to receive for nothing that which they would have to pay for if they did not know it was available more cheaply. That is how they keep their wealth. Those of us who have played some part in local government and have been involved with general administration are very well aware that there is perhaps a large minority of people who can afford to pay, but who do not if they find they can have something for nothing. As the words stand at the moment, and if they are tied with subsections (8) and (9), I do not believe that those who are really in need are going to be denied anything. My other on the ground interpretation is that I do not believe today that people are put off by an offence against their dignity if their means are looked at before they have some of the gifts and advantages that are available in this country.

That used to be the case for those of us who are old enough to remember or who played some part in the early 1930s regarding the means test as it was then presented. It was much misrepresented and there were many exaggerations about the way it was applied, but when we investigated we found that that was not the situation at all. In those days when the means test had become a dirty word, and the innovation that went with it, people were put off. Despite the arguments that the noble Lord, Lord Mishcon, put forward through his on the ground approach, I do not believe that people who really need assistance are nowadays put off because their means may have to be examined.

As regards the other leg of the argument, I believe that people who can afford to pay ought not to ask for free gifts and free attention, though too often they do. It is part of human nature that some people want to get all that is going whether or not they deserve it.

That is my on the ground reaction to the words both as they are in the Bill and in the amendment, and I believe that the Bill itself more closely reflects the on the ground situation than the amendment.

5.30 p.m.

Lord Elwyn-Jones

I do not know whether I have authority to speak on the ground or not. I have certainly been involved with the law centre problem all my professional life and as long as it has existed; as have certain members of my family. The fact is that people do not pay for advice that they receive from law centres and nor do they expect to have to pay. It is free legal advice and that is one of its qualities. It is an open door for those who want help. As my noble friend said, he will be a very eccentric character with his pockets full of pounds who goes into a law centre for advice. He might be well advised to do so, but at the moment he can do so and he would not pay or be expected to pay.

The only question which arises as regards the language of the clause is whether it would create a fear in the minds of people who now go through the open doors of the law centres. It may prevent them from doing so. They may find themselves subjected to means testing. Perhaps the noble and learned Lord will look at that aspect again before Report stage and give it some thought. Perhaps he will consult with some of those who have experience of running law centres. I believe that they will find the clause disturbing.

If the noble and learned Lord would be kind enough to give further thought to this matter I am sure that it will be very well received by those splendid young people throughout the country who are running the law centres. They are one of the most impressive developments that have come into my professional life. They do it for minimal charges and the vast amount of them give advice for nothing. I think they would be encouraged if this fear was not permitted to come into being.

The Legal Aid Advisory Committee, as my noble friend Lord Mishcon has reminded me, took the view that: the foundation of legal aid is good, early advice, to which access should be restricted only so far as is absolutely necessary to prevent abuse. We regard it as particularly important not to put obstacles, whether of a financial nature or not, in the way of access to the initial, diagnostic stage of advice". I draw attention to that view of the Legal Aid Advisory Committee and all I ask at this stage is whether the noble and learned Lord, after taking advice, is willing to give further thought to the matter.

Baroness Faithfull

I am somewhat confused over this amendment. With regard to law advice centres I quite understand the point of view of the noble and learned Lord, Lord Elwyn-Jones. As regards advice centres—if by that is meant citizens' advice centres—people of all sorts and conditions go into them for advice over a wide range of subjects. Honesty compels me to say, though I would like to say something different, that people of means go into citizens' advice centres because very often, particularly in country areas, they are the only places where they can receive advice.

I also join with the noble and learned Lord, Lord Elwyn-Jones, in suggesting that perhaps this can go back to be thought about again. In country areas where there is no other way of getting advice, whether you are wealthy or poor, you go to the Citizens' Advice Bureau. Perhaps the situation with regard to law centres and Citizens' Advice Bureaux is different.

The Lord Chancellor

I sought to explain the position. The clause into which this amendment is sought to be inserted deals with advice and assistance, which is legal advice and legal assistance, in terms of the statutory definition which we have in Clause 1. It is not intended to have any bearing at all on advice in a Citizens' Advice Bureau on matters of a general kind.

The idea in Part III is to set down the conditions upon which legal advice and assistance can be obtained; that is to say, the green form scheme. All I am saying at the moment is that there does not seem to be any particular reason why if you go to an ordinary solicitor under the green form scheme you have to pay, whereas if you obtain exactly the same advice under the same scheme at a law centre, you do not have to pay.

On the other hand, what we are hoping to introduce in Part II is a different system. An option is given to provide legal assistance through law centres which would not necessarily have all the qualifications required for the legal advice and assistance under the green form scheme. It is rather a complicated matter and, like every other matter that has been raised, I shall certainly think over what has been said between now and Report stage, and beyond.

Lord Elwyn-Jones

In the light of that generous conclusion to his remarks by the noble and learned Lord I ask leave to withdraw the amendment.

Anmendment, by leave, withdrawn.

Clause 8 agreed to.

Clause 9 [Financial limit on prospective cost of advice or assistance]:

Lord Mishcon moved Amendment No. 30: Page 8, line 21, at end insert— ("(4) The prescribed limit referred to in subsection (1) above shall be not less than the equivalent of four times the hourly rate of remuneration for solicitors giving advice or assistance prescribed by regulations made pursuant to section 32.").

The noble Lord said: Let me briefly explain what happens now in regard to remuneration on the matter which we are considering, advice and assistance given under the green form scheme. Its origins are in the Legal Advice and Assistance Act 1972. That was followed by the Legal Aid Act 1974, which set down financial limits on the amount of assistance a solicitor could give under this green form scheme. It said it was variable by regulation.

The limit that was set in 1974 was £25. That represented then—it is a little different now—four hours' work carried out by the solicitor. In other words it was charged at roughly £6 per hour. If it became necessary to exceed that limit then the solicitor had to make a special application for an extension from the legal aid area office. That situation has changed over the years. It remained at that level until 1980 when it was raised to £40. Then it was increased to the present £50 limit—and there is a limit of £90 for undefended divorce cases—in November 1983. So far as I know, there has been no change since November 1983.

There is no undertaking from the Government that there will be a review on a regular basis. Therefore it was thought sensible, instead of having administrative trouble and expense, quite apart from what might be a delay in matters, to see to it that the maximum was not less than the equivalent of four times the hourly rate of remuneration, which was the basis upon which this first started when it was £25.

I am moving this amendment (which has the support of the Law Society) in order to ensure that there should be a saving in administrative costs, that it should be upon the clear basis of four hours' work as the maximum before anyone needs apply to obtain an extension of that limit. If it is done in that way, one would presumably be ensuring that it was dealt with properly by regulation on that basis in the future. I beg to move.

The Lord Chancellor

There are very few areas in which private persons can incur public expenditure and expect it to be reimbursed without prior approval. On the other hand, for the green form scheme to work it is highly necessary that where a person wishes advice he should be able to go to a solicitor and get some without having to go for prior approval. It is the limit to be set for that that is in question in these amendments.

As the noble Lord, Lord Mishcon, has said, the initial limit for ordinary advice was £25. That has been raised twice, and the last time it was raised was in November 1983, when it was raised to £50. There is a separate and distinct limit for undefended divorce work. When legal representation was withdrawn, from undefended divorce work under the administration for which the noble and learned Lord, Lord Elwyn Jones, had responsibility, the cover for undefended divorces was put in the green form scheme, and it was last raised in 1985 to its present figure of £90. So it is £50 for ordinary work and £90 for undefended divorce work. Of course there is authority to seek further work if the case seems to require it, but that necessitates an application.

The idea of setting the limit by reference to the hourly rate may not be particularly attractive. What is needed is a simple check which is very easily made, and the cash limit has been found very practicable from that point of view. I am not surprised that the Law Society would support an increase in that. I do not think that the noble Lord mentioned the precise figure that would be involved in an increase to the equivalent of four hours' work, but it would be highly desirable to have some figure instead of any reference to hours. It is also perhaps relevant that the Public Accounts Committee in another place in 1986 was concerned that green form expenditure was not subject to enough checking. There is an area of difficulty in trying to balance reasonable control on public expenditure on the one hand and the avoidance of unnecessary checking and controls and reference to prior approval on the other.

I am certainly willing to consider the matter. It has been kept under review over the years, and I have stated the last occasions on which the limits were changed. Any increase in the limits has been found to produce some increase in expenditure, naturally enough, and therefore one would need to be rather careful. I am certainly not inclined to accept the amendment because, apart from anything else, it would be highly desirable to refer to a particular figure. As I have mentioned, the figures are set at £50 and £90 at present. They are clear and easy to apply, although I can understand that not everyone feels them to be large enough.

5.45 p.m.

Lord Mishcon

I am most grateful to the noble and learned Lord for his explanation of his views in regard to this amendment. I wonder whether he could assist me in this way. In view of the fact that this was last looked at in November 1983 and we are now over four years in advance of that, could he at least say that it is the intention of his department to review these matters annually? I am not suggesting that there be a promise of an increase in remuneration annually; but I am asking whether it is the intention of his department to review the remuneration annually.

The Lord Chancellor

The last alteration on review was in 1985. I certainly intend to keep the matter under review; but it might be rash of me to promise the particular intervals at which the reviews would take place. As I have said already, and as the noble Lord knows, there are a number of matters of competing priority that require one's attention. Certainly these limits will be kept under review in view of the considerations that go to show that they must be related to some extent to present circumstances.

Lord Mishcon

I have done my duty at the behest of the Law Society, and obviously the Law Society will consider what the noble and learned Lord has said. I in turn shall consider what they have to say to me. In those circumstances, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

Clause 10 [Payment for advice or assistance otherwise than through legally assisted person's contribution]:

Lord Silkin of Dulwich moved Amendment No. 31: Page 8, line 32, after ("property") insert ("other than his dwelling house, clothes, household furniture and the tools and instruments of his trade").

The noble and learned Lord said: Clause 10 provides for payment for advice or assistance where it does not come through a legally assisted person's contribution. In particular, subsection (2) makes provision for the first charge procedure as a result of which, where property is recovered or is able to be retained as a result of the advice or assistance, the excess costs, if there are any, payable by the assisted person who is unable himself or herself to pay them, become the first charge on the property itself.

That system has existed for a long time and it has always been felt that it can operate unfairly, particularly when matrimonial cases and the family home are involved. I appreciate the difficulties of getting rid of the system altogether, and this amendment is not intended to do that. The amendment takes advantage of the provision in the next clause of the Bill which deals with the limit which is to be paid by assisted persons both in relation to the assessment of their financial resources and also at a later stage where the question of execution of their property arises. Very reasonably, I think, that clause makes provision that the legally assisted person's dwelling house, clothes, household furniture and the tools and implements of his trade", are exempted from consideration in both of those calculations.

The clear principle behind that is that those assets are essential matters—the home, clothes, tools of trade and so on—and that they ought not to be removed from the assisted person by virtue of the need for advice and assistance. If that is right in dealing with assessing financial resources and if it is right in dealing with execution at a later stage, it is fair to ask why it is not also right in relation to the system of the first charge on property so that at least that part of the property which falls within the exception contained in Clause 11 would equally fall within the property referred to in Clause 10 in relation to the first charge.

Of course it does not mean that the solicitor would not be paid, because Clause 10 provides that to the extent that the sums due to the solicitor are not payable by the method of the first charge, then the board is required to pay the balance. I put this forward as a reasonable compromise. It does not go the way that many people have advocated who would like to see this system disappear altogether, but it goes a reasonable way in the right direction in equating the two areas, which it is difficult to see differ from one another in principle. On that basis, I beg to move.

Lord Denning

This raises one of the most controversial matters that the courts have had. In this simple case, when a man suffers a personal injury, has legal aid and gets £5,000 in damages, in the ordinary way the costs which the solicitor has incurred have to be recovered out of that £5,000, just as if he is an ordinary litigant. When he recovers £5,000 damages, the solicitor has a charge on the property recovered or preserved for his costs—that is sensible enough—just like any ordinary litigant.

The trouble that has vexed the courts for many years in cases coming up to this House judicially is the question of the matrimonial home when husband and wife dispute who owns it, whether it is half and half or whatever it may be, and each gets legal aid. Then the solicitor has a charge for legal aid costs on the property recovered or preserved, but the house itself has been recovered or preserved by one or other.

The courts have had great trouble in saying that the solicitor's costs—sometimes up to the House of Lords—comes out of the value of the house. In other words, the legal costs take away the value of the thing they have been fighting about all the time. These cases have vexed the courts. I know that one case in which I was concerned came to this House. There have been attempts in order to remedy that from time to time to make the charge limited to such and such or only after £2,500. In other words, attempts have been made to remedy that injustice so that the charge should not take away the whole value of the house.

I should have thought that the best way is not to make the blanket exception which this amendment would do but as it is such a controversial and difficult question let it be put into the regulations. It has been attempted hitherto, but this would be an opportunity. The opening words are: Except in so far as regulations otherwise provide". This seems to me to be a difficult case, which your Lordships would be unable to discuss fully or sufficiently in the Bill itself, and it would be an appropriate matter for regulation. It has been tried, although not very successfully, but let them try again by regulation and not by this amendment.

Lord Hailsham of Saint Marylebone

I would go even further than my noble and learned friend on the Cross-Benches on this amendment. The noble and learned Lord who proposed it said that it was a compromise. I am afraid that I do not accept that view. That is a false analogy. The list of exempt property that he has sought to enumerate in his amendment has a long and interesting legal history behind it and to this day has its roots in the things which a bailiff may not seize by way of execution against a debtor.

That is not the right analogy, with great respect to the noble and learned Lord who proposed the amendment. How often in one's early days, before there was such a thing as legal aid, one had to tell somebody, "It is true that you will probably win this case but it will all be eaten up with the costs and therefore it is not worth the candle. The reason is that the solicitor has to be paid and out of what he is paid he has to pay counsel too".

When the legal aid scheme was introduced in 1949, and to this day, it was provided that, on the analogy of what my noble and learned friend has referred to, a solicitor's lien was available on property recovered or preserved in unassisted litigation, and that analogy should apply to assisted litigation. The so-called charge on property recovered is not by way of analogy to the things that the bailiff cannot seize; it is applied by way of analogy to the solicitor's lien for costs on property or money recovered or preserved. The attempt to draw an analogy to something quite different, which is the goods exempt from execution, is a totally misguided legal principle.

But as my noble and learned friend pointed out, in practice what really counts, or what most frequently counts, is the dwelling house—the matrimonial home, as the jargon has it—in a matrimonial case, which may be worth £60,000 or £100,000, or even a great deal more, at least on paper. When the wife gets the matrimonial home, as a result of the proceedings under Section 25 of the 1973 Act, as amended, it does not seem to be at all unreasonable that that house should be charged with the cost of the litigation. Whoever else is responsible for the breakdown of the marriage between husband and wife, the taxpayer is not.

The purpose of legal aid is to provide that nobody should be denied access to the courts by reason of absence of means. However, ex hypothesi, if the parties, although they may not have a large bank account, have an asset worth between £50,000 and £100,000, they are not people without means. If they have to fight it to the bitter end in the matrimonial court I do not see why the taxpayer or the Consolidated Fund should pay for it.

This is one of those cases where one has a good deal of sympathy with the thinking behind the amendment but where an injustice would be done if it were to be accepted. There are—and I have no doubt that when my noble and learned friend comes to reply he will set them out—a number of mitigating factors removing the harshness of the statutory charge. I am far from saying that they are a bad thing, because these things can operate harshly and it is right that the Government should make concessions, especially as regards the matrimonial home. They have done so. Whether the concessions are sufficiently large or too much or too little does not arise on this amendment. With respect, and in support of what has fallen from my noble and learned friend Lord Denning, I simply say that the analogy which it has been sought to introduce is a false analogy and a bad principle.

6 p.m.

Lord Ackner

I should like to echo what my noble and learned friend Lord Denning has said. As my noble and learned friend the Lord Chancellor will recall, the Appeal Committee has recently drawn attention to the need to provide by regulation for what are very difficult cases. The example which my noble and learned friend Lord Hailsham has given describes a simple situation which really happens. The wife does not get a £100,000 house. What happens is that there is a dispute between the husband and wife in regard to a £100,000 house on which there is a £60,000 mortgage. The order is that the house be sold and the wife take 50 per cent., the husband, if he can, retaining the other share—either the proceeds or by raising a mortgage. By the time the costs are taken out of the value of the remaining equity there is basically nothing left and the litigation has achieved an absence of accommodation for both husband and wife. It is that situation which requires mitigation. The need to improve the regulations has been the subject matter of the attention of the courts which have asked that something be done about it. It has not been done yet.

Lord Meston

I agree that the amendments do not deal with the nub of the problem as it particularly affects matrimonial litigation. As has been indicated, in some respects matrimonial litigants are in a better position than other legally aided litigants. They have a £2,500 exemption if what they receive is simply cash. If they receive a dwelling-house the operation of the charge is suspended. In effect, that can be an open-ended interest-free loan secured by the charge which they can carry over to a substituted property. A matrimonial litigation is expensive. It involves an area of the law which is discretionary. Investigation into finances even in the simplest cases can be quite expensive. Emotions run so high that this is an area of litigation on which it is not easy to compromise.

The fact of the matter is that there are still anomalies. The £2,500 limit has never kept properly in line with the supplementary benefit capital disregard figure. More importantly there are the anomalies, which have just been referred to by the noble and learned Lord, Lord Ackner, whereby if what you get instead of a home is cash for a home the charge operates. That was most recently highlighted by the House of Lords in its judicial capacity in Simpson v. Law Society. What is urgently needed is a rationalisation of the operation of the charge to deal with that anomaly to clarify whether and to what extent the charge operates on chattels and whether it is now time for the charge to be interest-bearing.

These are all matters on which practitioners are anxious to have some answers. This area has become something of a minefield for the ordinary matrimonial practitioner.

The Lord Chancellor

The subject matter of the amendment has been plainly stated by a number of noble Lords and I do not wish to weary the Committee by a repetition of it. As my noble and learned friend Lord Hailsham explained, the origin of the matter is the lien of the solicitor for his charges over property recovered or preserved by virtue of the litigation on which the charges arose. When the Law Society came as the legal aid authority in place of the solicitor it seemed reasonable that a similar charge in favour of the Law Society should arise.

In the ordinary case in which the person suing succeeds he will normally get an award of costs in his favour. Those costs will discharge, if the taxation is reasonably favourable to him, the total amount that remains due to his solicitor. If the costs awarded are for any reason not sufficient the next thing that is attacked is the property which is recovered or preserved. There may he cases in which a party is successful in the main but unsuccessful in some matters incidental to the proceedings where a charge over these properties might arise.

So far as I have been able to understand from what I have read and heard, the principle difficulty has arisen in matrimonial cases, as the noble Lord, Lord Meston, and others have said. As the noble Lord pointed out, there is in such cases a mitigation in that the first £2,500 recovered or preserved is not subject to the charge. In that way matrimonial proceedings are more favourably regarded than others. Secondly, the payment of the charge is normally postponed when a matrimonial home is awarded to the legally assisted person. The real problem that has been focused on so far occurs when instead of the matrimonial home a sum of money is awarded—for example, to the wife—the intention being that the wife should purchase from that money a home for herself and probably the children.

The difficulty is that the statutory charge cannot be postponed in that situation. A suggestion has been made in this respect, possibly with a requirement to pay interest, perhaps also postponed, as a quid pro quo for postponing the charge on the money. The difficulty that has been highlighted in examining the matter is whether or not there is power to make conditions which would impose an obligation to pay some rate of interest.

Generally speaking, this is a problem which is best dealt with by regulations as the noble and learned Lord, Lord Denning, has said. It is a very difficult and rather detailed problem and one in which new kinds of examples are apt to occur from time to time, as the difficulties which beset matrimonial practioners in trying to resolve their clients' disputes are encountered.

I am considering this matter from the point of view of the regulations, but it may be that the regulation-making powers, wide as they are at present, may not be entirely adequate to solve all the problems. Therefore I may have to come to your Lordships later with an amendment on that aspect. But I venture to suggest to the noble and learned Lord, Lord Silkin of Dulwich, who has proposed this amendment in his usually clear and lucid terms, that it is not perhaps the best way to go about it in view of the detail that is involved. The regulation-making power is in this case a particularly useful one and it is to that that we must look, although, as I say, it may require to be extended to give us power to cope adequately with all the problems which we see at present.

Lord Silkin of Dulwich

I am grateful to all noble Lords who have spoken on this quite important amendment, and particularly to the noble and learned Lord the Lord Chancellor for his speech in which he recognised that there are problems. He wishes to go much further than my amendment in looking to possible solutions to those problems. Let me say to the noble and learned Lord, Lord Hailsham, that, whatever the historical basis of the first charge, it does not seem to me to alter the position. That makes it difficult for me, at any rate. to accept the validity of the distinction which provides that an assisted person's dwelling-house, clothes, household furniture and the tools of his trade are not to be taken into account in assessing his financial resources, and are not to be subject to execution, but that all of those items are to be taken into account when it comes to the payment of costs out of property which has been received, recovered or preserved. Logically it seems to me that if you disallow one there is good ground for disallowing the other.

However, what the noble and learned Lord the Lord Chancellor has said, echoing very much what was said by the noble Lord, Lord Meston, and the noble and learned Lord, Lord Ackner, is that there are wider problems that need to be looked at. I accept that that is probably so. My attempt to resolve the problem by what I chose to call a compromise solution probably does not deal with some of the more difficult problems which exist and which it is highly desirable the Lord Chancellor should look at, in terms either of regulations or of primary legislation by way of amendment if that he found necessary.

On the basis of the assurance that I understood him to be giving—namely, that he will look at the problem as a whole—I think that in that context it would be right to await the result of that hoping that something will come forward reasonably quickly. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 agreed to.

Clause 11 agreed to.

Clause 12 [Costs of successful unassisted parties]:

6.15 p.m.

Lord Silkin of Dulwich moved Amendment No. 32: Page 9, line 35, leave out from ("party") to ("and") in line 37.

The noble and learned Lord said: Clause 12 deals with the costs of successful unassisted parties and continues the position which exists today, that they may in certain circumstances where the court considers it proper have their costs recovered when they are not recovered from the assisted person. The provision in subsection (4)(b) is that, in the case of costs of proceedings in a court of first instance, those proceedings were instituted by the assisted party". That condition must be right, but not a provision which could apply where the party seeking relief started the proceedings. The paragraph goes on to provide, and the court is satisfied that the unassisted party will suffer severe financial hardship unless the order is made". It is those words which seem to me not merely unnecessary but wrong in principle.

If an unassisted person has been successful in proceedings and is not in a position to recover his costs from the assisted party, I find it hard to see why it is necessary for him to establish severe financial hardship—if indeed one knew exactly what that meant—before he could seek to have his costs paid by the public. In circumstances where a person is brought to court by someone who fails in the action, and the person who is assisted is unable to produce the costs which would in other litigation be the consequence of his failure in the action, it seems to me wrong that the unassisted party should suffer as a result, irrespective of whether there is a question of severe financial hardship. As it is, the requirement of severe financial hardship seems an unfortunate duty to place upon the court.

It is to be observed that the paragraph which follows is extremely wide. It provides that, in any case, the court is satisfied that it is just and equitable in all the circumstances of the case that provision for those costs should be made out of public funds. I do not really follow why one should add to that very wide discretionary power the provision that before doing that the court has to be satisfied that the unassisted party will suffer severe financial hardship if an order is not made. No doubt the court, in pursuing the requirements of subsection (4)(c) in deciding whether it is just and equitable in the circumstances, will be likely to take account of whether it is dealing with a person of very low means or a person of very great means as one of the possible factors. I can see no logic in writing it into the Bill to override the other part of the clause. I hope that the noble and learned Lord the Lord Chancellor will accept that logic and accept the amendment. I beg to move.

Lord Denning

The provision relating to advice and assistance is grouped with Amendments Nos. 37, 38 and 39, which relate to the civil procedure part of the Bill. The amendments raise a matter which has been much debated in the courts and upon which the courts have prayed and hoped that Parliament would intervene to cure an injustice. We put forward that intervention in the amendments.

I shall say what happens when a legally assisted person comes before the courts and loses his case against one who is unassisted. The Court of Appeal or this place can do what is just and equitable in the matter. But a special provision is made to deal with a court of first instance.

Let me give an everyday illustration. In a motor car accident, for example, a man may drive out of a side road while someone is coming along the main road. The latter runs into him and seriously injures him. There it is. He goes to his lawyer and says, have been seriously injured. I have a fair chance of winning, although I was coming out of the side road. The other man was going much too fast and didn't keep a good lookout, so I have a reasonable chance of suing him". The lawyer says, "That's a very good thing. Sue him. We will get legal aid for that". The man says, "What about the costs if we lose?" The lawyer says, "Don't worry about the costs. You won't be liable to pay any costs unless the other side suffers severe financial hardship". In 99 cases out of 100 that other side is insured and so will not suffer financial hardship at all. What is the result? When this legally aided person obtains legal aid he does not pay for any lawyers. He is armed with a tremendous weapon. He can go on, at the expense of the state, to fight the case through. Although he loses, he does not have to pay a penny in costs because the other side has an insurance company behind it.

The cards are altogether in the hands of the legally aided person. He can say, "Yes, go ahead. Everything is all right by me. If I win that's all right because I shall get the damages; but if I lose I haven't got to pay anything. Heads I win, tails you lose". It is as simple as that. In those circumstances the defendant may say, "Well, I am going to be put to all this expense in defending a case brought by this legally aided person. I would rather not go to all that expense. I'll try and buy him off". And he often does so. The legally aided person is bought off because it is too expensive to fight the case. That is the outline of the general run of cases.

In order to emphasise the importance of this point I shall mention two cases in which the judges have appealed to Parliament to remedy the matter. The first is the well-known case of Kelly v. London Transport Executive reported in 1982, 1 Weekly Law Reports, page 105. Michael Kelly was a plausible Irishman and a chronic alcoholic. In 1974 he obtained a job with the London Transport Executive. The next day he bumped his head and received a slight cut which did not worry him much because he went back to work. He stayed there and worked for six months. Then he left and went on social security. In 1976, two and a half years after this little bump, he went to a firm of solicitors and told them that he was suffering from depression and eye trouble all due to that little bump. The solicitor said, "That's all right. You've had this little bump and we'll get a doctor to say how you have suffered from depression ever since". In other words, he obtained legal aid and brought an action against London Transport Executive.

The London Transport Executive offered Mr. Kelly £4,000, to buy him off. But, no, that would not do. He could go on without any trouble to himself because he would not have to pay the costs. When it came to trial in 1980 (six years after the little bump), the judge, Mr. Justice Caulfield, said that the claim was bogus; that the plaintiff was an entirely unsatisfactory witness; and that the medical report had been very obligingly given by the medical man. Mr. Justice Caulfield said that it was just and equitable that provision should be made for the costs of the London Transport Executive to be paid out of public funds. But no, it was said that London Transport could not have that because it would not suffer severe financial hardship.

When the case reached the Court of Appeal, I was sitting there with my noble and learned friend Lord Ackner beside me. Lord Ackner said: The judge correctly held that it was just and equitable for the defendants to seek to obtain costs against the legal aid fund in a claim that had no foundation, which was riddled with defects and which they sought to buy off because of its nuisance value". It was just and equitable that the legal aid fund should pay the costs of the London Transport Executive, which, as I remember it, were only £8,000. We had to decide whether it would be a severe financial hardship for London Transport Executive to pay £8,000. I am afraid we all said, no, it could afford £8,000.

In that case, a legally aided plaintiff had nothing to lose by putting forward a bogus claim and getting lawyers to put it before the court. He could go on indefinitely without any loss to himself, and without paying any costs himself. But what about the legal aid fund? Surely those who were responsible for the case ought to have paid the costs. I am sure that if the Court of Appeal had been dealing with the case it would have held that it was just and equitable; in fact all of us would. It was as the judge said; it was just and equitable that the legal aid fund should pay the costs, but the judges could not allow that because of the provision about severe financial hardship. That is an example of a case where a legally aided plaintiff loses against an unassisted defendant.

I want to take the reverse case, which is dealt with in my later amendment. This is where the plaintiff is unassisted and the defendant obtains legal aid. I have here the case of Thew v. Reeves 1982, QB, page 172. Mr. and Mrs. Thew bought a good photographic business. In 1975 they sold it to Mr. Reeves for £14,000, £5,000 cash down, the balance of £9,000 payable monthly by instalments over five years. I am afraid that Mr. Reeves fell down in his instalments. He did not pay them, so Mr. Thew very properly and unassisted sued him in the courts for the instalments. Mr. Reeves then thought up a defence. "Oh", he said, "I was deceived by the fraud of Mr. Thew. He gave me the profits wrongly estimated on the business; I have got a defence because he was fraudulent". He got legal aid, if you please, for that defence. He told some cock-and-bull story to the lawyers about the fraud.

It then so happened that he failed when Mr. Thew won the case because the fraud was not proved at all. The judge in that court said that he was afraid he was bound to say that Mr. Thew could not get costs against Mr. Reeves because the provision about costs applied only to a successful and exceptional defendant. At all events, it was the other way about.

I must say that Mr. Thew had a very raw deal. He sued this man who had charged him with fraud, he disproved the fraud and showed that he was a perfectly honest man. However, he did not get any costs even though the other man had legal aid all the way through. If I may say so, the judge who tried the case said that it showed the unacceptable face of British justice because one man had got legal aid and could not be made liable for the costs.

Referring to an earlier case I myself was involved in, two judges, including the Vice-Chancellor, Sir Nicolas Browne-Wilkinson, expressed the hope that Parliament would intervene so as to remedy the injustice done to an unassisted. party when the other side was legally aided. However, Parliament seems to pay no heed to the hopes and prayers of the judges.

That is why, having been involved in these cases and being now retired, I would repeat the hope and prayer which the judges have been formulating. It is that this injustice should be remedied, the injustice when the legal aid fund maintains a case, presses it forward and, if you please, loses it. Then it will not pay the costs of the other side. That is the provision of this clause which has been there since 1974, a provision which the judges have protested about. Here is an opportunity to put it right, to make the courts of first instance the same as the courts of appeal. Let them do what is just and equitable in the matter.

That is the object of these amendments and I hope Parliament and the Lord Chancellor will listen to the hopes and prayers of the judges in those cases which I have cited to your Lordships.

6.30 p.m.

Lord Hailsham of Saint Marylebone

My noble and learned friend Lord Denning has ridden this horse with great persuasiveness and even greater enthusiasm on a number of occasions before. It is impossible not to sympathise with him up to a point because, as I shall endeavour to show, there is a certain degree of injustice about the result of cases brought by impecunious plaintiffs or defended by impecunious defendants who have no real case to bring or defend.

However, I think he has overstated his case and possibly been unjust to Parliament up to a point. Theoretically we are talking about advice by way of representation only in this amendment. But the debate has passed that stage and we are really talking about civil litigation in general. Perhaps I may remind the House where the situation would have stood under the cases of my noble and learned friend before there was any legal aid at all. Of course he practised even longer than I did in the days before the war when he was A. T. Denning, KC, and I was only a little pip-squeak of a newly called barrister.

I remember very clearly what the real situation was then. Of course Mr. Kelly would have brought his case just the same. I shall not name the firm of solicitors he would have consulted, nor a list of them, but they were well known to practitioners at the time; they were known as "ambulance-chasers". Of course he would have brought his case against the London General Omnibus Company or whatever. He would have lost when the judge heard the case and the London General Omnibus Company would never have got their costs out of him because it was a piece of speculative litigation.

As a matter of fact, the London General Omnibus Company or its successor, London Regional Transport, is in a much better position now even though it cannot show financial hardship. That is because before the plaintiff can bring his action under legal aid he has to pass two tests. I shall omit for this purpose the means test, but what is relevant to the argument is the merits test. He has to persuade one of these local committees manned by qualified lawyers that he has a case which ought to be brought with reasonable prospects of success. The result is that London Regional Transport in the Kelly case is in a much better position than it would have been under the pre-legal aid situation, even though London Regional Transport cannot transfer from one publicly-owned pocket to another publicly-owned pocket the amount of the fees of the lawyers. So that is not quite the injustice in the case of a publicly-owned board that my noble and learned friend would suggest.

It is of course the case that a private person who has been unjustly sued by an impecunious defendant and who succeeds as a defendant has always been under an injustice. My noble and learned friend's defendants would have won their case pre-legal aid. The action would have been brought by the fraudulent plaintiff if it were that way round; I have forgotten which way round it was. At any rate the impecunious defendant or litigant who lost was always free from liability for costs because he was not worth powder and shot. At any rate now whoever it may be is protected by the merits test to some extent, which he would not have been protected against before.

I am afraid one must take this point a little further because there is an injustice involved. I propose to indicate it in a moment. Let us remember that most litigation under the legal aid scheme is either matrimonial or personal injuries or occasionally it is contract. The great majority of personal injuries cases, especially those involving motor accidents, is covered by the insurance company, which adjusts its premiums accordingly. The company certainly does not suffer financial hardship if it settles its cases or loses them, although it may have to pay money out. If the plaintiff is unsuccessful after passing the means test, the company adjusts the loss from the premiums.

The individual person who is sued and is the nominal defendant on the grounds of his alleged negligence suffers no hardship at all because he is covered by his insurance policy, as are most doctors, under the Medical Defence Union, and other professional persons who may be sued on insufficient grounds. Mutatis mutandis, the same is true of all persons covered by trade union membership. Mutatis mutandis, again, those who carry on business and who carry on litigation in contract deduct the money from their income tax. So the public have to pay anyway.

As for the matrimonial cases, it is of course true that a number of unjust claims are pursued either unreasonably (which is the common case) or without foundation (which is the less common case). They do in fact pass both the means and the merits test; but in the end divorce cases have to be paid for. They are in fact paid for, whoever wins or whoever loses, very largely out of public funds. The idea that an order for costs should be made out of one pocket of the legal aid fund and paid into another pocket of that fund is not one which really attacts much advantage for the public purse.

I add only that there is an injustice in these circumstancs. The legal aid fund should be made to pay even though the conditions laid down in the Bill, as it stands, are not satisfied. There are some cases—although I think not very many and I should hope that they would be a tiny minority; they are probably somewhere between a minority and a tiny minority—in which the merits test should never have been passed at all. It may be that both the Kelly case and the other case cited by my noble and learned friend are two examples of that. In my view, for what it is worth—and that may not be much, although one cannot really claim that one's withers are particularly wrung by these stories!—there should be a sanction against the legal aid fund where the merits test has been wrongly allowed and where the court of first instance decides that the case should never have been brought or should never have been defended, and where that should have been apparent to the committee or whoever was responsible for the grant of legal aid.

There should be a sanction behind this aid. There is a limited injustice to remedy here. If it is thought that public money is best spent on that rather than on some other improvement in legal aid, I should myself support it; but I should not bully my noble and learned friend on the Front Bench very much if he decides that there are other higher priorities to consider. I think that the case can be exaggerated and one must not be too enthusiastic about people who obtain legal aid and then lose their case.

Lord Denning

Would not this simple amendment mean that a court could do what was just and equitable at first instance? That would remedy all the injustices.

Lord Hailsham of Saint Marylebone

I am not sure that it would; but I accept at once from my noble and learned friend that I should have added (and I do now add) that he is perfectly right and on to a perfectly valid point. There is no real justification for the distinction which now exists between the court of first instance and the Court of Appeal. I hope that neither would be too generous with public funds but if the Court of Appeal, presided over as it has been for so long and with such distinction by my noble and learned friend has that power, I do not see why Mr. Justice Caulfield should not have it as well.

6.45 p.m.

Lord Mishcon

I rise only to ensure that the discussion is complete, if I may put it that way. The noble and learned Lord, Lord Denning, cited cases where quite obviously there was no remedy at all to the other party once the legal aid certificate had been granted and even before. As I understand it, there will be a provision under this Bill or some regulation under which a party against whom a legal aid certificate has been granted will have the right to go to the board and give reason as to why that certificate should not be granted. That is a very real safeguard against the case without merit.

Lord Simon of Glaisdale

This amendment is designed to meet a case where an order for costs would be made if the proceedings had not been legally aided and the court had in addition to be satisfied that it is just and equitable in all the circumstances that the legal aid fund should reimburse the unassisted party. Surely that should be an end of the matter? If it is just and equitable that the legal aid fund should pay that answers with all respect the point of my noble and learned friend Lord Hailsham that there should be a sanction against the legal aid fund where it allows unmeritorious action to be brought.

I should only add that over the years many tens of thousands of orders have been made by legal aid committees and there have been remarkably few complaints that they have been wrongly made. Also far from all of those complaints are justified. But what we have here is that not only must it be just that the costs shall be paid, not only is it equitable that the costs should be paid, but also that in the proceedings at first instance, the unassisted party must suffer severe financial hardship. In those circumstances, he must put up with injustice. He must put up with inequity merely because he cannot show that the financial hardship that he inevitably suffers in losing a case which has been publicly funded against him does not cause him severe financial hardship.

Any judge who has tried to deal with this matter finds that test extraordinarily difficult to apply. I do not place much reliance on that because judges are employed not to make easy decisions but to make difficult decisions. However, this is an exceptionally difficult decision. When in all the circumstances can the financial hardship be said to he severe rather than something that the unassisted party must put up with? I come back to what I said at the beginning. if it is just that the legal aid fund should reimburse the successful unassisted party—if it is equitable that it should do so—there is no conceivable reason in justice and equity to make any further demand.

Lord Meston

I wish to express an opinion on this matter from the point of view of an advocate rather than a judge. If the noble and learned Lord is correct, it is not only extremely difficult for the judge to decide whether the financial hardship is severe, it is very difficult to persuade a court that financial hardship is severe. It is very easy to demonstrate financial hardship but very difficult to persuade a court that it is severe.

The Lord Chancellor

I suppose that advocates are not employed to advance easy arguments either. In that way they have a chance to develop their skills. The provision which is sought to be amended here has applied to litigation in terms of the statutory provisions for some time. That is why the noble and learned Lord, Lord Denning, is able to illustrate his argument by two cases in the history of legislation.

As my noble and learned friend Lord Hailsham so clearly demonstrated, the situation is that, under the law as it existed before legal aid, in practical terms there was no remedy for the successful defendant in a case against a person who had no substantial means. Legal aid was introduced in order to provide assistance to such people. Obviously, a question arose as to what would happen if claims were made in which some or all of the finance was provided by the state and which turned out to be unsuccessful. The balance that was struck then was that the legally aided person would be able to litigate at first instance on the terms that if he lost public funds would not be liable unless the defendant could show that he had suffered severe financial hardship. That was a balance between whether public funds should pay or whether the defendant should pay. In my view it was a reasonable balance at the time and it remains a reasonable balance.

The case is different if the legal aid fund goes on to fund an appeal so that the legally-aided person gets a second bite at the cherry. There was already a decision against him. In that situation the distinction was made between the other court—the Appeal Court—and the court of first instance. The court of first instance test remained in that way.

I should like to emphasise something that was brought into the discussion by the noble Lord, Lord Mishcon, as an important change. It is now proposed that those who oppose the grant of legal aid to an applicant should have an opportunity of stating the reasons for that opposition to the legal aid authorities. I suspect that if that had been done in both the cases to which the noble and learned Lord, Lord Denning, referred some further investigation might have taken place, and the problems might not have arisen. This may be a better way of achieving justice than trying to make the public purse liable for these particular costs.

Moreover, I should also like to say a few words about the legal aid authorities in cases in which they grant legal aid and, on investigation, the claim turns out, in the words of Mr. Justice Caulfield, to be bogus. The Committee must recall that the legal aid authorities have to decide on the applications made to them. It is one thing for a judge, having heard a full cross-examination of the plaintiff by distinguished counsel and listened to all the other evidence, to conclude that the case is bogus, it is quite another for legal aid authorities so to decide. They have to look at the merits of the case as presented to them, often buttressed by legal opinion, which on close examination can turn out to be wrong, but which attracts support at that stage as being reasonable.

Accordingly, this amounts to the fact that the balance which was struck a considerable time ago between the interests of particular litigants who may find themselves at the successful end of litigation is not as full as perhaps the fullest and most perfect justice would demand, but is still a reasonable compromise in the interests of the public purse and justice taken together. In all those matters of legal aid it must not be forgotten that it is the public purse—the taxpayer—that is funding the advice, assistance and representation, and that there are many claims on the public purse apart from this particular one.

While Parliament listens with attention to the pleas of judges over the years and takes great account of them, it does not necessarily follow that those prayers must he answered in precisely the way that the judges think. On full consideration of all the circumstances, it may be right to adhere to the present position. I venture to suggest to the Committee that in this case it should adhere to the present position, bearing in mind that it is to be somewhat improved by the provision in favour of notice to those likely to be affected by an application for legal aid. I hope that in the light of those explanations, the noble Lord will feel able to withdraw the amendment.

Lord Silkin of Dulwich

I must confess that I am disappointed by the reply given by the noble and learned Lord the Lord Chancellor on this matter. I am not very sure whether the new provision which enables an unassisted person to make submissions to the Legal Aid Committee affects the matter one way or the other, or if it does whether it supports the view of the noble and learned Lord the Lord Chancellor or the view put forward by those of us who have proposed this amendment. I am not sure what the effect will be. It is clear from what the noble and learned Lord the Lord Chancellor himself said that there will still be cases in which the legal aid authorities will grant legal aid, and indeed may adhere to the grant even in the face of representations from the other party if such representations can properly be made. At the end of the day the assisted person will fail. It is that sort of case that we have in mind.

I emphasise once again that the provision of the Bill as it stands at the moment is that before resorting to public funding the court must be satisfied not simply that it is just and equitable in all the circumstances of the case to do so, but also that the balance is in favour of payment out of public funds rather than that the loss should be left where it is. That seems to me to be a very important factor. This is what the court has to consider when an application is made to it; it has to consider all the circumstances and then to decide whether it is just and equitable that provision should be made out of public funds. It has directly in front of it the balance between the cost to the public and the cost to the individual in a particular case.

I find it very difficult to see how, in deciding where the balance of justice and equity lies, the court could normally disregard the question of the position of the unassisted parties so far as hardship is concerned if that were relevant in the particular circumstances of the case. Therefore I adhere to the view that there is a factor which the court will consider in proper cases where that balance brings in such hardship. What I am objecting to is that hardship should be laid over the justice and equity of the matter as between him and the public fund in a way which means that there will be cases where paragraph (c) will not apply. One will never get that far because the person concerned will not be in a position to show severe financial hardship. That was a point that was most forcefully made by the noble and learned Lord, Lord Simon of Glaisdale. I entirely agree with it.

This important matter applies not only in this clause but in the later clauses of the Bill, as the noble and learned Lord, Lord Hailsham, rightly pointed out. I apologise for not referring to those when I opened the matter. It is a pity that we have not had a larger attendance in Committee to consider the arguments on both sides. I can see the force of them all. However, there it is, and the hour is approaching the point at which we shall be required to break. Perhaps in those circumstances it would be sensible that we should look at it again. I hope that the noble and learned Lord the Lord Chancellor will look at what has been said in this debate and will consider whether the balance is right or whether it can be adjusted. I shall certainly consider the points that have been made on the other side in the debate. In the meantime I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

The Earl of Arran

I think that this would be an appropriate moment at which to break for dinner. Perhaps I may suggest that we do not return to the Committee stage of the Bill before 8 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

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