COMMONS AMENDMENT (Hansard, 19 July 1988)

§ The Lord Chancellor

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 22. I also speak to Amendment No. 24.

These two amendments provide a specific power to make regulations regulating to what is known as a statutory charge. The terms of these two amendments almost exactly reflect the existing Section 22 paragraph (e) of the Legal Aid Act 1974. Originally we had thought it unnecessary to reproduce these powers and had intended to make the necessary regulations under the general powers in the Bill. However, on reflection, we believe that a specific power akin to that in the 1974 Act would be preferable and hence these amendments. The only substantial change from the 1974 wording is paragraph (c) of Amendment No. 16.

It was announced in February 1986, and repeated in the Legal Aid White Paper, that the Government intended to make two changes to the operation of the statutory charge. The first is that we intended to allow postponement of the charge on a sum of money ordered by the court to be used for the purchase of a house. This is to remedy a long-standing complaint about the charge. The second is that interest will be charged on all postponed charges. It is the interest point that is covered in paragraph (c). I hope that it will be possible to make the regulations introducing these changes in the near future. Your Lordships who are familiar with the operation of this part of the legal aid system know that there was a most unfortunate distinction between a case where a charge is already 1210 on a house, and the charge on a sum of money to be used to purchase the house. Obviously, if the funds required to fund the legal aid contribution were taken out of the money, there would not be enough to buy the house. It was a most awkward situation. This we have dealt with by making provision to charge interest as is appropriate on the postponed debt.