HL Deb 18 May 1989 vol 507 cc1284-7

3.9 p.m.

Lord Rawlinson of Ewell asked Her Majesty's Government:

Whether in preparing their Green Papers on the legal profession they paid regard to the evidence of the United States Chief Justice to the Royal Commission on Legal Services on the proportion of damages awarded by United States courts which is absorbed by the costs of the contingent fee system and on the delays caused by the employment of inadequately trained advocates.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, in seeking to frame the proposals I paid particular attention to the work that had been done by the Royal Commission on Legal Services. Chief Justice Warren Burger was a witness and I paid particular attention to his testimony.

Lord Rawlinson of Ewell

My Lords, I am grateful to my noble and learned friend for that reply. Does he not agree that the comments of the Chief Justice of the United States were very significant, as they have a combined profession there? He said that the contingency fees of inadequately trained lawyers probably took about half of the damages awarded. Will my noble and learned friend look very carefully at the matter of contingency fees? There is more and more opinion coming from the United States that such fees increase costs, lead to ambulance-chasing and the stirring up of litigation, often frivolous and fraudulent.

The Lord Chancellor

My Lords, the Civil Justice Review recommended that we consider further the question of arrangements such as contingency fees. One of the Government's Green Papers has attempted to do that. We have received a great number of responses and I shall take the observations of my noble and learned friend as a further response. A number of different views have been expressed on the various options there put forward.

So far as concerns improperly trained advocates, I have sought to take account of that in the proposals in the Green Papers. Many of the responses are also directed to that question.

Lord Mellish

My Lords, is the noble and learned Lord aware that some of us who are mere laymen are amazed and astounded at the tremendous debate which took place in the House from nine o'clock in the morning until eleven o'clock at night? No profession other than the legal profession would have organised the debate on a discussion paper in that way. It is an amazing tribute to the trade union movement.

The Lord Chancellor

My Lords, I am glad that the noble Lord considers that the standard of the debate was high. I personally found it extremely useful.

Lord Alexander of Weedon

My Lords, will my noble and learned friend note that the professions welcomed his remarks the other day that he regarded their responses as constructive? He indicated that he regarded them as not being involved in a trade union activity but seeking to serve the public. Does my noble and learned friend agree that the responses of the professions are directed towards precisely that end of seeking to provide the best service to the public?

The Lord Chancellor

My Lords, I do not think that my noble friend quotes exactly what I said. I do not believe that I made any reference to trade unions in my response. However, I accept that the rest of what he said is the substance of my remarks and that the responses are extremely full and constructive. Naturally they are not all in the same direction. The question now is, in the light of the responses, what is the correct direction in which to move?

Lord Bonham-Carter

My Lords, does the noble and learned Lord agree that, in the light of the massive attendance of his colleagues from the legal trade union at the debate on the Green Papers, last Friday none of his colleagues was available when we discussed the fate of their clients in the debate on the report on the parole system by the noble Lord, Lord Carlisle of Bucklow?

The Lord Chancellor

My Lords, a number of my noble and learned friends were present on 7th April and contributed to the debate. I myself was here at the start of the debate on the report on the parole system which was initiated by the noble Lord, Lord Allen of Abbeydale. I certainly do not recollect noticing that any of my noble and learned friends managed to be present on that occasion.

Lord Benson

My Lords, for the removal of doubt, perhaps I may say that the question I ask is put in a helpful and not a critical spirit. Has the noble and learned Lord the Lord Chancellor had a chance to read the submission made to him dated 26th April by Lloyd's of London on contingency fees? That submission supports the evidence referred to by the noble and learned Lord, Lord Rawlinson. Does the noble and learned Lord the Lord Chancellor not think that under those conditions it would be prudent to modify or amend the statement which he made to the House on 16th May at col. 1039 of Hansard: Therefore, at the moment I am simply claiming that these proposals, if implemented, would not increase costs"? Does the noble and learned Lord not think it particularly important to modify or amend that statement, having regard to the fact that two days ago he also said that no research had been carried out by the Government before the Green Papers were issued?

The Lord Chancellor

My Lords, it is difficult to paraphrase exactly what I said two days ago. I said that my aim in the Green Papers was to propose the removal of unnecessary restrictions. The removal of unnecessary restrictions would not increase costs.

Of course I entirely accept that the debate in relation to the Green Papers is as to whether or not all or any of the matters covered in them are unnecessary restrictions. There is the question of whether the present restriction on contingency fees is necessary or unnecessary in the interests of the standards of conduct in the profession.

Lord Hailsham of Saint Marylebone

My Lords, bearing in mind that the Question on the Order Paper relates to contingency fees does my noble and learned friend not agree that potential defendants are at least as entitled to a fair crack of the whip as potential plaintiffs?

The Lord Chancellor

My Lords, I certainly agree with that. It is one reason why the speculative action on the Scottish model is perhaps better than the contingency fee arrangement in America, because it is available to potential defenders as well as to potential pursuers in that country.

Lord Molloy

My Lords, with respect to what I think is called the Family Division, does the noble and learned Lord know that very often families in conflict with one another go to court? They then find themselves greatly burdened with solicitors' expenses. One report which I read said that that was often the cause of suicides. Will that be examined in the context of the Green Papers?

The Lord Chancellor

My Lords, the overall objective of all the proposals which I have sought to make deals with costs and accessibility. I aim to avoid unnecessary costs. Sometimes there are of course great difficulties in family litigation. Among the actions that were initiated by my noble and learned friend Lord Hailsham was a study of the conciliation service. That study has recently reported and a good deal of discussion is taking place on the report. As often happens on these occasions, the views on the conclusions of the report are not unanimous. However, that is an important development which I hope we shall be able to take forward.

The Earl of Onslow

My Lords, has my noble and learned friend considered the increased costs involved in liability insurance in the event of the introduction of the contingency fee system? Does he also realise that, if the cost of liablity insurance is increased, that cost would be directly attributable to the general cost of living and the cost of every single item produced either by the manufacturing or the service industries?

The Lord Chancellor

My Lords, of course I am aware of the general effect on costs of the producers of goods having to bear the costs of litigation. I have that in mind. One also has to bear in mind the rights of those who may be injured as a result of products. As usual, it is a question of balancing the various interests. I am sure that the contribution of Lloyd's of London to the responses, as well as the other contributions we have received, will help us to reach a just balance in the result.