Legal Aid

HL Deb 14 March 1990 vol 516 cc1585-615

5.22 p.m.

Lord Mishcon rose to call attention to the 39th annual reports of the Law Society and the Lord Chancellor's Advisory Committee on Legal Aid; and to move for Papers.

The noble Lord said: My Lords, I should like to express my appreciation in advance to all those who have put their names down to speak. So many of them carry the weight of deep authority on the matter of legal aid on which I wish to address the House.

The reports to which I refer in the Motion include a preface written by the chairman of the Legal Aid Advisory Committee. In that preface she says that the year under review is one of the most active years that the committee can remember. That is quite right, I imagine, because during that year—1989—legal aid was handed over to the Legal Aid Board in the April, there was the White Paper on legal services, there was the Courts and Legal Services Bill which is still before this House, and there was the Children Act.

That is very fine and very true. However, the sad fact is that it has not by any manner of means been the most positive year for remedying the critical inadequacies of legal aid funding and availability. As many of your Lordships have said from time to time in debates upon matters which affect the citizen and law, it is extremely easy to pass such enactments but one has to remember the principle, upon which I believe everyone in the House is united, that if there is to be justice that justice must be available to all, regardless of means.

Against that background I look first at the question of eligibility for legal aid. When the Legal Aid Bill, which became the Legal Aid Act 1988, was debated in this House I remember the beloved voice of the late Lord Elwyn-Jones pleading with the Government to consider at that time what was being done regarding eligibility for legal aid. It is not a matter which is any way cured by the annual review which takes place when the basic amount is uprated by some 5.2 per cent. That merely keeps the lower limit in line with inflation and with the increase in social security benefits.

Perhaps I may say in parenthesis that it would be an extremely good idea, which I hope the noble and learned Lord will consider and agree to in tonight's debate, if, because of its vital import, this was a matter which was properly debated once a year instead of being dealt with by way of a negative resolution.

I turn now to the size of the problem of eligibility. One remembers that the noble and learned Lord, who is always forthcoming on matters on which he feels that the public and the House should be informed, had been somewhat timid over a considerable period when pressed to say what the drop in eligibility had been under this Government. On 13th November of last year he announced that there was to be a review regarding eligibility. I believe that I am right in saying that when that statement was made at a press conference he was pressed to say what had happened regarding eligbility so far. The answer that he gave on that occasion was that, as against the oft-quoted 1987 White Paper figure of 70 per cent. of the population being covered by legal aid, in November 1989 that figure was down to around 56 per cent. That meant a drop of 14 per cent. in just over two years. Translated into human statistics, that meant that 9 million people who were covered by the legal aid scheme in 1987 were no longer covered by the scheme in November 1989.

In addition, at about the same time the senior lecturer in the Department of Statistical and Mathematical Sciences at London University published an analysis of government statistics. His report showed that during the period 1979 to 1989 14 million people, or 5.5 million households, were no longer eligible for the scheme. Those are pretty dreadful figures.

One might have thought that I should not be making this speech at this time in view of my statement that the noble and learned Lord the Lord Chancellor had said last November that an eligibility exercise—a review of the financial criteria for eligibility—was taking place. It started in January of this year against the rather morbid background of an announcement by the noble and learned Lord that the result of the review might not be with us for three years. In the midst of that period we have had to discuss the Courts and Legal Services Bill. I hope that the noble and learned Lord will disabuse everyone of the wicked thought that that review is possibly being postponed in order to enable the Bill to become an enactment without having to deal with the subject about which I am talking; namely, the huge reduction in eligibility for the legal aid scheme.

Quite apart from the lecturer at London University, the Law Society, which I hope noble Lords will agree is reliable, has made its own calculations on the issue of eligibility. It has done so on a different basis but perhaps one which is more appealing to noble Lords as showing the extent of the problem. It has prepared calculations based on accurate data. It concluded that a male head of a household with earnings of two-thirds of the national average must now pay a considerable portion of his gross earnings in contributions to qualify for legal aid, compared with no contribution at all on his part in 1979, while those with one-and-a-half times national average earnings have gone out of the scheme altogether. It is not only those figures which have hit people in this country; everyone knows that the costs of litigation itself have gone up during that period.

I reiterate that this is a serious problem and it is no wonder that the advisory committee commented on it. I should like to refer to its comments. I am sure that the noble and learned Lord will agree with me when I say that there is no point in setting up an advisory committee and asking people to give up their valuable time in order to serve on it, prepare a report and make a recommendation if the recommendation has no effect. Paragraph 8 on page 88 of the advisory committee's report states: The issue of eligibility for legal aid has long been a concern of the Committee. We welcome your Lordship's announcement of 13th November, 1989 of changes to some eligibility limits and a review of the financial conditions for legal aid. We are pleased that this review will address the problem of financial eligibility in general because, as we stated in our 38th Report, eligibility levels should not be allowed to drift downwards. Nevertheless, the planned period of up to three years for the review is lengthy; this is a source of some anxiety to us in that such a downward drift might gather momentum over this time. We hope that every endeavour will therefore be made to expedite the review.

It would be ungracious of me if I did not refer to the fact that, at the same time as the noble and learned Lord announced that the review would take place, he announced that there would be some changes; namely, an increase in civil legal aid eligibility for children, pensioners and people involved in personal injury cases, the total cost of which would be about £5 million. That is welcome. I do not want to be churlish and say that it was long overdue, but there were pressures for that change over a considerable period of time. However, the committee goes only a small way to reversing what I can only call those savage cuts in legal aid which have been made by the Government in the past few years. It makes no changes in the entitlement to legal advice and assistance which is restricted to the very poor and even excludes some social security benefit claimants.

What do I from these Benches ask of the noble and learned Lord with, I hope, the agreement of noble Lords in all parts of the House? First, I ask for a broad approach to restore the cuts in allowances and an increase in capital limits to take account of inflation over the past 10 years. That is the very least that we must ask for. Secondly, I ask for an expedition of that review so that it may make its recommendations before the end of the year. I should have thought that that was a perfectly reasonable period. Finally, I ask that consultation takes place with interested organisations such as the Law Society and the Bar Council or, as the noble Lord, Lord Meston, might prefer me to say, the Bar Council and the Law Society. I do not think that the time in which I hoped the review would be completed becomes unreasonable merely because I have asked for consultations.

I am conscious of the time and must deal quickly with a few other subjects. I wish to mention first the critical situation with regard to criminal legal aid. I ask the noble and learned Lord to appreciate the crisis. At the time of the uprating in April 1989—this is what I am told by the Law Society and I therefore hope that noble Lords will believe that it is reliable information—the noble and learned Lord the Lord Chancellor had available to him jointly agreed evidence in the form of a profitability survey. That showed—I say this slowly because I want it to have a proper effect on noble Lords—that only 40 per cent. of solicitors' firms undertaking criminal legal aid work in London and 33 per cent. of such firms in the provinces were able to avoid making a loss on the work at the rates that were then paid. The Law Society contended that that was clear evidence arguing for a major rise in rates. However, the noble and learned Lord the Lord Chancellor decided to increase the rates by only some 6 per cent., which was an effective cut in the real value of the rates, thus pushing more firms into loss.

There have been discussions leading to the uprating to be made on 1st April this year. Those discussions have only just concluded. During those discussions there were two major pieces of hard evidence available on which the Lord Chancellor could base his decision. First, there was a jointly prepared and agreed index of solicitors' overheads. That showed that for the last two years for which figures were available (April 1987 to April 1989) the overheads faced by solicitors who undertook criminal legal work rose by some 27 per cent. There was also evidence from statistics provided by the Legal Aid Board to show that the number of firms doing criminal legal aid work was now reducing. That is a reversal of a previous trend.

Based on that evidence the Law Society advocated an increase in the rates of 21 per cent. because if firms literally are going out of business in doing criminal legal work, goodness only knows where our whole system of criminal justice will end up. I invite the noble and learned Lord to comment on these matters, especially when I inform the House that in the face of that request the noble and learned Lord the Lord Chancellor has apparently decided to increase the rates by only 7.5 per cent.

I could address the House on other matters raised in the reports which are of vital interest. There is the question of legal aid for tribunals; there are the advisory regional committees, which are not being funded centrally at all and should be; there are multi-party actions; and there are other such matters which are of great interest. However, other noble Lords are to participate in this debate. There are questions of conciliation raised in the report. I see the noble Baroness, Lady Faithfull, nods her head. That is a matter of great importance to your Lordships and nobody could address the House with more authority on such a subject than the noble Baroness.

I simply draw the attention of all noble Lords to the fact that there is a crisis with regard to legal aid. The name of legal aid must continue as a matter of pride in our system of justice. It does not deserve that pride at the moment and that pride has to be restored. I beg to move for Papers.

5.42 p.m.

Baroness Faithfull

My Lords, this debate which is based on two reports poses a very real dilemma for your Lordships and in particular the noble and learned Lord the Lord Chancellor. Figures published by the Attorney General showed that in 1979 the cost of legal aid in this country was £100 million. By 1989 the cost has risen to more than £550 million.

I am sure that the noble Lord, Lord Mishcon, to whom we are indebted for this debate, will wish me to say how money that is not now being spent should be spent and then to suggest ways in which money could be saved so that the legal aid system has a balanced budget, if I may so put it.

I support the noble Lord, Lord Mishcon, with regard to solicitors' pay. My family happens to be in the solicitor world. It is not a matter only of payments and salaries; there are rents, the cost of secretaries' salaries and the rising costs of running an office. Those costs affect everybody at the moment and not only solicitors; but in the case of solicitors it means that although some of them do not wish to stop doing legal aid work many of them have to do so because otherwise inevitably their offices would have to close. I speak with feeling because I know by how much the rents will increase.

With regard to how money should be spent and where it is not being spent at the moment, the noble Lord, Lord Mishcon, mentioned tribunals, and they are discussed on page 112 of the report. The effectiveness of legal representations in some tribunals is essential, although it is not essential in all cases. However, it would save the country a great deal of money if some tribunal cases were so dealt with. That is mentioned in the Genn report which does not recommend a blanket extension of legal aid throughout.

As has been said many times during the course of our debates on the Courts and Legal Services Bill, money could be saved in the county courts if they were more efficiently run. It could also be saved in the magistrates' courts. In an address to the Magistrates' Association in 1982 the then Lord Chancellor, the noble and learned Lord, Lord Hailsham of Saint Marylebone, estimated that waiting time on the day of hearing was costing the legal aid fund approximately £9.5 million. I suggest that money could be saved if the magistrates' courts were more efficiently run.

I know that the noble and learned Lord has sympathetic feelings toward family courts. If family courts were to be set up in this country I believe that they would save money on legal aid.

The noble Lord, Lord Mishcon, mentioned conciliation services. Newcastle University brought out a report which I think took two or three years to produce. It is in many ways a very good report and contains a great deal of valuable information. Unfortunately it was inconclusive as to whether conciliation would or would not save money on legal aid. I believe that it would. However, it is difficult to be certain when one cannot point to definite figures.

Although I have put the point to him before, I again say to the noble and learned Lord that if the Treasury were to advance a certain sum so that the conciliation service could be financed out of a Treasury grant (say for two years), one could then find out whether or not it saved the country money in terms of legal aid. That is the only way in which one can prove it, although I believe that it could do so. That mechanism has been used before in other areas, notably in the field of juvenile delinquency in setting up intermediate treatment.

I also ask the noble and learned Lord how the Children Act 1989 is to be administered with regard to legal aid. Whatever happens I suggest that in all cases legal aid must be readily available. It is for the wellbeing of the children in the cases concerned and partly for the saving of money in respect of legal aid. I feel slightly embarrassed in that I have sitting next to me the chairman of the advisory committee. Nevertheless I ask the noble and learned Lord to tell us the future of the advisory committee. On reading the report it seems to me that the advisory committee has done much to bring before your Lordships' House and the country both the good points and the difficulties. It seems to me that it would be a great pity—considering that all the people who serve on that committee are volunteers and people of very high quality—if that committee were to be cut back. I for one would be very sorry to see that happen.

With the utmost diffidence I wish to make a suggestion which bypasses the noble and learned Lord the Lord Chancellor. I do so with diffidence and I hope that I shall not be thought presumptuous. I have been a civil servant in two government departments and a chief officer in local government. I suggest that the noble and learned Lord's department is not adequately staffed. I believe that not enough money is going into it. We depend greatly on his department. It would be difficult for me to ask the noble and learned Lord whether he could take on more staff and have more money. Therefore from these Benches I bypass him and make a plea to the Treasury that the Treasury should consider the noble and learned Lord's department. It may be necessary to have a management survey. I believe that more money is needed for the department. If more were available more work could be done. I feel sure that he will welcome the suggestion and I hope that he will not consider me presumptuous in making it.

5.50 p.m.

Viscount Hanworth

My Lords, I spoke almost exclusively on this subject on the Second Reading of the Courts and Legal Services Bill. However, I feel very strongly that the effective denial of recourse to the High Court for a large number of citizens must be stressed again in this debate. That has already been done.

The cost of a High Court action is usually so great that without legal aid only the really rich can afford it. Surely that raises a major matter of principle. We cannot rightly talk about the rule of law while that situation continues.

Fairly recently the BBC was sued for a serious matter of defamation. It managed to spin out the proceedings until the plaintiff could no longer afford the costs of continuing the action. Fortunately someone agreed to underwrite the costs; and the BBC immediately settled out of court. That is a very sorry tale, but there are other even more unscrupulous cases where, for example, a man or a firm is ruined by a trumped up case which they cannot afford to defend.

When legal aid was set up 40 years ago—and I am speaking of civil legal aid—it was available to more than 80 per cent. of the population. Today the figure is about 50 per cent., with a cut-off point for those earning 6 per cent. above the average male earnings.

The Government's green form scheme is welcomed, but the effect will be small since only £5 million more is being made available. Giving the county courts greater jurisdiction will help but the gap, about which I have spoken, remains a glaring example of the failure of the fairness of our legal aid system.

The Government may not substantially raise the existing eligibility level for legal aid but that is not really the point that I am trying to make. I believe that legal aid should be available to everybody on a graded basis. There are of course other possibilities but the unfairness that I pointed out can be eliminated only if everyone is to some degree able to obtain legal aid.

We now have legal aid boards, which screen applications to ascertain litigants' means and the merits of the case. Surely therefore such a graded scheme as I am suggesting would not mean setting up a new organisation to manage it. Although I have mentioned only the graded scheme, there are variations and other possibilities. However, I certainly do not support merely raising the existing cut-off level by a small degree.

5.55 p.m.

Lord Simon of Glaisdale

My Lords, the noble Lord, Lord Mishcon, habitually puts us in his debt by his cogency and skill, and perhaps most of all by his courtesy in debate which means much to us on the Back-Benches and the Cross-Benches. He has again put your Lordships in his debt by introducing this subject at this time. He has absolutely no need to apologise for the timing. Not only is the subject most important, but it throws a great deal of light on the Bill that we have been debating for so long and so late into the night and the early morning—the Courts and Legal Services Bill.

One of the interesting matters about this quite admirable report by the advisory committee—and it is a privilege to say that in the presence of the chairman of the committee—is that the report bears out in so many respects the misgivings that have been expressed about the effects of the Courts and Legal Services Bill.

Perhaps I may take up a point that was made by the noble Baroness, Lady Faithfull. I have long been convinced that conciliation would save a great deal of money, and already saves a substantial amount of money in an area which forms one of the biggest demands on the legal aid fund; namely, matrimonial jurisdiction. I concur with the noble Baroness. I should like to see a system of family courts which would integrate any conciliation system. I believe that it would cost money. All the schemes and returns that I have seen indicate that it would not be an inexpensive exercise, at any rate immediately. But I am sure that in the end it would save money. I am convinced that it would save marriages.

The most important factor in that sphere is to relieve the strain that is inherent in the conduct of matrimonial proceedings and in their consequences.

I should like to see nobody seeking to obtain a matrimonial decree who had not sought help from a system of concilation on matters of controversy. I do not think that complete reconciliation has very real prospect at that stage. But we can ensure that those items that are susceptible to conciliation and agreement are taken out of the struggle so that nobody seeks adjudication who has not already shed the other matters of great controversy. Those generally carry greater pain for the parties than the main issue of whether a marriage should be terminated.

I have always been attracted by the structure of the French conseils d'état where one has an administrative court through which people must pass before going to the court of adjudication. That is what I should like to see in a family court: conciliation, welfare assistance and counselling, and so on, with only those matters taken to adjudication which cannot be made the subject of agreement.

The other point I wish to make as a background is this. It seems to me unreal at this moment to expect more money. The noble Baroness said—as people say so often—that the Treasury must cough up. I do not think she used so vulgar a term but that is, in effect, what she meant. However, the Treasury has no money of its own any more than my noble and learned friend's department has money of its own; all it can do is oversee the collection of taxpayers' money and ensure that it is paid out in accordance with the desire of Parliament.

However, this is a very bad time to expect more money, and one of the disturbing aspects of this admirable report is that it indicates that in many respects more money will be required merely to mitigate the effect on legal aid of the Courts and Legal Services Bill. It deals with three matters of which I shall only mention the first two. The first is the effect on the high street solicitors and the second is the effect on the junior Bar. The third relates to contingency fees which no doubt we shall be able to discuss tomorrow.

With regard to high street solicitors, the report echoes exactly the anxieties voiced in this Chamber when we were discussing the multi-disciplinary partnerships. My noble and learned friend Lord Templeman made a powerful speech when he examined the subject thoroughly and spoke with great authority. After that it was hardly controvertible that the loss of conveyancing fees would be a serious blow to the high street solicitors and would force many of them out of business.

My noble and learned friend replied that he did not share that apprehension, that he thought that the high street solicitors would be able to advertise and thereby survive. That reflects something that was put more delicately in the report when it refers to energetic marketing. However, Milton Friedman's observation that there is no such thing as a free lunch has passed as a truism into the language. Certainly there is no such thing as a free advertisement. An advertisement adds to the overheads which are passed on to the client or the customer. In that respect, therefore, there will be an increase in the cost of litigation which has already been cogently adverted to in the speech preceding mine.

The second point concerns the junior Bar. The report again echoes the anxieties expressed by your Lordships. In fact, the advisory committee is less sombre and pessimistic than I am. The committee believes that the Bar will survive as an institution, though it expects an attenuation. I should be very surprised if there are any more than surviving pockets of what is the present Bar.

The reason for that is that so far as I am aware no one has answered the question asked by the late Lord Gardiner. Lord Gardiner drew attention to the risks that throughout face a barrister. He also drew attention to the, no longer penury no doubt, but the difficulties at the start of a career, particularly compared to the start in other professions. He asked, "Why should anyone become a barrister when he could avoid those risks and sidestep those difficulties by becoming a solicitor?" Therefore, it seems to me that the advisory committee is absolutely right in facing the clear possibility that large firms of solicitors will recruit young barristers into in-house advocacy departments. That again, as the advisory committee points out, will restrict the sources on which legal aid can draw. Moreover, it points in relation to both of those matters that it will cost money even to mitigate those difficulties; money which, as I suggested, is certainly not available at the moment and in the future is likely to have to compete with various other social causes.

We, as lawyers—the noble Baroness, Lady Faithful!, knows more about the law than any of us—obviously put justice very high, if not the highest, in the list of social causes, but there are others. One can hardly attend the House at Question Time without hearing a cry for funding, generally massive funding. It is those matters, too, that will inhibit the availability of funds even to mitigate the dangers inherent in the Bill. As the noble Lord, Lord Mishcon, said, there are many aspects to be dealt with, but I prefer to leave those matters to others and to concentrate only on the two points I have raised—the effect of the Bill on the high street solicitors and the effect on the junior Bar with its repercussions on the availability of legal aid.

6.7 p.m.

Lord Irvine of Lairg

My Lords, I confine my speech to three subjects: the eligibility limits, the extension of legal aid to tribunals (industrial, immigration and social security) and the impact that the Courts and Legal Services Bill may have on access to legal aid for those who need it; essentially the point made by the noble and learned Lord, Lord Simon of Glaisdale.

The issue of the eligibility limits is now to be seen against a background of declining usage of legal aid. When addressing the Law Society conference at Cardiff in October 1988 the noble and learned Lord the Lord Chancellor felt able to claim that over the previous five years the number of legal aid certificates issued had increased by nearly one-third. In fact, when the figures in the 38th and 39th annual reports are taken into account the increase is only 6.75 per cent. The figures appear on page 25 of the 39th report. The reason is a fall—virtually for the first time—in the number of certificates issued during 1988–1989.

In paragraph 121 of its 38th report—the report for the year prior to the year covered by the 39th report now under debate—the advisory committee drew attention to the research of Mr. Cyril Glasser and, to the probability that under 60 per cent. of households and only just over half of the population are now eligible for legal aid". The committee continued: We find the position extremely worrying. We arc concerned that eligibility levels should not be allowed to drift downwards". The committee concluded that: in view of the real hardship that is now faced by those of moderate means who do not qualify for legal aid we would like to see an independent review of eligibility levels and how they are determined". I emphasise "independent review".

Therefore, in December 1988 the advisory committee was calling for an independent review. The Government took a whole year to react. In the meantime there was further research published again by Mr. Glasser and also the research referred to by my noble friend Lord Mishcon, that conducted by Mr. Michael Murphy, the senior statistician at the LSE, showing that the position was almost certainly even worse than had been assumed. I repeat Mr. Murphy's conclusion given by my noble friend Lord Mishcon that 14 million people in 5.5 million households no longer qualify for civil legal aid and legal advice and assistance compared with 1979 when the Government came into power. That is so startling a statistic from such an authority that it merits repetition.

What are the Government doing? With respect, I would say that what they are doing comes too late, will take too long and is too little. I say that it is too late because the Government have had compelling evidence before them since as long ago as 1987 of the decline in eligibility. However, it was not until November 1989 that the noble and learned Lord on the Woolsack announced a review of the financial conditions for the granting of legal aid. The review would begin its work in January of this year and would require as long as two or three years to complete its work. That is a lethargic timescale which calls for explanation. Therefore, I add my voice to what has already come from my noble friend Lord Mishcon.

That sluggish timescale gives the impression of a decision to kick the issue into touch for the balance of this Parliament. May the House be told what there is about the nature and difficulty of this review which prevents completion in six months from commencement? Typically, my noble friend Lord Mishcon was more generous than I and suggested the year end. Two to three years to most people brings an entirely new dimension to the concept of the law's delays.

I say that it is too little because the Government have not responded to the calls for an independent review. The review is to be conducted by officials from the noble and learned Lord's department and the Legal Aid Board. It should not be inhouse but should be independent. However, because it is inhouse, the delay is all the more inexplicable. I invite the noble and learned Lord, when replying to the debate, to say whether it is possible for him to meet the plea from his own advisory committee that the report be expedited.

The advisory committee calls attention to recent research commissioned by the noble and learned Lord's own department showing that representation before tribunals enhances the quality of justice. I refer in particular to the industrial, immigration and social security tribunals. As so often with research, it confirms what experienced practitioners know from their daily experience. There is no greater injustice which I personally have witnessed than the inequality between the unrepresented applicant worker and the represented employer in the industrial tribunals. Those tribunals daily make awards of many thousands of pounds for unfair dismissal, redundancy and discrimination on the grounds of race or sex. Their proceedings regularly involve much greater sums of money than in the county court where legal aid is available.

Contrary to what is often said to resist the extension of legal aid to these tribunals, the law that they apply is as complex, the formality of their proceedings is as great, the need for skilled professional cross-examination and legal argument is as extensive as the ordinary courts of law. There is no doubt that in many cases representation affects the results. If it affects the results, it affects the quality of justice. I should be interested to hear the noble and learned Lord say in his reply whether he has any plans for ensuring that legal aid is made available for those classes of tribunal case—and I agree with the noble Baroness, Lady Faithfull, that it should not be for every case—where equal justice will be secured only by representation.

That part of the advisory committee report has particular point because it was only about a fortnight ago that the Government announced that claims for damages for breach of employment contracts are to be transferred to industrial tribunals. At present, those claims can be brought only in the High Court and county court where legal aid is available. I have no objection in principle to the transfer of this class of case to the industrial tribunal. Indeed, it is natural that they should be there since unfair dismissal cases are already there and the issues in both class of proceedings overlap.

However, the transfer is thoroughly objectionable in view of the absence of legal aid in industrial tribunals. Is it the Government's intention by that transfer to deprive dismissed employees of legal aid for wrongful dismissal in breach of contract? I should have thought that that is an area where there is very little to fear on the costs front provided legal aid applications are properly and carefully examined to see if the claims have merit and the legal aid charge on money recovered is retained. I hope that the noble and learned Lord will find time when replying to this debate to reveal to us his current thinking on the extension or not of legal aid to those tribunals.

Finally, I turn to Part III of the report which I venture to suggest is important. I am conscious that I am covering ground traversed by the noble and learned Lord, Lord Simon of Glaisdale. However, I do that in the very particular context of what the committee actually said and the relevance of what it said to legal aid.

The committee welcomed much of the Courts and Legal Services Bill but it struck a cautionary note. It acknowledges: The Legal Aid Act 1988 creates important opportunities for the future development of legal aid and legal services". Paragraph 77 then states: It is vital that any re-organisation of the legal profession should complement, not detract from, those opportunities". In particular, the committee drew attention to the risk that if the financial institutions succeed in taking over a substantial share of the conveyancing market then, as the noble and learned Lord, Lord Simon of Glaisdale, said, the viability of many solicitors' firms may well be impaired with the attendant risk that some might disappear and others might shed their legal aid work, formerly subsidised by conveyancing income, in favour of more remunerative areas of practice.

The most obvious remedy which the committee identified was to improve remuneration for legally-aided work to make it attractive and reasonably profitable. The other danger which the committee identified was a reduction in the size of the Bar due to the extension of advocacy rights to solicitors. It did not prophesy doom but it prophesied that there would be a smaller pool of independent barristers from which solicitors can choose for legal aid work. Paragraph 68 states: If, as we expect, the major impact of the Government's proposals is initially on the younger members of the junior Bar, the legally aided client is likely to be most affected by any diminution in the quality of service, because it has traditionally been younger banisters who have done much of the legal aid work, particularly in criminal and matrimonial matters". That statement from an experienced committee such as this must be taken seriously.

I wonder whether the noble and learned Lord when he replies will feel able to assuage these anxieties on the basis that he has a clear structural view—and can tell us what it is—of how the size and structure of the professions of the providers of legal services are likely to be affected by the implementation of his current Bill.

I should also welcome the noble and learned Lord commenting, if he feels able, on whether he accepts the principle urged by the advisory committee at paragraph 69 of, ensuring that legal aid rates of remuneration do not compare unfavourably with privately paid work". That surely is the only guarantee that those whose only access to justice is through legal aid will in practice have access to legal services of sufficient quality to be consistent with their securing justice.

6.22 p.m.

Lord Renton

My Lords, I am glad that the noble Lord, Lord Irvine of Lairg, dealt with the effect of the legal services part of the recent Bill upon legal aid because it enables me to shorten my speech to some extent. I should like to endorse what he has said in that part of his speech.

We are indebted to the noble Lord, Lord Mishcon, for the fair-minded and temperate way in which he laid the foundations of this debate. There is very great anxiety with regard to legal aid as it is at present. He particularly took up the points about the review of eligibility taking perhaps as long as three years. That is not an acceptable length of time because in three years many changes can take place and they are not likely in present circumstances to be changes for the better. We are likely to see a deterioration. It is therefore most important that my noble and learned friend the Lord Chancellor responds to the request made on both sides of the House that the review should be shortened.

I sympathise with my noble and learned friend the Lord Chancellor because we know that in the matter of legal aid he, like his predecessors, has to depend to some extent upon the financial position of the country. We shall know a little more after next week's Budget what luck he is likely to have, but I do not think that we should raise his hopes very high. It is largely a question of doing the best with what we have. The very thoughtful report of the advisory committee, presided over by my noble friend Lady Park, contains various ways in which we can hope for a better expenditure of the limited funds available.

Perhaps I may deal with the remuneration of the two branches of the legal profession. My noble friend Lady Faithfull, with regard to solicitors dealing with criminal legal aid work, said that they were really suffering and that some might go under. I must point out, on first-hand evidence from two members of my family who do some legal aid work mainly in that part of their practice which is in the Family Division, that the fees are very tough indeed.

It is many years since I was a junior barrister, but in the days when one appeared, whether in matrimonial cases or in civil actions in the High Court or on Assize, there was a rule which was faithfully followed: that for legal aid work we received five-sixths of what was regarded as the scale fee or a reasonable fee in the circumstances. That rule has long since gone. I do not know whether there is any hope of it coming back in the foreseeable future, but when the fee was five-sixths we were only too happy to accept legal aid work. With the high rates of taxation, there was not much difference between legal aid and the run-of-the-mill civil work. I mention that to point out that it is not only solicitors who are feeling the pinch where legal aid work is concerned; junior barristers are also doing so.

I return to the report. I do not wish to repeat what has already been said. I endorse what was said about the effect of the legal services Bill with regard to the quality and so on of those who will carry on with legal aid in the new circumstances. However, for the sake of the record we should have the report and the opinion of the advisory committee on the conditional fee arrangements quoted very specifically. I make no apology therefore for reading out what the committee actually said so that it gets into the record of this important debate.

With regard to conditional fees, paragraph 74 at page 101 states that the committee is pleased to note that the Government rejected any type of fee involving a proportion of whatever damages are obtained. However, the committee also says: We remain somewhat apprehensive, however, regarding the proposal to allow conditional fees with a percentage addition to the normal costs. Although the possibility of serious conflicts of interest arising in such cases is probably remote, it should be ensured that any uplift of this type is unlikely to impair impartiality in the conduct of a case". It is very important that we should take note of that.

Paragaph 76 is not very long and I shall read the whole of it: We are also concerned to ensure that the availability of conditional fees is not perceived as a reason for not maintaining legal aid eligibility levels, and for not extending legal aid to those areas where it is presently unavailable but much needed. For the reasons outlined above, we do not regard the arrangements for conditional fees as a realistic alternative to legal aid". That paragraph expresses views that have been aired in all parts of your Lordships' House. However, I think in both branches of the profession there is still, in spite of the denial issued by my noble and learned friend the Lord Chancellor in reply to comments I made at Committee stage, this feeling—that conditional fees, when they are introduced in order to save legal aid, will not be used for extending legal aid to the desired extent. We must be very careful about that.

I do not envy my noble and learned friend the Lord Chancellor in the problems which confront him on legal aid. They are not of his creation and they are not of the creation, let me hasten to add, of his predecessors either. I hope I am not using the expression frivolously—my noble and learned friend Lord Hailsham may think I am—but the truth is that the terms of trade have altered. We must take note of that and do all that we can to mitigate the results of it.

6.30 p.m.

Lord Ackner

My Lords, it was quite some time ago that I appeared before the Court of Appeal presided over by the Master of the Rolls, Lord Denning. I had more than the usual thin veneer of self-confidence, because I had a case not only dead in point but one decided by his Lordship the Master of the Rolls. Having trotted it out with that air of confidence, he said, "Oh, but that was 17 years ago".

I do not know whether the same applies in this debate, because it was only six-and-a-half years ago that the Government produced a White Paper which was the Government's response to the report of the Royal Commission on Legal Services, and it dealt with a wide variety of recommendations by the Benson Commission, as it has been known, a large proportion of which have been repudiated within the last year by the Government's Green Paper.

I do not go back on them. I go straight to the recommendation with regard to legal aid and that is to be found on page 10, right at the bottom. It reads: The Government believes that legal aid should be available to assist those of small or moderate"— and I emphasise that— means by giving them the same chance to pursue or defend their legal rights as those in a position to instruct lawyers privately, provided that it has been shown that there are reasonable grounds for pursuing or defending the rights in question". Those sentiments are certainly not being carried out in practice now. Those of moderate means cannot afford without legal aid to litigate and they are not any longer eligible. It is not appreciated as fully as it should be that legal services are by their very nature expensive. So are accountancy services; so are any services that are labour intensive.

I had the pleasure of addressing the undergraduates at Exeter University last month, giving the annual Bracton Law Lecture, and I made the point to them, which will be well known to your Lordships, of how much costs have changed in those matters which are work intensive. I gave them, first, the example of the plumber who before the war one could pay, quite happily, five shillings, or 25p, to repair a leak in a pipe or put a washer on a tap. It now costs 100 times that, £25 in London at least, to get a plumber to cross the threshold. I also instanced the hairdresser. In my undergraduate days I went to Austin Reed's. It cost one shilling, or 5p, with threepence in those days for the tip, making 64p. The cost is now more than 100 times that figure.

Going to the other end of the scale, the most expensive firm for handmade shoes in London, in Bond Street, before the war charged 7 guineas, which is £7.35p. I phoned its counterpart that still exists and a handmade pair of brogues now, without VAT, costs over £800. Therefore the indication that a professional man now charges £200 an hour is only an indication that his figure before the war of £2 per hour has gone up in that sort of proportion.

It has not gone up to that extent at the Bar, so I understand, because, if one takes the figure appropriate for a half-hour conference before the war, it was one guinea. It is now not for the junior barrister, unless he has had to read a whole series of papers, 100 guineas. I am told that it is in the region of £50 to £70. But in legal aid. I am told, the figure which is laid down for a barrister's conference of one hour—that is, twice the one guinea, because the one guinea was for half an hour—is £28. So the cost has gone up not 100 times, like so many labour-intensive activities, but 14 times. That is all. That is an indication—and I am sure that the same sort of approach applies equally to solicitors—of the sacrifice that is being made by the profession to enable legal aid to be provided, but still eligibility is kept right down.

May I go now to the Government's philosophy as we have learned to understand it, if understand we can? It is encapsulated in that often quoted incantation: free competition will ensure through market discipline the most efficient and effective network of legal services at the most economic price.

I do not know whether my noble and learned friend the Lord Chancellor recalls a 21st anniversary dinner at Birmingham which he attended a little less than a year ago. I have a picture. I do not know whether it was taken before or after the dinner, but he was looking remarkably healthy. At that dinner Sir Gordon Borrie made the after-dinner speech and he said this, which relates so much to the philosophy which I have just quoted: The free play of market forces is of no use to the significant and rising proportion of the population who cannot afford to enter the market and are not eligible for legal aid". He went on to say: It is essential for the Government to give an unequivocal commitment that public support will be available to pay for essential legal services that cannot otherwise be afforded. Gradual rises in individual prosperity are not enough to make up for serious deficiences in the funding of legal advice". The unequivocal commitment which Sir Gordon Borrie, the Director General of Fair Trading, thought the Government should give has not been given at all. All that has been provided is a promise that, in something like three years' time, a survey will have been completed. One is bound to compare the speed which has been thought appropriate to apply to the process of the Courts and Legal Services Bill, with the Green Paper starting under a year ago and the Third Reading about to be finished tomorrow, with this proposed three years or thereabouts for an inquiry into eligibility. The period spent on this vital legislation was referred to by the noble Lord, Lord Beloff, who said that it was as though an emergency powers Bill was being passed with the enemy on our doorsteps. If that degree of alacrity can be adhered to, why on earth does it take three years to carry out vital research into a matter which cannot require anything like the energy that this Bill has required?

I go next to the question of tribunals and I fully support what the noble Lord, Lord Irvine of Lairg, has said with regard to the industrial tribunals and their complexity. We finished yesterday a two-day hearing of an appeal from an industrial tribunal concerned with race discrimination. It had gone up from the industrial tribunal to the employment appeal tribunal and to the Court of Appeal, where the Court of Appeal dismissed the application with a dissenting judgment and said that the employment appeal tribunal had overlooked that the industrial tribunal had not properly performed its function, in deciding as to whether a particular point had been satisfied by the ministry, and ordered that the application be sent back.

We completed our hearing. The result is quite apparent from the fact that we did not call upon the appellant to reply. That is some indication of complexity. There is a shortsightedness by the Government with regard to saving money by denying representation. Every judge is prepared firmly to make this observation: a case which is well presented takes far, far less time and enables one to be much more likely to reach the right result, thereby economising on the need for appeals. This is so often the case where you have complex matters such as are involved in the industrial tribunals.

The last point I would make is an enquiry. When I heard there was a suggestion about an order being made by my noble and learned friend the Lord Chancellor under Section 131 of the Employment Protection (Consolidation) Act 1978 to order the cases that have hitherto been tried in the High Court or elsewhere to be tried in the industrial tribunal, I looked up the section and I find that he can make an order under the section if the claim satisfies either of the following conditions: first, if it arises or is outstanding on the termination of the employee's employment or, secondly, if it arises in circumstances which give rise to proceedings already or simultaneously brought before an industrial tribunal otherwise than by virtue of this section. Alternatively, if the order so provides, it may satisfy both those conditions.

If an order is contemplated which only involves satisfying the obligation that the claim arises or is outstanding on the termination of the employee's employment, that will involve sending to the industrial tribunal a wide variety of claims where legal aid is now available which have nothing to do with the employment protection litigation, which all relates to the ordinary contractual relationship between employer and employee. I merely inquire as to whether the order has yet been sufficiently worked out to discover what will be its nature. If it is of the more restrictive kind, then in my respectful submission it is obviously quite wrong to withhold legal aid from such a tribunal and now to extend its jurisdiction.

6.44 p.m.

Lord Meston

My Lords, I feel I ought to declare an interest as a recipient of legal aid fees as a practitioner, I am proud to say, on the "cab rank", although I shall never be able to stand there in the sort of shoes to which the noble and learned Lord, Lord Ackner, has referred.

My first thought on hearing of this debate was to wonder why the noble Lord, Lord Mishcon, thought it necessary to bring the legal aid horse out of the stable again so soon after it had been thoroughly flogged round the course during the passage of the Legal Aid Act of 1988, and particularly since later this year we hope to see the first substantial report of the new jockeys at the Legal Aid Board.

The thought even crossed my mind that perhaps the House might have heard recently rather too much from the legal profession; but any such doubts were misplaced. This has been a stimulating debate, and the reports we have been considering cover new and continuing areas of concern. They also touch on some familiar areas, and what is now an all too familiar area of concern is dealt with in paragraphs 65 and 66 of the advisory committee's report. That relates to the impact of the entry of financial institutions into the conveyancing market, to which reference has already been made.

Under the rather depressing heading, "Breakdown in the Network", the committee say as follows? some firms may disappear altogether and others may shed their less profitable but time-consuming work so as to develop other areas of practice. In either case it is likely to become more difficult for the legally aided client to find a solicitor to act for him or her. Again, in paragraph 66 the conclusion is reached that, Whatever solution is adopted, it is likely to cost money if the services available to the legally aided client, particularly in rural areas, are not going to decline. The noble Lord, Lord Mishcon, dealt with the question of eligibility, particulary for civil legal aid. I read the letter from the Lord Chancellor to the Legal Aid Board dated 29th July 1988, which was published in the board's first report of May 1989.

In that letter he indicated that the Government did not intend the broad proportion of the population eligible for legal aid to increase. But more of a problem, I suggest, is assessing the rate of decrease and looking after the interests of those on the margins of eligibility.

If we had the Utopia suggested by my noble friend Lord Hanworth, it would be marvellous; but if we do not and we have to make the best of the existing system I suggest to my noble friend that defamation cases would not be a priority for legal aid and one of the ways forward would be to consider wider use of legal services insurance. However, the difficulty is that when one looks at the proportions of the population eligible for legal aid and the question of financial eligibility, one is looking at several moving targets and frankly, it is not surprising that there is controversy over statistical analysis.

As we were also told, on the 13th November 1989 the noble and learned Lord the Lord Chancellor announced a review of eligibility to be undertaken by a working party over the next two or three years. That review was rightly welcomed by the advisory committee. However, as has already been said, the advisory committee had earlier called for an independent review of eligibility. It is a matter for regret that there is no independent element in the working party. I also share the advisory committee's hope that the working party could speed its work in order to prevent the downward drift in eligibility gathering momentum.

We must be concerned at the closing words of paragraph 15 of the advisory committee's report: the decline in eligibility and the increase in the costs of litigation show clearly that there has been a 'squeeze' on those seeking access to legal services. The whole question of accessibility to legal services is something which I understand the Legal Aid Board is actively concerned with, and to that extent perhaps we should suspend judgment. However, this relates not only to where one should go for legal aid and advice but how quickly it can be provided. At the time board took over, the speed of processing legal aid applications could only be improved. There were agonising delays, particularly in matrimonial cases, affecting not only the applicant for legal aid, but the other party to the litigation or prospective litigation, and the children. I welcome the board's efforts to set and improve targets. That must remain a major priority.

Next there is the question of what can or cannot be done with legal aid once it has been granted. As has already been said, we still cannot have legal aid to be represented before tribunals. It is almost part of the ritual of these debates to call for legal aid to be extended to tribunals, and frankly it was encouraging to read the conclusions of the authoritative research summarised in paragraphs 130 and 131 of the advisory committee's report.

To be personal for a moment, I have just completed the ninth day of an industrial tribunal case brought by an applicant in person. We have at least two more days to go. I have no doubt whatever that if the case had been professionally prepared and presented, it would have taken half the time and involved about a quarter of the paper. It is no longer possible to say that industrial tribunals deal simply with simple questions. The law relating to dismissal, discrimination and the Wages Act is becoming more and more sophisticated. If, as has already been said, breach of employment contract damages claims will also have to be taken to the tribunals, there is a serious risk of injustice if proper representation is now allowed.

Legal representation can save money and time in the long run, not just in the way in which cases are presented but in settling them. Despite the adversarial image of lawyers and the Bar in particular, we spend a good deal of our time trying to spare our clients the expense, delay and upset of going to court.

That leads me to consider the question of conciliation. I agree with much of what has been said, and I welcome the suggestions of the advisory committee. I am familiar with the conciliation system as it operates at Somerset House and in some other county courts. I have seen the results of mediation in matrimonial, financial and property disputes. I want to emphasise one point: whether or not conciliation is to be court based, it has to be law based. The lawyers should not be allowed to disappear completely into the background.

For conciliation to work effectively, someone will still need to collate the information and to define, if not to present, the issues to the conciliator. My misgiving about conciliation in practice is that the weaker party—that is usually the wife in a matrimonial dispute—may be insufficiently protected from pressures to reach an agreement which may be contrary to her interests. In conventional court proceedings such a person usually has that protection. There may be further pressure towards reaching an agreement, whether or not it is in the person's interests, if the Law Commission's proposals relating to divorce are accepted and agreement on financial and property matters becomes the prerequisite for a final decree of divorce.

Therefore, I suggest that, welcome as it is, the move to conciliation still must involve a role for the lawyer. I welcome the suggestion in the advisory committee's report that the legal aid charge (that is the statutory charge securing the costs of the litigation) might not apply in respect of the costs of conciliation. That takes me to the question of the statutory charge. Reference has been made to the taxpayers' money. When one deals with the statutory charge one is dealing less with the taxpayers' money and more with the litigant's own money.

The rationalisation of the charge has removed one of the matrimonial lawyer's procedural nightmares. However, I suggest that there are further areas for rationalisation. First, the £2,500 exemption which has been around for a great number of years. It is still of some use in matrimonial cases but it will become an anachronism if it is not kept in line at least with the social security capital disregard.

The question of interest now operates on the amount charged against the matrimonial home. That is interest which now rolls up on the amount charged.

It will need careful scrutiny, particularly if house values continue to fall and commerical interest rates continue to rise. There is still the anomaly that the charge cannot be deferred if it is secured on a home which is recovered and preserved for an unmarried mother with children, for example, in Law of Property Act proceedings, or for a child under the new proceedings introduced by the Family Law Reform Act 1987. I urge the noble and learned Lord the Lord Chancellor to look at these and other areas of potential hardship particularly now that the legal aid fund can charge interest and will recover its money in the long run.

In this week's New Law Journal there is a very interesting article entitled "In defence of the Green Form" by Dr. Sheila Hill. She concludes with a paragraph which is worthy of being read to your Lordships: In view of the precarious position of the legal aid system as a whole, it is incumbent upon critics to base their attacks on reason rather than conjecture and assertion. It is unhelpful to exaggerate the inadequacies of the legal aid system or the practitioners who operate it. It may make good headlines, but it will not help to preserve or to improve the system for those clients who have no choice but to use it. That reminds us that legal aid is not a public service so much as a private one which is publicly funded, depending on the willingness and the ability of the lawyers who operate it. During the passage of the Legal Aid Act there were repeated references to a second-rate service. I hope that we shall never hear that phrase used again.

6.56 p.m.

Lord Prys-Davies

My Lords, the 39th Annual Report of the Law Society is the last report which will be issued by that body. We should thank the Law Society for its stewardship of the legal aid system for 39, or is it 40, years? It seems that it was left to the Lord Chancellor's Advisory Committee to draw attention to our misgivings and to the areas which are the justified cause of concern.

The principal issue which has emerged in the course of this debate is that too many people are now outside the scope of the legal aid system because the qualifying conditions are too low. It is surprising that that should be so because I believe there is a greater awareness by people of rights which are to be defended or of decisions which need to be challenged. There is an increase in the number of marriage breakdowns and in the number of people charged with criminal offences.

It is not surprising that more money is being spent on legal aid than ever before. A further point was powerfully made by the noble and learned Lord, Lord Ackner; namely, that inflationery pressures are also at work. Nevertheless, the dreadful fact remains that only about 56 per cent. of two-parent families with two children were eligible for civil legal aid in the year 1988–89, which is well below the 70 per cent. which applied in 1986–87 when the White Paper was issued and which had been established in 1979 by the late Lord Elwyn-Jones whom we remember tonight with great affection.

My noble friend Lord Mishcon dwelt at length on the significance of the fact that so many people are now excluded from legal aid. People with modest capital and income who are now just outside the reach of legal aid feel very strongly that they are excluded from benefits of the legal aid system. I have a feeling that this issue will not go away.

It is also my belief that there is broad agreement that the policy should be to restore as quickly as possible the 1979 level of eligibility. Reference has been made by many noble Lords to the review announced by the noble and learned Lord the Lord Chancellor on 13th November which is not expected to complete its work for about two or three years. A great deal of anxiety has been expressed that it should take two or three years to complete all aspects of the review. We therefore earnestly hope that the statement of 13th November does not mean that the Government propose to do no more for the time being in order to bring people within the scope of the legal aid system. My noble friend Lord Mishcon has urged that the noble and learned Lord should ask the review team to report on the need to uprate the financial condition before the end of the year so that people are not denied the means to defend their rights and challenge decisions. We await with great anticipation the noble and learned Lord's response to my noble friend's question.

I now want to turn to another issue which is beginning to emerge. The 39th Annual Report shows that for the first time since legal aid was established there was a fall in 1988–89 in the number of solicitors' offices receiving legal aid payments. This is the first time that this has happened in 39 years. That piece of evidence is to be found in appendix 4C of the report on page 68 and is again referred to on page 124 of the advisory committee's report. In 1988–89 legal aid payments went to 11,558 solicitors' offices, compared with 11,617 offices in 1987–88. One could say that that is a small fall, but I believe that the actual fall is almost certainly larger than the figures suggest. I say that because of the time lag involved. Payments will continue to come into a solicitors' office for about two or three years after the office has ceased to undertake new legal aid work.

It is agreed that too many people are unable to obtain legal aid because they are outside the financial criteria. If appendix 4C has picked up the beginning of a trend and that trend continues, there is now the possibility that even where a person obtains a legal aid certificate, it may in future be more difficult to find a solicitor who will accept instructions under the certificate. Appendix 4C is consistent with the evidence of the Law Society and the CAB that solicitors are withdrawing from legal aid work because the remuneration is below that for private work. That point has been made by a number of speakers in the course of the debate.

Before I leave appendix 4C I want to mention that it also shows that large firms are earning an increasing slice of the Legal Aid Fund. This may be a worrying trend. Thus in 1988–89, 36.7 per cent. of the legal aid budget was paid out to offices receiving more than 120,000 a year from the Legal Aid Fund. I have compared this figure with the figure for the years going back to 1985–86. In 1987–88, 31.06 per cent. of the payments went to large firms, compared with 23.7 per cent. in 1986–87 and only 18 per cent. in 1985–86. In that four-year period the slice of the fund paid to the large firms has increased from 18 per cent. to 36.7 per cent. It would be helpful if the noble and learned Lord could tell the House what is the true significance of this trend, bearing in mind the widely felt concern voiced by many noble Lords during the course of the debate and during the passage of the Courts and Legal Services Bill that the smaller high street firm, if it loses a substantial slice of conveyancing work as a result of the new legislation, will not be in a position to continue to cross-subsidise legal aid work.

I should now like to mention another important issue which has been highlighted not for the first time by the Lord Chancellor's Advisory Committee and has been underlined by my noble friend Lord Irvine of Lairg, by the noble and learned Lord, Lord Ackner, and by the noble Lord, Lord Meston. I refer to the failure to ensure that legal aid is available for more representation before tribunals. Reference has been made to the authoritative report last year on the effectiveness of representation at tribunals. It is well worth reminding ourselves that the team discovered that 150,000 cases a year were dealt with by tribunals. The research team concluded that representation at tribunals is full value for money, a point made by many speakers during the debate.

That is not the only reason or indeed the main reason why legal aid should be available for a greater breadth of representation before tribunals. The decisions of tribunals such as the Social Security Appeal Tribunal, the Industrial Tribunal and the Immigration Appeal Tribunal are as likely to affect or impinge upon the lives of many families, often disadvantaged families, as the decisions of the ordinary courts of law. I should like to remind the House of three significant findings of the research team. First, it found that 46 per cent. of cases which came before the Social Security Appeal Tribunal proceeded without the appellant or a representative of the appellant being present. Secondly, it found that in cases before the Industrial Tribunal only one-third of appellants were represented by lawyers while 48 per cent. of respondents were so represented. Thirdly, the research team found that the presence or absence of representation had an important effect on the outcome of the case. The advisory committee added that it had an effect on the quality of justice administered by tribunals. Tribunals, like the ordinary courts of the country, deal with basic individual rights. Their decisions can affect the whole family. We believe that the law should therefore guarantee representation before tribunals either by lawyers or by specialist advice centres where the appellant is eligible for legal aid.

Another point should be made. If legal aid were made available for tribunal representations it could lead to another beneficial result. Experienced solicitors in private practice are not attracted to welfare law. It is possible that more solicitors might be attracted to practise welfare law—this field which has been so neglected—if representation were to be made available before tribunals.

The final matter to which I should like to refer briefly is the need to identify gaps in the provision of legal services in a particular community or sector and then to take steps to fill such gaps. This aspect was touched upon in one of the debates in Committee on the Courts and Legal Services Bill. The efficiency scrutiny team recommended that some body should be under a duty to identify unmet needs and to consider how they should be met. That recommendation was made three years ago. Can the noble and learned Lord the Lord Chancellor tell us whether this work is being undertaken by any body?

I think that we all agree that the introduction of legal aid was one of the great reforms of this century. But there is clear evidence that it is being squeezed from two directions. Fewer people qualify for legal aid and it may be that fewer solicitors are prepared to undertake legal aid work. If nothing is done to address those two problems a significant proportion of our people will be denied access to the courts and to the tribunals to defend their rights and to challenge decisions which affect their lives.

The Lord Chancellor's Department is in the driving seat in this respect and, notwithstanding the pessimism expressed by the noble and learned Lord, Lord Simon of Glaisdale, we give it full support in its efforts to obtain the substantial and additional resources which are required.

7.12 p.m.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, I should like to begin by expressing my gratitude to the noble Lord, Lord Mishcon, for initiating this debate. I should also like to thank all noble Lords who have spoken. The subject of legal aid, and a great number of its aspects, is a matter of supreme importance to the Lord Chancellor's Department and to the Lord Chancellor himself. I certainly have endeavoured to take a close personal interest in such matters since I have had responsibility for them and I know that my noble and learned friend Lord Hailsham of Saint Marylebone did likewise when he was in office.

I am extremely grateful to my noble friend Lady Faithfull for suggesting that the staff of the Lord Chancellor's Department should be increased. I hope that her plea will be effective. However, I must be realistic on such matters. As my noble and learned friend Lord Simon of Glaisdale pointed out, neither the Lord Chancellor's Department nor the Treasury has money of its own and any money which is to be used for improving legal aid in any respect comes from the taxpayer. Of course, in deciding the level at which such matters should be set, there are very general considerations to be taken into account into which it would not be appropriate for me to enter on this particular date. But once such a decision is taken the question of priorities arises within the competing claims. As was pointed out by my noble and learned friend Lord Simon of Glaisdale, there are competing priorities between social goods, and I believe that this aspect is one which has a considerable priority. I believe that when we look at the situation realistically we shall see that the expenditure on legal aid over the period of this Government's office has been extremely large and that it has increased considerably.

Perhaps I may first, especially in the presence of my noble friend Lady Park of Monmouth, say a few words about the advisory committee. The situation is that we now have the Legal Aid Board in position. During the debate on the Legal Aid Bill I stated that I intended to review the role of the advisory committee some 12 months after the Legal Aid Board had taken over its responsibilities; that is to say, after April 1990. That is still my intention, although I shall not be in a position to make a final decision until about the middle of the year.

The White Paper on legal aid indicated—that is, the White Paper which preceded the Legal Aid Bill—that the role and function of the advisory committee would inevitably change once the Legal Aid Board was established. I am presently discussing with the committee its future position. I recently wrote to my noble friend stating that while I cannot say at this stage what will be the final decision, I am not currently minded to keep the committee in its present form as it no longer has a central role as a lay element to counterbalance the profession's administration of legal aid. I am also concerned to avoid duplicating the Legal Aid Board's work with regard to advising me on the provision of legal aid. In that respect I should like to see the board's annual report, which is expected in June, before finally deciding on what further arrangements may be necessary.

I informed my noble friend, who is the committee chairman, that I am particularly keen that the legal services conferences should continue. Those conferences are presently arranged by the committee as a key part of its activities. I believe that they are important as a means of ascertaining and bringing together the views on the arrangements for legal aid of all those who provide legal services. I have therefore asked the committee to advise me on how the legal services conferences might be maintained and developed and to outline the responsibilities which it might continue to have regarding them. As I said, discussions between the committee and myself on the issue are taking place at present. It would be appropriate, and not just because my noble friend is present in the Chamber, to say how much my predecessors in office and myself owe to the labours of the advisory committee over the years. I believe that it has a role to play in the future on the lines that I have indicated. But, of course, it is wise not to duplicate effort in this area because the resources for such efforts are scarce.

The next matter with which I should like to deal is the general question of eligibility and the funding associated therewith. The advisory committee in its report argues that the legal aid statistics indirectly show a fall in eligibility for legal aid. As your Lordships have mentioned, and as the report also notes, in November of last year I announced a package directed towards helping some of the more vulnerable groups. It was to take effect from April of this year.

From 9th April children's means will be assessed separately from those of parents. That means that most of them will be eligible without contribution. In my view that is an extremely important improvement in the arrangements. I believe that it would not be right to underestimate it. As I said, it means that most children will be eligible without any contribution whatever being made. In addition, pensioners dependent upon a small capital nest-egg will receive additional protection and all litigants in personal injury cases will have the benefit of an increased upper limit.

In November I also announced a review of the financial conditions for legal aid. Your Lordships and members of the advisory committee expressed some concern that the review is planned to take up to three years before it will be complete. In my judgment that is not an unreasonable period considering the need to fit in with developments to substantive law and procedure.

The review will be staged and will first of all consider legal aid in civil non-matrimonial proceedings in the light of the changes based on the Civil Justice Review. After that, criminal proceedings will be addressed and, finally, matrimonial proceedings. Matrimonial legal aid in particular must take account of the programme of work which covers the divorce process, conciliation and the court structure. A number of noble Lords made reference to these matters, including my noble and learned friend Lord Simon of Glaisdale and my noble friend Lady Faithfull. I personally am very interested in actively pursuing the possibility of improving the quality of the entire divorce process. The Law Commission's proposals on divorce, conciliation and the court structure—what is sometimes referred to as a family court—that is required to deal with these matters are under consideration. I believe there is considerable scope for improvement in that area.

As my noble friend Lady Faithfull pointed out, the Newcastle report does not give a sound basis for supposing that legal aid funds would be saved by opting for a conciliation service on a grand scale. The report also expressed doubt about the wisdom of opting for a court-based conciliation service. Therefore there are important issues to be addressed in that connection. I do not think it would be wise to try to deal with those issues in isolation.

I shall now return to the review. I made it clear in my announcement that any recommendations made in the course of the review, where practical and appropriate, would be implemented as soon as possible rather than waiting for the end of the review period. Therefore I hope that as we go along we may be able to make improvements. There will of course be consultation on the review while it is in progress.

One of the purposes of this review will be to explore whether there are ways of helping those of more substantial means when they are faced with the prospect of litigation costs which are beyond their reach. The noble Viscount, Lord Hanworth, suggested that it might be possible to have a graded system which would cover everyone. The noble Lord, Lord Meston, described that as an ideal world. I suspect that that may well be the case, but one of the objects of the review will be to see to what extent more flexibility can be introduced into the system. It is not just a question of reviewing the limits and seeing whether they can be raised, because we review the limits annually on the same basis as social security is reviewed. I should say that the limits represent the limits of disposable income. Disposable income is arrived at after allowing for deductions, including for example housing costs.

I hope that one of the aims of the review will be to see whether we can have a more flexible method of dealing with eligibility. Noble Lords have mentioned huge figures regarding the number of people who have passed out of the scope of legal aid in the past 10 years. Figures have been given ranging from 10 million to 14 million. However, they do not tell us very much about the precise situation of those people. Any statistician who has put such figures forward will realise that they are based on considerable assumptions. For this purpose I prefer to look at the scope of legal aid as it has been taken up. In 1979–80, 190,000 civil legal aid certificates were granted, including matrimonial certificates. By 1988–89 that figure had risen to an estimated 259,000. That is quite an important comparison. I agree that at the very end of that period there was a sign of a small fall, but I believe that comparisons over the 10-year period, which is the basis on which the other figures have been put forward, are a sensible way to consider the matter. If one considers the matter from the point of view of money, gross expenditure on all forms of legal aid has increased from £119 million in 1979–80 to £589 million in 1988–89. That is an increase in real terms of 250 per cent. Although it is always possible to point out that more could be done, it is absurd in the light of those figures to talk of cuts or of a decline in provision for legal aid.

I should say in passing that last year I invited the Legal Aid Advisory Committee to advise me on whether there was any area presently being serviced by legal aid which might be properly discarded in favour of some more important area which was being neglected. Not perhaps surprisingly, the committee could not suggest areas that we should abandon in favour of new fields, although it helpfully suggested possibilities of savings in some areas. Perhaps the most notable of those was the magistrates' courts. I entirely subscribe to the view that any saving and any reduction in waste of legal aid money should be actively pursued. If that money were saved, it would be available for some other desirable projects.

I have already referred to my next point which was mentioned once or twice. The length of time that the review will take is, I believe, reasonable having regard to what I intend the review to do. It is not just a matter of looking at the figures and reviewing various estimates of coverage but rather of trying to see whether we can devise a better system which is more attuned to what people need than the present system. I believe that the review is likely to be speedier than a completely independent review would be. During the course of that review there will of course be consultation.

Universal legal aid with graded contributions, which I believe the noble Viscount, Lord Hanworth, referred to, was considered by the Legal Aid Advisory Committee as long ago as 1984–85. I believe that the committee decided that that method was not a very practical way of making progress.

Some questions have been raised with regard to remuneration. I think it may not be right to say too much about this at present as I have recently intimated to the Law Society and to the Bar the proposals I have for uprating this year. However, I should point out that my department and the profession, or at least the Law Society, agreed to have a survey carried out by Touche Ross two years ago. The survey was carried out for last year's uprating. The results—I do not wish to go into great detail about them—showed that it was perfectly possible to make quite high rates of profit from legal aid remuneration, even after allowing for a notional salary for the principals in the partnerships. It is true of course that that was very much dependent on volume. It is reasonably clear that the larger the volume of legal aid work a firm carries out the more chance it has of making a profit. Towards the end of his speech the noble Lord, Lord Prys-Davies, pointed out that quite a high proportion of the money spent in legal aid goes to people who are working at levels of £120,000 or more. That of course does not represent a tremendous number of cases per week having regard to the average cost of cases. Therefore the problem I face is that studies demonstrated that at that time it was possible to make a profit of quite substantial proportions.

The legal aid remuneration system is not geared to particular firms. It is not a question of paying a particular firm for what it does during the year. Rather, it is a question of paying on the basis of agreed rates. If those agreed rates are shown to be capable of generating a profit, it is hard to take account of the fact that some firms are not able to do that.

I have, of course, considered the question of whether some different system could operate. However, your Lordships will understand that those who have a large business are not particularly keen to offer to work at a discount in order that they may see their less busy brethren rewarded more adequately. It is an extremely difficult problem. I hope that we shall be able to pursue the matter through obtaining further information in the years ahead, by agreement with the profession.

In that connection perhaps I should refer to the point of the noble Lords Lord Prys-Davies and Lord Mishcon, that there is some sign of a fall in the number of solicitors doing legal aid work. As your Lordships know, it has been declared for some time that there has been such a fall. That has been accompanied by a steady rise in the number of pay points at which money is paid to solicitors. The figures that are being used to show a drop in the number of solicitors deal with the number of payment points, they are not necessarily indicative of a drop in the number of firms. However, I agree that that is a matter which must be kept in mind, and I have certainly done so. However, I do not believe that the figures demonstrate any fall.

My time is running short but I do not believe that that matters in view of your Lordships' economy with time, and I should like to say something about tribunal representation because a good deal has been said in that connection. The situation has been referred to by a number of noble Lords. The noble Lord, Lord Meston, comes to us fresh from experience of one such tribunal, in which he is apparently opposed by a litigant in person. That can also occur in the courts, where litigants in person may, nonetheless, qualify for legal aid for a variety of reasons which it is not always easy to determine. I agree that at present legal aid is not available in the type of tribunal to which the noble Lord referred.

Noble Lords have referred to the research on representation at tribunals by Hazel and Yvette Genn, for whose efforts I am very grateful. They have produced a very interesting and illuminating report. I need hardly say that before there is any extension of the scope of legal aid the Government will have to look very hard at the expenditure implications.

As the committee acknowledges, there are also major policy considerations in relation to tribunals. In my view those need to be addressed before one comes to the question of finance. For example—and the noble Lord, Lord Prys-Davies, alluded to this—the researchers noted that lawyers were not necessarily more effective than non-lawyer specialists before the tribunals which they examined and that the provision of legal aid as such across the board was therefore not necessarily the right solution.

The questions about tribunals do not relate merely to their diversity. There are questions now as to how far the Franks criteria of informality and simplicity can be sustained by tribunals administering complex law. That is not to say that one should immediately abandon the approach which has traditionally informed tribunal procedure and go over fully to armed combat between lawyers, but it is a matter which certainly needs careful consideration.

It is also apparent that some appeal tribunals—for example, social security appeal tribunals—to a considerable extent provide an opportunity to correct initial decisions based on insufficient information. That suggests that the focus should not in all cases be directed simply at the tribunal in question but also at the preliminary information-gathering stage.

Those are merely illustrations of the large and complex issues affecting tribunals which I am seeking to study with my colleagues. The precise way forward is difficult to identify, for the reasons I have given.

Some reference has been made by the noble and learned Lord, Lord Irvine of Lairg, and my noble and learned friend Lord Ackner to Section 131 of the Employment Protection (Consolidation) Act 1978. That provision empowers me to enable industrial tribunals to hear certain damages claims arising out of contracts of employment. A difficulty sometimes—not very frequently—arises, in that claims under the contract fall partly within and partly outside the jurisdiction of an industrial tribunal, which is inconvenient to the parties. An order under the Act would enable claims subsidiary to the main claim, generally for unfair dismissals, to be heard together.

It is true that legal aid would not be available in the industrial tribunal, but nevertheless it is hard to see that the claimant would essentially as the result of an order be in any different position from the position he is in now. It would be open to him to choose between the convenience of disposing of all the claims together or of seeking legal aid, if he were eligible, for the subsidiary claim in the county court. There has been consultation on the matter by the Department of Employment and there appears to be general support for the change. I am now considering with my colleagues the details of an order that might be made.

Reference has been made to the anxieties that the committee expressed about the possibility of a breakdown in the network of solicitors' offices and of a reduction in the numbers at the junior Bar. Perhaps I could take the second problem first. My noble and learned friend, Lord Simon of Glaisdale, posed again the question that Lord Gardiner posed many years ago. I believe that the Bar is now returning a new and informed answer to that question. It is making arrangements under which new pupils coming to the Bar may have a measure of financial help and a reasonable chance of pupillage and tenancy, and, if not one of the tenancies, then a library arrangement, which was not in contemplation in Lord Gardiner's time. I believe that those changes, far from reducing the effectiveness and availability of lawyers of standing at the junior Bar, will have the opposite effect. I believe that that will be to the benefit of the legal services in this country as a whole.

So far as concerns the network of solicitors' offices, the problem is said to arise from the proposals in relation to conveyancing. Those arguments have been developed considerably during the passage of the Courts and Legal Services Bill through your Lordships' House. I have no reason to suppose that solicitors will not be able to compete effectively with the institutions. I do not believe that it would be appropriate for me to go into the matter in detail here because we have discussed it in connection with the Courts and Legal Services Bill.

However, I believe that the overall effect of that Bill will be, at the very least, to provide an opportunity to reduce costs. My noble and learned friend Lord Hailsham I am sure would wish to attribute that to Part I of the Bill, which implements the Civil Justice Review. I believe that the opportunity for reductions of costs will not be confined to that part.

I believe that the figures I gave concerning the money that has been expended on the provision of legal aid services demonstrate the commitment of the Government to the provision of those services. I believe that what we have done in seeking to improve the administration and delivery of legal aid is of the first importance. I believe that the administration of legal aid by the new Legal Aid Board which has now taken over from the Law Society is showing signs of considerable improvement. There is plenty of scope for more improvement, but I believe—this point was made by the noble Lord, Lord Meston—that to get the administration into good shape must be the first priority. It is no good having a great scheme available if the delays are so long that one cannot take advantage of it. I believe that administration is very important.

I should like to echo what the noble Lord, Lord Prys-Davies, said about the Law Society's stewardship of the scheme over 40 years. The scheme grew a great deal in its hands and it handed the scheme over with great grace to the Legal Aid Board, which addresses the problem of administration very effectively. It is important that, for example, in cases relating to children, applications for legal aid should be speedily disposed of. I certainly hope that we shall be able to make effective arrangements in connection with the implementation of the Children Act.

The debate has raised many interesting questions, many of which I shall have to keep in mind in the future. However, as matters stand at present, we have no reason to be ashamed of what we have done, as the figures demonstrate.

Lord Mishcon

My Lords, I should like to re-emphasise my debt of gratitude to all noble Lords who have contributed to the debate. Whatever the doubts that the noble Lord, Lord Meston, might have had about the relevance of the debate at this time, he found them removed by the debate. I am most grateful not only to noble Lords, but to the noble and learned Lord the Lord Chancellor for the care which he has exercised in replying to the debate. I know that he will forgive me—he always does—if I point out that I find some matters a little hard to take.

On the eligibility issue, it is rather absurd and unreliable to talk about figures or percentages of those who are eligible and those who are no longer eligible. The noble and learned Lord's White Paper quoted a figure of 70 per cent. of people who were eligible, yet, in November, the noble and learned Lord quoted a reduced figure of 56 per cent. Either those percentages should not be quoted at all or if they are quoted—perhaps I may put this most deferentially—they should be frankly accepted, especially when the figures are contrary to the Government's wishes.

On the question of tribunals, it is not as though there are now fresh issues. The matter has been urged from all quarters of the House over a substantial period of time. If my memory serves me correctly, when the Legal Aid Bill was debated the principle of assisting representation at tribunals by way of legal aid was admitted as one that the Government should take on board. It was then argued that it was a question of priorities between the various tribunals, but the principle was admitted and it was merely a question of when the Government could afford it. Fresh reasons are now given which seem to postpone the matter ever further. I had hoped that we should at least have reached that stage of government policy when we discussed the Legal Aid Bill.

On the question of the three-year period, I admired very much, as I always do, the noble and learned Lord's advocacy. However, if ever I had to go before a judge and tell him that an action should not be heard for three years and use the same language as the noble and learned Lord used about the period of time that would be taken for the review, I know that I should get short shrift from the learned judge when I made that submission. I should be ordered to get moving, to be a little more efficient and to ensure that the case was ready within a reasonable period of time.

Having said all that, I repeat my appreciation. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.