HL Deb 20 December 1995 vol 567 cc1611-41

3.30 p.m.

Lord Cocks of Hartcliffe rose to call attention to the increase in litigation and the consequences for the professions; and to move for Papers.

The noble Lord said: My Lords, on 6th November of this year the House discussed breast cancer screening. It was put to the Minister that while 250 specialist units were needed, only 170 specialist care nurses were available—and would more money be put to that cause? I thought to myself that we were talking as though there were some great supermarket where cancer care nurses sit on the shelf waiting patiently until they are required. That is hardly the case. Everyone who enters the profession makes the deliberate choice that that is the way in which they wish to serve the community. The burden of my case is that the growing threat of litigation is proving a serious deterrent to people who wish to enter the caring services. I say straight away that I have no wish to protect incompetence; and I have no wish to make any party political points. The issue is so all-embracing and serious that it must be discussed in an entirely rational and objective manner.

We are all aware of the situation in the United States. One of the great pleasures of going to the United States is to hear all the jokes which are constantly retold about lawyers. My favourite is this: why is all the high-level nuclear waste in New Jersey, whereas all the lawyers are in Washington? The answer is that New Jersey had first choice.

There is a serious side to this. At random I have chosen a few articles to illustrate the point. First, the Daily Telegraph on Wednesday 1st February 1995 states: A group of British smokers has been granted legal aid to sue the tobacco firms. Robert Hardman fears we are following the US on the path of litigation lunacy".

Next, the Independent on Sunday on 21st May 1995 states: America seeks to curb litigation frenzy—as Britain catches it".

My last example is from the Sunday Times of 12th November of this year which states: Huge legal suits threaten US firms. Litigate and make your fortune".

Perhaps I may refer to the marketing of this aspect. The Financial Times on 8th July 1994 published the results of a survey by KPMG Peat Marwiick forecasting that there would be a large increase in the amount of litigation business, in the property, construction, banking and fraud sectors … and personal injury".

The survey stated that one reason for the growth was the increasing awareness of litigation opportunities, partly because of marketing by lawyers. I have already drawn the attention of the House to an appointment card that I received from a hospital on the back of which was an advertisement by solicitors asking whether people who felt that their treatment was not entirely satisfactory wished to contact them in order to take the matter further. In a local paper on 9th November 1995, Lloyd & Associates, Solicitors, asked: Have you been injured in a traffic accident, at work, tripping or slipping? Have you received negligent service from a bank, accountant, doctor, builder or other professional?".

The advertisement offers a free half-hour interview.

I believe that it is a serious and growing situation. We have all been aware for some time of the grave difficulty of enrolling people into the specialisms of obstetrics and gynaecology. However, a survey in the Doctor, the weekly newspaper for the medical profession, of 7th December, states: Quality candidates for partnerships are increasingly scarce … When does a deteriorating recruitment problem in general practice become a crisis?".

It gives alarming figures. In another place a Question was asked which elicited a reply reported in the Daily Telegraph of 18th December. The article states, NHS 'forced to employ more locums'",

and refers to junior doctor vacancies and unfilled consultant posts and generally gives a black picture.

I hope that the answers will not be used to berate the Government over the shortage of general practitioners because I do not believe that there is very much they can do about that. People are still attracted to medicine but they shy away from the sections where there is a lot of patient contact. The more contact and exposure there is with a large number of people, the greater the probability that sooner or later some sort of trouble will lead to litigation.

We are all aware of the growth in defensive medicine and the way in which tests for the most obscure possibilities are multiplying in order to protect the doctor or specialist against possible legal action. There seems to be a growing attitude in society that if something goes wrong someone must be to blame. That is compounded by the constantly rising expectations which society now has. General practitioners are extremely exposed in their situation and are becoming increasingly anxious.

It is also becoming more difficult to recruit nurses. Nurses find themselves having to write more and more voluminous reports instead of attending to patient care. Those reports become more and more detailed in order to include every possible factor which might be required in the event of legal action. I heard a similar remark from a dentist recently that more and more time is having to be spent on writing up reports. People are constantly looking over their shoulders, worrying all the time.

Those factors apply to medicine which is probably the most clear example. However, the problem also spreads into education. The teaching profession is becoming increasingly alarmed. Litigation within schools is increasing and is seen as a real threat to both class teachers and senior management. At present it is used as a threat and as a way of intimidating, almost bullying, staff to concede points to angry parents and children. "Do as I say or I shall sue you", is the tenor of the remarks. Children and parents know that one can sue staff, even if they are mostly unclear about what and about how to do it—although no doubt more and more solicitors will be only too keen to advertise that their services are available. At this stage the threat is rarely carried out, but I am sure that if matters continue as they are there will soon be a change for the worse.

The fear of litigation is real for all staff in schools, partly because it involves the law, with which most staff are not conversant, and the accompanying threat of media coverage. If we do not do something, that fear of litigation will spoil the climate in our primary and secondary schools.

Let us take the social services departments of our local authorities. Staff are becoming much more nervous than a few years ago. An atmosphere of fear and uncertainty is building up. Staff are concerned all the time with the allocation of finite resources so they have to make choices. People who are left out of various aspects become disgruntled. Therefore every time staff allocate those resources they are at risk that somebody left out will become resentful.

We know of the child protection cases—staff are between the devil and the deep blue sea. If they do not do something in some cases they are heavily criticised. If they do something in other cases they also attract criticism. Again, one has a large group of desperately needed people in society who are looking over their shoulders all the time and worrying.

Accountants have recently been shaken by the Binder Hamlyn case involving £105 million. Architects and the construction industry are also worried. Litigation in the construction industry is inevitably expensive, not least due to the multiplicity of participants and the difficulty in establishing complicated issues of fact which brings about an apparent need for vast numbers of expensive expert witnesses. It is frequently, therefore, a cost-led activity, with sometimes unworthy, potentially costly claims being made as a ruse to thwart worthy but less expensive ones. It even spreads to surveyors, where there is a growing trend for clients to threaten legal action, not only to recover damages arising from professional negligence but also to extract work from an under-resourced consultant.

Even the voluntary agencies are not exempt. Let us consider an organisation like St. John's. We are all familiar with the uniformed figures who stand-by at functions in case anyone is taken ill. When they are on duty they may treat a casualty in good faith, but at the end of a case they may finish up as the target for legal action. Such threats are always at the back of their minds. We are becoming an introverted and egocentric society.

The example to the rest of the world is not good. I recently purchased a copy of the magazine The Big Issue and, like all noble Lords, allowed the vendor to keep the change. The issue of 27th November to 3rd December contains an article headed "Doctors use Pill disclaimer" which states: A medical practice in County Durham is asking women who want to continue using combined contraceptive pills following last month's health scare to sign a disclaimer saying that they accept the risks involved".

The form is admitted to be some sort of protection, against litigation in the future".

The point about that is that we are constantly pressing the developing world to do something about their population problems. We tell them that it is their responsibility to use contraceptive methods. Yet here we are—one of the most widely-used methods is coming under query. If we go to such countries and say, "Use this method", they will reply, "But in your own country people have to sign a form saying that there is no legal responsibility on the person who prescribes it". That is another form of neo-colonialism: we try to get people to do something while at the same time putting up our own defensive barriers.

I have referred to that in the past on the subject of energy. Having for two or three centuries used fossil fuels and created the most appalling pollution, and having built up a standard of living on that basis, we are now trying to lecture the rest of the world on not using fossil fuels and finding substitutes because of the greenhouse effect. That is another form of neo-colonialism. If we are not careful about that kind of thing, we shall create a situation in which the rest of the world is extremely resentful because it will not be a case of "Do as I do" but "Do as I say".

I can offer no solutions today. However, I am grateful to those who have listened to me because I believe that this is one of the most serious problems which faces our society today. I beg to move for Papers.

3.43 p.m.

Baroness Hooper

My Lords, the subject of the Motion before us affects all professionals, as the noble Lord, Lord Cocks, indicated. Most recently, chartered accountants have been under fire in a big way, but even lawyers themselves are under threat. Like the noble Lord, Lord Cocks, I wish to concentrate my remarks principally on health issues and the medical profession in particular. In doing so, I must declare an interest as a non-executive director of the Medical Defence Union.

The MDU is a professional association which provides doctors, dentists and other healthcare professionals with advice and assistance in medico-legal matters arising from clinical practice. One of its main functions is to support members who are sued under tort law for professional negligence and to pay legal costs and damages awarded against them. So there is a real interest in the subject of the debate.

In deciding to speak to the terms of the Motion of the noble Lord, Lord Cocks—and I should thank him for tabling it and for introducing the debate as he did—I sought some facts and figures from the Medical Defence Union. It is true that year on year we have seen a 10 per cent. increase in the number of claims made and a 5 per cent. increase in the amount of costs claimed. Earlier this year, my noble friend Lady Cumberlege stated that the Department of Health is seeing an increase in the number of cases brought to court and in the amounts of money now being awarded through court action. She stated that, although 96 per cent. of the cases brought were settled out of court, the sums are increasing alarmingly. In the past three years they have risen from awards amounting to some £60 million to £125 million. The burden on professionals to insure adequately has therefore greatly increased.

But far worse, I believe, is the effect on the morale of medical and dental practitioners, to which the noble Lord, Lord Cocks, referred. The danger of drop-outs from the profession is great and there is evidence to show that there is a direct correlation between drop-outs and complaints brought. Even worse, there are non-entrants into certain high risk categories of medical practice. There is also the danger that doctors and GPs in particular will go in for defensive medicine. Since primary-led healthcare is the first of the six National Health Service priorities in healthcare, it is to be deplored if GPs, instead of making decisions, refer patients to hospitals or play safe rather than taking risks, albeit based on professional expertise and judgment.

Clearly one would not wish to dispute that patients have rights and I was all in favour of the Patient's Charter. I am in favour of the efforts of the Department of Health to provide more easily accessible and streamlined complaints procedures. We must have a little more evidence of the results to see how the procedures work.

The noble and learned Lord, Lord Woolf, is currently conducting an inquiry into medical negligence and I believe the report is due out in its final form next year. The inquiry is exploring various ways of finding alternatives to court action. As I understand it, there have been considerable consultations with agreement on the need to find alternatives to court action. It is well known that at present many patients sue, particularly for small amounts, when what they most want is explanations, a proper hearing of their complaint and perhaps an apology. They do not usually receive any of those. What they get is a long and exhausting hassle, sometimes with money at the end of it. We need effective and useful alternatives to litigation and I hope that the Woolf Report in its final form will be helpful in that area.

Another issue has affected the number of complaints brought. The noble Lord, Lord Cocks, touched on it and it is the issue of legal aid. The vast majority of clinical negligence cases are brought by people entitled to legal aid and the number of legal aid certificates issued for clinical negligence cases in 1994-95 was, I understand, 8,167. That apparently represents a 7 per cent. increase over the previous year. Although not all certificates issued resulted in cases coming to court, there is a very important point to bear in mind in relation to legal aid proceedings; namely, no costs may be awarded to the defendant, even if he or she is successful. I shall be very interested to hear the views of my noble and learned friend the Lord Chancellor in the light of the work that he has been doing in the area of legal aid.

To return briefly to the Woolf Report, I understand that the noble and learned Lord may advocate a fast-track procedure for medical negligence claims. I question whether it is desirable that issues concerning professional reputations should be decided without the facility to call oral factual and expert evidence. I was asked to make that particular point in this debate, and I think it will be well understood.

Finally, I raise the issue of the role of judges in relation to the awarding of damages. Again, I ask my noble and learned friend the Lord Chancellor: what sort of guidelines exist, and what sort of method may be applied to try to avoid some of the excesses of the United States, to which the noble Lord, Lord Cocks, has already referred?

In summary, it is absolutely necessary to get the right balance between the rights and needs of consumers in relation to whichever branch of the profession is under fire and the need to have proper and expert advice and practice from the professional.

3.52 p.m.

Lord Ackner

My Lords, I hope that the noble Lord, Lord Cocks, will forgive me if I describe him as enigmatic. I do so for the following reasons. On 5th February 1990, on the occasion of the sixth day in Committee on the Courts and Legal Services Bill, Clause 44 provided for what is known as conditional fees, speculative litigation, contingency fees, or whatever one wishes. The noble and learned Lord, Lord Rawlinson, moved that that clause should not stand part of the Bill. There was a detailed debate, during which seven Law Lords, the Master of the Rolls, the former Lord Chancellor, my noble and learned friend Lord Hailsham of Saint Marylebone, and the former Attorney-General, the noble and learned Lord, Lord Rawlinson, all spoke in favour of his Motion. The Motion that the clause should not stand part of the Bill was defeated, in some measure due to the noble Lord, Lord Cocks, who voted with the Government for that clause to stand.

It may be that the noble Lord did not appreciate what might be the consequences. But that particular defence, if that is the right way to describe it, could not have existed after 7th February 1995 when, as the noble Baroness, Lady Hooper, just mentioned, there was a Starred Question concerning medical negligence. It was tabled by the noble Lord, Lord Campbell of Croy, who raised the question: Is it correct that claims are increasing in number, not because there is more negligence but because more of the public are now inclined to enter into litigation following a trend in the United States?"—[Official Report,7/2/95; col. 97.] The noble Baroness, Lady Cumberlege, answered: We are seeing an increase in the number of cases brought to court and the amounts of money that are now awarded through court action. We do not believe that there is an increase in clinical accidents".—[col. 97.] The 96 per cent. of cases settled out of court referred to by the noble Baroness, Lady Hooper, was specified.

The noble Lord, Lord Cocks, took part in exchanges on the Starred Question. He complained about the advertisements that solicitors were inserting in newspapers with a view to obtaining retainers to litigate on behalf of persons anxious to sue hospitals.

After the intervention by the noble Lord, Lord Cocks, I said: does the Minister accept that the position will be exacerbated when the Government allow the practice which has hitherto been prohibited—the contingency fee system—which will exacerbate the enthusiasm of lawyers to take up cases and bring them forward, particularly in the field of personal injuries?"—[col. 98] The noble Baroness, Lady Cumberlege, who did not have notice of the question, very wisely said: that is something that the Government need to consider". So the noble Lord, Lord Cocks, was well aware of that trend.

Therefore, it becomes the more surprising, when on 12th June this year (some six months ago) I sought to amend a draft order which the Lord Chancellor laid before the House to implement the speculative litigation, that the noble Lord should vote in favour of the order. The gravamen of my submissions was that the Lord Chancellor's proposal that a lawyer should be able to double his fees—a mark-up of 100 per cent.—where he succeeded on behalf of a client, was excessive, and that it should be no more than 20 per cent., which was the Lord Chancellor's second thought (his first thought had been 10 per cent.); or alternatively that, in order that the whole of the damages that might be recovered should not be eaten up by the 100 per cent., a cap should be put on the damages that could be recovered as 20 per cent.

We lost that amendment by only five votes. One of the votes against us was that of the noble Lord, Lord Cocks. We should have won that Motion if the Opposition Front Bench had been prepared to follow their troops into the Lobby through which they urged them. But apparently, by some strange precedent, that is not done. I do not blame the noble Lord, Lord Cocks, for that, but I do find it strange that he should be railing against the increase in litigation when so much of it at the moment is—and so much more will be—caused by speculative litigation.

The noble Lord referred to the building industry. At the present moment the conditional fee is permissible only in regard to personal injuries, insolvency matters (I believe), and matters in the European Court. But from a logical point of view there can be no basis for stopping the extension of speculative litigation into the field of construction work.

The Law Commission, whose views are usually respectfully followed by the Government, was not asked for them on the Green Paper on speculative litigation published in 1989. It therefore took the initiative of providing them without being asked. It was hostile to the whole concept of speculative litigation. It recounted the recommendation and observations put in by the official referees—who, as noble Lords will know, are the judges who deal with the complex building industry litigation. The official referees said: We think that architects, engineers and surveyors, also doctors and other professionals, could be particularly vulnerable to claims brought or threatened on a contingency basis. The damages recoverable in most construction cases would make receiving a proportion of them attractive, while for the professional, even to report the claim to his insurers will probably result in an increase in his next premium. In consequence, however strong the professional's case, he might think it expedient to make a 'nuisance payment'; if the professional goes to his insurers and the action shows signs of being fully contested, with large costs involved, a speculative solicitor can always advise his client to discontinue".—[Official Report, 5/2/90; col. 536.] It will be said that that is all water under the bridge. The policy of allowing speculative litigation in the manner permitted at present has been approved by Parliament. But in my submission that is not a situation in which one sits back and does nothing. The purpose of the rule against speculative litigation, which made speculative litigation agreements unenforceable as being contrary to public policy, was twofold: first, to prevent the exploitation of the litigant; and, secondly, to promote the interests of justice.

The question therefore remains: how does one ensure that the consumer is properly protected? That was a matter very much uppermost in the mind of the Lord Chancellor's very own Advisory Committee on Legal Education and Conduct. It has been strongly at odds with the Lord Chancellor with regard to his 100 per cent. uplift policy. It went public about that on the basis that it was a statutory committee and should tell the public how it felt.

In a lengthy letter to my noble and learned friend in April 1995, my noble and learned friend Lord Steyn, the Chairman of that committee, dealt with, inter alia, the question of monitoring. He wrote: Given the novelty and potential risk for the litigant inherent in setting up a system of conditional fee agreements, the committee remains concerned that there must be effective monitoring of the results. The need for effective monitoring would be even greater if, contrary to the committee's advice, you"— that is my noble and learned friend the Lord Chancellor— were to permit a maximum uplift to 100 per cent. The committee does not believe that monitoring will be effective if it has to rely on a sample which may well be unrepresentative. The committee believes that it should be possible, given co-operation between the professional bodies, to require registration of every case with the Law Society, for example, without requiring the disclosure of the parties' names". A separate letter dated 7th April 1995 to my noble and learned friend's department set out, with some particularity, the information which should be provided. That included the type of proceedings to which the agreement relates; the legal representative's estimate of the chances of success, the legal representative's estimate of the amount of damages; the extent of percentage uplift on fees and expenses specified; any variation subsequently made to the agreement; the outcome of the proceedings; the actual amount of damages, if any, recovered on behalf of the client; the amount of the legal representative's fees and expenses, less any increase; and the amount of the fees and expenses paid by the client under the agreement.

I understand that research on a fairly moderate scale will be funded, because all that is being provided by way of grant from the Lord Chancellor's Department is some £20,000. It will be carried out by the Policy Studies Institute. It does not involve any follow-up. It is based merely upon a sample. I would submit that that is quite inadequate.

I have the impression, because monitoring was not something which was offered by my noble and learned friend the Lord Chancellor in response to the fairly firm criticism which was made in the debate in June, that monitoring is not taken at all seriously. In that debate, the Lord Chief Justice described the legitimation of such speculative litigation as letting loose: an alien creature in our justice system".—[Official Report, 12/6/95; col. 1559–60.] I should have thought that that fully justifies monitoring and I would suggest monitoring not only from the point of view of the litigant himself—the consumer—but from the point of view of the defendant in order to see to what extent there is an abuse against a professional because of the threat which exists where one finds a solicitor prepared to take up speculative litigation.

4.7 p.m.

Lord Colwyn

My Lords, I should like to thank the noble and enigmatic Lord, the noble Lord, Lord Cocks, for introducing this debate this afternoon. I should also like to express some sympathy for my noble and learned friend the Lord Chancellor. The debate has tended to become slightly medical and therefore I too shall confine my remarks to the practice of medicine and dentistry. Here I must declare an interest. As well as being a practising dentist, I am a council member of the Medical Protection Society. That is a mutual defence organisation which has 82,000 members practising in the United Kingdom and 150,000 members throughout the world. I am also chairman of Dental Protection, the dental defence scheme, which has 35,000 dental members in all parts of the world. I am an adviser on both medical and dental cases committees.

When we talk about professional negligence, we are not discussing a new phenomenon. The first reported malpractice case in English law occurred more than 600 years ago. The MPS (Medical Protection Society) has been in existence for over 100 years and is run exclusively by doctors and dentists in order to protect and safeguard the interests of their colleagues.

A classic definition of negligence, as stated in the case of Donaghue v. Stephenson in 1932, is the omission to do something which a reasonable man guided by those considerations which ordinarily regulate the conduct of human affairs would do, or something which a prudent and reasonable man would not do. The noble and learned Lord, Lord Denning, stated that in order to test whether an error of judgment by a professional person amounted to negligence: You ask the average competent and careful practitioner: is this the sort of mistake which you yourself might make? If he says, 'Yes, even doing the best I could, it might have happened to me', then it is not negligent". From that judgment flows the test standard of whether a doctor or dentist has been negligent in diagnosis, advice and treatment: is it that of the reasonable practitioner of similar training and experience? That implies that the standard of care demanded by the profession is not static but changes with the state of the art at the material time and must keep pace with changes in medical practice and technological advances.

The noble Lord, Lord Cocks, warned us that the increase in litigation may well prevent many would-be surgeons, doctors and dentists from entering the professions. However, I am informed by the specialists at the Medical Protection Society that there is little evidence for this.

It is worth remembering that the surest way of reducing the incidence of claims is to improve the standard of delivery of healthcare. Public perceptions are of considerable importance. The belief of the hospital, health authority or medical and dental staff that they are providing a superb clinical service will count for little if the public perception in the community is of a poor standard of service.

Good communications remain of considerable importance if serious inroads are to be made into the level of complaints and claims. The hospital or health authority must do its best to create an environment conducive to the provision of caring and competent healthcare provided in an atmosphere of sympathetic understanding, kindness and tolerance in dealings between staff and patients. Communication is a two-way process and requires that the practitioner has time to listen to what the patient wishes to tell him or her.

The noble and learned Lord, Lord Donaldson, said in the inaugural address to the Professional Bar Association in April 1991: There are very few professionals who can honestly claim that they have never made any negligent mistakes, usually it has been put right before the damage occurs but whether this is or isn't the case is largely a matter of pure chance". One reason why patients are becoming more litigious is that there are many hungry lawyers, some of whom actively encourage their clients to litigate and others who advertise for likely clients. Noble Lords will be aware of that from the popular press. We heard from the noble Lord, Lord Cocks, about the advertising on appointment cards, and I am aware of groups of lawyers who are actually setting up offices within hospital premises.

Sadly, the volume of claims may be nowhere near the actual number of incidents. Studies in a large American hospital found that only one person in 65 injured by the negligence of a health worker went on to seek compensation. A study by the Harvard Medical Group found that only one person in eight made any claim. The Journal of Clinical Pathology, in 1991, wrote, All adult deaths at Peterborough District Hospital over a six month period were examined for discrepancies between clinical and pathological findings and for performance as judged by clinicians. 80% provided additional information, unsuspected diagnoses were found in 30% and in 13% the cause of death was 'completely wrong'". The Journal of the Royal Society of Medicine in 1991 wrote, Monthly audit meetings of the surgical unit at Southampton identified 89 'avoidable' deaths over 10 years". The question may be asked whether malpractice litigation has improved the quality of medical and dental care. No one can answer that question with any degree of certainty. It is difficult to see how the threat of malpractice litigation could result in the professional using less care than he would otherwise exercise. However, it is realistic to believe that the threat of being called to answer for wrongful conduct might have a salutary effect on practice. It certainly has a salutary effect on the practitioner. I remind noble Lords that in a practice span of 40 years, doctors and dentists can expect to be accused of negligence at least two or three times. That does not mean that they acted negligently; but even the accusation can be worrying. It is in that context that I prefer to think of negligence in terms of the concept of avoidable harm. If a patient is harmed and it was avoidable, then, if proved, that is called by lawyers "negligence" and the patient is compensated, usually in the form of money. In many ways the accusation of negligence to a professional person is as potentially damaging as the negligent act itself.

Prior to the introduction of Crown indemnity in 1990, defendants were in a much stronger position than plaintiffs, with a small number of competent lawyers—together with the defence organisations—handling claims. After the introduction of Crown indemnity, each hospital or health authority started handling its own claims, which led to a dissipation of expertise. At the same time, the plaintiffs started to get their acts together and, generally speaking, were better organised than the defendants.

Before Crown indemnity, doctors were represented by their defence organisation which had control of the claim. After Crown indemnity, control of the claim moved to the employer. Though there was some disquiet among the professions, no real evidence emerged to imply that that system caused problems with professional reputations. The previous system, whereby doctors subscribed to a defence organisation, was unsustainable because of the ever-rising cost of belonging to the organisation.

Settlements in the NHS hospital sector are currently running at around £150 million per annum with outstanding liabilities—those that have been incurred but not reported—unknown, but estimated to be around £1 billion (about 2.7 per cent. of the total healthcare budget).

Noble Lords may be aware that the Government recently created a new scheme for dealing with that, the aim being to try to contain or reduce the costs of clinical negligence. It is called CNST—Clinical Negligence Scheme for Trusts. The Medical Protection Society, in conjunction with the insurers Willis Corroon, were chosen as the most experienced organisation to run it. The Government set up the NHS Litigation Authority which will be operational in January 1996. However, there are factors which may make the cost of clinical negligence even higher.

Conditional fees for lawyers which are likely to affect claims valued at less than £100,000 means that seven out of eight patients who do not currently sue, may now be tempted. In my view this "no fault" compensation will both increase the costs of compensation and the pressure on the professions. The experience in New Zealand has shown that, despite the "no fault" element, patients still want their pound of flesh and complaints have increased dramatically since its introduction in 1974. "No fault" is only about compensation; it is important to distinguish it from accountability issues.

Changes to the way in which special damages are calculated by the courts are likely to put up the cost of high value claims. Some of the proposals of the Woolf Inquiry, which appears to be very much plaintiff-driven, are likely to make it more difficult to defend claims and increase costs. The continuing government promotion of consumerism with patient's charters, details of how to complain and the Wilson inquiry, all carry a price tag in the form of increased numbers of complaints which may lead to claims.

It is prompt action which enables early settlement of many claims and I am uneasy that the introduction of allowing medical claims to be made to the ombudsman in the near future may be a further delaying factor. The fundamental principle of English claims is that the claimant is entitled to a once-and-for-all lump sum payment. In claims of maximum severity, such as brain damage, there are profound implications for health authorities and defence organisations where sums of between £0.5 million and £1.5 million may be involved.

There is some pressure to reform the law and structured settlements may have something to offer in that regard. Also, in the past five years or so, it has been possible for courts to make orders for provisional damages with a right for plaintiffs to return at a later date for supplementary awards depending on changes in circumstances. A move away from lump sum payments to annuity-type payments may be considered to be more just, despite the fact that such a system would lead to greater uncertainties in the funding of such awards.

The noble Lord, Lord Cocks, drew our attention to the increase in litigation. Nothing can be certain, but it seems unlikely that the appetite of the media and the knowledge of the public with its wish to understand and question the care that the medical and dental professions provide, will reduce.

There is increasing pressure on the professions. The increase in litigation must demand higher standards, more openness and guarantees that the care and treatment that is received is appropriate and effective. Government changes to the legal framework are likely to increase numbers of claims and complaints over and above the amount that may be expected as a result of increasing consumerism.

4.19 p.m.

Viscount Bledisloe

My Lords, on previous occasions your Lordships have debated the effect of modern litigation on professions, particularly the accountancy and medical professions. Although those debates demonstrated a clear consensus in the House that there was a serious problem which was getting worse, on those occasions the Government seemed reluctant to do anything about it. I hope that today we are going to get better news.

The fact that there is a serious problem has been highlighted recently by the much reported case where every partner in a major firm of chartered accountants faces a massive personal liability not covered by insurance from a fault which was nothing to do with the principal partner but was the fault either of one of his partners or probably an employee in the firm. Today the noble Lord, Lord Cocks, has widened the scope of the debate to cover other professions, particularly the caring professions. The House will be very grateful to him for doing so. In the light of the wide scope of the debate my remarks will be somewhat random, though I shall not follow the noble and learned Lord, Lord Ackner, in his continuing and courageous battle on the topic of contingency fees. While he may well be right that they are liable to make the problem worse, I doubt that so far they have had much to do with the problem, and even without contingency fees the problem would be very serious.

In making my remarks I must declare an interest or, to be somewhat more accurate, I must declare two conflicting interests. First, I am a practising barrister who, in view of his total ignorance of the law, must be very liable to frequent claims for negligence. On the other hand, most of my practice consists of professional liability work, either suing or defending accountants and such like. Therefore, if my speech today is successful in curbing this danger, I shall be kicking myself in the financial teeth.

Although the malconsequences of this problem may manifest themselves differently in different professions, the problem is basically the same for all. There are two causes. First, as the noble Lord, Lord Cocks, said, there is a modern philosophy, or lack of philosophy, which says that whenever anything goes wrong someone must be blamed for it. That philosophy is undoubtedly fanned by the media, but it is now a general attitude. No longer when an operation is not a success does someone say that the doctor tried enormously hard but unfortunately it did not work. He says, "I wasn't cured', or, "I've got something else. Who do I sue? Who is to blame?". That theme is taken up by the press and so on.

Secondly, the other basic cause is that the law of negligence has been extended to new fields and, in practice, whatever high and learned judges may say, the test of what constitutes negligence is now very low. When one examines, as cases now do, for many days a routine procedure which was conducted in as many minutes as the case takes days, it is very easy to find something which was not according to the rules or which, with the benefit of cold hindsight, does not seem to have been perfectly done, although at the time probably no one would have thought that there was anything wrong with it. Whatever the tests may say—that it has to be a shocking case where another professional would throw up his hands in horror—it is now very easy to prove negligence, or there is a serious risk that a professional sued for negligence will be found to blame, although at the time probably no one watching him doing it would have thought that he was doing anything wrong.

It is no good blaming the present state of affairs on lawyers, with the possible exception of the few ambulance chasers mentioned by the noble Lord, Lord Cocks. If the law is in a state where it gives a reasonable prospect of success to a plaintiff, it is the lawyer's job to advise him of that and do everything to pursue the case. Though it is always nice to blame lawyers for everything, one cannot blame lawyers for the fact that they advise their clients that they stand a decent chance of getting substantial damages, if that is the actual state of affairs.

The other problem is that when something goes wrong the professional man bears the massive brunt of the claim because he is probably the one person with either the insurance or the assets to pay the substantial sum. Therefore, even though he may bear only a small part of the fault, he may well find himself bearing all the damages, while the others who were much more at fault but have no readily available insurance or assets escape. The professional man is then sued. Not only does he have an enormous bill to pay but the highlight of the blame is on him. I suggest that it is only in the professions that we have this whole concept of a massive disaster falling upon one because of a single fault of a moment committed for the first time in one's life.

That treatment of professionals conflicts with the whole thinking of our treatment of others. The thesis of the criminal law seems to be that a first offender must not be sent to prison. Indeed, the first time that one's employee makes a mistake, unless it is a dramatic one, he cannot possibly be dismissed. In all other spheres of life one is to be helped over one's single first mistake, whereas the professional who makes a single mistake and all those who may be in partnership with him may find themselves struck with disaster because of it.

It might well be thought that this was a bleat that professionals would set up. But I suggest to the House that it is by no means solely a concern of persons who may be sued. Although some individuals receive substantial sums, the cost of those and of the claims is borne by the world at large. As the noble Baroness, Lady Hooper, pointed out, more and more awards mean higher insurance costs and those insurance costs are passed on to everyone—if it is a paid profession, directly in the fees, or if it is the National Health Service, in the cost to the taxpayer. We know of the example of the United States where, if you can get insurance at all if you are a professional, the cost is massive. In some states of America a GP pays as much in professional insurance as a GP earns in total in this country. That means that his fees have to be very high.

Secondly, that generates the entire prophylactic attitude, where the professional man finds himself doing things not because he thinks they are good for the client but because it says so in the rules and if he does not do it he may be sued. It encourages him to hedge and to avoid pursuing bold and clear conduct or giving bold and clear advice. It does not make a good professional operate better. Doctors do not say to themselves, "This patient will not sue me. Let's slash at this one any old how and get it over quickly". Lawyers do not say, "This client cannot sue me. I won't bother to read the papers". Professionals go into their professions to do their job well and they do not do it better because they may be sued.

Thirdly, there is the enormous time spent and the cost involved in the procedures which are designed to guard against a claim, such as filling in forms, recording and so on. People went into the professions to do the work of the professions and not to keep dreary records. Devoted and enthusiastic nurses like my young daughter find it very discouraging that a large part of their time is spent filling in pieces of useless bumf to be filed away in case some dreary lawyer comes along five years later and says, "You did not treat that case properly". They would much rather get on and do the job of nursing, which is why they went into the profession.

Then one is going to find more and more that people will not take responsibility. There is a strong feeling now that a person is mad to take a partnership in a firm of accountants: why not just be salaried and avoid the responsibility? It is no answer to say, "If they were not at fault at all, it will all come right in the end because the judge will get it right". There is an enormous amount of hassle, concern, worry and waste of time spent in dealing with such cases.

Another disadvantage is the sheer dilemma that one faces. If one is a social worker it must be difficult enough, if one believes that a child is being maltreated, to know whether the child should be taken away from its parents. If the child is taken away the parents may sue; if the child is not taken away and is injured, the newspapers may criticise and there may be a prosecution. That makes the decision of the social worker more difficult; I do not believe that it makes the decision better.

It has been suggested that where something has gone wrong very often patients simply want a sensible explanation and an apology, if that is appropriate—then one will find out what one's insurer will say if one has given a sensible apology to someone and it turns out that it is being used as evidence of one's liability!

The speeches today have demonstrated quite clearly that there is a problem, but it is fair to say that they have been pretty short on remedy. I see that the noble and learned Lord on the Woolsack is rather agreeing with that. I suggest to him, at least for serious consideration, some possible remedies. I suggest that the time has come to have a comprehensive review of the whole concept of the level and test of fault liability. I do not believe that we should switch to no-fault liability. But we should consider whether what is blameworthy negligence has gone too far and whether in practical terms the test of where one should be held liable should be raised.

Secondly, I urge on the noble and learned Lord a system for the limitation of liability to the levels of compulsory insurance. The professionals should be compelled to take out insurance at various levels if they practise in various fields and their liability should be limited to those levels.

Thirdly, I suggest that we should contemplate what I believe some Americans are contemplating—restricting the extent of a professional's liability to the extent to which he is to blame. If an accountant is 25 per cent. to blame and the directors are 75 per cent. to blame but have no money, why should the accountant bear more than 25 per cent. of the overall loss?

Finally, surely we need to do something to encourage a proper appreciation of the unsung work done by the professionals as opposed to homing in on the occasions when things go wrong.

4.34 p.m.

Baroness Gardner of Parkes

My Lords, when I was a dental student we studied a subject called "dental jurisprudence". We were taught that if one became a general dental practitioner, one's responsibility was to do one's best for the patient within the limits of one's training and experience. If one was incapable of doing a specialist's job, then the patient should be referred to a specialist who had a greater responsibility.

That practice seems to have gone completely now. It now seems that everyone expects everything to be done perfectly all the time. The point has also been reached where none of us wants to accept responsibility for our own actions in life. There is the matter of pension advice, and the case of the man who tripped on Brighton Pier who said that the council should have displayed a notice; I believe that he was awarded£75,000. Whether or not it is because of television, we are all a little litigation-happy; we look to someone else to lift the problems off our shoulders and give us a nice cash handout. It is very worrying.

I am chairman of the Royal Free Hospital, which is the largest single-site teaching hospital in London; we receive a great many complaints each year: in fact, I encourage them. I do not look on them as complaints as much as feedback. One does not know that a person had difficulty getting to the lift unless that person writes in and says so. One does not know that someone did not like a sandwich. Some of the complaints are very easily dealt with. I believe that the noble Viscount, Lord Bledisloe, was very clear on that. Many patients are simply looking for a solution so that a particular incident does not happen again to someone else. They like to know, for example, that there is a porter near the lift to see people get in and out or that the freshness of a sandwich is checked. Many people's complaints fall into those categories and they are very easily resolved.

There are also some very serious complaints. Some of them are serious right from the outset, and clearly so. Every complaint made to the hospital is investigated. There may be a major issue, such as a case I know of where a patient was shot in the hospital by a contract killer. That required a full internal hospital investigation. I do not know whether such an incident has ever happened elsewhere in the United Kingdom. That occurred just before I took up my appointment as chairman at the hospital. There was a coroner's inquest because it was a major incident. All kinds of experts were required to give opinions and advice. I believe the police had their own inquiry: almost everyone had an inquiry on this matter. That is a rare incident that no one could have foreseen and, apart from the killer, no one could be blamed because nothing could be done.

However, if a similar case occurred and it came out at the inquiry that someone could have done something—for example, perhaps an operation was an hour late or the wrong blood was given—we would certainly wish to deal with that within the hospital straightaway. It might be that that particular patient had grounds for bringing an action.

What worries us very much is that in any litigation, under the rules of disclosure, the details of the internal inquiry of the hospital could be demanded by the other side. We are very worried about that because it means that there is a great disincentive to hold full internal inquiries. Concern is expressed by various practitioners at the hospital as to whether their defence unions—we have heard two speeches on that point today—will allow them to give evidence. The unions may say that they do not want their staff to give evidence if they may be involved. Shall we reach a point where we shall be unable to have a really frank, open and valuable inquiry that will provide the information that we need in order to deal with an issue and to make sure that it does not recur, without creating a ready-made legal case for someone and handing it to them on a plate? Therefore, it is a cause for concern.

I have a number of questions for the noble and learned Lord the Lord Chancellor as to how one screens out those who might be litigious from those who are not. That is a question that needs to be answered. New National Health complaints procedures are just being introduced. That is why I am so pleased that this debate is being held today because it is timely. There is a major report by the review committee on NHS complaints procedures entitled Being Heard. It is now referred to as the Wilson Report, and it is just coming into force. There is a section in that report—paragraph 69—entitled "Fairness to practitioners and staff' with which we all agree. The next heading is, "Avoidance of unnecessary litigation", which states, Complaints procedures have sometimes been presented as an alternative to, or [a] way of avoiding, civil litigation. This motivation has affected how the procedures themselves have developed and how complaints are handled under them. One effect of this has been a reluctance, particularly by doctors, to provide any statement which might be taken as an admission of liability. Although an apology need not be such an admission, this has sometimes meant apologies have been delayed or denied to complainants. In fact, the policies of the medical defence organisations now encourage apologies to be made". Another part of the report says that impartiality is what is looked for in the investigation of complaints. Of course we all want there to be impartiality, but how impartial can we be if we have to be defensive at the same time? Not only does the authority have to be defensive, but the very people upon whom we rely to give us honest and accurate reports of what has happened are also being defensive.

The noble Lord, Lord Cocks, mentioned the number of probably unnecessary hospital tests that are done. As a major teaching hospital, we could probably undertake some research into what tests are unnecessary and unrelated to certain conditions. If there were evidence to prove that tests were unnecessary that could be a defence, and doctors would not feel obliged to carry out 100 tests when five were all that were needed. That is another interesting point.

My concern relates to the rules on disclosure. The Wilson Report and the NHS have made interim proposals which are to be considered. They are informal measures to try to resolve difficult and delicate issues where all the parties involved are under stress. Anyone who complains is under stress because of what has happened, their state of health, or how they were treated. However, which of those cases will result in legal action? How do we reconcile the dilemma of disclosure with the lay person's suspicion that something is being hidden? Legal minds should be devoted to trying to reconcile those two positions. Clear guidelines are needed to protect all parties. The intention should be to ensure that information is properly and accurately recorded, and, above all, to resolve the original issues speedily and effectively to the greatest satisfaction possible, without turning the matter into a legal complaint.

My questions relate to privileged information. At one time our legal advisers told us that if our inquiries were chaired by a lawyer (a solicitor or a barrister, but I am not sure which) that might make the information privileged. However, I have been told that there have been court cases subsequently which have disproved that, and even if the inquiry is conducted by a lawyer, on behalf of the hospital, the information would not be privileged. Will my noble and learned friend the Lord Chancellor tell us whether there is any way in which we could have such inquiries so that they would be privileged?

Under stage 2 of the Wilson Report, legal representation will not be permitted. Stage 2 of the complaints procedure is when the matter passes from the hospital because it has not been possible to resolve it. A vast number of complaints are resolved simply at the early stages. When the complaint passes beyond that, it goes to an external group, and a person is allowed to have a friend present but not a lawyer. However, there is nothing to say that the friend cannot be a lawyer. So that legal element again comes into the matter. The friend can he legally qualified. No restriction is placed upon who can be one's friend. How can we ensure having proper, open, frank inquiries, designed to prevent the recurrence of whatever problem there may be, if the parties involved will not participate?

Will the NHS be able to subpoena doctors to give evidence designed to throw light on an issue which may implicate them? Will the new procedure be an encouragement to keep inadequate records so as to avoid disclosing the information which should be available? Where does the Data Protection Act come into all this? Does even material held on computers have to be disclosed? What about the confidentiality of records?

Everyone in the NHS wants to know the truth lying behind any untoward incident. I believe strongly in transparency, but I ask my noble and learned friend the Lord Chancellor to ensure that at this time of major administrative change within the NHS complaints procedure, the new procedures will be carefully and fully studied from the legal point of view to ensure that any guidelines issued by the NHS and the national health authorities will bear in mind the legal implications of what is to happen. On television I see people in the United States claiming the fifth amendment if they do not want to be implicated in a matter. Is there anything equivalent in the UK? What rights do people have here to refuse to give evidence? Do bodies such as the medical defence organisations or the trade unions have the right to prevent their members from taking part in inquiries? Is the answer to all of this litigation to keep no records, or would one then face further litigation for failing to keep records?

4.46 p.m.

Lord Lester of Herne Hill

My Lords, the whole House will be grateful to the noble Lord, Lord Cocks of Hartcliffe, for introducing this important subject. I am grateful to him for not having voiced his well-known aversion to members of my profession, the legal profession, to which I am proud to belong. It is of course easy to make jibes at the expense of the legal profession, whose public standing is only slightly higher than that of the noble Lord's own profession, the politicians, or that of journalists.

I have a rich collection of anti-lawyer jokes, and I commend to the noble Lord for his seasonal merriment the New York book of lawyer cartoons. There he will find a cartoon showing a concert pianist being introduced as, "Edwin Neils accompanied, as always, by his lawyer". The noble Lord will also see the cartoon of the attorney observing to his client, "You have a pretty good case, Mr. Pitkin. How much justice can you afford?".

Joking apart, what of the substance of the Motion? The debate has been unbalanced. None of the noble Lords who have spoken has talked from a plaintiff-driven perspective. The debate has been almost entirely defendant-driven. I have no personal interest in personal injuries litigation, and I shall attempt to give some facts and figures to provide a fairer balance to the debate.

To place the matter in perspective, according to the 1994 annual report of the Lord Chancellor's Department, the overall volume of civil litigation in this country is declining and not increasing. The county court has seen the most dramatic decrease in litigation. The number of plaints entered has fallen by about 28 per cent. since 1991. In the Queen's Bench Division of the High Court the number of writs and originating summonses issued has more than halved since 1990. They declined by a quarter between 1993 and 1994. In the Chancery Division 10 per cent. fewer proceedings were commenced in 1994 compared with the previous year.

Litigation has not, however, declined in every area of law. One area in which the volume of litigation has increased substantially has been in applications for the judicial review of decisions taken by Ministers, government departments, local authorities and other public authorities. I declare an interest because I practise in that field. The number of applications for judicial review, unlike those other areas, has increased hugely during the past 20 years. More than 3,200 applications were received last year, an 11 per cent. increase on 1993. Only about 10 per cent. succeed. But whether they succeed or fail, they are an essential safeguard of democratic government according to law.

The growth of judicial review has not been because of so-called judicial activism, nor has it been because of lawyers' greed. It has to do with the vastly expanded reach of government. The judges have not been activist in the sense of seeking to usurp the functions of Parliament or of government. Our courts have been scrupulously careful not to exceed their judicial powers or to trespass into the area of politics. The judges apply the law laid down by Parliament. They are extremely careful to respect the supremacy of Parliament under our constitutional system of government.

Just as liability for negligent conduct, to which I shall turn in a moment, is essential to the rights of the victims of negligence and other tortious conduct, so judicial review is of great importance in protecting the individual against the misuse of public powers and in ensuring high standards of public administration. I shall not give many examples—your Lordships will have read them in the newspapers—of the important issues decided in the past year in judicial review cases. However, perhaps I may give a few.

The first is whether the Cambridge District Health Authority could refuse life-giving treatment to a child dying of leukaemia; secondly, whether the Home Secretary could under his prerogative power introduce a scheme for compensating victims of crime inconsistent with a scheme enacted by Parliament and never brought into force; thirdly, whether the two-year employment retirement for benefits under the employment protection legislation unjustifiably discriminated against women workers; fourthly, whether the Defence Secretary could ban avowed homosexual men from the Armed Forces; fifthly—heard last Friday—whether the rail passenger franchises could be sold allowing private operators to make substantial cuts in service levels. Our fellow citizens have sought access to justice in these and other important cases in spite of the great impediments to justice in our legal system, including the cost, inadequately met, through the current legal aid provision, unacceptable delay and the complexity of the law.

Perhaps I may take legal aid as one example. In recent years there has been a steady decline in the number of people qualifying for legal aid. Applications for legal aid have also declined; for example, in the past two years there has been a fall of 10 per cent. Lord Justice Otton's working party recently found that one in three applicants to the Court of Appeal are unrepresented compared with one in 10 between 1989 and 1990. The problem has not been of too much litigation but rather of inadequate public funding to enable individuals of moderate means to have effective access to justice. That is the reason why I, unlike some noble Lords, greatly welcome the work being done by the noble and learned Lord, Lord Woolf, and his interim proposals to improve effective access to justice. We all await his final proposals with impatience.

The debate has concentrated on the threat to professionals—for example, health care professionals, accountants, surveyors, architects, barristers, solicitors and so forth—of negligence claims. I submit that the victims of negligence are as much deserving of public protection and of public sympathy as the victims of crime. That is why the House was so concerned when the Home Secretary sought to dilute the scheme for compensating the victims of crime.

Several noble Lords referred to American nightmares. I agree that in the United States there is a nightmare situation of excessive litigation, far too many lawyers and astronomical damages awards. However, I do not see that applying in this country, and perhaps I may briefly explain why. First, since 1933 jury trials for negligence cases have been abolished in this country. One of the main reasons why negligence awards are so high in the United States is that it has preserved trial by jury.

Secondly, in the United States there are class actions coupled with contingency fee systems. I agree with the noble and learned Lord, Lord Ackner, in his concern about the recently introduced contingency fee regulations in this country, and I also agree that there is a need for careful monitoring in order to avoid the vice of speculative litigation. However, having heard the views of the House on that matter, I am sure that the noble and learned Lord the Lord Chancellor will ensure that there is extremely careful monitoring.

We are very far indeed from the American situation of class actions, with speculative fees and with no liability for costs, where the loser has to pay the winner. In this country one of the great sanctions against frivolous, vexatious or unreasonable litigation is the Draconian cost rules to punish the plaintiff who loses.

The Medical Defence Union has been mentioned. Dr. Michael Saunders, chief executive, on being appointed in June 1995 said that complaints against the medical profession are likely to increase, not least because of the Department of Health's commitment to introducing a more accessible and responsive complaints system for patients. We should surely welcome that. We should welcome the fact that the Government have become committed to a more accessible and responsive complaints system. If that leads to more complaints, so be it; it helps to ensure the accountability of the medical profession.

Medical premiums are rising, but they have not reached American levels. According to the Medical Defence Union, a general practitioner earning £40,000 a year will pay an annual premium of about£1,500. In my view, that is not an excessive burden to impose upon a qualified professional lest his negligent conduct imposes severe loss or injury on one of his or her patients. Surely it is for the good that the public are increasingly calling the professions, including my own, to account when things go wrong. Those professionals concerned may be doctors, lawyers, accountants or whatever.

As regards the courts in this country, there is no substance in the view expressed by some that our judges have diluted the threshold in negligence claims. So far as I am aware, the duty of care has been the same since it was formulated before Donoghue and Stevenson; and the courts have been extremely careful to ensure that no excessive liability is placed upon defendants. Indeed, in the recent case of Caparo Industries, the Law Lords made quite clear that accountants, for example, would not be liable for economic loss except in very special circumstances.

I am aware of no evidence that personal injury awards made by judges have been excessive. Indeed, last week Mr. John Monks, General Secretary of the TUC, wrote to The Times in the wake of the admirable decision of the Court of Appeal to limit damages awards in libel cases. He pointed out that so far as concerns trade unions and their members, awards for damages for personal injury are far too low.

It is not self-evident to me that the lack of nurses or other health care professionals is caused by the effects of negligence litigation or the risks of litigation. What, I ask myself, about low pay or poor working conditions as more probable reasons if those professions are understaffed.

I agree with noble Lords who referred to the need to avoid unnecessary litigation. I believe that our legal system does that well. I believe also that we should pursue alternative dispute resolutions; and I know that the noble and learned Lord the Lord Chancellor, among others, has been in the vanguard of seeking to do that.

Therefore, with respect to those of your Lordships who have spoken thus far, I am not persuaded that there is a very serious mischief calling for the kind of rather extreme remedies which have been advocated in the course of this debate. It seems to me that our system of justice is fairly balanced between plaintiff and defendant. I can see a case for firms of accountants, for example, being permitted to incorporate and to limit their liability and matters of that kind. But I do not share the view, which I think was the view which motivated the Motion in the name of the noble Lord, Lord Cocks, that here is a serious social evil which calls for some kind of emergency action.

5 p.m.

Lord Peston

My Lords, I too must declare an interest. I am a lay member of the Council of the Royal Pharmaceutical Society of Great Britain. I emphasise the word "lay".

I thank my noble friend for introducing this important and interesting discussion. My point of departure is slightly different. It is the fact that in recent years, the professions have been subject to attack and there is even a sense of crisis in some of them. There are several origins of that onslaught but the two which immediately come to mind are the Government and the consumer movement. The professions are worried that people no longer trust them and are losing confidence in them. Those outside the professions seem to believe that they should be subject to the most critical scrutiny. In fact, the evidence of a decline in the public support for the professions is non-existent. As has already been pointed out, doctors—the most obvious example—are extremely highly rated by the public, rated far higher than the politicians who attack them.

My purpose is to say a few words in economics terms about what is meant by the professions and to assess whether professional ideals and ethics and all that may be said to comprise a profession are compatible with the welfare and interests of households. In that connection, I emphasise that in my judgment, professions are not valuable in themselves. They are valuable for what they do. They are valuable if they please the customers, households and clients that use them.

Therefore, in asking whether the professions are compatible with the welfare and interests of households, we must ask whether it is true, as some critics allege, that the professions are just a high-flown way of engaging in restrictive practices or in certain areas, or whether they are fundamental to the protection of consumers and the maintenance of their welfare. Are education and validation of qualifications merely the means of restricting supply and raising fees or are they a guarantee of quality and a path to redress for poor service?

I regard all those topics as highly controversial and none of us will be able to answer the questions which I have raised or that other noble Lords have raised with a simple yes or no. But I hope that what I say will at least help noble Lords to take a view.

As I say, it is probable that in no circumstances would it be valid to take a strong position and I do not doubt that the professions are worthy of critical scrutiny. But my main question is to ask whether changes are desirable. In particular, I must ask whether it is possible for the professions to take the consumer more seriously and to operate in a more market-dominated environment but without destroying professional ideals.

I must make a few remarks on the meaning of the word "professional". In common parlance, the word takes on a meaning as the opposite of amateur. That implies both a concern with money and a high degree of seriousness of approach. For example, in sport it is associated with effective behaviour which can often be regarded as unethical. One may refer to the professional foul in football; and, in cricket, the batsmen who never walk. Perhaps I may say en passant that I have never known a time in my life when ethical standards in sport on or off the field have been as low as they are at present.

But our concern is not with professionalism in those pejorative senses. We must distinguish between professional motivation which brings a good monetary reward and monetary motivation per se.I believe that we all agree that the essence of a profession is its ethic. To reply in part to the question which I asked, I believe that that ethic, far from being anti-consumer, properly interpreted and put into practice must be for the benefit of consumers. I do not say that that is always so but that it should be so.

Another aspect which I must raise is professional autonomy. That is connected with self-regulation which is demanded by all sorts of people such as those providing financial services who are not professionals in the traditional sense. But it is also to do with the right to make an independent professional judgment. A classic example is the clinical freedom so dear to the medical profession. Whatever else one says, I should not like to see any developments which undermine that kind of professional independence.

What then do the economists say generally about that? It will not surprise your Lordships that viewing the professionals as they are normally organised, the economist's immediate response is to dislike the restrictive practices involved with having a profession. But the general view which I think most of us accept is that in this case, what we might call the departures from free competition, although they look like a restrictive cartel, whether we are discussing doctors, lawyers or anybody else, are palatable to the public and the only way in which they become palatable to the public is because of the assurance of a high quality service which the professions give. I argue that a competitive model would not give that. But it seems to me that that places the emphasis where it should be placed; namely, less on theoretical questions and much more on practical questions such as what the professionals actually achieve.

As I see it, the central question is one of—if your Lordships will forgive the language—asymmetric information between buyer and seller. By definition, the seller is an expert professional and the buyer is not. Of course, that is how it should be, otherwise we should not have the division of labour that we want. It would be absurd if the market or anybody else required the patient to know as much as the doctor or the client to know as much as the lawyer. But the position is worse than that because if a consumer is sold a dud second-hand car, that soon becomes apparent to him. That is equally so as regards a bad meal or an unbecoming haircut. But in relation to professional services, performance is difficult to judge even ex post facto. Other noble Lords have alluded to those examples. The fact that one loses a case or fails to recover satisfactorily from medical treatment does not mean that the lawyer or doctor did not do his professional best. The problem is how one knows that.

That problem gives rise to the need for externally constrained rules of contract and why we must have statutory restrictions on entry to the professions.

That is also why professionals should be treated differently from other people providing a service. The essential point is that if the professional does his best and is not negligent, he may still be subject to litigation and costly insurance. That is why control of entry to the professions is so important and is also why the maintenance of professional standards within them is equally important.

A further point to bear in mind is that if anyone can practice a profession or, indeed, there are professionals who act with less than the highest ethical motives, that imposes a cost on their fellow professionals. Again, that is why ethics committees are so important. I am interested in the concern that solicitors are having at present in relation to low-cost conveyancing. As an economist, that is fascinating to me because if the behaviour of those carrying out low-cost conveyancing characterises everybody who is carrying out conveyancing, then that has a deleterious effect on the public view of all people doing conveyancing which could raise the insurance costs for everyone.

Therefore, although I accept the fact that one worries about restrictive practices in that respect, I well understand the dilemma that faces solicitors. I believe that the same point applies to all the professions. A pharmacist who acts improperly damages the reputation of all pharmacists; indeed, that is also true of doctors and everyone else. That is why we have to take the matter seriously.

I turn now to my next point upon which I have made one or two remarks; namely, that there is a certain lack of balance. Of course I agree with those who condemn the sort of person who argues in every case that someone must be to blame. I take the view that we do not want that to happen. However, logically we should not go to the other extreme and argue that it is never the case that someone is to blame. The real problem is precisely—to use a word that the noble Baroness, Lady Hooper, used; and I agree very much with what she said—to seek some kind of balance.

In saying that it is a matter of balance and reminding ourselves that we are discussing a wide variety of professions, I am afraid that we cannot avoid discussing lawyers and the practice of law specifically. I speak as someone who, as an undergraduate, was offered a choice between law and mathematics as an ancillary subject. I chose mathematics, and have never regretted doing so. But we must accept that there is a problem so far as concerns the cost of using the law. Although I agreed with a great deal of what the noble Lord, Lord Lester of Herne Hill, had to say, I was somewhat disappointed at one or two of his remarks which did not seem to be quite as critical of his colleagues as perhaps they ought to have been. Most ordinary people are not eligible for legal aid, but they also cannot meet the cost of legal proceedings. Even going to a solicitor for something simple may appear to be open ended in the sense that one does not know beforehand what the cost will be.

I am not saying that lawyers are failing to meet professional standards or that they are overcharging clients; but I am saying that there is a good deal of uncertainty involved. In saying that, I must tell your Lordships that I spoke to several lawyers on the matter. They rather laughed at me and asked me whether I knew the standard joke that whereas an accountant can afford to use an accountant and a doctor can afford to use a doctor, not even a lawyer can afford to use a lawyer. I would not quite go that far, but I am quoting from legal friends.

My own view is that if the law is too expensive, then surely that is an unsatisfactory state of affairs and one which must lead to a sense of grievance which is actually harmful to all our democratic processes. I have to say that the problem is not so much recompense for damage done, but much more a feeling of injustice that someone has got away with something and is therefore above the law—that they are, if you like, laughing at the rest of us.

Perhaps I may refer to a personal experience. I have had the experience of being defamed by a Sunday newspaper. I am glad to see that the noble Lord, Lord Wakeham, is sitting in his place because I am about to make a critical remark or two which, as he knows, is very unusual for me. My lawyers told me that, without a shadow of a doubt, it was defamatory; but they also begged me and strongly advised me not to go to law unless I had virtually unlimited sums of money to commit. I can shrug my shoulders about that, but I am not alone in having had such an experience. In noting the presence of the noble Lord, Lord Wakeham, in the Chamber, I have to say that the Press Complaints Commission is quite pathetic in its lack of response to the scale of insinuation and libel which permeates our newspapers.

I believe that the noble and learned Lord the Lord Chancellor has published a paper on fast-track proceedings with respect to libel. I wish him well, just as I am supportive of the lines that the noble and learned Lord, Lord Woolf, wishes .to develop. However, there is the general problem which is more than just the specific aspect of libel law. I refer to the need of trying to get something simple and straightforward, as the noble Baroness, Lady Hooper, said, when dealing with all sorts of grievances. We wish somehow to cope with the behaviour of the professions where, in a tiny minority of cases, they are not doing quite what one has in mind. But one does not wish to deal with the complaints which arise on the basis of a large and expensive resort to the law. That is just what one does not want to do.

In my own judgment—and I speak both as a consumer and a lay person—those who have senior positions in the law and senior positions in the professions need themselves to address the matter and provide us with procedures which are simple and inexpensive and which, above all, give the public greater faith in self-regulation. I reiterate: I do not want to see more litigation; and I do not wish to see the professions more tightly regulated. Moreover, in echoing the remarks made by my noble friend Lord Cocks, I certainly do not want people to be deterred from entering the professions because of the need to protect themselves against the continuing risk of legal confrontation.

s However, having said that, the public have genuine concerns, and in my view, they need more protection than they currently get or feel that they are getting. Therefore, I must conclude by asking: is it not right to consider whether our existing procedures in all those professional areas, even though they may have been reasonably good in the past, are perhaps not quite apposite for the present, let alone for doing the job for a very complicated, developing future?

5.15 p.m.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, it is with gratitude that I acknowledge the kindness of the noble Lord, Lord Cocks, in introducing today's debate. Obviously it is a matter of very considerable importance and it is right that your Lordships should have an opportunity to discuss it, such as is provided by this short debate.

s In the earlier parts of the debate, it might be said that the solutions to the problems were not so evident as statements about what the problems are. I believe that the general law which regulates the reliability of the professional person is that that person has to show a standard of reasonable care which is appropriate to that person's position in the profession. Perhaps I may take the point made by my noble friend Lady Gardner of Parkes. For example, a junior doctor is not expected to have the standard of care that would be exhibited by a very senior consultant in the profession. On the other hand, if a junior doctor has charge of a case, he has the responsibility for knowing when he should hand it over to someone more experienced. Indeed, there have been cases in the courts when junior doctors have failed in that respect. However, in my view, there is no doubt at all that the law does properly discriminate between such matters.

I also believe that the general law is unexceptionable. I do not know anyone who has formulated a better basic rule than the rule of reasonable care, having regard to the professional competence in question. Therefore, although the noble Viscount, Lord Bledisloe, indicated that at senior levels in the judiciary the law was thought to be "x", I believe that he also suggested that at lower levels in the judiciary the law was, perhaps, less than "x". Well, there are appeals systems which should redress that situation if it were so. Certainly I would take issue with that as a general principle. Obviously, sometimes a litigant is unhappy with a decision against him or her at first instance and might think that the law had been misapplied. But, so far as liability is concerned, I should have thought that the general law on the subject is unexceptionable.

I also believe that the general law on other subject matters that have been raised is unexceptionable. I have in mind the law relating to judicial review. Although it is a developing law in which it may not always be possible for a person likely to be subject to an application for judicial review to forecast its outcome—as, indeed, some of the cases that the noble Lord, Lord Lester of Herne Hill, referred to amply demonstrate—it is, in its general structure, a balanced law which I believe would command respect from all.

There are of course special questions in relation to liability as between different people. The noble Viscount, Lord Bledisloe, referred to that, in particular in relation to accountancy firms. On that matter there is a question whether what is referred to as joint and several liability is always fair. On the other hand, from the point of view of the injured or damaged person, the fact that there has been a fault which has given rise to a certain damage is the fundamental matter. It does not appear to me to matter too much to that person whether two or three others are also implicated as well as the person whom he or she chose to litigate against in the first place. There is a degree of question about this matter and I believe that the Law Commission is considering this as a general question at the present time. However, I do not think it is at all self-evident that the law would be a fair law which would make the liability of a wrongdoer only in that proportion which he would have with other wrongdoers as a measure of his liability to the plaintiff. I do not think that is established.

These are the main matters of law underlying this subject matter. As I say, as far as I have heard, these are not really capable of being seriously objected to. As my noble friend Lord Colwyn said, the obvious answer therefore, if this is the law, is that so long as the practice is a good practice there is nothing to fear. As he pointed out, the pressure to conform with good practice cannot be a bad thing. It cannot lower standards in any event. It is also important that complaints procedures should be good so that people can raise questions before there is any litigation. However, when it comes to a serious fault and something has gone wrong which is due to blame or negligence on the part of a professional person, it appears to me that, unless that is agreed, some form of procedure is necessary for resolving it. The courts are the ultimate forum for resolving these matters. However, I certainly believe that there are other ways of doing it which are appropriate to particular circumstances. The field of alternative dispute resolution is a wide one which contains many different possibilities. I believe there are possibilities within the medical profession, the dental profession, among accountants and others. In the ultimate there must be a court to decide matters if parties cannot otherwise resolve their differences.

This brings me to a matter that was raised by my noble friend Lady Gardner of Parkes. One of the difficulties and one of the essential prerequisites of a profession is what the noble Lord, Lord Peston, referred to as the asymmetric character of the information that the parties have. One does not expect the patient to know as much as the doctor because if that were the case at least the advice might not be necessary, although no doubt the operation might still require to be done by the doctor. This is one of the problems that gives rise to suspicion. If I go into hospital for an operation and I look all right when I go in but I come out with serious injuries in a part that did not appear to be affected originally by the illness for which I went into hospital, I would be apt to think as a natural consequence that something had gone wrong. However, I may not find it easy to say what has gone wrong. If the doctor is able to explain to me in terms which I can understand what has gone wrong, and that that was nothing to do with him but was the result of a natural condition that had suddenly developed coincidentally at the time when he happened to be operating, that would be all well and good. However, if when I complain a complete blind comes down and I cannot find out what on earth went wrong or what went on when I was in hospital, my suspicions are raised. There is no doubt in my mind that a good deal of trouble arises from such situations. The proposals to be made by my right honourable friend the Secretary of State for Health which were referred to are intended, at least to some extent, to deal with that point.

I do not believe that legal professional privilege or any other form of privilege is likely to attach to the sort of inquiry that my noble friend referred to as regards a hospital. After all, the patient in a case where something has gone wrong is the person in respect of whom something has gone wrong and is the person whom we might think has the most important interest of all. I am not sure why it should be thought proper or wise to restrict the patient's access to knowledge of what has gone wrong. I believe that better complaints procedures have a part to play in this matter. The noble Lord, Lord Lester of Herne Hill, mentioned some figures with regard to the level of litigation. These figures tend to indicate that perhaps there is not as much litigation as some may think. On the other hand the more complaints are dealt with and resolved without litigation, the better. I believe that the more we can do in that connection, the better things will be for everyone.

The noble Lord, Lord Cocks of Hartcliffe, referred to an attitude which suggests that, if something has gone wrong, someone must be to blame. That is certainly not the law. The law makes it clear that one cannot generally attack someone and receive compensation from that person. There are certain areas of strict liability but generally speaking the law states that one can only receive compensation in respect of a fault which has been proved to cause the loss in respect of which one is claiming. Therefore the attitude I have referred to is not the attitude of the law. Perhaps my profession should try to make that plainer and try at least to redress the balance and counter the suggestion that whenever something goes wrong someone must be to blame.

My noble and learned friend Lord Ackner and the noble Lord, Lord Lester of Herne Hill, referred to conditional fees. These were introduced last summer in a limited class of case. I do not believe that they have contributed as yet to anything of the kind that the noble Lord, Lord Cocks of Hartcliffe, mentioned. There is one extremely important point that arises in this connection which was also referred to by the noble Lord, Lord Lester of Herne Hill; namely, that in our country the courts as a general rule award costs against the unsuccessful party. Therefore those who litigate on an unfounded basis are running the risk of incurring considerable costs. Where legal aid is awarded—as has been pointed out—there are quite severe limitations in that respect. That is one reason why a litigant who is opposed by a litigant with legal aid is in quite a difficult situation, because often the chance of recovering any costs is small. Even if the likelihood of liability is not severe, it may be economic to settle the action if it concerns a small amount. That would not, of course, apply if large amounts were involved. Therefore legal aid is not an unmitigated benefit to all. It may have serious effects as regards those sued with the benefit of legal aid on the other side. That is a matter which I am seeking to address in the Green Paper published earlier in the year. Any noble Lords who have useful thoughts to contribute on that subject matter are warmly invited to do so.

As regards procedures, I am strongly in favour of the view that we should do what we can to improve our procedures. I believe that the noble and learned Lord, Lord Woolf, has given us an exciting taste of what is to come in his interim report. When someone suggests a simplification in legal procedure a host of people explain why it should not apply to their particular case because they want a full hearing. That was one of the points made by my noble friend Lady Hooper in relation to doctors, who may be slightly uneasy about a very simple form of procedure because they feel that it does not give them a chance fully to vindicate their professional reputation. It is difficult to move to simplification in every case when there are problems of that kind to deal with.

However, I believe that we should persevere. The noble and learned Lord, Lord Woolf, is persevering and I am looking forward with eager anticipation to his final report, which I hope will emerge in the course of this year. All of your Lordships are grateful to the noble and learned Lord, Lord Woolf, for the time and effort that he has put into that work. The extent to which his proposals have been seen as valuable and going in the right direction has been encouraging for him.

Those are the main matters to which I wished to refer. It may have been of some consequence that the noble Lord, Lord Peston, chose mathematics as his extra subject rather than law. That is a valuable basis on which to approach questions about the professions.

Lord Ackner

My Lords, before my noble and learned friend sits down, can he inform the House, in the light of the advice from his advisory committee to which I referred, what action he is taking or proposes to take in order to monitor the implementation of the conditional fee system to ensure that the consumer is properly and fully protected from potential exploitation?

The Lord Chancellor

My Lords, as my noble and learned friend mentioned, I have arranged for a research project to be carried out under the authority of my advisory committee. In the light of what transpires there I shall consider what else may be required.

As I said, and as my noble and learned friend mentioned, that project was limited in scope. I shall require to take some time before a decision is made as to its effect and whether it should be extended. My noble and learned friend said that there would be no reason in logic for not extending it. That is a question to he determined in the light of experience of its operation.

Baroness Gardner of Parkes

My Lords, before my noble and learned friend sits down, can he comment on the rights or otherwise of individuals to refuse to give evidence to inquiries and whether doctors could be subpoenaed by the National Health Service?

The Lord Chancellor

My Lords, except in so far as there is statutory authority—and in some types of inquiry there is authority for the issue of subpoenas—there would not normally be any right to issue a subpoena nor any obligation to comply with one. There are sometimes contractual conditions which require people to give evidence or information. I have no doubt that at least some of the inquiries to which my noble friend referred will have characteristics of that kind which will apply in respect of at least some of the officers involved.

In most cases it will depend entirely on the wish of the individual and what the individual thinks right. I should have thought that most of those who hold responsible positions in hospitals where something has gone wrong would wish to co-operate as fully as possible with those who are inquiring into the matter.

5.33 p.m.

Lord Cocks of Hartcliffe

My Lords, I should like to thank all colleagues who have taken part in the debate. In view of the concentration on medical matters, I should perhaps have declared an interest as a lifelong hypochondriac. I hope that those colleagues who concentrated on the medical aspect will bear in mind the problems of recruitment into the other callings that I mentioned.

With regard to the noble and learned Lord, Lord Ackner, probably the simplest thing would be for me to plead guilty as charged and throw myself on his mercy. I shall certainly try to obtain the book recommended by the noble Lord, Lord Lester. In the meantime, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.