Legal Aid Expenditure (Hansard, 11 March 1996)

§ Lord Chancellor (Lord Mackay of Clashfern)
My Lords, the net expenditure on legal aid in 1994–95 was £1.299 billion. The largest single item of expenditure identified in that year was a payment to solicitors of £4.57 million made in respect of a lead case in a childhood leukaemia multi-party action. However, the largest single item of expenditure relating to a single case was a payment of £1.02 million to solicitors acting on behalf of a defendant involved in a fraud trial which arose out of the investigation into the BCCI banking fraud.

§ Lord Boyd-Carpenter
My Lords, I thank my noble and learned friend for that extremely interesting, if depressing, Answer. Can he possibly tell the House whether steps are now being taken to reduce the expenditure on legal aid?

§ The Lord Chancellor
My Lords, steps are being taken to control further expenditure on legal aid. I have already indicated some of those to your Lordships. The most important is the possibility of taking into account the circumstances of those who may assist persons applying for legal aid to maintain a lifestyle which seems higher than the assets and income that they possess. The second aspect is a new unit to investigate in more detail the circumstances of those whose financial affairs seem to be complicated and who are applying for legal aid.

§ Lord Irvine of Lairg
My Lords, can the noble and learned Lord confirm that his department's latest estimate is of an underspend of £65 million this year on the legal aid budget? Can he further confirm that that is the third consecutive substantial underspend against the estimate's provision and therefore any assertion that the legal aid budget is out of control is without foundation?

§ The Lord Chancellor
My Lords, legal aid expenditure is rising. However, it is true that the forecast that we made to date this year indicates an underspend on this year's figure. That is a sign that the controls are effective; it does not mean that the budget itself is in any way being reduced. I believe that the efficacy of the control system is being demonstrated.

§ Lord Ironside
My Lords, can my noble and learned friend say what proportion of that total was spent on 612 personal injury cases? Can he say also how much out of that amount of money was involved in successful litigation and whether any of that was recoverable as a result?

§ The Lord Chancellor
My Lords, I do not have the precise figures to mind. But quite a high proportion of the expenditure in personal injury actions is recovered by the Legal Aid Board because success is normally attended by an order for costs. As I mentioned in my original Answer, the largest single item of expenditure was in respect of a childhood leukaemia multi-party action which is in the nature of a personal injury action of a special type. However, that case was unsuccessful and therefore would not have given rise to a costs order and recovery.

§ Lord Cledwyn of Penrhos
My Lords, does the noble and learned Lord agree that when legal aid was introduced over 40 years ago the object was to help the poorer sections of the community? Now that objective has completely vanished and in many cases it is helping extremely dubious people.

§ The Lord Chancellor
My Lords, the intention of the scheme is still to help those from the poorer sections of the community. The same rules are applied to everyone. However, experience has shown that in some circumstances a fuller investigation of some people's financial affairs is required before a final determination is made. The object of the scheme remains very much as the noble Lord described it.

§ Lord Strabolgi
My Lords, in view of the noble and learned Lord's proposal that legal aid should be denied to people who own a house worth more than £100,000, does that figure include the mortgaged element? Also, will the noble and learned Lord reconsider that figure since in relation to house property in southern England it appears to be quite unrealistic?

§ The Lord Chancellor
My Lords, it is a question of whether it is right across the country to have a figure of that sort. The £100,000 refers to the equity in the house. I should have thought that a figure of £100,000 as a disregard is reasonable as a way of trying to ensure that the legal aid scheme serves the interests of those who need assistance.

§ Lord Boardman
My Lords, is not the main sufferer in the legal aid system the successful defendant who all too often is unable to recover any part of his costs?

§ The Lord Chancellor
My Lords, this is a matter that I have addressed in the Green Paper because it is seen as a cause of injustice that a successful defendant may not be able to recover his costs. The normal way in which this is applied means that, where there is no contribution, on the whole there is no cost. Yet the person in question might have a house of substantial size. This issue requires to be re-examined and the consultation on the Green Paper will enable that to be done.