Lords Sitting of 11 February 1999

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Carlisle.): The LORD CHANCELLOR on the Woolsack.
The Duke of Manchester—Took the Oath.

Scottish Schools: Foreign Language Teaching
3.2 p.m.
Lord Thomson of Monifieth Lord Thomson of Monifieth asked Her Majesty's Government:
What steps they are taking to improve the standards of foreign language teaching in Scottish schools and to increase the number of pupils sitting the higher leaving certificate in such subjects.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, in October 1998, my right honourable friend Mrs. Helen Liddell, Minister of State for Education, announced a package of measures to strengthen modern languages in Scottish schools. This included securing the place of modern languages within the five to 14 curriculum, improving the quality of modern languages at standard grade and the establishment of an action group on languages. Those measures will seek to improve the continuity between five to 14, standard grade and higher grade and also to raise the appeal of modern languages at higher grade. From 1st July 1999 this will be a matter for the Scottish Parliament.
Lord Thomson of Monifieth: My Lords, I warmly welcome that Answer from the Minister. Is he aware that over the past 20 years the number of pupils in fifth forms in Scottish schools, taking modern European languages at the higher certificate level, has dropped by about a half? In October last year, when the Minister was setting up the action paper, Her Majesty's inspectors of schools said that there were significant weaknesses in the teaching of languages in 80 per cent. of Scottish secondary schools.
Naturally I welcome the setting up of the action group, but will the Government give a pledge to accept the recommendations that come from it and to monitor the results of the efforts being made to make Scotland, in the modern sense, a country with an education system appropriate to being a good European country?
Lord Sewel: My Lords, there is a one-word answer to that question: yes. It is true that there has been a considerable and unwelcome decline in the number of presentations at higher grade over the past 10 years. It has fallen from about 11,000 to 5,000. That worries us to a considerable extent and it is why my right
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honourable friend the Minister for Education in Scotland established the languages action group. We are determined to ensure that progress is made in the area.
Lord Quirk: My Lords, when the Minister has sorted out Scotland in that respect, perhaps in the interests of joined up government he would have a word with his colleagues in the DfEE, to fix things for the rest of the UK as well. Will he refer them to page 35 of this week's Ofsted report which states that during the five years of secondary education in England and Wales, less progress was made in modern languages than in almost any other subject in the curriculum?
Lord Sewel: My Lords, a tiny part of me is tempted to say that I am more than delighted to do so. However, the rest of me suggests that I am rather circumspect in venturing south of the Border on such matters.
Lord Elton: My Lords, given that the Government's party may not be in a majority in the Scottish Parliament, how is the noble Lord able to give undertakings as to what will be done in devolved areas of policy in two years' time?
Lord Sewel: My Lords, I have faith and confidence in the good judgment of the Scottish people.
Baroness Carnegy of Lour: My Lords, the Westminster Parliament will continue to be responsible for foreign affairs in the United Kingdom and modern languages have a good deal to do with foreign affairs. Can the Minister—who, after all, speaks for the whole Government—tell the House whether, once the Scots Parliament is in being, it will be possible in this House to ask questions and receive answers on a matter such as this relating to the education of Scots people in foreign languages?
Lord Sewel: My Lords, as I understand it, it is a matter for the House authorities to decide whether, and how, matters of Scottish interest will be dealt with in this House. I believe that the other place has already made a decision that questions on Scottish business will not be accepted. That is my understanding. The difficulty would be that if questions on the topic were put down in this House there would be no Scottish Minister to answer them.

MoD Documents: Court Proceedings
3.7 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
What is the current position with regard to the documents misappropriated from the Medical Assessment Programme of the Ministry of Defence in November 1998.
The Minister of State, Ministry of Defence (Lord Gilbert): My Lords, on 5th February a man appeared before Horseferry Road magistrates' court charged with

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theft in relation to unclassified internal documents which were removed from the MoD's Gulf Veterans' Medical Assessment Programme at St. Thomas's Hospital in November last year. The case was adjourned until 19th February. In view of the considerable public concern raised by misinformed media reporting of the contents of the two documents, the Ministry of Defence formally released both of them on 16th December and placed copies in the Library of the House.
The Countess of Mar: My Lords, I am grateful to the Minister for that reply. Is he aware that MoD lawyers, I believe, have indicated that the documents—incidentally, 23 pages of schedules—are in the public domain? Can the Minister therefore say when the Ministry of Defence will fully disclose the documents?
Lord Gilbert: My Lords, I may have misunderstood the noble Countess's Question, because I thought that I had already answered it. We have in fact disclosed the documents and have put them in the Library of the House.
The Countess of Mar: My Lords, with the leave of the House, the Minister has disclosed the schedules. It is the documents listed in the schedules which the MoD says are now in the public domain. I ask the Minister when the MoD intends fully to disclose them.
Lord Gilbert: My Lords, we are now talking about something different. I will look into the point raised by the noble Countess.

European Time Zones
3.8 p.m.
Lord Tanlaw Lord Tanlaw asked Her Majesty's Government:
Whether it is their intention to harmonise with the European time zone before or after entry to the European monetary union.
The Minister of State, Home Office (Lord Williams of Mostyn): My Lords, we have no present plans to change our time zone.
Lord Tanlaw: My Lords, I am grateful to the Minister for his detailed and informative Answer. Is he aware of the Government's report which concludes that, by not implementing the switch to single-double summer time or European time for lighter evenings in winter, the right honourable gentleman the Secretary of State for the Home Office is directly accountable for the preventable deaths of approximately 138 pedestrians on British roads every year? Can the Minister inform the House why Report No. 368 of the Transport Research Laboratory was commissioned by the Department of the Environment and not the Home Office, which is the department responsible for the nation's time standard?
Lord Williams of Mostyn: My Lords, the Home Office is responsible in the way that the noble Lord, Lord Tanlaw, indicates, but not every aspect of every conceivable human activity falls within the remit of the Home Office—yet. The appropriate department commissioned the research. There are arguments one way or the other about central European time. Some sections of our community favour it and others do not. When a Bill introduced by Mr. John Butterfill was before the House of Commons not very long ago the views of the other place were virtually evenly divided. There are different views about the introduction of central European time.
Lord Ezra: My Lords, is it not a fact that the report by Dr. Jeremy Broughton to which the noble Lord, Lord Tanlaw, refers shows that on the basis of his own recent investigation and previous reports the number of deaths and major injuries arising from road accidents as a result of the current change to winter time is about 150 and 350 respectively? Is this not a very serious consideration? Should not the Government be looking again at the issue in order to save lives next winter?
Lord Williams of Mostyn: My Lords, as I have said, different sections of our community have different views. Plainly, the observation of the noble Lord, Lord Ezra, is extremely important but not necessarily determinative of the final outcome. At present we have no plans for change in this area.
Lord Tebbit: My Lords, do the Government agree with the general proposition which is accepted by many of us that noon is when the sun is south of the observer in question, and therefore since noon in Berlin—this is about Berlin time—is almost an hour earlier than on the Greenwich meridian, it would be very wise to follow our present system of time? After all, that is certain. The question whether lives would be saved or lost if we changed to Berlin time is entirely speculative.
Lord Williams of Mostyn: My Lords, I am always happy to have the support of the noble Lord, Lord Tebbit, and I expected it by stressing twice that the alternative was central European time. Many people in this country believe that a number of aspects of our traditional way of life, including GMT, are matters to which we should adhere. That is a significant feeling that any sensible and well-informed department like the Home Office takes into account.
Lord Monson: My Lords, does the Minister agree that there is no such thing as European monetary union and that the correct term is "economic and monetary union", which is rather different? Does he also agree that there is no such thing as a single European time zone? There are three time zones in Europe—four if one includes the Azores. Does the noble Lord agree that those who think like my noble friend Lord Tanlaw would do well to study the United States, Canada and Australia, all of which have several time zones, none of which impedes the prosperity or efficiency of those countries?
Lord Williams of Mostyn: My Lords, I was just about to mention that. There are differing time zones in the United States. The United States seems to be prospering quite well and its economic record at the moment is first rate. Its unemployment is also gratifyingly low as in this country. There are different views on this matter. People feel passionately about different matters. There is no such thing as Greenwich Mean Time any more and, if necessary, I shall be happy to explain that observation to noble Lords. I repeat that some people like the way that we have traditionally operated in this country. They do not believe that the present arrangement has any significant disadvantages. I repeat that we have no present plans for change.
Viscount Montgomery of Alamein: My Lords, does the noble Lord recall that I introduced the Western European Time Bill at the same time as John Butterfill's Bill was introduced, and at that time opposition to the change came mainly from the Scots? In those circumstances when arrangements alter in Scotland later this year will the position change again?
Lord Williams of Mostyn: My Lords, the mere fact that the Scots oppose something is not necessarily definitive in coming to a conclusion in England, Northern Ireland and Wales. From my many conversations with the noble Viscount on this matter, I am aware of his passionate and enduring interest in the changes that he has identified. The question of time and zones is reserved to the Union Parliament here.
Lord Tanlaw: My Lords, can the Minister inform the House whether the question of time harmonisation will be included in the questions in the referendum on the European currency?
Lord Williams of Mostyn: My Lords, not as far as I am aware.

House of Lords: Royal Commission
3.15 p.m.
Lord Chesham Lord Chesham asked Her Majesty's Government:
Whether their appointees to the Royal Commission on the future of the House of Lords represent all shades of opinion and areas of expertise.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, I believe that it would be very foolish to suggest or assert that any group of 12 people automatically embraced all shades of opinion and expertise as the Question suggests. However, those people who have been invited to serve on the Royal Commission are drawn from a wide variety of backgrounds. There s an excellent spread of experience and expertise among them. I am sure that they will all make a significant contribution to the work of the Royal Commission, and the Government are grateful to them for undertaking this important task.
Lord Chesham: My Lords, while I thank the noble Baroness the Lord Privy Seal for that response, she will recall her words in a debate on the future of this House:
"noble Lords are, after all, the experts on this House: experts on its role, its customs, its strengths and of course its weaknesses. It is right that those most affected by proposals for change should have a proper opportunity to contribute".—[Official Report, 14/10/98; col. 921.]
Does the noble Baroness suggest that no hereditary Peer has that expertise?
Baroness Jay of Paddington: My Lords, I recall the remarks to which the noble Lord draws attention. If he looks at the context in which they were made he will see that it was the debate on the occasion that he cites and it related to all debates that I expected to have during this Session on the Bill on the first stage of reform that will reach your Lordships' House in due course. As to the membership of the Royal Commission, as it is the purpose of the Bill that is passing through another place this time to exclude the hereditary peerage from being Members of Parliament I do not believe that it would be logical to invite them to take part in considering the longer-term position of the second House.
Lord Beloff: My Lords, without dissenting necessarily from what the noble Baroness has just said, does she agree that most people might be of the view that if one planned to reorganise part of a parliament that had over 700 years to its record the kind of people one would want to provide advice would be experts on constitutional law and the history of the constitution? As far as one knows, neither category is represented in the names that have emerged so far.
Baroness Jay of Paddington: My Lords, I must differ with the noble Lord, Lord Beloff, not about his original premise, with which I agree, but the names of those involved in the Royal Commission. I suggest that, for example, both Professor Anthony King and Professor Dawn Oliver fall into the category he described. Sir Michael Wheeler-Booth, as a very long-standing member of the Clerks' Department of your Lordships' House, is a very appropriate person to take part in the discussion on the history and traditions of this House.
Lord Peston: My Lords, does my noble friend agree that the most important characteristic of anyone who sits on a Royal Commission is the ability to take evidence and consider it dispassionately? As I understand it, there is nothing in the remit of the Royal Commission to cause its members to say that they do not wish to receive sensible evidence from hereditary Peers or any other experts that anyone may want to consider. The notion that one must have expertise to be on the Royal Commission seems to me to be quite preposterous. Am I not right?
Baroness Jay of Paddington: My Lords, the simple answer to my noble friend is, yes. However, he is right to draw your Lordships' attention to the fact—I was slightly remiss in not mentioning it in my response to

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the original Question—that it is open to those who feel they have points to make, in particular Members of your Lordships' House, to address them to the members of the Royal Commission.
Viscount Cranborne: My Lords, will the noble Baroness agree with me that this is probably a once-in-a-century opportunity to examine the composition and functions of your Lordships' House, and in particular its relationship with another place? If she agrees with that proposition, does she agree equally that it is important that the Royal Commission be seen by the public to have examined the question in all its aspects; and that therefore it is important for its deliberations to be made as public as possible and for as much evidence as possible to be heard in public?
Baroness Jay of Paddington: My Lords, I agree with the noble Viscount's point about it being an important opportunity to discuss the matters he raised. Those are explicitly mentioned in the terms of reference of the Royal Commission.
The way in which the Royal Commission conducts its business will be primarily a matter for the chairman, the noble Lord, Lord Wakeham, and his colleagues to decide.
Lord Strathclyde: My Lords, of course it will be for the Royal Commission to decide on its deliberations, but my noble friend Lord Cranborne was clear in asking the opinion of the Government. Would the noble Baroness the Leader of the House like to consider her reply? Do the Government believe that the Royal Commission should take evidence from the public; and that that evidence should be in public?
Baroness Jay of Paddington: My Lords, of course the Government would be happy for members of the public to give evidence to the Royal Commission. I hope that that was included in the answer I gave to my noble friend Lord Peston. How that evidence is acquired, the form in which it is given—whether written or in person—is appropriately a matter for the chairman and his colleagues.
Lord Renton: My Lords, is the noble Baroness the Leader of the House still hoping that the Royal Commission will report by 31st December of this year? Taking into account the wide range of issues that will have to be considered, the evidence that the commission will have to take and the diversity of opinions that members may have among themselves, does the noble Baroness think that the commission will be able to complete its work by then, bearing in mind that every Royal Commission in living memory has taken longer to do its work than expected?
Baroness Jay of Paddington: My Lords, the intention of the Government, and the request we have made to the chairman of the Royal Commission and the members, is that they should report by the end of the year.
Lord Mackay of Ardbrecknish: My Lords, can the noble Baroness the Leader of the House help me with one of the names on the list; namely, Sir Kenneth Munro? No one seems to know exactly who Sir Kenneth is. Is it the Ken Munro who is currently the chairman of the Labour think-tank in Scotland who was formerly the European Union representative in Scotland? If so, I give him a reasonable welcome as he was a crony of mine at university and it is always gratifying if one's cronies are appointed. However, does the noble Baroness realise that if she had wished to have one of my Scottish cronies, and had asked me, I could have nominated, for example, two of her colleagues: the noble Baroness, Lady Ramsay, and the noble Lord, Lord Gordon? I could have nominated the former Permanent Secretary at the Scottish Office, Sir Russell Hillhouse. I could have nominated the Principal of St. Andrew's University. There is a whole list. Why not one of them? Why is it Ken Munro; and why give him a bogus knighthood?
Baroness Jay of Paddington: My Lords, the noble Lord having moved his seat to sit next to the noble Lord, Lord MacLaurin, I thought that they were going to ask a collective question about having some member of the English cricket team on the Royal Commission. However, the noble Lord asks about Mr. Ken Munro. It is regrettable that a press release suggested that he had been given a knighthood. The giving of the knighthood is not regrettable—I am sure he is well deserving of it. However, the press release was inaccurate. As regards the suggestions of different names from Scotland, the noble Lord will know that the system of approval and recommendation of names for a Royal Commission is not, alas, in my hands.
The Earl of Lauderdale: My Lords, will the evidence be heard in public or private?
Baroness Jay of Paddington: My Lords, in response to previous questions, I am sorry that I may not have made clear the position that I feel is appropriate. That is a matter for the chairman of the Royal Commission and his colleagues.
The Countess of Mar: My Lords, following the question of the noble Lord, Lord Renton, is it the Government's wish that the Royal Commission gets the matter right first time, or that it gives a rushed decision, fitting it in before 31st December in order to accommodate the Government?
Baroness Jay of Paddington: My Lords, I do not regard it as being mutually exclusive to reach a conclusion by the end of December and for it to be a right decision, which is what we invite.
It is appropriate to point out that unlike other royal commissions—for example, on the criminal justice system or the one commission currently reporting on long-term care for the elderly—the basic arguments that the Royal Commission will need to discuss are well

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known. They have been under discussion since 1911. The necessity for original, primary research is much less than in some other royal commissions.
Lord Richard: My Lords, is my noble friend aware that the composition of the Royal Commission is reasonably well balanced? Mr. Ken Munro will make an excellent member of it. I heard the answer my noble friend gave twice in response to questions from the Opposition. However, is she aware that it is important that as much evidence as possible is taken in public by the Royal Commission? After all, I had always understood the object of the exercise to be that between stage one and stage two there was to be a major exercise in public consultation. That was one of the reasons that the Government, I think sensibly, moved away from a joint committee to a Royal Commission. While my noble friend cannot commit the Royal Commission, can she give a gentle steer, in her usual elegant and gentle way, in the direction of evidence being heard in public?
Baroness Jay of Paddington: My Lords, I am happy to respond to my noble friend's kind remarks. I am glad he supports the appointment of Mr. Ken Munro and others who have been suggested for the Royal Commission.
I believe that vie may be making slightly heavy weather of the question of evidence. There is no reason why oral evidence in particular should not be held in public. If that is the wish of the chairman and his colleagues, nothing I can suggest would inhibit him from so doing—not least any negative position from the Government.
Lord Campbell of Alloway: My Lords, can the noble Baroness the Leader of the House confirm that the terms of reference are sufficient to enable the Royal Commission to consider the powers of the new second chamber as well as its functions and composition?
Baroness Jay of Paddington: My Lords, perhaps I may quote directly from the terms of reference. It is for the noble Lord to interpret them. They seem quite clear to me. They are:
"Having regard to the need to maintain the position of the House of Commons as the pre-eminent chamber of Parliament and taking particular account of the present nature of the constitutional settlement, including the newly devolved institutions, the impact of the Human Rights Act and developing relations with the European Union to consider and make recommendations on the role and functions of the second chamber; and to make recommendations on the method or combination of methods required to constitute a second chamber fit for that role and those functions".
Lord Campbell of Alloway: My Lords, the noble Baroness has not answered the question.
Lord Dixon-Smith: My Lords, implicit in the answer given by the noble Baroness the Leader of the House to the noble Countess, Lady Mar, is the presumption that the Royal Commission will come up with "the right answer". What happens if it comes up with "the wrong answer"? How can the noble Baroness be so confident?
Baroness Jay of Paddington: My Lords, I was only confident in suggesting to the noble Countess that it was
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perfectly possible to get to an answer which could be rightly described (in quotation marks) as "the right answer" within the period of time we have suggested is appropriate. The noble Countess, Lady Mar, asked about the period of time rather than any specific answer. The noble Lord will be aware that no government can make a commitment to accept all the recommendations of a commission of this kind.
Baroness Blatch: My Lords, will the noble Baroness say why Scotland and Wales are represented but not Northern Ireland?
Baroness Jay of Paddington: My Lords, the point is not that people are represented. Individuals with, as I said, particular expertise and experience which we thought relevant, were invited to serve on the commission.
Earl Russell: My Lords, no one dissents from what the Minister said about another place remaining the pre-eminent Chamber of Parliament. However, does she agree that active membership of this House involves a great deal of work and the reason many of us undertake that work is the hope of occasionally inducing the Government to change their mind when they are, conspicuously reluctant to do so?
Baroness Jay of Paddington: My Lords, I entirely accept that point, but I do not believe that it is particularly related to the Question.
Lord Tebbit: My Lords, does the Minister believe that a completely elected second Chamber would undermine the supremacy of the other place?
Baroness Jay of Paddington: My Lords, it will be most interesting to see what discussions the Royal Commission has and what are its responses to particular questions of that type.
Baroness Ludford: My Lords, will the Minister confirm that what she regards to be the right answer would be an effective second Chamber which is able to challenge the elected Chamber, challenge Executive power and ensure that we do not have an authoritarian government who are able always to get their own way?
Baroness Jay of Paddington: My Lords, I am sure that the noble Baroness has read the White Paper on the House of Lords, which we will have the opportunity to debate at some length next week. I am sure that she will recognise that within that document there is a requirement that the second Chamber, however it is constituted and with whatever role and function, should be effective.
Baroness Carnegy of Lour: My Lords, in view of the Minister's reply about a member with experience of life in Northern Ireland, can she say whether the Government believe that experience and understanding of the situation in that Province within the United Kingdom has nothing to do with the work of the Royal Commission?
Baroness Jay of Paddington: My Lords, no, that was not the answer that I gave nor the suggestion that I made. In reply to the noble Baroness, Lady Blatch, I said that no one had been appointed to the Royal Commission as a representative of any particular body. It is true that there are members who are in a sense related to different parts of the country and have other expertise and experience to bring to the commission. It is, of course, relevant that those devolved assemblies and institutions which are included in the terms of reference are considered appropriately, and that would obviously include that in Northern Ireland.
Lord Campbell of Alloway: My Lords, may I respectfully ask the Minister to answer my question?
Baroness Jay of Paddington: My Lords, I am sorry, I thought that I had answered the noble Lord's question.

Water Industry Bill
Brought from the Commons; read a first time, and to be printed.

Access to Justice Bill [H.L.]
3.33 p.m.
Report received.
Lord Lloyd of Berwick Lord Lloyd of Berwick moved Amendment No. 1:
Before Clause 1, insert the following new clause—
("Principles to be applied
PRINCIPLES APPLICABLE TO PART I

.—(1) Every person exercising functions in connection with this Part must act, so far as possible, in a way which is compatible with the objectives set out in subsection (2)

(2)The objectives are—

(a)that persons have access to legal services and the machinery of justice which they would otherwise be unable to obtain on account of their means;

(b)that such access is not to be impaired on account of disability (within the meaning of the Disability Discrimination Act 1995) or the place in England and Wales where any legal services are sought;

(c)that legal services and facilities of high quality be available such that disputes may be resolved, and proceedings determined, expeditiously, fairly and with the parties placed on an equal footing.").

The noble and learned Lord said: My Lords, I beg to move the amendment standing in my name—
Baroness Farrington of Ribbleton: My Lords, I wonder whether noble Lords leaving the Chamber will do so as quietly as possible. The noble and learned Lord, Lord Lloyd of Berwick, is unable to speak to his amendment.
Lord Lloyd of Berwick: My Lords, the amendment is similar to that which I tabled on the first day of the Committee stage. It received support from all sides and perhaps more importantly, it received a favourable
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response from the noble and learned Lord the Lord Chancellor. I will not remind him of the assurances which he gave on that occasion because I am sure that he has them well in mind.
The main difference between the amendment now proposed and that proposed at the beginning of the Committee stage is in Clause 1(2)(b). The previous amendment required access to justice to be enjoyed without discrimination on any ground. The noble and learned Lord then pointed out that it was on the wide side and it would appear to exclude discrimination on grounds of merit, merely on the grounds that one case was stronger than another. That could not have been intended and would not be right.
The noble and learned Lord agreed with the principle that there should be no discrimination on grounds of race, gender or disability as being a principle worth stating at the outset of Part I. The amendment picks up on the word "disability". Because it may mean different things to different people, we have given it a definition.
In addition, we suggest that there should be no discrimination on what one might call geographical grounds. That is an important point. We have in mind the avoidance of all the available resources being channelled in the direction of the large conurbations. We want to ensure that access to justice is equally available to those living in rural communities. That is especially important in the case of the disabled. It may well be that a potential disabled plaintiff may be able to get to see his solicitor in his nearest town, but unable to get to see his solicitor in Birmingham, Bristol or wherever. The two halves of the amendment tie together in that way. It may be that the amendment is now too narrowly focused and that we have gone to the opposite extreme. However, I hope that as it stands it will be acceptable.
In subsection (2)(c), we have referred to the "quality" of the legal services to be provided. Throughout the debates on the Bill during Second Reading and in Committee the noble and learned Lord the Lord Chancellor rightly laid emphasis on the importance of maintaining the quality of legal services to be provided. Therefore, we have added those words in subsection (2)(c) to ensure that that is an objective under the Bill.
Finally, we have omitted subsection (2)(d), which referred to the need to ensure a strong independent legal profession. The noble and learned Lord the Lord Chancellor pointed out that that is more relevant to Part III and Schedule 5 to the Bill and is hardly relevant to Part I. I respectfully agree and propose to bring forward that proposal when we come to Part III and Schedule 5. Therefore, we are concerned only with subsection (2)(a), (b) and (c) as the objective.
I now turn briefly to the broader considerations which lie behind the proposed amendment. I am sure the whole House will be pleased to see that the noble and learned Lord the Lord Chancellor will be moving an amendment later today to leave out Clause 4 which was much attacked in Committee. Leaving out the clause will be a great improvement to the Bill.
The House will be pleased also to see that the noble and learned Lord the Lord Chancellor has gone some way to meeting the important points made in Committee

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on the need for a purpose clause setting out the broad objectives of the Bill. However, in place of the broad purpose clause, which some of us hoped for, we now have rather limited objectives which will be set out in Clause 5, to which. Amendment No. 29 relates; Clause 6, to which Amenclment No. 37 relates; and Clause 12, to which Amendment No. 86 relates. For my part, I do not regard those provisions, tucked away and heavily qualified as they are, as being satisfactory. No doubt that will be discussed when we reach the amendments.
My point at this stage is simply to say that what was needed and what we still do not have is a bold statement of the objectives applying to the whole of Part I such as one finds frequently in other Bills and such as we have in Section 1 of the Legal Aid Act 1988. That is surely what the Select Committee had in mind. I apologise for quoting again the part of the report to which I referred on the last occasion where it states:
"The policy objectives and national principles are not set out in the Bill, which contains no parameters or criteria for the exercise of his powers by the Lord Chancellor, but are simply left to be supplied by directions. We see the setting of objectives and priorities which will have such important consequences for citizens as a legislative act".
One also feels sure that such a clause is what the noble and learned Lord the Lord Chief Justice had in mind in his speech on Second Reading. Your Lordships will recall that what he said on that occasion was echoed later in the debate by the noble and learned Lord, Lord Woolf, the Master of the Rolls.
If we split the objectives in the Bill in the way proposed, we shall only create problems for ourselves because some lawyer is sure to be found who will say, "Why is the objective in Clause 5 rather different from that in Clause 12? Surely Parliament must have meant this here and that there." That will lead to endless argument as to the scope of the objective in relation to a particular case. It is much better to have all the objectives put together at the start of the Bill as I had hoped the noble and learned Lord the Lord Chancellor would do.
The dismemberment of the purpose clause which is what will happen if the amendment in the name of the noble and learned Lord the Lord Chancellor is accepted and mine is not, will deprive the purpose clause of part of the point of having such a clause. I beg to move.
Lord Goodhart: My Lords, I shall speak briefly on this amendment because I have little to add. At present, there is no overriding clause in Part I. Clause 5 provides a kind of purpose clause for the community legal service and Clause 12 provides a kind of purpose clause for the criminal defence service. The original versions are still on the face of the Bill and are extremely inadequate. I accept that they are improved by Amendment No. 29 in relation to Clause 5 and by Amendment No. 86 in relation to Clause 12—those amendments being in the name of the noble and learned Lord the Lord Chancellor—but they are still not good enough. The amendment to Clause 5 is limited by the inclusion of the words,
"within the resources made available".
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That is not part of the purpose. That is a restriction on the achievement of the purpose. That restriction is unavoidable but it has no place in the purpose clause itself. The proposed new clause is an admirable statement of what should be the purpose of Part I. I strongly support the noble and learned Lord, Lord Lloyd of Berwick.
3.45 p.m.
Lord Clinton-Davis: My Lords, I rise to support what has been said by the noble and learned Lord and the noble Lord opposite because I believe that, if for no other reason, it is a much tidier way in which to approach the question of looking at the objectives of the Bill. It is better to have those objectives right at the beginning of the Bill rather than have them stated in various clauses for which one must look extremely carefully. I fail to see the logic of my noble and learned friend's resistance to what I thought was stated very positively in Committee.
Of course, I shall listen to what my noble and learned friend says. We are, however, discussing a dramatic change and one which should be stated clearly in unequivocal terms right at the beginning of the Bill. Otherwise, it loses much of its point—whether in Clause 5 or anywhere else. I hope that my noble and learned friend will respond positively to the amendment.
Lord Campbell of Alloway: My Lords, I support the amendment. "Every person" means and includes the noble and learned Lord the Lord Chancellor and it is not irrelevant to look at his proposed Amendment No. 27 in that context. And, of course, "every person" includes the commission. Those are the fundamental overriding principles which govern both the Lord Chancellor and the commission. It is absolutely essential that they should be stated at the outset of the Bill.
Lord Kingsland: My Lords, the noble and learned Lord the Lord Chancellor made a very generous statement at the outset of the Committee stage both about the incorporation of a purpose clause and about transforming into regulations the large number of powers about which he had to make directions. It must be said for the noble and learned Lord the Lord Chancellor that he has gone a long way to meeting those undertakings. I know that your Lordships' House is grateful.
However, I am a signatory to the amendment and I endorse entirely what the noble and learned Lord, Lord Lloyd of Berwick, said. It seems to me an unhappy solution to dismember the clause in the way it has been dismembered. But above all, as the noble Lord, Lord Goodhart, said, the clause itself does not contain a clear declaration of purpose. Instead it contains a heavily qualified declaration, a declaration qualified by notions of constraints on resources and the application of priorities which are themselves the substance of Clauses 1 to 12.
The noble and learned Lord the Lord Chancellor has given himself in the Bill an extremely wide range of regulation-making powers. He rightly says that to exercise those powers he will have to come to your

333
Lordships' House. But your Lordships are well aware that, by convention, your Lordships do not vote against statutory instruments containing delegated powers. I know that that obligation is not included in the Parliament Act; nevertheless, it is the convention. Therefore, it falls upon the courts, and the courts alone, to control the executive in this matter. The courts can do that successfully only if they have a clear sense of direction on the face of the Bill.
Lord Windlesham: My Lords, perhaps I may inject a somewhat different line of thought into the discussion before the noble and learned Lord the Lord Chancellor replies. If the purpose clause—that is the phrase that has been used—at the start of a Bill or at different parts of a Bill sets out a statement of objectives, that is a useful and commendable device. But it is not the same as creating a statutory duty to be imposed upon named individuals. That surely is what the formulation so carefully worked out and eloquently proposed by the noble and learned Lord, Lord Lloyd of Berwick does. It states that:
"Every person exercising functions in connection with this Part"—
and it would be possible to identify who those persons are—
"must act, so far as possible, in a way which is compatible with the objectives set out",
in the latter part of the clause. So here we have a specific obligation in the form of a statutory duty.
Statutory duties are rare in legislation. The most well known is in the Race Relations Act 1976. But the issue arose again last year in the Crime and Disorder Bill which contained a statutory duty. It is for that reason that I have an interest in the matter and should like to put the question whether the creation of statutory duties is an inappropriate addition to this Bill, whereas a statement of objectives may well be justified.
The Lord Chancellor: (Lord Irvine of Lairg): My Lords, Amendment No. 1 is broadly similar to the first amendment which we discussed in Committee and which was moved so ably by the noble and learned Lord, Lord Lloyd of Berwick. Nothing that I say in inviting your Lordships not to accept this amendment should be construed as in any way indicating that I am not in some sympathy with the broad aspirational purposes of the new clause.
In our discussions in Committee I said that I fully accepted the principles underlying the report on this Bill by the Delegated Powers and Deregulation Committee and I undertook to bring forward amendments on Report. I brought forward a great raft of amendments and believe that the broad purposes for which the community legal service and the criminal defence service exist are satisfactorily expressed in those amendments to which your Lordships will come when we consider the third grouping.
I say to my noble friend Lord Clinton-Davis that purpose clauses have no less effect if they address distinct subject matters—the two separate services—and do not appear in Clause 1 but in a later clause.
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Amendment No. 1 also deals with the objectives of Part I of the Bill. The natural place for a discussion of those broad issues is within the third group, which your Lordships will consider shortly. The amendment seeks to establish principles or objectives which are to apply to the whole of Part I of the Bill. As I indicated in Committee, and I will make it good later, my preference is for separate clauses setting out the purposes of the community legal service and the criminal defence service. Why? Because that approach better reflects the different nature and objectives of the two schemes. I believe also that that will be a tighter and more effective means of defining what the legal services commission will do and what directions and orders the Lord Chancellor may give separately in relation to each scheme.
So, under the approach I shall be proposing later, all the decisions and actions of the legal services commission will have to be consistent with the defined purposes of the community legal service or the criminal defence service, as the case may be. Therefore, the Lord Chancellor will only be able to order or direct the commission to do things that are consistent with the relevant purposes.
To all that we will come more fully shortly. But perhaps I may deal briefly with the details of the objectives listed in Amendment No. 1. I repeat, I am not for one second suggesting that I am out of sympathy with the broad aspirational purposes of the amendment, but I cannot accept them as a formulation that meets what is required for the objectives of the Bill.
Objective (a) reads,
"that persons have access to legal services and the machinery of justice which they would otherwise be unable to obtain on account of their means".
Legal aid is subject to eligibility limits and I rather think that this objective does not take account of that. It is unfortunately the case that many who have incomes in excess of the eligibility limits do not have the means to afford to commence litigation. But I doubt that the first proposed objective recognises that.
I have not ignored the words in the proposed clause, "so far as possible"; but the proposed objective is drafted unrealistically and the words, "so far as possible" are far too vague and not justiciable in context. Also, objectives of this kind are calculated to create false and unrealistic expectations. The two purpose clauses which I propose in Amendments Nos. 29 and 86 cover this issue in a way that is realistic and we will come to that argument later.
Objective (b) reads,
"that such access is not to be impaired on account of disability (within the meaning of the Disability Discrimination Act 1995)".
I have difficulty in seeing why discrimination on the grounds of disability—though I am as great an opponent as any of discrimination on those grounds—is singled out by contrast with the other forms of discrimination which exist in society. Also objective (b) is about access and the first part of objective (c) relates to quality. I am confident that the reforms set in train by this Bill will improve both, but the two objectives could pull in different directions. In the context of the limited

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resources available for the community legal service, they will also have to be balanced against considerations of cost. The objective in Subsection (1)(c) is:
"that legal services and facilities of high quality be available such that disputes may be resolved, and proceedings determined, expeditiously, fairly"—
I emphasise the next words—
"and with the parties placed on an equal footing".
I believe that my proposed purpose clause for the criminal defence service, which speaks of the interests of justice, covers that point adequately. As regards the community legal service, I believe that that objective may place too much emphasis on proceedings and disputes, but its underlying purpose is adequately and realistically met by the reference in my purpose clause to services that can meet people's needs.
More particularly as regards the objective in paragraph(c), the words.
"and with the parties placed on an equal footing",
are simply unrealistic. There is no way, and it is unrealistic to suggest, that the state could put those that it assists on an equal footing with what money can buy when lawyers in the private sector command fees which the market will bear.
Therefore, with the best will in the world for the general aspirations which inspire these objectives, I cannot accept them as setting out at the outset of the Bill a satisfactory or realistic set of objectives to govern its whole purpose.
4 p.m.
Lord Lloyd of Berwick: My lords, perhaps I may mention briefly the point made by the noble Lord, Lord Windlesham. Yes, indeed, there are differences between objective or purpose causes which do not impose a.statutory duty and those which do. This one clearly does and is meant to do so. Persons who have duties to perform under Part I of the Bill will be obliged under the amendment to act in accordance with these broad objectives.
Lord Windlesham: My Lords, perhaps the noble and learned Lord will forgive me for interrupting him at the start of his winding-up speech. Is there to be any enforcement procedure and, if so, what will it be?
Lord Lloyd of Berwick: My Lords, the procedure will be the same as in any other case;that is, by way of judicial review to the High Court. If it can be shown that the person making the decision had disregarded an objective to which it was his statutory duty to have regard, that decision could be upset.
I thank the noble and learned Lord the Lord Chancellor. He is in sympathy with what he calls the aspirational purpose of the amendment. He said so on more than one occasion in his reply. For our part, we believe that we have gone all the way to meet the difficulties which he foresaw when the amendment was proposed in Committee. At present, we see no reason why he should not accept the amendment as it stands. I emphasise that this is not just a question of my words
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against his words. It may look that, especially to non-lawyers, but there is an important point of principle here. For that reason I seek the opinion of the House.
4.3 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 182; Not-Contents, 111.

Division No. 1

CONTENTS

Ackner, L.

Dundee, E

Addington, L.

Dundonald, E

Ailsa, M.

Eames, L

Alderdice, L;

Ellenborough, L

Aldington, L

Eiles, B

Alexander of Tunis, E

Ezra, L

Allenby of Megiddo, V

Falkland, V

Anelay of St. Johns, B

Fookes, B

Annaly, L

Fraser of Carmyllile, L.

Archer of Weston-Super-Mare, L.

Gage, V.

Ashbourne, L.

Gainford, L.

Astor, V.

Gardner of Parkes, B.

Astor of Hever, L.

Gladwyn, L.

Attlee, E.

Glasgow, E.

Avebury, L.

Goodhart, L.

Bath, M.

Gormanston, V.

Beaumont of Whitley, L.

Granard, E.

Belstead, L.

Gray of Contin, L.

Bethell, L.

Greenway, L.

Biddulph, L.

Halsbury, E.

Biffen, L.

Hanningfield, L.

Birdwood, L.

Harding of Petherton, L.

Blatch, B.

Harmsworth, L.

Bramall, L.

Harris of Greenwich, L.

Bridges, L.

Hayhoe, L.

Broadbridge, L.

Henley, L.[Teller.].

Brougham and Vaux, L.

Holderness, L.

Butterworth, L.

Holme of Cheltenham, L.

Byford, B.

HolmPatrick, L.

Calverley, L.

Hood, V.

Campbell of Alloway, L.

Hurd of Westwell, L.

Carew, L.

Hussey of North Bradley, L.

Carlisle, E.

Hutchinson of Lullington, L.

Carlisle of Bucklow, L.

Hylton-Foster, B.

Carnegy of Lour, B.

Ilchester, E.

Carnock, L.

Iveagh, E.

Cavendish of Furness, L.

Jenkin of Roding, L.

Charteris of Amisfield, L.

Jenkins of Hillhead, L.

Chesham, L.

Jopling, L.

Chorley, L.

Kingsland, L.

Clark of Kempston, L.

Kinloss, Ly.

Clemet-Jones, L.

Knollys, V.

Cobbold, L.

Lamont of Lerwick, L.

Coleraine, L.

Lauderdale, E.

Coleridge, L.

Leigh, L.

Cowdrey of Tonbridge, L.

Liverpool, E.

Cox, B.

Lloyd of Berwick, L. [Teller.].

Craigavon, V.

Long, V.

Cranborne, V.

Lucas of Chilworth, L.

Crickhowell, L.

Ludford, B.

Davidson, V.

Lyell, L.

Davies, L.

McColl of Dulwich, L.

Dean of Harptree, L.

Mackay of Ardbrecknish, L.

Denbigh, E.

Mackay of Drumadoon, L.

Denham, L.

MacLaurin of Knebworth, L.

Dholakia, L.

Macleod of Borve, B.

Dilhorne, V.

Mar and Kellie, E.

Dixon-Smith, L.

Mayhew of Twysden, L.

Dudley, E.

Miller of Hendon, B.

337

Molyneaux of Killead, L.

Rawlinson of Ewell, L.

Monk Bretton, L.

Renton, L.

Monteagle of Brandon, L.

Renwick, L.

Montgomery of Alamein, V.

Rodgers of Quarry Bank, L.

Morris, L.

Rowallan, L.

Mountevans, L.

Runciman of Doxford, V.

Mowbray and Stourton, L.

Russell, E.

Moyne, L.

St Davids, V.

Munster, E.

Seccombe, B.

Murton of Lindisfarne, L.

Sharp of Guildford, B.

Napier and Ettrick, L.

Shaw of Northstead, L.

Napier of Magdâla, L.

Simon of Glaisdale, L.

Nelson, E.

Skelmersdale, L.

Newall, L.

Strange, B.

Newby, L.

Strathcarron, L.

Noel-Buxton, L.

Strathclyde, L.

Northesk, E.

Strathcona and Mount Royal, L.

Norton of Louth, L.

Swinfen, L.

Nunburnholme, L.

Taverne, L.

O'Cathain, B.

Thomas of Gresford, L.

Ogmore, L.

Thomas of Walliswood, B.

Oliver of Aylmerton, L.

Thomson of Monifieth, L.

Pearson of Rannoch, L.

Tope, L.

Pender, L.

Tordoff, L.

Phillips of Sudbury, L.

Torrington, V.

Pilkington of Oxenford, L.

Trefgarne, L.

Platt of Writtle, B.

Vivian, L.

Plummer of St. Marylebone, L.

Waddington, L.

Quinton, L.

Warnock, B.

Rankeillour, L.

Westbury, L.

Rathcavan, L.

Wilcox, B.

Rawlings, B.

Young, B.

NOT-CONTENTS

Acton, L.

Hacking, L.

Ahmed, L.

Hanworth, V.

Ailesbury, M.

Hardie, L.

Alli, L.

Hardy of Wath, L.

Amos, B.

Harris of Haringey, L.

Archer of Sandwell, L.

Haskel, L.

Ashley of Stoke, L.

Hayman, B.

Bach, L.

Hilton of Eggardon, B.

Bassam of Brighton, L.

Hollis of Heigham, B.

Berkeley, L.

Howie of Troon, L.

Blackstone, B.

Hoyle, L.

Borrie, L.

Hughes,L.

Bragg, L.

Hughes of Woodside, L.

Brooke of Alverthorpe, L.

Hunt of Kings Heath, L.

Brookman, L.

Irvine of Lairg, L. [Lord Chancellor.].

Bruce of Donington, L.

Burlison, L.

Janner of Braunstone, L.

Carter, L. [Teller.].

Jay of paddington, B [Lord Privy Seal

Castle of Blackburn, B.

Christopher, L.

Jeger, B.

Clarke of Hampstead, L.

Jenkins of Putney, L.

Clinton-Davis, L.

Judd, L.

Cocks of Hartcliffe, L.

Kirkhill, L

Crawley, B.

Levy, L.

David, B.

Lovell-Davis, L.

Davies of Oldham, L.

McIntosh of Haringey, L

Desai, L.

[Teller]

Diamond, L

Mackenzie of Framwellgate, L.

Donoughue, L.

McNair, L.

Dormand of Easington, L.

Mallalieu, B.

Dubs, L.

Merlyn-Rees, L.

Falconer of Thoroton, L.

Milner of Leeds, L.

Farrington of Ribbleton, B.

Molloy, L.

Fiit, L.

Monkswell, L.

Gilbert, L.

Montague of Oxford, L.

Gladwin of Clee, L.

Morris of Castle Morris, L.

Glanusk, L.

Morris of Manchester, L.

Goudie, B.

Peston, L.

Gould of Potternewton, B.

Pitkeathley, B.

Graham of Edmonton, L.

Plant of Highfield, L.

Grenfell, L.

Ponsonby of Shulbrede, L.

338

Prys-Davies, L.

Strafford, E.

Puttnam, L.

Symons of Vernham Dean, B.

Ramsay of Cartvale, B.

Taylor of Blackburn, L.

Rea, L.

Tenby, V..

Sainsbury of Turville, L.

Thornton, B.

Scotland of Asthal, B.

Thurlow, L.

Serota, B.

Turner of Camden, B.

Sewel, L.

Uddin, B.

Shannon, E.

Warner, L.

Shepherd, L.

Wedderburn of Charlton, L.

Shore of Stepney, L.

Whitty, L.

Simon, V.

Williams of Elvel, L.

Simon of Highbury, L.

Williams of Mostyn, L.

Smith of Gilmorehill, B.

Winchilsea and Nottingham, E.

Stallard, L.

Wrenbury, L.

Strabolgi, L.

Young of Old scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.
4.14 p.m.
Clause 1 [The Legal Services Commission]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 2:
Page 2, line 3, at end insert—
("( ) The Commission shall include at least one solicitor, one barrister, and one representative of consumers each of whom shall have knowledge of the provision of services which the Commission can fund, appointed after consultation with the Law Society, the General Council of the Bar, and organisations representing consumers, respectively.").
The noble Lord said: My Lords, in moving this amendment it may be for the convenience of the House if we also discuss Amendment No. 5. At the outset may I very much welcome my noble and learned friend's amendment. I believe that it is what the Committee clearly wanted when we debated the matter. I hope that he will be benign as regards my amendment.
I know not with what unique cry of joy the noble Baroness, Lady Wilcox, will appreciate the amendment that she has won. She inspired the whole Committee recently with her rather unusual exclamation. Unfortunately, the Bill currently contains no provision on the part of the Government to consult representative bodies before making appointments to the commission. It is important that there should be consultation.
Perhaps I may say initially that people who are members of the commission are not there in any delegate status, but as those with expertise in their particular field just as members of the Civil Aviation Authority are not there as delegates. So it is not uncommon for committees or commissions of this character to be peopled by members of that kind.
It is very important to ensure that people who come on to the commission with the necessary expertise are people of considerable calibre. The professional and consumer bodies concerned have a particular role in helping to ensure that that objective is reached. For example, the professional bodies would become directly aware of advertisements which my noble and learned friend will place in relation to the appointments. In turn, they can play their part in ensuring, on a perfectly reasonable, equitable and competitive basis, that suitable candidates come forward. They can play a real part not only in doing that, but also in encouraging people to

339
come forward to fill the positions. I cannot see why my noble friends should resist that. It is usually part and parcel of the process of government to engage in such consultations, so why not ensure that that duty appears on the face of the Bill. I beg to move.
Lord Renton: My Lords, on this occasion, and perhaps unexpectedly for your Lordships, I find myself sympathising more with the amendments tabled in this group by the noble and learned Lord the Lord Chancellor than with that moved by the noble Lord, Lord Clinton-Davis, and supported by others. As regards consumers, Amendment No. 5 will enable them to be inserted in Clause 1. As it is already drafted, the clause enables the members of the legal profession to be included. Indeed, in subsection (5) there is express provision saying that the members of the commission must contain those,
"with experience in or knowledge of—
(a) the provision of services which the Commission can fund as part of the Community Legal Service or Criminal Defence Service",
and,
(b) the work of the courts".
Bearing in mind that the Lord Chancellor will have the power to appoint as many as 12 members to the Commission, it should be kept flexible instead of tying it down, as proposed in this amendment, to at least one barrister and one solicitor and, in the next amendment, to at least two solicitors and one barrister. If I may say so on this occasion I think the noble and learned Lord the Lord Chancellor has not only got it right but from the drafting point of view, it is more succinct.
Lord Borrie: My Lords, I feel very much in accord with what the noble Lord, Lord Renton, says. It is unfortunate if one has the lack of flexibility which seems to arise from the amendment we are discussing because specific organisations are mentioned. Once you mention specific organisations to the exclusion of others, there is a reduction of flexibility. In the case of consumer organisations or—to adopt the expression that is used—"organisations representing consumers", questions spring to mind. One may say that the National Consumer Council and the Consumers' Association must be within that category. But what about the National Association of Citizens Advice Bureaux? Perhaps because their remit is broader citizens advice bureaux may not be considered consumer organisations. Therefore a problem of interpretation arises. It seems to me that the amendments of the noble and learned Lord the Lord Chancellor present a much more satisfactory solution to the problem of ensuring representation than the amendment we are discussing, and the subsequent amendment.
Lord Phillips of Sudbury: My Lords, Amendment No. 3 stands in my name and that of my noble friend Lord Goodhart. I counter the points made by the noble Lords. Lord Borrie and Lord Renton, by reference to the Courts and Legal Services Act 1990. Section 19 of that Act, which will be repealed by this Bill, specifies that the Lord Chancellor's Advisory Committee on Legal Education and Conduct should comprise up to 16
340
members. It sets out specifically who they will be. Of the 16, two are to be practising barristers, two are to be practising solicitors, one a judge and two,
"shall be persons with experience in the teaching of law".
The remaining nine members of the committee were to come from, approximately speaking, the same classes of person as set out in the relevant part of Clause 1 of the Bill. What this amendment seeks to do is to put back into the, if you like, compulsory part of the composition of the legal services commission barristers and solicitors, two and two respectively in the case of Amendment No. 2, and two solicitors and one barrister in the case of my amendment. That is not in any way to reflect ill upon my brethren at the Bar but is simply a reflection of the fact that under the Bill a vastly larger number of solicitors will be engaged in the practicalities of the delivery of legal services than will be the case for barristers.
Lord Renton: My Lords, as the noble Lord was not a Member of your Lordships' House at the time, I hope he will not mind my mentioning that even lawyers who were supporters on the government side on that important statute did not agree with all the detail in that Act. Indeed, from time to time some of us moved amendments of a contrary nature. I cannot say that we did so on this matter, but I would not like to feel that that was necessarily the kind of precedent which binds us.
Lord Phillips of Sudbury: My Lords, I thank the noble Lord, Lord Renton, for that piece of history which I cannot gainsay. However, I shall not be deterred from suggesting that it is not inappropriate that up to a quarter of the commission to be appointed under the Bill should come from the ranks of practising solicitors and barristers. They carry overwhelmingly the greatest burden of delivery of legal aid services. That will not be altered even though, as we all hope, the process of bringing into the legal aid scheme some of the voluntary bodies envisaged by the Bill proceeds rapidly. Therefore, from a practical point of view, I think it is not inappropriate—I hope your Lordships will agree—that at least one anchors into this important commission four (or, in my case, three) practising members of the legal profession on whose shoulders the success or failure of the provisions of the Bill will principally rest.
Baroness Thornton: My Lords, I wish to speak in opposition to the amendment standing in the name of my noble friend Lord Clinton-Davis and that in the name of the noble Lord, Lord Phillips of Sudbury, and in support of the amendment proposed by the noble and learned Lord the Lord Chancellor, which, as we all know, originated in the amendment tabled by the noble Baroness, Lady Wilcox, which was supported by myself and many others at the time.
Consumer interests are at the heart of this Bill and their inclusion is wholly to be welcomed. The composition of the legal services commission and how it is appointed is surely intimately linked with how it

341
discharges its job. That is why it is important not to appoint people as direct representatives of particular organisations or causes. We have all served on bodies—
Lord Clinton-Davis: My Lords, I am obliged to my noble friend for giving way. The whole purpose of what I was saying was that they would not be there as delegates or representatives. They would be there—whether as lawyers, consumers or whatever—as people with particular expertise to offer, just as happens in many other cases where bodies of this kind are set up.
Baroness Thornton: My Lords, I thank my noble friend for his comments. However, the point at issue is which way one faces when one is appointed to a body. That is the point I seek to make. It is legitimate to represent the interests of an organisation on a body to which you are appointed and indeed to fight for its corner. However, in this case we do not want people who wish to fight the corner of a particular organisation and to whom they owe their primary loyalty. Surely we need people on the commission whose primary concern is the work of the commission and its tasks. I want people who are expert and experienced in these matters, who are skilled at listening and consulting. I want people who act only in the best interests of the commission and I want people who in particular do not look over their shoulders to check whether they should or should not adopt a particular position because of the interests they serve. I fully expect, and welcome the fact, that solicitors, barristers and others will be represented on the commission, as they should be. However, I think they should be appointed through the same public appointment system as everyone else. I believe such a procedure would strengthen the commission.
Baroness Wilcox: My Lords, I support Amendments Nos. 4 and 5. The noble and learned Lord the Lord Chancellor kindly sent me the wording following the Committee stage when I withdrew my own amendment on the promise that I would get what I asked for, which I have. I am absolutely delighted by that. I have read the wording carefully. The provision now states,
"includes members who (between them) have experience in or knowledge of".
I am happy with that. If I have calculated correctly, I believe that on line 9 of page 2 consumer affairs have been moved slightly up the list. They are not at the very bottom where I thought they would be put when I tabled my own amendment. I am pleased about that. I am sure that the House will also be pleased to note this further indication of how seriously the noble and learned Lord the Lord Chancellor is considering the input of the end users of courts and legal services. I am happy to support the amendment.
The Lord Chancellor: My Lords, with your Lordships' leave, I shall speak also to Amendments Nos. 3, 4 and 5 which are grouped with Amendment No. 2.
The amendments proposed by the noble Lords, Lord Clinton-Davis and Lord Phillips of Sudbury, would add requirements to the appointment of members of the legal
342
services commission under Clause 1(4). They are aimed at ensuring that the interests of the legal professions and consumers are represented on the commission by reserving seats on the commission for solicitors, a barrister and a consumer representative, and by introducing a specific requirement for consultation with particular bodies before such appointments are made. The only substantive difference that I can see between the two amendments is that my noble friend Lord Clinton-Davis seeks to reserve a seat on the commission for only one solicitor, while the noble Lords, Lord Phillips and Lord Goodhart, are even kinder to solicitors and seek to reserve seats for two of them. The Government's intentions on the composition of the commission are indicated in Clause 1(5).
Lord Archer of Sandwell: My Lords, before my noble and learned friend leaves that first point, I am sure he would not wish to misrepresent my noble friend Lord Clinton-Davis who said he was not concerned that the interests of the legal profession should be represented but that the expertise derived from that practice should be represented. Does my noble and learned friend agree that if one is selecting the England football team it might be wise to provide that there should be at least one person on the committee who plays football?
Lord Clinton-Davis: Certainly after last night!
4.30 p.m.
The Lord Chancellor: My Lords, I can easily distinguish intellectually between the expertise which solicitors would bring and the interests that they might serve, but many members of the public might regard that as a rather nice distinction.
The categories of expertise which are set out in subsection (5) are designed to ensure that the commission is informed about the nature of the services that will be provided under the community legal service and the criminal defence service; the interplay between the provision of services and the work of the courts; the social environment in which it will be providing legal services; and good management practice.
The Legal Aid Act 1988 requires the appointment of two solicitors to the Legal Aid Board, and points to the desirability of also appointing two barristers. But this is 1999. Times have moved on. The role of the legal services commission will be quite different from that of the Legal Aid Board. It therefore calls for a different composition. The lack of a requirement for a specified number of lawyers among the members of the commission reflects the shift in focus from the needs of providers of legal services towards the needs of users.
The Bill is drafted so as to secure that appointments to the legal services commission are appropriate to the functions of the commission. However, I can reassure my noble and learned friend Lord Archer of Sandwell that lawyer membership on the commission is by no mean precluded. Indeed, it is envisaged that he commission will include members who represent both providers and consumers of the services the commission will provide. Paragraph (a) specifically points to the desirability of including on the commission members

343
with experience in or knowledge of the provision of services which the commission can fund. I would envisage that solicitors and barristers might well fall into that category, as indeed, equally, might advisors from the voluntary sector. I shall turn to the question of representation on the commission of someone with special knowledge of consumer affairs in a moment.
As I made clear in response to similar amendments in Committee, the Government intend that all appointments to the legal services commission will be made in accordance with the Nolan Committee's recommendations on public appointments and the Office for the Commissioner of Public Appointments' Guidance on Appointments to Executive Non-Departmental Public Bodies and NHS Bodies. There will therefore be an opportunity for professional and consumer bodies to nominate candidates for appointment, and we hope they will do so. But to require consultation with a broad range of bodies on the merits of proposed appointments prior to the appointment being made would be time consuming, costly and unnecessary and—indeed, I go further—likely to discourage applicants. On that basis, I invite the noble Lords to withdraw their amendments.
The first government amendment in this group is a drafting amendment, intended to clarify that the members of the legal services commission should include persons who. between them, have experience in, or knowledge of, the various matters specified in Clause 1(5). The second government amendment adds "consumer affairs" to the categories of experience and knowledge already set out in Clause 1(5)(a) to (d).
The first government amendment addresses a point raised in Committee by the noble and learned Lord, Lord Simon of Glaisdale. He was concerned that the current drafting of Clause 1(5) might imply that the Commission should include an individual having experience in or knowledge of all of the categories specified. I undertook to refer this point to the draftsman, and I think that the amendment now before your Lordships makes the position clear beyond doubt. I am pleased to see the noble and learned Lord nodding his head in agreement. I am grateful to the noble and learned Lord for bringing this matter to the attention of the House.
The second government amendment is in response to an amendment moved in Committee by the noble Baroness, Lady Wilcox. She put forward forceful arguments for making clear on the face of the Bill the desirability of including on the legal services commission a person with knowledge or experience of consumer affairs. Her arguments were widely supported around the House, including from these Benches. As I have said, the Government firmly intend that the focus of the legal services commission should be on the needs of users, rather than providers, of the legal services to be provided by the community legal service and the criminal defence service. It has always been our intention to reflect the interests of consumers in the membership of the commission, and for that reason we have accepted that this intention should appear on the face of the Bill.
Lord Clinton-Davis: My Lords, I do not think that there is too much between my noble and learned friend and myself. However, I think there is a grotesque misunderstanding on the part of my noble friend Baroness Thornton, who cannot recognise a situation where people come forward to serve on certain bodies like this without having any powers imposed on them or provided for them by the professional bodies to which they belong. Indeed, I do not know how she views any lawyers who might be appointed by my noble and learned friend in that regard. Would they have a prior duty to the Bar Council or the Law Society? There is no distinction about that. People play a distinguished part in committees of this kind without being delegates. I have sufficient experience of that situation, particularly in the field of aviation.
When my noble and learned friend says that there will be too many people to consult, with respect, I do not think that is right. I certainly do not think that this is a fundamental difference between us—it can be done and it should be done. I said before that the Nolan principles would apply in a fair competition. That is a duty laid on my noble and learned friend in any event. But when he says that the provision requiring consultation with professional bodies would have the effect of impairing people from coming forward from professional bodies, I really cannot accept that at all. For my purposes, I think that it would help the Government to ensure that the best qualified people come forward. It is not to embarrass the Government or to impair the choice of candidates coming forward at all. However, having said that, I certainly do not intend to press the matter to a Division. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
The Lord Chancellor The Lord Chancellor moved Amendment No. 4:
Page 2, line 6, leave out ("persons with") and insert ("members who (between them) have").
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No. 5:
Page 2, line 9, at end insert—
("( ) consumer affairs,").
On Question, amendment agreed to
Schedule 1 [The Legal Services Commission]:
Lord Simon of Glaisdale: My Lords, before my noble and learned friend rises to move this amendment, may I point out that it is grouped with a great number of other amendments, one of which, Amendment No. 26, stands in my name and raises a quite different and separate issue. It has been inconveniently grouped. It is my fault; I failed to attend the grouping conference.
It seems to me that the amendment goes also with Amendment No. 27, which is in the name of my noble and learned friend the Lord Chancellor, and probably also with Amendment No. 28, which I greatly welcome. My intervention is merely to indicate that I shall be moving Amendment No. 26 separately.
The Lord Chancellor: My Lords, that is the privilege of the noble and learned Lord in due time. At

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the appropriate point in the course of my speech on all the amendments in the next grouping, I shall endeavour to deal, I hope to the noble and learned Lord's satisfaction, with Amendment No. 26.
The Lord Chancellor The Lord Chancellor moved Amendment No. 6:
Page 51, line 32, leave out ("direct") and insert ("require").
The noble and learned Lord said: My Lords, this is a very substantial group of amendments. I propose, with your Lordships' leave, to speak to all the amendments in the group. They are Amendments Nos. 6 to 12, 14, 18, 22, 26 to 32, 35, 39, 41, 42, 46, 54, 55, 72, 76, 77, 86, 96, 99, 132, 133, 136, 137, 138, 190 and 191. I am not in the least surprised, after putting forward the grouping, that the noble and learned Lord, Lord Simon of Glaisdale, was in a little bit of a muddle as regards finding his Amendment No. 26.
In Committee I undertook to bring forward amendments with a view to giving effect to the recommendations of the Select Committee on Delegated Powers and Deregulation. The government amendments in this group redeem that undertaking. The group also includes amendments tabled by other noble Lords. I have already referred to Amendments Nos. 26 and 41. Taken together, these amendments define the broad purpose of the community legal service and of the criminal defence service separately. Having regard to our earlier discussions on Amendment No. 1, I would say at the outset that focused purposes for these distinct services with their distinct objectives are better, more precise and more helpful than broad general purposes at the outset of the Bill as a whole.
The amendments also set out on the face of the Bill the kinds of directions that the Lord Chancellor may give to the legal services commission and, where appropriate, subject those directions and the commissioners' funding code to parliamentary approval. In working out the detail of these changes, I have tried to strike the right balance between parliamentary scrutiny and administrative flexibility.
During our discussion in Committee I said, in welcoming the Select Committee's report:
"I support the principle underlying the committee's recommendations that powers, if I may express myself generally, of an administrative character do not require parliamentary scrutiny. But those which deal with matters of principle and substance and which are of a major legislative character should be subject to parliamentary procedures appropriate to their importance".— [Official Report, 19/1/99; cols. 483–84.]
That is an important principle, but it is also important to avoid an excessive degree of scrutiny. That is not only wasteful of parliamentary time that could better be spent on other issues, but it also builds an element of inflexibility into the administration of the scheme in question, which can prevent or delay desirable improvements.
During the Committee stage several of your Lordships, in particular the noble and learned Lord, Lord Simon of Glaisdale, chided me about my use of the word "flexibility". I make no apology for using that word. Legal aid is a complex system which has to operate across the country where there is a fractured and
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geographically uneven range of legal services available. To rationalise and to meet geographically distinct needs calls for flexibility, not rigidity. The community legal service opens up the scheme to non-lawyer providers and will involve new methods for procuring services.
The legal services commission will therefore have substantial discretion to develop and administer the community legal service and the criminal defence service in the way it thinks best. That makes it particularly important to ensure that the commission is sufficiently independent of government. I very much agree with what my noble and learned friend Lord Archer of Sandwell said in Committee, that the legal services commission should have not just a separate legal identity but also a personality and ideas of its own. But again there is a balance to be struck. An independent body should not be able to spend substantial sums of public money virtually untrammelled by the need to have regard to the policies and priorities of the government of the day, not least because it is ultimately Ministers who must answer to Parliament for the use to which that public money is put.
I hope that your Lordships will consider my detailed proposals against this background and feel able to agree that they strike the right balance between prescription and flexibility and independence and control.
I now turn to the amendments. I shall deal, first, with those that relate to the objectives of the two new schemes. I reserve for later discussion the purpose of Part III of the Bill. Amendment No. 29 contains the purpose clause for the community legal service. As amended, Clause 5(1) would read:
"The Commission shall establish, maintain and develop a service known as the Community Legal Service for the purpose of promoting the availability to individuals of services of the descriptions specified in subsection (1A) and, in particular, for securing (within the resources made available, and priorities set, in accordance with this Part) that individuals have access to services of a type and quality appropriate to meet their needs".
Clause 5(1A) would then list the broad range of services that fell within the scope of the community legal service, as currently listed in Clause 5(1)(a) to (e).
The amended clause establishes, first, that the overall purpose of the community legal service is to improve the availability to the public of legal services in the widest sense of that term. The structure of the clause is designed to reflect the fact that the legal services commission will play two key roles in developing the community legal service. First, it will take the lead in developing the wider community legal service by co-ordinating the efforts of various bodies which fund services to identify need and priorities, to plan the provision of funding and to assure quality.
The second part of the clause, from the words "in particular", focuses on the commission's second role of funding services directly. The words chosen are intended to encapsulate the essence of the new scheme, which is to seek to use a given amount of money to the best possible effect. I welcome the fact that in our debates at earlier stages few if any of your Lordships sought seriously to question the iron fact of life that the resources available for this purpose are limited. It follows that the scheme must be capable of identifying

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and targeting priorities and pursuing value for money and that the services provided should be sufficient but not excessive to meet the need effectively. The drafting is also intended to reflect that a necessary component in seeking the best overall outcome with limited resources is to strike a balance between access in the sense of geographic coverage, quality, choice and price.
Amendment No. 86 would amend the purpose of the criminal defence service in Clause 12(1) to read:
"The commission shall establish, maintain and develop a service known as the Criminal Defence Service for the purpose of securing that individuals involved in criminal investigations or criminal proceedings have access to such advice, assistance and representation as the interests of justice require".
This makes it clear that we intend the criminal defence service to provide substantially mere than is required by our obligations under the European Convention on Human Rights. The convention, by Article 6(3)(a), requires that legal assistance is provided free of charge to people charged with a criminal offence who cannot afford to pay for it themselves, when the interests of justice require it.
The criminal defence service will also encompass the provision of advice and assistance to suspects arrested by the police and in such other circumstances as may be prescribed in Clause 13(1)(b). We intend to prescribe all the relevant circumstances for which legally-aided advice and assistance is available now; including, for example, people voluntarily helping the police with their enquiries. The amended purpose would make the provision of advice and assistance in these circumstances subject to the same interests of justice principle that the European Convention applies to representation at court.
The effect of the amended clause will be that the commission must have regard to the interests of justice in all its decisions and actions in relation to the criminal defence service. This would include, for example, its decisions about the form and nature of the advice and assistance it should fund under Clause 13(1) and its actions in pursuit of value for money under Clause 17(3).
The noble and learned Lord, Lord Ackner, drew particular attention to these two clauses in Committee, but I would assure him that, given Amendment No. 86, it is neither necessary nor desirable to refer specifically to the interests of justice in these clauses. To do so there alone might throw doubt on whether the interests of justice were equally relevant in other places. The alternative would be to attach these words to virtually every proposition in Clauses 12 to 17. I feel sure that the noble and learned Lord, Lord Simon of Glaisdale, would not welcome that approach, and I imagine also that the noble and learned Lord, Lord Ackner, will be content. I rather feel that if he were not content he would be in his place, and he is not.
The overall effect of the two-purpose clauses is to constrain the actions of the legal services commission to those which are consistent with the purpose of the community legal service or the criminal defence service as the case may be. This applies equally to actions that
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the commission takes on its own initiative and any actions which the Lord Chancellor may direct it to take. That is why the draftsman has not found it necessary to state specifically that directions must be consistent with the purpose of the relevant scheme.
I now turn to the amendments relating to the Lord Chancellor's powers to direct the commission. As it stands, Clause 4 empowers the Lord Chancellor to give directions and guidance to the commission about any matter relating to the discharge of its functions, other than in relation to an individual case. Amendment No. 28 strikes out Clause 4 and Amendment No. 132 reinstates it at a different point in relation to guidance. Several other amendments in my name then seek to specify the Lord Chancellor's powers to require the commission to act (or refrain from acting) in a particular way, either in the form of directions or in the form of orders subject to Parliamentary approval. Amendment No. 136 makes the directions subject to the same limitations as before: that is, they may not relate to individual cases, and they must be published.
The Lord Chancellor's powers to direct or order the commission remain wide-ranging, and necessarily so. But there is no longer an all-embracing catch-all power: the Lord Chancellor may not make directions about matters which are not specified on the face of the Bill. The powers as redefined in these amendments fall into four broad categories. First, there are powers to direct the commission about purely administrative matters, such as the form of its accounts. These powers relate mainly to issues of transparency and accountability: it is not intended that the Lord Chancellor should interfere in the internal management of the commission.
As it stands, Schedule 1 to the Bill already refers specifically to three powers in this category: in paragraphs 9(4), 15(4) and 16(2). Amendments Nos. 11, 14 and 18 complete the picture by specifying three further powers relating to the commission's committees and the contents of its annual plan and report. I emphasise that the latter powers enable the Lord Chancellor to direct the commission to deal with additional matters in the plan or report: he cannot require them to leave things out. The Delegated Powers and Deregulation Committee accepted that administrative directions of this kind did not require parliamentary scrutiny.
My second category consists of directions about priorities for funding services from the community legal services fund. These powers will enable the Lord Chancellor, each year, to set the broad framework of national priorities within which the commission is to draw up its plans. Clause 7(1) allows the Lord Chancellor to set priorities in general terms; Clause 6(4) allows him to specify how much within the overall fund should be spent on particular categories of service or case; and Clause 7(7) allows him to identify unusual circumstances in which funding should be available in generally excluded categories. As I indicated in Committee, I do not believe it appropriate for decisions about the detailed allocation of money already voted by

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Parliament to be subject to a further round of parliamentary approval; least of all, if I may say so, in your Lordships' House. As I said then:
"The accountability for those matters is already adequately provided through general ministerial accountability to Parliament and, in my view, that is not appropriate for secondary legislation."— [Official Report, 19/1/99; col. 518.]
I would add that directions under Clause 7(7), by which the Lord Chancellor may extend (but not reduce) scope, may often be urgent. For those reasons I believe it remains appropriate to deal with these matters in directions rather than orders. Amendment No. 41, standing in the names of the noble Lords, Lord Goodhart and Lord Thomas of Gresford, takes the opposite approach. On the basis of the explanation I have given, I ask them to consider not moving it.
Amendment No. 55 extends the scope of the power provided by Clause 7(7). It would allow the Lord Chancellor to authorise, but not require, the commission to fund an exceptional individual case in a category generally excluded from scope by Schedule 2. The amendment makes clear that the initiative would lie with the commission, which could seek the Lord Chancellor's authority when an exceptional case presented itself. This amendment is intended to ensure that provision can be made in wholly exceptional circumstances, while preserving the important principle that the Executive should not be able to interfere in individual cases.
My third category consists of directions about how the commission should, or should not, carry out its principal functions—that is to say, identifying need and planning provision to meet that need; kitemarking providers who meet quality standards; and procuring services through contracts or other means. Amendments Nos. 27, 35, 46, 96, 99 and 105 provide for orders, subject to the negative resolution procedure, about how the commission should carry out these functions. The last of these, Amendment No. 105, is not included in this group because it also deals with other issues which it will be more convenient to discuss later.
Generally, our intention is that the commission should be left to decide the best way to carry out its functions. These are, for the most part, in the nature of reserve powers for the Lord Chancellor. In practice, they may be rarely used. But it is possible to envisage a range of situations in which powers of this kind would potentially be useful or necessary. For example, when the commission is first set up it may be useful to make an order requiring it to develop its kitemarking function in a way that builds on the work that will already have been undertaken with other funders of services to develop common quality criteria. Or the Lord Chancellor may wish to order the commission to begin to pilot and develop contracts of a particular type. Similarly, the commission may wish, essentially for reasons of administrative convenience, always to incorporate the cost of advocacy within contracts with solicitors' firms, but the Lord Chancellor may think that, in some circumstances, this carries too great a risk of diminishing the quality of advocacy available and may order the commission to contract directly with
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barristers' chambers or other groupings of barristers. Or, again, the Lord Chancellor may use the power to limit the proportion of services in a given category that the commission can provide through its own employees.
The uses to which these powers could be put are potentially very wide. In practice, however, they would be used from time to time to promote relatively uncontroversial but useful developments in the ways in which the commission undertakes its functions. I believe that the negative procedure provides sufficient scrutiny of this kind of order whereas, because of the constraints on parliamentary time, the affirmative procedure might hold up useful change.
I pause briefly at this point to claim the attention of the noble and learned Lord, Lord Simon of Glaisdale, regarding Amendment No. 26 standing in his name. It seeks to amend Clause 3(4) concerning delegation of the commission's functions. I am sure that the noble and learned Lord intends to argue that it is an unnecessary statement of the obvious. I invite his attention to my Amendment No. 27 which also amends Clause 3(4) and seeks to make it clearer not only that the commission may delegate its functions, but also that the Lord Chancellor may make orders about when and how the commission shall or shall not do so. For example, an order might specify the monitoring arrangements and other safeguards that should be in place before the commission sought to delegate the task of making assessments under the funding code to contracted providers.
My fourth and final category relates to requirements that the Lord Chancellor may wish to impose about the contents of the funding code. He might, for example, require the commission in drawing up the code to consider additional factors under Clause 9(2)(h) or he might require it to give more or less weight to one of the existing factors in a given category of case. Requirements of this kind would relate directly to the ability of individual applicants to obtain funding and would frequently raise issues of important principle. Therefore, Amendment No. 138 makes such requirements subject to order by way of affirmative resolution.
I should mention in passing that Amendment No. 138 also applies the affirmative approval procedure to the power of the Lord Chancellor in paragraph 6(3) of Schedule 3 to add new factors or vary the paragraph 6(2) factors which must be taken into account under the interests of justice rubric.
I turn finally to the procedure for preparing and approving the funding code. I said in Committee:
"While I accept that certainly the first draft of the code should be affirmed by affirmative procedure, I wish to consider carefully how we can achieve proper scrutiny"—
I was referring here to scrutiny of subsequent amendments to the code—
"of those parts of the code that are significant, without wasting the time of the House on those parts that are not significant."—[Official Report, 19/1/99; col. 486.]
Amendment No. 76 requires the commission to undertake appropriate consultations when drafting or amending the code. Amendment No. 77 provides for an

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affirmative resolution before the code first comes into effect and again for any subsequent changes to the criteria set out in:he code. Parliamentary approval is not, however, required for amendments to the code that affect the procedures for making applications and challenging refusals applications, and any guidance to decision-makers that the code may include.
The amendment also provides for an exceptional procedure so that urgent changes can take effect without delay. This procedure is only available for changes initiated by the commission itself. All changes imposed by the Lord Chancellor by order will require affirmative resolution before taking effect. The amendment would allow the Lord Chancellor to certify a change as urgent. I have in mind, for example, changes that may be necessary to take account of a court judgment. That change would then take effect immediately but fall after 120 days if not confirmed by affirmative resolution. A similar procedure was adopted in the Human Rights Act in relation to remedial orders to amend statutes held to be incompatible with the European Convention on Human Rights.
Many of the other amendments in this group are consequential drafting changes.
I apologise to the House for the length at which it has been necessary to explain this complex set of changes but they are critical for the scheme of the Bill as a whole. On the basis of that explanation, I ask other noble Lords with amendments in this group not to move them. I beg to move
Lord Goodhart: My Lords, this massive group includes my Amendment No. 41. I wish to speak to that as well as responding to the noble and learned Lord the Lord Chancellor on his amendments.
In relation to the Bill as originally drafted there was very wide criticism of the extent of the powers of the Lord Chancellor to control the legal services commission and the community legal service without any reference back to Parliament. As the noble and learned Lord the Lord Chancellor explained, those criticisms came in particular from the Select Committee on Delegated Powers and Deregulation. On the first day in Committee the noble and learned Lord accepted the force of those criticisms and has now tabled a large number of amendments to meet them. To a large extent, we believe that his amendments meet the criticisms. For that reason, we give them a warm welcome. Indeed, we support all the amendments which the noble and learned Lord has put down in this group.
However, we also believe that there is one major omission from the amendments which Amendment No. 41 aims to correct. Clause 7(1) requires the commission to set priorities in the funding of services by the community legal service in accordance with directions given by the Lord Chancellor. There is no requirement that those directions should receive parliamentary approval. However, the setting of priorities is perhaps the most important power of all the powers given to the Lord Chancellor by the Bill. The Select Committee on Delegated Powers and Deregulation referred to the Lord Chancellor's
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direction-making powers under the original Bill and commented on them, in paragraph 4 of its report, as follows:
"The explanatory notes state … that the purpose of these provisions is to establish a flexible mechanism by which the Lord Chancellor can ensure that the Commission discharges its functions in a way that meets the government's policy objectives and, in particular, that it allocates the resources of the Community Service Fund according to 'national priorities'. The Committee sees such very wide-ranging power to give direction as a legislative power. The policy objectives and national principles are not set out in the bill, which contains no parameters or criteria for the exercise of his powers by the Lord Chancellor, but are simply left to be supplied by directions. We see the setting of objectives and priorities which will have such important consequences for citizens as a legislative act".
I do not dispute that the Government are entitled to set priorities. But in doing so, they are, as the Select Committee said, legislating. It is, I believe an appropriate and necessary case for secondary legislation. Amendment No. 41 which I put down is somewhat generous to the Government in that it requires only the negative procedure. I do not know how the noble and learned Lord the Lord Chancellor envisages that he will give directions to the commission about priorities. I hope and expect that he does not envisage a stream of directions given on a daily or weekly basis to the commission. I assume that the priorities will be changed relatively infrequently.
At the Committee stage, the noble and learned Lord referred to the National Health Service as a comparable case and said that NHS priorities are not set out in regulations. That is correct, but I do not believe that the NHS is a fair comparison. NHS priorities are much less explicit and far more operational. I am not aware of any reference in the NHS legislation on the setting of priorities
The second and more important difference between the NHS and the community legal service is that the Government have a conflict of interest in deciding what are the priorities for the community legal service. For example, by directing that a low priority he given to cases of judicial review or cases under the Human Rights Act, the Government would plainly be acting in their own interest. No such conflict arises in the case of the National Health Service.
I believe it is essential that parliamentary control over the setting of priorities by the Lord Chancellor should be retained by requiring the directions which set the priorities to be given in the form of a statutory instrument. That is what Amendment No. 41 provides.
5.15 p.m.
Lord Archer of Sandwell: My Lords, I rise for two purposes: first, to thank my noble and learned friend for responding so fully to the anxieties that I, among others, expressed at Committee stage; secondly, to confess that, save as to one matter, I am content. The one matter is Amendment No. 41 referred to by the noble Lord, Lord Goodhart.
At Committee, some of us thought that the kind of policy issues with which Amendment No. 41 is concerned might have been better set out in primary legislation. I ventured to set down an amendment listing

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some of the objectives which I thought might be included. Quite rightly, my noble and learned friend said. first, that some might be open to detailed objections; secondly, that it was probably not the best way of approaching the subject. I am happy to accept now that it is something that can properly be done in secondary legislation.
However, as a member of the Select Committee, like the noble Lord, Lord Goodhart, I still endorse what the Select Committee said. It was that on matters of this kind which amount to legislation there ought to be parliamentary control. I hope that my noble and learned friend will think about that one matter again.
Lord Kingsland: My Lords, I support what the noble and learned Lord, Lord Archer of Sandwell, said. It seems to me that if one puts Clause 6(4) and Clause 7(1) in the context of the amendment put down by the noble and learned Lord the Lord Chancellor, Amendment No. 29 (his proposed purpose clause for the community legal service), it is difficult to understand how his direction-making powers could be subject to judicial control in any circumstances.
I listened carefully to the way in which the noble and learned Lord described the four categories of direction-making powers and why it was appropriate to retain them in the Bill. To some extent, I can see the force of his argument about the second category of those powers. Clearly, because it is linked to both financial constraints and political decisions, the establishment every year of priorities in the last resort, is a matter for a politician to decide. If the noble and learned Lord the Lord Chancellor does not think that delegated legislation rather than directions is appropriate, what other form of political control does he say he will put in place? First, if the purpose clause does not bite judicially, and, second, if there is to be no statutory instrument, then, unless there is some clear parliamentary control of a more general nature, the Lord Chancellor's discretion in the area is controlled by no one.
The Lord Chancellor: My Lords, I am not persuaded by the noble Lord, Lord Goodhart, and will not, therefore, accept Amendment No. 41. I largely agree with the way in which he approaches the issue, however. The question is whether you categorise it as a legislative matter or a day-to-day matter of administration appropriate for the executive. I make the general proposition that a parliamentary chamber would act quite inappropriately if it sought to assume executive powers over the day-to-day administration of the scheme.
What do directions about priorities deal with? The detailed breakdown between different categories of a sum of money that will already have been voted by Parliament within the scope of a scheme as defined in legislation. What it amounts to in substance is an exercise in setting budgets. That is, par excellence, an administrative act. I submit that it would be quite inappropriate for a legislative chamber to take that kind of administrative decision into its own hands. It
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confuses the respective spheres of a legislative chamber and the executive. Therefore, I do not accept the amendment.
Lord Kingsland: My Lords, before the noble and learned Lord sits down, does he accept that the purpose of Parliament, including your Lordships' House, is not only to scrutinise legislation but also to control the acts and decisions of the executive?
The Lord Chancellor: My Lords, the scope of the functions of the legislature is to lay down by legislation appropriate powers for the executive to exercise. That may be in accordance with standards defined by legislation. But my judgment is that here to seek to assume by affirmative means the power to regulate budgetary allocations within moneys voted by Parliament for statutory purposes is for the legislature to seek to overreach itself.
Lord Simon of Glaisdale: My Lords, does the noble and learned Lord—
The Lord Chancellor: My Lords, I do not give way yet. If your Lordships accept the amendment it would be within the powers of Parliament to pass it. My point, however, is that it would be an inappropriate assumption of legislative power over what is naturally an executive function.
On Question, amendment agreed to.
Amendments Nos. 7 to 12 agreed to.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 13:
Page 52, leave out lines 41 to 43.
The noble and learned Lord said: My Lords, Amendment No. 13 relates to Schedule 1. Paragraph 12 deals with the proceedings of the commission. The opening paragraph constitutes the legal services commission as a body corporate; that is to say, a corporation aggregate. The sub-paragraph that I seek to leave out provides:
"(5) the validity of any proceedings of the Commission or of any committee appointed by the Commission shall not be affected by any vacancy among its members or by any defect in the appointment of any member".
That provision is completely unnecessary because there is a fundamental rule that bodies corporate (corporations aggregate) can act effectively by a majority. Obviously, as long as there is a majority it does not matter in the least if some of the members are invalidly appointed or, for that matter, there is a vacancy. The point can very easily be seen by considering the most usual form of body corporate these days: a limited liability company. No one has ever suggested—it would be quite absurd to do so—that, for example, if one of the directors had died, or a shareholder was in the course of transferring his shares to somebody else but the transaction had not been completed, the proceedings of the limited liability company would thereby be invalidated.
We come to the question of how far it is desirable to clutter up the statute book with unnecessary provisions that the existing law amply takes care of. My noble and learned friend the Lord Chancellor referred briefly to this matter in his speech on the previous amendment; namely, that if there was an unnecessary provision in one place it drew attention to, and founded an argument for, its absence from another. Apart from that, it is expensive to add words to the statute book. We go on expanding and expanding. The Government are in favour of bearing down on inflation, quite rightly, but not when it comes to the inflation of statutory language. As to that, they tend to spread themselves.
In addition to the expense of producing extra pages, drawing on the cost of secretaries, typists, civil servants, Ministers, printers and book-binders, enormous expenditure is involved if an extra volume is added to the statutes in force. They are extremely expensive. I indicated in Committee how the statute book had not only enlarged in format but increased in its number of volumes since the Renton Committee in 1975 drew attention to the prolixity and over-elaboration that had been the subject of criticism.
In addition, every unnecessary provision will found an argument. The noble and learned Lord, Lord Falconer, propounded what might be termed the Falconer syndrome; namely, that one had to think of every argument however far-fetched and fatuous and forestall it. If one places extra unnecessary words in a statute it merely gives greater scope to the Falconer syndrome. I beg to move.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords. I thought that the whole point of this provision was to get rid of the Falconer syndrome on the basis that to put in a provision of this kind will prevent lawyers from making the appalling points that the noble and learned Lord describes. I recall that we have had this debate once before. I have been involved in it only once but it may have happened on a number of occasions.
Lord Simon of Glaisdale: My Lords, the noble and learned Lord will recall that it arose in the previous Session. I cannot be prevented from raising it again in a subsequent Session when the lesson has not been learnt.
Lord Falconer of Thoroton: My Lords, I am sorry if my tone suggests that I complain about it. I certainly do not complain about this matter being raised again. I recall that in the context of the Government of Wales Bill the issue was whether or not the proceedings of the Welsh Assembly could be affected by one or other member not being present. We debated the very same point there. The same arguments were run by the noble and learned Lord. My response to the noble and learned Lord will not be as bleak as on the previous occasion. I invite the noble and learned Lord to withdraw the amendment on the basis that I shall invite the parliamentary draftsman to consider his views. The Lord Chancellor will then consider the position once the parliamentary draftsman has given him his response. They will consider the position in relation to the question: is this provision necessary or not?
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I hope that on that basis the noble and learned Lord will withdraw the amendment with a slightly greater degree of enthusiasm than he has on previous occasions.
5.30 p.m.
Lord Simon of Glaisdale: My Lords, since the last Session, the noble and learned Lord has had ample time to consider whether the point is good. I am grateful for his offer to write to me, and I am glad that the Lord Chancellor and the parliamentary draftsman will consider it. However, it is simply not good enough. No one knows better than the noble and learned Lord—he is an admired lawyer—that the provision is entirely unnecessary because the law takes care of it.
I understood the noble and learned Lord to chide me because I again raised the point. I do not apologise for doing so because after time a lesson is learnt. When I gave evidence to the Renton Committee, I drew its attention to the extraordinary provision in the National Insurance Act 1946. It stated:
"For the purpose of this Part of the Schedule a person over pensionable age, not being an insured person, shall he treated as an employed person if he would be an insured person were he under pensionable age and would be an employed person were he an insured person".
I happen to know the very able draftsman who drafted that statute. Knowing him, I believe that he understood what he wrote. However, I am quite certain that no one else did. One does not stop there. That provision was repeated in national insurance Act after national insurance Act and still no one understood what it was about. But after much hilarity, it disappeared from the statute book in subsequent national insurance Acts—and no one was a penny the worse. No one sought to argue, as the noble and learned Lord, Lord Falconer, so much fears, that its disappearance would give rise to a new series of arguments. I apologise for completing my sentence. I give way.
Lord Falconer of Thoroton: My Lords, the noble and learned Lord chides me for not having a view on this issue having had the holidays to think about it since the last Session. It is a matter for the Lord Chancellor's Department. It would like to convey the point that had the noble and learned Lord put down his amendment before yesterday he might have had a firmer response.
Lord Simon of Glaisdale: My Lords, I apologise that I raise it a further time. I put down the amendment only when I saw the amendment of my noble and learned friend the Lord Chancellor on the schedule. It prompted me again to raise the point. However, I fancy that the noble and learned Lord knows perfectly well the answer. He knows that the provision is unnecessary because a vacancy in a body corporate cannot possibly affect the validity of its proceedings providing there is still a majority.
Having derived comfort from what happened in the National Insurance Act, I cannot promise that I shall not continue to raise the point until any government manage

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to summon up their courage and get rid of this unnecessary provision. In the meantime, although full of hope, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 14:
Page 53, line 12, at end insert—
("( ) The Lord Chancellor may by direction require the Commission to deal with the matters specified in the direction in reports, or a particular report, under this paragraph.").
On Question, amendment agreed to.
Lord Archer of Sandwell Lord Archer of Sandwell moved Amendment No. 15:
Page 53, line 12, at end insert—
("( ) In relation to services funded from the Community Legal Service Fund the report shall specify—

(a) a detailed breakdown of the types of case for which advice and assistance was granted, and the implied hours worked,

(b) the number of applications for assistance received,

(c) the number of cases for which assistance was granted or refused, and on what grounds,

(d) the number of appeals against refusal, and the outcome of such appeals,

(e) financial information about eligibility and contributions.").

The noble and learned Lord said: My Lords, in moving the amendment, it may be for your Lordships' convenience if we debate Amendments Nos. 16, 17, 19, 20 and 21. We seem to have reached my amendment in what I think I detect as a period of rising governmental "receptivity". I can only hope.
The legal services commission will be required to publish an annual report. That is very much to be applauded. But its utility depends upon the information it contains. Paragraph 14 of Schedule 1 sets out what it is to contain. I paraphrase. The information required is how the commission has funded services from the community legal service fund; how it has funded services as part of the criminal defence service; and how it has exercised its other functions. That is a widely embracing provision but it can hardly be said to be specific. At present the Legal Aid Board publishes an annual report which is very informative and extremely helpful. It tells us the types of case in which aid and assistance have been granted, what applications were refused, and on what grounds. We are told the numbers and types of case where certificates were issued, the numbers of applications received, which were refused, on what grounds, the number of appeals against refusal and the outcome of the appeals. There is detailed financial information about eligibility and contributions, details about the outcome of cases, average costs, and the operation of the statutory charge. There are details about the implied hours worked.
That has greatly helped everyone, in particular the NGOs and academics, to monitor the workings of the system. From the year 2003 all legal aid work will be done under exclusive contracts, as I understand it. One consequence of that is that many of the decisions now taken by the Legal Aid Board—and, when the Bill is
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first introduced, by the legal services commission—will in effect be devolved to individual suppliers. For example, under contracts negotiated on a fixed cost per case basis the supplier may decide that he can make the contract pay only by a process of cherry picking. Clients who may occupy more time may not be offered assistance. My noble and learned friend Lord Clinton-Davis—
Lord Clinton-Davis: I am not "learned".
Lord Archer of Sandwell: My Lords, I apologise to my noble friend for calling him "learned". Technically, I agree he is not "learned". He, and the noble Lord, Lord Phillips, at an earlier stage of our deliberations, warned of that possible outcome. I do not say that that will necessarily happen, but we do not know. My noble and learned friend the Lord Chancellor does not believe that it will. He says, and repeated it a few moments ago, that if it does he will take action. But how will we know unless we have the information collected centrally in a statistical form?
The Legal Aid Board in its paper Legal Aid—Targeting Need, which it produced in response to the previous government's Green Paper, stated at page 58:
"Contracted suppliers should be required to record decisions to reject an identified client's case together with the reasons for doing so. Such decisions could then be monitored…to provide the Board with information about the extent to which clients were being turned away".
I hope that my noble and learned friend will recognise the need for this information, if only so that he can be satisfied that he was right all along and that our anxieties were groundless. I beg to move.
Lord Goodhart: My Lords, this group of amendments includes Amendment No. 17 standing in my name and that of my noble friend Lord Phillips of Sudbury. I shall speak briefly because it is not the most important amendment we are discussing tonight.
Under Clause 5(4), the commission must inform itself about the need for services and must plan what can be done towards meeting that need. Under paragraph 15 of Schedule 1, the commission prepares a plan setting out how it intends to fund the services in the community legal service fund, plus the criminal defence service and the exercise of its other functions. That will then be published. Since it then has a duty to prepare a plan for publication, surely it would be appropriate to require that plan to include the assessment of need upon which the plan is based.
5.45 p.m.
The Lord Chancellor: My Lords, with the leave of the House, I shall speak to Amendment No. 15, to Amendments Nos. 16, 19, 20 and 21 standing in my name, and to Amendment No. 17 in the name of the noble Lords, Lord Goodhart and Lord Phillips of Sudbury. They deal with the annual report and annual plan of the legal services commission. The amendment tabled by my noble and learned friend Lord Archer of Sandwell would require the legal services commission to provide in its annual report specified information in

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relation to services funded from the community legal service fund. Although as I develop the submission your Lordships will find evidenced a rising governmental receptivity, it has not yet arisen because I believe that the amendment would lead to an unnecessary amount of detail on the face of the Bill on the content of one part of the annual report.
Included in the. large group of amendments we recently debated was an amendment giving the Lord Chancellor power, by direction, to require the commission to deal in its annual report with matters specified in the direction. This direction-making power will ensure that the commission's annual reports provide necessary and relevant information about its performance of its functions. I envisage that the commission's annual reports will provide a level of detail similar to that currently provided by the Legal Aid Board in its annual report, but tailored to the particular functions of the commission. No details for the annual report of the Legal Aid Board are set in statute. I envisage that much of the information specified in my noble and learned friend's amendment would be provided in the commission's annual report, as would other information which he has not specified.
There will clearly be a need for the commission's annual report to give details of the services it has provided and its use of different methods of funding across its areas of responsibility. It will also provide other information, such as comparison of planned and actual use of the commission's resources. However, to specify on the face of the Bill the particular matters mentioned in the noble and learned Lord's amendment would imply that those matters had particular weight, when there is other information which we would wish to see provided which should be given equal or greater weight.
Furthermore, some of the particular further information he has specified is not quite in the form that we would wish to see and some others cause problems of definition. For example, a requirement for information about implied hours worked would preclude some methods of contracting which might otherwise provide good value for money for the taxpayer, but not be based on an assumed number of hours or an hourly rate. Information about grounds for refusal of assistance might be difficult to ascertain for cases which do not proceed beyond a very early stage when it might be unclear whether or not they have entered the system. Financial information about eligibility and contributions might relate to national estimates or factual information about individual applications. For those reasons, it is preferable for the content of the commission's annual report to be dealt with under the direction-making power to which I have referred. On that basis, I invite my noble and learned friend to withdraw his amendment.
The first government amendment in the group to which I speak with your Lordships' leave would make clear that the commission will publish its annual report once it has been laid before Parliament. This will ensure that the annual report is Trade widely available by the commission, as is now the case with the annual report of the Legal Aid Board.
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I turn to the commission's annual plan. The amendment in the name of the noble Lords, Lord Goodhart and Lord Phillips of Sudbury, would add a specific requirement for the commission to set out in its plan the results of its assessment of the need for services to be provided through the community legal service. It has always been our intention that the annual plan should summarise the findings of the regional legal services committees' "regional strategies", which will themselves have been published in full following wide consultation, and it seems to me to be desirable for this intention to be reflected on the face of the Bill. However, I would wish to have an opportunity to seek the draftsman's view on the precise wording and then to table a government amendment in accordance with the principle of the noble Lords' proposed amendment.
In response to an amendment moved by the noble Lord, Lord Kingsland, in Committee, I undertook to table amendments to require the Lord Chancellor, when laying the annual report of the legal services commission before Parliament, to accompany it with a statement of his reasons for departing in any material respect from the commission's draft plan. The remaining government amendments in this group are intended to achieve that objective and so to provide greater transparency for the Lord Chancellor's role in the commission's planning process.
The amendments would put in place a procedure for the Lord Chancellor's approval of the commission's annual plan which avoids unnecessary delay, but delivers the degree of transparency I undertook to provide. Under this procedure, the commission would prepare its plan and send it to the Lord Chancellor. The Lord Chancellor would then either approve the plan and lay it before Parliament before the commission published it, or, if the Lord Chancellor did not approve it, he would direct the commission to revise it by way of a published direction setting out his reasons for not approving the plan. The commission would then make the revisions and send the revised plan to the Lord Chancellor who would lay it before Parliament before the commission published it. I envisage that the published plan would have appended to it any directions under which it had been revised. With that amendment, I apprehend that the noble Lord, Lord Kingsland, will be content.
Lord Archer of Sandwell: My Lords, I was going to offer my noble and learned friend a deal. I would welcome his amendments and he would accept mine. But he has indicated that it is hoped we shall get our information even though it is not in the Bill. My fly did not attract a salmon but I shall settle for a sea trout. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter: My Lords, before we move to the next amendment, it may be for the convenience of the House if I say that at a convenient moment after 7 p.m., my noble friend Lord Gilbert will, with the leave of the House, repeat a Statement that is being made in another place on Kosovo.
The Lord Chancellor The Lord Chancellor moved Amendment No. 16:
Page 53, line 14, at end insert ("and the Commission shall publish a report once it has been so laid.").
On Question, amendment agreed to.
[Amendment No. 17 not moved.]
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 18 to 22:
Page 53, line 25, at end insert—
("( ) The Lord Chancellor may by direction require the Commission to deal with the matters specified in the direction in plans, or a particular plan, under sub-paragraph (1).").
Page 53, line 28, leave out from ("shall") to end of line 29 and insert ("lay a copy before each House of Parliament and the Commission shall publish the plan once it has been so laid.").
Page 53, line 30, leave out from ("shall") to ("it") in line 31 and insert ("by direction require the Commission to revise it in accordance with the direction; and the direction shall include the Lord Chancellor's reasons for not approving the plan.
( ) When the Commission has revised the plan").
Page 53, line 33, at end insert ("and the Commission shall publish the revised plan once it has been so laid.").
Page 53, line 38, leave out ("direct") and insert ("specify by direction given to the Commission").
On Question, amendments agreed to.
Clause 3 [Powers of Commission]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 23:
Page 2, line 37, at end insert ("in such manner as is available to a trustee").
The noble and learned Lord said: My Lords, this pursues a matter I raised in Committee. This is partly a probing amendment. Clause 3 deals with the powers of the commission and subsection (1), putting it broadly, says that it can do anything. Subsection (2) says that in particular it shall have power in paragraph (d) "to invest money" and subsection (3) says that that does not extend to a,
"power to borrow money or to acquire or hold shares in bodies corporate"
Amendment No. 23 seeks to add to the words "to invest money" the words,
"in such manner as in available to a trustee".
Amendment No. 25, which is grouped with this amendment, seeks to excise the words,
"or to acquire or hold shares in bodies corporate".
Practically the only thing which is certain is that the Bill as it stands is wrong. It gives the commission power to invest in everything without exception except shares in bodies corporate, including blue chip shares. Apparently, it can invest in futures in Singapore or property during a property boom which brought another merchant bank almost to its knees. Although it can invest in, for example, metals on the Metal Exchange, on the face of it it cannot invest in blue chips.
My noble and learned friend Lord Brightman tells me that as regards trustees the governing authority is still the 1961 Act for which I was parliamentarily responsible. I have had plenty of time to forget whatever I knew then. Until then a trustee could only invest in gilt-edged shares. That was very much to the detriment of the remainder man, although it was safe for the life
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tenant. So roughly what the 1961 Act did was to allow a trustee to invest half in gilt-edged and half in trustee securities, including, for example, blue chip shares. That is what is suggested here.
My noble and learned friend the Lord Chancellor very helpfully wrote to me on the matter. I received the letter only just before this stage. He seems to suggest that although my description is right and the commission can invest in virtually anything other than shares, nevertheless it was safe because the accounting officer of the commission is bound by a Treasury directive not to speculate.
If that is the only sanction, that simply will not do. It means that what we are doing on the face of the statute is to confer unlimited powers and then to rely on an official, subject to a Treasury direction, not to exploit the powers given. We are legislators and as a Parliament we are bound to get it right on the face of the statute. I beg to move.
Lord Brightman: My Lords, I support this amendment. I find Clause 3 most peculiar. I object to it as a matter of drafting. It says that the commission may invest money except in the shares of companies. As a matter of judicial interpretation, it is clear that to invest money means to apply money in the acquisition of any asset, an asset of any description, with a view to income or capital appreciation. It follows, as my noble and learned friend said, that the commission is given power, for example, to invest in the units of an emerging markets unit trust; for example, a unit trust specialising in Russia or Indonesia. Such trusts would qualify for the commission's spare money. But the commission would have no power to invest in the shares of ICI. The commission would have power to invest in soya bean futures but not in the shares of British Gas.
I do not suggest for a moment that the commission would be so dotty as to invest in soya bean futures. I am merely saying that as a matter of drafting, Clause 3 is very peculiar. What is the point of forbidding equities if you authorise unit trusts? What is the logic behind the power so drawn? Would it not be better to give the commission a power of investment equivalent to the statutory power of investment available to trustees, as suggested by my noble and learned friend.
I am not sure what power of investment is needed. I should have thought it would be sufficient for the commission's spare money to be put on deposit at the bank so that it is available when needed. But I suggest that we do not want to send Clause 3 to the other place saying, "We think this is right; this is the best we can do". I ask the noble and learned Lord the Lord Chancellor to consider referring this matter back to his drafting team.
6 p.m.
Lord Falconer of Thoroton: My Lords, these amendments relate to the powers of the legal services commission to invest money. Amendment No. 23 would limit the commission's power to invest money so that it could do so only in such manner as is available to a trustee. Amendment No. 25 would remove from the Bill

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the restriction which would specifically prevent the commission acquiring or holding shares in bodies corporate.
In Committee, the noble and learned Lord, Lord Simon of Glaisdale, questioned the reason for preventing the commission investing in equities. He suggested that the commission should have powers to invest similar to those of a trustee. He also suggested that, given that the Bill does not prevent the commission investing in property, it would be odd if it prevented it investing in shares in bodies corporate. The noble and learned Lord the Lord Chancellor considered carefully the points made about the commission's powers to invest, and wrote to the noble and learned Lord, Lord Simon, setting out his views.
It is true that there is no specific provision in the Bill which prevents the commission investing in property. But, under Clause 3(1), the commission's powers, including its power to invest money, exist only in the context of the discharge of its functions. Under the principles of government accounting, the commission's accounting officer would be responsible for ensuring that the funds for which he or she is responsible are applied only to the extent and for the purposes authorised by Parliament. I can foresee no circumstances in which speculative investment of any kind, whether in equities, in property or otherwise, could be shown to assist the commission in discharging its functions, and therefore to be for a purpose authorised by Parliament. Indeed, it is a matter of general principle that non-departmental public bodies, such as the commission will be, should not put Exchequer funds into speculative investments; this would not be consistent with the general requirement on NDPB accounting officers for "prudent" administration, set out in Treasury guidance. Any form of speculative investment by the commission would therefore be quite improper.
Lord Simon of Glaisdale: My Lords, it would be improper but it would be legal on the face of the statute, would it not?
Lord Falconer of Thoroton: My Lords, it would be subject to judicial review if the commission began to invest speculatively. To that extent I would say, tentatively, that it would not be legal.
I cannot accept the noble and learned Lord's amendment to give the power of a trustee. That would specifically envisage investments, albeit safe, by a trustee of a speculative nature and that is plainly not what is being considered. The noble and learned Lords exchange knowing glances.
Lord Simon of Glaisdale: My Lords, my noble and learned friend Lord Brightman shook his head.
Lord Falconer of Thoroton: My Lords, any movement of the head of the noble and learned Lord, Lord Brightman, is to be regarded with some significance. I will defer to anything the noble and learned Lord, Lord Brightman, says, but it seems to me that a trustee is entitled to invest in appropriate equities with a view to making money out of the investment and
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in conditional terms that may be a speculation, in the sense that there is a risk that the shares may go up or down. That is not something that is forbidden to a trustee.
The position of the commission will be quite different from that of a trustee; it will have responsibility for administering a sizeable sum of public money, forecast to be £1.67 billion in 2000–2001. It must do so prudently; that means that speculative investment of any kind, such as that open to a trustee, is not open to the commission. I therefore invite the noble and learned Lord to withdraw his first amendment.
In the light of the further consideration resulting from the point the noble and learned Lord made, the Lord Chancellor thought again about the restriction currently contained in Clause 3(3) of the Bill, which is the subject of Amendment No. 25. While it is correct that the commission must not acquire or hold shares in bodies corporate, a specific restriction on the face of the Bill is unnecessary because of the general requirements on NDPBs to which I have already referred. Indeed—I believe this is the point made by the noble and learned Lord, Lord Brightman—the specific restriction is perhaps misleading, because there are other forms of speculative investment in which it would be equally improper for the commission to be involved: speculative investment in property, for example. I am therefore content that, in the interests of clarity, consistency and brevity, the specific restriction regarding the acquisition or holding of shares in bodies corporate by the commission should not appear on the face of the Bill. That and similar matters can be dealt with satisfactorily in the Financial Memorandum between my department and the commission. I therefore accept Amendment No. 25 and hope that I have managed to meet the concerns of the noble and learned Lord.
Lord Simon of Glaisdale: My Lords, I am grateful to the noble and learned Lord for accepting Amendment No. 25 and for, as always, the extremely agreeable way in which he replies, even when he does not accept the amendment. I believe he realises that on the point where my noble and learned friend—who is a transcendent expert on this matter—shook his head, the noble and learned Lord, Lord Falconer of Thoroton, was not right.
I am not wedded to the term "a trustee" but it must be wrong, for the reasons that my noble and learned friend Lord Brightman gave, for us to be legislating to give almost unlimited powers and relying on a Financial Memorandum from the Lord Chancellor's Department to the commission, and the Treasury guidance that governs all accounting officers, to limit what is given on the face of the statute.
I shall seek to return to that matter because I hope that my noble and learned friend the Lord Chancellor will reconsider it and try to bring the powers that are given into line with the powers that are needed and that will be operated. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 24:
Page 2, line 43, at end insert (", and
(h) to pay fees and disbursements on account by way of loans to solicitors and barristers.").
The noble Lord said: My Lords, Amendment No. 24 seeks to ensure that the legal services commission will be able to go on making payments on account to solicitors and barristers in respect of work done and disbursements incurred. It is different from other amendments with which we shall be dealing later, though it, too, deals with disbursements.
The payments on account, as I indicated in earlier debates and as is known to practising lawyers in the House, were introduced because it was considered to be unreasonable to make lawyers wait until the end of a case before receiving any payment. It was an imposition upon their ability to function effectively without undue overdraft facilities, and so on. Indeed, it replicated the practice in privately funded cases, which still goes on, whereby disbursements are invariably collected by the solicitor from the client. When the legal services commission enters into contracts with practitioners, those contracts may well provide for payment on a regular basis, at regular stages, rather than requiring lawyers to wait until the conclusion of the case before payment is made. In my submission, it is important to ensure that payment on account can be made in cases funded on an individual basis. This provision would put the matter beyond all doubt.
This is a matter of considerable importance to those who presently practise in the area of legal aid work. By and large, they are not practices which are well capitalised. The requirement in the Bill would add to the need to obtain overdraft facilities—it would duplicate that—and would indirectly create a burden for the client as well as for the solicitor. I am not suggesting the amendment in order simply to reward the solicitor in some misbegotten way; what I am suggesting is an essential element of being able to carry on a practice in the sort of firms to which I have alluded in earlier debates. I refer to high-street firms which would be severely embarrassed if the amendment is not passed. I beg to move.
Lord Borrie: My Lords, with due respect to my noble friend, I should like to express a feeling of some discomfort about the amendment. I know that my noble friend did not emphasise the word "loans", but that word does appear in the amendment. The purpose of the clause is the use of public funds to enable people to finance their legal claims, not to assist the providers of legal services.
In so far as loans may be made by the commission to solicitors or barristers, I ask: at what rate? If loans are to be made at the commercial rate, I point out that lawyers, assuming that they are always (or almost always) credit-worthy, can obtain loans in the normal way, just like anybody else. If, on the other hand, my noble friend is suggesting that a rate lower than the commercial rate should be charged, that would be a subsidy to lawyers at public expense. As I have said, the purpose of these provisions is to enable taxpayers' money, through the
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commission, to be made available to people who might otherwise be unable to pursue claims; it is not to assist lawyers.
In an effort to be constructive, perhaps I may ask my noble friend whether he has considered the Credit Unions Act 1979. In a consultation paper, the Government propose to make that law and the creation of credit unions more flexible. Even under the present law, there is surely no doubt, to use the words in the Act, that solicitors have a common bond between them. Surely barristers have a common bond. Perhaps my noble friend would consider that as a constructive way in which loans at rather less than normal commercial rates obtainable from banks might be available to solicitors and barristers.
I am not expressing outright opposition to a proposition which my noble friend puts forward on a reasonable basis, but I am questioning whether it has been adequately thought through.
6.15 p.m.
Lord Meston: My Lords, I declare an interest as someone who is a grateful beneficiary of the payment-on-account scheme. I do not regard this as a debate about loans, but see this as an opportunity (provided by the noble Lord, Lord Clinton-Davis, and his amendment) to ask for confirmation from the Government that the payment-on-account scheme, or something like it, will be preserved under the Bill. It is a fact that many lawyers in practice depend on the scheme for their existence and credit arrangements. For many of us, it is, frankly, the lifeblood by which we are able to continue in practice. I hope, therefore, that the Government will give an indication—either with regard to this amendment or at some other appropriate point—that the payment-on-account scheme will continue in existence.
Baroness Crawley: My Lords, like my noble friend Lord Borrie, I am hesitant about the amendment. If I understand it correctly, the amendment, which stands in the names of my noble friend, Lord Clinton-Davis, and my noble and learned friend Lord Archer, would require the legal services commission to act as a banker to private solicitors and barristers. Given the reluctance of my bank to loan me anything other than an ear, the amendment, if passed, would act as an inducement to me to take up the legal profession as a late career move.
It is rather a tall order to expect, within the reforming context of the Bill, limited public funding to be made available to solicitors to "sub" them when they are left a bit short in the course of their professional work. Therefore, I cannot support the amendment.
Lord Clinton-Davis: My Lords, does my noble friend realise that, as the noble Lord, Lord Meston, said, with legal aid, moneys are paid on account of profit costs and in respect of disbursements? That is the current situation.
Baroness Goudie: My Lords, I am totally against the amendment and agree with my noble friends Lord

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Borrie and Lady Crawley. I understand fully the present situation as regards legal aid whereby solicitors and barristers are enabled to obtain fees on account of costs, but that is after the work has been done and the disbursements spent, not before.
The amendment makes it clear that it is asking not for money on account of costs, but,
"on account by way of. loans".
That is completely different. It would be a disgrace if public funds were used in that way.
Lord Carlisle of Bucklow: My Lords, I rise to support briefly the noble Lord, Lord Meston. Are we not in danger of getting bogged down by the words "by way of loans" when what was asked for, perfectly reasonably, was an undertaking from the Government that they will continue to pay fees on account both to the Bar and to solicitors in appropriate cases, as happens at the moment with legal aid?
Lord Mishcon: My Lords, perhaps I may say a few words in praise of the previous contribution. I look askance at the noble Lord, Lord Borrie, whose wisdom, I know, is such that he must have realised that he was making a bad point.
This is protection for the commission. The fact that fees on account are asked for and that the disbursements made are to be repaid means that, unless the words "by way of loans" are included, the commission can never say, "Well, those fees were not earned. We made a mistake when we paid the account. The disbursements were not properly incurred". There is no question of interest here; there cannot be. Under the amendment, the commission would be asked to pay sums to solicitors and barristers about which subsequently the commission could say, "Now, we merely lent you that money, you know. It wasn't paid to you as a final payment. Would you please, in the final account, take it for granted that we merely lent you the money and that now you must properly account for it and ensure that you didn't overcharge and that you incurred this disbursement properly?". With all his vast experience, the noble Lord, Lord Borrie, must have known that. However, he made his point so eloquently that I cannot really grumble.
Lord Windlesham: My Lords, this short debate provides an opportunity to put a general point to the House and perhaps to the Front Bench opposite in particular. It is not specifically directed in support or in criticism of the amendment of the noble Lord, Lord Clinton-Davis. Do not the differences of opinion that we have heard illustrate the difficulties that arise when a mass of detail is put into a statute setting up a new departmental public body? The legal services commission is going to be a very important public body. It is right that its purposes and powers should be stated. But as we have heard in earlier debates, the Lord Chancellor will have considerable reserve powers of regulation to make directions on a whole range of matters. We have page after page of what the commission can do and is prohibited from doing. I hesitate to say so, but it is open to almost any noble Lord, or any special interest represented by a noble Lord
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in this House, to run his own hobby-horse and have it included or, conversely, to get something excluded. Therefore, what is the case for having this degree of detail in this part of the Bill?
Lord Hacking: My Lords, the noble Lord, Lord Windlesham, has made a very good point. I would not wish for this amendment to be included in the Bill. Indeed, I do not believe that my noble friends would wish for this amendment to be approved by the House provided that we can have confidence that there is going to be continuity in the present system. That system is not working just for the benefit of lawyers: it is to make sure that lawyers, who have not got unlimited means, cannot act as bankers for their own clients for very large sums of money. The purpose of this amendment is to focus on the need of the lawyer so that he can serve his client and have some form of interim funding. In Clause 3(2)(c) there is already the power "to make loans".
If that is sufficient to cover this issue, then I am sure that my noble friends do not want to press this amendment and to clutter the Bill with detail which the noble Lord, Lord Windlesham, had advised us against. All we want from my noble and learned friend the Lord Chancellor, is for him to say that there is provision in the Bill to deal with this problem when the need arises.
The Lord Chancellor: My Lords, this entertaining amendment in the name of the noble Lord. Lord Clinton-Davis, has provided us with a little sound and fury, but even more fun. It has been sound, fury and fun about nothing.
The trouble arises from the amendment in which it is proposed,
"to pay fees and disbursements on account by way of loans to solicitors and barristers".
The amendment muddles up the idea of payment on account with that of a loan. Of course, a payment on account is the payment of a reasonable sum, being a genuine estimate of the value of the services already rendered. Therefore, it is quite inconsistent with a loan. The noble Lord has quite inadvertently confused the House. But to the extent that he is seriously proposing that there should be payments made to lawyers by way of loans by the legal services commission, I believe that most people would regard it as an extraordinary proposition that lawyers in business should have loans from the public purse to cover ordinary business costs.
However, as the White Paper made plain, we envisage that contracting will in time provide for earlier and more certain payment for services actually rendered than the present system of payment on account by the Legal Aid Board, the latter having absolutely nothing to do with making loans available to lawyers, quite exceptionally by the state, for their businesses. Therefore, I invite the noble Lord to withdraw the amendment.
Lord Clinton-Davis: My Lords, I thank noble Lords who have participated in this debate. Naturally, I thank those who supported what I was seeking to probe from the Government rather more than other noble Lords. Least of all, I thank the noble Lord, Lord Borrie who

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is not immune from making mistakes, as my noble friend Lord Mischon pointed out, despite his very considerable career.
The fact of the matter is that this was an attempt to probe the Government. I had no intention of dividing the House on this issue at any time. My noble and learned friend has referred to the consultation paper issued by the Legal Aid Board. I was particularly concerned that he spoke of litigation support. I took it to mean some sort of assistance with disbursements in cases which would otherwise be outside the scope of legal aid.
It has been important to canvass from my noble and learned friend what he has in mind on the subject. It is absurd to suggest that it is a grandiose scheme for the legal aid commission to act as a banker for solicitors in practice. My noble and learned friend knows that very well. But he took it upon himself to poke fun at the matter in that way. With great respect, I believe that it was an unworthy way of responding to this debate. I do not intend to provoke my noble and learned friend for whom I have considerable regard—as he knows—except on this issue.
I do not agree with the noble Lord, Lord Windlesham, that it is a question of imposing too many requirements on the new body. It was simply a way of trying to find out what it is. Some mystery remains in that respect. I am not at all sure that my noble and learned friend's response—even deliberately humorous in parts—cast a great deal of light on what is happening on this matter. But having raised it, I do not believe that there is any great point in repeating arguments that I have already addressed to the House. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter: My Lords, I mentioned earlier that the Statement on Kosovo will be taken at a convenient moment after 7 p.m. The noble Earl, Lord Lytton, has kindly agreed to postpone the debate in his name, which was the business for the dinner break. Therefore, the Statement will become the business dealt with in the dinner break. I suggest that the House returns to the Access to Justice Bill one hour after the Statement has been taken.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 25:
Page 3, line 2, leave out from ("money") to end of line.
On Question, amendment agreed to.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved AmendmentNo. 26:
Page 3, line 5, leave out from ("functions") to end of line 8.
The noble and learned Lord said: My Lords, I apologise for yet again inflicting an argument on your Lordships, though I believe that this is my final amendment. It was grouped with a very large number of amendments which were dealt with by my noble and learned friend the Lord Chancellor in a speech of marvellous lucidity. I agreed with his general thrust and
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with most of the points that he made. It is concerned with the powers given to the Minister and to the parliamentary control of those powers.
But perhaps I may say this, repeating what I said in Committee. It is, I think, a matter of alarm that as the Bill was pronounced it gave quite inordinate power to the executive. I draw on a report of the Delegated Powers Committee—a report of a severity that I cannot remember since the very inception of the committee.
This Government are not alone in arrogating power to the executive. Indeed, in the previous Parliament there was the major matter of the Child Support Act which stripped away a whole jurisdiction from magistrates and gave it, with disastrous consequences, to a new statutory body. But I think this Government are going further still in what they have called their hands on policy—of which this Bill is a notable example—and, to use a common phrase, control freakery.
This amendment does not affect the power of the executive. What it does is to seek to eliminate a provision which is beyond question unnecessary. Clause 3(4) states that the commission
"may make such arrangements as it considers appropriate for the discharge of its functions".
Then, it adds quite unnecessarily,
"including the delegation of specified functions, and shall make such arrangements for the delegation of functions as may he prescribed".
that is, prescribed by the Lord Chancellor.
That is unnecessary because every body has a power to delegate functions unless it has itself had power delegated to it. I did not understand my noble and learned friend to be controverting that in Committee. Indeed, I should have thought that it is hornbook law that a body can delegate except when it is itself a delegate. That is a good example of the idiom that the exception proves the rule because a delegate cannot sub-delegate. It proves that other persons can delegate. Therefore, this provision is unnecessary and should be removed.
I have no objection to the next amendment of my noble and learned friend, which gives him power to require the commission to delegate or not to delegate and to make arrangements as to delegation. That seems to me perfectly acceptable within the wide powers that my noble and learned friend is seeking to take into his hands. However, the previous provision, the one which is the subject of Amendment No. 26, is quite unnecessary. Unnecessary provisions give rise to unacceptable and dangerous argument. I beg to move.
6.30 p.m.
The Lord Chancellor: My Lords, I have already spoken to Amendments Nos. 26 and 27 in the context of our debates on all the amendments in that group.
Lord Simon of Glaisdale: My Lords, the argument put forward was that this provision is unnecessary. I have not, I confess, heard that replied to. In fact, I think that in Committee my noble and learned friend accepted that it was unnecessary but said it made clear that there was a power to delegate, accepting that

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without the statute there was still a power to delegate. It is highly unsatisfactory that a serious argument should be brushed aside. There is no limit if we are to try to make clear everything that is already clear in the common law. There is no end to the expansion of the statute book. But I shall certainly return to the matter at a later stage. I hope that my noble and learned friend will have second and better thoughts. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Lord Chancellor The Lord Chancellor moved Amendment No. 27:
Page 3, line 5, leave out from second ("of") to end of line 8 and insert ("any of its functions.
( ) The Lord Chancellor may by order require the Commission—

(a) to delegate any function specified in the order or to delegate any function so specified to a person (or person of a description) so specified,

(b) not to delegate any function so specified or not to delegate any function so specified to a person (or person of a description) so specified, or

.(c) to make arrangements such as are specified in the order in relation to the delegation of any function so specified.").

On Question, amendment agreed to.
Clause 4 [Directions and guidance]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 28:
Leave out Clause 4.
On Question, amendment agreed to.
Clause 5 [The Community Legal Service]:
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 29 to 32:
Page 3, line 21, leave out from ("Service") to end of line 22 and insert ("for the purpose of promoting the availability to individuals of services of the descriptions specified in subsection (1A) and, in particular, for securing (within the resources made available, and priorities set, in accordance with this Part) that individuals have access to services of a type and quality appropriate to meet their needs.
(1A) The descriptions of services referred to in subsection (1) are—").
Page 3, line 33, leave out subsection (2) and insert—
("(2) Services which the Commission can fund as part of the Criminal Defence Service do not fall within subsection (1A).").
Page 3, line 36, leave out ("(1)") and insert ("(1A)").
Page 3, line 39, leave out ("(1)") and insert ("(1A)").
The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 29 to 32 en bloc.
On Question, amendments agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 33:
Page 4, line 3. at end insert—
("and the Commission shall notify the Lord Chancellor of what it has done under this subsection.").
The noble and learned Lord said: My Lords, I wish to speak to Amendments Nos. 33, 37, 43 and 48.
These amendments are designed to strengthen the requirement on the Lord Chancellor to consider the needs for services before making directions about the funding of services or the way that services should
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be funded. Amendments of this type were suggested by, among others, the noble Lord, Lord Goodhatt, during the Committee stage of the Bill and I am grateful to him.
I hope that your Lordships will agree that these amendments ensure that the need for services is to be considered throughout the funding process. In each case need for services is defined in terms of the types of help listed in Clause 5.
Amendment No. 37 requires the Lord Chancellor in making his determination of the sums to be paid into the community legal service fund to have regard to the need for services described in Clause 5 identified by the commission under Clause 5(4). The amendment also makes it clear that the Lord Chancellor may also take account of any other factors he considers relevant. This reflects the fact that the budget for the community legal service fund will be set as part of the general public expenditure planning process. This takes account of the general state of the economy and the competing needs of other public spending programmes.
Amendment No. 33 is consequential on Amendment No. 37. The Bill has already placed a duty on the commission at Clause 5(4) to inform itself about the need for the services described and about the provision and quality of the services available. This amendment extends the duty to ensure that the commission informs the Lord Chancellor of the results of its investigations, ensuring that he has as much information as possible about the need for services. Amendment No. 37 ensures that, when setting the priorities for the funding of services, the commission takes account of the need for those services described in Clause 5.
Amendment No. 48 was inspired by the noble and learned Lord, Lord Mackay of Clashfern, who I am sorry to note is not present. He suggested in Committee that the use of the word "communities" instead of "areas",
"would give the community legal service a kind of local community connection"—[Official Report, 19/1/99; col. 565.]
I accept that the commission should be able to respond as flexibly as possible to the needs of different communities, whether that different need arises as a result of geographic location, ethnic or religious background, or otherwise. I therefore propose that the text should be amended to read:
"The commission may fund as part of the Community Legal Service different descriptions of services or services provided by different means in relation to different areas or communities".
I hope that your Lordships agree that that provides for the greatest possible flexibility. I beg to move.
Lord Simon of Glaisdale: My Lords, I have only one question. It concerns Amendment No. 37. Does my noble and learned friend, or the noble and learned Lord, Lord Falconer of Thoroton, really think that it is necessary to stipulate by statute:
"In making any determination under subsection (2) the Lord Chancellor shall take into account (in addition to such other factors as he considers relevant) the need for services of the descriptions specified in subsection (1A) of Section 5 as notified to him by the Commission under subsection (4) of that section"?

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If that was not there, would my noble and learned friend really take no notice of what the commission thought was required?
Lord Falconer of Thoroton: My Lords, I cannot say whether it is legally necessary or not. It seems to me entirely sensible that it should say that. It provides a focus of what should be considered and it places the emphasis in the right place.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 34:
Page 4, line 5, leave out from ("subsection") to end of line 6 and insert ("(1A).
(6) In particular, the Commission may accredit, or authorise others to accredit, persons or bodies providing services of the descriptions specified in subsection (1A); and any system of accreditation shall include provision for the monitoring of the services provided by accredited persons and bodies and for the withdrawal of accreditation from any providing services of unsatisfactory quality.").
The noble and learned Lord said: My Lords, in moving Amendment No. 34, I shall speak also to Amendment No. 95. The amendments build upon the powers in Clause 5(5) and Clause 12(5) respectively that the legal services commission may set and monitor standards in the community legal service and criminal defence service, or authorise others to do so.
Clause 5(5) empowers the commission to set and monitor standards of service, and to accredit, or authorise others to accredit, persons or bodies providing relevant services. Amendment No. 34 will place a duty on the legal services commission to ensure that any accreditation system it may establish includes provision for monitoring all those providing accredited services and withdrawing accreditation from any who provide services of an unsatisfactory quality.
I believe that the amendment improves Clause 5 as it puts beyond doubt that the commission, or other authorised bodies, can and will monitor the provision of services by accredited providers and, if necessary, withdraw that accreditation.
Providing consumers with an assurance of quality is a key feature of the Lord Chancellor's plans for the community legal service. The conditions for accreditation will initially be provided by the Legal Aid Board's franchising specification, which will become a requirement of all contracts that the legal services commission makes with providers. But the noble and learned Lord the Lord Chancellor intends in future that franchising will be integrated into a wider community legal service kitemark on which both the commission and other funders of legal services can rely. A common system of accreditation should reduce the administrative burden on providers who seek funding from a number of sources and currently have to satisfy several different sets of quality criteria. It should also encourage referrals between different types of service provider, reduce the burden on funders of developing separate quality requirements, and generally strengthen public confidence in the quality of service provision.
To develop details of the kitemark, the noble and learned Lord the Lord Chancellor has set up a quality task force which includes representatives of all the major organisations concerned with the quality of advice. The aim of the quality task force is to identify and agree the core quality criteria which providers should be expected to comply with and which could form the basis of a community legal service kitemark.
Amendment No. 34 also ensures that subsection (5) and the new subsection (6) refer to subsection (1A), as inserted by Amendment No. 30, which lists the descriptions of service available, rather than to subsection (1), which will set out the objectives of the community legal service.
Amendment No. 95 makes a similar change in relation to the commission's powers to accredit providers of criminal defence services. I beg to move.
6.45 p.m.
Lord Renton: My Lords, I do not object to the amendment, but I wish for some enlightenment. The word "accredit" has not previously been used in the Bill. It can mean different things in different circumstances. It is an unusual word to find in a statute anyway. I wonder if the noble Lord can be more precise and tell your Lordships exactly the application of it in this context.
Lord Falconer of Thoroton: My Lords, "accreditation" in this context means ascribing to a particular person or body a certain quality standard.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 35:
Page 4, line 6, at end insert—
("( ) The Lord Chancellor may by order require the Commission to discharge the functions in subsections (4) to (6) in accordance with the order.").
On Question, amendment agreed to.
Clause 6 [Funding of services]:
[Amendment No. 36 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 37:
Page 4, line 16, at end inser—
("( ) In making any determination under subsection (2) the Lord Chancellor shall take into account (in addition to such other factors as he considers relevant) the need for services of the descriptions specified in subsection (1A) of section 5 as notified to him by the Commission under subsection (4) of that section.").
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 38:
Page 4, line 16, at end insert—
("( ) In determining the amount appropriate for the funding of services as part of the Community Legal Service, the Lord Chancellor shall not take into account the level of expenditure expected for the Criminal Defence Service.").
The noble Lord said: My Lords, I am very concerned about the subject matter raised in this amendment. I hope that it will give the Government an opportunity

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to define their purposes or to reconsider what has previously been said. That is the purpose of the debate that I subscribe to.
I take the view that there is a serious risk involved if the level which is appropriate for the community legal service may not be determined on its merits. The influence of the level of expenditure on criminal cases is likely to impact upon this issue very seriously.
The noble and learned Lord the Lord Chancellor has said before that his intentions are that the community legal service should operate subject to a cash limit in contrast to the situation where civil legal aid has previously been based on an entitlement benefit. The previous situation—to which my noble and learned friend objects—was that all applicants had to satisfy the merits test. Their financial circumstances would make them eligible for assistance or entitle them to legal aid. One of the merits of the situation was that it provided for a measure of consistency to apply in different parts of the country. Now that we are moving to a cash-limited system, that consistency might be very difficult to achieve. A requirement of the Lord Chancellor to take account of identified need before settling the funding for the commission could help to mitigate that risk.
At the Committee stage my noble and learned friend argued that funding for help in civil cases should be regarded as subordinate to funding in criminal cases; that, indeed, funding for civil cases should be what is available after the prior claims of criminal cases had been met. I do not disagree with the Lord Chancellor exempting assistance in criminal cases from cash limiting because of the need to meet the obligations under the European Convention on Human Rights. But should that mean that any unexpected expenditure in criminal cases automatically leads to a corresponding reduction in the civil field without any regard to the merits of the case and in the context of public expenditure generally? This is a serious matter. I am anxious to hear from my noble and learned friend whether he has reflected further or whether he adheres to the point he made previously. I beg to move.
Lord Goodhart: My Lords, I support the noble Lord, Lord Clinton-Davis. I regard this as one of the most important amendments to the Bill; in all probability the most important. We have long been aware that one of the purposes of the Bill is to cash limit civil legal aid. We recognise that in recent years, although not perhaps in the past two years, the cost of civil legal aid has mushroomed. We have therefore reluctantly accepted the need for capping.
We were glad to see in the Bill that criminal legal aid was not to be capped. What we had not realised until Committee stage was that the noble and learned Lord the Lord Chancellor intended in effect that there should be a single block grant to cover both criminal and civil legal aid so that the more that was spent on criminal legal aid the less would be available for civil legal aid. Nothing in the Bill or in the Explanatory Notes makes that clear. Indeed, Clause 6(2) states:
"The Lord Chancellor … shall pay to the Commission the sums which he determines are appropriate for the funding of services by the Commission as part of the Community Legal Service".
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We recognise that the Lord Chancellor's decision as to what is appropriate must take into account the Government's targets for public spending and the demands from other claimants for funds. However, as I read the Bill, the needs of the community legal service constitute a free-standing claim to which public funds are allocated on the basis of the merits of that claim as the Government see them and the right to whatever is left over after the criminal defence service has been funded is something entirely different. I see no reason whatever why the two should be linked. Indeed, I believe it is highly arguable that the Lord Chancellor would be in breach of his duty under Clause 6(2) if he decided that what was appropriate funding for the community legal service was whatever was left over after funding the criminal defence service. That could be nothing at all.
Criminal legal aid is part of the cost of maintaining law and order in this country. Civil legal aid is intended to give access to justice to people who cannot afford to pay for it themselves. The cost of criminal legal aid has gone up over the years, to a large extent because of the increase in crime. That may or may not continue. I hope it does not. But if it does, the cost of paying for the defence of accused persons will necessarily go up too. Why should that increase in cost be paid for by depriving other people of access to justice?
I believe it is essential to prevent that happening. I trust that the Lord Chancellor will either accept the amendment or render it unnecessary by giving an undertaking that the funding of the community legal service will be considered independently of the funding of the criminal defence service. I find it difficult to believe that the noble and learned Lord the Lord Chancellor could have accepted of his own volition a proposal so damaging to access to justice by people in need.
Lord Carlisle of Bucklow: My Lords, I wish to briefly to add my support to the amendment moved by the noble Lord, Lord Clinton-Davis. It would be extraordinary if the amount of money to be made available for civil legal aid were to depend entirely on the amount of money spent on criminal legal aid. How can it be said that appropriate money is being provided for one service when we have just had an amendment which says that the Lord Chancellor, in deciding what is the appropriate amount of money to fund the community legal service, shall take into account the needs of that service, and then, having taken that into account, the amount of money available is affected by powers totally outside the control of the community legal service; namely, because of the amount being spent on criminal legal aid? I cannot see that there is any greater relationship between these two individual parts of the funding of legal aid, civil and criminal. It is like saying, for example, that if you have to spend more on defence then, automatically, you will reduce the amount spent on schools or something of that nature.
Clearly, the Government are entitled to cap the amount of money they wish to spend on legal aid as a whole, but to make one general cap and then say that

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the amount provided for civil legal aid is wholly dependent on what is spent on criminal legal aid is totally illogical.
Lord Hunt of Wirral: My Lords, I wish to support the noble Lord, Lord Clinton-Davis. It is wrong to allow funding for the community legal service to be adversely affected, in the way that would occur without this amendment, by the amount of spending on the criminal defence service. There may be a problem here. I hope that the noble and learned Lord the Lord Chancellor will share with us whether or not the pass has already been sold. If he has agreed with the Chief Secretary that there will be one block, that was a bad decision for all those who are relying on the community legal service to meet needs right across the country.
I know that the Chief Secretary drives a hard bargain. My noble friend Lord Carlisle will remember in his negotiations with the Treasury that wherever there was an argument a cash limit was involved. It is important to fight those cash limits, to ring-fence them, and to ensure that where there is a needs-led budget a reasonable assessment is placed on the amount that will be required and it should not eat into other parts of the budget which are right to observe and which ought to be met.
I hope that the noble and learned Lord the Lord Chancellor will come clean about whether or not he has already negotiated a settlement which makes this amendment impossible. I very much hope that that is not the case. It would be very regrettable if we were to find, through some unforeseen demand on the criminal legal aid service, that the amount available for the community legal service was savagely cut.
Baroness Thornton: My Lords, I wish to speak against the amendment proposed by my noble friend Lord Clinton-Davis. In the almost 20 years of our friendship I cannot remember ever disagreeing with him. But now I am doing so twice in one day. I suspect that he may once again feel that I do not understand the issue. I prefer to think that we have a different understanding of it.
The idea that no cash limits should be imposed in this area—this area alone of all areas of government expenditure—is extraordinary. The Government have to be able to decide their priorities and they have decided that those priorities are health and education. That is the real world. There are real constraints on the Government's budget and priorities. The funding of legal services has to be part of that process. It cannot be outside the process. In fact it is desirable that it should be part of the process. No one is suggesting that restrictions or reductions are on the cards. No one is saying that these provisions are not very important and would not be fought for. However, a balance has to be found. I think it right that this budget heading takes its place in negotiations along with all others.
Lord Ackner: My Lords, I do not follow how it can be sincerely emphasised that one of the main purposes of this legislation is to improve access to justice when
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legal aid for civil litigation is in the vulnerable state that has been described here. I therefore support the amendment.
7 p.m.
Lord Hacking: My Lords, those of us who have practised law for as long as I have, for over 30 years, will be fully aware that there is great need for support for civil law, as there is for criminal law. We have also become aware of the enormous cost to the state in defending in criminal cases. My noble and learned friend has repeatedly said since becoming Lord Chancellor that he is paying attention to that and taking steps to bring those costs into order.
We are also aware that the Government have limited resources and that they have to take an overview. It seems to me that in taking an overview the Government have to decide how much they are going to allocate to education, health, the legal services and the like. They also have to go through the rationality, when looking at legal services, of deciding how much they will allocate to civil legal services and to criminal legal services.
Therefore, although I understand the concerns that have been expressed I have to say that this amendment is unacceptable, because in the real world the noble and learned Lord has to take account of the cost of expenditure of the criminal defence service at the same time as considering the community legal service. May I add that at the same time he has to do it "vice versa". By approaching it in that way, it seems to me that this amendment, although it gives us a convenient opportunity to express your Lordships' concern, is not one which can possibly be accepted by my noble and learned friend.
Lord Kingsland: My Lords, I rise to support the amendment of the noble Lord, Lord Clinton-Davis, as well. When the noble and learned Lord the Lord Chancellor replied to the debate on the first amendment this afternoon, initiated by the noble and learned Lord, Lord Lloyd of Berwick, he was at pains to point out that one of the reasons why he could not accept that amendment was because he felt that two purpose clauses rather than one should be inserted into the Bill: one purpose clause for civil legal aid and one purpose clause for criminal legal aid.
At no stage did he say that the dominating purpose clause should be the criminal legal aid clause and the subservient or subsidiary purpose clause should be the civil legal aid clause—because that is the effect of making civil legal aid the acolyte of criminal legal aid. In my submission, were that position to be maintained it would be in breach of the noble and learned Lord the Lord Chancellor's own Amendment No. 29 as it stands, which I believe your Lordships have already adopted.
Of course we all accept that expenditure on legal aid has to take its place alongside expenditure on defence, on the health service and on educational services, and it has to fight its corner. There has to be an overall constraint. I might add that over the last four or five years the increase in the overall legal aid budget has been well within the cash constraints laid down first of

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all by the previous government and now by this Government. I recall the noble and learned Lord the Lord Chancellor, when he was Shadow Lord Chancellor, saying that the only circumstances in which he would be prepared to accept cash limits would be if there was or had been an explosion in legal aid.
However, at no stage was there any suggestion, until the Second Reading, that one part of the legal aid budget was dependent on the other. I can find no parallel in other parts of public expenditure which mirrors this proposal. For example, there is nothing in the health budget that suggests that just because general practitioners exceed their budgets there should be a corresponding reduction in the budget for surgery in hospitals. It seems to me, in exactly the same way, that no such constraint should apply to legal aid.
Lord Phillips of Sudbury: My Lords, I think the House may need reminding that never before have legal aid budgets been capped and that, as we have heard tonight, within that cap there has been, if you like, a "double whammy" for the civil system by reason of the fact that criminal legal aid is going to have absolute priority. I think it needs saying, because sometimes a contrary impression is given that the legal aid budget is now under control.
It is fair to say that it was out of control, but last year just short of 3.5 million of our fellow citizens received assistance under the legal aid scheme, civil and criminal, and that represented 3.2 per cent. more cases than in the previous year, with only a 1.2 per cent. increase in the cost to the taxpayer. The budget for this year is very little different from that of last year and I think I am right in saying that projections for two years ahead show an absolute decline in the amount of legal aid expenditure.
On top of that, in this Bill the Government are seeking to ensure that the legal services commission and indeed the Lord Chancellor of the day will have a panoply of powers and discretions so as to ensure that the projections that they make for the provision of legal services are met. They can turn the tap on and off with regard, for example, to the means test, the merits test, the amount of spend in the regions, and so on.
In other words, ultimately this is surely a fundamentally political issue. Is civil legal aid, which we are talking about, so important to our fellow citizens that it deserves protection against the double capping, if I can call it that, which currently is inherent in this Bill? In an age when every one of us year by year is ever more dependent upon an ever-increasing panoply of laws—the complexity of which is beyond the wit of the vast majority of us—I suggest that, in that general environment and at this stage for the first time in our history, it is simply unacceptable to impose, first, an overall cap and then leave civil legal aid with what is left after the criminal take. It should be unacceptable to everyone in this House and to everyone in the other place. I hope therefore that there will be great support for this amendment
The Lord Chancellor: My Lords, this amendment seeks to ensure that when considering the amount of
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public money available for the funding of services as part of the community legal service, no account should be taken of the level of expenditure expected for the criminal defence service. I have to tell noble Lords who advance that position that it is simply unrealistic and that they are not willing to accommodate themselves to the world in which we live. In considering the amount of public money to be spent on any service, it is the duty of Ministers collectively to consider all the demands that will be made upon the public purse. So we cannot consider the public funding of legal services without considering the amount to be spent on teachers' salaries or the amount needed for nurses' salaries, for road building or any other call on public funds.
I have to say firmly to noble Lords on the Benches opposite—and I am looking firmly in the direction of the Liberal Democrat Benches—that the Prime Minister won the last election on an oft-repeated statement that schools and hospitals came first. He did not win the election on the proposition that legal aid came first—
Lord Goodhart: My Lords, did he put forward the proposition that access to justice should be cut?
The Lord Chancellor: My Lords, he put forward the proposition, in fact all the propositions, which were in a winning manifesto. The purpose of this Bill is not to cut access to justice but to enhance it. However, the adherence of some to the vested interests of lawyers is the principal objection to achieving that sensible outcome. To ring-fence one area—the criminal defence service—and exclude it from this type of consideration is utterly unrealistic. The noble Lord, Lord Kingsland, is in Cloud-cuckoo-land when he says that if too much is paid to doctors that does not entail less being paid for surgery. That is simply to be unwilling to accommodate oneself to the reality of the world which all the rest of us occupy.
All services funded by the Government are funded by the taxpayer. The Government must be free to consider competing priorities for the finite resources that are available. Those who indulge in amendments of this kind play politics, but do not accept realities.
Lord Harris of Greenwich: My Lords, perhaps I may draw the noble and learned Lord's attention to the fact that this amendment was proposed by one of his noble friends.
The Lord Chancellor: My Lords, I appreciate that it was proposed by one of my noble friends, and he will remain one of my noble friends, but the enthusiasm of noble Lords opposite for an erroneous position does not encourage me.
Criminal legal aid has become a greedy Leviathan. Between the financial years 1991–92 and 1997–98 the cost of criminal legal aid in the higher courts rose by 87 per cent.; that is almost 70 per cent. above the rate of inflation. Average payments have increased by 65 per cent., again well above the rate of inflation. In the Crown Court the most expensive 1 per cent. of cases continue to consume more than 40 per cent. of the

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budget—all this when the number of people actually helped has fallen by more than 9 per cent. This is the budget that noble Lords wish to see ring-fenced.
Lord Kingsland: My Lords, I am grateful to the noble and learned Lord for giving way. He mentioned that 1 per cent. of criminal cases absorbed over 40 per cent. of the legal aid budget. Does he agree that if he were able to target successfully that 1 per cent. of cases and control that money, that would be a simple and straightforward way of solving the problem that he is asked to confront by this amendment?
The Lord Chancellor: My Lords, would that it were so simple. I look forward to the noble Lord's strong support for my undoubted attempts to bring that part of the budget under control. The only people who could possibly be attracted to a ring-fenced budget for criminal cases would be lawyers. It would be of no benefit whatever to the public. On the other hand, our international obligations must be fulfilled. As I said earlier this afternoon when speaking to Amendment No. 86, we are going beyond the minimum of these obligations and we are going to increase access to justice.
I do not seek to conceal—and I apprehend that I shall have the support of the principal Opposition party—that I shall come down hard on excessive prices for legal services in criminal cases. I welcome the support of the noble Lord, Lord Kingsland, for that position.
My principal method for gaining control will be through contracting with the providers of legal services in criminal cases. Through monitoring and controlling the contracts I shall bring downward pressure on excessive fees. I make no secret of this fact. I must bear down on this budget if I am to have the funds that I want to be able to develop the community legal service, and I am determined to do so.
My earlier comments in Committee recognised that the criminal legal service fund budget must have a higher priority than civil when budgets are set because of the absolute nature of our international obligations, to which I imagine the noble Lord, Lord Goodhart, is as enthusiastically committed as I am.
The white Paper states expressly in paragraph 6.10, that the Criminal Defence Service budget and the community legal service budget are separate. However, your Lordships should know that I must live within an expenditure settlement that is now settled for the next three years. In that context the proposal in this amendment to ring-fence one or both budgets is not to live in real world politics.
However, it is not ultimately a rigidly controlled budget. Circumstances could arise whereby it might be appropriate to make a claim on the Exchequer, but I should have to press my claim, perhaps in competition with others, on the Chancellor of the Exchequer.
Lord Clinton-Davis: My Lords, one reassuring point has emerged; namely, that there is a continuum, according to my noble and learned friend, in the personal relations between us totally unsullied by anything that I have done during this debate.
The debate has been interesting. It has demonstrated the real dilemma confronting my noble and learned friend, which he has explained vividly. On the other hand, people are at least now aware, theoretically, of the problem confronting civil legal aid. It is to be subordinate.
Theoretically, a situation could arise whereby no money is available for the provision of civil legal aid. Realistically, I do not believe that that is a measurable risk. I am aware, and have been for a long time, of my noble and learned friend's position; he is not reticent in stating bluntly where he stands on most issues.
While it is true that the Government have limited resources, it is plain, having listened to this debate, that my noble friend is sensitive about the situation on civil legal aid. Therefore, I do not imagine that the draconian consequences spelt out by the noble Lord, Lord Goodhart, are likely to be as calamitous as he suggested.
I tabled the amendment because I wanted to probe the Government's intention in this regard. It is not my intention to divide the House. I therefore beg leave to withdraw the amendment.
The Deputy Speaker (Viscount Allenby of Megiddo): My Lords, is it your Lordships' pleasure that the amendment be withdrawn?
Noble Lords: No!
7.18 p.m.
On Question, Whether the said amendment (No. 38) shall be agreed to?
Their Lordships divided: Contents, 54; Not-Contents, 86.

Division No. 2

CONTENTS

Ackner, L.

Hooson, L.

Addington, L.

Hunt of Wirral, L.

Alderdice, L.

Kingsland, L.

Alexander of Tunis, E.

Kinnoull, E.

Astor of Hever, L.

Leigh, L.

Attlee, E.

Lindsey and Abingdon, E

Bridgeman, V.

Liverpool, E.

Carlisle, E.

Ludford, B.

Carlisle of Bucklow, L.

Lyell, L.

Carnegy of Lour, B.

McNair, L.

Clanwilliam, E.

McNally, L.

Clement-Jones, L.

Maddock, B.

Colwyn, L.

Meston, L.

Cross, V.

Monk Bretton, L.

Dixon-Smith, L.

Morris, L.

Falkland, V.

Mountevans, L.

Gardner of Parkes, B.

Napier and Ettrick, L.

Goodhart, L. [Teller.]

Norrie, L.

Hamwee, B.

Oxfuird, V.

Harris of Greenwich, L.

Phillips of Sudbury, L.[Teller.]

Henley, L.

Renton, L.

Hogg, B.

Rodgers of Quarry Bank, L.

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Russell, E.

Thomas of Walliswood, B.

Shrewsbury, E.

Tordoff, L.

Stewartby, L.

Vivian, L.

Taverne, L.

Wallace of Saltaire, L.

Thomas of Gresford, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Acton, L.

Hoyle, L.

Ahmed, L.

Hughes, L.

Allenby of Megiddo, V.

Hughes of Woodside, L.

Alli, L.

Hunt of Kings Heath, L.

Amos, B.

Irvine of Lairg, L.[Lord Chancellor.]

Ampthill, L.

Archer of Sandwell, L.

Jay of Paddington, B. [Lard Privy Seal.]

Bach, L.

Bassam of Brighton, L.

Macdonald of Tradeston, L.

Blackstone, B.

Mclntosh of Haringey, L. [Teller.]

Borrie, L.

Mackenzie of Framwellgate, L.

Bragg, L.

Merlyn-Rees, L.

Brooke of Alverthorpe, L.

Milner of Leeds, L.

Brookman, L.

Molloy, L.

Brooks of Tremorfa, L.

Monkswell, L.

Carter, L. [Teller.]

Montague of Oxford, L.

Chandos, V.

Morris of Castle Morris, L.

Christopher, L.

Morris of Manchester, L.

Clarke of Hampstead, L.

Paul, L.

Clinton-Davis, L.

Ponsonby of Shulbrede, L.

Crawley, B.

Puttnam, L.

Currie of Marylebone, L.

Ramsay of Cartvale, B.

Dean of Thornton-le-Fylde, B.

Randall of St. Budeaux, L.

Desai, L.

Rea, L.

Donoughue, L.

Sainsbury of Turville, L.

Dormand of Easington, L.

Sawyer, L.

Dubs, L.

Sewel, L.

Evans of Watford, L.

Shepherd, L.

Falconer of Thoroton, L.

Simon, V.

Farrington of Ribbleton, B.

Simon of Glaisdale, L.

Gilbert, L.

Simon of Highbury, L.

Goudie, B.

Smith of Gilmorehill, B.

Gould of Potternewton, B.

Stone of Blackheath, L.

Graham of Edmonton, L.

Strabolgi, L.

Grenfell, L.

Symons of Vernham Dean, B.

Hacking, L.

Thornton, B.

Hanworth, V.

Turner of Camden, B.

Hardie, L.

Uddin, B.

Hardy of Wath, L.

Walker of Doncaster, L.

Haskel, L.

Warner, L.

Hayman, B.

Wedderburn of Charlton, L.

Hilton of Eggardon, B.

Whitty, L.

Hollick, L.

Williams of Mostyn, L.

Howie of Troon, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly
7.23 p.m.
Lord Hunt of Kings Heath: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that the Report stage begins again not before 8.25 p.m.
Moved accordingly, and, on Question, Motion agreed to.
Lord Hunt of Kings Heath: My Lords, before we move to the Statement on Kosovo, I should like to take the opportunity to remind the House that the Companion indicates that discussion on the Statement should be
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confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

Kosovo
7.24 p.m.
Lord Gilbert: My Lords, I beg leave to repeat a Statement made a few moments ago in another place by my right honourable friend the Secretary of State for Defence.
"With permission, I would like to make a Statement on decisions which have been made today to ensure that British forces are immediately available in case a NATO force is required to deploy to Kosovo.
"As the House will be aware, my right honourable friend the Foreign Secretary is currently at the Kosovo proximity talks at Rambouillet in France, which he is jointly chairing with the French Foreign Minister, Monsieur Hubert Vedrine. A news blockade has been imposed on the talks to encourage the parties to focus on the discussions, rather than on telling the world how they are going. It is clear, however, that progress is being made. Contact group foreign ministers will take stock of what remains to be achieved in the negotiations when they meet in Paris on Sunday.
"It is unclear at this stage whether a NATO force will be required to support any peace agreement. Any decision to proceed with such a force will have to be taken by Britain and its allies in NATO, following a satisfactory conclusion to the talks at Rambouillet. No such decision has yet been taken.
"What is clear, however, is that, should a force be required, it will have to be ready to go into Kosovo as quickly as possible after a peace agreement is reached. A military force which is to be effective must be assembled well in advance. This means that we and our allies must have our forces in the region. ready to go into action at short notice.
"It is for this reason that the Government have decided today to send to the region, at the beginning of next week, the vehicles and other heavy equipment of the units which would form the leading elements of any deployment. These will include Challenger tanks. Warrior armoured vehicles and artillery. The units principally involved are the King's Royal Hussars, the Irish Guards, 4 Regiment Royal Artillery, with a tactical headquarters being drawn from 4 Armoured Brigade. Other units will also be providing equipment. Loading of the Royal Fleet Auxiliary ships 'Sea Centurion' and 'Sea Crusader' will begin on Monday.
"Although these vehicles and heavy equipment will be accompanied by a small number of personnel, the majority of the personnel from the units involved will remain at their bases, at short notice to move and join their vehicles. The decision whether to deploy them will depend on how the situation develops.

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"To prepare for the arrival of this equipment in the region, about 200 key logistics personnel will be deploying next week to Greece and Macedonia, where we already have an armoured infantry company deployed as part of the NATO Extraction Force.
"The House will draw from these decisions the clear message that the United Kingdom is determined to play its part in supporting a negotiated settlement in Kosovo, but we will only deploy our forces in support of an operation with a clear mission and clear objectives, and alongside our allies.
"Contingency planning is continuing at NATO with Britain playing a full part. Other allies are making preparations similar to our own. From my contacts with my fellow NATO defence ministers, I know that others will be on the ground alongside us should a decision be made to go ahead with the operation.
"The decision that I am announcing this evening represents prudent military contingency steps. In no way does it prejudge any decision to proceed with an operation. Whether a force is to be deployed into Kosovo will depend in large measure on the parties. Neither side can take it for granted that NATO will deploy a ground force. They must make the hard choices necessary to reach an agreement".
My Lords, that concludes the Statement.
7.29 p.m.
Lord Burnham: My Lords, I thank the noble Lord for repeating the Statement made by his right honourable friend in another place. There can be no doubt whatever that the Government are wise to take precautions and to prepare themselves for any problems that may arise from the situation in Kosovo and the current discussions in Rambouillet. On 4th February the Secretary of State announced a notice to move for what seemed like a very much larger force than that contained in the Statement. However, it is true that the force to be prepared on Monday which comprises the tactical headquarters of 4 Armoured Brigade will at the very least be a skeleton within which a larger force can be contained. We must make these preparations. I remember that a large force assembled on ships in the Clyde at the time of Suez. It did not do any good in the event but at least we were prepared.
On behalf of these Benches I state categorically that we support the dispatch of troops. This appears to be the first serious test of the SDR and I hope that it turns out well. There is no doubt that at the present moment sea transport is available. If it were necessary at any time to employ any further merchant shipping we would not have the same number of ships that were available to us at the time of the Falklands.
One has the very serious problem of overstretch. I hope that the Army can cope with that because there may be other matters for which troops are required. It is quite easy to say that such and such a unit will go to a place in crisis, in this case Macedonia or wherever it may be, but if it comprises the same people in one unit who have recently returned from Bosnia nominally in
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another unit that does not relieve their difficulties or the overstretch that we face. I hope that that will not be a problem.
I ask the Government to be more specific than they have been so far as to what other countries are doing. We understand that France and Germany are to provide sizeable forces. I have tried to interpret the comments of Mrs. Madeleine Albright. To my mind she speaks in riddles. My reading of the situation is that the United States will provide only a small number of ground troops. But when the force gets there what is it to do? If a peace agreement is agreed in Rambouillet we accept that the United Kingdom should be part of a large multinational force, but we need to plan well ahead. I accept that we must get the troops and all of their equipment onto the ships but before they get anywhere near action we must know the long-term plan. We would be rather less happy if that force were to be involved in conflict. There is a danger—let us pray that it does not happen, and I do not believe that it will—of another Vietnam which started on a very small scale. I remember the headline on the cover of the first edition of the colour magazine of the Daily Telegraph which read "Vietnam—the forgotten war". Let us hope that we are not entering, with whatever good intentions, something that leads to that. Having gone through Bosnia, that is probably all right.
Finally, can the Government clarify the rules of engagement of any force that may go to Kosovo? I suggest to the noble Lord that they must be the same as in Bosnia. If I understand correctly, UNPROFOR could interfere only if NATO personnel were under attack or were in any danger. They could not do so if atrocities were being committed by one part of the local population against another. Under Op Palatine in which our forces are currently engaged I believe that they can interfere in such cases. I hope that what any force is allowed to do will be made clear. Can the noble Lord confirm that the extraction unit is not part of the force to be deployed under the notice to move Statement? I do not believe that it is because it is a separate body. But however much we believe that the step that has been taken is the only course that the Government can follow, we hope that this evening the noble Lord will be able to provide some answers to one or two questions that remain unanswered.
7.36 p.m.
Lord Wallace of Saltaire: My Lords, I shall be brief. Clearly, this will not be the last Statement on Kosovo in the next few weeks. We support this action as clearly prudent military contingency planning. It is inappropriate to say that one welcomes the necessary commitment of troops. I recall that when the intervention in Bosnia occurred it took a remarkably long time to get the heavy equipment there. Therefore, it is sensible to make the necessary moves in advance even if we are not yet sure how much we may need to deploy. However, it seems to me likely that we shall have to deploy something.

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We on these Benches also recognise that at this very delicate stage in the negotiations in Rambouillet the Government cannot say much about the exact deployment of the forces or even the rules of the deployment. I reiterate from these Benches what we said on the previous occasion a Statement was made. We recognise that this may well be a substantial and potentially long-term commitment. We see this as being a necessary commitment in Britain's national interests. On that very sober basis we give it our full support.
We recognise that deployment depends on there being a peace to enforce in which both sides in the conflict will have to come to an agreement. We also recognise that what is currently being discussed is only an advance guard of what has been referred to as an enlarged brigade of as many as 8,000 troops. We have already remarked that this means the problems of overstretch are likely to involve a substantial number of reserves being called up to maintain the commitment. Therefore, the future of the Territorial Army and how actively that is re-recruited seems an extremely important element. I support the noble Lord, Lord Burnham, in his request. What can the Minister tell us about parallel moves by other governments who are likely to take part in the force, not only the French and the Germans but also, if possible, the United States?
7.39 p.m.
Lord Gilbert: My Lords, first, I express my unfeigned gratitude to both noble Lords who have just spoken for their acceptance of the necessity for the decisions taken today by Her Majesty's Government. They have both asked about the position of other governments. I do not believe that I can go further than to say that we confidently anticipate that all our major allies will be alongside us should it be necessary, I emphasise as strongly as I can, for us to take further steps and deploy troops and other assets inside Kosovo. I do not think that I can say more than that. We are in constant discussions not only with our French, German and American friends, countries which have been mentioned by both noble Lords, but also with other friends. in particular the Italians who are closest to this area of controversy.
The noble Lord, Lord Burnham, invites me to speculate on the size of any land contribution the United States may make. I think that it would be rash for me to do so, in particular since these matters are still under discussion with the American authorities and no doubt within the American Government.
The noble Lord said he would be less happy, as we all would be, if the United Kingdom force were to be involved in a conflict. I wish to assure noble Lords that it is absolutely no part of the intentions of Her Majesty's Government that we fight our way into Kosovo. Our present intention is only to deploy into Kosovo to help to enforce a peace agreement reached by the parties now negotiating in Rambouillet.
The noble Lord, Lord Burnham, asked about the extraction force. I may he able to help him. The advance party would be designated as part of the extraction force at this time because no status of forces agreement has
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yet been negotiated between NATO and Macedonia for an implementation force. But it would be necessary for NATO to negotiate as soon as possible host nation support agreements with Greece and Macedonia. I hope that that covers the noble Lord's point.
On a point of detail, the noble Lord believed that sea transport was available at present. By my silence I should not wish to mislead him. We shall have to look outside our present assets to find adequate maritime transport. However, we hope to be able to charter some vessels in the near future. The heavy assets will go by sea from Emden. However, in the long run more will go by sea from Marchwood.
Lord Burnham: My Lords, I think the noble Lord for giving way. I understand the necessity to charter transport. Will it be British flagged ships?
Lord Gilbert: My Lords, we hope that it would be. However, if British flagged ships were not available at short notice, I hope that we may make arrangements with our allies for other ships to meet our needs. I cannot give the noble Lord a commitment on that point.
The noble Lord, Lord Wallace of Saltaire, said that it was the advance guard of possibly as many as 8,000 troops. He is exactly right. We are looking at the possibility, which we hope will not come about, of having to send as many as 8,000 troops.
The noble Lord asked me what the force was going to do. I think that I have answered that question. It will be there to enforce a peace agreement. He wanted to know the long term plan? These things are wrapped in the future. It is pointless for me to speculate. But if we go in, we shall not expect to come out until it is clear that peace has been established, that the parties engaged there accept it, and that it is being enforced in good faith. That is all I can say usefully at this stage.
7.42 p.m.
The Earl of Carlisle: My Lords, I thank the Minister for the Statement, which I fully support. First, will the noble Lord assure the House that if the force is deployed the force commander will be given a clear military aim? Secondly, can he tell us more about the chain of command? To whom will the brigade commander report? Thirdly, he has not mentioned any reconnaissance units within the force. Will the force be supported by reconnaissance helicopters?
Lord Gilbert: My Lords, helicopters will be available. It is best that I do not speculate at this stage on whether they will be deployed. The chain of command will flow to the Commander of the Allied Rapid Reaction Corps.
Baroness Ludford: My Lords, like my noble friend Lord Wallace of Saltaire, I fully support the Statement. It is evident that we have learned our lesson from Bosnia. While aware that it is prudent military planning and does not pre-judge a decision on deploying a force, nonetheless were such a decision to be taken—I believe

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that it would be honourable and courageous—it would need to be explained to the British public. As my noble friend said, to welcome such deployment sends wrong signals, but it would indicate that it was necessary for our security and that of Europe. It is not a foreign venture in a far-away place of which we know little. If we took the decision to deploy such a force, have the Government any plans for conveying to the British public that such a decision is relevant to our security so that there is no misunderstanding of the matter?
Lord Gilbert: My Lords, I am obliged to the noble Baroness for her contribution. First, I should emphasise that any future decision will not be taken by Her Majesty's Government alone. It will be taken in conjunction with governments of our allies in NATO. I wish to make that absolutely clear. Secondly, I think today's Statement is evidence that we want to take the British people into our confidence as early as possible, making clear that the Government are prepared to live up to their international responsibilities, as well as sending the same message to the people of Bosnia and Serbia.
Lord Monkswell: My Lords, I thank the Minister for repeating the Statement. We are pleased that the Government are not acting on their own but are working in conjunction with allies. We are all pleased that what might be described as the heavy element—I refer to tanks, artillery and armoured personnel carriers—will be deployed from British military forces. But we are also cognisant of the fact that in modern military affairs helicopters play a major part. Can my noble friend assure the House that helicopters will be available? If they are not available through the British contingent, will they be available from our allied contingents in the possible theatre of activity in Kosovo?
Lord Gilbert: My Lords, I am obliged to my noble friend for his support for what we are doing and for his recognition of the need for us to make preparations to move our heavy equipment as soon as possible. I hope that I have made clear that helicopters are to be available. Whether or not they will be deployed is a matter for the future.
Earl Attlee: My Lords, from experience with Bosnia, I would expect the staff to be planning for a three-year deployment. What will be the effect of that on overstretch in the Army? My noble friend Lord Burnham referred to the rules of engagement. Can the Minister confirm that the rules of engagement will be broadly the same as for Op Palatine?
Lord Gilbert: My Lords, the noble Earl, as usual, is right. This deployment will add to overstretch in the Army, in particular if we end up deploying of the order of 8,000 men. Some will be RAF personnel. However, it will add greatly to overstretch within the Army.
If the noble Lord will forgive me, I prefer not to say more about the rules of engagement at this stage.
Lord Hoyle: My Lords, I beg to move that the House do now adjourn during pleasure until 8.25 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.48 to 8.25 p.m.]

Access to Justice Bill [H.L.]
Consideration of amendments on Report resumed on Clause 6.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 39:
Page 4, line 21, leave out ("Directions given by the Lord Chancellor under section 4 may") and insert ("The Lord Chancellor may by direction").
On Question, amendment agreed to.
Lord Kingsland Lord Kingsland moved Amendment No. 40:
Page 4, line 26, at end insert—
("(6) The Lord Chancellor shall by order make provision about the payments which may be made by the Commission in respect of advocacy provided by non-contracted private practitioners in cases funded as part of the Community Legal Service; and such provision shall require that the remuneration for such advocacy in each case be quantified and paid separately from other funded services.
(7) For the purposes of subsection (6), representation is provided by a non-contracted private practitioner if it is provided, otherwise than pursuant to a contract entered into by the Commission, by a person or body which is neither—

(a) a person or body in receipt of grants or loans made by the Commission as part of the Community Legal Service, nor

(b) the Commission itself or a body established or maintained by the Commission.").

The noble Lord said: My Lords, the noble and learned Lord the Lord Chancellor will recall the substance of the amendment being debated on more than one occasion during the course of the Committee stage. Indeed, the notion of ring-fencing loomed large in the answer he gave before the dinner break. The amendment seeks to ring fence advocacy fees, but I hasten to add that it is not a barrister's amendment, as the noble and learned Lord suggested in Committee. It would protect the funding and payment for the services of a specialist solicitor-advocate as much as those of a barrister.
Funding by block contract arrangements can induce financial pressures not to use specialist advocates. Where the services of a specialist advocate are necessary, it is essential that clients are not under pressure to decline them. Clients must not be put under pressure and not be put in a position of having to accept unsatisfactory offers from the other side because the funds for advocacy services at a trial are not available or are not sufficiently separated from general funding to encourage or enable this to happen.
As I recall, in answer to the point when raised in Committee, the noble and learned Lord suggested that it was open to banisters to engage in direct block funding arrangements with the legal services commission. I entirely accept that, but, with respect, it is not the point of the amendment. The point of the amendment is to deal with the case which has

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reached the stage where a solicitor ought to consider whether it is appropriate to advise the client to engage in court proceedings and therefore perhaps to engage a specialist solicitor-advocate or a barrister.
In my submission, unless there is a separate budget for the payment of the specialist solicitor-advocate or for the barrister, there will be a strong temptation for the block contractor either not to advise his client to engage in court proceedings at all or at least to have a service which is less thorough than the one he ought to receive. I beg to move.
8.30 p.m.
Lord Ackner: My Lords, it has been frequently stated during the course of debates on the Bill that the Government recognise that a strong and independent Bar is absolutely essential in the interests of democracy, a well-run legal system and the public. You cannot, on the one hand, emphasise the need for such a branch of a profession if, on the other, you are going to starve its members of the wherewithal not only to flourish but to enter the profession in the first place. So these rather gratuitous smears that one hears from time to time—that "This is a method of protecting the narrow interests of the profession"—are quite wrong. This is a vibrant profession wanting to continue in existence, but very conscious of the fact that the Bill when enacted will cause it a great deal of problems. I can see nothing in the Bill which will enhance its position. It will increase the struggles which have to be made certainly by the very junior Bar. I support the amendment.
8.30 p.m.
Lord Renton: My Lords, the amendment is very necessary in order to ensure that in future the work of the commission can be done satisfactorily. Alas, one may have had to contemplate a situation in which not enough private practitioners make themselves available. Therefore, it may be necessary to go beyond those who have contracted. This amendment would give that necessary power to do so and would ensure that there was enough professional support for legal aid to be carried out as required. I hope that the Government will consider the amendment sympathetically.
Lord Goodhart: My Lords, one of the amendments in this group is tabled in the name of the noble Lord, Lord Clinton-Davis. He has not spoken to it and I do not know whether he intends to, but it raises another similar and important point with which, perhaps, I may deal briefly: that is, the question of disbursements.
If you need an expert witness, a doctor's report or something of that kind, if there is a contract and that price is to come out of solicitor's contracted payment due from the community legal service, the effect will be that inevitably the solicitor will be under considerable pressures from his partners to opt for the cheapest expert that he can find because there is no advantage to him in opting for anyone else. However, it may well be in the interests of the client to opt for an expert who is more reliable, better qualified and more experienced. In that
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case, it seems to me that there is a strong case for having a separate payment of not only advocacy fees but also disbursements, as is proposed in Amendment No. 47.
Lord Clinton-Davis: My Lords, I do have an amendment grouped with Amendment No. 40. It is a matter which I raised both on Second Reading and in Committee. It is extremely important that one should take proper account of what is likely to be a disadvantage not simply for the solicitor but also for the client whom the solicitor serves. My noble and learned friend has pointed out repeatedly that those clients are the principal targets for his concern.
A problem may arise because a lawyer may come under additional pressure; for example, because he needs to raise additional overdraft facilities. That is in addition to other pressures which assail so many firms. Even the largest firms operate with overdraft facilities of various kinds and sizes. Lawyers who are operating in the neighbourhood law service field, or high street firms, are particularly vulnerable to that specific form of economic pressure. They then find that they are impelled to cut back on what would ordinarily be described as necessary disbursements. They may even try to put pressure on a client to settle a case which should ordinarily be contested.
I know that my noble and learned friend really discounts that argument on the basis of the Thompson argument; that is, the argument that trade union firms can surmount such difficulties with a fair amount of ease. It is true that many of them do. However, I have gone to a lot of trouble to make inquiries of solicitors serving trade union clients and they tell me that the practice is variable. It is by no means the uniform position which the Thompson's news release would lead us to suppose. I have shown my noble and learned friend the letters that I have received from four leading firms in the field. It is a fairly narrow group of firms which practise in the field. Those letters describe the likely plight of the smaller, even medium-sized, firms which practise in an area in which disbursements are extremely crucial, as is the judgment as to whether to incur them at all. If those pressures exist, then there will be a temptation not to incur them.
My noble and learned friend argues also that the repayment of disbursements should wait until the end of a case and that experts' fees can be managed properly by firms of solicitors so that they do not have to pay them until the conclusion of the case. With respect, I say that that is being out of touch and will not be so in regard to many experts, and certainly not those who are involved in a recurrent type of case. Perhaps the ordinary orthopaedic surgeon is prepared more readily to wait some time before he is paid. It depends on the solicitor, where those people reside, where they carry on their practice, and on very many extraneous factors. It also depends, of course, on the solicitor being able to raise the funds ultimately to pay him, and that may be before the end of the case.
There is then that type of specialist advice which is extremely unusual; for example, a PI case in which someone has suffered brain damage. The consultant whom the solicitor consults will be consulted only on a

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very rare basis. He may not, and in most cases will not, wait for the payment of his fees. Alternatively, other forms of expert evidence may be required in order to carry out a proper investigation into a case. I suggest that what will happen is that many experts, particularly those who demand higher fees for simply carrying out an examination and then submitting a report, will say, "What's in it for us? Why should we bear the costs that are involved in examining whether or not a case exists?".
My noble and learned friend may dismiss that, but it is not right that the trial should be disadvantaged by a judgment that is forced upon a firm of solicitors who cannot enjoy the benefits of the Thompsons of this world. It is an embarrassingly difficult problem for some large firms practising in this field as well. It is not quite as straightforward as my noble and learned friend suggested in earlier debates.
I believe that there should be provision, perhaps in compelling circumstances, where the authority concerned has a discretion as to whether fees of this kind should be allowed. Of course, it would be the duty of the solicitor to establish that those disbursements are reasonably incurred and the question of the costs of advocacy in the court has already been dealt with.
I hope that my noble and learned friend will consult rather more than the Lord Chancellor's Department has so far done because serious injustice may arise. It is not ultimately that it is a form of great economic support for the solicitors who practise in this field; I want to see that justice is done to a vulnerable client.
Lord Falconer of Thoroton: My Lords, this group of amendments includes amendments relating both to direct payments to advocates—solicitor or barrister—and in relation to the payment of disbursements. It includes also a number of amendments tabled by the Lord Chancellor which deal to some extent with those issues. Perhaps I may deal with the amendments of the Lord Chancellor first because it is only in that context that one can go on to look at the amendments tabled by noble Lords.
The Bill gives the commission power in Clauses 7(3), 13(2) and 14(3) to secure the provision of services by making direct payments. In relation to the first two clauses this power is intended as a reserve power to be used in exceptional cases. It is the Lord Chancellor's firm intent that in general the provision of services will be through contracts. However, in relation to Clause 14 the position is different. Here there is an entitlement that the public receive representation and it is likely, in the medium term, that the principal means of securing services will be to make direct payments under remuneration schemes similar to the ones presently provided in regulations under the current Act. The Lord Chancellor undertook in Committee to consider further what provisions should be made in the Bill, in relation to the circumstances where direct payment is made, as to the manner in which the Lord Chancellor might set remuneration rates, the factors he should take into account, and the consultation he should be required to undertake before he sets rates.
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Separately, as the Lord Chancellor mentioned when speaking to the first group of amendments considered today, he has provided a power to make orders about the way in which the commission shall discharge its functions under Clauses 7(3) and 13(2). This group of amendments considers how remuneration provisions should be provided within the structure of the Bill and the provisions relating to the making of orders.
The first amendment in this group standing in the Lord Chancellor's name amends Clause 14 by inserting three new subsections. As I said, Clause 14 creates an entitlement to representation and that, unlike the provisions in Clauses 7(3) and 13(2), it is likely that the provision of services by direct payment will continue to be the principal means of funding the provisions of representation in criminal cases. Even in the longer term, when we would expect services to be provided increasingly through contracts, direct payments will continue to be a significant means of securing provision of services.
Proposed subsection (3A), therefore, creates a duty on the Lord Chancellor, by order, to make provision about the payments which may be made by the commission in respect of representation funded under Clause 14. I should perhaps make clear that the words "making provision about payments" are intended to encompass not only the rates that are to be paid but also the mechanism by which the rates may be applied to arrive at a final sum of remuneration, and the court, person or other body that may carry out any determination of the final sum of remuneration.
Under the proposed subsection (3A)(b) the order may also make provision requiring the commission to discharge a function in subsection (3) in accordance with the order. This provision mirrors similar provisions which I have already mentioned were contained in the group of amendments that the Lord Chancellor moved earlier today relating to the making of orders by him. New subsection (3B) provides a definition of when representation is provided otherwise than through a contract, so that there can be no doubt about when the remuneration rates apply.
Finally, new subsection (3C) requires the Lord Chancellor to ensure that any order makes provision for reviews of, or appeals against, determinations required for the purposes of the order. The changes made by the inclusion of the new subsections required a consequential amendment to Clause 14(5), which is the second amendment in this group standing in the Lord Chancellor's name, to more accurately reflect the function being performed by the commission. As a result of the inclusion of the new subsections in Clause 14, Clause 15 is no longer necessary. All of the powers which are contained in Clause 15 are now contained in the provisions of the proposed Clause 14(3A)(a). Consequently, the third government amendment in this group seeks to remove Clause 15 from the Bill.
The final government amendment in this group is perhaps the one which interests the profession the most, for it provides for the factors that the Lord Chancellor shall consider in making a remuneration order, and the extent that he is required to consult before he makes a

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remuneration order. The new Clause 23(1A) provides a duty on the Lord Chancellor to consult the General Council of the Bar and the Law Society before he makes a remuneration order. This continues the duty contained in the present Act to consult those bodies before making remuneration regulations.
The new subsection (1B) sets out three factors to which the Lord Chancellor shall have regard in making a remuneration order. First, the Lord Chancellor must have regard to the extent to which the rates he is setting will ensure that he is able to secure the provision of a sufficient number of competent persons or bodies to provide the services required. The Lord Chancellor will also have to have regard to the cost to public funds. We have repeatedly told your Lordships that public funding of legal services has to operate within a controlled budget. It could not be otherwise than that, when setting remuneration rates, the Lord Chancellor must have regard to the consequential effect on the cost to public funds of any rates he decides to set.
Finally, the Lord Chancellor will have to have regard to value for money. This last factor places the same duty on the Lord Chancellor that is placed on the commission in relation to the community legal service and the criminal defence service by Clauses 6(5) and 17(3). It describes the act of balancing both quality and price in an attempt to achieve the optimum balance of the two.
The new subsection (1C) provides the definition of what the term "remuneration order" means, by making it clear that it is an order made under the provisions of the three new subsections that I have already mentioned: namely 7(3A), 13(2A) and 14(3A).
In rnoving these amendments, the Lord Chancellor sought to meet the concerns of the noble Lords, Lord Kingsland, Lord Goodhart, Lord Phillips and the noble and learned Lord, Lord Lloyd, who wished to see, on the face of the Bill, the manner in which the Lord Chancellor would determine remuneration rates in those cases where payment is made directly to service providers, and otherwise than through a contract.
That brings me to the three amendments in this group standing in the names of the noble Lords, Lord Kingsland, Lord Goodhart, Lord Hunt, Lord Phillips and my noble friend Lord Clinton-Davis. We are not able to accept these amendments because we believe that they are unnecessary and place an undesirable restriction in the Bill on the way in which services may be purchased by the commission.
They are unnecessary because there are ample powers for the Lord Chancellor to make provision of the kind sought if that were ever to prove necessary. Amendment No. 40, in particular, seeks to secure for the Bar a permanent privileged position. In Committee the Lord Chancellor said repeatedly that he fully understood the concerns of the Bar that they do not wish the fees of barristers to be treated simply as a disbursement to be taken from the contract price agreed with the solicitor. He said, too, that he is ready to contract with the Bar if it can organise itself to make that a practical proposition. To some extent, the ball is in the Bar's court. It should start addressing the issues to place itself in a position to contract for work with the community legal service.
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I repeat the position. We understand the Bar's concerns. We would prefer to be able to contract with the Bar so that banisters can be paid directly. We do not favour, as a general rule, a position in which the barrister's fees are simply whatever the solicitor who holds the contract is prepared to allow. I do not believe that that would be healthy for the relationship between the two halves of the profession.
Finally, my noble friend Lord Clinton-Davis referred to disbursements to be paid to experts. He said that the noble and learned Lord the Lord Chancellor had not taken those concerns sufficiently seriously. I do not think that is right. There is a power in the Bill for the legal services commission to make such payments. I refer to Clause 7(3)(b). That power is already in the legislation and there is no appropriate basis for amendments which seek to restate it. In the light of what I have said, I hope that the noble Lords, Lord Kingsland and Lord Goodhart, will not press their amendment and I commend my noble and learned friend's amendment to the House.
Lord Carlisle of Bucklow: My Lords, I intervene to ask the noble and learned Lord, Lord Falconer, whether he will be good enough to answer certain questions. I say this with great diffidence because I did not take part in the debates in Committee, although I have attempted to read them.
There is one point I do not understand. The noble and learned Lord the Lord Chancellor said on many occasions in Committee that he was anxious that the Bar should contract with the commission for its services. How will that work? If I have raised this matter at the wrong time, I apologise, but this seems to be the appropriate group of amendments on which to mention it.
I understand that the commission will contract with a solicitor to do a certain volume of work. I declare an interest as a member of the criminal Bar practising in chambers which do a great deal of criminal work. When the noble and learned Lord the Lord Chancellor says that he hopes that the Bar will contract directly with the commission, how does he envisage that will occur as regards criminal work? Are the chambers to which I belong, or a group in that chambers, to agree to do so many cases during the year for a lump sum? If so, how will they get them? Presumably they will still come through solicitors, or will they not?
I accept that I ask these questions in ignorance. I hope that they are not so basic as to mean that I have not understood the principles of the Bill. I am not sure that I appreciate how contracting will work given that the noble and learned Lord the Lord Chancellor says that it should be direct with the Bar. I do not see how that will work in criminal practice. I should he grateful for an explanation.
Lord Falconer of Thoroton: My Lords, the noble Lord is certainly not misplaced in terms of timing. This seems to me to be the right place to raise the matter. The question of how the legal services commission will contract with the Bar is plainly, to a large extent, in the hands of the Bar. There have been discussions about

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how it might be done. The groupings might be chambers, people within chambers, or other groupings, including, for example, circuits. It has been suggested in some quarters that circuits could contract with the legal services commission.
As a matter of principle, we are prepared to discuss with the Bar what it sees as the most convenient way to contract. Thus, having identified with whom the contracts could be made—I make it clear that that could also be with individuals—one might contract for a type of case, an individual case or certain aspects of cases. The most obvious would be, "You will do a certain number of pleas from a set of chambers", or something of that nature. I am not ruling out anything. It seems to us to be possible that with goodwill on both sides—there is certainly goodwill on the side of the Lord Chancellor's Department—structures could be worked out that were acceptable to the Bar whereby there would be direct contracting with the Bar. The Bar would thus avoid the problem of being dependent upon what had been negotiated with the solicitor, given that there would be great pressure on the solicitor to negotiate as low a price as possible. It takes two to come to sensible arrangements.
Lord Renton: My Lords, I am grateful to the noble and learned Lord for giving way. This is an important matter. I refer to the word "groupings" in relation to a set of chambers. We must be careful to bear in mind that, not only by long tradition, but also by continuous professional standards, the Bar does not form partnerships. It does not contract "globally" as a set of chambers. Before the noble and learned Lord sits down, can he give an assurance that in the system he has described the individual responsibility of barristers will be retained?
Lord Falconer of Thoroton: My Lords, with the greatest respect to the noble Lord, it is not for me to set out how the Bar organises itself in relation to the sort of issue to which he has referred. I said groupings within chambers because I know, from my own experience, that in certain chambers some people do only criminal work while others do only civil work. It might well be that it would be inappropriate for the whole set of chambers to contract; perhaps only part of it would do so.
I do not think it appropriate for me to start talking about how the legal aspects of the matter should be dealt with. I believe that to a large extent it is for the Bar to work out the most convenient way to proceed and to come forward with ideas as to how this may be effected, having regard to its traditions, ethos and rules of conduct.
All that we can say is that we are willing in principle, and keen, for some arrangements to be entered into which would permit the payment of direct sums to advocates. In speaking about "the Bar", I appreciate that solicitors may be instructed by other solicitors, but for the purposes of the debate, it is easier to talk about "the Bar".
Lord Renton: My Lords, I know that we are not in Committee, but this is such an important matter that I am grateful for being allowed to intervene again. Surely, it is not good enough for us to leave it to the Bar when the Bill may make it possible to change the whole system.
Lord Falconer of Thoroton: My Lords, the Bill makes it possible for direct payments to be made to the Bar. It would be wholly inappropriate for the Bill to specify the arrangements to be made by the Bar. I hope that that answers the noble Lord's question.
Lord Carlisle of Bucklow: My Lords, I am grateful to the noble and learned Lord, Lord Falconer, for what he said. However, I am still perplexed. I declare an interest again. I am a member of what I suppose is probably the largest set of criminal chambers in the Temple.
I understand the noble and learned Lord to say that the commission might contract with a certain number, juniors in those chambers, to do a certain number of cases in a year at a fixed price. But how will it get them? Does it mean that access will be direct from the Bar without going through a solicitor? Are we changing other principles of the profession at the same time or will those barristers get such cases only through a contracted solicitor choosing to come to that member of the Bar? I am genuinely mystified about how the system will work.
Lord Falconer of Thoroton: My Lords, I am sorry to repeat the answer. We are prepared to do it. However, in a sense, it is for the Bar to work out precisely how it wants the provision to work. It is not for me to comment on questions of direct access, for example. That seems entirely a matter for the Bar. Therefore, I do not think I can elaborate further on the position.
Lord Kingsland: My Lords, I thank the noble and learned Lord for his extremely full and most helpful explanation of the amendments in the name of the noble and learned Lord the Lord Chancellor. I shall read carefully what he said, but the impression I have is a positive one.
I have just one reflection on the latter exchanges between the noble and learned Lord, Lord Falconer. and the noble Lords, Lord Carlisle of Bucklow and Lord Renton. I entirely accept that the relationships between the legal services commission and the Bar are, in the first place, matters for the two parties. But the noble and learned Lord will bear in mind that the Lord Chancellor has taken substantial powers under Schedule 5 to deal with certain matters connected with competition in the provision of legal services which can, in certain circumstances, touch on the rules of the profession relating to etiquette, and so forth. Although the noble and learned Lord, Lord Falconer, said that contracting was really a matter for the Bar, it could become a matter for the Lord Chancellor if it touches on some of the very substantial powers that he has in Schedule 5.

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In the period of deep reflection that I know will be going on between Report stage and Third Reading, it might be helpful for the noble and learned Lord to reflect on that fact to see whether, after due consideration, he might like to provide one or two suggestions about how this contractual relationship could develop. I am most grateful to the noble and learned Lord for the way in which he has responded to this amendment. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause 7 [Services which may be funded]:
[Amendment No. 41 not moved.]
The Lord Chancellor The Lord Chancellor moved Amendment No. 42:
Page 4, line 29, leave out ("under section 4").
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No. 43:
Page 4, line 30, at end insert (", and
(b) after taking into account the need for services of the descriptions specified in section 5(1A).").
On Question, amendment agreed to.
9 p.m.
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 4:
Page 4, line 30, at end insert—
("( ) In funding services as part of the Community Legal Service, the Commission shall aim to obtain the best long term value for money on the basis that all persons and bodies applying for funding who meet the standards set by the Commission shall be able to provide services for individuals under this Part of this Act on terms as to remuneration and otherwise, set by contract or by regulations.").
The noble Lord said: My Lords, this amendment confronts a central financial instrument behind the Government's proposed reforms; namely, competitive tenders for block contracts to supply legal services. As it has been made clear, that is the ultimate destination for legal aid financing. Unless this amendment is successful or its sister Amendment No. 57, in future the public may only choose solicitors, and possibly barristers, who have won the competitive tenders. I make it clear that that will exclude many thousands of firms of solicitors of the requisite quality standards which are currently doing legal aid. No solicitor or barrister is looking for what the noble and learned Lord the Lord Chancellor sometimes mis-describes as "guaranteed contracts". No solicitor today can do legal aid work unless he or she has a client who wants him or her to do it. There is nothing guaranteed about it. Indeed, it is odd to find a spokesman of New Labour in this House proposing the replacement of free consumer choice in a free legal market by a restricted, highly bureaucratic régime. I can assure the noble and learned Lord the Lord Chancellor that local solicitors are highly sensitive to local demand; they have to be.
The only guarantee that legal aid lawyers currently get is that, subject to the means test, the merits test, the rules of court and the rigours of taxation, the solicitor who undertakes legal aid work is entitled to be paid,
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rather like NHS doctors. At the heart of the Government's case are three main issues and they are access, quality and cost. As regards access, the noble and learned Lord the Lord Chancellor said in his letter to The Times of 25th January,
"The point of my reforms is to give people on legal aid a choice from among about 3,000 quality assured firms".
However, that compares with over 10,600 solicitors' offices doing legal aid work today. It is surely perverse to pretend that access will not be damaged even if many of the 7,000 or so excluded solicitors' offices currently do only a modest amount of legal aid work. Often they are the best. A fact well known to legal aid solicitors is that very many people still will not seek legal aid help when they need it, and that those who do are very often reassured by what someone has told them of the individual solicitor or firm to which they eventually go.
Personal "lawyering" is still about confidence and trust. Furthermore, where there is only one firm in a town with a block contract, the other side to the dispute will often have to travel to the nearest town to find a firm able and willing to do the work because the budget is capped and rationing may be operating. In my part of Suffolk that will mean very significant travel at considerable expense in terms of fares—if there is public transport—and in terms of time and inconvenience. That is sure to put off many needy people.
Great oaks from tiny acorns grow no less among law firms than any other form of business. In yesterday's letter to the President of the Law Society, of which the noble and learned Lord the Lord Chancellor kindly sent me a copy, he wrote,
"The Board have made clear in their contracting material that in the longer term they may need to Introduce minimum levels of work that firms are generally willing to contract for, otherwise there is a real risk that money that should he spent on services for the public would go in meeting the cost of administering large numbers of very small contracts".
In effect, the bureaucratic tail is starting to wag the legal aid dog.
I have been approached by several small firms during the course of the proceedings on this Bill. Some have said that they are contemplating jacking out of legal aid even now because of the bureaucratic over-burden and the impracticalities for them of the franchising regime. Others made clear that they see no prospect of competing when the Phase II block contracting comes in. The noble and learned Lord the Lord Chancellor's letter, which I have just quoted, seems to give that game away despite protestations to the contrary made by him and the noble and learned Lord, Lord Falconer of Thoroton, in previous debates.
As regards cost savings via the bulk purchase of legal services, that might make sense were it not for the fact that legal aid is already the worst paid legal work., typically earning half private client rates. Most solicitors are trying to control the amount of legal aid work that they do and not increase it, as is made abundantly clear in surveys recently done by the Legal Aid Practitioners' Group and the Suffolk and North Essex Law Society. There are few, if any, economies of scale in private client cases. One of the inexorable rules of law firms is

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that the bigger they get the bigger their overheads become, and fees likewise. Noble Lords should try shopping around for themselves.
Finally there is the Government claim that quality will be improved by competitive block tendering. That seems to me to be the most incredible of all their claims. Although in a few exceptional cases it will no doubt be so, the reality is crude and simple: you pay for what you get, even with solicitors. Quality follows remuneration. I should be very surprised if the noble and learned Lord the Lord Chancellor shopped around for a cheap surgeon if ever he needed one, as we devoutly hope he will not.
What will be the position if Amendment No. 44 is carried? It stipulates that only solicitors who meet the standards set by the commission will be able to offer legal aid services. It confirms that the commission has a duty to obtain the best long-term value for money and it enables it to remunerate on terms set by contract or regulation. Other powers in the Bill already give wide discretions to the commission and enable it fully to police the system, if it has the will and skill to do so. The main riposte of the Government is that this will not allow the hard Treasury cap on the budget to be observed. But, as I said in the debate just before the dinner break, many of the claims made in that regard in terms of the escalation of the legal aid budget are now old hat and irrelevant.
Many in the profession, and indeed in the Law Society, have been perplexed as to why the Legal Aid Board has not been much more effective in policing legal aid payments using the considerable powers given it under the Legal Aid Act 1988. Some of us get worried when failure effectively to exercise existing powers becomes an argument for legislating even more extensive ones. In effect, what we are suggesting is that this element of the Bill represents a sledgehammer to crack a nut, and that, as the image implies, the legal aid scheme will in the years to come be severely, irreparably damaged.
Just over a year ago the Secretary of State for Health, Mr. Frank Dobson, told the other House in relation to the NHS reforms that the Government would,
"abolish the wasteful and bureaucratic competitive internal market introduced by the Tories".
It is because we believe that the competitive block tendering proposed by the Government vis-à-vis legal aid would indeed be wasteful and bureaucratic and unnecessary that so many of us are so anxious to persuade the Government to change their mind. Support for this amendment and its sister, Amendment No. 57, extends to all parts of the House and is also supported by the Law Society, the Bar Council, the Legal Action Group and the Legal Aid Practitioners Group. As the names of the noble and learned Lord, Lord Archer of Sandwell, and the noble Lord, Lord Clinton-Davis, on the amendments indicate, there is also distinguished support from the Government Benches.
I really do believe that to attempt to present to this House the choice between a Bill that serves the provider or a Bill that serves the user is a wholly false analysis. The two are inseparably connected and all the concerns
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emanating from these Benches go to the impact and the long-term health and success of the scheme which will be enacted under this Bill. I can only urge that however central the competitive block tendering system appears to be to the Government at this moment, they reconsider the effects that it will most surely have on their plans. I beg to move.
Lord Clinton-Davis: My Lords, I wish to speak to Amendment No. 57 which stands in my name. I submit that it is an amendment that satisfies the criteria which my noble and learned friend has submitted, particularly in terms of quality control. It is also important in relation to accessibility and giving a wide choice to clients which, after all, is, I think, a rather critical element of the solicitor-client relationship.
The Law Society itself has established a management standards scheme, Lexcel, which is intended to provide that measure of quality control to a particular area of legal services. I submit that the legal services commission should be prepared to enter into contracts with firms that are achieving those standards. I refer to the specialist panels of the Law Society which at present exist for family personal injuries, medical negligence, children cases, Mental Health Review Tribunal and family cases. A similar standard will apply, as I understand it, to housing, immigration and criminal law. These are people who have demonstrated clearly, if they are going into those areas of practice, that they will be well equipped to do so. Therefore, one has to ask why is there the risk that they may be excluded?
The Law Society has taken the view, having, of course, been in close contact with its members—of which I am one—that quality assurance, the ability on the part of the Lord Chancellor to introduce cash limiting, and his ability to contain the costs of individual cases, would not be prejudiced by reason of what is being proposed here. I am suggesting that only those who meet prescribed quality criteria should be entitled to a contract. I am not saying all those who are presently involved in the provision of legal aid are automatically qualified for that purpose. Not at all.
My noble and learned friend's argument that this might be inconsistent with cash limiting, with respect, is also not the case. If more firms than expected were to enter into contracts the commission would simply need to scale down the size of contract available to each firm. Subsection (2)(c) of the new clause specifically recognises the ability of the commission to make proportionate reductions, where necessary, in the number of cases funded. That is a point made a few moments ago by the noble Lord opposite.
I know that my noble and learned friend is concerned about controlling individual case costs. We are not proposing that firms entering into contracts would be able to charge whatever they wanted in each and every case. They will have to be willing to work for the rates laid down by the Lord Chancellor or the commission. The proposed new clause would make it difficult for the Lord Chancellor to exclude firms from providing legal services through competitive price tendering. It is important not to introduce price competition at the expense of quality of service—a point previously made

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by my noble and learned friend. Where there are no reliable and generally accepted means of measuring the quality of work in a particular case, would it not be unwise to introduce price competition of that kind?
The new provision would not prevent the Lord Chancellor from introducing an element of price competition if he so wished. It would be possible for the Lord Chancellor to ask the commission to introduce price competition when asking firms whether they wanted to apply to take on additional cases beyond the level funded in the previous year—although the Law Society does not believe that it would be wise to introduce any such provision at the present time.
The root issue is giving clients a choice of firms which are able to provide the quality standards that my noble and learned friend so rightly insists upon. That would overcome the problems of geographical access, to which reference was made in previous debates. There is absolutely no reason why a lower level of choice and access should be provided in order to attain this criteria of quality.
I hope that my noble and learned friend will feel that this approach is not an unreasonable one. Any restrictions on choice which go beyond what is necessary to secure quality seem designed to meet the interests of the administrators of legal aid, who might well find it convenient to deal with a smaller number of suppliers rather than to serve the interests of the public for whom the scheme is intended. I hope that my noble and learned friend will look upon this as a constructive contribution to his considerations.
9.15 p.m.
Lord Hunt of Wirral: My Lords, quality must lie at the very heart of the services provided by the community legal service. I believe that there we are as one with the noble and learned Lord the Lord Chancellor. The noble Lord, Lord Clinton-Davis, highlighted an important area in saying that quality must he accompanied by choice. This is the Access to Justice Bill so I find myself very much in agreement with the noble and learned Lord the Lord Chancellor when he demonstrated again that right at the heart of his reforms lie the principles of improving access to, and the quality of, justice.
I find the arguments of the noble Lord, Lord Clinton-Davis, to be persuasive when he reminds us that there are a number of issues that we have to bear in mind. The Law Society has, I think rather persuasively, set out four principles which should underlie the approach to the provision of legal services in the future: first, to ensure high quality; secondly, to provide the widest possible choice for clients and potential clients; thirdly, to ensure ready geographical access to services; and, fourthly, to provide proper funding for the service. If one applies those four principles to the debate, one sees that to try to limit the number of firms which have achieved the requisite quality standard starts to get right in the path and presents a huge obstacle to the very purpose of the reforms that we are debating. If we are to improve access, it must surely be right for clients to be able to go to firms that have met the necessary quality standards.
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I agree with the noble Lord, Lord Clinton-Davis, that the new management standards scheme, Lexcel, is an excellent move in the right direction. I commend the Law Society on applying the well-established principles of quality management to the particular area of legal services. The two combined standards of Investors in People, an initiative in which I was proud to play a part, and Lexcel will give law firms an opportunity to provide that quality service which must lie at the very heart of these reforms.
It may well be that the noble and learned Lord the Lord Chancellor will set all our minds at rest by giving an assurance in response to his noble friend that all firms meeting the quality requirements will be entitled to a contract. If that is the case, we will all go away very happy. But I have a horrible feeling that he may not yet be disposed to giving us that assurance. That is why we must continue pressing.
I say that because I have heard the noble and learned Lord argue that such an assurance would undermine efforts to provide quality assurance, would undennine the noble and learned Lord's ability to introduce cash limiting—he will know our views on that—and would also undermine his ability to contain the costs of individual cases. I would ask him to reflect again, because I do not believe that any of those arguments bear close scrutiny. The new clause proposed by the noble Lord, Lord Clinton-Davis, specifically says that only those who would meet prescribed quality criteria should be entitled to a contract. It is not suggested that all those currently providing legal aid should be entitled to a contract. Surely the proposed amendment fully meets the need to provide quality assurance.
It is necessary further to reflect on the argument about this proposal being inconsistent with cash limiting. If more firms than expected seek contracts, the commission would need to scale down the size of the contract available to each firm. Subsection (2)(c) of the proposed new clause specifically recognises the commission's ability, where necessary, to make proportionate reductions in the number of cases funded. I hope that the noble and learned Lord the Lord Chancellor will reflect for a moment on the fact that we are not seeking to stand in the way of his declared intention to limit the amount of cash. Concern about controlling the cost of individual cases is also unjustified. The new clause does not propose that firms entering into contracts would be able to charge whatever rate they wished for each case. The firms of solicitors would have to be willing to work for the rates laid down by the Lord Chancellor or by the commission.
However, I admit that the proposed new clause would make it difficult for the noble and learned Lord to exclude firms from the provision of legal services through competitive price tendering, but then he himself has recognised that it is important not to introduce price competition at the expense of quality of service.
I hope that the noble and learned Lord will reflect on the intention behind the proposed new clause. No doubt there will be problems with the implementation of some of the words and the drafting but I think that the noble Lord, Lord Clinton-Davis, would be happy to accept

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further amendments to it. I hope that the noble and learned Lord the Lord Chancellor will accept the principle behind the new clause, which is to go back very persuasively, I think, to those four principles relating to the provision of legal services in the future: high quality, the widest possible choice, geographical access and proper funding.
Lord Archer of Sandwell: My Lords, this will be a very brief intervention at this hour, but I share the deep concern of the three noble Lords who have already spoken that the number of solicitors' firms who have contracts in certain fields of expertise shall not be whittled down to the point where choice disappears. We all understand that contracts should be confined to those who can be shown to offer the expertise in question and the other requisite standards. No one wants to see inefficient and incompetent solicitors let loose on the public, except possibly the inefficient and incompetent solicitors.
However, there are small firms which can offer a very good, competent and caring service. Often they can offer it in geographical locations where large firms or specialist firms are not to be found. In my former constituency there are some very good firms of solicitors. If they are forced out of the picture it will be poor comfort to tell the people of Cradley Heath or of Oldbury that they can go to Birmingham for advice. In many cases we are talking about disadvantaged people. Sometimes the fare to Birmingham would be sufficient to discourage people from pursuing redress. I hope that my noble and learned friend will enforce the quality criteria but I also hope that when those are met he will not exclude small firms simply on the ground that "only big is beautiful".
Lord Thomas of Gresford: My Lords, the remarks of some noble Lords take me back to my youth when I was a solicitor in a small village in north Wales. We were a five-partner firm, and we endeavoured to provide a service to the community which was a mixture of rural villages and industrial and mining villages. We covered the whole gamut. I was the person in charge of legal aid, and so I was the partner who, I regret to say, made the least money in the whole practice. But if we needed expertise we had the advantage of being able to go to the independent Bar, to the finest minds in the country. I recall that on two occasions I went to my former tutor, who happens to be the noble and learned Lord, Lord Lloyd of Berwick, in commercial cases, and instructed him to advise. It was a rather unusual thing to receive such high quality advice in a rural area such as that.
Looking at these proposals, it seems to me that they will result in the fact that there may be one firm of solicitors—I can think of one firm—in north Wales that could possibly contract in bulk for legal aid work. I cannot think of more than one. That would mean that for a population of getting on for half a million people there would be all the problems of getting through the mountains and valleys of that rather beautiful part of the world to somewhere such as Rhyl or Colwyn Bay in order to obtain the legal services required.
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What has happened in the past and what has been the strength of the legal aid system is that expertise and quality have been available to people locally within a few miles. Those firms have not only been able to ensure quality themselves but, as I indicated, they have had access to advice from the best legal brains in the country. These proposals are going to wreck that system and, to my mind, will be detrimental to the rural population.
The Lord Chancellor: My Lords, I hesitate to respond to what has just been said by the noble Lord, Lord Thomas of Gresford, because it is not immediately clear to me how his small firm had peculiarly advantageous access to the noble and learned Lord, Lord Lloyd of Berwick, which would not have been available perhaps, a fortiori, to a larger firm. It is not clear how that contributes to the argument on these amendments.
These two amendments seek to provide a protected position for lawyers providing services within the reformed scheme, while we are addressing purchases of legal services to be made in the public interest. The amendments seek to guarantee work for all lawyers who meet the quality threshold. They also seek to safeguard the market share of this work currently enjoyed by lawyers and to bind the commission to the terms on which it can enter into contracts. They are prescriptive and inflexible; they look backward, not forward. I really do encourage some noble Lords to avoid an occupational resistance to looking forward.
The new scheme is not intended to be a slightly polished-up version of the present scheme, which is a lawyers' scheme built with lawyers in mind. The commission, through the community legal service, will determine the needs of ordinary people who find themselves in difficulty and seek to match those needs within priorities established by the Government or the commission and within the resources that are actually available by securing services from a range of legal service providers.
I find it inconceivable that Parliament would seek to direct in detail the terms under which the National Health Service, for example, should discharge its functions in providing services, or indeed to direct how any part of government should undertake a major procurement exercise. To entrench in legislation detailed provisions about the terms on which services may be purchased by the commission is prescriptive and inflexible. The amendments are, I am afraid, an example of a feather-bedding culture which seeks to protect lawyers from the possibility of having to compete in order to retain work funded--
Lord Archer of Sandwell: My Lords, will my noble and learned friend—
The Lord Chancellor—by the state. This culture must change. I will give way when I choose to give way.
Lord Archer of Sandwell: My Lords, I was not expecting my noble and learned friend to give way

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before he chose. However, knowing him, I was sure that he would be courteous enough to choose to do so before very long and I am most grateful to him.
Some of us are becoming slightly worried that every proposal that has been made during the course of today's debate has been met by the answer that the lawyers are ganging up to feather-bed their own concerns. I make no declaration of interest as I have no interest at all in any firm of solicitors. My concern is purely the people of the areas to which I referred who should have access to justice. I believe that that is true of the other noble Lords who have spoken. I fully follow my noble and learned friend's arguments, and he is entitled to deploy them, but it is less than fair to suggest that anyone who disagrees with him does so because this is a trade union ganging up.
The Lord Chancellor: My Lords, I am happy to acquit the noble and learned Lord, Lord Archer of Sandwell, of bad motives. However, I believe his arguments to be fundamentally wrong, and I shall endeavour to persuade him.
Essentially, both these amendments seek to preserve for the profession, subject to its members meeting quality standards, the right to do as much or as little legal aid work as they wish and, in the case of the proposed new clause, to preserve the market share that lawyers currently have of that work. We have heard it claimed, both in Committee and again today, that by giving guarantees of this kind it will be possible to ensure the widest choice for those seeking access to justice.
I accept that that is what the noble and learned Lord, Lord Archer of Sandwell, conscientiously believes. However, I believe him to be fundamentally wrong. I have noticed in the debates on this Bill that providing the greatest choice of lawyer is often regarded as central to providing access to justice. That is a lawyer's perspective. I have, I am afraid, an uncomfortable truth to reveal. The access that the disadvantaged require is not access to traditional lawyers; it is access to justice. Access to justice may not require the services of a lawyer at all.
The services provided through the community legal service, including the services of the lawyers, are no more than the conduits through which disadvantaged people gain access to justice. That is why the community legal service as a whole is wider than simply the efforts of the commission using the resources of the community legal service fund. What I want to achieve is public money to buy the right services of the right quality at the right price to allow the disadvantaged to resolve disputes, enforce their rights or seek the protection of the courts, where appropriate, particularly in areas of unmet need. That requires a radical departure from the current ways of providing publicly funded help with legal problems.
Granting a guarantee of contracts to all firms who obtain a franchise would reduce the commission's ability to direct funding to the needs and priorities identified by communities. This goes rank counter to the fundamental purpose of the community legal service.
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I am also keen, and make no apology for it, that in the longer term selective contracting should allow us to introduce an element of competition. Competition is not inconsistent with the maintenance of quality. On the contrary, I believe that the spur of competition offers the prospect of increased quality and cost effectiveness of legal services. I want to ensure that taxpayers' money is used to its best effect, and that requires a change to the funding system.
However, giving guarantees of the kind suggested which provides across-the-board contracts to all providers would effectively maintain the present system. I want a commission that will be proactive in meeting local needs and priorities by purchasing the best and most effective legal services it can find to match the needs of communities.
I remain confident that enough contracts will be entered into to give good access to the public. Contracts have already been guaranteed to all those who obtain franchises in the mental health, immigration and family categories. On the current application rate, it would not be unrealistic to estimate that family contracts would be awarded to between 5,000 and 6,000 firms. That would cover about 96 per cent. of current family legal aid spend, with most firms doing a volume of work similar to their current caseload.
The position in regard to non-family advice and assistance will be clearer in the near future. But the figure of 3,200 contracts, widely cited recently, was not a target. It is in fact the Legal Aid Board's assumption about the number of contracts that would result from the contracting process. That was a number which it believed would be sufficient to provide reasonable access.
Looking ahead, contracting for non-family civil litigation work, currently certificated work, is timetabled for introduction in April 2001. We are still at the planning stage, but in the first round of contracting I would again expect all franchised firms who want a contract to receive one. Our current expectation would be the same for contracts for criminal work and we may even initially grant contracts to firms who meet standards other than those set for a franchise.
It is of course also the case that access can be ensured through requirements in contracts for service providers to go to the clients and through good publicity about where help can be obtained. The recent introduction of limited choice of representation in clinical negligence cases is a first class example.
The Legal Aid Board has established a panel of lawyers who may take these cases on behalf of assisted persons. I should like to make quite clear that any plaintiff who is the victim of clinical negligence, with all of the personal tragedies that that involves, is much better off with a limited choice going to a quality-assured practitioner than, as today, going through the door of any solicitor who, regardless of expertise, is entitled to take his case from beginning to end. These firms have produced publicity material to be distributed to advice agencies. It contains a freephone number so that people who need lawyers can telephone the board and be told where the nearest lawyer with the

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requisite skill and experience is situated. The contracts issued to those lawyers on the panel require that if necessary they must visit the clients if that is the only way that access can be provided.
We seek to make important changes at a pace that allows the profession to adapt, but it must stop looking backwards and start looking forwards. We are not talking about a big bang; ours is a cautious step-by-step approach. The first stage that is underway is effectively to issue licences to quality suppliers to carry out legal aid work. In some areas such as family work this has meant a guarantee for all those who hold a franchise. But we shall adopt a careful approach, possibly by means of pilot exercises, to introduce an element of competition—yes, competition.
I turn to Amendment No. 57, in particular subsection (2)(a):
"the Commission shall contract with every supplier who meets prescribed quality criteria and who wishes to provide services under the Community Legal Service".
What is that? It is a prescriptive obligation to contract with a provider. That is something that no other purchaser of services is obliged to do. Let us consider (b):
"the Commission shall offer each contractor a contract for at least the same number of cases as they undertook in the year preceding the year of contracts".
That is guaranteed work for lawyers. The future must be no less than equal to the past. What grotesque rigidity! We come to (c):
"where the total number of cases to be funded in any category of work in a particular region is to be reduced below the number undertaken in the previous year, the Commission may make proportionate reductions in the number of cases to be funded by each contractor in the region concerned".
That is the right to a rigid, bureaucratic, proportionate reduction in work if there is an overall reduction. Under (d) it is proposed that,
"the Commission shall not set a minimal level for the number of cases for which it is willing to contract".
What does that mean? The sky is the limit for any contractor.
We come to (e):
"contracts shall provide for separate payment, in addition to the contract sum, to be paid for disbursements reasonably incurred, and for the costs of advocacy in court".
How prescriptive! That could be appropriate in certain cases but not always, for example if the lawyer were to act as the solicitor and also be the advocate.
We come finally to (f):
"contracts shall define the number of hours' work, or number of cases, to be undertaken for the contract sum".
What does that prescribe? It prescribes that an hourly rate is the only acceptable means of remuneration. I stigmatise the whole of the proposed amendment as amounting to an uncommercial rigidity statutorily imposed on the purchaser of legal services when those purchases should be made in the public interest.
I hope that I have not waxed too indignant. For the reasons that I have given I dare say that it will not surprise noble Lords who have spoken in support of
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this amendment if I say to them that I do not believe that propositions of this kind, with which in any event for the reasons that I have given I disagree, are appropriate for the face of the Bill. These matters address the detail of contracts which have to be a matter for the commission flexibly to determine. I urge the noble Lords in whose names the amendments stand to stop looking backwards, to start looking forward and to withdraw the amendment.
9.45 p.m.
Lord Phillips of Sudbury: My Lords, I am sure we listened with a combination of emotions to the comments of the noble and learned Lord the Lord Chancellor. His extreme remarks were devoted exclusively to Amendment No. 57. Not one of his comments was devoted to Amendment No. 44 which I moved. I venture to suggest that none of his strictures could fairly be applied to Amendment No. 44.
We have spent 43 minutes debating the amendments. It would be wrong for me to labour what I believe deserves belabouring. I shall resist the jibes levelled several times by the noble and learned Lord at these Benches in particular. I defer to no man or woman in this House, least of all to him, in terms of my record vis-à-vis upholding or extending the effectiveness of legal aid. I was the first chair and co-founder in 1971 of the Legal Action Group, continuing with the founding of Lawyers in the Community Scheme and now the Citizenship Foundation.
In a serious debate such as this, it is unhelpful to slide off the point with a slur. I suspect and hope that the noble and learned Lord did not mean it too seriously. However, he did not address the main issues which I put to him in the debate. Not one single point made by the noble and learned Lord addressed cost, quality or access. To talk about a feather-bedding culture betrays a lack of awareness of what life is like on the legal aid frontline. If noble Lords think that that is a feather-bedded culture they must have been a long time away from such work.
To state that we on these Benches have an occupational resistance to looking forward is unfair. We say that the map devised by the noble and learned Lord the Lord Chancellor, his colleagues and the Legal Aid Board for their brave march into the new world is unsafe. Its destination will not be reached if a method of financing is pursued which will diminish rather than increase choice. For the arguments reasonably given, we believe that it will diminish choice.
Enough has been said. At this time of night there is no point in seeking a Division. However, I reserve the right to bring back the matter at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 45:
Page 4, line 44, leave out ("(or groups of individuals)").
The noble and learned Lord said: My Lords, noble Lords will be glad to hear that this is a technical drafting amendment. I am grateful to the noble and learned Lord,

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Lord Mackay of Clashfern, (who unfortunately cannot be in his place today) for identifying a possible problem with the current wording.
Clause 7(3)(e) empowers the legal services commission to secure services as part of the community legal service by making grants or loans directly to the individuals concerned to enable them to purchase the necessary services themselves. The amendment deletes the words in parentheses "(or groups of individuals)". Those words are unnecessary and potentially confusing. Removing them would in no way detract from the commission's ability to fund multi-party or group actions if the case were strong and important enough to merit it, although in practice I think it unlikely that the commission would choose to do so under the power in Clause 7(3)(e).
At present, legal aid in a multi-party case is available only to those plaintiffs who qualify financially under the normal test. It is the Government's intention to replicate that position for the community legal service under Clause 8(1). In the longer term, it might be possible to relax that position by waiving the upper eligibility limit under Clause 8(2) for other plaintiffs in a multi-party case. But we would of course expect such litigants to be liable for substantial contributions under Clause 10.
The problem is that Clauses 8 and 10 refer simply to individuals. The additional words "or groups of individuals" in Clause 7(3)(e) may carry the misleading implication that funding is provided to the group per se, rather than to the individuals who constitute the group. In reality it can only be to the individuals that the funding is provided, as shown by the fact that the rules about eligibility and contributions apply to each individually. I beg to move.
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No. 46:
Page 5, line 3, at end insert—
("(3A) The Lord Chancellor may by order require the Commission to discharge the function in subsection (3) in accordance with the order.").
On Question, amendment agreed to.
[;Amendment No. 47 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 48:
Page 5, line 6, leave out ("in different areas") and insert ("in relation to different areas or communities").
On Question, amendment agreed to.
Lord Goodhart Lord Goodhart moved Amendment No. 49:
Page 5, line 8, after ("not") insert ("(except as provided by subsection (6A))").
The noble Lord said: My Lords, in moving this amendment, which stands in the name of the noble Lord, Lord Kingsland, and myself, I wish to speak also to Amendment No. 53.
This is the first of a group of amendments attacking paragraph 3(a) of Schedule 2, which excludes all personal injury cases from public funding except cases of clinical negligence. If the Bill is enacted as it now
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stands, the only way round that exclusion will be for the Lord Chancellor to give directions under Clause 7(7) authorising the commission to fund personal injury actions which are otherwise excluded.
For the first, but not the last, time in the Report stage of the debate on this Bill, this raises the issue of the vision of the noble and learned Lord the Lord Chancellor of conditional fee agreements—CFAs—as a panacea. I emphatically disagree with that view.
CFAs do indeed have a role to play in the system. They provide access to justice for those with a claim for damages who do not qualify for legal aid on financial grounds but cannot afford the risk of litigation at their own expense. Indeed, I agree that where CFAs are available and workable, claimants should use them rather than put taxpayers' money at risk.
But we are simply not yet ready to scrap legal aid for personal injury cases. CFAs are in many respects unproven and may turn out to be unworkable over a large part of the spectrum of personal injury cases. The fact is that CFAs are so far of proven value in road accident cases. That is largely for a special reason; namely, that the police investigate every road accident which causes injury. That usually establishes causation and identifies the person at fault. That leaves very little to be argued about in court.
But, indeed, there are many cases where CFAs are unsuitable. Let us look at them. As the Government have accepted in the case of clinical negligence, CFAs are unsuitable where substantial costs of investigation have to be incurred before the commencement of proceedings. It is not only clinical negligence cases which involve such costs. What about product liability cases or industrial diseases such as the miners' white finger cases which were brought recently and resulted in large awards? What about damage to health by emissions from a nearby factory? All of those will require substantial investigatory costs before proceedings can be commenced. None of them is clinical negligence.
Solicitors will be extremely reluctant to carry heavy pre-commencement costs themselves. One might ask: what about cases involving expensive trials; for example, trials involving experts on both sides? Again, solicitors may well be unwilling to bear the costs themselves and in such a case insurance against payment of the other party's costs may be impossible to obtain or very expensive. Are CFAs appropriate where the claimant is a child or someone who lacks mental capacity?
The viability of CFAs in cases involving substantial up-front costs is far from clear. The KPMG repots for the Lord Chancellor says one thing; Professor Shapland's report for the Law Society says another. Investigations and research are still continuing. The availability of insurance at acceptable premiums in non-road accident cases is extremely uncertain. Premiums for accident-at-work cases have already doubled those originally set. So we are risking hardship to injured people by excluding the right to public funding for personal injury cases. And we are doing it to save a negligible amount of money.
The net cost of legal aid in personal injury cases to the Exchequer in each of the three years from 1994 to 1997 was less than £2 million, ignoring VAT on fees which comes back to the Exchequer within three months.
Various solutions are offered by this group of amendments. The first would be to leave funding available in principle for personal injury work but to rule that the applicant would have to show that CFA was not available or not likely to be available. Secondly, there is a possibility of listing in Schedule 2 categories of PI cases where funding should remain available. The noble Lord, Lord Clinton-Davis, tabled an amendment in Committee listing no less than 15 categories where funding should be retained. That is an illustration of the wide range of cases in which it is unlikely that CFAs will provide an adequate alternative. The third solution is the more limited amendment, set out in Amendments Nos. 49 and 53, which prevent paragraph 3 coming into effect as regards personal injury until the commission is satisfied that CFAs or some other kind of funding provide an adequate replacement. Why does not the noble and learned Lord the Lord Chancellor accept that implementation of paragraph 3 in relation to personal injury work should be delayed until we know whether CFAs will work?
On 3rd November, the noble and learned Lord's deputy, Mr. Geoffrey Hoon, in another place, said in answer to a Parliamentary Question:
"We have made it clear that legal aid will not be withdrawn from anyone in our society unless and until there are effective alternatives and effective access to justice. The extension and development of conditional fees will allow that to take place in due course, but we have made it clear that we want to see an extension of legal expenses insurance. We believe that that is appropriate for the great majority of people. Equally, we have made it clear that no one will lose out unless and until there is effective access to justice for them".—[Official Report, Commons, 3/11/98; col. 676.]
In the period of a little more than three months since Mr. Hoon gave that answer, I see no reason to suppose that we have made such enormously rapid strides that we are now in a position to say that, yes, CFAs are the definitive answer. I ask the noble and learned Lord the Lord Chancellor to honour the undertaking given by Mr. Hoon in another place. I beg to move.
10 p.m.
Lord Archer of Sandwell: My Lords, this is a vexed problem and a genuine problem. It is not a piece of Luddism by a bunch of dinosaurs. Perhaps we can establish that at the outset of the debate.
A number of noble Lords have at various stages in our deliberations explored possible solutions to the problem. The Bill provides that the services set out in Schedule 2 shall not be funded as part of the community legal service, subject to my noble and learned friend's power to give directions to the contrary. One of the services which is not to be funded is help in proceedings for negligence other than clinical negligence. My noble and learned friend explained that those proceedings will be funded on a conditional fee basis or on such other basis as may be devised.
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I ventured to raise the question in Committee as to how much money is likely to be saved, since I believe that in the large majority of personal injury cases the plaintiff's costs are ultimately met by the defendants, either after a settlement or a decision in the plaintiff's favour. I seem to remember my noble and learned friend making almost precisely that point in a speech to the Bar Conference in 1996. I am indebted to the Personal Injury Bar Association for the information that in 1996–97 more than 502 million damages were recovered at a net cost to public funds of £1,418,000, much of which was offset because it saved social security benefits. Now there's value for money!
Leaving that point aside, what troubles some of us—it certainly troubles the Law Society, the Bar Council, the Legal Action Group and the noble Lord, Lord Goodhart—is whether all potential plaintiffs will find solicitors and counsel prepared to act on that basis given, in certain cases, the amount of time entailed, the disbursements involved and the unpredictability of the outcome. We are also concerned as to whether contingency insurance against liability to pay costs will always be available or available at affordable premiums.
My noble and learned friend is an optimist in these matters and in Committee (at col. 568) he expressed confidence that conditional fee agreements would normally be available and that in exceptional cases he would exercise his direction-making power to make appropriate provision. He added that in what he believed was the highly unlikely event of a hiccup in the market—in fairness that is my paraphrasing, not his words—he would intervene by direction.
Finally, as I recollect, he said that if necessary he would make provision in individual cases, though that would entail an amendment to Clause 7(7). Taking him at his word, I sought to implement his suggestion by tabling an amendment, but he stalled me earlier in our deliberations today by tabling it himself. For that we are all duly grateful. I hope my noble and learned friend will forgive me if I am not totally persuaded to share his optimism. I am not stating the opposite; I simply confess to a strain of agnosticism and I am fortified by the fact that it is obviously shared by all the organisations I mentioned and a large number of your Lordships.
If it were to transpire that there were problems, the difficulties which may trigger my noble and learned friend's intervention would become apparent only after an appreciable number of people were shown to have been denied justice, after all the frustration and the despair and heart ache. It seems to me quite unprovocative to table an amendment, as a number of noble Lords sought to do, which says that the prohibition in Schedule 2 shall not apply in a case where it appears that adequate arrangements for alternative funding are not available. If my noble and learned friend is justified in his optimism nothing is lost and it will not cost the public purse anything.
I appreciate that it would impose an administrative burden to require the commission to satisfy itself in every case that alternative funding is available. That is why, in Amendment No. 50, I sought to reverse the

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burden, to remove the prohibition, only where the applicant can show that after making diligent inquiries he has not been able to obtain advice and assistance. I am being more accommodating than even the noble Lord, Lord Goodhart, and, I believe, more accommodating than the present position of the Bar Council. It may transpire that my noble and learned friend is completely right in his predictions. If so, the fund will be no worse off. If he is wrong, at least he will not have been disastrously wrong.
Lord Carlisle of Bucklow: My Lords, I think that the noble and learned Lord the Lord Chancellor is right in supporting conditional fee agreements. I believe that they can work perfectly well in many actions. I suspect—I am not sure whether rightly or wrongly—that many of those who appear before the Criminal Injuries Compensation Board, where there is no legal aid, probably have some form of conditional fee arrangements with their clients—in Scotland, at least.
I am surprised at the confidence with which the noble and learned Lord the Lord Chancellor says that he feels we can do away entirely with legal aid. Indeed, to some extent, as I understand it, by his own amendment, Amendment No. 55. he has attempted to meet this concern by saying that in individual cases he may waive those cases in the schedule for which legal aid is not available. I should have thought that there was a strong argument for retaining, in the short term at least, the possibility of people being allowed to have their cases funded by legal aid where a conditional fee agreement is found not to be practical.
However, I rise to ask a question, notice of which I informally gave to the noble and learned Lord, Lord Falconer, before the debate commenced today. I do not understand the relationship between what is now proposed and what I believe is the present green-form system. As I understand it, at present, anybody may go to a solicitor—the noble Lord, Lord Clinton-Davis, will correct me if I am wrong—and obtain a certain degree or period of advice which is dealt with on a green form and paid for accordingly through the Legal Aid Fund. Does that introductory advice apply to someone who is inquiring whether he has an action which would not be funded under the community legal service because it is an action for personal injury? In other words, if an individual goes into a firm of solicitors saying, "I had an accident at work yesterday and I want to know whether I have a claim for negligence against my employer for an unsafe system of work"—it may, as the noble and learned Lord, Lord Archer, said, in many cases involve a lot of exploratory work—is the solicitor entitled to any form of remuneration for answering the request and giving that advice?
Clearly, as I understand it, if the advice is, "Yes, you do have an action", the solicitor may decide whether or not he will take on that action on a conditional fee basis. He may or may not choose to do so. However, what if he says, "I am sorry: I've looked into the law and, in fact, you have no action"? Does that mean that the whole of the advice must be given free of charge or does the present provision for his remuneration through the green-form system apply although the potential action is
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one which is excluded, under the Bill, from the community legal service? I should be grateful if the noble and learned Lord who replies would try to elucidate the answer to my question.
Lord Clinton-Davis: My Lords, the noble Lord, Lord Carlisle, has asked an interesting and pertinent question. I do not know the answer to it. I suspect that it will not be possible to obtain advice under the green form system. I shall listen with interest, as he will, to whichever of my noble and learned friends replies.
I simply do not know what sort of contumely will befall me as a result of having the effrontery to put down certain amendments when my noble and learned friend—if it is he—comes to reply. I had better declare my interest. I do not say this with pride, and it is partly due to Brussels: I have not actually dealt with a legal aid case since 1984. I suppose I am with a fat cat firm of lawyers as many people are in this House. I remember and I keep in touch. I hear what the smaller firms, high street firms—call them what one will—have to say. They are not fat cats. By and large they are people who are very able and who have offered to provide a service in the interests of the community. One of my former partners came from a very large firm of City solicitors. Today he is certainly no fat cat. He is doing a wonderful job, as so many are.
It is all very well for my noble and learned friend, having had a very lucrative practice at the Bar himself—
The Lord Chancellor: Never!
Lord Clinton-Davis: Never? I believe that he has, and deservedly so. He was a very good barrister. It is no good pretending that the world is as he would like it to be. These people are dedicated and they should not be treated with disrespect as my noble and learned friend resorts to treating them frequently during the course of this debate. He says that he has a high regard for these people, but that does not always appear to be the case when he rises to his feet.
I turn to my own amendments which are designed to probe. I make that very clear. Amendments Nos. 51 and 52 are designed to see what my noble and learned friend will do if in fact he is faced by serious problems affecting personal injury cases. With whom is he going to consult about that, and where is he going to get his information? How do we know that he is actually looking at this matter with the intention of securing equity and justice? Or is he going to act on advice? This is a matter where my noble and learned friend needs to be closely involved with the practitioners in this area, and also with those such as the Legal Action Group and other organisations to which my noble and learned friend Lord Archer referred earlier.
We are saying here that legal aid should not be withdrawn from personal injury cases unless my noble and learned friend is sure—not on the basis of optimism—that adequate alternative arrangements are in place. There is a doubt about the efficacy of insurance arrangements. There is a doubt at the present time as regards some of the matters on which my noble and

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learned friend has formed an optimistic view. I have said some harsh things to my noble and learned friend and he has to me. I do not grumble. As he put it to me, this is a place where each one of us should take hard knocks. That is fair enough.
As regards conditional fees, I hope that my noble and learned friend will be absolutely right. I hope that all the anxieties that I and others have expressed will come to nothing. But can we be sure that that is the case? Unless he is prepared to take the view that it is right and proper at the time to remove what has been a protection for a very long period of time, I fear that it will be a judgment that we shall all regret.
Conditional fees should be used wherever they are appropriate. Cases which merit public funding, but for which conditional fees are impractical, should continue to be eligible for support. The legal services commission should not be swamped by applications.
We come to the question of compelling reasons. It may be that it is not the best form of words. I did not like "special reasons" for other reasons, as I said in Committee. However, I think there must be some way of making a judgment about this matter. I have tried to define a compelling reason in Amendment No. 62 which states:
"A compelling reason for the purposes of sub-paragraph (1)(a) or (c) above exists where—

(a) the case is one which a private client of sufficient means would be likely to wish to pursue or defend;

(b) it is not practical for the case to be conducted on a conditional fee basis:

(c) (in the case of sub-paragraph (1)(c) the circumstances are not such that a reasonably prudent person would have insured against the risk of a dispute arising")".

I refer to a private client of sufficient but not super-abundant means. I believe that this is not an unreasonable request. I hope that I may obtain a rather more reasonable response from my noble and learned friend on this occasion.
10.15 p.m.
Baroness Wilcox: My Lords, I support Amendment No. 53 which is a cautious approach to conditional fees. I can see why the noble and learned Lord the Lord Chancellor is in a hurry to take personal injury claims out of the legal aid budget. On the one hand, he has the interests of consumers in mind. He wants to revolutionise the way legal services are delivered. That is the point of the Bill and it is an admirable one. To do that he must free up money from a budget that at present leaves him little room for manoeuvre. Personal injury seems an obvious choice. An alternative method of funding has been developing over the past few years and it could well be a viable alternative for all or some people. In addition, conditional fees are much fairer to the winning opponent who will be able to recover costs.
On the other hand, the noble and learned Lord may remember that in previous debates I have expressed concern on behalf of consumers that we do not yet know enough about how conditional fees operate in practice. Saying that they have been running for three years does
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not tell the whole story. Over those three years there has been no monitoring of how they work from the point of view of clients. We still do not know how people manage to pay the upfront costs of experts and other expenses. We still do not know if good cases are being turned down purely because they are a little too complex or clients present special difficulties; for example, they are not articulate or have problems with the English language.
In the past the noble and learned Lord has listened carefully to the concerns of consumer groups about damages being eroded by the cost of insurance premiums and success fees. He helpfully proposes in this Bill to make them both recoverable from a losing opponent. But that seems to me yet another reason to take a measured approach. Would it not be better to let the new arrangements bed down for a year or two while his department monitors conditional fees, as I know it is planning to do? In the meantime, the Bill as amended would still allow personal injury cases to be turned down on a case by case basis provided the decision maker is confident that in a particular case a conditional fee is available. In that way a picture can be built up of cases that are particularly suited to conditional fees and those that are not. If that picture is distorted by lawyers cherry picking the easy cases for conditional fees, I shall certainly support measures the Government take to discourage that. But it is as well to discover and deal with cherry picking while an alternative is still available for those rejected for the wrong reasons.
I support conditional fees in theory. Properly implemented they can increase choice and access to justice for consumers. I also support many of the reforms the noble and learned Lord is trying to bring about with the money that will be saved from legal aid. But when we are withdrawing a safety net from poor people who have been injured—as we are here—we must be sure that we are not asking them to jump from a great height into a new net that is full of holes.
Therefore I urge the noble and learned Lord to accept this amendment of my noble friend Lord Kingsland with a review when the new arrangements have been properly tested through monitoring. It is my hope that during that time money for his other reforms will begin to be freed up as conditional fees find a market based not on compulsion but on real consumer choice.
The Lord Chancellor: My Lords, let me attempt to deal with two specific questions before addressing the amendments. My noble and learned friend Lord Archer of Sandwell suggested that the net cost to the Exchequer of personal injury cases was about £2 million a year. In fact, it is about £40 million a year. But rather than go into detail now, I will undertake to write to him.
Lord Archer of Sandwell: My Lords, will my noble and learned friend forgive me. To set the record straight, I never said any such thing. It may be that I was muttering into my beard, but I never mentioned £2 million. I do not think that I gave that figure at all.
The Lord Chancellor: My Lords, if I misheard the noble and learned Lord, I apologise. But, just to ensure that I did not, I will read Hansard tomorrow with great diligence.

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The noble Lord, Lord Carlisle, asked about the green form in relation to a conditional fee agreement. I am not going to attempt an authoritative answer now—I undertake to write to him—but let me say shortly what I believe the answer to be. The noble Lord realises that the green form is only available to give very basic advice to very poor people. My understanding—and I will be corrected subsequently if I am wrong—is that if the advice was to the effect "You do not have a case", then there would be no charge. If the advice was "Yes, you do have a case. Would you like a conditional fee agreement?". then I think that the cost of the advice would be subsumed within the conditional fee agreement and a green form charge would be inappropriate. I am always anxious about giving immediate replies and I will therefore write to the noble Lord authoritatively. If I am wrong I will be the first to acknowledge it in my letter.
Lord Clinton-Davis: My Lords, I am grateful to my noble and learned friend. This is not really a matter of private correspondence between my noble and learned friend and the noble Lord, Lord Carlisle; it is matter of great importance to the legal profession. If my noble and learned friend reconsiders his view, or departs from it in any material way, the legal profession as a whole—and especially that part of it which practises in the green form area—will want to know. An exchange of letters would not achieve that.
The Lord Chancellor: My Lords, I will certainly ensure that the noble Lord, Lord Clinton-Davis is on the mailing list. But even adding his name will not ensure that the world knows. I shall think about some means of ensuring that the world is informed. Perhaps I shall write to the Law Society as well.
I am grateful to the noble Lord, Lord Clinton-Davis, for saying that we must not be too sensitive about our differences in the issues which engage us. Parliament is a place in which hard knocks are given and received in good spirit. The contributions of my noble and learned friend Lord Archer of Sandwell and my noble friend Lord Clinton-Davis have been so frequent from the Benches behind me that it demonstrates that on this subject our party is a broad church. I have noticed that the Liberal Democratic party is also quite a broad church on these issues—perhaps three broad churches.
These amendments are designed to keep some personal injury cases, which would be excluded by Schedule 2, within the scope of public funding, and to bring some cases involving property, companies and partnerships into scope. Amendment No. 50 would effectively mean that for every personal injury case the commission would have to satisfy itself that in each and every case adequate arrangements could be made to fund the case in some other way. Amendments Nos. 49 and 53 would have much the same effect. Amendments Nos. 5l and 52 seek to ensure that, before exclusions can be made under Schedule 2 to the provision of help in bringing or defending personal injury actions, the Lord Chancellor will have to satisfy himself that alternative forms of funding do exist throughout
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England and Wales. Amendment No. 68 is intended to put on the face of the Bill the circumstances in which cases could return to scope for funding.
I believe that these exceptions are better dealt with by way of directions. I shall explain my reasons in a moment. Amendment No. 58 would restore personal injury to the scope of publicly funded help. Amendment No. 56 would allow the Lord Chancellor to direct that funding should be given to an individual case that otherwise would be excluded. Amendments Nos. 59, 61 and 62 would allow help to be provided to individuals with disputes relating to the negligent damage of property, or involved in company or partnership disputes in certain circumstances. So I am speaking to all of the amendments in this group—Amendment Nos. 49 to 53, 56, 58, 59, 61, 62 and 68.
I shall begin by addressing the general issue of personal injury cases. I said in Committee that the majority of personal injury cases were, in my considerecl judgment, suitable for funding through conditional fee agreements. Perhaps I may give some more detail on how I have arrived at that conclusion. In 1996–97 there were 83,852 personal injury cases funded by legal aid. Of those, 11,868 were clinical negligence cases, which will remain within scope. That leaves 71,984 cases. Of those cases, 89 per cent. cost 6,000 or less; 84 per cent. cost 5,000 or less; and 81 per cent. cost 4,000 or less. These figures are total costs for the case. They include all disbursement costs, including counsels' fees. So, with all costs included, the vast majority of cases cost less than 4,000. Simply from the costs involved, it is possible to see that these cases did not require exceptionally large amounts of work or expenditure from the solicitors; nor were the costs of any investigations required particularly high.
We do know that taking a conditional fee in these types of case is profitable for lawyers. So, if the overall costs do not amount to more than 4,000 or 5,000 in most cases, I do not think it is unreasonable that solicitors should be asked to bear any risk involved. Every business incurs costs with a view to profit and runs risks. Why not lawyers as well? These cases, provided they have merit, are exactly the type of case which should be able to attract a conditional fee agreement. If a case is without merit, it may not be able to do so. But it would also be completely wrong for public funding to support cases of insufficient merit.
I know that there are those who argue that the financial arrangements in many solicitors' firms are such that they will be unable to support the increased overdrafts that might result and it is said that they will therefore be unwilling to enter into conditional fee agreements. I am not convinced. We know that some solicitors' firms already bear the up-front costs of disbursements, charging clients only after the case has finished. If those firms can organise their financial affairs in that way, it is not unreasonable to expect other firms to do the same.
I am also aware of the concern of some that conditional fee agreements will not be available in particular parts of the country. I do not accept that. First, since these agreements are unquestionably

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profitable when properly managed, it is hard to believe that no solicitor in an area would be prepared to take them on. But, secondly, even if that is the case, one of the important parts of the community legal service will be the development of information about the availability of assistance and better referral systems. If a specialist adviser is not available in the home town of the client, there should be little problem in putting the individual in touch with a lawyer who will want to help.
In contrast, if either the Bill or directions under it are used to make exceptions for individual areas, that would act as a disincentive to conditional fee agreements ever developing and there would be a continuing drain on limited resources that could be better spent elsewhere. The lesson is that lawyers, too, have to learn to adapt.
I return now to Amendments Nos. 50, 68, 49 and 53. If the majority of cases were suitable for funding elsewhere, then all that is achieved by forcing the commission to consider them individually is to take up a great deal of time and money of all involved in considering the application.
I want to say this again: we must ensure that the limited public money available is properly directed to provide help to those people who need help and cannot afford to pay for it themselves and we must ensure that, where there are alternative means of funding, they are used.
The removal of the majority of personal injury cases from the scope of legal aid is one of the principal methods of securing funding for other needy areas of law where conditional fee agreements may not be suitable. So I am not in favour of the return to scope of personal injury in general cases. On that basis, I would not accept Amendment No. 58.
Amendments Nos. 51 and 52 are linked with that, because they would prevent personal injury being returned to Schedule 2 until such time as the Lord Chancellor was satisfied that alternative funding arrangements existed throughout the country. I have spoken about the need to ensure that CFAs develop throughout the country, and I have little doubt that they will.
I intend to make directions so that public funding will be available in exceptional cases of high cost and complexity and I say in particular to the noble Lord, Lord Goodhart, that exceptional cases of high cost and complexity are not confined to criminal negligence cases—that is to say, cases where the costs of any initial investigation required to evaluate the strength of the case are very high or where there is a wider public interest—in that, although the costs and chances of success are disproportionate to the likely damages and therefore do not make the case naturally suitable for a conditional fee, nonetheless legal aid might be available for a case where there were wider benefits to society in having the case determined.
As the market develops and solicitors become more confident about which cases they can handle on a conditional fee basis, I would expect to be able to pull back such cases from public funding. Directions given by me will be more amenable to change than something set out on the face of an Act: as the market changes,
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the directions can change to reflect the new needs and priorities of society. Also there is the important point that by setting out factors on the fact of the Act there is a danger that they will act as a disincentive to developing alternative methods of funding.
Amendment No. 56, in the name of my noble and learned friend, Lord Archer of Sandwell, would allow the Lord Chancellor to direct that funding should be given in an individual case. In my view, however, it goes too far, in that it would allow a Lord Chancellor to do this regardless of the considerations motivating him and even if the commission did not believe it met the relevant conditions of the funding code or commanded the necessary priority. I hope that my Amendment No. 55, which would allow funding to be given exceptionally in an individual case where the Lord Chancellor agrees to a request initiated by the commission, meets the substance of my noble and learned friend's concern. I do not think that the executive should intervene in individual cases in the way that this amendment would permit but I believe I would be entitled to respond to an approach from the commission in an exceptional case. On that basis, I would invite my noble and learned friend not to press his amendment.
Finally, perhaps I may make a further comment on Amendments Nos. 59, 61 and 62. These amendments would restore funding for negligent damage to property and for disputes in partnerships and companies in certain circumstances. I say only this. The Bill is about ensuring that limited resources are directed to areas of priority. I do not believe that, given a controlled budget, these areas will have sufficient priority to qualify for public funding within the foreseeable future. There is simply not enough public money to bring those areas back within scope. To do so could only be at the expense of priority areas such as clinical negligence or cases involving children. That would go against the whole underlying principle of the changes that I seek to make to the legal aid system—changes which are designed to ensure that the limited money available is spent on those cases that are most deserving of public funding. On that basis, I—
Lord Archer of Sandwell: My Lords, before my noble and learned friend sits down—and I am most grateful to him for giving way—of course I accept what he says about my Amendment No. 56 and I shall not move it. However, for the removal of a misapprehension, he has twice said that my Amendment No. 50 would entail that the commission in every case would have to satisfy itself that no alternative source of funding was available. My amendment is designed precisely to avoid that problem. It would be for the applicant to satisfy the commission in any particular case that he had looked for alternative funding and failed to find it.
The Lord Chancellor: My Lords, I appreciate that that is so as a matter of drafting, and indeed as a matter of substance. Nonetheless, in any case in which an applicant so contended and applied for legal aid considerable resources would be involved in investigating whether or not that was so.
Lord Ackner: My Lords, before the noble and learned Lord sits down, can he assist me on the following matters? What monitoring is currently being carried out by the Lord Chancellor's Department into the effectiveness and justness of the way in which the conditional fee system is working? Secondly, can the noble and learned Lord assist us with the results of his department's inquiry into what is available on the insurance market? Finally, in regard to the cases that have averaged £4,000, £5,000 and £6,000, did any of them actually reach the court—not reach the court doors, but get through the court doors?
The Lord Chancellor: My Lords, at this hour these are questions of considerable detail. We are in discussion with the professions and we are about to commission research in relation to the operation of conditional fee agreements. The question asked by the noble and learned Lord about the insurance market calls for a very detailed reply subject to commercial confidentiality. We have had many conversations and discussions with many insurers and that is the basis of my confidence. As to the detail of the personal injury cases, that is much more suitable for a detailed letter.
Lord Goodhart: My Lords, I listened with care to what the noble and learned Lord the Lord Chancellor said. At this time of night I certainly do not intend to comment on it in any detail. The one point I would make is that, as I recall, the noble and learned Lord said that 85 per cent. of the non-clinical negligence cases involved costs of no more than £6,000. That means that 15 per cent. of them did, and that (again if my recollection is right) means more than 10,000 cases, which is a very substantial number. Of course I accept that not all of those cases may be ones where CFAs would not be appropriate.
I very much regret that the noble and learned Lord was not able to be more forthcoming on this matter. Once again, after half past ten at night it is hardly appropriate to seek the opinion of the House and I do not intend to do so. I shall read with great care what the noble and learned Lord the Lord Chancellor said. We may feel the need to bring this issue back before the House for a final attempt. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 50 to 53 not moved.]
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 54 and 55:
Page 5, line 12, leave out ("give directions under section 4 requiring or authorising") and insert ("by direction require").
Page 5, line 14, leave out ("by the directions") and insert ("in the direction, and
(b) may authorise the Commission to fund the provision of any of those services in specified circumstances or, if the Commission request him to do so. in an individual case.
(8) The Lord Chancellor shall either—

(a) publish, or

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(b) require the Commission to publish,

any authorisation under subsection (7)(b) unless it relates to an individual case (in which case he or the Commission may publish it if appropriate).").

On Question, amendments agreed to.
[Amendments Nos. 56 and 57 not moved.]
Schedule 2 [Community Legal Service: excluded services]:
[Amendments Nos. 58 and 59 not moved.]
Lord Archer of Sandwell Lord Archer of Sandwell moved Amendment No. 60:
Page 54, line 37, at end insert—

("(ii) cases for children and people suffering from a mental disability,

(iii)cases where the overall costs are likely to exceed £25,000,

(iv)cases where the costs of investigation are likely to exceed £3,000,

(v)complex cases where damages are likely to exceed £50,000,

(vi)cases involving multiple causes of action,").

The noble and learned Lord said: My Lords, my noble and learned friend has been patient with us, but I am sure that he appreciates that there are some deep anxieties here. If funding by the community legal service is to be denied to personal injury cases other than for clinical negligence, I hope that my noble and learned friend will look again to ensure that some exceptional categories of case are protected. I accept, as he said a few moments ago, that their number will not be large.
I am grateful to the Legal Action Group for the benefit of its advice and experience in setting out the list which I have in this amendment of the categories which occasion the greatest anxiety. First, there are the cases for vulnerable clients. I have suggested two classes of vulnerable people: children and people suffering from a mental disability.
Since 1990, children have been able to make their own applications for legal aid and the financial assessment is that of their own resources. This has meant that they are not dependent either on their parents' willingness to apply or on their parents' means.
There are a number of reasons for making special provision in this case. First, children and people under a mental disability may have greater than average difficulty in finding a solicitor prepared to act under a conditional fee agreement and in negotiating a fair agreement with him. Secondly, there is likely to be an increased need for initial investigation and an increase in the time needed to take instructions. If there is a cherry-picking process, they will be the least colourful cherries.
Thirdly, negotiations for a conditional fee agreement may have to be conducted through a next friend, who may feel very exposed to criticism in bargaining away a proportion of their entitlement. Fourthly, I suspect—though I concede that I have no evidence—the insurers will be inclined to load the dice against them for actuarial reasons. I have read that 53 per cent. of legally-aided personal injury victims are children. So it

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may be that I was wrong to concede that it may be a very small category. I hope that my noble and learned friend will agree that they are very much a special case.
The second category of special case comprises those where the costs are likely to be unusually high. Not only may solicitors be reluctant to invest the initial disbursements—and we have discussed that already—but insurers may charge high premiums to provide cover. I am told that cover against liability for costs up to £25,000 would normally attract a premium of about £1,650. Cover for costs up to £100,000 could be as much as £6,000. That outlay seems likely to fall on the client.
The Policy Studies Institute some time ago studied 197 conditional fee agreements undertaken by 120 firms of solicitors. I do not know whether these figures are already at my noble and learned friend's fingertips but I hope that he will take account of them at some stage during our debate. The insurance against liability for costs was taken at the expense of the client, not the solicitor, in 99 per cent of cases. I can understand the reluctance of solicitors to speculate to that extent with their own money. With premiums at that level clients would be virtually excluded in a high percentage of cases from seeking redress. I am aware that the Legal Aid Board knows about the problem because paragraph 7.13 of the funding code makes the point. I shall not trouble your Lordships at this hour by reading it out.
The next category I have sought to list is where the investigating costs exceed £3,000. I would not go to the stake for that specific figure. As I understand it, this is the factor which influences my noble and learned friend in excluding clinical negligence cases from Schedule 2. I point out that there may be other cases where investigative costs are exceptionally high. If that is prohibitive the client may never even discover whether he has an arguable case.
This overlaps with the next category that I list: complex cases where damages are likely to exceed £50,000. Frequently, they can be the test cases that establish a basis of liability for many other claimants—whether a particular product is toxic, whether a particular situation can give rise to a cause of action or which of two links in the marketing chain is responsible for the damage. If they have to rely on conditional fee agreements it is doubtful whether the early claimants relating to human growth hormone could have brought proceedings.
My final category is where more than one cause of action is involved against the same defendant. There may be a claim for false imprisonment and personal injury. It would be virtually impossible to pursue part of the claim through C. L. S. funding and the other part by CFA funding. I would not go to the stake for my list, but I hope that my noble and learned friend recognises that there are exceptional circumstances where there may be a high risk of injustice. I hope that he will set everyone's mind at rest and agree to write those obvious special categories into the Bill.
Lord Falconer of Thoroton: My Lords, to some extent this amendment raises the same question as the
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previous debate, so I shall be brief. My noble and learned friend seeks to define a number of factors which would bring personal injury cases back within the scope of funding. My noble and learned friend the Lord Chancellor said in Committee that he was aware it would not be possible overnight to fund personal injury cases through conditional fees in all circumstances. The Lord Chancellor will make directions which will allow some classes of case to come back into the scope of public funding. I have sympathy with most of the criteria suggested by the noble and learned Lord, Lord Archer, in his amendment. However, I do not think that the face of the Bill is the correct place to make these exceptions.
I set out the intention of the Lord Chancellor in relation to directions that he will make so that public funding will be available in exceptional cases of high cost and complexity, where the costs of any initial investigation required to evaluate the strengths of the case are very high, or where there is a wider public interest in that, although costs and chances of success weighed against the likely damages do not make the individual cases suitable for a conditional fee, it is nonetheless a case where there are wider benefits to society from having the case settled.
As the market develops and solicitors become more confident about which case they can handle on a conditional fee basis the Lord Chancellor will feel able to pull back from public funding. Directions given by him will be more amenable to change than something set out on the face of an Act of Parliament, so that as the market changes the directions can change to reflect the new needs and priorities of society.
I hope that what I have said will provide some reassurance to the noble and learned Lord that we are to a significant extent overlapping what we seek to achieve. I hope that that will be sufficient to persuade the noble and learned Lord to withdraw the amendment.
Lord Archer of Sandwell: My Lords, I am grateful to my noble and learned friend for that caring and careful reply. I am not sure that I agree that it would not be wise to set out some of the exceptional cases on the face of the Bill and set everyone's mind at rest. But good intentions are better than bad intentions. I settle for the half loaf. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 61 to 63 not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 64:
Page 55, line 28, at end inser—
("( ) proceedings before the employment tribunals,").
The noble Lord said: My Lords, in moving the amendment, perhaps I may also speak to Amendments Nos. 65 and 66 which stand in my name.
The amendments propose that public funding should be extended to certain tribunals where legal aid has not been available under existing law. At Committee stage I moved an amendment which would have included appeal tribunals under the Social Security Act 1998 in the list of tribunals where legal aid public funding should be available. In his reply, the noble and learned

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Lord the Lord Chancellor persuaded me that the procedure in those tribunals made public funding inappropriate. Both tribunals investigate claims and there is no opposing party in the ordinary sense, so they do not have what one might call a normal court procedure.
That is not true of employment tribunals which follow an adversarial procedure with parties arguing their cases on each side. Furthermore, the raising of the limit on awards for unfair dismissal now makes these highly significant tribunals. Race and sex discrimination cases before employment tribunals have a particularly high priority. They tend to be complex and in some cases, especially those concerning equal pay for work of equal value, they cannot in practice be brought without legal assistance. The absence of power to award costs makes employment tribunals unsuitable for CFAs but changing to the rule that costs follow the event would deter employees from applying since they cannot face the risk of paying their employers' costs. I therefore ask the noble and learned Lord the Lord Chancellor to add employment tribunals to the list in paragraph 5 (2) of Schedule 2 on the basis, which I accept, that for the time being representation before employment tribunals would have to be given a low priority.
I recognise that employment tribunals could be added in the future, but including them in the list now would ensure that the need to provide funding for employment tribunal cases would not be ignored.
Next in the list is immigration tribunals. These are included as a warning shot. Advice and representation before immigration tribunals are of the utmost importance to applicants. In some cases they are literally matters of life and death. Few of the applicants speak English. All of them are likely to be wholly ignorant of English legal procedure and under great stress.
The current system of funding for immigration and asylum work is partly through green form legal aid and partly through Home Office funding for appeals representation. This delivers an incomplete service which leads to duplication and poor management of resources. Legal advice and assistance for hearings before the adjudicators and the tribunals are funded under the legal aid green form scheme. This scheme does not allow representation by a lawyer. Thus, while an appellant can get limited help with the preparation of the case he will be left with the responsibility of preparing his case before the adjudicator or the tribunal. The immigration advisory service and the Refugee Legal Centre receive grants from the Home Office to provide advice, assistance and representation at appeal. But the type of split funding between the first year and the appeal results in duplication of work and is a thoroughly ineffective way of managing resources. It is clear that the management and allocation of resources for advice, preparation and representation at both the initial hearing and the appeal should be conducted through the community legal service. It should have the appropriate transfer of funds from the Home Office.
I recognise that the Immigration and Asylum Bill may he a more appropriate place to deal with the issue. However, I wish to flag up the fact that we will take it very seriously when vie come to that Bill.
Finally, I have put my name to an amendment tabled by the noble and learned Lord, Lord Archer of Sandwell, about hearings before the social security commissioners. I can be brief because it is for the noble and learned Lord to speak to it. I wish to make only two points. First, appeals to the social security commissioners are on points of law, whereas most appeals to the social security appeal tribunals raise factual issues. It is impossible for most claimants to research and argue points of law. Secondly, the Government have indicated that welfare rights will have a high priority. A combination of these factors surely makes a case for funding appeals to the social security commissioners unanswerable, unless perhaps the noble and learned Lord the Lord Chancellor can make some suggestion as to how they can be funded by CFAs. I beg to move.
Lord Archer of Sandwell: My Lords, in Committee a number of your Lordships proposed additions to the list and my noble and learned friend most helpfully set out his thoughts on the various categories of proceedings which we discussed. One category, suggested in Committee by the noble Lord, Lord Goodhart. was proceedings before social security tribunals. My noble and learned friend gave reasons why the extension of funding to all social security tribunals was not considered appropriate, at least at that stage. I seek now to explore only one sub-category of proceeding within that general description; proceedings before the social security commissioners. Your Lordships will know that they hear appeals from various social security tribunals. Appeal lies only on a point of substance involving a matter of law, as the noble Lord, Lord Goodhart, said, and it lies only by leave of the tribunal chairman or commissioner. Therefore, there is little risk of a plethora of frivolous appeals.
Social security law has become increasingly complex. Even in the days long ago when I used to appear before the commissioners it was unusual for anyone to appear unless he was known to have some expertise in the subject. Since then, it has increasingly become a special field of practice. An unrepresented appellant is at a grave disadvantage. I pay a warm tribute to the work of the commissioners who strive to ensure that an unrepresented appellant is not unduly penalised and often they carry out their own research very commendably. But, like any members of the judiciary, they are bound to rely largely on the arguments which are addressed to them.
The people who are appealing are frequently the most vulnerable and disadvantaged in respect of health and sometimes of schooling. I wonder whether it will he possible for me to have the attention of my noble and learned friend. I am not unmindful of the valued work done by bodies such as the citizens advice bureaux, but there is not an inexhaustible supply of CAB officers trained in the subject.
Sometimes, it is not even a question of whether the claimant decides to appeal to the commissioners. A claimant my win his case before a tribunal and the Benefits Agency may appeal so that the claimant has no choice in the matter. Legal aid is now available before

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the employment appeal tribunal. I understand that the reason for that is that it is considered largely the equivalent of the High Court.
I am bound to point out that the social security commissioners exercise precisely the same kind of appellate jurisdiction as the employment appeal tribunal does within its field. They are regarded as being on the same kind of level as the High Court. It is certainly no less complicated a system of law which it administers, as I said.
The Government indicate repeatedly, as the noble Lord, Lord Goodhart pointed out, that they have a concern for those involved with welfare law. In the White Paper Modernising Justice, my noble and learned friend said that he proposed to accord priority to social welfare cases which help people to avoid or climb out of social exclusion.
This is a fairly modest proposal to extend Schedule 2. I hope that in this case my noble and learned friend will feel able to agree.
11 p.m.
Lord Clinton-Davis: My Lords, I wish to speak to Amendment No. 67 which stands in my name. I was encouraged by what was said in Committee by my noble and learned friend when he suggested that there may be truly exceptional circumstances in which it would be fair for public funds to be spent on representation at inquests and inquiries. He cited the example of the "Marchioness" disaster in support of what he said.
My noble and learned friend stated that the new legal aid funding scheme would contain a similar provision and that my noble and learned friend the Lord Chancellor would be considering how best that might be achieved. For that reason, I have tabled what I consider to be a probing amendment in order to find out more about the Government's intentions.
As regards coroners' inquests, I take the view that that is an important area of investigation, or it can be. But I do not say that in every case legal aid should be available automatically. I am not saying that at all. It must be apposite and within the community legal service's power to provide legal aid. It should not be a duty but a power. Without this amendment, as I understand it, there will be no power for the community legal service to fund a coroner's inquest into death or public or judicial inquiries. If I am wrong about that, I am sure that my noble and learned friend will point that out. As I say, I was encouraged by what was said at an earlier stage and I await my noble and learned friend's reply now.
Lord Falconer of Thoroton: My Lords, these amendments are grouped together since they are of a similar nature. Each seeks to extend the scope of the community legal service. My noble and learned friend Lord Archer of Sandwell proposes an amendment to Schedule 2 which would allow the commission to fund representation in proceedings before the social security commissioners. The noble Lords, Lord Goodhart and Lord Thomas, propose a similar amendment in relation
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to employment tribunals and immigration tribunals. My noble friend Lord Clinton-Davis proposes that public funds should be available to provide representation at coroners' inquests and at public and judicial inquiries.
Lord Clinton-Davis: My Lords, I did not say "should be". I said that there should be the power to make it available.
Lord Falconer of Thoroton: My Lords, that is quite right. I stand corrected. We debated similar amendments in Committee so I shall try to be brief.
At present advice and assistance are available for all those proceedings under the green form scheme but, as with most tribunals, legal aid is not available for representation. Under the new scheme, my noble and learned friend the Lord Chancellor intends initially to mirror the present arrangements so that advice and assistance will continue to be available but representation will not. That initial view is, of course, subject to the interdepartmental review which is due to start shortly. That review will consider for the various tribunals the extent to which current procedures and other arrangements, including representation, comply with our ECHR and European Union obligations. It would be premature to reach any decisions about publicly funded representation before that review is complete.
Having said that, perhaps I may deal individually with each tribunal referred to. I deal first with the social security commissioners referred to by the noble Lord, Lord Goodhart and my noble and learned friend Lord Archer. As my noble and learned friend Lord Archer said, the commissioners hear appeals on points of law from social security appeal tribunals. The vast majority of hearings are paper hearings, with only approximately 300 cases a year settled by an oral hearing out of a total of around 4,000. The help we propose to make available includes everything short of advocacy and we think it is therefore sufficient to prepare a case for a paper hearing. Subject to any findings of the interdepartmental review, to which I have already referred, the Government do not believe it would be justified to extend the scope of legal aid to provide representation in oral hearings.
We have to face up to the fact that we will be operating under a controlled budget. Any extension of scope in one area would have to be at the expense of another area. Representation is already provided by a number of not-for-profit organisations such as the Child Poverty Action Group, and we believe that the help that the commission will fund under the community legal service will be sufficient for an applicant to present his or her case thoroughly. Despite the eloquent pleas made by my noble and learned friend Lord Archer and the noble Lord, Lord Goodhart, therefore, it cannot be a priority to extend the scope in this area.
Lord Archer of Sandwell: My Lords, I am grateful to my noble and learned friend for giving way; I hope I am not being tiresome. Surely the fact that there are so few oral hearings is an argument in favour of granting it because the calls on the fund would be very small.
Lord Falconer of Thoroton: My Lords, surely that points the other way. If there are other sources of funding available and other areas which could be assisted by the community legal service, then perhaps it is not appropriate and not a priority. If we extend the scope, then we necessarily treat it as one of our priorities and that may not be the appropriate thing to do in the light of the limited number of cases. The fact that they are paper cases; the fact that advice can be obtained through the Green Form Scheme and the fact that there are other bodies which will be assisted by the community legal service accounts for the difference. I appreciate that there is no bright line answer to that; it is a question of where one draws the line.
Turning to immigration, publicly-funded representation is already available. The Home Secretary makes grants under Section 23 of the Immigration Act 1971 to the Immigration Advisory Service and the Refugee Legal Centre. Those are two voluntary organisations which provide free advice, assistance and representation at those appeals. That complements the advice and assistance that is available under the Green Form Scheme.
As the noble Lord, Lord Goodhart, knows, the whole immigration and asylum system is in flux. The Immigration and Asylum Bill was introduced in the other place on Monday. The Lord Chancellor has been working closely with his right honourable friend the Home Secretary on many aspects of the reforms, such as the rationalisation of the appeals system and the control of unscrupulous immigration advisers. We are therefore actively involved in ensuring that good quality advice, assistance and representation are available for immigration and asylum matters. Again, that specific amendment does not seem appropriate and we cannot agree to it.
On the question of whether the commission should fund representation in proceedings before employment tribunals, the Lord Chancellor's views are well documented. As he said in Committee, there are certainly some cases before employment tribunals for which legal representation is desirable because often factual and legal issues arise which are resolved indistinguishably from litigation in the ordinary courts. But that is not to say that representation should necessarily be provided through legal aid or its successor. A number of organisations already provide some representation in these proceedings; for example, trade unions, various not-for-profit organisations such as Law Centres, the Equal Opportunities Commission, the Commission for Racial Equality and the Free Representation Unit. But they certainly do not cover the whole ground.
The Lord Chancellor is also considering how to make conditional fee agreements more attractive for cases before employment tribunals. They are currently available for people to use, but as the Lord Chancellor explained in Committee, where, under the employment tribunals' current cost rules, costs do not follow the event, a successful applicant under a conditional fee agreement would have to pay his lawyer's success fee and the insurance premium from the damages awarded because he could not recover them from the respondent.
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The Government believe that, where the private sector can provide an effective service, such as conditional fee agreements, public money should not be spent. With a change to the employment tribunals' cost rules, conditional fee agreements could be a viable and attractive option for many cases before the employment tribunal.
The reform of the legal aid scheme will give control over expenditure and the ability to target resources to priority areas. Savings generated in one area can be spent in another. The Lord Chancellor has said that he is willing to consider whether the commission should, in time, fund representation in certain cases before employment tribunals. However, he cannot consider this until he has control over expenditure. By that time, the Government will also have completed a review, for all tribunals, of the extent to which current procedures and other arrangements, including representation, comply with our ECHR and EU obligations.
As I said previously, coroners' inquests and public judicial inquiries, unlike most court proceedings, are inquisitorial. Legal representation should be unnecessary, which is why civil legal aid is not available. The new scheme will operate under a controlled budget. There will be many competing claims on this budget and resources will be targeted towards priority areas. Any extension of scope would have to be at the expense of other parts of legal aid expenditure. We cannot agree that providing publicly funded representation at inquests and inquiries should be a priority for taxpayers' money.
Lord Clinton-Davis: My Lords, when we last discussed this, the noble and learned Lord said that public funding might be available, as in the "Marchioness" case. Am I wrong?
Lord Falconer of Thoroton: My Lords, no, absolutely right!
Lord Clinton-Davis: My Lords, if I am absolutely right, I have at least one success.
Therefore, presumably the position is that public funding comes out of another budget. That is the point that I anticipate the noble and learned Lord making. In reality, it does not make a lot of difference. I repeat that I am not asking that it should happen, but that the Government should have the power to make it happen through the legal aid commission.
Lord Falconer of Thoroton: My Lords, it is my fault; there was such a long introduction about why the power is there. That is why my noble friend interrupts me—
Lord Thomas of Gresford: My Lords, perhaps I, too, may intervene. I have been very quiet!

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The noble and learned Lord refers to priority areas. The White Paper, Modernising Justice, states that the area of greatest priority is,
"social welfare cases, which help people to avoid, or climb out of, social exclusion; for example, cases about people's basic entitlements, like a roof over their heads and the correct social security benefits".
How is the £40 million that is to be saved on negligence cases to be spent on such priority areas? Nothing in the Bill assists us on that point.
Lord Falconer of Thoroton: My Lords, I believe that the noble and learned Lord, Lord Archer of Sandwell, also cited that quotation in his excellent speech on this issue—
Lord Thomas of Gresford: My Lords, I have not yet heard an answer!
Lord Falconer of Thoroton: My Lords, I am not complaining; the more that it is read, the better!
The answer is that the community legal service will provide the money for such things. It is not simply a case of direct legal aid being paid to solicitors. There are also the citizens' advice bureaux and the not-for-profit organisations, such as the Child Poverty Action Group, which, as part of the services that they provide, specialise in advising those who are making claims to the social security commissioners. The answer to the question from the noble Lord, Lord Thomas of Gresford, is that some of the money in the community legal service will go to such groups which help people more widely than by providing straight legal advice. They will be able to help people with, for example, preparing cases for the social security commissioners.
The noble Lord, Lord Thomas of Gresford, interrupted me interrupting the question about foreigners which came from my noble and learned friend. Under current arrangements, legal advice and assistance is available under the green-form scheme. When truly exceptional circumstances warrant it, the legal services commission will be able to fund representation at inquests. That was made possible by government Amendment No. 55, which we considered earlier. I do not blame noble Lords for not spotting it because there were about 40 other amendments in the same group. It would provide for circumstances similar to those concerning the inquiry into the "Marchioness" where a second inquiry was necessary because of failures in the running of the first. I believe I said on the previous occasion that we would want there to be such a power as my noble friend wished. I believe that we have now provided it. I am sorry that I took so long to say that. In the light of what I have said, I invite my noble and learned friend Lord Archer, the noble Lords, Lord Goodhart, Lord Thomas of Gresford, and my noble friend Lord Clinton-Davis to withdraw their amendments.
11.15 p.m.
Lord Goodhart: My Lords, I listened with such attention as I can muster at this time of night to what
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the noble and learned Lord, Lord Falconer said. As I said earlier regarding the immigration tribunals, I accept that, given recently introduced legislation whereby the whole system is to have a fundamental shake-up within the next few months, it is perhaps not appropriate in this Bill to deal with this matter. However, I make it clear that it is virtually certain that we shall wish to return to it in the debates on the Immigration and Asylum Bill.
As regards the employment tribunals, I was somewhat alarmed at the suggestion that the cost rules for those tribunals might be changed. While I recognise that that might make CFAs more viable, the advantage of the cost rule at present is that an employee who believes that he or she has been unfairly dismissed or has some other appropriate claim against an employer, even if they believe that they have only a small chance of winning, can take their case to the employment tribunal knowing that if the worst comes to the worst they will not have to meet the employer's costs, which are very likely to be considerably higher than those of the employee because the employer can afford to pay more.
It seems to me that the existing cost rule in employment tribunals provides considerable assistance for an employee. I would be very much disturbed if it were changed. Taking that into account, I believe that cases before the employment tribunal should be very seriously considered. I have taken such comfort as I can from the statement of intent from the noble and learned Lord the Lord Chancellor to look into it in the fullness of time and possibly produce a form of public funding in some circumstances for those tribunals.
Finally, there are the social security commissioners. As I suggested earlier, I believe that the case is unanswerable. They are not likely to be expensive because there are very few cases which proceed to an oral hearing. But they involve points which hardly any claimant could deal with himself. Given that in the social security field there is no doubt that a represented claimant stands a much better chance of success than an unrepresented one, that should have a very high priority for funding. It should go into the schedule now as a case where funding is permitted. Having said that, it is not my intention to press this amendment. With the hope that the noble and learned Lord the Lord Chancellor will give these matters more favourable consideration in future, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 65 to 67 not moved.]
[Amendment No. 68 not moved.]
Clause 9 [Code about provision of funded services]:
The Lord Chancellor moved Amendment No. 69:
Page 5, line 36, leave out ("to") and insert ("for").
The noble and learned Lord said: My Lords, in moving this amendments and, with the leave of your Lordships, I shall speak also to Amendments Nos. 70, 71, 74, 75 and 79. I bring these amendments forward in response to our debate at Committee stage. They are designed to ensure that concerns expressed by some of your Lordships on a number of issues which the amendments address are dealt with on the face of the Bill.

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The noble Lord, Lord Phillips of Sudbury, expressed concern that the word "conduct" was too wide and could be used to exclude cases where the conduct of a particular individual seeking assistance was, for whatever reason, unpopular. This of course was never my intention and I am happy to provide for a tighter definition on the face of the Bill. The types of conduct which I think we would all agree should be taken into account are where, for example, there has been a persistent failure to attend appointments with lawyers, persistent failure to give proper instructions, or a failure to co-operate in a reasonable way or behaving in an abusive way. Amendment No. 71 will ensure that only the conduct of the applicant in relation to his current or a previous application for funding or in connection with any proceedings shall be taken into account. Clearly it will be the case that the current proceedings will be the most relevant.
However, where in the past an individual has, for example, submitted a fraudulent application for funding it should be capable of being considered although it would not necessarily rule out funding in a new case. Amendment No. 79 to Clause 10 ensures that the same meaning is given to "conduct" when considering conduct in the context of the applicant's liability to make contributions. Where an individual had given misleading information on an application or behaved in some other way that would result in withdrawal of legal aid, the commission would be able to seek to recover money spent.
Concern was also expressed that the applicant should be given reasons if his or her application for funding was not successful and information about where alternative funding might be sought. I am grateful to the noble Lord, Lord Kingsland, whose suggestions have formed the basis for Amendments Nos. 74 and 75. These amendments place a duty on the commission both to inform applicants of the reason for refusal and to give information about alternative forms of funding available. They do not, place and are not intended to place the commission under any obligation to advise on the relative merits of alternative sources. Amendments Nos. 69 and 70 are technical amendments designed to improve the clarity of the Bill. I hope that, taken together, these amendments go a long way to meeting concerns expressed by your Lordships in Committee. I beg to move.
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 70 and 71:
Page 5, line 38, leave out ("as part of the Community Legal Service").
Page 5, line 42, at end insert ("in connection with services funded as part of the Community Legal Service (or an application for funding) or in or in connection with any proceedings").
On Question, amendments agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No.72:
Page 6, line 1, leave out from ("may") to end of line 3 and insert ("by order require the Commission to consider.").
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 73:
Page 6, line 5, at end insert (", provided that the code shall not require applicants to attempt mediation rather than application to the court save in circumstances where a privately paying client would be advised to attempt mediation.").
The noble Lord said: My Lords, I can speak quite shortly on this. I want to probe the Government's intentions with regard to mediation. Mediation is frequently in suitable cases an important way of proceeding. It is also frequently a less costly method. It is a good way of settling legal disputes. But of course it has to be dealt with on the basis of appropriate cases; that is appropriate in terms of the case itself and appropriate in terms of the client. What would be utterly wrong would be to have mediation foisted on a client as a way of avoiding the costs of providing legal services through the state.
The amendment that I have tabled requires applicants to attempt mediation wherever a privately paying client would be advised so to do, rather than the suggestion which we made previously that this would occur only where a privately paying client would be likely to opt to do so. It strikes a better balance. Most importantly, I should like to know from my noble and learned friend where the whole question of mediation stands in relation to the questions we are considering and the Bill in particular. I beg to move.
Lord Kingsland: My Lords I rise to support the amendment, which also stands in my name. I support what the noble Lord, Lord Clinton-Davis, said about mediation. Mediation should be available to all clients, whether or not they are meeting the costs of legal disputes themselves.
Lawyers—especially in family cases—need to be aware of the value of mediation and should be prepared to advise clients to attempt it where appropriate. However, it is important to ensure that the mediation is used in cases where it is suitable for the clients, rather than it being foisted on those who cannot afford the costs of legal services as a cheap alternative to publicly-funded representation.
During the Committee stage, your Lordships considered an amendment which would have precluded the code from requiring applicants to attempt mediation, save in circumstances where a privately paying client would be likely to opt for it. Some of your Lordships may recall that that was criticised on the ground that private clients may be free to make unwise decisions which will incur greater costs than necessary. The amendment tackles this issue by enabling the code to require applicants to attempt mediation wherever a privately-paying client would be advised to do so, rather than only where a privately paying client would be likely to opt to do so.
This strikes the right balance between the need to ensure prudent use of public funds and the need to ensure that the services available to the lesser off are, as nearly as possible, the same as those available to those meeting the costs themselves.
The Lord Chancellor: My Lords, this amendment is similar to the one proposed by the noble Lords, Lord

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Kingsland and Lord Phillips of Sudbury, at Committee stage. As I explained then, I cannot accept the amendment as it would cut across the discretionary framework of the code by imposing an entitlement to representation rather than mediation in certain, rather vague, circumstances where a privately paying client would be advised to attempt mediation. I do not know how that could be a workable criterion. I do not know how you could possibly evaluate whether a privately paying client who could afford a court battle—and perhaps desired it—would be likely to be advised not to go for it but to attempt mediation.
Under a controlled budget there can be no entitlement to particular services. Instead, the commission must seek to ensure that the most appropriate types of services are funded for individual cases, taking account of priorities and achieving value for taxpayers' money. I would stress to my noble friend Lord Clinton-Davis that there is no question of compelling people to mediate when they do not wish to do so. But if in the commission's judgment a particular type of service is the most appropriate for a particular circumstance, then it should be entitled to fund that service but decline to fund other services.
It is the Government's belief that in many family proceedings mediation is more constructive than adversarial court proceedings. The commission should be entitled to provide help for mediation but not for litigation where it is more likely that mediation will provide the more satisfactory outcome. That is likely in many family proceedings where future co-operation between the parties will clearly be in the interests of the children. Mediation encourages co-operation whereas litigation often serves only to fuel passions and create continuing acrimony. Experience shows that parties to a mediated outcome share a sense of ownership in the outcome which is very often absent in court-imposed solutions.
It is also a fact that mediation is cheaper than court proceedings. That will, of course, not deter some privately paying clients who would be likely to want their Olympian confrontation in court regardless of the cost and perhaps be likely to be advised by lawyers to proceed in that way. That is their choice. It is their money. However, the money that the commission is spending is the public's money and it therefore has a duty to ensure that the services that it purchases are not only effective but also offer good value for money. It is the Government's belief that for many family proceedings, though not all, mediation services will fulfil both these criteria and therefore the code should reflect that. I therefore invite my noble friend to withdraw his amendment.
11.30 p.m.
Lord Clinton-Davis: My Lords, I listened with interest to my noble and learned friend. I thank him for the care with which he has looked at this issue. I was encouraged by many of the things he said. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Henley: My Lords, before Amendment No. 74 is called, perhaps I may ask the noble and learned Lord
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the Lord Chancellor or the noble Lord the Deputy Chief Whip what their intentions are in terms of how late we should sit. It is now 11.30 p.m. While Amendment No. 73 was being discussed I tried to find the noble Lord the Government Chief Whip to ask him what his intentions are. It is getting very late. A number of important amendments are coming up. I know that some noble Lords feel we should not go beyond Clause 10 tonight so that we can start later amendments on another day. I should be very grateful if I could hear from either the noble Lord the Deputy Chief Whip or from the noble and learned Lord the Lord Chancellor what the Government's intentions are.
Lord McIntosh of Haringey: My Lords, it is somewhat unfortunate that this kind of exchange should take place across the Floor of the Chamber rather than through the usual channels. If I may conduct the Opposition Chief Whip to the Government Chief Whip, perhaps we can discuss the matter in a more convenient and suitable place.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 74 to 77:
Page 6, line 15, after ("funding") insert—
("( ) provision requiring applicants to be informed of the reasons for any decision to refuse an application,
( ) provision for the giving of information to individuals whose applications are refused about alternative ways of obtaining or funding services,").
Page 6, line 16, at end insert ("and for the giving of information about those procedures").
Page 6, line 19, leave but from first ("code") to end of line 27 and insert—
("( ) Before preparing the code the Commission shall undertake such consultation as appears to it to be appropriate; and before revising the code the Commission shall undertake such consultation as appears to it to be appropriate unless it considers that it is desirable for the revised version to come into force without delay.
( ) The Lord Chancellor may by order require the Commission to discharge its functions relating to the code in accordance with the order.").
After Clause 9, insert the following new clause—
PROCEDURE RELATING TO FUNDING CODE
(".—(1) After preparing the code or a revised version of the code the Commission shall send a copy to the Lord Chancellor.
(2) If he approves it he shall lay it before each House of Parliament.
(3) The Commission shall publish—

(a) the code as first approved by the Lord Chancellor, and

(b)where he approves a revised version, either the revisions or the revised code as appropriate.

(4) The code as first approved by the Lord Chancellor shall not come into force until it has been approved by a resolution of each House of Parliament.
(5) A revised version of the code which does not contain changes in the criteria set out in the code shall not come into force until it has been laid before each House of Parliament.
(6) Subject as follows, a revised version of the code which does contain such changes shall not come into force until it has been approved by a resolution of each House of Parliament.
(7) Where the Lord Chancellor considers that it is desirable for a revised version of the code containing such changes to come into force without delay, he may (when laying the revised version before Parliament) also lay before each House a statement of his reasons for so considering.
(8) In that event the revised version of the code—

(a) shall not come into force until it has been laid before each House of Parliament, and

(b) shall cease to have effect at the end of the period of 120 days beginning with the day on which it comes into force unless a resolution approving it has been made by each House (but without that affecting anything previously done in accordance with it).").

On Question, amendments agreed to.
Clause [Terms of provision of funded services]:
Lord Archer of Sandwell Lord Archer of Sandwell moved Amendment No. 78:
Page 6, line 33. after ("individual") insert ("other than a person who is in receipt of income support, income-based jobseeker's allowance or family credit").
The noble and learned Lord said: My Lords, in Committee I set down amendments to provide that no contribution should be payable in respect of services funded by the commission from someone in receipt of means-tested social security benefits, as it would already have been ascertained that he was not in a position to pay. In reply my noble and learned friend Lord Falconer made two points (at col. 748 of Hansard of 21st January). First, he said that those in receipt of income support and income-based jobseeker's allowance are already passporteei through the legal aid means test.
Secondly, he said that there are other social security benefits which, although they are means-tested, do not necessarily entail the occupier being on a very low income. He instanced family credit. These are not at present passported. He indicated that it was proposed in regulations to replicate the existing position. I promised to go away and consider what my noble and learned friend had said, and I did. On reflection, his argument does not appear so persuasive as it did the first time round.
It is true that family credit may be paid to someone who is not on the lowest income, but it is paid because by reason of the number of children a man has to support his income is too low for his needs. It follows that it is paid only to people who by definition have no money to spare and, if legal assistance is made conditional on paying a contribution, they may have to decline the offer and lose their right to redress.
Your Lordships may remember that in 1993 there was a restructuring of the legal aid contribution system. It is true that no contribution was required if someone on income support applied, but someone on family credit could be made to pay a contribution, as my noble and learned friend said.
In 1996 the Legal Aid Board, which was troubled by what it was finding, commissioned research into the consequences. It was found that the reduction in eligibility had affected some 12 million people, many of whom could no longer afford to take up an offer of legal aid. Of those interviewed who were in receipt of family credit, invalidity benefit and similar benefits in that category, 77 per cent. said that paying contributions would have left them without sufficient money for food, heating and rent. Typical was a divorced mother of two, who was quoted as saying,
"If you are on family credit of £46 a week, to find £91 per month for legal aid is impossible".
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On page 35 of the White Paper, Modernising Justice, the Government announced their intention to increase the number of people potentially eligible for advice and assistance under this scheme. This provision would deny justice to a large number of people who have already been dealt a rough hand from life. I hope that in the light of that my noble and learned friend will feel able to reconsider what he said. I beg to move.
Lord Clinton-Davis: My Lords, my amendment is No. 80. What I am suggesting is that the current provisions which are not contained in statute should be incorporated in primary legislation, as far as disregard of house capital is concerned, in assessing resources for legal aid. That would have one very positive effect in that Parliament would be able to control the situation, which it cannot do at the moment. The present position is as stated in the first part of the amendment: £100,000 is the exempted amount, and it is limited to that. I think it is a perfectly reasonable proposition to have a limit so far as the disregard of equity is concerned, and the regulations currently do that.
However, it is important also to strike a balance between ensuring that people are not effectively being denied legal aid through being required to contribute from assets which are not realisable and ensuring that those applicants who are well off are required to pay even if their affluence simply took the form of house capital rather than a large disposable income.
From the Explanatory Notes to the Bill, it appears that the Government intend to move away from that principle and to treat house capital in the same way as any other capital asset so far as assessment of contributions is concerned. The only modification would be that applicants would not be expected to provide the contribution up front; instead, it would attach as a charge to their house.
If that is the Government's decision, it is a wrong one. It would effectively mean that applicants entitled to income support would be required to meet the full costs of their legal aid. In reality, people in that position will be almost bound to turn down legal aid All the research shows that those on low incomes do not want to borrow against the security of their house, even when it comes to more vital matters such as repairs So it is unlikely that they would be any more willing to borrow to meet legal costs. The effect would be to make legal aid unavailable to those buying their own homes. That seems a wrong decision. It is one that I certainly do not like.
Retaining a £100,000 exemption for house capital is not an ideal situation, as it takes no account at all of different house prices in different regions of the country. However, it is a sensible compromise between the need to obtain contributions from those who can afford to pay and the need to ensure that legal aid is not, through unrealistic rules about contributions, effectively denied to those buying their own homes.
Lord Goodhart: My Lords, as I said in Committee in moving an amendment similar to the one I have

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tabled today, this proposal is a lot more important than it looks. Amendment No. 84 in my name brings back in a varied form an amendment that I moved previously.
The background is that under the present legal aid regulations the first £100,000 of equity in a house is disregarded for determining both eligibility for legal aid and liability to pay contributions. An individual is eligible for legal aid if he or she has a house with an equity of less than £100,000 and other capital of no more than £6,750, provided that he or she satisfies the income qualifications. If a person has capital of between £3,000 and £6,750, he or she may have to pay by way of contributions capital in excess of £3,000.
The Government's proposal as set out in Annex A to the Explanatory Notes to the Bill is that the £100,000 disregard will be continued for eligibility for legal aid or public funding, but will not be continued for liability to pay contributions. So if someone has no capital assets other than equity of £99,000 in their house, a litigant who is funded by the community legal service will be liable to pay contributions of up to £96,000. The community legal service will most generously defer enforcement of that debt until the sale of the house, but meanwhile the litigant must pay a market rate of interest under the proposals in Annex A.
The effect of that is that hardly any home owner will ever apply for funding from the community legal service. Those eligible for funding—we do not expect the funding limits to be raised above the present ones—will be those living on benefits or modest pensions, or holding low-paid jobs. Many people in those categories are, however, home owners. If such a person loses a case and is saddled with a contribution of, let us say, £20,000, which is perfectly possible in a case that is not of enormous complexity, how on earth is he or she to pay interest of £1,000 to £1,500 a year, which means £20 to £30 a week, out of his or her income? For example, what about those whose mortgage interest is paid out of income support? Will income support cover the interest on these contributions as well? I would bet pretty strongly that it will not.
What about a young couple wanting to start a family and needing their existing equity in their present house in order to buy a bigger house? Will they take the risk of losing that equity and being unable to make the move that they need to make?
The Law Society, in giving a briefing before the Committee stage, said that the Government's proposal in Annex A would effectively mean that legal aid would only be available to those living in rented accommodation. I agree. Equity in a home is simply not a resource that is available to fund litigation. My amendment therefore directs a disregard of the first £100,000 of equity for contributions as well as for eligibility. The amendment also covers the assessment of resources when deciding on liability to pay costs ordered by a court under Clause 11, as well as for the purpose of liability to pay contributions under Clause 10.
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I should add that, since the resources of all parties are relevant for Clause 11, fairness requires that there should be disregard for the party seeking costs as well as for the party liable to pay costs.
Subsection (2) of the new clause in my amendment brings in a limit on the deduction of mortgage debt from equity that already applies to legal aid. That is, if you have a debt of more than £100,000, it is a limited charge on the house, the charge is limited to £100,000.
Subsection (3) is intended to cover the situation where an individual funded by the community legal service is a co-owner rather than sole owner. For example, where the action by the husband will benefit the wife as well as him and they jointly own a house with an equity of £200,000, it is probably unreasonable to allow the husband to claim the full disregard of £100,000 in an action in which he is receiving public funding. Regulations could provide for that situation.
If this amendment is not accepted and the Government go ahead with their proposals in Annex A to the Explanatory Notes, I believe that a very serious injustice will be done and that many people will in practice be unjustifiably excluded from public funding for legitimate claims.
11.45 p.m.
Lord Kingsland: My Lords, I wish to speak to Amendment No. 78 and Amendment No. 80, to which I put my name. Amendment No. 78 would ensure, as the noble Lord, Lord Clinton-Davis, has already said, that those in receipt of family credit would not be required to contribute towards the cost of assistance they receive from the community legal service.
Family credit is a benefit paid to low income families where at least one parent is working. It is a regular weekly supplement to income. It seems anomalous that those who have been assessed as requiring regular weekly support from public funds to meet their ordinary living expenses should, at the same time, face the possibility of contributing towards the cost of legal help.
This amendment will also ensure that the arrangements for contributing towards the cost of legal representation, where cases go to court, are brought into line with the rules concerning legal advice. At present, those receiving family credit are not required to contribute towards the cost of legal advice, but they are potentially liable to contribute towards the cost of legal representation.
Amendment No. 80 would incorporate in primary legislation the current provisions concerning disregard of house capital in assessing the resources of applicants for legal aid. It would ensure that there was parliamentary control over any variation to the figure.
Until recently, as noble Lords will have learnt from the speech of the noble Lord, Lord Goodhart, any equity value which an applicant might have in his or her dwelling house was disregarded for the purposes of assessing contributions towards legal aid. It was similarly disregarded for other means-tested benefits.
The principal reason for the disregard was that contributions were required from disposable capital rather than all capital resources. It was recognised that to

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require contributions from capital which was not readily available would effectively be to deny support to the applicants in question. Regulations introduced by the previous government modified this principle as far as concerned legal aid. Those regulations limited the exempt amount to £100,000.
The reasoning behind this was that those with equity in a dwellinghouse above that figure might reasonably be expected to borrow against the security of the home to meet legal costs. I accept that it was reasonable to have a limit in the disregard of equity. It was important to strike a balance between ensuring that people were not effectively denied legal aid by being required to contribute from assets that were not realisable and ensuring that those applicants who were well off were required to pay even if their affluence took the form of house capital rather than a large disposal income.
However, the Government have indicated in the explanatory notes to the Bill that they propose to move away from that principle. They intend to treat house capital in the same way as any other capital asset in assessing required contributions. The only modification is that applicants will not be expected to provide the contribution up front; instead, it will attach as a charge to their houses.
Her Majesty's loyal Opposition believe that that approach is fundamentally misconceived. It means that applicants who are entitled to income support will be required to meet the full cost of their legal aid. In reality people in this position will be almost bound to turn down legal aid. Research evidence shows that those on low incomes are unwilling to borrow against the security of their homes even for vital repairs. They are unlikely to be any more willing to borrow to meet legal costs. The effect of this is to make legal aid unavailable to those who are buying their own homes. In terms of social justice that seems a peculiar approach for the Government to take. The retention of the £100,000 exemption for house capital is not perfect; in particular it takes no account of different house prices in different regions of the country, but it is a sensible compromise between the need to obtain contributions from those who can afford to pay and the need to ensure that legal aid is not effectively denied to those buying their own homes through unrealistic rules about contributions.
Lord Phillips of Sudbury: My Lords, I have put my name to Amendment No.84. If a Bill can be said to have a sentiment I give the Government credit that in the Access to Justice Bill they try to concentrate scarce resources where they are most needed. It appears bizarre to my noble friend Lord Goodhart, to me, and to others who have tabled amendments relating to this aspect of the Bill that the damage done by the previous government in reducing the disregard for the family home to £100,000 should now be added to by the proposal that will follow if the Bill is passed unamended. This is a very important matter that affects a very large number of would-be legal aid applicants. I
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very much hope that the Government will remain true to the spirit of their own Bill.
Lord Falconer of Thoroton: My Lords, the amendments raise effectively two entirely separate questions. The first is the question raised by the noble and learned Lord, Lord Archer or Sandwell; namely, should there be passporting straight through if one receives jobseeker's allowance, income support or family credit? The second and entirely separate question is whether or not there should be a disregard of the first £100,000 of the equity in people's houses when considering not eligibility but contribution to legal aid.
Noble Lords have set out the background in fulsome detail, so I need not go into that. I deal, first, with Amendment No. 78 in which my noble and learned friend Lord Archer raises the question of passporting if one is on certain benefits. The three benefits are income support, income-based jobseeker's allowance and family credit. I consider the amendment unnecessary in relation to the first two benefits listed, income support and income-based jobseeker's allowance, and undesirable in relation to the third which is family credit. The noble and learned Lord the Lord Chancellor intends to preserve the existing system of what is called passporting—automatic eligibility for free legal aid—for recipients of income support and income-based jobseeker's allowance subject only to the possibility about which he will consult of a capital contribution from equity only payable at a later stage once the assisted person was no longer receiving benefits. In relation to those first two benefits, I respectfully submit the amendment is unnecessary.
In relation to family credit, I respectfully submit that the amendment is undesirable. Income support and jobseeker's allowance are basic benefits intended to guarantee a minimum level of income. Family credit is not. Family credit supplements the income of parents in relatively low paid employment. It is calculated on a tapering scale—that is to say, unlike income support, the benefit payable is not reduced pound-for-pound as earnings increase. As a consequence of this, a person receiving family credit can have a disposable income which makes them liable for substantial contributions; or even, in certain circumstances, ineligible for legal aid altogether. It cannot be right for people with the same disposable income—that is, disposable income having made allowance for the extra cost of looking after children—to be treated differently for legal aid purposes, which is the consequence of including family credit.
I hope that the noble and learned Lord will revert to his first impression of my argument on the last occasion namely, that it was unnecessary in relation to the other two benefits and that it is not appropriate in relation to this benefit—and that he will withdraw the amendment.
I turn to the homes issue. This revisits an area which was covered in Committee. The noble Lords who moved the amendment seek a provision under which the first £100,000 of equity in a house would he disregarded in

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calculating contributions from capital. In the case of Amendment No. 84 there would be power to increase the figure of £100,000 but not to reduce it. In the case of Amendment No. 80, there would be a general power to change the protected figure by affirmative procedure regulations. Unless the noble and learned Lord the Lord Chancellor used the power provided by Amendment No. 80 to reduce the protected figure close to zero, both amendments would prevent the Government from implementing the proposal about equity to which all noble Lords referred.
I respectfully submit that the proposal about the £100,000 equity is to do with greater fairness. At present those who have, say, £25,000 saved, perhaps as a result of redundancy, cannot receive legal aid. Those who have the same amount of equity in a house, but no savings, can receive legal aid and benefit from cost protection. Their equity is, moreover, not subject to any subsequent change if they lose, unless their home was a subject of the dispute. We propose to go some way to putting both classes of litigant on a more even footing by making the equity in the property subject to a charge in relation to contribution. It still does not apply in relation to eligibility. Of course we recognise that the house is more than an investment and that assets in that form are not readily realisable. That is why people with less than £100,000 equity will continue to be eligible for legal aid, and why the Lord Chancellor also intends to ensure that any charge on a house would not be realised unless and until the house was sold; and not even then if that would result in hardship.
One can imagine a situation where if the position were that both sides had small incomes and both sides had equity in their houses of some tens of thousands of pounds, but one of the two sides had £10,000 or £15,000 in savings, thereby depriving that person of the right to legal aid, when the person who did not obtain legal aid won he would be forced to sell his house. The other person would not be forced to sell his house at all and would gain a great advantage in the litigation. If the charge does not come into effect until the house is sold, and if it does not apply until it is established that there is no hardship, or it cannot be established that there is hardship, that is a much fairer situation than the current one. Indeed, the current situation was not dealt with by the noble Lords, Lord Goodhart and Lord Kingsland, in their eloquently expressed submissions which I felt I had heard during an earlier debate. In advancing the amendment, it is important for noble Lords to address the issue of fairness and not look at it from the point of view of only one party in the litigation, but of both parties.
We cannot accept a provision on the face of the Bill that would effectively preclude a change to the regulations which would make the financial conditions on which help is provided fairer; which would produce savings that could then be applied to improve other aspects of the system; and which, I might add, the noble and learned Lord the Lord Chancellor could implement
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tomorrow by negative regulations under the existing powers of the Legal Aid Act. On that basis, I invite my noble and learned friend to withdraw his amendment.
Midnight
Lord Archer of Sandwell: My Lords, I am grateful to my noble and learned friend for expressing his argument so clearly. As regards Amendment No. 78, I agree that in respect of the first two benefits which are listed it is not necessary. Had it not been for the third benefit, family benefit, I would not have tabled the amendment.
In respect of that benefit, I am aware that it is proposed to continue the present position, which I believe is unfair and unjust. I was hoping to change it, but this is not the moment to continue that debate. I doubt whether I would enhance my popularity if I attempted to do so. For the moment, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Lord Chancellor The Lord Chancellor moved Amendment No. 79:
Page 6, line 36, after ("conduct") insert ("such as is specified in section 9(2)(f)").
On Question, amendment agreed to.
[Amendment No. 80 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 81:
Page 7, line 27, after second ("or") insert ("in any compromise or settlement of any").
The noble and learned Lord said: My Lords, I will speak to Amendments Nos. 81 and 82 together. These are drafting amendments, intended simply to shorten the Bill. I am grateful to my noble and learned friend Lord Simon of Glaisdale for pointing out the opportunity to shorten the statute book by some eight lines. During Committee, the noble and learned Lord asked whether Clause 10(8) added in any material way to the tail of Clause 10(7).
The tail of Clause 10(7) and Clause 10(8) are, in substance, drawn from the current Legal Aid Act 1988. They define the scope of the legal aid statutory charge, which allows the Legal Aid Board to recover any outstanding costs from the property recovered or preserved as a result of their case by litigants who received legal aid. Let me make it clear, for the record, that the Government intend the charge created in this Bill in relation to funding provided by the community legal service fund to have exactly the same scope as the legal aid statutory charge has now. These amendments are aimed solely at brevity; they in no way represent a change of substance.
They are possible because of certain other differences in the drafting of the Bill and the 1988 Act. In the 1988 Act, the equivalent words to what is now Clause 10(8)(a) are necessary for two reasons. First, they make it clear that the statutory charge bites on cases settled before proceedings are issued. The appearance in Clause

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10(7) of the words "or dispute", which do not appear in the current Act, mean that Clause 10(8)(a) is no longer necessary for that purpose.
Secondly, Clause 10(8)(a) serves to make clear that the charge bites on any property contained in a compromise or settlement, regardless of whether that was the property originally at issue in the proceedings. This is necessary because case law has established that the words "recovered or preserved in proceedings" relate only to property formally at issue in the case. Amendment No. 81, which inserts additional words in Clause 10(7), is intended to preserve this position.
The equivalent words in the 1988 Act to Clause 10(8)(b) are necessary to ensure that the board can recover any outstanding liability to the legal aid fund from a successful litigant who was legally-aided at an earlier stage of the case, but not at the time when costs were awarded or agreed in his or her favour. This provision is no longer necessary because of the different way that costs ate dealt with in the Bill.
Clause 11 gives power to make regulations about,
"costs in cases in which services have been funded … for any of the parties [including regulations] requiring the payment to the Commission … of any sum awarded by way of costs".
In other words, these regulations can provide for situations where a litigant received services funded by the commission for any part of the case. Clause 10(8)(b) is therefore unnecessary. I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 82:
Page 7, line 29, leave out subsection (8).
On Question, amendment agreed to.
Lord Goodhart had given notice of his intention to move Amendment No. 83:
After Clause 11, insert the following new clause—
PUBLIC INTEREST LITIGATION FUND
(".—(1) The Commission shall establish and maintain a fund known as the Public Interest Litigation Fund.
(2) The Lord Chancellor—

(a) shall pay to the Commission the sums which he determines as appropriate for the funding of services by the Commission out of the Public Interest Litigation Fund, and

(b) may determine the manner in which and times at which the sums are to be paid to the Commission and may impose conditions on the payment of the sums.

(3) The purpose of the Public Interest Litigation Fund shall be to finance the provision of services of any of the kinds specified in section 5(1) to a person who is or may become a party to legal proceedings if the conditions in subsection (4) are satisfied and the Commission thinks it appropriate to finance the provision of those services.
(4) The conditions referred to in subsection (3) are—

(a) that the proceedings give rise to an issue of substantial public importance,

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(b) that the person seeking the services is not entitled to have those services funded out of the Community Legal Services Fund or as part of the Criminal Defence Service, and
that neither the person seeking the services nor any other persons having a similar interest in the proceedings can reasonably be expected to pay for such services out of his own financial resources or resources which may be made available for that purpose from another source.

(5)Regulations may be made for the implementation of this section.
(6)In this section "proceedings" include prospective proceedings and any step in proceedings.").
The noble Lord said: My Lords, at this time of night. I propose to give your Lordships' House a little treat by not moving this amendment.
[Amendment No. 83 not moved.]
[Amendment No. 84 not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 85:
After Clause 11, insert the following new clause—
CONDITIONALLY FUNDED FEE AGREEMENTS
(".—(1) The Commission shall conduct research into the likely demand for and financial viability of conditionally funded fee agreements (as defined in section 58(6) of the Courts and Legal Services Act 1990).

(2) For the purposes of such research the Lord Chancellor may by order authorise the Commission to enter into conditionally funded fee agreements as the funder subject to such restrictions as may be specified in the order.

(3) The Lord Chancellor shall pay to the Commission such sums as he thinks appropriate to enable the Commission to conduct such research.

(4) The Commission shall submit a report on the results of its research under this section to the Lord Chancellor and shall publish its report.

(5) The Lord Chancellor may, after receiving the report, by order authorise the Commission to enter into conditionally funded fee agreements as the funder to any extent specified in the order.

(6) The Lord Chancellor shall pay to the Commission such sums by way of loan or grant as he thinks appropriate for meeting any liabilities incurred by the Commission in acting under an authority given under subsection (5) and may guarantee discharge by the Commission of any such liabilities.").

The noble Lord said: My Lords, I shall move this amendment but I shall be brief. This amendment is grouped with Amendment No. 144.
This amendment raises the issue of CLAF—the contingency legal aid fund—although those words are not mentioned in the amendment. I shall not explain exactly how a CLAF scheme works, nor shall I explain again the manifold advantages of CLAF over CFAs, which I explained in some detail in Committee.
The amendments tabled in Committee required the legal services commission to set up and fund a full-blown CLAF scheme. I accept that that goes too far. This amendment involves a commitment only to a research project, possibly involving a pilot scheme. The cost to public funds will be very limited. There will be no obligation at all to go ahead if it is shown that the scheme is not viable. If the pilot scheme shows that

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CLAF is viable, a full-scale scheme can be set up on the basis of private funding, the Government's involvement being limited at most to the giving of the guarantee. That guarantee will not be needed until research has shown that the scheme will work and therefore the guarantee, in practice, is unlikely to be needed.
I believe that CLAF has important advantages over CFAs for clients, lawyers and the interests of justice. It deserves a trial and the costs of the trial would be well within the means of the community legal service.
Amendment No. 144, which is grouped with Amendment No. 85, serves a more limited purpose. It would enable the noble and learned Lord the Lord Chancellor to give the go-ahead for an independent CLAF at no cost whatever to public funds. It makes it clear that in that event, the CLAF agreement, described as a conditionally funded fee agreement, is legal if it satisfies the test for legality in CFAs. It requires approval by the noble and learned Lord the Lord Chancellor for any organisation acting as a funder of a CLAF scheme, which seems appropriate, and as Amendment No. 144 involves no expense to public funds and is simply permissive, I hope that the noble and learned Lord the Lord Chancellor will be prepared to accept that, even if he is not prepared to accept Amendment No. 85.
The Lord Chancellor: My Lords, in speaking to the two amendments in this group, I shall speak to the second first because it provides the definition of a conditionally funded agreement which is referred to in the first amendment.
The amendment that is sought to Clause 27 would include in the proposed new Section 58 of the Courts and Legal Services Act 1990 three new subsections. The proposed new subsection (5) allows the Lord Chancellor to direct by order that the provisions of Section 58 shall apply to conditionally funded fee agreements as if they were conditional fee agreements which provide for an enhanced fee, defined by Section 58(2). Subsection (6) goes on to define a conditionally funded agreement as an agreement made between a lawyer, his client, and some third person who agrees to act as funder to the action being pursued by the client which provides for the circumstances in which, first, the costs of the client will be met by the funder to the extent that they are not payable by some other person; secondly, the costs awarded by the court are to be paid to the funder; and, thirdly, the client will be liable to pay his lawyer's fees. Subsection (7) further provides that a person may only act as funder if he has been so authorised by order made by the Lord Chancellor.
These provisions seek to provide a statutory basis for a third party to agree to fund litigation along the lines of the CLAF. That is what was proposed by the noble Lord in Committee. Your Lordships well know from our discussions in Committee that I am not attracted to the
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idea of establishing a CLAF with public money because I believe conditional fees will provide a suitable alternative and that in competition with conditional fees a CLAF would not be viable. I have nevertheless taken a reserve power in Clause 10(2)(c) to establish a CLAF in the unlikely event that it should prove that conditional fees cannot make adequate alternative provision.
Although I am not minded to establish a CLAF, I have in the past encouraged the profession, if they believe that a CLAF represents a viable proposition, to seek to establish one of their own with private financial backing. The amendment seeks to establish a statutory basis on which such a scheme could be established.
I do see that there would need to be absolute clarity about whether or not agreements made with a fund of this kind established in the private sector were lawful. The common law doctrines of champerty and maintenance were intended to prevent third parties encouraging actions by agreeing to fund a person to commence litigation and then sharing in the proceeds to litigation to which they were not a party. It is important that a client who is funded in this way is still able to recover his costs from his opponent if he is successful. Save where statute law or the common law as developed by the courts otherwise provides, any agreement for funding of this kind might be liable to legal challenge and struck down by the courts as contrary to public policy and unlawful.
The noble Lord's amendment appears to have fundamentally the right structure in that it provides a proper mechanism for authorising someone to act as a funder; it also provides for the provisions of Section 58 to apply with necessary modifications specified by order to conditionally funded fee agreements. Therefore I have some sympathy with the intention of the amendment but would like time to consider it further. It is unlikely that I will be in a position to come back to this House before the Bill moves to be considered in another place. However, I shall keep the noble Lord informed and if I was minded to cause an amendment to be tabled in another place, I would try to notify him sufficiently in advance to have his comments before the amendment was tabled. I cannot guarantee that, but I undertake to try.
As I imagine the noble Lord anticipates, I have less cheer for him on his first amendment because I cannot accept it. It seeks to place duties on the commission and to require the commitment of public money in a way which I believe is unnecessary and unacceptable.
Subsection (1) of the proposed new clause would require the commission, in perpetuity so far as I can see, to undertake research into the demand for, and financial viability of, conditionally funded fee agreements. Subsection (2) provides that the Lord Chancellor may by order allow the commission, for the purposes of the research, to enter into conditionally funded agreements with the funder, subject to such restrictions as he may determine.

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Subsection (3) requires the Lord Chancellor to provide the commission with the funds to undertake the research. Subsection (4) provides for a report on the results of the research to be furnished to the Lord Chancellor by the commission, a report which he is required to publish. The final two subsections allow the Lord Chancellor by order to authorise the commission, once the report has been received, to enter into conditional fee agreements as funder to the extent specified in the order and require the Lord Chancellor to make funds available for this purpose by way of loan or grant and to guarantee discharge by the commission of any liabilities.
As I said, I am certainly not minded to establish a CLAF. I have no objection if the profession really has that confidence in the CLAF which it invites the Lord Chancellor to share. I have no objection if it wants to put its money where its mouth is to establish a CLAF and run it in competition with conditional fee agreements, as I am unwilling to do. However, I am happy to consider further whether particular statutory provisions would need to be made to allow that to happen. That is what I have indicated I propose to do.
However, if the profession or another private organisation wishes to establish such a fund, it will have to meet the costs of establishing whether there is a demand for such a fund and whether one can be viable. That is part of the costs of establishing and running a fund of this kind. However, I do not accept that the state should be required to undertake research for the benefit of private organisations. As my noble and learned friend Lord Falconer said in Committee, if, as we believe to be the case, a CLAF cannot operate viably in competition with conditional fee agreements, it cannot be right for the Government to risk public money in seeking to establish its viability. That goes equally for funding cases directly to test viability and funding research.
I would ask the noble Lord, Lord Goodhart, therefore, to withdraw his amendment but with a fair prospect that I may be able to do something later in the Bill's passage through Parliament to meet the intent of the second amendment in this group.
Lord Goodhart: My Lords, I am disappointed but hardly surprised at the reaction of the noble and learned Lord the Lord Chancellor to Amendment No. 85. I have more comfort from his reaction to Amendment No. 144.
I had felt that Clause 10(2)(c) created a rather slender basis for the possible introduction of a privately funded CLAF scheme and that, in particular, it did not get over the problem that, under the common law, such a scheme might well face problems of unenforceability through champerty and maintenance whatever Clause 10(2)(c) authorised because it does not, I believe, authorise a change in the common law.
That being so, as the noble and learned Lord the Lord Chancellor knows, both the Bar Council and the Law
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Society are giving serious consideration to the development of CLAF. If it looks to be financially viable and might be attractive to a financial organisation, Amendment No. 144 would at least make it possible to go ahead with it. I am therefore grateful to the noble and learned Lord the Lord Chancellor for what he said on this amendment. With regret, I shall wave farewell to the idea of a publicly-funded CLAF by begging the leave of the House to withdraw Amendment No. 85.
Amendment, by leave, withdrawn.
Clause 12 [The Criminal Defence Service]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 86:
Page 8, line 30, leave out from ("of") to end of line 32 and insert ("securing that individuals involved in criminal investigations or criminal proceedings have access to such advice, assistance and representation as the interests of justice require.").
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 87:
Page 8, line 33, leave out ("this Part") and insert ("subsection (1)").
The noble and learned Lord said: My Lords, with the leave of the House I shall move Amendments No. 87 and speak to Amendments Nos. 88 to 94, Amendment No. 100, Amendments Nos. 114 to 121, and Amendments Nos. 139 and 140.
These amendments deal with the range and scope and the procedure for grant of representation. In particular, the amendments clarify the procedure for grant of representation in additional categories of case that the Lord Chancellor may prescribe under Clause 12(3)(f), and limit the power of the Lord Chancellor to transfer responsibility for grant to the legal services commission to those cases.
We have already discussed Amendment No. 86 which sets out the purpose of the criminal defence service as securing that individuals involved in criminal investigations or criminal proceedings have access to such advice assistance or representation as the interests of justice require. That duty arises in the circumstances set out in Clause 13(1)(a), or circumstances prescribed by the Lord Chancellor under (1)(b) for advice and assistance, and Clause 14 for representation.
Paragraph 1 of Schedule 3 sets out the individuals to whom the right of representation may be granted and Amendment No. 115 extends the right to all individuals who would come within Clause 12(3).
Amendment No. 115 also extends criminal defence services to private individuals who successfully bring private prosecutions before the magistrates' court, in circumstances where the conviction is appealed to the Crown Court, for the purpose of resisting that appeal. Specific courts are no longer named so that criminal proceedings before any body, such as the Parole Board, would be covered by the word "court" under Schedule 3. Amendment No. 100 brings Schedule 3 into effect

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and states that the commission shall fund representation to which an individual has been granted a right under Schedule 3.
In deciding whether it is in the interests of justice for a right of representation to be granted, the criteria in paragraph 6(2) of Schedule 3 must be taken into account. As presently drafted, the factors are expressed in terms which are applicable to courts. Amendments Nos. 119 to 121 generalise the wording of the criteria in paragraph 6(2) so that they are not confined to court based proceedings. For example, paragraph 6(2)(a), as amended, refers to whether the person concerned is in danger of losing his liberty as a result of the proceedings, without specific references such as "accused" and "sentence". This will enable the factors to be equally applicable to other criminal proceedings such as Parole Board reviews of discretionary life sentences, or sentences of young offenders detained at Her Majesty's pleasure.
Amendments Nos. 116 to 118 amend paragraph 4 of Schedule 3 to reflect the Lord Chancellor's undertaking, in response to Amendment No. 180 of the noble and learned Lord, Lord Ackner, in Committee, reported in Hansard for 26th January 1999, [cols. 926–7] to clarify our intentions for the procedure for grant of representation.
In substance the effect of paragraph 4 of Schedule 3 as it stands at present is to carry into the present Bill powers similar to those contained in Section 20(9) of the Legal Aid Act 1988, which allows the Lord Chancellor to transfer to the Legal Aid Board the power to grant legal aid for representation in criminal cases by providing that,
"In the event of the Lord Chancellor making an order under section 3(4) as respects the function of granting representation under this Part for the purposes of proceedings before any court, the Board shall be competent as respects those proceedings, on an application made for the purpose".
In the event the power has never been used. Decisions about granting representation in criminal proceedings will, in future, turn solely on the interests of justice. I cannot envisage circumstances in which it would be necessary to take that decision away from the courts and Amendments Nos. 117 and 118 reflect that by removing the Lord Chancellor's power to make regulations to provide for the legal services commission to have power to grant or withdraw rights of representation and for the commission to delegate those powers. However, Clause 12(3)(f) gives the Lord Chancellor power to extend the scope of "criminal proceedings" to other circumstances not covered in subsection (3)(a) to (e). The Lord Chancellor gave examples in Committee of the use of this power to extend "criminal proceedings" to hearings which might not be before a court, such as Parole Board hearings. Amendment No. 116 limits the power of the Lord Chancellor to transfer responsibility for grant to the legal services commission to criminal proceedings prescribed under this paragraph.
The other amendments in this group are minor drafting amendments. Amendments Nos. 88 to 90 and 92 to 94 are intended to clarify that the criminal defence service is for individuals subject to criminal investigations and proceedings, and not, as was feared by the noble Lords, Lord Wigoder and Lord Renton, judges, Home Office pathologists, and others.
Amendment No. 91 deals with the rare situation where a convicted person has died and approval is given to someone else to proceed with an appeal on behalf of the deceased person. This situation is expressly retained within the scope of the clause.
Amendment No. 90 simply corrects the Bill to show the relevant section of the Extradition Act. Amendment No. 140 removes "criminal investigations" from the interpretation Clause 24. Amendment No. 87 is a consequential drafting amendment.
Finally, the giving spirit of Committee is continued in Report. The Lord Chancellor is of the view that regulations made under paragraph 5 of Schedule 3 should be subject to affirmative resolution, as this paragraph provides for rights and avenues of appeal against a decision to refuse or withdraw a right to representation. I invite noble Lords to approve Amendment No. 139, which achieves this. Accordingly I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 88 to 94:
Page 8, line 37. after ("proceedings") insert ("before any court").
Page 8, line 38, leave out ("for dealing with an offender for an offence or") and insert ("before any court for dealing with an individual convicted of an offence, for dealing with an individual").
Page 8, line 39, leave out ("offender under section 6") and insert ("individual under section 9").
Page 8, line 44, at end insert—
("( ) proceedings on an appeal brought by an individual under section 44A of the Criminal Appeal Act 1968,").
Page 8, line 45, leave out ("supervision orders") and insert ("a supervision order in respect of an individual").
Page 9, line 1, after ("contempt") insert ("committed, or alleged to have been committed, by an individual").
Page 9, line 2, after ("proceedings") insert ("concerning an individual, before any such court or other body,").
The noble and learned Lord said: My Lords, I beg to move Amendments Nos. 88 to 94 en bloc.
On Question, amendments agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 95:
Page 9, line 8, at end insert("; and any system of accreditation shall include provision for the monitoring of the services provided by accredited persons and bodies and for the withdrawal of accreditation from any providing services of unsatisfactory quality.").
The noble and learned Lord said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 96:
Page 9, line 8, at end insert—
("( ) The Lord Chancellor may by order require the Commission to discharge the functions in subsection (5) in accordance with the order.").
On Question, amendment agreed to.
Lord Carter: My Lords, I beg to move that consideration on Report be now adjourned.
Moved accordingly and, on Question, Motion agreed to.
House adjourned at twenty-six minutes past midnight.