HL Deb 21 January 1999 vol 596 cc701-52

3.38 p.m.

The Lord Chancellor (Lord Irvine of Lairg)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 7 [Services which may be funded]:

The Chairman of Committees (Lord Boston of Faversham)

I remind the Committee that if Amendment No. 90 is agreed to, I cannot call Amendment No. 91.

Lord Simon of Glaisdale moved Amendment No. 90:

Page 5, line 12, leave out subsection (7).

The noble and learned Lord said: Amendment No. 90 seeks to leave out subsection (7) of Clause 7. The scheme of this part of the Bill is to set up a body called the legal services commission which will operate through two subordinate bodies, of which the relevant one is the community legal service. The community legal service funds various legal services apart from criminal proceedings. However, by subsection (5) of the clause, the commission may not fund any of the services specified in Schedule 2; and subsection (6) says that, Regulations may amend that Schedule". That is plainly a Henry VIII clause providing for legislation by decree and it is therefore subject properly to affirmative resolution at the very minimum. Subsection (7) however, with which the Committee is concerned, says, The Lord Chancellor may give directions … requiring or authorising", the funding of services in Schedule 2. That equally is a Henry VIII clause but, as I read the Bill, this time it is subject only to negative resolution.

My first question to my noble and learned friend the Lord Chancellor is: why is that subject only to negative resolution? My noble and learned friend has indicated that he will bring forward at Report stage provisions to rectify what some of us regard as constitutional enormities in this Bill. It may be that he intends to make that subsection subject to affirmative resolution.

The other question is probing. It would be helpful to know why my noble and learned friend requires that power. I hope it is not merely that it may come in useful at some time or another in circumstances which cannot now be foreseen. That is not the sort of power that we ought to give. I hope that my noble and learned friend will not use the words "flexible" or "flexibility" which are synonyms for the arrogation of executive powers.

Why does my noble and learned friend, apart from flexibility and a liking to have odd powers in his pocket, want that power? What provisions does he feel may be made subject to the funding potentiality; in other words, taken out of the negative Schedule 2? I beg to move.

The Lord Chancellor: Clause 7(7) provides that: The Lord Chancellor may give directions under section 4 requiring or authorising the Commission to fund the provision of any of the services specified in Schedule 2 in circumstances specified by the directions". I suggest with respect to the noble and learned Lord that he should not be over-prescriptive in relation to these matters. Let me tell him why I cannot and do not think it would be wise to accept his amendment. It is important that the Lord Chancellor should be able to make limited provision for cases otherwise outside the scope of the community legal service where that would be appropriate to alleviate hardship. That seems an entirely sensible provision. What I desire to emphasise to the noble and learned Lord is that the provision confers on the Lord Chancellor a power only to give and not to take away, and the need could be urgent.

I can see that the noble and learned Lord, who is a purist in these matters, takes the view that Schedule 2 should be amended under the affirmative procedure. But there are arguments as powerful the other way. I indicated in my opening speech to the Committee that I thought it right that substantial change to the schedule should be made by the affirmative procedure, in particular if it was taking away. However, I believe it right that there should be powers for the Lord Chancellor to give and to be able to move swiftly to deal with specific problems that may arise. Those are my reasons for inviting the noble and learned Lord to withdraw his amendment.

3.45 p.m.

Lord Simon of Glaisdale

I am grateful to my noble and learned friend for his explanation; I hope he will not be offended if I add the words, "such as it was". Of course, he did not answer the question as to why he needs this power, except to say that it might come in useful at some time. That is simply not good enough.

As to the question of affirmative or negative resolution, we shall have to wait until Report stage when we see my noble and learned friend's better constitutional thoughts. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Clinton-Davis moved Amendment No. 91:

Page 5, line 14, after ("2") insert ("or (Community Legal Service)").

The noble Lord said: In moving Amendment No. 91 I shall speak also to Amendments Nos. 99 and 107 which stand in my name and that of the noble Lord, Lord Kingsland. The purpose of the amendments—the first two are paving amendments—is to ensure that some personal injury cases remain within the scope of legal aid. I stress that this is simply a probing amendment. I have tried to list some of the cases which are likely to give rise to difficulty in practical terms.

Conditional fee agreements are unlikely to be offered by lawyers for the foreseeable future on the scale that needs to be contemplated. There will be a serious reduction of access to justice for personal injury victims if no legal aid is available. It is worth noting in passing that a number of successful cases fall within the sort of categories listed in the schedule. I mention only some. For example, there was the liability in the Ben Smolden case. He was a rugby referee who suffered a paraplegic injury. There was also the issue of human growth hormone litigation. The difficult case, which is still pending in terms of assessment of damages at least, relates to chronic bronchitis and emphysema suffered by miners.

I add, in parenthesis, that when I was on the Front Bench dealing with that issue, I made it clear in answer to a question that the Government would not apply the sort of standards applied by insurers when dealing with such matters and would be not just sympathetic, but practically sympathetic.

There is also the question, not totally unrelated to that—in principle, at least—of chronic vibration white finger. I refer to the Myodil case. There are several others. The Hancock case dealt with long-term exposure to asbestos. There are other asbestosis cases. That illustrates the sort of cases that have been successful in the recent past. I feel that it may be necessary to revisit some of the arguments already touched on, and I do so because I have been able to reflect on what my noble and learned friend said about the availability of conditional fee agreements. The assertion was that those will become widely available and that insurance will provide a satisfactory alternative.

With respect to my noble and learned friend, I think that we need further and better particulars of the availability of insurance. He cited some cases. I tried to investigate this with practitioners and I am assured that frequently there are real difficulties in this regard.

Another point arises in relation to this. My noble and learned friend said that the better managerial arrangement of solicitors' offices should overcome any difficulties that may arise in that respect. He prayed in aid a press release from Thompsons. Thompsons is a large firm with a continuing cash flow. It is an extremely competent firm and I have the highest regard for it. However, it is very different from the high street practitioner who does not have the same sort of cash flow.

Premiums in the range of £70 to £100 may be required for a case and if there are a substantial number of cases, that will represent a real burden to ordinary practitioners who practise in the high streets up and down the country, and particularly to those in the poorer areas.

The question was also put to my noble and learned friend by the noble Lord, Lord Goodhart, and my noble and learned friend Lord Archer of Sandwell: what if his prediction is proved to be wrong? My noble and learned friend quite properly referred to his previous statement that he has power to intervene in certain cases of hardship. Again, I feel that we should request from my noble and learned friend a greater idea of what he has in mind. In this regard there is uncertainty and apprehension on the part of many practitioners. Those apprehensions—perhaps misapprehensions—should be put to rest. The deep concerns felt by those providing services at present ought to be met.

I said before that premiums ranged from £70 to £100. On reflection, I believe that the figure of £90 to £170 was quoted by my noble and learned friend, which adds to the burden that I have already sought to argue.

I hope that my noble and learned friend will feel that some of the cases that I have listed in the schedule give rise to particular problems. I do not propose to argue them one by one. I have touched on one or two. However, I hope that my noble and learned friend, while recognising that this is simply a probing amendment, will try to give as many satisfactory assurances as he possibly can to those very worried practitioners who are working, as far as they can, in the best interests of their clients. I beg to move.

Lord Goodhart

I rise to support the amendment. A long series of examples of cases is set out in which it is likely that CFAs will in practice be unobtainable and yet in which there may be a strong case for supporting a plaintiff who wishes to take action to claim damages. The list is extensive; there are 15 different examples. Each of them falls clearly within this category. The number of cases in the list is an example of the fact that it is wholly indefensible to exclude from public funding cases of personal injury. There are many types of personal injury case where CFAs will not be appropriate or available. The amendment illustrates the importance of returning to the principle of saying that public funding will remain available for personal injury cases, but will be excluded in cases which it is reasonable to expect to be funded through a CFA; and only in those cases will it be excluded.

Lord Campbell of Alloway

I wish to support the amendment for the reasons put so clearly by the noble Lord, Lord Goodhart, which are real, practical and wholly cogent.

Before I sit down I should like to take up the point that the noble Lord, Lord Clinton-Davis, made that sometimes it is forgotten and wholly unrealistic to compare the position of a firm of the ilk of Thompsons with that of a high street solicitor working in a poor area. The noble Lord speaks from his own experience and I think that we should defer to his opinion.

Lord Kingsland

I too rise to support the amendment tabled by the noble Lord, Lord Clinton-Davis. There seem to be two categories of personal injury cases covered in the proposed schedule. The first concerns vulnerable victims and the second concerns cases that will require a great deal of research and expenditure before the risk involved can be accurately assessed. That is why I think that the list is worthy of the noble and learned Lord's attention.

We had a long debate on the principles that lie behind CFAs and personal injury cases on Tuesday and it is certainly not my intention to repeat the arguments today. However, it should be borne in mind that when the legal services commission exercises its discretion in relation to a request for funding, one of its options is to suggest an alternative solution.

I want to ask the noble and learned Lord—perhaps he will say to me that it is obvious on the face of the Bill; nevertheless, it is not obvious to me so I shall ask him—in circumstances where such a list were to be incorporated, would it still be open to the legal services commission to say that in a particular case contained in that list a CFA would nevertheless be appropriate?

Lord Phillips of Sudbury

I should like to support the amendment and to add two points to the debate. First, if Clause 28 is passed as it stands, it could have a significant impact on the risk to which members of the public may be put, who, under present circumstances, may be able to obtain legal aid in the normal way.

The second point that I would add is that I was a non-executive director of one of these legal costs insurance companies for eight years. I had discussions with that and another such company only recently. I fear that the hopes of the Government in relation to the availability of suitable costs insurance may well not be realised. I believe that the premium rates to which the noble Lord, Lord Clinton-Davis, referred may already be out of date. Indeed, there is serious concern within the small group of companies which provide such insurance that there is some selection against them. Moreover, I also fear that the after-the-event insurance, which is what we are principally concerned with here, may not be effectively available in terms of cost. Therefore, I strongly support the amendment.

4 p.m.

Lord Ackner

I, too, should like to express my support for the amendment. However, I think it would probably be helpful to get on record what the noble and learned Lord the Lord Chief Justice said at the Barnett Lecture which he gave on Thursday 11th June 1998. Towards the end of that lecture he said: In relation to the main thrust of the Government's proposals for the reform of civil legal aid, the argument is a complex and closely reasoned one. One cannot read the well-argued responses to the Government's proposals submitted, for instance, by the Bar, the Personal Injuries Bar Association and Justice without appreciating the difficulties and the potentially fateful consequences of any radical change to the current arrangements. Those of us who have had no contact with insurance interests cannot be other than unsure whether insurance cover will be available in the much wider range of civil proceedings which are suggested as suitable for conditional fee agreements".

The Lord Chancellor

Conditional fee agreements are good for the public. They will bring into access to justice the millions who are not eligible for legal aid and cannot afford to litigate because they cannot run the risk of losing and having to pay the other side's legal costs. Conditional fee agreements will also be good for the business of lawyers. When lawyers recover from the shock of the new, I believe that they will come to recognise that the extension of conditional fee agreements is a major boost to legal business for litigators. Lawyers in a changing world are not free from the need to adapt. They must recognise that they can no longer live in the world of traditional legal aid where lawyers are paid—win, lose or draw.

The proposed amendments would have the effect of introducing a schedule of entitlements in respect of personal injury cases into the Bill. I cannot accept them for two main reasons. First, the community legal service fund will operate within a controlled budget, and resources will be allocated according to priorities, in the areas of greatest need. There is no place in such a scheme for a set of entitlements such as those proposed by my noble friend and the noble Lord, Lord Kingsland.

Secondly, the exclusion of personal injury cases from the scope of public funding is not only important in releasing funds for priority cases, but it is also based on the fact—and I do not propose to go over the detail that I gave earlier in Committee in this respect—that there is a viable alternative method of funding; namely, conditional fee agreements. I give way to the noble and learned Lord.

Lord Simon of Glaisdale

Is there not, in addition, a further alternative? I refer to the one that will shortly be proposed by the noble Lord, Lord Goodhart; namely, the contingency legal aid fund. It is not just one alternative to which my noble and learned friend is so attached.

The Lord Chancellor

We shall debate the possibility of a contingency legal aid fund in due course and in its proper place in our proceedings. However, we are of the clear view that a contingency legal aid fund would attract only the weak cases because the strong cases would proceed by conditional fee agreements carried forward by the profession. We believe that a contingency legal aid fund would be doomed to failure. However, lest we are wrong about that, we are taking reserve powers which would enable us, if need be, to establish such a fund. In the meantime, we are proceeding in the way that I have indicated.

Nevertheless, I desire to say this to lawyers, be they barristers or solicitors. Every other business incurs costs and runs risks in order to earn profits. Litigation will be very profitable for the lawyer under a conditional fee agreement when he wins. I do not begin to accept that lawyers, among all businesses, should be excluded from running risks and incurring costs in order to earn profits. Lawyers must come to terms with the real world and not that of conventional legal aid where lawyers are paid whether they win, lose or draw. I give way to the noble Lord.

Lord Goodhart

Is the noble and learned Lord the Lord Chancellor suggesting, for example, that doctors should be paid on a no cure, no payment basis?

The Lord Chancellor

Certainly not. We are proposing a means of funding litigation which is an alternative to the public purse and which will expand access to justice, thereby releasing moneys to follow other desirable purposes. However, I will have the flexibility through my direction-making powers in Clause 4 and Clause 7(7) to allow the funding of personal injury cases in some circumstances.

I shall not repeat the detail of what has already been said, but it is clear that, if need be, I shall be in a position to achieve some of the objectives set out in the amendments. By keeping the cases specified by the noble Lord and my noble friend off the face of the Bill, I will have greater flexibility to respond to changing needs and circumstances in the future. I shall certainly take their suggestions into account as I develop policy and, if any need is demonstrated, I shall consider whether to restore particular categories of case to legal aid. I predict that the prophets of doom are wrong and that conditional fee agreements will prove to be a triumphant success. I therefore invite my noble friend and the noble Lord to withdraw their amendment.

However, although it was not germane to the specific argument on these amendments, perhaps I should respond to the point made by the noble Lord, Lord Kingsland. On the footing that the amendment were accepted, he asked whether the commission could still refuse to provide legal aid. In response, I invite the noble Lord to consider Clause 9(2)(d) of the Bill.

Lord Clinton-Davis

I thank my noble and learned friend for at least some of the arguments that he has adduced and, in particular, for drawing attention once again to the power that he will have to utilise directions in certain specific instances. However, the position remains very vague and, notwithstanding my noble and learned friend's usual powerful advocacy, my doubts are not put wholly at rest.

My noble and learned friend said on the first day of the Committee stage that he was satisfied that the kind of concerns that we have mentioned again today were unfounded. He said, It is my view that the majority of personal injury cases do not warrant public funding in the future because there is a viable alternative in the private sector; namely, conditional fee agreements".—[Official Report, 19/1/99; col. 568.] But what constitutes a majority? A majority is 51 per cent. I assume that my noble and learned friend asserts that he is talking about a substantial majority, but I do not know upon what basis this has been properly assessed. It remains imprecise. If there is a real risk that a substantial minority of cases will be prejudiced as a result of this situation, it remains a cause for great anxiety.

I do not agree with the totality of the argument that my noble and learned friend adduces when he acquaints lawyers' practices with the general run of businesses. Lawyers' practices, certainly in the City and the West End, are run as businesses—there can be no doubt about that at all—but they are vastly different in character and in the work that they undertake from the kind of practices to which I have alluded. There are no vast profits being made by the overwhelming majority of that category of firm. I believe that they are doing a superb job in protecting the interests of the public and making access to justice a reality. Of course there are many things that go wrong, but I believe that the public have confused the high-blown cases that one reads about—mostly criminal cases involving substantial fraud—with the ordinary day-to-day routine business that is undertaken in a solicitor's practice of the kind I have mentioned.

I am most grateful to those who have spoken in this debate. It is important that my noble and learned friend should respond to the point made by the noble and learned Lord, Lord Ackner, in citing a speech he made some time in June 1998—I did not catch the exact date—which does not altogether sit satisfactorily alongside the remarks that my noble and learned friend has made.

Lord Ackner

I intervene, first, to correct what the noble Lord has said and, secondly, to strengthen it. I was not quoting from a speech I made, I was quoting from a speech made by my noble and learned friend the Lord Chief Justice.

Lord Clinton-Davis

I apologise if I expressed myself inelegantly or in an inappropriate manner. I was referring to the intervention made when the noble and learned Lord cited the speech made by my noble and learned friend. That does not altogether sit easily with the remarks that he has made during the course of these debates.

I understand that my noble and learned friend will adopt a measure of flexibility. However, while he is reluctant to be more specific about the kind of instances where that would apply—I understand that—the matter remains imprecise. That makes things difficult for people who practise in these areas. I do not know whether any Member of the Committee wishes to speak again before I seek to withdraw the amendment, as I propose to do. I see no vigorous nodding of heads. I ask my noble and learned friend to respond to the points I have just made.

4.15 p.m.

The Lord Chancellor

I do not propose to respond as I did so in the previous arguments that I put to the Committee.

Lord Clinton-Davis

Perhaps my noble and learned friend will at least indicate what he meant by a majority of personal injury cases, and the extent of that majority.

The Lord Chancellor

I shall read Hansard to see precisely what I said but I have total confidence that the overwhelming majority of personal injury cases will be funded successfully through conditional fee agreements. For many years trade union solicitors have carried forward bulk personal injury litigation successfully for those whom they represent on terms specifically of not expecting fees from their substantive clients—the trade unions—when they lose because the fees they get when they win enable them to run a profitable business. In fact probably the best evidence that conditional fee agreements are completely viable in this area is precisely what I have now said.

Lord Phillips of Sudbury

I rise to—

The Lord Chancellor

The noble Lord, Lord Phillips of Sudbury, wishes me to give way before I have completed my reply to my noble friend Lord Clinton-Davis. However, I yield to his enthusiasm.

Lord Phillips of Sudbury

I am grateful to the noble and learned Lord the Lord Chancellor for so doing. He has twice now mentioned firms which represent trade unions and the manner in which they conduct business. My own firm represents one of the large unions and has for a long time had an arrangement with that union as to the payment of costs. However, I must assure the Committee that that situation is not comparable with the situation we are talking about which concerns a case by case arrangement for individual solicitors dealing with clients as they come through the door. A relationship with a trade union involves swings and roundabouts. The arrangement is capable of being adjusted from month to month and year to year to ensure that the firm concerned gets a fair return overall for the cases. There is no such averaging out in the case of an individual solicitor who is dealing with an individual client.

The Lord Chancellor

The noble Lord, by that intervention, gives away his position. What we are doing is addressing whether individuals will have access to justice through conditional fee agreements. I say they will because we can see that the volume providers of services, the trade union lawyers, make a satisfactory profit in providing that volume service. However, the noble Lord says that one cannot equate that with the position of the small lawyer. That shows that the noble Lord is seeking to defend the interests of a particular group of lawyers. The question I am addressing is whether the public will have access to conditional fee agreements in the overwhelming majority of cases. I say that they will.

There is a further point I desire to make in reply to my noble friend Lord Clinton-Davis. The only cases where I have a measure of concern is where there are high investigative costs. We are taking powers under the Bill partially to fund cases going forward under conditional fee agreements so that sums are advanced to cover these high investigative costs. These are the reasons why I have confidence in the situation and why I repeat my invitation to my noble friend to withdraw the amendment.

Lord Clinton-Davis

My noble and learned friend is right to underline again the particular category of case where it is virtually impossible to proceed because of high investigative costs. That point was mentioned by the noble Lord, Lord Kingsland. My noble and learned friend has given an assurance to the Committee that he is giving serious consideration to this kind of issue. I must say that I am no more enlightened about his view of the majority, to which he had referred earlier—and to which he has referred twice more in his remarks—than I was before. I am tempted to submit a request for further and better particulars as regards a majority. However, I shall not hold up the deliberations of the Committee to extract a reply at this stage. I cannot promise that I shall not return to this matter at further stages of our consideration of this Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 92 and 93 not moved.]

Lord Kingsland moved Amendment No. 94:

Page 5, line 14, at end insert— ("( ) Where services are funded in accordance with subsection (3)(b), payment shall be made in accordance with regulations made by the Lord Chancellor after consultation with the Law Society and the General Council of the Bar, and in making such regulations the Lord Chancellor shall have regard to the principle of providing fair and reasonable remuneration.").

The noble Lord said: Amendment No. 94 concerns the regulations which will be made by the noble and learned Lord the Lord Chancellor to determine the conditions under which payments are made by subsection (3)(b) of Clause 7. There are two issues to which I wish to draw the noble and learned Lord's attention. First, it is desirable that the noble and learned Lord should consult both the Bar Council and the Law Society before making those regulations. Secondly, the basis upon which payment should be made under Clause 7(3)(b) should be as transparent as possible. This is to prevent the undermining of quality services. In making these proposals, I am reflecting the terms of the Legal Aid Act 1974 with respect to transparency and the Legal Aid Act 1988 with respect to consultation. I beg to move.

The Lord Chancellor

The purpose of these amendments is to provide a framework in which remuneration of lawyers will be determined. Amendments Nos. 94 and 182 would restore the concept of fair and reasonable remuneration to the face of the legislation. Amendment No. 184 would require me, in relation to services procured through the criminal defence service, to respect the principle that such services are to be remunerated by payment of a reasonable amount in all the circumstances of the case.

I do not accept the terms of the present amendment. The terms "fair" and "reasonable" are far too wide and imprecise. Nor do these amendments contain any reference to what might be affordable or what value for money might be achieved through the remuneration scheme. At the risk of becoming tedious, I have to say that public money is limited; the priorities for that public money are many, and they compete with each other. It cannot be right that a duty should be placed on the Lord Chancellor to make regulations relating to the remuneration of lawyers which take no account of the availability of those public funds. To suggest otherwise is not to live in the real world.

I am not attracted simply to carrying into this Bill provisions about remuneration that have previously failed. It seems to me that the Lord Chancellor should have a discretion to set rates, as now, but that in doing so he should have regard to the extent to which the rates ensure the availability of a sufficient number of competent practitioners, the cost to public funds and the value for money achieved for the taxpayer, and the beneficiaries of the help received from the money spent.

I propose to put down an amendment along those lines, setting out the factors that the Lord Chancellor should consider in fixing remuneration rates. I will also address the level of any consultation that might be appropriate in the circumstances. On that basis I invite the noble Lords who tabled these amendments not to press them.

Lord Kingsland

When the noble and learned Lord the Lord Chancellor began to speak I felt a sensation of intense and acute depression, but I had somewhat recovered by the end of his speech. I thank him for what I take to be a move in some direction towards the terms of these amendments. I look forward to seeing what he has to say about the matter and debating it again at Report stage. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 7 agreed to.

[Amendment No. 95 not moved.]

Schedule 2 [Community Legal Service: excluded services]:

Lord Goodhart moved Amendment No. 96:

Page 53, leave out lines 33 and 34.

The noble Lord said: Paragraph 2 of Schedule 2 excludes from any possibility of funding out of the CLS, Services consisting of the provision of help in bringing or defending any proceedings in the course of carrying on a business". The Legal Aid Act 1988 and its predecessors excluded any form of legal aid to corporate bodies. I think that is an entirely correct position, which is continued by the present Bill. Under the Legal Aid Act, aid can be granted to business proceedings if the business is carried on by an individual on his own or by individuals in partnership. This paragraph of Schedule 2 would exclude that possibility. I believe that position is wrong.

In a small business carried on by an individual, a business action may well destroy that person's livelihood. Let us consider the example of a corner shop. The lease of that shop comes to an end and there is an application for a new tenancy under the Landlord and Tenant Act. The landlord puts in a wholly unjustifiable claim for a much higher rent before the new tenancy is granted. If that claim takes effect, the shop may be forced out of business and the shopkeeper may well suffer personal bankruptcy. A challenge to that claim in the court is very likely to require help from a lawyer and, indeed, from a surveyor. Very many small shopkeepers would not be able to afford that help. Should it not be possible for such shopkeepers to be at least considered, in due course of priority, for help from the community legal service fund?

In a case of that kind it is very hard to see how a CFA could possibly be suitable. It is not a risk of the kind covered by a normal insurance policy. I accept that if the owner of the business has chosen to get the benefit of limited liability by incorporating the business, he should not get publicly funded help for the benefit of that company. Nor would I expect the community legal service to fund the costs of large firms, solicitors and accountants.

Cases where it is appropriate to fund business proceedings out of the community legal service fund will certainly be rare, but I believe that small businesses should not be excluded altogether from the possibility of applying. I accept that if a CFA is available, the case should not be funded by the taxpayer. But that is not always the case and it is not appropriate to exclude that type of case on the assumption that a CFA will always provide an acceptable alternative to public funding. On the relatively rare occasion where a business is conducted by an individual and a case represents a real threat to his livelihood there should be a possibility of funding out of the community legal service. I beg to move.

4.30 p.m.

The Lord Chancellor

I do not accept this amendment. One of the key objectives of these reforms is to ensure that publicly funded help under a controlled budget is directed to areas where the need of people is greatest, such as social welfare cases and public interest cases; for example, those involving the interests of children. Politics is the language of priorities and there are hugely competitive demands on the public purse. I have to live within a controlled budget. Proceedings carried on in the course of a business do not, in my judgment, have sufficient priority to warrant any public funding other than for the provision of basic information and advice on the law.

I agree with the noble Lord that under the current legal aid scheme legal aid is not available to companies but a sole trader can currently receive legal aid to pursue a business dispute. Businessmen who are running profitable businesses have the option of insuring against the possibility of having to take or defend legal proceedings. I do not follow how the noble Lord is able to assert that insurance is necessarily not available for the kind of case which he supposed. It is a question of judgment and priorities. I do not believe that the taxpayer should have to meet the legal costs of sole traders who do not take out adequate insurance.

Lord Goodhart

I find myself naturally somewhat disappointed with that answer. The test of priorities is one that has to be applied in deciding which types of case should have priority, but there should also be sufficient flexibility to enable cases of particular hardship within types of case which in general have a lower priority to be promoted up the scale. While I accept that this is a type of case where it would be relatively rare for the CLS to fund proceedings, I still think that it would be best to keep that type of case in so that, where appropriate, it could be funded. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 97 to 99 not moved.]

Lord Goodhart moved Amendment No. 100:

Page 54, line 28, at end insert— ("( ) proceedings before industrial tribunals, ( ) proceedings before appeal tribunals constituted under the Social Security Act 1998,").

The noble Lord said: In moving this amendment, I wish to speak also to Amendments Nos. 101, 102 and 104. They propose to include in Schedule 2 a number of additional tribunals for which public funding would be possible. The effect of paragraph 5 of the schedule is that services consisting of the provision of representation are excluded except those specified in sub-paragraph (2). Sub-paragraph (2) broadly maintains the present courts and tribunals in which representation is possible.

One of the main drawbacks to the present system of legal aid has been that it has never extended to tribunals which decide many cases of great importance to people who cannot afford legal help out of their own pockets. The Bill retains the possibility of public funding for two tribunals where it is now available—the Employment Appeal Tribunal and the Mental Health Review Tribunal. However, it excludes public funding where legal aid is now available for hearings before the Lands Tribunal or the Commons Commissioners. I accept those exclusions. It also appears to exclude the existing right of representation before the Discretionary Lifer Panels, which consider applications for release on licence from prisoners who have been given life sentences for offences for which a life sentence is not the sole mandatory sentence. Those proceedings are not covered by paragraph 5(2) of Schedule 2, but, equally, do not appear to be criminal proceedings. Aid is now provided by way of the ABWOR scheme for representation. Aid should be provided in such cases and I hope that it has been omitted by way of an oversight.

Paragraph 5(2) does not extend rights of representation to any tribunals which do not have them now. There is no representation for tribunals dealing with employment matters. I must apologise for having used in my amendment the old description of them as "industrial tribunals" rather than the current one of "employment tribunals". It does not provide any representation before the tribunals under the Social Security Act 1998, or before the Social Security Commissioners, or before immigration and asylum tribunals. The rejection of a case before any of those tribunals may be devastating to the claimant. It may lead to a loss of livelihood, it may lead to extreme personal hardship, and in an asylum case it may lead to an applicant being returned to a country where he or she will suffer a grave risk to their life. Representation is extremely valuable. It is clear that claimants who are represented before employment tribunals through, for example, their trade union, or social security claimants who are represented through advice agencies, have a much better chance of success.

I believe that it is the Government's intention that, as and when the costs of existing services are brought under tighter control, it will be possible to modify Schedule 2 to allow an extension of services to these tribunals. But I do not think that that mere statement of intention is good enough. I believe that the Bill should allow representation before suitable tribunals now. I accept that representation would have to be phased in very slowly for these purposes. An immediate grant of tribunal representation to all who need it without a large increase in funds would mean an unacceptable restriction of services provided under the existing law. But necessity for phasing in does not mean that tribunals should be excluded.

It is true that the commission is supposed, under Clause 5, to inform itself of the need for services and to plan how to meet that demand. Obviously, it cannot investigate the need for services which by law it cannot provide. It is only if representation before tribunals is not excluded that the commission can inform itself of the need for representation and plan how those needs can be satisfied. The commission should start on that right away. Representation before tribunals on employment, social security and immigration matters at present form the greatest pool of unmet need for legal services. They should not be excluded by Schedule 2 so that phasing in can begin now for how those services are to be incorporated into the scheme of the community legal service fund. I beg to move.

Lord Archer of Sandwell

Amendment No. 103, in this group, bears my name. It proposes that a further item should be added to the list of proceedings which may be funded as part of the community legal service for the purpose of representation; namely, proceedings before immigration adjudicators and the Immigration Appeals Tribunal. The noble Lord, Lord Goodhart, got there first. So I am content to support his amendment and not to move my own.

The reasons that it would be unfair and unjust to exclude those proceedings from the benefits of the scheme were touched upon by the noble Lord. Perhaps I may briefly elaborate. As the noble Lord said, those who are concerned in these proceedings have very serious matters at stake, sometimes their lives. They are frequently unfamiliar with the English language. It is possible to give evidence with the assistance of an interpreter, but it is very difficult to conduct one's own case using an interpreter. Often, such people are unfamiliar with tribunal proceedings, or indeed any proceedings at all, certainly in the United Kingdom. They are unlikely to know the intricacies of the legal provisions that are at the very core of the issues to be decided.

I take this opportunity to pay tribute to the adjudicators and the chairmen and members of the Immigration Appeals Tribunal, most of whom are totally dedicated and grapple with the difficulties to produce a just result. But unskilled representation in those conditions is no substitute for justice.

Sometimes of course such people are represented at the expense of their families; and sometimes by advocates from outside the legal profession. That representation may be very competent. It is within my knowledge that the Immigration Advisory Service and the Refugee Legal Centre make a commendable contribution to the process, as do law centres. However, some appellants, unfamiliar with the procedure, fall into the hands of charlatans without qualifications, knowledge or skill and who are simply out to make a fast buck. I am aware that the Home Office, the Bar Council and the Law Society are considering how the problem may best be addressed. But at present it is very much in evidence. In terms of a contribution to justice, the addition of these proceedings to the list of those for which representation may be provided would be a sound investment.

However, I confess that, like the noble Lord, Lord Goodhart, I had an ulterior motive in tabling this amendment. We may all make suggestions as to meritorious additions to the list. I was anxious to make a more general point—one which I believe will find some sympathy with my noble and learned friend the Lord Chancellor, even if he cannot respond positively to all the specific suggestions in this group. I am grateful to the noble Lord, Lord Goodhart, for ventilating the subject in general.

I must declare an interest. I am privileged to be chairman of the Council on Tribunals—a matter that is known to my noble and learned friend as, together with my noble and learned friend the Lord Advocate, he appointed me.

When I first came to the Bar, tribunals were the poor relations. The questions with which they dealt were perceived as marginal. It was said in their favour that they were less formal than the traditional courts. So indeed they were. But that very virtue was conceived as ensuring that they administered second-rate justice. I must confess that the period of which I am speaking falls not within history but archaeology! It was before the Franks Report in 1957.

One important consequence was that, almost if not totally without exception, proceedings in tribunals were not considered worthy of legal aid. Now, in terms of numbers, they deal with the major part of our justice system. At the last count, the number of tribunal systems that fell within the supervision of the Council on Tribunals was 78, bearing in mind that some of those jurisdictions embrace a variety of situations and issues. The citizen is six times more likely to encounter our system of civil justice in a tribunal than in the more traditional courts. Some deal with very large sums of money. Many deal with matters of vital importance to those who come before them. The law that they dispense is often exceedingly complicated and requires a high degree of expertise. The president or regional chairman is often of a status at least equivalent to that of a senior circuit judge; in fact, sometimes it is a senior circuit judge.

I hope that in the foreseeable future there will be a new acronym in the language—SCROCG—which stands for the Standing Conference on the Resolution of Citizens' Grievances. It arises out of an international conference which took place in 1997 at the University of Bristol, and, happily, was sponsored by my noble and learned friend's department. Much of the credit for it goes to Professor Martin Partington. The purpose of establishing it is to review the many decisions that are now taken in our system of administrative law where the citizen may need to know in which direction he should go for redress.

My noble and learned friend has recognised some of these points already in the schedule, which includes mental health review tribunals. I shall not make a false point about the Employment Appeal Tribunal because that is in a special position. The noble Lord, Lord Goodhart, has suggested other candidates for the list, and I support those candidates.

I hope that the culture in which tribunals were often seen as the harijans of the system will not find its way into the legal services commission, and that even if my noble and learned friend does not feel able to respond positively to all these amendments, the seed will germinate and—who knows?—possibly bear fruit in the future.

4.45 p.m.

Lord Meston

I support the amendment and strongly support the remarks of the noble and learned Lord, Lord Archer. There seem to me to be four main reasons for advocating representation supported by the state in some form or other before tribunals.

Before tribunals, the imbalance between the represented employer and the unrepresented employee, or former employee, is usually most pronounced. If ever there were a case for equality of arms, it is in tribunals. Secondly, over the years the law that was intended to be straightforward and simple, particularly before industrial tribunals, as they were then called, has become increasingly complex. That is partly the fault of Parliament in enacting employment Bills of one kind or another year after year. However, it is not merely a question of legislation coming from Parliament but of that coming directly from Europe. Thirdly, as both my noble friend and the noble and learned Lord said, the issues and their outcome can be of great importance to the individual concerned. Fourthly, the unrepresented applicant who has no recourse to a union, and who will therefore be tempted to represent himself, may fall prey to the so-called experts in representation who hold themselves up as representing applicants to tribunals and who are in some cases, as the noble and learned Lord accurately described, charlatans. They often have their own agenda; they often do more harm than good to the individual concerned; and they are not accountable to any professional body for their conduct. In areas involving particular expertise such as race and sex discrimination cases, and nowadays disability discrimination, expertise is most important for the effective presentation and defence of a claim. For those reasons I strongly support the amendment.

Lord Renton

May I say that I have no objection in principle to Amendments Nos. 100, 102 and 104, although I would have thought it better to leave those to the discretion of the noble and learned Lord the Lord Chancellor when exercising his power, if he ever does so, to add to paragraph 5 of the second schedule. But I must make absolutely plain that for reasons I shall give I am strongly opposed to Amendments Nos. 101 and 103. I say that with deep respect to the noble and learned Lord, Lord Archer of Sandwell, for whom I have had a high regard for many years, having known him well in both Houses of Parliament as well as a member of the Bar.

The trouble really is this. We have to acknowledge that our country, probably more than any other country in the world, is subject to pressure from immigration. We have bogus asylum seekers; we have people who come here not as asylum seekers but in a speculative way, hoping that they will be allowed eventually to stay.

Lord Goodhart

I am most grateful to the noble Lord, Lord Renton, for giving way. When he says that the pressure on this country is greater than on any other country in the world, does he seriously suggest that the pressure is greater than that on Germany and Austria which face very large incursions of refugees from eastern Europe and the former Yugoslavia?

Lord Renton

I agree that pressure has been very great in the past, but it is not within my knowledge that it continues to be so, whereas year after year we have vast numbers of people wishing to come here and settle in overcrowded parts of England; not so much in Scotland or Wales. I shall not give way again, although I may later. I think I should be allowed to develop my argument. If noble Lords are afraid of hearing my argument, so much the worse for them.

To grant the kind of aid which is being proposed in respect of appearances before the immigration appeal authorities and the immigration appeal tribunals would produce, I am sure, many more bogus asylum seekers coming here speculatively and hoping to get leave to remain. I do not consider that a wise use of public funds, especially when the noble and learned Lord the Lord Chancellor, faced with tremendous public expenditure on legal aid, is doing his very best under the Bill to try to change the system and make it more rational. I do not consider it would be wise for your Lordships to accept Amendments Nos. 101 and 103. I now give way.

Lord Archer of Sandwell

The noble Lord is typically generous and I am most grateful to him for giving way. He uses the words "bogus asylum seekers". How is it to be known whether an asylum seeker is bogus until his case has been competently deployed and competently considered?

Lord Renton

If I may say so, I think that a somewhat tendentious argument. We know that many people come here speculatively and we would only increase the numbers doing so if they were given public funds to help establish themselves here. I must confess that I do not think that is in the public interest.

Lord Clinton-Davis

I support, certainly in principle, the amendments we are addressing. I record a prior interest. I was at one time chairman of the Refugee Council, a body which undertakes invaluable work on behalf of people who are extremely vulnerable, many of them inarticulate and most of them incapable of coping with the sort of problems we are talking about.

I want to address briefly some of the remarks made by the noble Lord, Lord Renton, for whom I have a high regard, as he knows. We are good friends. However, I reject most of what he had to say. It is simply not true that this country, in the past or currently, bears a burden of immigration comparable to that of many countries in Europe, certainly proportionately. The noble Lord is simply mistaken. I did not know that he would raise the point; otherwise I would have armed myself with the statistics to buttress what I am saying. I invite the noble Lord to examine the statistics which are available.

The burdens borne by European countries do not compare with those in impoverished countries of Africa which have immigration problems of an unparalleled size. I think it is fair to say that in the light of the noble Lord's remarks.

As to the amendment, I adopt the argument adduced by my noble and learned friend Lord Archer. The issues being dealt with here can, even if they concern only a minority of cases, be matters of life or death. They have the most profound significance for many of the people who appear before the tribunals. I would also add—it goes without saying—that by no means all asylum seekers should be declared "bogus" before their cases have even been investigated properly.

I understand the arguments about priorities which I am sure my noble and learned friend will seek to adduce. I remind him that those arguments were present before in connection with the Society of Labour Lawyers, of which he is a distinguished co-president along with my noble and learned friend Lord Archer. I too have the privilege of being a co-president. I think the society is on record as having made a statement defending legal aid before the sorts of tribunals we are addressing. So there is something of an inconsistency about the current situation as it is being argued under the Bill. The Society of Labour Lawyers is very clearly on record over a long period of time as being in support of the very proposition now being discussed.

Lord Renton

Before the noble Lord sits down, does he agree that even if we are not getting more people seeking immigration here, relatively speaking, than other countries, the number is higher than is acceptable in the interests of the people of this country?

Lord Clinton-Davis

I am not going to enter into an argument because the matter cannot be dealt with properly in this way. I do not accept the argument that the noble Lord has adduced; nor do I accept that bogus immigrants are pouring into the country and that they are likely to get legal aid to appear before these tribunals. That is a rather speculative possibility and in fact one which is very unlikely to happen.

Lord Mackay of Clashfern

In relation to Amendments Nos. 101 and 103, it occurs to me to inquire whether, once the legal aid system is altered in accordance with this Bill, it might not be quite a good idea to invite the noble and learned Lord the Lord Chancellor and his colleague the Home Secretary to pass over the budget for support of representation in these tribunals so that it might be brought into the community legal service as part of the planned integration and perhaps therefore made use of under criteria which are more general than those which apply to the Home Office budget in this respect at the present time.

5 p.m.

The Lord Chancellor

The proposition is that Schedule 2 should be amended to allow legal aid to be available for representation in proceedings before employment tribunals—the old industrial tribunals—and social security tribunals. I speak from personal experience, and I believe that my experience would be confirmed by practitioners today. I have always made my views crystal clear, and my noble friend Lord Clinton-Davis has called attention to that.

I accept that employment tribunals follow procedures similar to those of the courts. That is because their function, like that of the courts, is to determine what are often complex factual and legal issues between private parties. Legal complexity can in some cases exceed anything which appears in the county courts. There can, I agree, be professional cross-examination of witnesses, and lawyers frequently appear in these tribunals. Applicants can be unrepresented in difficult cases, while employers are represented, and that is unequal representation. I accept that there are certainly some cases in which legal representation is desirable.

I recognise that representation is already provided for in proceedings before employment tribunals from a number of sources, including trades unions and statutory bodies such as the Commission for Racial Equality and the Equal Opportunities Commission. Nevertheless, it is clear to me that many people are unable to obtain representation when they need it, and it would be unworthy of me to seek to deny that.

I have already extended the availability of conditional fee agreements to all civil courts and tribunals, and under the Bill I propose changes to make these agreements more attractive. As I have already said, it is my belief that where the private sector can provide an effective service, such as conditional fee agreements, public money should not be spent. Conditional fee agreements are available for people to use in relation to employment disputes in employment tribunals. However, under the employment tribunals' costs rules, costs do not follow the event as in almost all other litigation where significant sums of money are recovered. A successful applicant in the employment tribunal under a conditional fee agreement would therefore have to pay his lawyer's success fee and the insurance premium from the damages awarded because he could not recover these from the respondent.

At the Home Affairs Select Committee on 13th October 1997 I was asked whether I planned to expand legal aid to cover representation at tribunals. The answer I gave on that day was that it would not be possible until I had control over expenditure. The reformed scheme which I propose to introduce under the Bill should, over time, give me that control and the flexibility required to target resources on deserving cases. I am willing to consider whether legal aid could be made available, in certain limited circumstances, for representation in proceedings before employment tribunals.

However, there are two points I wish to make. First, it would be premature to reach any decisions about extending publicly-funded representation in tribunal proceedings before the Government have completed a review, on which they are now embarked, of the extent to which current procedures and other arrangements, including representation, comply with our ECHR and EU obligations and until we have identified the options for ensuring compliance in the future; and, secondly, in any event, within my controlled budget I could not here and now realistically consider the availability of legal aid in employment tribunals beyond a very limited category of case, for to admit it even to that extent would be at the expense of other priority parts of the budget.

Legal aid could not conceivably be granted in present circumstances in every employment case. My general approach is clear. Public funding should not support weak cases. It should not displace other forms of support. Cases need to be tested for priority of claim under a controlled budget. Factors to be considered would include the complexity of the case, factually or legally, the public importance of the issues at stake and the availability to the applicant of other sources of representation. I can assure the Committee that I have these issues under active consideration.

Different considerations apply to tribunals dealing with social security appeals, whether the appeal tribunals or the proceedings before the social security commissioners, although I cannot claim any direct personal experience of these. Welfare tribunals investigate all questions relating to the appeal through an informal and inquisitorial hearing and are in sharp contrast to employment tribunals, which are adversarial. Oral evidence in these tribunals does not carry the same significance that it has in employment tribunals. Since 1996 appellants have had the opportunity in these tribunals to opt for either an oral or a paper hearing. The Department of Social Security's officials act as amici curiae, informing the tribunal of the relevant evidence, whether it assists the appellant or the department. Presenting officers receive training and guidance which stresses that they must not assume a defensive role or think in terms of winning cases. For these reasons, I see far less prospect that these cases could have a sufficient claim on a controlled budget.

On that basis, and bearing in mind what I have felt able to say about employment tribunals, which I believe is of an encouraging nature, I invite noble Lords not to press their amendments.

I turn now to Amendment No. 102. The noble Lord, Lord Goodhart, called specific attention to discretionary lifer panels. He proposes an amendment to Schedule 2 to allow funding to be available under the community legal service for representation in proceedings before discretionary lifer panels.

I welcome the opportunity to assure the Committee that representation will continue to be made available under the new scheme. However, I cannot accept the amendment because I intend to make provision under the criminal defence service rather than under the community legal service.

Although these hearings are not strictly criminal proceedings, the expertise necessary to provide this type of representation is most likely to be found in those practitioners who will provide services as part of the criminal defence service. However, I can give an assurance to the noble Lord, Lord Goodhart, that, although there is no provision for representation at these proceedings on the face of the Bill, I intend to make regulations under Clause 12(3)(f) to enable prisoners to be represented before parole board panels dealing with "discretionary lifers" and offenders detained at Her Majesty's pleasure. Clause 14(2)(b) requires the legal services commission to fund representation in the circumstances there prescribed. On that basis, I invite the noble Lord not to press that amendment.

I turn to Amendments Nos. 101 and 103, which address immigration tribunals. I am grateful to my predecessor the noble and learned Lord, Lord Mackay of Clashfern, for fuelling my assumed irredentist ambitions and seeking to gain control over part of the Home Office budget. I shall certainly convey what the noble and learned Lord said to my right honourable friend the Home Secretary. I do not believe that the amendments are necessary in the area of immigration tribunals. The Home Secretary already makes grants under Section 23 of the Immigration Act 1971 to the Immigration Advisory Centre and the Refugee Legal Centre. They are two voluntary organisations who provide free advice, assistance and representation at these appeals.

The whole system of immigration and asylum appeals is a matter that is receiving the current attention of the Government. I have been working closely with my right honourable friend the Home Secretary on proposals to rationalise the whole system of immigration appeals. I have also asked the Legal Aid Board to report to me with proposals for contracting legally-aided immigration work. All of this means that currently we are addressing the effectiveness of the system from the standpoint of having good quality advice, assistance and representation where needed. On that basis I invite the noble Lord to withdraw the amendment.

Lord Harris of Greenwich

Speaking as a former chairman of the Parole Board, I very much welcome the observations of the noble and learned Lord about discretionary life panels. When I was chairman of the board the Home Secretary alone took the final decision. As a result of the judgment these decisions are made by panels of the Parole Board. That being so, it is highly desirable that there should be legal assistance in cases of this kind, and I very much welcome what the noble and learned Lord said.

5.15 p.m.

Lord Windlesham

I also was chairman of the Parole Board and had an opportunity to observe discretionary life sentence prisoner hearings. I was under the impression that applicants were already legally aided.

Lord Meston

Before the noble and learned Lord responds further—if he intends to do so—perhaps he can add to the list of those whom he acknowledges provide good representation for those who appear before employment tribunals, in particular the Free Representation Unit. Further, when considering whether conditional fee agreements are appropriate before such tribunals, will he bear in mind that they would be inappropriate in many cases where the primary remedy sought was reinstatement rather than financial compensation, and also that they might be inappropriate before tribunals where inter partes orders for costs are not the norm?

The Lord Chancellor

That is the problem, is it not? It is very difficult to make conditional fee agreements wholly effective where costs do not follow the event. That was the point that I was at pains to make. Conditional fee agreements can work in a regime where costs do not follow the event, but they have the disadvantage that the fees of the claimant's lawyers and the uplift must come out of the compensation and so reduce the amount to which ex hypothesi the claimant is entitled. Conditional fee agreements therefore work much more effectively in a regime where costs follow the event.

It is not however obvious why costs should not follow the event in tribunals when that is the norm in every other class of litigation. But conditional fee agreements in employment tribunals can, without the benefit of a general presumption that costs follow the event, still improve upon the current state of affairs. I can assure the noble Lord that I am ready to add my voice to that of others in praise of the Free Representation Unit.

Lord Donaldson of Lymington

Do I understand the noble and learned Lord the Lord Chancellor to say that it is not obvious to him—or I assume to anyone else—why costs should not follow the event in employment tribunal cases? I believe that it is very obvious. Usually they are cases in which individuals are suing their employers. The employer has considerable assets and can incur enormous sums in costs. If the employee loses, under a revised regime he will be liable for the employer's costs. In many cases that would strongly deter the employee from seeking to assert his rights. The very threat would achieve the employer's result. It is not a case where one would expect the employee to insure against that liability. Not all employees—perhaps not even the majority—have trade unions behind them to act as substitute insurers. I would be very alarmed at any move to make costs follow the event in employment tribunals except to the extent that it already exists; for example, if there were a major abuse of process by the claimant.

The Lord Chancellor

This is a matter that we can debate to a substantial degree. A rule that costs follow the event must be a reciprocal one. The applicant would have to be liable for costs if he lost. That is the position in all civil litigation. One asks what is so special about employment tribunals that entails that the rule that applies in all other civil litigation should not apply in employment tribunals. Throughout the country employers are sued for damages in the county courts and the High Court by employees where the rule applies that costs follow the event. What reason in principle is there for making a difference in employment tribunals? The noble and learned Lord suggests one reason may be that the applicant will be deterred from bringing his case before the employment tribunal by the risk of a liability in cost. It can be argued, however, that one should discourage weak cases. Very often applicants bring weak cases before employment tribunals inspired by animus against their employers arising out of their dismissal. If the effect of changing the cost rule were to deter weak claims and prevent employers being vexed by them there is a highly respectable argument in favour of that change. There is a lot to argue about in this area, but perhaps now is not the time.

Lord Simon of Glaisdale

This most valuable debate has brought out a number of interesting points. I draw attention to one spin-off. We now have a clear demonstration that conditional fee agreements are not a universal panacea. They do not give access to the legal system in all circumstances but much less to justice. I hope that the proponents of the contingency legal aid fund—the noble Lord, Lord Goodheart, and my noble and learned friend Lord Brightman who made such a striking speech on the White Paper—will note that. I understand that it is not proposed that the contingency legal aid system should be in addition to conditional fees. My noble and learned friend is right when he said that if that were so, the conditional fee agreement would cream off all the cases likely to succeed leaving only the more speculative cases. That is not what I understand is proposed. On the contrary, the contingency legal aid fund system covers the same ground as the conditional fee agreement area, but without any of the disadvantages of the latter. However, it has been a valuable debate. We now have clearly demonstrated one of those disadvantages.

Lord Goodhart

I am grateful to those who have spoken in the debate; and I am grateful to the noble and learned Lord the Lord Chancellor for the answers he has given to the amendments in the group.

In descending order of gratitude, perhaps I may touch on the replies to the amendments. First, on Amendment No. 102 relating to the proceedings before the discretionary "lifer" panels I am entirely satisfied by the response of the noble and learned Lord the Lord Chancellor. It clarifies a point which was not clear on the face of the Bill and was a matter of considerable concern to Justice.

As regards immigration proceedings, there is a considerable, unmet, need for assistance. However, in view of the extensive review of immigration proceedings now under way, this may not be the moment to press that issue further. It is a matter that I wish to take away. I shall be interested to hear the view of the noble and learned Lord, Lord Archer of Sandwell, on this aspect.

I shall wish to read what the noble and learned Lord the Lord Chancellor said on social security proceedings, and to consult with bodies which are actively involved in that area before deciding whether the issue should be brought back. However, in the case of appeals before the social security commissioners—they are appeals from the first level of appeal tribunal under the 1998 Act—there is inevitably a strong case at that level for providing publicly funded assistance. By the time the matter is before the social security commissioners it necessarily involves a point of law. It involves necessarily technical arguments, and it is surely appropriate that assistance should be provided there.

Finally, on employment tribunals the noble and learned Lord accepted that it was desirable in principle that in a number of cases, and subject to a case satisfying the applicable merits test, there should be publicly funded assistance. But that was dependent on getting the budget in order. I am somewhat disappointed. If that is the objective, the provision should go into the Bill now, even though at present it is necessary to give it a low priority. It is desirable that a clear aim of the Government should not at the very first stage be wholly excluded, but should be included on the understanding that it inevitably receives a low priority.

Having said that, I beg leave to withdraw Amendment No. 100 at this stage.

Amendment, by leave, withdrawn.

[Amendments Nos. 101 to 104 not moved.]

Lord Clinton-Davis moved Amendment No. 105:

Page 54, line 32, at end insert— ("(I) proceedings in coroners' inquests into death, and (j) public and judicial inquiries").

The noble Lord said: It does not follow that all coroners' inquests, and public and judicial inquiries, would fall within these categories; but in the light of the exclusion of clinical negligence from the general negative approach towards legal aid, I believe that these amendments could be associated with that provision. I presume the reason for excluding clinical negligence from the general rule that personal injury negligence should not come within legal aid is because of its complexity, the expense involved and the difficulties of carrying out investigations. I submit that enabling representation to take place where these difficult considerations are likely to apply could well obviate costs.

I have appeared at inquests and have found that material which had not been willingly given—perhaps suppressed is too hard a word—was available at the inquest. I cannot remember a case where I charged to appear at an inquest; it has not been eligible for legal aid in the past. But in my experience, and I am sure that of other practitioners present, in particular in clinical negligence cases, it would have been extremely difficult to obtain the information and evidence to enable that to happen. I believe that there is an argument for this to be considered by my noble and learned friend in relation to the approach that he has indicated about other matters.

The same argument applies as regards public and judicial inquiries. I do not press that so hard and I should be happy to abandon that part of the amendment. The issue is more important in relation to coroners' inquests.

I hope that my noble and learned friend will recognise the point I made at the outset. It is a way of obviating costs which could be expensive if the provision is not allowed. It occurs at present; and I believe that it should not. My noble and learned friend will always have discretion in relation to these matters. I commend the idea to him. I beg to move.

The Minister of State, Cabinet Office (Lord Falconer of Thoroton)

The effect of my noble friend's amendment would be to make public funds available to provide representation at coroners' inquests and at public and judicial inquiries. I do not think that we can accept the amendment. An inquest is an inquiry concerned with the facts surrounding a death rather than issues such as civil or criminal liability. The proceedings are intended to be inquisitorial and informal; and legal representation is generally considered unnecessary. Full civil legal aid is not therefore available to someone appearing at an inquest. For similar reasons, it is not available for making representations for public or judicial inquiry. This does not mean that someone who is required to attend an inquest will receive no assistance from the legal aid scheme. Legal advice and assistance from a solicitor is available under the green form scheme to those who are financially eligible. The proposed new scheme replicates this position.

I accept that there may be truly exceptional circumstances in which it is fair for public funds to be spent on representation at inquests and inquiries. I am thinking of circumstances similar to those concerning the inquest into the "Marchioness" disaster where a second inquiry was necessary because of failures in running the first. On that occasion, legal aid was provided in the form of a specific grant covering only that instance. As the failures of the inquest were in no way the responsibility of the families, it was only fair that they should not have to pay to be represented a second time around. The noble and learned Lord the Lord Chancellor therefore exercised his power to permit the legal aid board to pay for representation at the second inquiry, despite that being outside the normal scope of legal aid. No similar grants have been made since. I believe that the new scheme should contain a similar provision and the noble and learned Lord the Lord Chancellor will be considering how best this can be achieved. I hope that in the light of that somewhat encouraging speech the noble Lord will withdraw his amendment.

Lord Clinton-Davis

I welcome what has been said by my noble and learned friend. He has been more forthcoming than I expected and I accept with relish what he has offered. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.30 p.m.

Lord Archer of Sandwell moved Amendment No. 106:

Page 55, line 5, at end insert (", and ( ) proceedings on a complaint under the Environmental Protection Act 1990.").

The noble and learned Lord said: This is a narrow point. The amendment seeks to add an item to the list of proceedings in a magistrates' court for which funding may be made available for representation. The proposal, for which I am indebted to the Law Centres Federation, is designed not primarily to assist people in defending proceedings but to enable someone to bring proceedings. The proceedings in question arise where a tenant is living in a house which by reason of disrepair is alleged to create a health hazard, or an unfitness for habitation, or a public nuisance. The complaint may be against a private landlord or against a local authority.

Most constituency MPs have experience written on their hearts of where a problem which despite repeated complaints is always relegated to next year and the danger to health is overlooked. Sometimes a summons is the only way to concentrate minds. I cannot believe that this would represent a serious drain on resources. However, the existence of the possibility of a sanction represented by the inclusion of these proceedings in the list may itself lead to the redress of a genuine grievance.

The provision is a useful statutory provision, but tenants may well hesitate to avail themselves of it without access in an appropriate case to representation. I hope that in such a case, where generosity is not likely to be exhaustive, my noble and learned friend will feel able to respond. I beg to move.

Lord Falconer of Thoroton

My noble friend's amendment to paragraph 5 of Schedule 2 would have the effect of making public funds available for representation for complaints under the Environmental Protection Act 1990. These are summary criminal proceedings which allow for any person to issue a complaint to a magistrates' court where aggrieved by the existence of a statutory nuisance, or the defacement by litter or refuse of any public land or other land within a litter-control area of a local authority, as specified in Parts III and IV of that Act.

I am afraid that we cannot accept the amendment. In the cases described, the court has to order a defendant to pay the reasonable expenses incurred by the complainant where there were reasonable grounds for bringing the complaint. In the majority of complaints, the defendant will be a public body or company and there is not the risk of costs not being paid. One of the key objectives of the reforms of the legal aid system is to ensure that publicly-funded help under a controlled budget is directed to areas where the need of people is greatest; for example, social welfare cases, public interest cases and those involving the interests of children. In the judgment of the noble and learned Lord the Lord Chancellor, these proceedings do not have sufficient priority to warrant any public funding other than for the provision of basic information and advice on the law. Therefore, I invite my noble and learned friend to withdraw his amendment.

Lord Archer of Sandwell

My noble and learned friend and I are agreed on the premise—something has slipped—but we are not agreed on the conclusion. I agree that the purpose of the legislation should be to direct legal aid to where the need is greatest. If he had seen some of the cases with which I had to deal as a constituency MP he might have believed that there was a need. However, we live in a real world, even in this Chamber. I am disappointed but scarcely surprised by his response and not being surprised I am resigned. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

[Amendment No. 107 not moved.]

Clause 8 [Individuals for whom services may be funded]:

Lord Archer of Sandwell moved Amendment No. 108:

Page 5, line 15, at beginning insert ("Subject to subsection (4),").

The noble and learned Lord said: It may be to the Committee's convenience if with this amendment we discuss Amendment No. 112, for which Amendment No. 108 is a paving amendment. I tabled the two amendments in the hope of allaying anxiety, including my own. If I am told that they are unnecessary I shall be delighted and happily seek leave to withdraw them.

Clause 8 is about financial limits on applicants for community legal service funding. Subsection (2) recognises that there may be situations in which justice may require funding without an investigation of financial resources, possibly because there is an emergency and no time to carry out an investigation or because for some reason the applicant is unable to provide information about his resources.

There is some anxiety because no specific mention is made of what is now called the green form scheme. I believe that a few moments ago my noble and learned friend Lord Falconer went some distance to make the point which I am now raising, but the fact that he did not go the whole distance was because it did not arise in respect of the amendment moved by my noble friend Lord Clinton-Davis.

As I ventured to suggest during our debate on Tuesday, problems do not always come packaged in neat categories to facilitate administration. Someone may have a variety of problems. Some he may not recognise as legal problems at all. Some he may not appreciate as being susceptible to a remedy. Frequently he may not know what his remedy is and where to find it. A short interview with someone well informed and practised in analysis may be essential to sort out whether he can bring proceedings at all and if so for what. There can be no application for public funding and therefore no financial assessment until he is clear for what purpose he is making the application. A short interview may be not only the source of a solution to his problems, but it may represent a saving in court or tribunal time and certainly in administrative time. If my noble and learned friend can assure me that such an interview can be funded under the proposed scheme without my amendment I shall proceed no further and simply enjoy the feeling of pleasure which he has engendered. If he cannot give me that assurance, and if the amendment is necessary, I hope he will agree that it should be made. I beg to move.

Lord Goodhart

I rise briefly to express my complete support for what the noble and learned Lord, Lord Archer of Sandwell, said. The free diagnostic interview seems an absolutely essential element in any scheme if it is to work, and I too therefore hope that the noble and learned Lord the Lord Chancellor will be able to satisfy the concerns of the noble and learned Lord, Lord Archer, and myself.

Lord Clinton-Davis

I wish to ask my noble and learned friend Lord Archer a question. I have not been involved with the green form for many years but I think it does attract a fee which is assessed by the solicitor when dealing with the green form application. He or she is required, on the basis of means as he or she feels appropriate, to insert in the form a fee—it is a very small one—from the client. I think that the wording of the amendment is therefore defective because it refers to an initial free interview. If my noble and learned friend was referring to the inclusion of the green form requirements and conditions, that is fine, but the proposal may be defective for that reason.

Lord Archer of Sandwell

If the question had occurred to me I would have consulted my noble friend Lord Clinton-Davis because I would have assumed that he knew more about the green form scheme than I do. However that may be, I am grateful to him for having raised the question. I do not seek to improve on the existing green form scheme, and if the wording of my amendment is defective as he suggests, I would be very happy to withdraw it if we can be assured either that it is unnecessary or that an appropriate amendment will be forthcoming at a later stage.

Lord Falconer of Thoroton

I can very well understand the intention behind this amendment. For technical reasons it will not achieve its desired effect, but I am happy to say that I think it is unnecessary. As I understand the amendment and the speech in support of it by the noble and learned Lord, Lord Archer of Sandwell, it is meant to ensure that it will always be possible for people to get an hour's free basic advice regardless of what other conditions may be imposed on eligibility by regulations made under Clause 8.

The amendment says that those regulations cannot preclude the provision of the hour's advice. However, regulations made under this clause cannot provide for charges to be applied or disapplied. They can only impose conditions on eligibility in terms of applicants' financial resources. Regulations about payment for services would be made under Clause 10. In strict terms, therefore, it is already the case that the regulations in Clause 8 cannot preclude the provision of free advice. I hope that in that rather convoluted way I have dealt with the point. The regulations in Clause 8 cannot preclude the provision of free advice. That is the important point. Perhaps the noble and learned Lord's amendment is intended to go further and ensure that an hour's advice will be available to anyone, regardless of their means. I am not sure that the amendment as drafted will achieve that. If that were the effect, I would have to urge your Lordships to reject it. Clause 8(2) allows the Lord Chancellor to prescribe circumstances in which services can be given regardless of means. I envisage that this will usually mean only the most basic of services such as information about the availability of help. I would be reluctant to make an hour's advice available to absolutely anyone because of the cost implications. Even diagnostic advice would take time that would need to be paid for, and giving that to anyone who asked would take money away from people who needed it more.

The Government intend to make services available free of charge to people who absolutely cannot afford to pay for them and will bring forward regulations in due course under Clause 10. But we believe people should pay something towards their help where they can afford to. This amendment carries the risk that some services might not be provided on that basis. I hope therefore, with those encouraging words, that the noble and learned Lord will withdraw his amendment.

Lord Archer of Sandwell

I am grateful to my noble and learned friend for that exposition. I did invite him to tell me that my amendment was unnecessary. I did not expect him to tell me that it was unnecessary because I had put it down in the wrong place. As I said a moment ago, I do not seek to improve on the existing scheme. I probably moved the amendment from a reservoir of ignorance which ought to be dispelled before I seek to proceed further. I shall consult further with those who know about these matters to decide whether there is some other way in which I can ensure that what I originally intended will take place or whether what my noble and learned friend has promised will be sufficient to achieve that. That will require a little reflection and, for the moment at least, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

[Amendments Nos. 109 to 112 not moved.]

Clause 8 agreed to.

Clause 9 [Code about provision of funded services]:

Lord Kingsland moved Amendment No. 113:

Page 5, line 23, after ("code") insert ("following consultation with interested parties as appropriate").

The noble Lord said: The intention of this amendment is to introduce into Clause 9(1) an obligation on the commission to consult with interested parties before its funding code is settled. I understand that recently the Legal Aid Board has published a draft funding code. I wonder whether the noble and learned Lord the Lord Chancellor will confirm that he intends to take account of the views expressed by interested individuals and organisations before approving the code in final form.

The Lord Chancellor

Never in the history of this Chamber can advocacy so brief have met with success. I am happy to consider these amendments. Our practice, as the noble Lord indicated, is always to consult on major innovations like the funding code. As the noble Lord said, the Legal Aid Board only last week published a first draft of the code for consultation. That shows that we are already abiding by the duty envisaged in the first amendment, and I have no objection at all to the Bill containing such a duty.

The second amendment imposes the same duty on the commission when it is considering any revisions to the code. Again, I would expect consultation to be undertaken as a matter of course. I imagine that in many cases revisions to the code will come about as a result of the commission consulting practitioners and others about the way the code is working in practice. I think that consultation will drive the revisions rather than the other way about. I am happy, however, to take both these amendments away for positive consideration.

Lord Kingsland

If my brevity has that effect I shall continue in the same vein. I am most grateful to the noble and learned Lord for his reply and in those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (The Viscount of Oxfuird)

I must advise the Committee that should Amendment No. 114 be agreed to, I am unable to call Amendments Nos. 115 to 118 inclusive due to pre-emption.

Lord Simon of Glaisdale moved Amendment No. 114:

Page 5, line 27, leave out subsection (2).

The noble and learned Lord said: This amendment seeks to leave out subsection (2) and is grouped with amendments to leave out subsections (4) and (6). My noble and learned friend the Lord Chancellor was, or seemed, rather cavalier on Tuesday about the desirability of economical drafting. Under our arrangements there is no one to give directions to the draftsmen generally that they should draft in accordance with the recommendations of the Renton Committee on preparation of legislation or the later report of the Hansard Society on the legislative process. It is therefore left to each departmental Minister in charge of the Bill to ensure and satisfy himself as to the drafting. That does not mean only the accuracy of the drafting; it also means its economy.

Perhaps I may remind the Committee that it was prolonged dissatisfaction as to the contents of the statute book which led to the setting up of the Renton Committee in 1975. It remarked, among other things, on the evil of prolixity in the statute book and over-elaboration. At that time the statute book consisted of three medium-sized, though fairly stout, volumes of public and general Acts. Ten years later, far from there being economy in pursuance of what the Renton Committee recommended, it had swelled to five volumes—not only five volumes but, comparably, there were fewer statutes in those five volumes than there had been in the preceding three volumes.

The format of the statute book was enlarged rather than the drafting being made less prolix. That was expensive to those who had bookcases made for the smaller format, but was a minor consideration when it succeeded once again in reducing the number of volumes from five to three. However, in spite of the larger format, within a few years it was again up to five volumes. I shall be very surprised if this year it is not six or more.

Therefore I make no apology—I hope I do not need to make one—for begging for there to be economy in the drafting of the statute books. There is another disadvantage. It is extremely expensive to have unnecessary provisions; for example, subsection (2), which is around one third of a page, will be printed over and over again; secretaries, draftsmen, printers and bookbinders will all be concerned and the people who pay for it in the end are, first, the taxpayers who fund the public purse and, secondly, the users of the statute book. That is not the only reason.

The other reason, as I am sure my noble and learned friend the Lord Chancellor will bear out, is that unnecessary provisions in a statute add to the complication and difficulty of interpretation, which quite often leads to a misinterpretation. Therefore, if we can get down to the essentials, we are performing our duty as a legislative chamber.

Subsection (2) might be described under the rubric of legislation to teach grandmothers to suck eggs. Clause 9 says that the commission must draw up a code as to the criteria which will govern the principles of funding. That is splendid; so it should. But then the clause goes on to say precisely how that should be done. One must remember that the commission is not drawn from the local mental deficiency colony; it consists of men of acumen and experience chosen for their special gifts by my noble and learned friend himself. Let us consider what they have to be told. They have to consider the likely cost and how much money they have to meet those cost, the importance of the matters, the prospect of success and the conduct of the applicant.

Do they really need to be told that? But that is not the end. They have to be told also that they must consider the public interest. Is it really conceivable that, in carrying out the duties imposed on them by subsection (1), they would not consider those matters? So much for subsection (2), which is a grandmother/egg subsection.

Subsection (4) falls under the same rubric. It says, Where more than one description of service is available, the service funded is that which (in all the circumstances) is the most appropriate having regard to the criteria set out in the code". Do they need to be told that too? Subsection (6) is not grandmother-led, it is computer-led. It is something that pops up in almost every statute in one form or another. It says, The code may make different provision for different purposes". Is it conceivable that it should not do so; that the same provision must be made however different the purposes and the different circumstances?

As I say, we are under a duty to see that this measure, which is extensive and one of whose objects is economy generally—with which I wholly concur—ensures that the cost of the legal aid service is contained. But in doing that, we should act consonant with it. All those provisions merely either tell people what they would do in any event without the necessity of writing it into the statute, or are completely absurd, telling them that the code must not make different provisions for different purposes.

6 P.m.

Lord Hacking

I have had a great affection for the noble and learned Lord for over 30 years. He was generous to me when, as a young and nervous barrister, I appeared before him when he was President of the Probate, Divorce and Admiralty Division. Alas, I must profoundly disagree with what he has just said. I do not believe that the drafting of Clause 9, and the code that will be published consequent to Clause 9, is a licence to print reams of legislation and subsidiary legislation; nor do I consider that subsection (2) falls under the rubric of trying to teach one's grandmother to suck eggs.

The correct approach is to look at what the Government are seeking to achieve. First, it is plain that the Government are seeking to achieve greater flexibility in the application of legal funding than is currently available under the legal aid merits test. Secondly, they are deliberately introducing a range of considerations identified in subsection (2)(a) in terms of comparing the likely cost of funding and the benefit to the individual. That seems an entirely sound test.

I turn to subsection (2)(c) on, the importance of the matters in relation to which the services would be provided to the individual". Again, that seems an entirely sound test.

Paragraph (f) deals with the conduct of the individual. We shall discuss that later and I shall reserve my position on it. I refer finally to paragraph (g) which deals with the public interest. Those are all examples of the helpfulness of the Explanatory Notes which have been prepared under the auspices of my noble and learned friend the Lord Chancellor.

I refer to paragraph 82 where we see another good example of why the new proposed criteria are a definite step forward from the criteria used for the grant of legal aid. It states: For example, prospects of success will not be a relevant factor in cases about whether a child should be taken into local authority care". Again, that is an example of how I believe that the clause achieves its objective. As a result, I believe that it will result in a much better regime for the funding of legal aid than currently exists.

The fact is that, economic with the legislation or not, the amendment drives a coach and horses through the setting up of the new criteria. On that basis, I hope that my noble and learned friend will resist the amendment. If he does, he will have my full support.

Lord Falconer of Thoroton

I am encouraged by that support to resist, with diffidence, the amendment proposed by the noble and learned Lord, Lord Simon of Glaisdale. Of course, I concede immediately that unnecessarily long legislation is to be deprecated. Therefore, the position that I have to defend is why the three subsections that the noble and learned Lord seeks to remove should be retained.

The first, Amendment No. 114, would remove Clause 9(2) in its entirety. This would be an act of quite astonishing statutory vandalism. This is the clause that sets out the factors which are to be considered in framing criteria for the funding code. The removal of the criteria would render the funding code either ineffective or unclear. They are its essence in terms of enabling the commission, in drawing up and operating the code, to reflect priorities and ensure that only the most deserving cases receive funding. The removal of the criteria would also make the system of giving help to individual cases far less accountable. I cannot understand why anyone would want to remove that subsection.

Lord Simon of Glaisdale

I cannot have made myself clear. The subsection is quite unnecessary; it goes without saying.

Lord Falconer of Thoroton

The noble and learned Lord says, "It goes without saying" as to which are the particular considerations for the commission to take into account. It may "go without saying" to a reasonable man, such as the noble and learned Lord, but I would not for one moment think that it would "go without saying" to lawyers considering the means of challenging the ways in which the commission has prepared its code. A reasonable fellow, such as a predecessor of the noble and learned Lord the Lord Chancellor, was himself challenged in court by both the Bar Council and the Law Society some years ago in relation to provisions that he made in relation to regulations. No doubt it would have been said in those proceedings that what is required "goes without saying". In my submission, it is perfectly sensible in such a Bill to specify with precision the considerations that the commission has to take into account. If they are obvious, that makes things clearer.

The second amendment, Amendment No. 120, would remove Clause 9(4). This clause allows the commission to ensure that the most appropriate type of service is used in individual cases. The amendment is unacceptable because it would remove the commission's discretion to assess whether the most appropriate service was being considered by the applicant; for example, was the case suitable for mediation rather than full-blown litigation? The noble and learned Lord's point on that, that "It is so obvious; they could do that anyway; you do not need to include that"—

Lord Simon of Glaisdale

Not only that; it says elsewhere in the statute that it cannot be done.

Lord Falconer of Thoroton

In my respectful submission, subsection (4) is the only place where it is made clear that the code shall seek to ensure that. That is why it is there.

The final amendment, Amendment No. 123, would remove Clause 9(6). The clause allows the commission to vary the funding code criteria according to the category of case or the type of service; for example, if a case has a wider public interest, the commission could apply less stringent criteria for the prospects of success. The removal of the clause would remove an important part of the commission's ability to allocate funds according to priorities and need.

Lord Simon of Glaisdale

I apologise for interrupting the noble and learned Lord again. I say again that I have not made myself clear. Certainly, it should have power—obviously, it should have power—to make different provisions for different cases. The noble and learned Lord has just given an example. The point is that it does not need to be told that it can do that. Common sense and reasonableness say that it may do that. We cannot go on legislating for every aberration, for every ridiculous argument that some ingenious advocate might place before a court.

Lord Falconer of Thoroton

I am grateful to the noble and learned Lord for making his argument clear. I had understood it. The argument boils down to assertion and counter-assertion. The noble and learned Lord says that common sense leads to the conclusion so clearly that there is no need for such provisions to be set out in the Bill. Parliamentary draftsmen take the view—having, with the greatest of respect to the noble and learned Lord, heard him making that point in respect of a number of parallel clauses in previous legislation—that that is not right. It is a matter of judgment and balance. It is sensible to set out this sort of power in order to avoid any disputes that may be brought by lawyers.

A judgment must be made as to whether or not it is necessary—and thereby avoid disputes in the future—or whether one can rely on the common sense not only of the judges, which I am sure one can, but also of the claimants who might think that because there is a gap there is a chance for making a claim and clogging up the time of the court. So, a judgment has to be made and the line must be drawn somewhere. It does not seem to me to be inappropriate to draw the line in the way outlined by the parliamentary draftsmen. It will avoid disputes, especially in an area where lawyers might be motivated to bring judicial review or similar proceedings. Speaking for myself, I think that it is quite a sensible course that the parliamentary draftsmen have taken. Although the noble and learned Lord might disagree, and although I have obviously failed to persuade him, I trust that he will rest assured that I did understand his argument. In the light of those comments, I invite the noble and learned Lord to withdraw his amendment.

Lord Simon of Glaisdale

My first very pleasant duty is to thank the noble Lord, Lord Hacking, for what he said in his introductory remarks. All too often these days I have to say, "Yes, I knew his father". Occasionally, as with the noble Lord, Lord Strathclyde, it is, "Yes, I was a fellow Member with his grandfather in both Houses". The father of the noble Lord, Lord Hacking, was a very old friend of mine. It is a great joy to see his son intervening in debates, even if the points he made today were not perhaps the best that could be made. Neither he nor the noble and learned Lord, Lord Falconer, really faced the fact that, although they may be desirable, these criteria are the sort which the kind of people that my noble and learned friend is going to appoint are bound to consider.

The noble and learned Lord said that any reasonable body would take these criteria into account. But he then went on to say that that would not preclude some enthusiastic lawyer putting forward to a tribunal a point that is ex hypothesi unreasonable. If we are really going to legislate in that way, there will be no end to the statute book. It will not be merely six volumes; indeed, it will be seven, eight or nine in a few years' time. What is more, it will establish a precedent.

I recall a certain Bill, but I am not sure whether it was one for which the noble and learned Lord the Lord Advocate was responsible. However, I remember one of the Ministers involved. I shall name him because there is no shame attached. I have in mind the noble Lord, Lord Williams of Mostyn. When I pointed out to the latter during the proceedings on that Bill that a provision was unnecessary, he said: "There is precedent". Members of the Committee will remember the well-known provision in paragraph 10 to the seventh schedule of the Local Government (Scotland) Bill. That is the way in which the provision will be used. I am sure that we shall have many precedents.

I am afraid that the noble and learned Lord did not make the point that the test is: what is the meaning to a reasonable man? That is the test in every court. We simply cannot go against the reasonable man, the very basis of Anglo-American jurisdiction, and take as our criterion the most ingenious and wrong-headed advocate seeking to find a hole. That is not the way—and I say this with all the force at my command—to frame a statute. If we try to do so, as I said, there will be no end to the mischief.

The noble and learned Lord concluded his speech—given, as usual, so delightfully—by saying that, in view of what he had said, he hoped I would withdraw the amendment. I shall withdraw the amendment, but I trust that the noble and learned Lord will not take offence if I say that it is not in view of what he said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.15 p.m.

Lord Kingsland moved Amendment No. 115:

Page 5, leave out lines 31 to 34.

The noble Lord said: This amendment seeks to remove the provision which enables the legal services commission to deny legal aid in cases in which an individual would otherwise have qualified but does not do so because of lack of resources. In seeking to illuminate the point, I shall quote briefly from the keynote address to the Bar Annual Conference in 1996 made by the noble and learned Lord the Lord Chancellor. Lest he should think that this is a hostile act on my part, I should say that I accept that the words he uttered cut both ways, politically. The opening part of the noble and learned Lord's speech referred to a White Paper produced by the previous government. He said: The main feature of the White Paper is to cap legal aid for the first time and to impose heavier liabilities on assisted persons both to pay greater contributions and their opponent's costs if they lose. Of course, I do not exclude cost capping, if the cost of a demand-led system makes that unavoidable. Cost capping, however, is unattractive in principle because legal aid would cease to be a benefit to which a qualifying individual is entitled. It would, in practice, become a discretionary benefit, available at bureaucratic disposal—a benefit which would have to be disallowed when the money run out, or when another category of case was given preference. Legal aid would cease to be a service available on an equal basis nationally because cases would go forward in one region where identical cases in others of equal merit would not. I am not persuaded by the arguments of the White Paper that that would not happen".

I accept, first, that the policy of capping legal aid was the policy of the previous government; and I am a member of the party of that government. Secondly, I also accept that the noble and learned Lord the Lord Chancellor qualified, quite heavily, what he said on that occasion by saying that he did not exclude cost capping, if the cost of a demand-led system makes it unavoidable". Nevertheless, it seems to me that the principle which flows from what the noble and learned Lord said is that, all things being equal, a system of entitlements is preferable to a system of bureaucratic discretion.

At present, we face a legal aid budget which is not out of control. The budget has been underspent over the past five years and, indeed, it forms only just 0.5 per cent. of the total annual budget of this nation. Moreover, the measures that the noble and learned Lord is proposing in the Bill will further discipline expenditure. I am thinking in particular of the block contracting system to solicitors. I am thinking also of the intention to widen the use of graduated fees, which currently apply in criminal cases up to a length of 10 days, to other cases.

If those facts are put together, it is my submission that, far from being out of control, the legal aid budget is well under control. In those circumstances, the threat to which the noble and learned Lord the Lord Chancellor alluded in his speech is not on the horizon. I wonder whether the noble and learned Lord will reconsider that part of the Bill which imposes financial cut offs in circumstances where otherwise individuals would be perfectly entitled to be legally aided. I beg to move.

Baroness Crawley

I cannot agree with Amendment No. 115 in the name of the noble Lord, Lord Kingsland. For the commission to operate effectively it is essential that it is able to assess the availability of resources and use those resources within the terms of the community legal service fund. After all, as we are constantly reminded by my noble and learned friend the Lord Chancellor, this is a properly controlled budget which must be administered in the context of the priorities set by my noble and learned friend. My noble and learned friend quite rightly reminds us that there is no longer a bottomless pit of resources within the terms of this Bill.

Lord Phillips of Sudbury

We on these Benches wish to associate ourselves with the amendment moved by the noble Lord, Lord Kingsland. Access to justice—as this Bill is entitled—will not prevail once the capped budget has been reached. Access to justice and equality before the law is one of the most basic and fundamental rights to which citizens of this country are entitled, and which they have claimed since the time of Magna Carta.

Like the noble Lord, Lord Kingsland, we too believe that the budget is not out of control. Last year and this year the legal aid system operated within budget. The number of cases covered rose by 3 per cent. Most important of all under this Bill the Government will take vast new powers, discretions and controls to ensure that what has prevailed without those extra powers over the past two years will prevail in future. Therefore the difference between us in terms of this amendment may be less than the previous speaker and the noble and learned Lord the Lord Chancellor have indicated.

As I said, with the new regime there is a degree of flexibility which the Government can control to some extent by means of the merits test and the means test. That is desirable from any point of view and most of all in terms of obtaining access to justice. The legal aid budget has never before been capped in this way. It is difficult to see the justification for doing so at a time when the legal complexities of life for the ordinary citizen and the importance of obtaining access to justice, have never been so great. That need will continue to increase. In our view it is not possible to justify this aspect of the Bill.

Baroness Thornton

I am puzzled about this matter. The figures appear to indicate that expenditure on legal aid has risen dramatically over the past few years and that it continues to rise at a rate well above inflation. That means that we have to set priorities in regard to this area of our public expenditure. Politics is about setting priorities. I do not see why this area of our public expenditure should not be subjected to the same conditions as other areas of our public expenditure. No one has said anything so far to convince me otherwise.

This legislation seeks to establish systems to ensure we obtain the best value from the resources which are available. The Bill seeks to build a modern legal edifice which will achieve several key objectives; namely, high quality legal services which are accessible to people when they need them most. The Bill seeks to achieve the most effective use of public funds to meet those objectives. A cornerstone of the Bill is the concept of the availability of resources and likely demand. The effect of the amendment would be to make the new structure lopsided, even if it did not make it fall over, as it were. Therefore I believe the amendment must be resisted.

The Lord Chancellor

The Prime Minister said again and again during the election campaign that schools and hospitals were our number one priority. He did not say that legal aid was our number one priority. I agree with the realism of the noble Baroness, Lady Crawley. With regard to all the competing claims on scarce resources, the Government are entitled to take a view as to how much they will spend on legal aid, and on what kinds of services they will expend those moneys. The average cost of cases has continued to outstrip inflation. In 1997–98 the average cost of a civil case was 12 per cent. higher than the previous year.

It is essential that under a controlled budget the funding code should reflect the availability of resources. Therefore I cannot accept the noble Lord's amendment. The main way that resources will affect the code will be through the priorities that I set for the deployment of resources. That will obviously be influenced by the amount of money that I can provide to the community legal service fund. I must repeat a simple truth that no noble Lord would or could gainsay in our discussions; namely, that what is available for civil legal aid is what is left over from the budget after the prior claims of criminal legal aid have been met. We can no longer operate in a world where the budget for funding civil legal aid is entirely open-ended and controlled by the lawyers and simply regulated by demand. That is simply not an appropriate way of spending taxpayers' money when there are so many other important calls on public expenditure.

Resources will not usually be taken directly into account in individual funding assessments as regards the merits of cases that should go forward. But they will be a factor in determining the toughness of the criteria at any particular time. For very expensive cases, which will be funded through a centrally held budget, resources will always be a factor, and they may be a factor in borderline cases, particularly if the commission is faced with unforeseen demand and needs to ensure that it can continue to meet the demand for funds that are judged to be required in priority areas. In fact unforeseen demand is not something that I expect to be a major problem. The combination of effective planning and the flexible allocation of resources to service providers through contracting should, with the ability to vary the criteria in the funding code, mean that we have an effective system for matching the available resources to the need for publicly funded legal services.

However, it is important here to stress this flexibility in the funding code. It has been designed to be able to take a variety of factors into account, with criteria varying with the priority accorded to the category of case. In some cases resources will be a major consideration, such as the high cost cases to which I have just referred. In others, such as cases about whether a child should be taken into care, they will not be considered at all.

I know that some people fear that the funding code will somehow or other be used covertly to achieve cuts in services and to lead to differing availability of services in different parts of the country. I shall take those two points in turn. First, there is nothing covert about the funding code. Quite the opposite is the case. For a start, a consultation document—to which I have already referred—outlining the code has just been published by the Legal Aid Board. People have until the end of April to make their views about it known. The code is very much more detailed and open about what is intended than before. For example, there is an entire chapter about resources issues. I have already indicated that I am prepared to consider making the important changes to the code in future subject to affirmative resolution by Parliament. Openness and accountability are central characteristics of the new code.

Secondly, the code is a national one. There is nothing in it which will discriminate between different areas or communities across the country. I refer your Lordships to paragraph 2.27 of the code. It is simply wrong to suggest that that kind of discrimination is possible. Of course the differing needs of areas and communities will be assessed by the commission under its duties in Clause 5(4) so as to assess the needs for particular kinds of services that specific areas most require. The allocation of contracts will take account of geographical variations in the need for services of particular kinds.

I understand the concerns that noble Lords may have about the consideration of resources in the funding code. I do not believe their concerns are well founded and I invite the noble Lord to withdraw his amendment.

6.30 p.m.

Lord Simon of Glaisdale

As I have intervened every time, until now, on matters on which I considered this Bill was open to criticism, it is only in justice to my noble and learned friend that I should say that I entirely agree with the way in which he has just put the case. We really cannot afford any open-ended financial commitment—not even for education, which I would certainly put first, or health. Our resources are not unlimited. If any fund is to be limited it has to have priorities within it, just as there must be priorities for the other major demands.

Still less are we entitled to regard any fund as open-ended if we are in a state where we are borrowing—not only borrowing at a particular moment but incurring debt over the whole economic cycle. What we would then be doing is asking those who come after us to pay for our satisfactions. To my mind, that is legitimate in education, which will inure to their benefit; it is extremely doubtful as to health and access to justice. Access to justice is not the same as access to the legal system.

It seems to me, even though we are disappointed in our particular predilection—even those of us who have chosen a life in the law because we believe it to be a life serving justice—that we have to accept that there, too, the funds are not unlimited and that therefore there must be priorities. As I said, I entirely agree with the way in which it was put by my noble and learned friend.

Lord Kingsland

In rising to respond I feel more than usually battle scarred as a result of the intervention of the noble and learned Lord, Lord Simon of Glaisdale. If there were clear evidence that the legal aid budget was out of control, of course I would accept the arguments of the noble and learned Lord the Lord Chancellor, and his position would be entirely consistent with what he said in his speech to the Bar Council in the autumn of 1996. But, in my submission, there is no evidence that the legal aid budget is out of control. It must therefore follow in that context that the decision to switch from an entitlement system to a system of bureaucratic discretion is unjustified.

However, I have been in your Lordships' House long enough to know when a Minister means what he says. The look in the eye of the noble and learned Lord the Lord Chancellor left me in no doubt that he meant what he said. In those circumstances, it would be prudent of me to seek leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Phillips of Sudbury moved Amendment No. 116:

Page 5, leave out line 42.

The noble Lord said: I am moving Amendment No. 116 in the name of the noble Lord, Lord Kingsland, and myself. Clause 9 of the Bill is very important. It requires the commission to prepare a code setting out the criteria according to which it will decide whether or not to fund. The paragraph that we are dealing with here refers to "the conduct of the individual" as being one of those matters in respect of which the commission's criteria must speak.

The problem is that if, as has been said previously, phrases such as "fair and reasonable" are too flexible and uncertain of interpretation, what on earth is one to make of the phrase "the conduct of the individual"? For example, does this mean that the criteria will address the degree to which the public supports or condemns the conduct of the individual applying for legal aid? Would that conduct be in relation to the matter for which legal aid was applied for, or for some previous matter? If the person was very unpopular and had convictions for dire offences against children, would that be a matter that the commission, through its criteria, would have regard to? I suspect not, but the degree of flexibility which this particular paragraph allows the commission seems to be excessive and to encourage indiscretion on its part in drawing up the criteria. It is on those bases that we would prefer to see this part of Clause 9 removed from the Bill. I beg to move.

Lord Hacking

As the noble Lord, Lord Phillips of Sudbury, has so succinctly described, he seeks to remove the criteria of the party's conduct in the provisions under the new funding arrangements. Conduct has always been a factor in considering whether to grant a legal aid certificate and, more significantly, whether to withdraw it. For example, persistent failure to attend appointments with the individual's lawyers, persistent failure to give proper instructions to the lawyer, failure to co-operate, and behaving in an abusive way have always been grounds for withdrawing legal aid.

It has never been ground for refusing or withdrawing legal aid that a client's cause is unpopular or that he has behaved in a way which gives offence. For example, the conduct of those disrupting the Easter Sermon of the Archbishop of Canterbury in Canterbury Cathedral last March or April was extremely offensive to some people. I am sure that the noble and learned Lord the Lord Chancellor is not directing attention to the conduct which has caused the individual to be involved in the litigation, be it criminal or civil. After all, murder is pretty awful conduct.

Having said that, I wonder whether the word "conduct" as drafted in the Bill is quite the appropriate word. I wonder whether, in the circumstances, my noble and learned friend would consider a different drafting so that we focus not on the conduct that has caused the individual to be involved in the litigation but the conduct in the course of that litigation.

Lord Phillips of Sudbury

I am obliged to the noble Lord for that suggestion. Amendments along those lines would indeed meet the point I have been trying to make.

Lord Meston

I had assumed that the reference to "conduct" was to deal with those individuals who were perceived to be vexatious and possibly also, in the modern climate, with those individuals who refused to submit themselves to mediation when mediation was available.

I should like to deal with one further point. The Explanatory Notes say, and the noble and learned Lord the Lord Chancellor has repeated, that the prospects of success referred to in the preceding paragraph will not be a relevant factor in cases concerning whether a child should be taken into local authority care. That must be quite right. There are few cases in which one can think of representation being needed more than when a local authority is preparing to take the drastic step of removing a child into care, possibly irrevocably if adoption is considered. There may well be cases where the prospects of success for the individual parent in resisting care proceedings will be relatively slight. Although the Explanatory Notes indicate that the code will not allow that to be a factor in care proceedings, I cannot help wondering whether the conduct of the individual will allow the parent to be denied representation if the conduct of the parent is perceived not to be deserving of representation irrespective of the prospects of success. In other words, those cases in which the prospects of success are not to be taken into consideration will be undermined by the paragraph referring to the conduct of the individual.

Lord Renton

There have been rare cases in which the legally aided person has behaved in a most extraordinary way, sometimes starting off by dismissing the solicitor and barrister who were appearing for him and then becoming a litigant in person who wastes the time of the court by extraordinary behaviour. That necessarily would add to the ultimate costs of the case. I think that a person who behaves like that should not be treated in the way that he would normally be treated if as a legally aided person he had behaved properly throughout. I think that the word "conduct" is fairly broad. If noble Lords think that the word "behaviour" is slightly different and would meet the point of the noble Lord, Lord Hacking, we could add "behaviour". But I do not think it is really necessary.

Baroness Crawley

Perhaps I may add one or two points to those already made. I understand the concern of the noble Lord, Lord Phillips of Sudbury, about the word "conduct", but in that concern I think that if he continues with his amendment he will close down the opportunity of being able to cut off the facility of public funding from people who, as the noble Lord, Lord Renton, has said, may behave extraordinarily badly and be impossible as applicants to deal with. The noble Lord must have met one or two of my constituents over the years.

6.45 p.m.

The Lord Chancellor

The noble Lord, Lord Phillips of Sudbury, conjured up the spectre that the politically or socially unpopular might be denied legal aid because of who they are by contrast with the merits of the case that they desired to bring forward. That is no part of the Government's intention. It is only the applicant's case—the quality of his case—and his financial eligibility that matter as to whether he should receive help. His character and who he is do not count.

However, as the noble Lord, Lord Hacking, made perfectly plain, there are circumstances where the applicant's conduct can matter, if not when applying for help then certainly once it has been given. The noble Lord, Lord Hacking, gave good examples. The board can remove someone's certificate for reasons of conduct—for failing to attend interviews or failing to provide material information about the case. It is always open to a solicitor to decline instructions, to refuse to continue to act, if the solicitor believes that the solicitor-client relationship has broken down because the client is being persistently abusive or, for example, is wilfully declining to give proper instructions so as to put the solicitor in an impossible position.

Clause 9(2)(f) simply preserves for the legal services commission powers that are already there. I can assure the Committee that these powers would be used very sparingly. But it is important to retain a power to take people's help away from them if their conduct warrants it, as the board can now do. For example, I am sure the Committee would agree that people who have been demonstrably untruthful to the commission about material facts—I see the noble Lord, Lord Renton, nodding his assent—should not be able to take up funds that other more honest people could better use. But I can assure the Committee that the commission will monitor refusals and removals of legal aid as part of the contract monitoring process.

Having said that, I appreciate, as the noble Lord, Lord Hacking, indicated, that the word "conduct", particularly perhaps in relation to the grant of legal aid, is somewhat stark and conjures up the image of people being refused help for reasons quite unconnected with their applications, although I can assure the Committee that that is no part of our intention. I undertake to consider our deliberations and take this amendment away and consider how best to ensure that the commission has the powers that I have described and how best to obviate any risk, although I do not think it is a very real risk, of these powers being carried beyond their proper sphere. On that basis, I invite the noble Lord to withdraw his amendment.

Lord Phillips of Sudbury

On that basis, the noble and learned Lord the Lord Chancellor has entirely satisfied the movers of the amendment. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendments Nos. 117 and 118 not moved.]

Lord Kingsland moved Amendment No. 119:

Page 6, line 5, at end insert (", provided that assistance for representation shall not be refused on the grounds that mediation is more appropriate unless the circumstances are such that a privately paying individual would be likely to opt for mediation.").

The noble Lord said: This amendment is based on the principle that those who cannot afford the full cost of legal services should have the same access to the system of justice as those who pay privately. If we apply that principle to Clause 9, at line 5 on page 6 of the Bill, we should reach the conclusion that it would only be appropriate to require mediation from public funds, rather than defray the costs of negotiations through solicitors, if a private party were likely to take the same approach. In other words, we do not wish to see mediation introduced as a poor relation to a procedure that would have been used were the parties to the action or the dispute both private parties. That is the purpose of the amendment. I beg to move.

Lord Hacking

I am sure that it is not the intention of my noble and learned friend to treat mediation as a poor relation in the resolution of disputes. The starting-point is the guidance. As I have said several times, the guidance notes are very helpful. Paragraph 83 states the principles which it is intended that the code should follow. Perhaps I may read the paragraph as I believe it is important. It states: The Code is required to reflect the principle that in many family disputes mediation is more appropriate than court proceedings. This is intended to reinforce the development, under the Family Law Act 1996, of mediation as a means of resolving private law family disputes in a way that promotes as good a continuing relationship between the parties concerned as is possible in the circumstances. The Government believes that mediation is more constructive than adversarial court proceedings, and that litigation in these cases usually serves only to reinforce already entrenched positions and further damage the relationship between the parties. In addition, the cost of court proceedings is higher than that of mediation and additional costs have to be borne by the property of the family, reducing the amount available to the parties and their children in future". Those are important principles. Neither the Bill nor the guidance note indicates that mediation is mandatory; nor do they indicate that there should be some obligatory appropriateness test. Indeed, if the code did so, it would be going beyond the powers given to it by Parliament under the Bill.

Secondly, I am not sure that the test proposed by the noble Lord who moved the amendment is entirely satisfactory. It is the test of what private litigators would do. Unfortunately, experience shows that some private litigators who have the funds can be pretty bloody-minded in matrimonial and other civil cases and go for court proceedings for reasons of vindictiveness. To attempt to apply this test to what a private vindictive person would do is surely not sensible in any degree. For those reasons I oppose the amendment.

Baroness Crawley

I, too, oppose the amendment. I do so simply because it would cut across the proposition that, in order to increase access to justice for more people while keeping an eye on best value for money for the taxpayer, it would be better for people to try mediation first, before becoming eligible for other services. Such a course of action would seem eminently sensible, certainly from the point of view of the distinct advantages of mediation in conflict resolution.

Lord Simon of Glaisdale

Perhaps I may speak briefly from the point of view of family law. My remarks are made in the knowledge that the noble Lords, Lord Meston and Lord Hacking, and the noble Baroness, Lady Scotland, have more recent experience than I.

As regards family disputes, we are concerned only with the financial and property repercussions, where mediation is of particular value because passions are frequently more virulent in such disputes. Indeed, they may poison whole relationships, particularly those of the parties as regards their children. One should not regard mediation as a poor relation, or even as a first step to litigation. On the contrary, in family disputes mediation will frequently be in the interests of the parties.

The Lord Chancellor

The noble Lord, Lord Kingsland, was more economical in his recommendation of this amendment to the Committee than even the noble and learned Lord, Lord Simon of Glaisdale, would wish the statute book to be.

The noble Lord, Lord Hacking, put the matter in context. Clause 9 as a whole provides for a code that reflects priorities and under which the commission seeks to ensure that the most appropriate types of service for an individual case are funded. It is a discretionary framework, as it must be under a controlled budget.

The amendment to Clause 9(3) cuts across that discretionary framework. The clause provides that, The criteria set out in the code shall reflect the principle that in many family disputes mediation will be more appropriate than court proceedings". The amendment would add, provided that assistance for representation shall not be refused on the grounds that mediation is more appropriate unless the circumstances are such that a privately paying individual would be likely to opt for mediation". So the amendment cuts across the discretionary approach by laying down an iron rule that assistance for representation shall not be refused on the grounds that mediation is more appropriate unless the circumstances are such that a privately paying individual would be likely to opt for mediation in the circumstances.

I do not accept that this is a test that the commission should have to apply in addressing the allocation of scarce public resources for the benefit of people who do not have the resources to be privately paying clients.

The noble Lord, Lord Hacking, made sound points. It may be that the acrimony in a particular marriage relationship between well-off partners who can afford to litigate would mean that they would be likely to insist on a set-piece confrontation in the courts instead of mediation. The result would be costly litigation from which their lawyers would benefit. That would do nothing but harm their long-term relationship. It would be likely to be damaging to the interests of the children, with whom they must both continue a relationship after the marriage and property disputes have been resolved.

It would be entirely reasonable for the commission in its discretion to take the view that people should try mediation in these property disputes first, and become eligible for representation only if that failed. The fact that well-off people who could afford to litigate might be likely to prefer an Olympian confrontation in the courts should not deter the commission from promoting a more sensible course. So I am afraid that the Government cannot accept this amendment, because it cuts across a discretionary system based on clear criteria which the Government believe does command popular assent to achieve access to justice for the many while maintaining best value for taxpayers' money. Traditional litigation in this area does not, because of lawyers' costs, make a persuasive appeal to claims on scarce public resources. On that basis I invite the noble Lord, Lord Kingsland, to withdraw his amendment.

7 p.m.

Lord Kingsland

I should like to thank the noble and learned Lord for his response and, although I am not happy with it, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 120 not moved.]

The Deputy Chairman of Committees (Lord Brougham and Vaux)

Amendment No. 121 has already been debated.

[Amendment No. 121 not moved.]

Lord Kingsland moved Amendment No. 122:

Page 6, line 16, at end insert ("and procedures for informing the individual applying for funding about the decision, the reasons for that decision, and where funding has been refused what help should be given to that individual to find alternative ways of resolving the dispute.").

The noble Lord said: This amendment requires the code to contain procedures for informing applicants of the reasons for decisions and provisions concerning what help should be given to applicants who are refused funding to find alternative ways of resolving their disputes. As your Lordships are aware, the Bill replaces the merits test with a funding assessment which takes into account a large number of considerations. There are the Government's priorities; the availability of finance; the strength of the case; the importance of the case to the client; public interest in bringing the case; whether there is another way of funding the case; and whether there is another way of resolving it.

Depending upon the particular priority given to the area of law which is the subject of the decision, different weights will be given to each of these factors. So the task of balancing all these weights against each other is an extremely complex one in each individual case. There are likely to be very many dissimilar instances. In those circumstances, if the application is refused it is my submission that very clear reasons should be given so that, first of all, the applicant knows exactly where he stands. Secondly, if that funding is refused the applicant is given a very full opportunity to consider all the other options that may or may not be at his disposal.

The noble and learned Lord the Lord Chancellor has spoken on several occasions during the course of this Committee stage about the importance of open government and of an open approach to decision-making. In my submission, that principle is more important in relation to Clause 9 than in relation to any other clause. I beg to move.

Baroness Wilcox

I rise to support my noble friend Lord Kingsland, because this amendment involves consumer protection and accountability to consumers for decision-making. The amendment deals with the vital information that will be given to people when a decision is made as to whether or not their case will be funded.

The new decision-making process considers a number of factors which will be given different weights depending on the priority and resources for that type of case. This process will be much more discretionary than in the past, and much more complicated. Unless the Act places a duty on the decision-maker to give clear reasons to the applicant when funding is refused, the applicant will be in great danger of not knowing what to do next.

Where the applicant is refused because there are better ways of funding or of resolving the dispute, the applicant may need help to find alternatives. During my time serving on the review of the civil Court of Appeal set up by my noble and learned friend Lord Mackay of Clashfern when Lord Chancellor, I came into contact with people driven to appeal, often as lay litigants in person, because they did not understand the reasons for the decisions affecting their cases.

Although this is a different aspect of decision-making, I suggest that it makes the point that a lot of wasted time, and unnecessary heartache, in the civil justice system could be avoided if people were entitled to and were actually given—in plain English, of course—clear reasons for the key decisions in their cases.

Lord Donaldson of Lymington

I should like strongly to support this amendment on the basis partly of trying to remove a sense of injustice on the part of the person refused funding, but much more on the basis of causing those who are deciding the matter to think through why they are refusing funding. That view is consistent with the view that is being taken by the courts—it was being taken by the courts even when I was in office—which was in all circumstances to try to encourage not the High Court but the tribunals and lower courts, and in many cases judicial review, to give reasons. I was responsible, with others of course, for giving leave to apply for judicial review, largely on the basis that while the authority concerned might well have been right we just did not know, because of the failure to give reasons. So, both from the point of view of deciding whether anybody ought to object to the refusal, but much more in terms of improving the decision-making process, I think that something on these lines ought to be included.

The Lord Chancellor

Clause 9(5) already lays down that the code must include procedures for appealing against decisions, and I agree with the noble and learned Lord, Lord Donaldson of Lymington, that an integral part of such a procedure must be to give the applicant reasons for the decision. Not to do so would breach basic principles of natural justice and, I am sure, would lead us very quickly to judicial review of the commission.

My officials are working on the details of the information that unsuccessful applicants will be given. I expect them to be set out in the code when it is finalised. A draft appeals procedure is already contained in the version published last week, but it does not go as far as the points we are currently discussing.

I take a similar view of information about alternatives. One of the criteria on which funding can be refused will be the existence of an alternative. Providers will have to advise applicants whether there are alternatives so that they can give them a good idea of whether their applications are likely to succeed. In fact, where an alternative exists I expect that many will not even put in an application. But there will be situations where someone has been turned down for some reason or another and will want to know about alternatives. Given that one of the tasks of the commission will be to give basic advice about the availability of services, doing this should become second nature. I am sure that there will be no harm but much good in making it an obligation at this stage of the process as well.

That leaves the most obvious case, simple refusals, for which the amendment would require reasons, which we should in any event give before the appeal to which I have referred could be meaningful. So, if I may, in the light of this debate, I will take this amendment away and give it positive consideration. On that basis, I invite the noble Lord to withdraw his amendment in its present form.

Lord Kingsland

I am most grateful to the noble and learned Lord the Lord Chancellor for his reply. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 123 to 129 not moved.]

Clause 9 agreed to.

Clause 10 [Terms of provision of funded services]:

Lord Archer of Sandwell moved Amendment No. 130:

Page 6, line 33, after ("individual") insert (", other than a person who is in receipt of any means-tested benefit,").

The noble and learned Lord said: While my noble and learned friend's ear is so obviously open, this may be a propitious moment at which to introduce the debate on my amendment. Clause 10 deals with the contributions which a recipient of services from the community legal service shall be required to pay. At present we do not know what the rules will be because the Bill provides that they will appear in regulations. It may be that my noble and learned friend will take advantage of this debate to give us some indication of what the regulations may contain. They are not regulations which, according to Clause 23, are to be subject to the affirmative procedure. That may make it all the more important that we should have some indication of what they may say.

My amendment is designed to ensure that one matter is not left uncertain: that no one, as a condition of access to justice, shall be required to pay a contribution which is beyond his means. One criterion of that seems to me to be where some other authority has investigated the applicant's means and found that they are not sufficient for his needs.

I note that the noble Lord, Lord Goodhart, together with the noble Lords, Lord Phillips and Lord Kingsland, have set their names to Amendment No. 133, which seeks to impose a similar constraint with respect to capital resources. Subject to anything which may emerge in this debate, I support their amendment, which is wholly consistent with mine. I beg to move.

Lord Goodhart

I rise briefly to say that I sympathise with the view that it seems unnecessary to have rules about recovering contributions from someone who clearly is not in a position to pay them.

Lord Falconer of Thoroton

I hope that the noble and learned Lord, Lord Archer of Sandwell, will forgive me if I do not take up his gentle invitation to give details of what may be in the regulations. It may be that we shall do that later, but I am not in a position to do it at the moment.

The noble and learned Lord's amendment goes to the important issue of the relationship between eligibility for social security benefits and for help from the community service fund. The effect of the amendment would be to prevent the Lord Chancellor from making regulations requiring contributions or fees from any person who was receiving any means-tested benefit.

The noble and learned Lord's argument is that, if someone's means have already been assessed for social security purposes, they should also qualify for help from the fund. In other words, he says that, if a person's means are low enough to warrant help from the state with living expenses, help for legal services should be automatic. If that were the position, his argument would be very attractive. Unfortunately, it is not as simple as that.

Currently, recipients of income support and income-based jobseeker's allowance are indeed automatically qualified for legal aid without contribution. In the jargon, they are "passported" through the means test. But there are other means-tested social security benefits that do not automatically qualify the recipient for legal aid—with good reason. Income support and jobseeker's allowance are benefits designed to guarantee a minimum level of income, and the eligibility limit for legal aid without contribution is aligned with that minimum level of income. Other means-tested benefits, however—for example family credit—are available in certain circumstances to people with significantly higher income. It would not be fair to allow family credit recipients free legal aid when people on the same income would be required to pay a substantial contribution. The powers under the Bill should be wide enough to allow us to replicate the position that currently exists under legal aid, which seems fair. This amendment would prevent that. In those circumstances, I ask the noble and learned Lord to withdraw the amendment.

7.15 p.m.

Lord Archer of Sandwell

My noble and learned friend correctly paraphrased my argument. He equally correctly pointed out where it breaks down. I understand that his heart is in the right place, even though his ear is not as open as was that of my noble and learned friend the Lord Chancellor at an earlier stage. Perhaps we should both reflect further on the problem. Clearly we both want to achieve a just result. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Simon of Glaisdale moved Amendment No. 131:

Page 6, line 36, leave out (", or conduct is,").

The noble and learned Lord said: This probing amendment is grouped with a number of other amendments which, apart from the last one, are also probing amendments. The amendment refers to Clause 10(2)(b): if his financial resources are, or conduct is, such as to make him liable … under the regulations". We may have covered that point in discussing a previous amendment. I am not certain whether my noble and learned friend wishes to add anything. I am not clear what is the conduct in question and whether it is the kind of matter which we discussed in relation to an earlier amendment.

Amendment No. 134 relates to Clause 10(6): The regulations may … (b) make provision for the determination of the cost of services for the purposes of the regulations". I am not sure what kind of machinery my noble and learned friend has in mind for that.

Amendment No. 135 is to leave out of Clause 10(7) the words, Except so far as regulations otherwise provide". What is the force of that?

Amendment No. 136 relates to Clause 10(7)(b): other sums payable by the individual by virtue of regulations under this section". What is that meant to catch?

Finally, Amendment No. 137 relates to Clause 10(8): For the purposes of subsection (7)"— which I believe is an old provision, going back to the original Legal Aid Act, relating to a first charge on any property recovered or preserved— it is immaterial what the nature of the property is and where it is situated; and the property within the charge includes—(a) any to which the individual is entitled under any compromise or settlement of the dispute". At the moment I do not see why that is not subsumed in subsection (7) which gives a first charge in respect of any property that is recovered or preserved. Does that not include property recovered or preserved under a compromise? I beg to move.

Lord Falconer of Thoroton

The amendments in this group are Amendments Nos. 131, 132 and 134 to 137. The noble and learned Lord has dealt with some, but not all of them. Amendment No. 132 in the name of the noble Lord, Lord Kingsland, has not been moved and I shall not deal with it unless the noble Lord moves it later. I deal first with Amendment No. 131.

Lord Simon of Glaisdale

To clear my mind, is it right that the odd man out is Amendment No. 132? I do not believe that I spoke to that amendment.

Lord Falconer of Thoroton

The noble and learned Lord did not speak to that amendment but it is in the grouping. The noble and learned Lord is right not to speak to it because that amendment is in the name of the noble Lord, Lord Kingsland, who has lost heart as to that, quite understandably.

Lord Kingsland

I have not lost heart. I simply reserve my position for a later stage.

Lord Falconer of Thoroton

The noble Lord lies in wait for me with Amendment No. 132. I am on tenterhooks as my noble friend Lord Clinton-Davis says. The effect of Amendment No. 131 is to remove conduct as a consideration in deciding whether or not a person should pay something towards the costs of his case. The noble and learned Lord asks whether the Government wanted to elaborate on the meaning of "conduct". All I can say is that this will allow the commission to recover its costs or retain contributions where a person has misbehaved; for example by fabricating evidence. It is already possible to do this under the present scheme. A person's certificate can be revoked if his conduct is bad enough and revocation means that he is liable to repay everything that has been spent so far on his case. We need to be able to do the same under the new scheme to cater for similar extreme cases. That gives some indication of the conduct considered.

Under Amendment No. 134 the noble and learned Lord seeks to remove Clause 10(6)(b). That subsection allows regulations to provide for how the cost of a service is to be calculated. This will be essential in future if the contract price paid to the lawyer is a fixed unit price per case. Around this fixed price costs for work done in an individual case may vary considerably.

Lord Simon of Glaisdale

Before the noble and learned Lord moves on I am not clear about the machinery of recovery.

Lord Falconer of Thoroton

Is the noble and learned Lord referring to the machinery under Amendment No. 131 or Amendment No. 134? I have not finished my response to Amendment No. 134. Perhaps I may complete my response and return to that question. The power under Clause 10(6)(b) could be used to set a notional cost at the beginning of a case to avoid assisted people having to pay unexpectedly large or small amounts. This power also allows us to develop more detailed systems for relating repayment more closely to the stages cases reach. These features are important to make the scheme fair and predictable. That is the aim of Clause 10(6)(b). The precise machinery set up to achieve that has not yet been fixed. At this stage I can do no more than set out precisely what it is aiming at rather than the form of the machinery.

The noble and learned Lord's next three amendments are about the statutory charge. Clause 10(7) provides for a first charge that the commission (like the board now) will have over any property recovered or preserved in proceedings in respect of the costs of the case. The first of these amendments, Amendment No. 135, would remove the power by regulations under Clause 10(7) to modify or disapply the charge in respect of some cases. That lack of flexibility can risk serious unfairness and harshness and that is why it is there. Amendment No. 136 would remove Clause 10(7)(b). That provides for the statutory charge to include sums over and above the actual cost of the case. This would be necessary if a conditional legal aid fund (CLAF) were set up where the person would be liable to pay a success fee into the fund. To remove the power would undermine the operation of a CLAF if one were set up.

The noble and learned Lord's last amendment, Amendment No. 137, would remove Clause 10(8)(a) which applies the statutory charge to property recovered or preserved as a result of settling a case. It would be very odd not to have that power. At present the Legal Aid Act does the same. I am not sure why the noble and learned Lord wants to take a backward step. In this respect there is no reason why we should make a distinction between cases that go to trial and those that settle.

Lord Simon of Glaisdale

I apologise to the noble and learned Lord for not making myself clear. My question is this: why is the power in subsection (8)(a) not contained in the last limb of subsection (7)? In other words, why is recovery under a compromise or settlement not property recovered or preserved in a dispute?

Lord Falconer of Thoroton

It is dealt with in this way because it is wide enough to cover a situation where no proceedings have been issued. I believe that that answers all of the questions raised by the noble and learned Lord. In the light of that I ask him to withdraw his amendment.

Lord Simon of Glaisdale

As usual, the noble and learned Lord has replied very pleasantly, although I fear that he as well as his noble and learned friend the Lord Chancellor have now used the word "flexibility". I understand that the question that I asked about machinery was answered on the basis that the Government had not yet made up their mind. I am quite content to accept that. Otherwise, I believe that the noble and learned Lord answered satisfactorily all of my other queries except for the last which I shall consider and perhaps return to on Report. Perhaps the noble and learned Lord will himself consider the matter again. I was not entirely convinced in so far as I took it in. In the meantime, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 132 not moved.]

Lord Hunt of Kings Heath

My Lords, I beg to move that the House do resume. In moving this Motion I suggest that the Committee stage begin again not before 8.29 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.