HL Deb 26 January 1999 vol 596 cc951-1008

8.30 p.m.

House again in Committee.

Clause 19 [Restriction of disclosure of information]:

[Amendment No. 198 not moved.]

The Deputy Chairman of Committees (Viscount St. Davids)

Before calling Amendment No. 199, I should remind the Committee that, if this Amendment is agreed to, I cannot call Amendment No. 200.

[Amendments Nos. 199 and 200 not moved.]

Lord Goodhart moved Amendment No. 200A:

Page 12, line 19, leave out from ("Commission") to ("furnished") in line 20 and insert— ("( ) Nothing in this section shall permit the disclosure of information which has been").

The noble Lord said: I apologise for tabling this amendment at a late stage; however, the matter was drawn to my attention only yesterday morning by my noble friend Lord Phillips of Sudbury.

The amendment relates to subsection (3)(c) of Clause 19. I assume that subsection (3)(c) was intended as a redraft of Section 38(6) of the Legal Aid Act. Like Clause 19 of the present Bill, that section contains a general restriction on publication of information furnished for the purpose of receiving legal aid or public funding but it permits publication for certain specified purposes.

Section 38(6) of the Legal Aid Act provides that information provided by a client to his lawyer is not to be treated as information provided for the purposes of the Legal Aid Act. That information covers statements made by a client for the purpose of contesting the case which might contain, for example, admissions of offences or misconduct of some kind.

As I understand it, the purpose of Section 38(6) is to preserve legal professional privilege against the disclosure of information of that kind. That is done by taking such information outside the scope of Section 38 altogether. That information therefore remains subject to the normal rules of legal professional privilege and cannot be disclosed even under one of the specified grounds in Section 38(1).

Clause 19(3)(c), however, appears to reverse the position. Clause 19(1) states that certain information shall not be disclosed unless it is authorised by other provisions in that clause. Clause 19(2) contains specific grounds for disclosure. Clause 19(3) then states that Clause 19(1)—namely, the general restriction on disclosure—shall not apply to certain categories of information.

On an examination of subsections (3)(a) and (3)(b) it is obvious that the intention is that the information in those categories should be disclosed. It is, information in the form of a summary or collection of information so framed as not to enable information relating to any individual to be ascertained from it". So it is obvious that that information is intended to be disclosed. Sub-paragraph (b) refers to, information about the amount of any grant, loan or other payment made to any person or body by the Commission". Again, one assumes that that information is to be disclosed.

That therefore gives rise to an inference that the information referred to in sub-paragraph (c) should also be disclosed. I do not suppose that that is the intention of that sub-paragraph. However, if that is the case, then the drafting is dangerously ambiguous. Sub-paragraphs (a) and (b) are entirely different from sub-paragraph (c); they authorise the publication of information which was clearly supplied for the purposes of the Act, whereas I assume that sub-paragraph (c) is intended to exclude information by treating it as not supplied for the purposes of the Act. Therefore, I suggest that the provision needs to be redrafted along the lines of Amendment No. 200A.

If that is not the case, and it is intended that information referred to in sub-paragraph (c) should be disclosed, that clearly opens up a wholly impermissible infringement of the basis of legal professional privilege. I therefore wait with some interest to hear what is the correct position.

The Lord Chancellor

I am grateful to the noble Lord, Lord Goodhart, for that full explanation. I shall express myself rather more shortly, but it was very helpful of him to set out as he did all the reasons for his concerns. I am minded to take these provisions away and consider them further, for reasons that I shall give shortly.

Clause 19(1) prohibits the disclosure of information furnished to the commission except as permitted by subsection (2). Subsection (3) disapplies the prohibition in subsection (1), inter alia Clause 19(2)(c); namely, information that was furnished to a person providing services funded as part of the community legal service or criminal defence service by or on behalf of an individual seeking or receiving such services.

The contrast between the prohibition on disclosure in Clause 19(1) and the disapplication of that prohibition to the information described in subsection (3), which includes the information described in sub-paragraph (c), might suggest that since the disclosure is not prohibited it is permitted.

The purpose, however, is in fact to prevent someone who discloses such information from being liable to a criminal offence under Clause 19(5). It is not, however, intended to cause the disclosure of the information to cease to be a breach of privilege. Thus, Clause 21(1)(a) is intended to preserve privilege in this area.

However, I am certainly persuaded, for the short reasons I have given and for the additional reasons given by the noble Lord, that the relationship between Clause 19(3) and Clause 21(1) may be unsatisfactory. I undertake to draw this debate to the attention of the parliamentary draftsman with a view to his considering whether the provisions as they stand satisfactorily achieve the outcomes intended or whether they would profit from redrafting. On that basis I invite the noble Lord to withdraw his amendment.

Lord Goodhart

I am grateful to the noble and learned Lord the Lord Chancellor for undertaking to take the matter back to the parliamentary draftsman. On that understanding, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 agreed to.

Clauses 20 to 22 agreed to.

Schedule 4 agreed to.

Clause 23 [Orders and regulations]:

The Deputy Chairman of Committees

Before calling Amendment No. 201, I should point out to the Committee that, if it is agreed to, I cannot call Amendment No. 202.

[Amendments Nos. 201 to 204 not moved.]

The Lord Chancellor moved Amendment No. 205:

Page 14, line 8, leave out ("11(2)(a), (b)") and insert ("11(2)(b)").

On Question, amendment agreed to.

[Amendment No. 206 not moved.]

[Amendment No. 207 had been withdrawn from the Marshalled List.]

[Amendment No. 208 not moved.]

Clause 23, as amended, agreed to.

Clauses 24 to 26 agreed to.

Clause 27 [Conditional fee agreements]:

Lord Kingsland moved Amendment No. 209:

Page 15, line 15, after ("client") insert ("(including the professional client of a person providing services on a referral basis)").

The noble Lord said: The noble and learned Lord the Lord Chancellor has accused me of being excessively crisp in my interventions on previous occasions. This time I make no excuse for committing the same offence because this is a drafting amendment. It is intended to make clear that a conditional fee arrangement involving a barrister is between the barrister and the professional client instructing him or her and not between the barrister and the lay client.

That interpretation could be read into the words of Clause 27(1) concerning Section 58 (2)(a), but it will not necessarily be so. For that reason I seek clarification from the noble and learned Lord. I beg to move.

8.45 p.m.

The Lord Chancellor

I am grateful to the noble Lord for raising the matter and for his economic expression of the thinking behind the amendment. I am inclined to accept it in principle. It provides a useful clarification of the existing clause. The amendment seeks to put beyond doubt that a conditional fee agreement with a barrister entered into by a solicitor on behalf of his client is a valid conditional fee agreement.

This is sought to be achieved by amending the proposed Section 58(2)(a) of the Courts and Legal Services Act 1990 introduced by Clause 27. The amendment defines client to include the professional client of a person providing services on a referral basis. In practice, the barrister's professional client would be a solicitor.

The amendment is inspired because of the relationship between barristers and clients. Banisters do not, as a general rule, accept instructions directly from members of the public or other bodies. They are instructed by a solicitor as their professional client and members of the public or other bodies are referred to as the lay client. The professional client is technically liable for the fees of the barrister, although he in turn is indemnified by the lay client. The concern, therefore, behind the amendment is whether the terms of Section 58(2)(a) sufficiently encompass the arrangements where a barrister concludes a conditional fee agreement with a solicitor acting on behalf of a lay client so as to make that agreement lawful and enforceable.

I desire conditional fee agreements to be effective and I would not wish the legislation to be at all ambiguous on the point. The language of the amended Section 58 was intended to encompass agreements made with barristers. I am keen that they should be able to offer their services under conditional fees. As I have said before, I believe conditional fees represent an important avenue to access to justice for those who have been excluded because they cannot afford to pay lawyer's fees if they lose. I would be most concerned if it could be persuasively argued that the legislation did not adequately provide for the arrangements by which barristers are retained and that therefore conditional fee agreements with a barrister were not sanctioned by law. I should like a little time to consider the exact terms of the amendment and to bring back amendments at Report. On that basis, I ask the noble Lord not to press his amendment tonight.

Lord Kingsland

I thank the noble and learned Lord for his response. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Clinton-Davis moved Amendment No. 210:

Page 15, line 30, leave out from ("agreement") to end of line 32.

The noble Lord said: The amendment stands in my name and that of the noble Lord, Lord Kingsland. The agreements which are set out m Section 58(2)(a) are already permitted at common law, as I understand it. Without statutory requirements, many are likely to be in existence before any new statutory provisions might come into force.

I submit that the public interest is to ensure that conditional fee agreements with improved fees comply with specific requirements. There is not the same need to be prescriptive where legal representatives agree to work for less than their normal fee, if unsuccessful, but do not seek to charge more than their normal fee, if successful. I beg to move.

Lord Falconer of Thoroton

Perhaps I may deal with Amendments Nos. 210, 211 and 213 together. The purpose of Amendment No. 210 in the names of the noble Lords, Lord Clinton-Davis and Lord Kingsland, is to remove entirely from the revised Section 58 of the Courts and Legal Services Act 1990 which is proposed by Clause 27(1), Section 58(3)(c). The subsection provides that a conditional fee agreement, must comply with such requirements (if any) as may be prescribed by the Lord Chancellor". The purpose of Amendment No. 211 is to insert into Section 58(3) a new paragraph (d) which provides that the agreement, may only be entered into by a person or body supplying advocacy or litigation services who is solvent throughout the currency of the agreement".

Lord Kingsland

I am grateful to the noble and learned Lord for giving way. I should already have intervened to tell him that I shall not move Amendment No. 211.

Lord Falconer of Thoroton

I am grateful for that. I shall therefore deal with Amendments Nos. 210 and 213, which I believe still apply, although Amendment No. 211 may not be moved. I cannot accept the amendments. Part of the purpose of the revised Section 58 is to bring into statute the effect of the decision in Thai Trading v. Taylor which has approved certain conditional agreements as being lawful at common law. Thai Trading does not sanction conditional fee agreements prescribing a costs uplift in the event of success. It sanctions solicitors agreeing with their clients to recover less than their normal fee if they lose. In theory, therefore, they could recover nothing. But if they win, they are able to recover the full costs from the unsuccessful defendant despite the agreement for a reduction with their own clients.

Regulation of those kinds of agreements is therefore at present subject to the common law, overseen by the courts. I believe it is right that, as we are bringing these agreements within the statute law, the Lord Chancellor should be able to regulate the agreements under statute. At some time there may be a need to address issues concerning consumer protection or undesirable practice, and the Lord Chancellor must have the means to do that. The Lord Chancellor has no intention of seeking to prescribe requirements, at least initially, for anything other than conditional fee agreements that provide for enhanced fees. He would wish to see similar provision being made along the lines of the present Conditional Fee Regulations 1995 in relation to those agreements—for example, the circumstances in which the success fee becomes payable must be stated. I am quite sure that those noble Lords who are concerned about consumer protection expect nothing less of the Lord Chancellor.

I am confident that the Lord Chancellor will not need to prescribe requirements for those agreements which do not provide for enhanced fees—a matter with which my noble friend Lord Clinton-Davis dealt. However, if it should prove necessary to set minimum standards it is right that provision is made in the legislation to allow for that to be done. In the light of the remarks of the noble Lord, Lord Kingsland, I do not need to deal with Amendment No. 211 and, in view of what is in the mind of the Lord Chancellor, I ask my noble friend to withdraw his amendment.

Lord Clinton-Davis

I shall certainly consider the words of my noble friend. It may be necessary to return to this issue perhaps in another form. It is important that the law in relation to contingency fees should be clarified; more importantly, steps should be taken to prohibit pure contingency fees entirely. I would rather come back perhaps with another amendment to elaborate the point. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 211 not moved.]

Lord Goodhart moved Amendment No. 212:

Page 15, line 32, at end insert— ("( ) A conditional fee agreement of the type described in subsection (2)(a) shall not be unenforceable simply by reason of its being made prior to the coming into force of this Act.").

The noble Lord said: No-win, no-fee agreements without enhanced fees have been common for some time in certain fields not covered by the specific authority of the Courts and Legal Services Act 1990. As a number of Members of the Committee will be aware—certainly including the Lord Chancellor—it was decided by the Court of Appeal a number of months ago in the Thai Trading case that such agreements were lawful and could be enforced. For the benefit of Members of the Committee who are not familiar with that case, there the successful defendant's lawyer acted on a no-win, no-fee basis. The losing party, the plaintiff, was then ordered to pay the costs and argued that it could not be required to pay the defendant's lawyer's fees under the court order because the no-win, no-fee agreement was unlawful and gave the lawyer no right to cover his fees. That argument was rejected and the losing party, the plaintiff, was ordered to pay. But a decision of the Court of Appeal within the past few weeks, Hughes v. Kingston-upon-Hull City Council has suggested, without actually holding, that the Thai Trading case was wrongly decided. If so, clients who have entered into no-win, no-fee agreements and are successful cannot recover their lawyers' fees under the court order and the lawyers who have entered into no-win, no-fee agreements cannot recover from their clients if their client should be paid the costs. The purpose of this amendment therefore is to remove any doubt as to the validity of the Thai Trading decision and legitimate all arrangements entered into in reliance upon it. There are some minor drafting defects in the amendment, but it is obviously a fair one and I hope that the Government will accept it in principle. I beg to move.

Lord Falconer of Thoroton

The purpose of this amendment is to make lawful any agreements of the kind envisaged by what will be Section 58(2)(a) entered into before, the coming into force of this Act". I am not sure to which Act the noble Lord's amendment refers.

Lord Goodhart

That is one of the drafting defects to which I referred. I believe that the amendment should make reference to "this section".

Lord Falconer of Thoroton

I am grateful to the noble Lord. If this ever came back, obviously that matter would be put right. I am a little surprised that this amendment has been moved because it invites Parliament to make retrospective legislation. Whichever Act is intended to be referred to—the noble Lord has made clear what he has in mind by his intervention—agreements that might have been unlawful at the time they were entered into would be legitimised by this amendment. I do not believe that that is a particularly desirable outcome and may well lead to the reopening of cases or situations that have otherwise been treated as settled.

The problem that this amendment seeks to cure is that, since the decision in Thai Trading, to which the noble Lord has referred and which allowed lawyers to agree to charge less than their normal fees if they were unsuccessful on behalf of their clients hut to recover their costs if they won, the common law authorises the use of these kinds of fee arrangements. However, as the noble Lord has very frankly said, the common law is subject to development and change by the courts in subsequent cases and it may be that the effect of Thai Trading will change over time. The Hughes case suggests that that is the position.

I do not see that I can do more in this regard than I am doing to make these agreements lawful at statute law. Parliament rightly makes retrospective legislation only exceptionally. I do not believe that this is an appropriate circumstance in which to do so. In effect, the noble Lord seeks to say that all of the Thai Trading-type cases whenever they arose should be treated as lawful when the position may be—I do not know—that the common law will say that they were unlawful. I therefore ask the noble Lord to withdraw his amendment.

Lord Goodhart

I am disappointed by the reply. While I accept that Parliament should not normally legislate on a retrospective basis, there are exceptions to that. One of the exceptions that has been applied on a number of occasions in the past is where an apparently authoritative decision has led people to act in reliance on that decision and it has been subsequently held that, contrary to expectations, the law is different. Further, if the Thai Trading cases are legitimated, it will do no one any harm except those who take improper advantage of a defect in the law. If a party is ordered to pay costs I believe that it is an abuse of rights to be able to avoid paying costs to the successful party's lawyer on the ground that that particular agreement is unenforceable. Since I am sure that Thai Trading, which is very well known in legal circles, will have been assumed by both plaintiffs and defendants to have been correctly decided—as indeed may turn out to be the case—I do not believe that anyone will find himself at an unfair disadvantage if this particular piece of retrospective legislation is passed. However, I do not intend to divide the Committee on this occasion in order to take that point, though I hope that the Government will reconsider the position between now and Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 213 not moved.]

Lord Kingsland moved Amendment No. 213A:

Page 15, line 44, at end insert ("; and (d) the amount of the increase must not be calculated (expressly or otherwise) by reference to the amount or value of any money, property or other benefit recovered or preserved in the proceedings").

The noble Lord said: The object of this amendment is to prevent anyone, solicitor, barrister, claims assessor—whoever—from acting on a pure contingency fee; that is, one fixed by reference to the amount of damages awarded or property recovered or preserved in proceedings. The background to this is that contingency fees were, and probably remain, unlawful at common law except in certain specific instances. For example, a solicitor may charge on a contingency basis for non-contentious business which includes debt recovery by writing letters or negotiating settlement of any claims without starting proceedings. It also includes acting in tribunal cases, planning inquiries, criminal injuries compensation claims and any other tribunal case. That is because the definition of non-contentious business in the Solicitors Act 1974 is seriously outdated. It only covers litigation before courts making no mention whatsoever of tribunals. The definition dates back to the 19th century when there were hardly any tribunals.

The solicitors' practice rules prohibit the charging of contingency fees only in contentious businesses. Clause 27 covers Thai Trading arrangements. However, that begs the question as to what is a normal fee. The noble and learned Lord the Lord Chancellor will take the opportunity, I hope, to clarify the law and to prohibit pure contingency fees. The noble and learned Lord has often said that he is opposed to contingency fees on ethical grounds. On the other hand, he strongly supports conditional fees. The problem about their use in employment cases is, as I believe he pointed out last week, that the normal costs rules do not apply, so a case conducted under a conditional fee arrangement requires the client to pay from the compensation awarded. As there is no limit to damages in a discrimination case, such arrangements may be possible. However, from a client's perspective, they look indistinguishable from contingency fees. I beg to move.

9 p.m.

Lord Clinton-Davis

I support the principle underlying the amendment. It is extremely important. I have alluded to it in another context. I am not entirely convinced that we have the right instrument to deal with it here, but it is the principle that matters. I support the noble Lord, Lord Kingsland, in saying that this is a good opportunity for my noble and learned friend to clarify the situation so far as concerns the law; and, I hope, to move decisively against contingency fees.

Lord Goodhart

I, too, support the noble Lord, Lord Kingsland. Contingency fees are part of the reason why civil litigation in the USA has become completely out of hand. It has now reached a level which is seriously damaging to the economy. Admittedly, we do not have juries in civil actions, as the Americans do. That is another cause of that problem. However, I believe that contingency fees should continue to be forbidden as a matter of common law and should not be validated under the legislation of this Bill, which will authorise conditional fees.

Lord Phillips of Sudbury

I support the amendment.

Lord Mackay of Clashfern

If such an amendment is necessary, I, too, strongly support it.

The Lord Chancellor

The matter is a little more complex than has been indicated to the Committee. The noble Lord, Lord Kingsland, wishes to ensure that contingency fees—that is, fees which are fixed as a percentage of the value of the successful claim—are made unlawful. The purpose of the amendment is to amend the proposed Section 58(4) of the Courts and Legal Services Act 1990 set out in Clause 27 to include a new paragraph (d) to make it a requirement of a conditional fee agreement which provides for enhanced fees that the amount of the enhanced fee may not be calculated by reference to the, amount or value of any money, property or other benefit recovered or preserved in the proceedings". Section 58 seeks to bring the effect of the judgment of the Court of Appeal in Thai Trading into statute law. As my noble and learned friend Lord Falconer of Thoroton said a little time ago, that decision does not sanction conditional fee agreements prescribing a costs uplift in the event of success. It sanctions solicitors agreeing with their clients to recover less than their normal fee if they lose—and in theory they could recover nothing—but, if they win, to recover the full costs from the unsuccessful opposing party despite the agreement for a reduction with their own clients.

It was not the intention of this legislation to make unlawful other kinds of fee agreements that solicitors presently use. For example, it is perfectly lawful for solicitors to work on a contingency fee basis where they are undertaking work in "non-contentious business" as defined by the Solicitors Act 1974. When we turn to contingency fees in relation to other work undertaken by lawyers, I am not convinced that the use of contingency fees in relation to non-contentious business should be unlawful. I have a different view, of course, in relation to contentious business properly so described. There are many services provided on a similar basis to conditional fees by professional people other than lawyers. I think, for example, of estate agents selling homes, or other persons who are remunerated on a commission basis. I do not see any reason why lawyers especially should be prevented from ever being able to offer their services in this way in relation to the many other services they provide apart from conducting litigation.

"Contentious business" is defined by Section 87(1) of the Solicitors Act 1974 as proceedings before a court or arbitrator. "Non-contentious business" means any business not within the definition of "contentious business".

The noble Lord, Lord Kingsland, referred to proceedings in employment tribunals. Under the Act, non-contentious business includes all proceedings in employment tribunals because they are neither proceedings before a court nor an arbitrator. However, everyone knows that in practice they are just as contentious as court proceedings. It is only the employment appeal tribunal which is treated as contentious.

I am told that solicitors regularly undertake cases in these tribunals on a contingency basis. Since July 1998 conditional fee agreements have been made available in these tribunal proceedings. There may not be much point in that because of the availability of contingency fees and, a matter to which we referred previously in Committee, costs do not follow the event in these tribunals. Under a conditional fee agreement in employment tribunal proceedings, the uplift would have to come out of the compensation recovered.

That is a state of affairs about which I have some concern. I intend to invite the Law Society to make representations to me. Indeed, the amendment has focused my attention upon that. The revised Section 58 is intended only to give effect in statute law to the decision in Thai Trading and to go no further. My department has received representations from the Bar and the Law Society about whether that has been satisfactorily achieved. I will consider the representations which have been made. It may be that I will see a need to revisit the terms of Clause 27 on Report.

I have indicated my concern about the position in relation to the employment tribunals. That needs careful thought. As I told the Committee previously, the Government are looking at their obligations under European Union law and the ECHR Convention before reaching any conclusions about employment tribunals. It seems to us that this issue, too, needs to be addressed in that context. I do not believe that we should simply consider the position of employment tribunals and related issues of cost or publicly funded support to take cases to them in a piecemeal fashion. However, I am aware of the concern about equality and treatment of the kinds of fee arrangements which barristers and solicitors may use when appearing before employment tribunals and I believe that we must look at the matter with care.

I turn to the strict terms of the amendment. I am not sure that it would have the intended outcome. It would not affect conditional fee agreements which do not provide for enhanced fees and it could not affect contingency fee agreements currently used by solicitors in non-contentious business. I do not believe that the noble Lord intends it to. The proposed Section 58(4), in which the additional words would be inserted, does no more than provide the conditions that are applicable to a conditional fee agreement which provides for enhanced fees; that is to say, fees increased by a specified incentive in the event of success. The earlier provisions of Section 58(4) provide that these agreements may be entered into in respect of proceedings specified by order by the Lord Chancellor; the agreement must state the percentage by which the fees of the lawyers are to be increased; and the percentage must not exceed the maximum amount specified by the Lord Chancellor by order. Therefore, I see nothing in these provisions or anywhere else in the proposed Section 58 which legitimates the use of contingency fees. Calculations of the sum payable in the event of specified circumstances occurring will always be by reference to the fees of the lawyer and not by reference to the award of the court. Consequently, as I see it, the position envisaged by the amendment cannot arise. Therefore, I am not minded to accept the amendment for those reasons and I invite the noble Lord to withdraw it. But I repeat my hostility to contingency fees, strictly so-called, in contentious court proceedings.

9.15 p.m.

Lord Ackner

I do not at the moment follow why there should be that hostility to contingency fees. In many ways it is an argument about semantics. I have not brought it with me but the Middleton Report is really quite in favour of contingency fees and it gives its reasons. The conditional fee can, in given circumstances, be much more unfriendly to the plaintiff than the contingency fee. The 100 per cent. uplift which is allowed—and there is no bar on it going up to 100 per cent.—could wipe out entirely the award of damages made, particularly in a personal injury case where contributory negligence is found.

The contingency fee cannot do that. As I understand it, it provides a maximum of the proportion which can be taken out of the damages recovered. I believe that it is 40 per cent., at most, in most American states. Therefore, one is being emotionally illogical in being so hostile to the contingency fee when the conditional fee is merely a species of contingency fee which in certain circumstances may prove more expensive to the plaintiff than the contingency fee. One should think a little more clearly as to what difference, if any, there is.

I remind the Committee that the Green Paper, as I recall it, which first raised the ugly head of this method of remuneration was called Contingency Fees because, quite clearly the conditional fee depends on a contingency. The contingency is success. If that is achieved, then—and I use that horrible phrase—the uplift in costs is permitted.

Lord Clinton-Davis

The noble and learned Lord, Lord Ackner, is quite right that there is a relationship between the two. My concerns in relation to contingency fees mirror those pointed out by the noble Lord, Lord Goodhart, who referred to the experience in the United States where litigation is out of control. There is some attribution of responsibility for that condition to the operation of contingency fees. In any event, that is my view.

I am not really in favour of lawyers having a share of the financial action, so to speak, because that promotes an interest which is less than objective. But I do not wish to argue that point now.

I wish to ask my noble and learned friend whether, during the later stages of the Bill—either here or in another place—he proposes to deal with the disparities between lawyers and non-lawyers; for example, claims assessors and so on who are able to operate contingency fees. And yet, the essential difference between the two is something which my noble and learned friend has lost no opportunity of emphasising throughout our debates; that is, quality control. There is no quality control in relation to claims assessors and people of that character.

Does my noble and learned friend intend to do something about that? In the White Paper he envisaged some possible controls over non-lawyers giving legal advice, but no concrete proposals have emerged in that respect save for the one announced recently in the field of immigration. A proposal is to be introduced by the Home Office because in that sector it is quite clear that a number of those non-legal so-called experts have been guilty of aberrant behaviour to the great disadvantage of people appearing before immigration tribunals. It is right that the Home Office should take action to deal with the matter.

But why should there be no quality control over other people who are in direct contact with clients and—it must be said—whose qualities are extremely variable indeed?

I am not suggesting that legitimate and properly controlled agencies giving advice and carrying out representation at tribunals should be curbed; but there is an important point to be made in relation to quality control in some other sectors. Inexperienced people are vulnerable when it comes to claims assessors. They are not told and do not know how claims are made. It is easy to under-assess a large claim—I believe that happens. I do not want to argue the entire case now, but I should like to know whether my noble and learned friend is able to indicate at this stage whether he has any plans to deal with that specific sector.

Lord Donaldson of Lymington

Perhaps I can intervene before the noble and learned Lord rises to his feet, otherwise he will be bobbing up and down again. I entirely support the idea behind the amendment. My dislike of contingency fees is tempered only by my dislike of conditional fee agreements for precisely the reasons given by the noble Lord, Lord Clinton-Davis. Fortunately, when I was a trial judge, I never had two plaintiffs in front of me—the litigant and his lawyer. That is what one is faced with under conditional fee agreements.

My point is that if Amendment No. 213A is accepted, it will be impossible to give statutory or regulatory effect to a rule which is imposed by the Law Society; namely, that the increase—though within whatever may be the permitted percentages (I believe it runs up to 100 per cent.)—should not exceed 25 per cent. of the amount recovered. That cap, whether or not it exists, seems to be extremely healthy and one which the Lord Chancellor might like to be able to impose by an addition to Section 58 through Clause 27. However, if this amendment is included in this form, he cannot do that and that would be unfortunate.

Lord Ackner

My noble and learned friend is probably not aware that I put forward that 25 per cent. should be the top and that that should be incorporated in the regulations. I was defeated.

The Lord Chancellor

I do not believe that even at this hour of the night I was being either illogical or emotional but, as ever, entirely reasonable. What I say to the noble and learned Lord, Lord Ackner, is that the real vice of the contingency fee agreement, properly so-called, is that it gives the lawyer interest in the outcome of the action. Where the damages are very high, theoretically there is no limit to what percentage of the recovery the lawyer may claim and that can result in sums which are much greater than would be recovered under the uplifts in conditional fee agreements.

Another reason why conditional fee agreements are entirely different is that, under the Bill, the amount of the uplift will be recovered from the unsuccessful defendant and will therefore not come out of the plaintiff's compensation.

The noble Lord, Lord Clinton-Davis, asked about the work of claims' assessors and related categories. Those are people who offer to recover compensation for members of the public arising, for example, out of personal injury, for a fixed percentage of the damages recovered. I have to say that I have to share his anxieties in that regard. I and my department have received complaints from lawyers about the activities of those people and indeed other practitioners whose activities fall short of the work of litigators and who are otherwise not currently regulated. It is alleged that the services of claims assessors, which are paid for out of settlements, are unduly costly and that the settlements that they achieve fall far below the level that a competent lawyer would achieve.

The Government have a duty to ensure that consumers are protected, especially in the case of legal services where many clients can be ill informed and where the consequences of poor advice can be very severe indeed. If there is a need for regulation in this area to protect the consumers of legal services, I would not hesitate to promote the necessary measures. As the noble Lord, Lord Clinton-Davis, mentioned, the Government are already committed to taking steps to control unscrupulous immigration advisers. The Home Secretary and I have agreed proposals on that subject which he will shortly put before Parliament. Apart from that, although there is limited anecdotal evidence of poor service, there is not yet a detailed picture; nor do I know what measures would be effective; nor the views of legally qualified practitioners. However, I can assure the Committee that I am considering, as a matter of urgency, how best the necessary investigation and research can be undertaken. I hope that I shall shortly be in a position to announce what I intend to do.

The noble and learned Lord, Lord Donaldson of Lymington, made the point that an unlooked-for consequence of the amendment, if acceded to by the Committee, would be to outlaw the recommendation of the Law Society, which I think is generally adhered to in practice, that uplifts shall not exceed 25 per cent. of the recovery. That appears to be another reason why, on reflection, the noble Lord, Lord Kingsland, should withdraw the amendment.

Lord Kingsland

I thank the noble and learned Lord the Lord Chancellor for his extremely thoughtful and, I discern, constructive response to the amendment. He said that he will go away, reflect, and consult on it. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Goodhart moved Amendment No. 214:

Page 16, line 1, after ("proceedings") insert (", save those brought under section 82 of the Environmental Protection Act 1990").

The noble Lord said: The Bill rightly prohibits CFAs in criminal proceedings. However, the amendment permits a CFA to be made in a housing disrepair case under the Environmental Protection Act. Such cases are brought by tenants against landlords in the magistrates' courts and, nominally, they are criminal proceedings. However, they are much more akin to civil proceedings for a mandatory injunction. If we have to have CFAs, those proceedings seem perfectly appropriate for funding by a CFA. I beg to move.

Lord Falconer of Thoroton

The purpose of this amendment is to allow conditional fee agreements to be used in bringing prosecutions under Section 82 of the Environmental Protection Act 1990. That section provides for summary proceedings by persons aggrieved by a statutory nuisance. Technically, as the noble Lord pointed out, proceedings under Section 82 are criminal proceedings. As such, they would be excluded under the general exception of criminal proceedings from proceedings in which conditional fees may be used. It is not without interest that part of the effect of the decision in the Thai Trading court case, which Clause 27 of this Bill is seeking to bring into statute, was to approve the use of something similar to conditional fee agreements in cases under Section 82. It is interesting that the Thai Trading case overturned an earlier decision in the case of British Waterways Board v. Norman which said that they could not be used in such a situation—in the latter case an agreement between the solicitor and the client that if a prosecution under Section 82 were unsuccessful the solicitor would not seek to recover costs against the client. That agreement was held to be unlawful and unenforceable in the latter case.

It was not the intention of the Lord Chancellor for Clause 27 to have the effect that has been described accurately by the noble Lord, Lord Goodhart. I would like, if I can, to be able to reach a consensus with him on the best way of addressing the difficulty that he has described. As I have just said, I accept that the courts have explicitly approved the use of what will become conditional fee agreements in the types of cases outlined by the noble Lord, even though they are technically criminal proceedings. However, I ask for a little more time to consider this amendment and to decide what should be done, if necessary, by talking to the noble Lord. Accordingly, I ask him not to press the amendment in those circumstances.

9.30 p.m.

Lord Goodhart

I am grateful for that helpful reply. Naturally, in the circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Meston moved Amendment No. 215:

Page 16, line 2, leave out from ("proceedings") to end of line 4.

The noble Lord said: The purpose of this amendment is to ensure that no type of family proceedings can be the subject of an enforceable conditional fee agreement. The Bill, as drafted, will permit conditional fee agreements in those family proceedings which consist of a financial matter or a matter concerning property. That proposal has caused concern to the specialist Family Law Bar Association and the Solicitors' Family Law Association, as well as to others, including Relate.

There are several objections to this proposal. First and fundamentally, a conditional fee agreement will require the parties to think in terms of winning and losing, which is now quite contrary to the whole ethos of the specialist legal associations and of current family law and practice. Lawyers are now duty bound, and encouraged by the courts, to limit costs and to limit acrimony by seeking a compromise in financial and property disputes and by avoiding adversarial stances. That applies not just to financial and property matters but also to other aspects of family and matrimonial litigation. Expert mediation will have a formal statutory status when the Family Law Act 1996 comes into full force.

Already there is a successful ancillary relief pilot scheme which places great emphasis on early settlement of property and financial claims, on keeping litigation costs under close control and on ensuring full and frank disclosure of all relevant financial circumstances. Conditional fee agreements will tend to reintroduce a litigious culture to family work, in which lawyers now successfully settle a very high proportion of cases. That high rate of settlement occurs because conscientious lawyers, encouraged by their professional association's guidelines, spend much of their time advising and persuading their clients to put all their cards on the table, face up, and advising their clients to lower their financial expectations.

The second objection is that the nature of the financial and property jurisdiction in this country often makes it difficult to define who has won or lost. Cases are seldom "all or nothing". Usually the courts and lawyers are seeking to achieve a fair apportionment of finite family capital resources and income, both at present and in the foreseeable future. Now those include the reallocation of pension rights in certain cases.

The statutory framework under which we operate gives broad discretion, and requires first consideration to be given to the interests of minor children. Ancillary relief claims are not the same as claims for debt or for compensatory damages. The discretion and wide powers of the court over present and prospective resources mean that there is seldom a precisely predictable result, but rather a bracket of correct outcomes. Thus, a former spouse may "win" in terms of obtaining or retaining capital assets, but at the same time "lose" on the amount of maintenance payable. The party who wants the transfer of the former matrimonial home may not receive it outright but on trust, or subject to a charge back—or on terms that a compensatory lump sum payment is made—or the level of maintenance payable may be limited in duration.

In reality it is much easier to define who has won or lost a simple dispute over a child, but the Bill, perfectly properly, excludes conditional fee agreements from that type of family proceedings. It does so, presumably, on the basis that CFAs can be inconsistent with the welfare of children who are the subject of the dispute; but, of course, many financial and property disputes between former spouses and partners involve a consideration of the needs of the children of the family.

There is a further concern in that the question arises: at what stage should the conditional fee be fixed or become payable? When divorcing parties first see their lawyers—and, quite often, for some time afterwards—they can be unaware of the extent or value of assets of the other spouse, unaware of the present and potential income available and only vaguely aware of their own or the other party's realistic needs. The necessary initial inquiries which give the basis for informed legal advice, and which enable so many cases to settle without hostile litigation, have to be paid for. It cannot possibly be said that there is a winner or a loser in such a situation.

In passing, I should mention that in The Lawyer magazine of 15th December 1998, in an article about this proposal, a spokesman for the Lord Chancellor's Department was quoted as saying that it "would depend on the view of the client" whether any result was seen as a win or a loss. It is hard to believe that that was a complete or accurate quotation but, if it was, it suggests something which is quite unworkable and has not been thought through.

In most cases, the task of the court and of the lawyers in reaching settlement out of court is to distribute assets and income according to needs, the most important of which are normally housing needs. In most cases, the distribution is of very limited resources and the family can ill afford contested litigation. If a conditional fee is payable, the needs of the party concerned will rise requiring a higher award. In matrimonial litigation at present the court is kept informed of the costs incurred on either side and will always bear in mind the overall impact of costs on the family's finances. Yet the court will not be privy to the conditional fee agreement or the terms of the uplift.

Under the present legal aid scheme the recovery of costs can be achieved by the state by means of the statutory charge, which can be deferred if a home is obtained by the assisted party in family cases. That charged amount bears interest. It is an effective way of postponing the payment of costs, which are not recovered from the other party, while still protecting the interests of the public purse. By contrast, CFAs may well lead to so-called "satellite" litigation between the lawyer and the former client about who has won or lost, and they will almost certainly not allow for deferred payment by charge against a former matrimonial asset. Moreover, the nature of the work and litigation will mean that insurance cover to protect against payment of the other party's costs will be unobtainable. Insurance companies would not touch this kind of litigation with a bargepole.

Although it will probably be said that the Bill is only permissive and conditional fee agreements will only be optional, there is a fear that legal aid will be withdrawn because conditional fee agreements are theoretically available if the Bill stands as it is presently drafted. In the long term the Family Law Act 1996 with its emphasis on mediation adding to the current attitudes fostered by the courts and the legal professional bodies will reduce the financial costs and emotional damage of family breakdown. In family cases conditional fee agreements have the potential to increase conflict, unhappiness and expense. I beg to move.

Lord Clinton-Davis

I support the amendment which also stands in my name, and the arguments that have been adduced by the noble Lord, Lord Meston. The introduction of the conditional fee into this sphere runs completely counter to the philosophy and the practice which have been prevalent for the past 20 years or even longer to try to allay the bitterness which the adversarial approach previously had encouraged. When these matters were debated during the 1990 Courts and Legal Services Act it was then asserted—I think with conviction—that conditional fees were wholly inappropriate for criminal and family proceedings.

I ask my noble and learned friend what evidence is there of any demand for conditional fees in disputes in the field of matrimonial property? What research has been done to ascertain that? What research has been done into the availability of insurance—that point was made by the noble Lord, Lord Meston—to cover conditional fees in this sector?

Baroness Scotland of Asthal

I too support this amendment. One of the things that all those of us who have practised in family law have come to realise, particularly in the past 20-odd years, as my noble friend has said, is that when one is dealing with family disputes one is dealing with a lose, lose situation. There are no winners. There is no one other than losers. The whole family is damaged by the disintegration that occurs at times of divorce. What lawyers who are properly instructed should aim at is a damage limitation exercise.

Litigants who are regrettably engaged in divorce and family proceedings do not separate in fact because often they have children whom they share and they will remain engaged in that relationship at some level for a long time. I assure the Committee that matrimonial property, fees and the matter of who paid for what continue the bitter wrangle for many, many years. That does much to undermine the rapprochement that is hoped for families, and does much to destroy the integrity of what is left. One has disappointment and anger.

It is also important for us to remember when thinking of these cases that often the litigant involved is not reasonable. Litigants are often angry, disappointed and have gone through a great deal of pain and suffering. Not surprisingly they feel that there are scores that need to be settled—scores that they would wish their advocates to advocate on their behalf. The lawyer in family cases, be he solicitor, barrister or employed person, is in a difficult position because part of the lawyer's role is to assuage that feeling of pain, disappointment and anger so as to permit his client to see what is in the long-term best interests of the family. That will not be enhanced by a conditional fee agreement which means that if the other party loses and is persuaded to see that he has lost, the lawyer gains.

I know that this Government are wholly committed to the family, mediation, conciliation and rapprochement so that the pain that comes from divorce can be muted, if not totally expunged. Therefore, I am confident that the Government will bear those factors in mind when considering this amendment; confident that they will put children and families and those who go through the trauma of divorce first; and confident that they will see the wisdom of this amendment and put this part of the Bill to one side.

9.45 p.m.

Lord Sheppard of Liverpool

We have heard today the Government's responses to reasoned debate. I join others in hoping that the noble and learned Lord the Lord Chancellor will also respond to this important point. When I sat on the Bishops Benches a few years ago I recall that, as chairman of our board for social responsibility, I met the noble and learned Lord, Lord Mackay of Clashfern—then the Lord Chancellor—on a number of occasions. I firmly supported throughout his Bill the idea of trying to get these disputes out of the adversarial setting of the law courts and into something where mediation was much more possible.

I do not believe that you can chop up the different parts of family law. I very much hope that the Government, with their firm support for the family, will want to help couples move out of the pain of marriage breakdown with as little bitterness as possible. I believe that this amendment would help that to happen.

Lord Mackay of Clashfern

The arguments of the noble Lord, Lord Meston, the noble Baroness, Lady Scotland, and the noble Lord, Lord Sheppard, were, in very general terms, the arguments that persuaded me in 1990 that it would not be appropriate to have conditional fee arrangements in relation to family disputes of any kind. Many of your Lordships have sought to persuade me from time to time that some of my decisions in 1990 were wrong, but I still feel a certain degree of affection for quite a number of them, including this one. I will be interested to hear what my noble and learned successor has to say about it.

As the noble Baroness said, people are often in a state of unreason as a result of matrimonial disputes. It may be possible to devise conditional fee arrangements which, in a sense, help to modify that enthusiasm. One of the consequences of the legal aid scheme is that many people in matrimonial disputes have not expected the charge on the matrimonial property, notwithstanding that it was carefully explained to them. Often at the stage of divorce and arguing over the property, one or both of the parties are quite unreasonable and great amounts of money are spent on the legal aid fund. Although they had been told, it had not dawned on them that all that money is coming out of their property and they find out later that the matrimonial home is being drained away by the fees of the lawyers they have instructed to fight the matter out to the hitter end. I suppose it is just conceivable that conditional fee arrangements could be helpful in trying to bring that kind of dispute under control.

For my part, until persuaded to the contrary, I remain of the view that the whole ethos of family law, on which the Family Law Act was predicated—I understand the Act is to come into force more fully in the year 2000—was the idea of trying to remove disputes and encouraging settlement, primarily in the interests of the children of the marriage, but also in the interests of the spouses. My present feeling is that the arguments used against this change have a lot of force, but I wait to hear the persuasive eloquence of my noble and learned successor on this important matter.

Lord Phillips of Sudbury

I am sure that many noble Lords have been lobbied, as I have, on this part of the Bill. I would be surprised if any noble Lord had received other than the single plaintive message that I have received from many quarters. It is, "Do not allow this provision to pass". Perhaps I may refer to the survey carried out by Suffolk and North Essex Law Society of its member firms. On the question of contingency fee arrangements—I should properly say conditional fee arrangements—there was, again, a unanimous voice that this class of case is simply not appropriate for conditional fees.

I would make only one other point. Under Clause 9 of the Bill, which sets out the criteria according to which the commission is to fund services, the only class of case that is given special treatment, in subsection (3), is family disputes. Subsection (3) states: 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". It seems to be entirely consistent with that special insight that this amendment should be passed.

The Lord Chancellor

The Government are committed to encouraging the parties involved in family proceedings to resolve disputes in such a way as to reduce conflict and distress and to promote as good a continuing relationship between them for the future as is possible in the circumstances, not least in the interests of the children. The Government are committed, as I have said many times, to the use of mediation in family disputes in order to achieve that end.

The purpose of Clause 27 is no more than that, in cases where there are disputes about property and finance, and nothing else, and where the parties decide that mediation is not appropriate, conditional fees would provide a further alternative means of funding the case. Conditional fees could have the merit that they would allow people who would otherwise be unable to meet that cost to pursue their cases. This could benefit people, particularly those just outside the range of eligibility for legal aid, in taking their cases forward. It certainly was not intended that the use of conditional fee agreements in the manner proposed would undermine the conciliatory approach to family proceedings encouraged by the Family Law Act but rather that it should allow an alternative means of funding cases in circumstances where court proceedings could not be avoided. So the removal of the statutory bar on the use of conditional fee agreements in this limited type of family dispute was thought to facilitate the conduct of cases and benefit many people, particularly those just outside the range of eligibility for legal aid.

However, the Government have listened carefully to the views put to us about this proposal. We accept in particular—the noble Lord, Lord Meston, made the point very well—the practical difficulties associated with defining what constitutes a win in these cases. We also accept that this provision could be seen to be encouraging lawyer-driven litigation in marital disputes when the Government's overriding objective is to reduce bitterness and acrimony between the parties. So we have been listening very carefully to representations on this subject made by family specialists and others and we have decided to accept the amendment in principle. We will therefore bring forward an amendment on Report. I invite the noble Lord, Lord Meston, who I see is well pleased with the outcome, to withdraw the amendment.

Lord Meston

I am grateful to the noble and learned Lord and to all those who have spoken. Perhaps I may single out the noble Baroness, Lady Scotland, for her clear and powerful statement of the modern approach to family litigation as she practises it and as I, too, endeavour to practise it. If any outsider now thinks that modern practitioners of family law are cynically concerned to encourage friction and hostility for their own ends, he or she need go no further than to read the words of the noble Baroness. The noble Baroness of course spoiled my argument. I endeavoured to say that there are no winners or losers. When one is against her, she is always the winner.

On the basis indicated by the noble and learned Lord the Lord Chancellor I am happy to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Kingsland moved Amendment No. 216:

Page 16, line 29, at end insert ("and such proceedings shall be specified proceedings notwithstanding that they are concluded without the commencement of court proceedings").

The noble Lord said: The purpose of this amendment is to incorporate in primary legislation the provision in the conditional fee agreements order 1995 which makes it clear that proceedings need not necessarily have been commenced.

Most conditional fee agreements are signed before it is known whether it will be necessary to commence any type of proceedings. The amendment would make it clear that a conditional fee agreement could be used where a case was to be concluded by negotiation or mediation. I do not think I need say anything further. I beg to move.

Lord Falconer of Thoroton

This amendment would amend the new proposed Section 58A of the Courts and Legal Services Act 1990 inserted by Clause 27 of the Bill. It seeks to amend Section 58A(4), which presently reads, In section 58(4) "proceedings" includes any sort of proceedings for resolving disputes (and not just proceedings in a court)", By inserting at the end of that section the words, and such proceedings shall be specified proceedings notwithstanding that they are concluded without the commencement of court proceedings". I understand this amendment to be intended to give effect to the decision of the Vice-Chancellor in the case of Bevan Ashford v. Geoff Yeandle (Contractors) Ltd. in which the Vice-Chancellor decided that where an alternative means of resolving a dispute to court proceedings was used in proceedings where conditional fees were permitted, any agreement between the lawyer and the client to work on a conditional basis was lawful and enforceable. The problem arose in that case because of the narrow definition of proceedings in the Courts and Legal Services Act 1990 which defines "proceedings" in Section 119 as, "proceedings in any Court". The intention of this clause is to do no more than to give statutory effect to that decision.

I should at this point say that the Lord Chancellor's officials have received representations from the Law Society among others about whether the wording of Section 58A(4) may go further than the limited extent I have just described. I am urgently considering the points put to me and it may be that the Lord Chancellor will need to come back at Report stage with amendments of his own to this subsection.

The amendment that the noble Lord seeks would insert words which currently appear in Article 3(2) of the Conditional Fees Order 1998 and bring them into the statute. These words are used to ensure that simply because a dispute is settled before proceedings are commenced in the court the conditional fee agreement, provided it is in relation to a proceeding specified by order, is valid and enforceable. Without that it might be open to a client to dispute that a valid agreement existed.

In principle the Lord Chancellor has no objection to the inclusion of the words suggested. However, perhaps we could have an opportunity to consider the detailed terms of the amendment before bringing forward an appropriate amendment. In those circumstances I ask the noble Lord to withdraw his amendment.

Lord Kingsland

I thank the noble and learned Lord for his response. In the circumstances, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

10 p.m.

Lord Kingsland moved Amendment No. 217.

Page 16, line 35, leave out ("other authorised bodies (if any)") and insert ("bodies").

The noble Lord said: This is one of those rare occasions in the debate on the Bill in Committee when a request is made for the noble and learned Lord the Lord Chancellor to increase rather than constrain his discretion. The simple purpose of the amendment is to remove the qualifying word "authorised" in the expression: other authorised bodies (if any) as he considers appropriate in subsection (5)(d) of Section 58A. I see no reason why the bodies consulted should be so constrained. I beg to move.

The Lord Chancellor

I believe that this amendment merits further consideration. Section 58(4) provides that the proceedings for which enhanced fees and the permitted percentage of any enhancement are applicable must be specified by order made by the Lord Chancellor. Prior to making the order, the Lord Chancellor shall consult specified bodies, including any authorised bodies not specifically referred to. Authorised bodies are defined in the Courts and Legal Services Act and they are professional bodies.

I am conscious that limiting consultation to authorised and specific bodies may be too restrictive, given the increasing role and interest of non-professional bodies in the provision of legal services. For that reason, I am willing to consider the matter further and, if necessary, to bring forward amendments at Report. On that basis, I ask the noble Lord to withdraw his amendment.

Lord Kingsland

I shall, of course, do so. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Clinton Davis moved Amendment No. 218:

Page 16, line 38, leave out (-party") and insert ("claimant").

The noble Lord said: It may be for the convenience of the Committee if we also discuss Amendments Nos. 219, 220, 223, 224, and 225. Most Members of the Committee will welcome the proposal made by the Government that success fees in conditional fee cases should be paid by the losing party in the litigation. That is a precondition to the Government's proposals to abolish legal aid in personal injury cases. That is not something I am entirely happy about, but that is another debate. Without it, personal injury victims would face losing up to 25 per cent. of their compensation by way of lawyers' fees.

Amendment No. 218 proposes that the right to recover success fees should be limited to claimants. It is only claimants who lose the right to legal aid under the Bill. It is not to be expected that lawyers acting for defendants will be prepared to act routinely under conditional fee agreements with success fees. There are substantial difficulties in defining successful defendants. Insurance premiums for after-the-event insurance will rise dramatically if costs payable by after-the-event insurers in lost cases rise to include payment of success fees to defendants.

Amendment No. 219 provides that a court order for the losing party to pay costs shall—that is instead of "may"—include payment of the success fee by the losing party. The claimant should not face the uncertainty of not knowing whether the success fee will be recovered. Similarly, this should only be additionally subject to the rules of court if the Government are able to publish draft rules dealing with procedure and principles to be applied in the assessment of success fees by cost judges.

As for the other amendments, the Government's proposal that legal expenses insurance premiums in conditional fee cases be paid by the losing party to the litigation is very welcome. But the amendment proposes that this should be restricted to claimants. They are the only people who lose the right to legal aid under the Bill. If defendants can recover insurance premiums, does this include public and employers' liability premiums paid and, if so, over what period?

The amendment provides that the recovery of insurance premiums should be mandatory and not discretionary and should be additionally subject to rules of court only if the draft rules are published in advance. I beg to move.

Lord Goodhart

I am unable to support this amendment for the reason that it clashes with amendments that stand in my name in the next group. I shall develop my arguments when that group of amendments is considered. I am somewhat concerned by the fact that a distinction is sought to be drawn between claimants and others. There may well be cases in which it is the defendant who has to rely on a CFA. For example, I can envisage certain cases in which a landlord seeks an order for possession against a tenant where it will be the tenant rather than the landlord who needs support via a CFA.

The Lord Chancellor

The purpose of this amendment is to make the recovery of the success fee and the insurance premium mandatory in cases where a claimant, and only a claimant, successfully uses a conditional fee to pursue a claim. Although the general rule in this country is that costs follow the event in litigation, the recovery of costs is always at the discretion of the court.

These amendments are supported by the Association of Personal Injury Lawyers (APIL), which argues that clients should have certainty that they will recover the success fee and the insurance premium if they are successful. It also argues that, where defendants successfully defend a claim using a conditional fee agreement, they should not be allowed to recover the success fee; otherwise, the costs of insurance premiums will increase if there is a possibility of having to meet a success fee in addition to the normal costs under the policy.

I am not willing to accept the amendment for two basic reasons. The first reason is that discretion must always be retained by the courts to do justice in individual cases. The second reason is that which appealed to the noble Lord, Lord Goodhart: the provision proposed for defendants would prescribe not an equitable but an inequitable balance of power as between plaintiffs and defendants in civil litigation. The provision would place claimants in a significantly stronger position in litigation where they used conditional fee agreements. The clauses as drafted seek to place the success fee and the insurance premium in the same position as normal costs—in the discretion of the court subject to rules of court.

No litigant ever enters into litigation in the certainty that he will necessarily recover all of his costs even if he is successful. Although court rules make a general presumption that costs will follow the event, the court always retains a discretion to decide otherwise. For example, that discretion would be exercised where the behaviour of the successful party had been unreasonable or there had been contributory negligence. For the recovery of the success fee and the insurance premium to work equitably, I think it important that the courts should retain this flexibility. It is for this reason that we have provided for the operation of the recovery of success fees and insurance premiums to be made subject to rules of court. I fully intend to ensure that any rules made under these provisions will continue the principle that costs should follow the event of success, but I am equally sure that it will be necessary to allow the courts to exercise a discretion within this general presumption. I cannot think that it would be right that the courts should be obliged to award the success fee and insurance premium in full when it was otherwise exercising its discretion not to award costs or to award only part of the costs.

There is one respect however where I cannot hope to meet the proponents of these amendments and that is in regard to making recovery of the success fee and insurance premium available only to claimants. I do not regard that as fair. It must be remembered that these provisions will apply across all fields of law, not simply personal injury, in which conditional fees are allowed. I simply could not agree to placing one party at a significant disadvantage from the outset of litigation by the operation of the costs rules.

APIL well knows the benefit for claimants under conditional fee agreements of the provisions of the Bill enabling the uplift and the insurance premium to be recovered—and they will be, in the overwhelming majority of cases which succeed, for plaintiffs under conditional fee agreements. These will ensure the success of conditional fee agreements in practice. But I regard these amendments as going too far and altering the balance of power and advantage in litigation against the interest of defendants to an unacceptable extent. I therefore invite the noble Lord to withdraw the amendment.

Lord Clinton-Davis

My noble and learned friend should not have a monopoly over reasonableness tonight. I thought that his arguments were reasonable. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 219 and 220 not moved.]

Lord Goodhart moved Amendment No. 221:

Page 16, line 39, after ("subject") insert ("to subsections (6A) and (6B) and").

The noble Lord said: In moving the amendment, I speak also to Amendments Nos. 222, 226 and 227.

It is an important and difficult group of amendments and I am sorry that I have to raise the issue at this late hour of the night. The purpose of the amendments is to provide that the mark-up on an enhanced fee CFA agreement is recoverable from the losing party only if the court thinks it just in all the circumstances to make an order to that effect, and not on the basis, as the Lord Chancellor indicated, that there would be a presumption that the mark-up should be recoverable.

I start from the widely shared belief that there are some quite serious drawbacks to CFAs. The integrity of lawyers is absolutely essential to a properly functioning legal system. But giving lawyers a financial interest in the outcome of their case may tempt some of them to breach professional rules, for example about disclosure of documents. More often they will be subject to a strong temptation to settle cases for too little. As soon as an offer is received which is enough to cover their enhanced fee, lawyers will be under great pressure to accept that offer rather than to press on and risk losing everything.

I am not saying that there will be wholesale breakdown of professional integrity as a result of CFAs. That would be absurd. But there are risks in CFAs. While the legal system should tolerate CFAs, it should not encourage them. I find the enthusiasm of the Lord Chancellor for CFAs somewhat disturbing.

Of course where CFAs give access to justice—where it would not be possible without them—we must have them. They help the problem of those who are too rich for legal aid but too poor to litigate at their own cost. I also accept with some reluctance but ultimately without doubt that public funding should not be provided where CFAs offer a viable alternative, but where someone can afford to litigate at their own expense they should be encouraged to do so. Such a person has an option. He can litigate on a conventional basis: if he loses he has to pay the costs; if he wins he gets the winnings clear and has his costs paid. If he chooses to insure himself against the risk of paying costs by going for a CFA and an insurance policy, that is a matter for him and it should not affect the other party's cost liability. Of course, a poor person does not have that choice. A poor person can litigate only with the benefit of the CFA.

Making enhanced fees under CFAs recoverable more or less as a matter of course, at least as a matter of general principle, will have two undesirable consequences. First, almost everyone will be tempted to go for CFAs, whether they need to or not. If you lose you pay nothing; if you win you get your damages clear. It is a, "heads I win, tails you lose" situation. Secondly, in such a case the losing party has to pay three sets of costs; his own, plus the other party's costs twice over. Not all losing parties have acted unreasonably or are wealthy corporations. I believe that to require a losing party to pay triple costs is seriously unfair.

We therefore propose that the courts should have a discretion whether or not to order payment of enhanced fees under a cost order and should only do so when it is just. Hardship to a successful party is one case where it might be just. Let us take the case where a plaintiff is paid a large sum in damages for catastrophic injuries after what has been a difficult and expensive case. In such a case, it would be wrong to deduct 25 per cent. of the damages to pay the lawyer's enhanced fees. Again, where the successful plaintiff had no choice because he could not afford to litigate at his own cost it will usually be just to order the other side to pay those advanced fees. Again, where the defendant has increased the costs by unreasonable displaying tactics, the defendant should bear the burden and not the successful plaintiff. But to say that enhanced fees can be recovered as costs more or less irrespective of the circumstances, even when the plaintiff has had a real choice whether to sue at his own expense or by a CFA, would be unfair to defendants and I believe damaging to the legal system.

The noble and learned Lord the Lord Chancellor seems to regard CFAs as a panacea. They are not; they serve a purpose. Their use should not be encouraged where they are not necessary and I do not think that the consequences of encouraging their use has been adequately thought out.

I turn more briefly to Amendments Nos. 226 and 227. These concern the recovery of costs of insurance premiums under a cost order and seek to apply the same principle. They raise the same issue as enhanced fees for CFAs, though in a less acute form. There are two forms of insurance cover. Pre-event insurance to cover legal costs of actions which may arise in the future is the first. That includes household policy cover for occupiers' liability or a professional negligence policy. If I am sued for negligence and successfully defend the action how would it be possible to identify how much of my premium should be recovered from the plaintiff? Indeed, if I could recover it. it would be an absurd anomaly because I would then be better off than if I had not been sued at all. If I had not been sued the premium would still be the same and there would be no one to recover it from. I do not believe that Clause 28 is intended to cover pre-event insurance, but perhaps the noble and learned Lord the Lord Chancellor will clarify that.

Secondly, there is post-event insurance. That will normally be restricted to cover the opponent's costs and coupled with a CFA. Such a policy will sometimes have a benefit for the other party because if the insured party is poor it will produce a fund for the payment of the other party's costs which might otherwise have been irrecoverable. But that is not true if the insured party could afford to pay the costs from his own pocket if he loses the case. If the winning party has chosen to protect himself against the risk of loss which he could have afforded to meet, why should the loser have to pay the costs for both parties and the premium on top of that?

There is a second type of post-event insurance; that is, insurance to cover one's own costs as well as the opponent's costs. In such a case, the prospective plaintiff will pay the lump sum premium to insurers who will finance all the costs of litigation. Clause 28 would permit the cost of that premium to be recovered without the protection from excessive mark-ups provided by Section 58(4) of the Courts and Legal Services Act. That loophole should be stopped. As with enhanced fees, the courts should be able to order payment of the successful party's insurance premiums only when it is just to do so.

I ask the noble and learned Lord the Lord Chancellor to consider very carefully the problems which recovery of enhanced fees and insurance premiums will cause in those cases. I beg to move.

Lord Ackner

I support this amendment. I am extremely unhappy about the provision for loading on to the unsuccessful defendant the uplift of the cost of insurance. It seems to me to be contrary to the ordinary principle.

If, before CFAs were allowed, a plaintiff raised, and had to raise, a very large loan in order to bring proceedings, no one would have contemplated that in addition to the damage he recovered, he would also be able to recover the interest which he paid on the loan which was necessary to finance his action. That would be because it was looked upon as too remote.

In principle, the same situation can be applied to CFAs. The only difference is that the Government are so anxious and enthusiastic that conditional fee agreements should work, thereby removing the cost of some legal aid, that they are prepared to do two things: they are prepared to have this form of penal costs order; and they are prepared to avoid monitoring how CFAs are working.

I and others have asked time and time again when the Government will monitor what is happening. We know from the very limited monitoring that occurred in early cases that the average mark-up in personal injury cases is over 40 per cent. We all know that that is far too high because it is accepted that in about 97 per cent. of cases they are dead-cert winners which settle comfortably.

At this late hour, I do not wish to go on further but those are my reasons for supporting the amendment.

Lord Phillips of Sudbury

I too strongly support the amendment moved by my noble friend Lord Goodhart and I identify myself with the remarks just made by the noble and learned Lord, Lord Ackner.

There are many people outside the Committee and in it who are deeply concerned about the potential effect on the probity of the legal process of even the qualified step of conditional fees. The Government extended conditional fee arrangements just before the Summer Recess but they had not given proper or full consideration to the consequences.

There were two considerations. The first was that lawyers should be discouraged from taking on weak cases; and secondly, lawyers should be discouraged from stringing out cases. Both activities are discreditable, but one must accept that some lawyers will act in that way. The irony is that under conditional fee arrangements, those lawyers who are unscrupulous could have a field day because of the potential 100 per cent. uplift in fees.

Perhaps I may give one illustration of why the amendment proposed is needed and, further, why the Lord Chancellor may consider establishing a monitoring process which would look at the wider integrity issues surrounding conditional fees. For example, consider the case of a lawyer retained on a conditional fee to act in a very strong case where the client will not be in a position to understand its strength. If unscrupulous—I repeat, one of the suppositions underlying the need for this conditional fee arrangement was unscrupulous lawyers—the lawyer, far from wanting to hurry the case to a conclusion, will have an incentive under the arrangements to string out the case even more than he might have been inclined to do formerly. For every hour and every step by which he strings out the case he will be paid not once but twice. He will be certain of that double payment because he will know that the strength of the case assures victory in the end.

The conditional fee agreements will also tempt lawyers to embark upon the full panoply of High Court or county court proceedings unnecessarily when they know that the issue of proceedings is not in any way necessary for the conduct and satisfactory conclusion of the case they are handling. Those are but two potential abuses which the conditional fee arrangement, far from reducing or controlling, will inadvertently encourage. That is why the amendment proposed is timely and necessary. There are of course many other examples of where the oversight of the courts must be brought to bear to see both justice to the legal system as a whole and justice to individual parties to litigation.

I add one final point. My noble friend Lord Goodhart surprised the Lord Chancellor when he talked of the defeated party having to pay three sets of fees—that is, his own fees and, in cases of 100 per cent. uplift, two lots of fees of the winning party. But it is worse than that. Under Clause 28 of the Bill, he will also be paying the insurance premium. The large insurance company DAS, which provides after-the-event insurance, charges a premium of 15 per cent. of the damages recovered. It is not confined by contingency arrangements. Therefore, not merely will the defeated party be paying three sets of fees, but he or she will also be paying 15 per cent. damages on top of the damages awarded.

The consequences of the totality of these arrangements and the way in which conditional fees may work could have unforseen results in terms of unfairness and could deter citizens from defending proceedings where they ought to have that opportunity, exacerbated by the proposals to shift out of legal aid categories of cases that are now capable of being dealt with under the conditional fee arrangements. I hope therefore that the amendment commends itself to the Government.

The Lord Chancellor

The purpose of these amendments is to bring on to the face of the Bill considerations the court should have in mind when determining the liability for and the amount of any success fee and insurance premium that a person who has used a conditional fee agreement successfully should recover from his opponent.

Amendments Nos. 221 and 222 to Clause 27 impose on the court a number of considerations before it can make the success fee recoverable, including such things as the hardship towards the person liable to pay the costs and the extent to which the case could have been funded without using conditional fees.

10.30 p.m.

Lord Goodhart

I apologise for intervening. I think that the noble and learned Lord the Lord Chancellor has, in fact, made a slip. Paragraph (a) does not refer to hardship caused to the party which has been ordered to pay the costs, but to the hardship caused to the successful party if the uplift is not paid.

The Lord Chancellor

If I misread that, I apologise. I shall study Hansard to see whether that is so. Although I shall, of course, also read carefully the fairly lengthy speech of the noble Lord, Lord Goodhart, I feel that to the extent to which these considerations need to be dealt with at all, they are far better dealt with in rules of court. In any event, I am concerned that they would, in effect, establish satellite litigation while arguments are made based on such considerations.

Amendments Nos. 226 and 227 seem to proceed on the assumption that the provisions of Clause 28 apply only to premiums used to support conditional fee agreements. Clause 28 extends to other forms of "after the event" insurance and the premiums paid for such insurance. Consequently, it is not only concerned with the recovery of premiums in cases where a conditional fee is used. I have to say that I would need a lot of convincing—

Lord Goodhart

Can the noble and learned Lord the Lord Chancellor confirm that Clause 28 does not apply to "pre-event" insurance?

The Lord Chancellor

Yes, the noble Lord is right about that.

What I am really concerned about is whether the application of these considerations would create satellite litigation while arguments are made about whether, for example, a person could have afforded to take a case without using conditional fees or an insurance premium in relation to the accuracy of the calculations, and so forth.

I believe that, generally, it is entirely right that a successful party should be entitled to recover any costs to which it has been put in prosecuting or defending a claim. I do not accept that it is in any way objectionable in principle that the costs uplift, or the costs of the insurance premium, should be recovered from defendants who are liable to plaintiffs; those being the circumstances in which plaintiffs can secure justice against such defendants. Therefore, I find it difficult to accept that the court should have to consider the various issues set out in the proposed amendments, particularly in relation to costs orders where one party has used a conditional fee agreement.

I believe that it would be far simpler to allow the normal rules on costs to apply: a presumption that costs will follow the event of the judgment with a discretion to the court to vary this in appropriate circumstances. I would, however, be prepared to consider further the concerns behind the amendments and to read closely the speech of the noble Lord, Lord Goodhart, which he delivered commendably at this hour of the night at a considerable pace, so as to consider whether some of the concerns can be met in the context of drafting the necessary rules of court. For the present, I do not accept the amendment and I ask the noble Lord to withdraw it.

Lord Donaldson of Lymington

Perhaps I may take up a point made by the noble and learned Lord the Lord Chancellor. He said that he accepted, or supported the principle, that all costs incurred in litigation should prima facie be recoverable on the basis of costs following the event. That is not the principle. The court has a discretion to award half the costs, a quarter, or those of particular issues. That is a different matter. The taxation of costs always produces something less than the totality of the costs paid by the party. Partly, no doubt, because of the hour of the night and partly because it might be regarded as a detail, although not for the litigants themselves, the noble and learned Lord is failing to take account of the difference between indemnity costs and ordinary party and party costs.

The Lord Chancellor

If that is the first slip that I have made in the course of a long day perhaps that is not too bad. I entirely recognise that the costs to be recovered are subject to taxation. I have had that very much in mind in considering making the uplift recoverable from the unsuccessful opponent. His protection will be in taxation if the amount of the uplift is unreasonable.

Lord Goodhart

I regret that the noble and learned Lord, while giving slight ground on this, is unable to be more substantially forthcoming. However, at least for tonight, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 222 not moved.]

Clause 27 agreed to.

Clause 28 [Recovery of insurance premiums by way of costs]:

[Amendments Nos. 223 to 228 not moved.]

Clause 28 agreed to.

Lord Clinton-Davis moved Amendment No. 229:

After Clause 28, insert the following new clause—


(" . Rules of court shall provide that when assessing costs payable by another party no account shall be taken by the court of any funding agreement between the receiving party and their legal representative.").

The noble Lord said: In moving this amendment it is for the convenience of the Committee if we also discuss Amendment No. 230. I can be quite brief. Under the Bill as presented to the Committee there is a liability remaining for the client to pay the solicitor's and his own costs if there is any shortfall between the fee agreed in the event of a win and the fee recovered from the loser. Even if the lawyer subsequently agrees to waive the shortfall, he cannot do it in advance because at common law the client would not then be entitled to recover any fees from his losing opponent because there would be nothing to indemnify.

Therefore, the Bill should provide to enable lawyers to agree in advance with clients to charge what can be reasonably recovered from the opponent by agreement or on taxation. That could benefit individual clients who agree with their lawyer that they pay nothing, win or lose, and other lawyers providing services through trade unions and also legal expense insurers. The amendment seeks to achieve that purpose by divorcing the right to recover costs from the losing party from the funding arrangements between the winning party and his lawyer. I beg to move.

The Lord Chancellor

As I understand these amendments they seek to abolish what is known as the indemnity principle for costs. Put at its shortest, the indemnity principle provides that where one is successful in an action and awarded costs against the opponent, one may not recover more in costs from him than one is liable to pay to one's own solicitor. The principle goes back a long time in case law.

Recent case law has made the operation of the principle on taxation very difficult and conditional fees, legal aid regulations and fixed costs in fast track trials, together with other matters, have, to some extent, disapplied the operation of the indemnity principle in recent years. The time may well have come to consider whether that principle should be abolished.

However, the principle is central to the present basis upon which costs are taxed by the courts, and it does operate to place some limit on the sums that can be recovered. Its absolute removal might well lead to costs inflation because of the removal of the limitation on the sum that can be recovered under that principle.

My response to the amendment is to say that I would wish to carry out a proper consultation exercise before deciding what, if any, rules of court might be needed to retain the beneficial effects of the indemnity principle once the principle enshrined in the common law had been abolished. Therefore, I should like to consider most carefully the precise terms of any amendment. I am not saying that I will be able to come back on Report in relation to this proposal, but I am saying that, in effect, I intend to reflect upon the ramifications involved and to consult widely. On that basis, I invite my noble friend not to press these amendments at this stage.

Lord Clinton-Davis

In view of the fact that no Member of the Committee wishes to speak to Amendment No. 230, I can respond to my noble and learned friend. I am grateful to him for indicating that he is prepared to carry out this consultation. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 230 not moved.]

Clause 29 [Replacement of ACLEC by Consultative Panel]:

Lord Clinton-Davis moved Amendment No. 231:

Page 17, line 9, leave out subsection (1).

The noble Lord said: I can deal with this amendment extremely briefly; indeed, almost as briefly as the noble Lord opposite dealt with his. Simply put, I believe that the proposals made by the Government to abolish the Advisory Committee on Legal Education and Conduct, both in respect of its composition and its tardiness in coming to conclusions, could be dealt with by reform rather than by abolition. Perhaps my noble and learned friend would like to comment on that proposition. I beg to move.

Lord Falconer of Thoroton

When I first saw this amendment, I guessed that my noble friend Lord Clinton-Davis had tabled it as a probing amendment in an effort to discover why we are abolishing ACLEC and replacing it with the new legal services consultative panel. I assume—I hope, correctly—that no Members of the Committee want two quangos doing the job that one currently does, which, strictly speaking, is what the amendment would achieve.

ACLEC has had a succession of exceptionally distinguished chairmen, many of whom are Members of this Chamber; and, indeed, many distinguished memberships over the years. Its present chairman is a most distinguished lawyer and it has been ably served by loyal staff. Nevertheless, it has, in some senses, failed. It is a large, rather unwieldy committee whose members have often fallen into predictable camps, resulting in stalemate over important issues. I believe that it has failed to foster the expansion of legal services. To some extent, ACLEC has been a prisoner of the procedures created around it by the Courts and Legal Services Act. These have proved exceptionally complex and time consuming, with the result that important applications for the approval of rule alterations have sometimes taken years to resolve.

The most striking example of delays and problems caused by the current statutory procedure concerns that part of the Law Society's application for rights of audience in the higher courts which related to employed solicitors. The application took no fewer than six years to resolve, and was considered by ACLEC at least three times and twice by the Director General of Fair Trading, the Lord Chancellor and the designated judges. ACLEC initially gave defective advice, urging that the Courts and Legal Services Act should be amended, and had to be directed by the then Lord Chancellor to reconsider the matter. When ACLEC gave its final advice, it was split down the middle. Eight members and the chairman advised against allowing employed solicitors to appear in the higher courts; the other eight members criticised the way that their colleagues had approached the issue and advised that the Law Society's amended application should be granted.

The results of six years of painfully slow debate, consultation and advice about what rights of audience employed solicitors should have in the higher courts were in practice negligible. The then Lord Chancellor and the designated judges granted the Law Society's application in a very limited form, allowing employed solicitors to appear in substantive proceedings in the higher courts if they succeeded in obtaining the Law Society's higher courts qualifications, but only if led by an advocate in private practice. An employed solicitor can appear as the sole advocate only in preliminary proceedings which do not dispose of the merits of a case.

This Bill will change those procedures, but it is also time to replace ACLEC and appoint a different body in its place. ACLEC is not cheap to run. It is a large quango with paid members and its own staff and offices and it costs the Lord Chancellor's Department the best part of a million pounds a year. The Lord Chancellor wants and values independent advice on legal services and legal education, but thinks this could be better provided by a smaller, more focused and more flexible body whose members were appointed solely for their individual expertise and not as representatives of particular organisations or interest groups. The Lord Chancellor will of course take account of the desirability of ensuring that the panel represents different perspectives, including those of the consumers of legal services, as well as the providers. The next group of amendments will give us the opportunity to discuss how the panel members should be appointed. I see the Committee waiting in expectation for those later amendments.

The legal services consultative panel's programme of work and research will be agreed by the Lord Chancellor so that it can be tied into the department's priorities. He wants to be sure that this valuable and expensive resource is tackling the questions that he needs answered. The panel will be a leaner organisation than ACLEC, which will cost the taxpayer less while providing advice that is no less independent and no less expert. The creation of a body independent in mind and approach is not solely a matter for legislation: it depends in large measure on the appointments that the Lord Chancellor makes.

Let me make it clear on behalf of the Lord Chancellor that he expects the panel to give him advice of the highest quality and of the greatest independence. He wishes it neither to be swayed by what it takes to be his views, nor by any vested interests. He will be under a statutory duty to make available to the panel appropriate administrative support. This means that the secretarial support which will be provided by the Lord Chancellor's department will be sufficient to meet the panel's needs. The panel will also be able, through the Lord Chancellor's department, to commission research in line with the agreed programme of work. The Lord Chancellor is confident that the panel will be of sufficient strength to let him know if it ever feels that its work is being under-resourced.

I should add that the Lord Chancellor will bring forward an amendment to enhance the status of the panel in conducting its work by making it clear that, in performing its duty of assisting in the maintenance and development of standards in the education, training and conduct of persons offering legal services, it may seek information from or give advice to any body or person.

I hope that the detailed explanation given sufficiently reassures my noble friend and that he will withdraw the amendment.

10.45 p.m.

Lord Clinton-Davis

I am most grateful to my noble friend. Clearly, he has presented a case of an organisation that has not worked efficiently and that is not worth trying to fix. I am completely convinced that the course he has outlined is the right one. There was some benefit in tabling this amendment: it has flushed out the Government's thinking on this issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Wilcox moved Amendment No. 232:

Page 17, line 15, at end insert—

("( ) In appointing such persons to the panel, the Lord Chancellor shall have regard to the desirability of appointing persons who have experience in, or knowledge of—

  1. (a) the provision of legal services;
  2. (b) the provision of advice services;
  3. (c) civil or criminal proceedings and the working of the courts;
  4. (d) the maintenance of professional standards among barristers or solicitors;
  5. (e) social conditions;
  6. (f) consumer affairs;
  7. (g) commercial affairs; or
  8. (h) the maintenance of professional standards in professions other than the legal profession.").

The noble Baroness said: I was greatly heartened by the very positive response from the Lord Chancellor to my amendment about the membership of the legal services commission earlier in this Committee stage of the Bill. I rise to speak to Amendment No. 232, which relates to another body established under the Bill—the legal services consultative panel. The panel will replace the Advisory Committee on Legal Education and Conduct, known as ACLEC, which has been described in detail by the noble and learned Lord, Lord Falconer. I tried to listen carefully to the noble and learned Lord, but I fear that I may repeat him at some stage. I am not sure whether I shall get everything I want or absolutely nothing, but at this stage I shall plough on in hope.

This important new body will have a key role in maintaining and developing standards in the education, training and conduct of people providing legal services. From my perspective, as one interested in consumer issues, I believe that it is important that providers of services—including legal services—should be user-focused in their work.

The Woolf reforms and the other reforms that we are debating in the Bill aim to bring about a huge cultural change in the way in which legal services are delivered. The only way that that will happen is if the education and training of those providing the services is geared more than it was in the past towards putting the needs of the client and the consumer first. Having consumer membership of this consultative panel will maximise the chances of bringing about the sweeping changes to education and training that I think we all agree will be needed.

I turn to another role of the panel: the conduct of those providing legal services. The Government know only too well the problems that have arisen in the past, with imprecise rules of professional conduct leaving large gaps into which the interests of clients sometimes fell. Costs information to clients is one of those gaps which has given rise to huge numbers of complaints from clients. In the White Paper Modernising Justice the noble and learned Lord the Lord Chancellor has highlighted the problems for clients caused by inaccurate estimates of costs from the lawyers at the start of the case. Indeed, the White Paper wants to rectify this. It says, In future, the Government expects to see lawyers give clear and firm estimates of the likely cost of cases, so clients can make informed decisions about whether to proceed. The circumstances in which an estimate might have to be changed, and how any change would be calculated, should also be explained clearly at the outset". Presumably the consultative panel will have to work at this particular problem.

In addressing this and other issues, it is important that the panel have a balance of interests, including those who speak with the client's voice undiluted by any competing interests.

Until now, the main providers of legal services have been solicitors and barristers. But the reforms which began two years ago have meant that advice agencies are increasingly providing legal services under contract from the Legal Aid Board, soon to become part of the legal services commission. It is equally important that the panel has input into the education, training and conduct of the advice sector, and therefore it is crucial that the advice sector's voice is also heard on the new panel.

Perhaps it might be helpful if I say a few words about the thinking behind the wording of this amendment. The provisions in Clause 29 abolish ACLEC, as set up in the Courts and Legal Services Act 1990, and establish the new consultative panel. The legislation establishing ACLEC specified the types of people that should be its members. By contrast, this Bill does not specify what types of people should be on the consultative panel. Given what I have already said about the importance of consumer and adviser voices on this new panel, that is a worrying omission. My amendment aims to address this and, in so doing, expresses the concerns and fears in this area of the National Consumer Council and the National Federation of Consumer Groups.

In the two years that I have been a Member of your Lordships' House I have learnt that when devising amendments it is often a good idea to use the wording of legislation that already exists because the precedent is already there. That thinking is followed in this amendment. It is almost identical to the provisions of subsection (5) of Section 19 of the Courts and Legal Services Act, which specifies part of ACLEC's membership. One significant difference, however, is the addition of the advice sector, for the reasons I have already mentioned. I have not been as specific as the previous Act in the membership of ACLEC. ACLEC relied heavily on academics and lawyers. My hope is that the new legislation will enable the new body to take a fresh approach by incorporating a broader range of interests.

I do hope that the Lord Chancellor will be as generous in his response to this amendment as he was to my amendment to Clause 1 earlier in the Committee stage. I know from what he said then that he, as well as I, is keen to shift the focus of the civil justice system towards the users of the service. Accepting this amendment would be one further important step in that direction. I beg to move.

Baroness Goudie

I welcome and support the amendment moved by the noble Baroness. It is important that we name the kind of people that we would like to be part of the panel. Not only should they be people with a legal background but people with an education background and those who have worked in consumer affairs. I hope that the Lord Chancellor will feel that he can accept the amendment.

Lord Kingsland

I rise to speak to Amendments Nos. 233 and 235, both of which stand in my name. Amendment No. 233 is quite specific about some of the people who ought to be members of this body. I am not sure whether my noble friend Lady Wilcox would entirely agree with the specific categories of lawyers or indeed the number of lawyers that I have included in Amendment No. 233. The thinking behind the amendment is that we need a body which can match in skill and experience the membership of the legal services commission as one of the jobs of this new body will be to monitor the work of the legal services commission. The members will therefore need skills of a similar, if not an identical, kind.

I am aware that on one interpretation Amendment No. 235 might be said to contradict Amendment No. 233 because in Amendment No. 233 I have called for one practising solicitor and one practising barrister whereas in Amendment No. 235 I have called for two of each. But I also note that Amendment No. 235 suggests "not fewer than nine members" and "not more than 12 members". If it is 12 members, there would be plenty of room for two barristers and two solicitors; but if the figure is nine I accept that I shall have to be content with only one of each.

Baroness Crawley

I support Amendment No. 232 moved by the noble Baroness, Lady Wilcox, who has in her refreshingly no nonsense way pointed out an omission which should not be allowed to stand. She has also been consistent in that this amendment is very much in the spirit of Clause 1, which now seems several years, let alone days, ago. The amendment would ensure that in the membership of the legal services consultative panel representation of consumer interests would be included and the education and training work of the panel would benefit greatly from that wide base of representation. This inclusion of user-friendly involvement would genuinely reflect the place that consumer interests have in the very heart of this Bill.

Lord Mackay of Clashfern

Entering the debate on Clause 29, I feel like someone attending the funeral of a rather precious relative.

It must be remembered that one of the features of ACLEC was that it had a preponderance of lay membership. So the idea that lay people, users of the courts, have come into the contemplation of the Lord Chancellor for the first time since the noble and learned Lord came to the Woolsack is a slight misrepresentation of the position. However, history moves on. I certainly do not wish to say much more about this particular matter.

It is also true to say that there was no question of the members of ACLEC being appointed as representative of the profession. The idea was that they should be appointed after consultation. We used effectively the advertisement and the Nolan system for making the appointments. But it was found difficult, and divisions between the parties such as that mentioned by the noble and learned Lord, Lord Falconer, went right down through the lay people as well. So the persuasive powers of the two groups seemed to influence the lay people almost equally.

It was my intention that ACLEC should be able to resolve some of those difficult issues. It may well be that the new panel will be able to do what ACLEC has failed to do. However, the future alone will determine that.

Lord Donaldson of Lymington

Perhaps I make what I suppose is a footling point on Amendment No. 233. I am intrigued as to why a retired circuit judge or someone who has been a circuit judge is eligible, but a retired Lord of Appeal in Ordinary or a retired judge of the Supreme Court—unless he has on the way to that position been a circuit judge—is not eligible. I hastily disclaim any interest in becoming a member.

The Lord Chancellor

The noble and learned Lord's request for information should not be addressed to me but to the proposer of the amendment, who has not risen to the bait. However, I take the point.

These amendments either specify the composition of the consultative panel or set out factors which must be taken into account in appointing its members. The membership of the panel has been deliberately left unspecified in the Bill. That is because the membership of ACLEC is spelt out in some detail in the 1990 Act, and the need to allocate members to the various interest groups—I do not shrink from the expression "interest groups"—(barristers, solicitors and teachers of law) and to have, as the noble and learned Lord, Lord Mackay of Clashfern, pointed out, a lay majority has led to a large committee, with members sometimes voting on predictable "party" lines. We wish to be able to appoint the best members, based on their individual experience and expertise, rather than to be bound by prescriptive statutory criteria.

The two amendments of the noble Lord, Lord Kingsland, go a considerable way towards returning us to the composition of ACLEC, and I believe that that is not wise. In particular, I do not think it appropriate to have a barrister and a solicitor (or even two barristers and two solicitors) appointed effectively as delegates from the Bar Council and the Law Society. That would have a tendency to polarise members of the panel into two camps, and would hinder them in giving effective, independent advice. "Independent" in this context should not mean only independent of the Lord Chancellor it should also mean independent of the professional bodies.

The approach is further flawed by the fact that the noble Lord seems to have forgotten that there are now more than two authorised bodies. The Institute of Legal Executives has been authorised to grant rights of audience since last year. If the Bar and the Law Society are to have their statutory representatives, so should ILEX and so should any other body that may be authorised in the future.

That said, it is inconceivable that the panel will not include some members of the legal profession of appropriate standing and experience.

What I want the panel to consist of is not factional representatives of particular interest groups, but independent experts who can advise me. I will advertise the posts and appoint the best applicants. Having said that, I will, of course, in appointing them wish to ensure that a wide variety of expertise is included and that the interests of consumers are not overlooked.

The Government intend that all appointments to the legal services consultative panel will be made in accordance with the Nolan Committee's recommendations on public appointments. There will, therefore, be an opportunity for professional and consumer bodies to urge candidates to apply. We hope that they will do so. But I do not think it is appropriate for the authorised bodies to be able effectively to nominate their own appointees to the panel. I do not guarantee that every authorised body will necessarily have a member on the panel.

In making appointments I will have in mind very much the kind of criteria proposed by the noble Baroness, Lady Wilcox. I am therefore happy to accept her amendment in principle. On the first day of Committee, when we were considering a similar amendment concerning the composition of the legal services commission, the noble Baroness was kind enough to say (at col. 504 of Hansard, 19th January) that I had "pleased [her] very much". But today it is the noble Baroness who is pleasing me by hitting the target yet again. The only fault I see in her amendment is that it, too, refers to barristers and solicitors, rather than to the wider categories of authorised advocates and authorised litigators to which they belong. But that is a technicality which is worthy only of a lawyer.

I will therefore return with a government amendment on the subject at Report stage. Again I undertake to show the noble Baroness a draft for her consideration before Report. In the meantime, I hope that the noble Lord, Lord Kingsland, and the noble Baroness will agree to withdraw their amendments.

Baroness Wilcox

I am more in control of myself than I was the last time I stood up to speak to an amendment. I am extremely grateful to the Hansard reporters who omitted the words, "Gosh, thanks", which is apparently what I said. For once, may I address Hansard and thank the reporters.

Lord Goodhart

The noble Baroness has not entirely got away with it. In one of my later speeches I am afraid I referred to the words she used which have been recorded in Hansard (at col. 540, 19th January).

Baroness Wilcox

I am grateful to the noble and learned Lord the Lord Chancellor for his kind consideration of my amendments. I look forward to reading the wording he returns with at Report stage. Naturally I would not be me unless I wanted everything and I wanted the same wording as with the legal services commission. However, I must not be greedy. I am grateful to the noble and learned Lord because he listened and is prepared to return with further wording I wish also to express my thanks to the noble Baronesses, Lady Goudie and Lady Crawley, for supporting me at this late hour. I apologise to my noble and learned friend Lord Mackay of Clashfern if I in any way quoted ACLEC as not being as representative as I should have suggested. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Kingsland had given notice of his intention to move Amendment No. 233:

Page 17, line 15, at end insert—

("(1A) The persons appointed shall include at least—

  1. (a) one Lord of Appeal in Ordinary or judge of the Supreme Court of England and Wales;
  2. (b) one person who is or has been a circuit judge;
  3. (c) one practising solicitor, appointed after consultation with the Law Society;
  4. (d) one practising barrister, appointed after consultation with the General Council of the Bar; and
  5. (e) one person with experience in the teaching of law, appointed after consultation with such institutions concerned with the teaching of law and such persons representing teachers of law as the Lord Chancellor considers appropriate.

(1B) Subject to subsection (1A), in appointing persons to be members of the Consultative Panel, the Lord Chancellor shall have regard to the desirability of securing that the Panel includes persons with experience or knowledge of—

  1. (a) the provision of legal services;
  2. (b) the work of the courts;
  3. (c) the maintenance of professional standards in the legal and other professions;
  4. (d) consumer affairs; and
  5. (e) management.").

The noble Lord said: I shall certainly not say, "Gosh, thanks!" to the noble and learned Lord for the way that he reacted to my amendments. Nevertheless, I do not intend to move Amendment No. 233.

[Amendment No. 233 not moved.]

Lord Kingsland moved Amendment No. 234:

Page 17, line 24, at end insert ("and publishing those recommendations").

The noble Lord said: At an earlier point in Committee I tabled a similar amendment to the recommendations expected to be made by the Legal Services Commission in seeking to give advice to the noble and learned Lord. I believe my memory serves me correctly when I say that at that time the noble and learned Lord reacted quite positively to that suggestion. I have made a similar recommendation in respect of the consultative panel and look forward to receiving a similar response from the noble and learned Lord. I beg to move.

The Lord Chancellor

I am happy to accept this amendment in principle. The noble Lord's amendment would require the consultative panel to publish any recommendations that it made to me about the maintenance and development of standards in the education, training and conduct of persons offering legal services. The Government strongly believe in open government, and I therefore agree with the amendment in principle. I see no good reason why the panel's recommendations to me should not be made public. I go further. The noble Lord's amendment covers only those of the panel's activities that are dealt with in paragraph (a) of the new Section 18A(2) of the Courts and Legal Services Act 1990 which deals with maintaining standards of legal education, training and conduct. I believe that the panel should also publish any advice that it gives to me under paragraph (b). This would cover responses to any requests that I made from time to time for advice about any other matters related to the provision of legal services. I shall therefore table a suitable amendment, and on that basis I invite the noble Lord, Lord Kingsland, to agree to withdraw his amendment.

Lord Kingsland

The noble and learned Lord the Lord Chancellor could not have been more generous in his response and in those circumstances I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Falconer of Thoroton moved Amendment No. 234A:

Page 17, line 31, at end insert—

("( ) The Consultative Panel may, in performance of the duty in subsection (2)(a), seek information from or give advice to any body or person.").

The noble and learned Lord said: The Lord Chancellor intends that the new legal services consultative panel shall be a strong body of undoubted independence. This amendment underpins that intention by emphasising that the panel should have powers to act on its own initiative. New Section 18A(2)(a) of the 1990 Act inserted by Clause 29(2) of the Bill gives the consultative panel the duty of, assisting in the maintenance and development of standards in the education, training and conduct of persons offering legal services". This replicates an existing duty of the Lord Chancellor's Advisory Committee on Legal Education and Conduct. This amendment gives the panel the right to, seek information from or give advice to any body or person". The intention is to ensure that in carrying out its work under new Section 18A(2)(a) the panel should be able to make reasonable requests of others in formulating its recommendations to the Lord Chancellor.

I recognise that particularly with regard to work on legal education, which may continue over time, the panel may wish to give its views to those closely involved, such as the professional bodies and the academic institutions, as work progresses without the need on each occasion to put its views to the Lord Chancellor first. The purpose of the amendment is not to give the panel any power which it would otherwise be denied by the Bill but to emphasise that the panel may, seek information from or give advice to others in the course of its agreed work.

I should emphasise from the outset the importance which the Government attach to education. The success of our legal system depends on having lawyers who are properly trained in law and its practice. Legal education must evolve to reflect the developing law and to ensure that the lawyer is fully prepared for practice. And of course legal education and training do not end once the lawyer starts working; continuing professional development is rightly becoming more important for lawyers as well as for other professionals.

The Lord Chancellor will continue to have a role in approving alterations to qualification regulations for barristers, solicitors and other authorised advocates and litigators. But he will have a wider interest in ensuring that lawyers remain of an appropriate standard. In both those areas he will look to the advice of the panel.

I pay tribute to the work on legal education and training carried out by ACLEC. It has produced reports, largely directed to the professional bodies, which have given rise to much debate. There is a creative tension between the academic institutions, the providers of vocational training, the professional bodies and the legal practices. They each have their own view, sometimes a variety of views, of what a legal education should provide. If nothing else, ACLEC has done much in bringing the various players together and encouraging a dialogue between them. ACLEC has organised the Standing Conference on Legal Education, a twice-yearly meeting of the key players when topical issues can be canvassed. I believe that the standing conference has been useful and the Lord Chancellor proposes that the consultative panel and his department should continue to organise something along the current lines of the standing conference. At present consultation is taking place between interested parties on how this might best be done.

As I have said, the consultative panel will have a statutory duty, of assisting in the maintenance and development in the education, training and conduct of persons offering legal services". This is the same general duty as ACLEC's. The Lord Chancellor intends that the panel should be strong and independent, to use words which were used by the Lord Chief Justice and now have a particular resonance. The Lord Chancellor will agree with the panel its programme of work. This is not with the aim of constraining the advice the panel gives but rather to ensure that the panel gives its consideration to issues which are important to the Government as well as to those which the panel considers important. A close and co-operative relationship between the Lord Chancellor and the panel will pay dividends. It will give the panel greater focus and, I believe, greater standing.

It would be premature to set out now what issues the panel should at first consider. Indeed, the panel is yet to be appointed. There will be an open competition in due course. But I emphasise that the Lord Chancellor expects the members of the panel to be appointed for their individual expertise and experience rather than because they represent a particular viewpoint or interest.

Finally, let me add that the Lord Chancellor will be under a statutory duty to make available to the panel "appropriate administrative support". This means that the secretarial support which will be provided by the department will be sufficient to meet the panel's need. The panel will also be able through the Lord Chancellor's department to commission research in line with the agreed programme of work. The Lord Chancellor is confident that the panel will be of sufficient strength to let him know if it ever felt that its work is being under-resourced. I beg to move.

11.15 p.m.

Lord Mackay of Clashfern

I wish to take the opportunity warmly to support what the noble and learned Lord said about the work of ACLEC in the field of legal education. It has done a tremendous job. As the noble and learned Lord said, there is a lot of interest with different perspectives in that general area. It has done a great deal to advance the cause of legal education in England and Wales, and I think that it deserves the gratitude of all Members of the Committee.

On Question, amendment agreed to.

[Amendment No. 235 not moved.]

Clause 29, as amended, agreed to.

On Question, Whether Clause 30 shall stand part of the Bill?

Lord Ackner

Clause 30 deals with barristers and solicitors, their rights of audience and their rights to conduct litigation. The clause has been based largely on a consultative paper issued last summer entitled Rights of Audience and Rights to Conduct Litigation in England and Wales: The Way Ahead. That consultation paper was in many respects seriously flawed.

Perhaps I may deal first with the position of solicitors in private practice. Immediately after the Courts and Legal Services Act was passed, the Law Society applied to amend its rules to enable solicitors to apply for full rights of audience in civil or criminal proceedings, or both, in the High Court. The Law Society recognised, as indeed does the Lord Chancellor in his foreword to the paper to which I referred, that its members have to be properly trained to exercise these rights. The Law Society therefore produced various recommendations to ensure that there was proper training.

Its application in respect of solicitors in private practice was approved on 8th December 1993. Accordingly, for nearly the past five years solicitors in private practice have had rights of audience in the higher courts on the terms proposed by the Law Society. Nowhere in the noble and learned Lord's paper is it suggested that the Law Society's tests or requirements were other than reasonable. However, your Lordships may not know that there was a high failure rate among candidates who took the test. It is understood that in 1995 the pass rate for the civil test was 28 per cent.

The test is not unduly onerous. This is borne out by reports to the Law Society by the advocacy training adviser and chief examiner. Commenting on the low pass rate in the civil test, the chief examiner stated in his 1995 report: The result in the first civil test in June 1994 was promising. Since then there has been an alarming decline in the pass rate, which has fallen from 65 per cent., to 42 per cent., to 28 per cent. It is difficult to diagnose the cause. The reason for the poor results in the civil test is a matter of conjecture. By and large, the candidates are competent in procedural matters but not in other aspects of the test. The expectation may be that they are accustomed to appearing before masters and district judges, but leave it to counsel to decide on other matters; for example, the admissibility of evidence". Professor Scott, the Law Society's then advocacy training adviser, stated in his 1996 report: In my view, the papers that the test board has produced have provided a fair test on matters that advocates going into the higher courts really ought to know about. The number of candidates failing the test has been a matter for comment. I do not think that any criticism can be directed at the test board in this respect. The candidates taking the test are meant to be experienced in lower court advocacy. Those who failed have in my view deserved to fail. Indeed, often I have been astonished am the ignorance of some candidates, especially those doing poorly in the criminal test". In his 1996 report, the chief examiner suggested that poor results in the early years of the criminal test may have been the result of candidates not preparing properly but assuming that their practical experience would suffice. He noted that the civil test results continued to be "disappointing"—37.5 per cent. and 50 per cent. passes. He stated that the quality of answers on professional conduct and ethics was very disappointing.

In his consultation paper the noble and learned Lord the Lord Chancellor drew attention to the fact that only 624 solicitors out of more than 70,000 have so far obtained the Law Society's higher court qualification. That is not the fault of the system. Solicitors in private practice are not being "debarred" from appearing in the higher courts.

What is the reason for the slow take-up of the opportunity available to solicitors in private practice to appear in the higher courts? There is some very interesting material on that subject to be found in an article published by the International Journal of the Legal Profession, Volume 4, No. 3, 1997 entitled, "Rights of audience in the higher courts in England and Wales since the 1990 Act—What happened?". That is an article by Professor Zander.

It is apparent from that article, although, strangely enough, it does not figure in the paper of the noble and learned Lord the Lord Chancellor, that in 1994, ACLEC—that is the Lord Chancellor's own committee—commissioned research to try to determine: The extent to which the granting of wider rights of audience is contributing to the development of new or better ways of providing legal services". The successful bidders for that research were a team from Westminster University, led by Professor John Flood, and from Bristol University, led by Professor Gwyn Davies. That research reveals that even solicitors who have the higher court qualifications may not be using them to any great extent.

Of the many reasons, three important ones were found to be: first, the uncertainties of listing of cases and the resultant loss of time spent hanging around court rooms; next, the insufficiency of the volume of advocacy work; and, thirdly, the fact that barristers were generally cheaper than solicitors for most routine work.

That material in Professor Zander's article completely destroys the suggestion that, although there are solicitor advocates, the vast majority of defendants in the Crown Courts and litigants in the High Court above are forced to employ a barrister in private practice in addition to the solicitor who is already working on the case". That is referred to in paragraph 2.1 of the Lord Chancellor's paper.

The suggestion that the choice is "limited by out-of-date restrictive practices" is quite inaccurate; and yet it is an essential part of the foundation upon which the noble and learned Lord the Lord Chancellor bases his justification for the abolition of the judges' statutory right to control the exercise of rights of audience in the higher courts.

One other quotation is important. It comes from the Bar Council memorandum and reads as follows: The high failure rate proves the necessity for the maintenance of the standard, not the converse, at least if the public interest is the touchstone. In short, the answer to a high failure rate cannot be to lower the pass mark unless quality standards are to be relegated in importance". That is precisely what the Lord Chancellor is proposing to do. He is making it clear that all solicitors can expect to have full rights of audience having passed a test which must be less than the current test because that only provided 650-odd advocates. Hence this reference to the quality of service is an illusion.

If we provide solicitors with a significant test, but a fair one, they do not take it—it means work; it means effort. And, even if they do take it, they do not use it, for the reasons I suggested. But if we lower the requirements, then they have no excuse for not taking the test, qualifying with advocacy rights and then being obliged to exercise those rights (which they are not at the moment) by the terms of the block contracts which they will be obliged to face up to.

Clause 30, therefore, is quite unnecessary. The present situation in which the solicitors in private practice have full right to enjoy higher court advocacy is there for the taking, but for the reasons provided to the Lord Chancellor from the research but which he did not see fit to include in his paper, it is the barrister in constant practice who is the obvious person to do the work in the higher courts.

11.30 pm
Lord Falconer of Thoroton

As the noble and learned Lord, Lord Ackner, points out, subsection (2)(a) of Clause 30 makes the same provision in respect of solicitors' rights of audience that subsection (1) makes in respect of barristers. All solicitors are deemed by that subsection to have full rights of audience in all the courts, but—and it is an important "but"—they may only exercise those rights if they comply with the qualification regulations and rules of conduct imposed by the Law Society. This provision differs from the current provision and, as I understand it, it is that difference to which the noble and learned Lord objects.

At present, all solicitors have rights of audience in the lower courts but unlike banisters they are not deemed to have rights of audience in the higher courts. Instead, solicitors are granted rights of audience in the higher courts only once they have obtained the Law Society's higher courts qualification. If they obtain such a qualification, they are retrospectively deemed to have been granted full rights of audience on admission to the roll of solicitors in accordance with paragraph 3 of Schedule 19 to the Courts and Legal Services Act 1990.

At the heart of the noble and learned Lord's argument was that, because independent persons have said that many of the people who apply to be qualified solicitor-advocates do not pass the exam and therefore cannot be up to it, this clause poses a danger of incompetent people becoming qualified advocates who are solicitors. Speaking for myself, I should have thought that precisely the reverse conclusion was to be drawn from the present situation. The Law Society, which has set its standards, has set an appropriate standard which has weeded out those who are no good. I do not know the basis on which the noble and learned Lord says that the Law Society will immediately lower its standards. Perhaps I may make it plain that neither the Lord Chancellor nor anybody on this side has any desire to see unqualified or incompetent advocates practising in the higher courts or anywhere else.

The position under subsection (2)(a) will still be that solicitors can appear only in the higher courts if they have met the requirements which the Law Society imposes, just as it is at present. Solicitors will be in the same position as barristers: they will have full rights of audience, but whether they can exercise them fully will depend on whether they have complied with the relevant rules. Of course, there will still be a marked distinction in practice. The Bar is essentially a specialist advocacy profession. Most solicitors are not specialist advocates, and those who do not want to appear in the higher courts, and do not obtain the necessary qualifications, will still not be able to appear in the higher courts.

The 1990 Act enabled solicitors to obtain full rights of audience in the higher courts, yet nine years on less than 1 per cent. of the profession—about 730 solicitors out of more than 78,000 in practice—have obtained those rights. In my book, that does not signal a huge appetite by solicitors to become specialist advocates. Nevertheless, the changes made by this Bill should encourage more solicitors to take up the rights of audience to which they are well entitled, if suitably qualified. The expansion of solicitors' rights of audience will not pose a threat to the continued existence of the Bar. I believe that that point underlies the noble and learned Lord's speech. Experience in Australia and New Zealand, where barristers and solicitors have either formed a merged profession, or where both branches of the legal profession have long had full rights of audience, is clear evidence that there is still plenty of mom for specialist advocates to thrive. Of course, there is no reason why solicitors should be precluded from being specialist advocates if they wish, as the long tradition of Scotland proves. Procurators fiscal have acted as solicitor advocates for centuries. Scotland also has a long tradition of specialist solicitor advocates in the sheriff courts.

Subsection (2)(b) of the new Section 31 which will be inserted by Clause 30 simply maintains the status quo by providing that all solicitors are deemed to have been granted rights to conduct litigation under the Courts and Legal Services Act. I do not understand my noble and learned friend to object to that provision.

As I have explained, Clause 30 sets out the basic proposition that all banisters and solicitors have full rights of audience. In itself, that provision would leave in place current restrictions on the exercise of rights of audience which I believe are unwarranted and contrary to the public interest; for example, the current rules of the Bar Council prevent employed lawyers appearing in the higher courts in almost any circumstances. That leads to the extraordinary result that barristers of such distinction as Dame Barbara Mills or David Calvert-Smith, the former DPP and the present DPP, are not able to appear in the higher courts, which strikes one as a very odd result.

The rules of the Law Society similarly impose restrictions on those employed solicitors who have obtained the higher courts advocacy qualifications which do not apply to solicitors in private practice: they may not appear as sole or senior advocate in any substantive case in the higher courts. I may add that these restrictions were effectively forced on the Law Society in 1997, when the Law Society's application for employed solicitors to be granted rights of audience in the higher courts was finally resolved—that is, after six weary years. I believe that we have spoken about this previously.

Those restrictions on employed banisters and solicitors are unjustified. They are the worst kind of restrictive practice—designed simply to protect the work and incomes of privately practising barristers, with no shred of benefit to the public. I do not believe that the professional bodies should be in a position to impose such rules which discriminate against their employed members. Clause 31 therefore provides that employed advocates are not bound by restrictions imposed on their rights of audience which do not also apply to their colleagues in private practice.

I emphasise that that does not mean that employed lawyers should not be subject to regulation—of course, they should be, but that regulation should be in the public interest. It should not be designed to promote the interests of one small, although important, section of the legal profession over those of all other lawyers.

The Government do not intend that the professional bodies shall have to apply the same regulations in every respect to employed advocates as those that they apply to advocates in private practice. Clearly, they should be allowed to allow for differences between them. For example, it would not be appropriate for employed banisters to have to work from chambers as those in private practice have to. But employed advocates should not be prevented by their employed status from effectively exercising their rights of audience.

I believe that that deals with the kind of things which Clause 30 is designed to deal with. I emphasise that it is not intended to lower the quality of those solicitors who appear as advocates.

Lord Mackay of Clashfern

At Second Reading I raised a question about this particular clause. The noble and learned Lord the Lord Chancellor very kindly wrote to me on 12th January, dealing, among other things, with this question. In the time available to him, the noble and learned Lord, Lord Falconer, did not have time to reply to all the questions raised, which is a perfectly normal situation.

However, the point I wanted to be clear about was that the regulations for the qualification of the exercise of the rights of audience by solicitors would not be less stringent than the present regulations which have been adopted in order to secure competence in the exercise of those rights of audience in the higher courts.

In the letter to which I have referred, the noble and learned Lord the Lord Chancellor explained that the clause would grant theoretical rights of audience on admission to the solicitors' Roll, which would be the same as barristers on Call, but that the right to exercise those rights of audience would be dependent on securing the necessary qualification. So far, that seems to reproduce the present position in practice although not quite in theory.

In writing to me, the noble and learned Lord said that, if the Bill was passed—I should say that he said, "once the Bill is passed",—which may be subtly different— the Law Society will wish to modify the Legal Practice Course, to provide advocacy training for solicitors joining the profession— In other words, that is a change in the general system. That would cost something and it is a question of whether that cost is necessarily something that should be undertaken. That is a matter for the Law Society. The letter continues— so that they are ready to take up rights of audience in the higher courts once they start practising, if they wish to do so". To train to do something that you may or may not wish to do may be wise or it may not. The point I am really anxious about is the next sentence, which states, I also expect that the Law Society will wish to propose changes to the requirements of its higher courts qualifications, in order to encourage more solicitors to take up rights of audience in the higher courts". What does that mean? How is one going to encourage more solicitors to take up rights of audience in the higher courts, having regard to the history which my noble and learned friend Lord Ackner has described? One way of doing it is to reduce the standard marginally or more than marginally. The noble and learned Lord the Lord Chancellor and the noble and learned Lord, Lord Falconer, say that they want to have competent people. I am not quite clear how changes in the qualification regulations will encourage more solicitors to take up rights of audience unless these changes reduce the threshold or the standard. I should say in fairness to the noble and learned Lord that his letter continues, Having said that, neither the Law Society nor I have any desire to see badly trained or incompetent advocates let loose in the higher courts, and I will ensure that this does not happen". I entirely accept that last sentiment. "Letting loose" in the higher courts such people obviously would not be a very desirable thing to happen. But I am not very clear in that respect about the relationship between that last sentence and the penultimate sentence that I have read out.

I certainly believe that the research that Professor Flood and his colleagues from Bristol undertook is valuable and I believe that they prophesied that as time went on the number of solicitors who would qualify would increase in any event. I should like a little more clarification on that particular aspect of the matter, because it is quite important.

11.45 p.m.

Lord Hacking

Having taken part in long debates in 1990 during the proceedings on the Courts and Legal Services Bill regarding rights of audience with the noble and learned Lord, Lord Mackay of Clashfern, with my noble and learned friend and, indeed, with the noble and learned Lord, Lord Ackner, I desire to make a brief intervention.

I should like, first, to concentrate on what the noble and learned Lord, Lord Mackay, said. He questioned how, other than dropping standards, more solicitors could be encouraged to take up higher court advocacy. It does not have to involve the dropping of standards. The noble and learned Lord referred to difficulties that, apparently, some solicitor candidates had in getting higher court advocacy certificates on matters of evidence. The experience of my side of the profession—and I believe that it is so for the other side of the profession—is that the training can be greatly improved to deal with the situation. There are now many more training sessions available, not only to those who aspire to be either a barrister or a solicitor, but also to those who have now qualified. There is a continuing training requirement on my side of the profession and I believe that to be so on the side of the Bar. Therefore, the means of further encouraging members of my profession to take the higher court advocacy is to assist them in the training so that they are better prepared. When they pass that test they will become better and more proficient advocates.

However, the central point—and this concerns all of those who need to resort to the courts—is to have able and sufficient advocates. The fact that we have a bifurcated profession is a historical accident that goes back to the end of the 18th century and the beginning of the 19th century: how the Inns of Chancery collapsed and the Inns of Court managed to keep going. It was the Inns of Court which had the rights of audience in the King's Court and the Inns of Chancery had the rights of audience in the courts of equity. No one would have designed a profession bifurcated in the way that now applies to our profession. Anything that gives an equal opportunity to lawyers of either side of the profession to practise their skills to the top of that profession should be endorsed by anyone who uses those courts. I say that for the one very simple reason that we want the best of advocates to appear for us in the courts.

What I find pleasing in the now re-written Sections 31 to 33 of the Courts and Legal Services Act is the fact that there is an even playing field. Members of the Bar have to satisfy the qualification regulations imposed upon them by the General Council of the Bar before they can practise in the higher courts of the land and the same requirements are imposed upon solicitors. By that means, I hope that we will have advocates coming up from either side of the profession who are properly trained and tested and that they will provide the advocacy services that the user of the courts both wants and needs and to which he is indeed entitled.

The Courts and Legal Services Act was structured in such a way—and no better person than the noble and learned Lord, Lord Mackay of Clashfern, knows this—as to open up the system, but to do so in circumstances where one side of the profession had a total monopoly on the rights of audience in the higher courts. When I started at the Bar as a solicitor one only had rights of audience to appear in a magistrates' court or in the county court; and that was it. If one had a client who needed a plea of mitigation to be made in the Crown Court or, as it was then, in the courts of assizes or quarter sessions, you had to go to members of the Bar. There was a total monopoly by one side of the profession. Anything that makes that position more equitable is for the better. What was achieved in the Courts and Legal Services Act was an opening out of the system. However, it was not an opening out on the basis that each side of the profession had the same training regulations or the same requirements that they had to meet in order to become a higher court advocate.

The reason I wholly support Clause 30 of this Bill, which seeks to replace Sections 31 to 33 of the Courts and Legal Services Act with the provisions that are set out in the Bill, is that it creates an even playing field, and it also creates the opportunity for the users of courts to have good advocates whether they come from the stable of a solicitor or the stable of the Bar.

Lord Ackner

I rise for two reasons, one is to discover whether my noble and learned friend the Lord Chancellor will reply to the questions raised by my noble and learned friend Lord Mackay, because he raised matters which I should have thought call for a reply. Then I propose in a matter of three or four sentences to deal with what was said against my application.

Lord Falconer of Thoroton

I intended to reply but my attention wandered briefly at the vital moment and that is why I did not get to my feet quickly enough, for which I apologise. First of all, in relation to the points made by the noble and learned Lord, Lord Mackay of Clashfern, what the Law Society does is obviously matter for that body in the first instance. Secondly, it is perfectly conceivable that it can produce rules that would encourage greater numbers of applications by members of the solicitors' profession to become higher court advocates, for example by imposing training requirements at an earlier stage, by making the qualifications that are required to become a higher court advocate more relevant to the particular experience that solicitors have had up to that time, and also by changing the requirements for training.

As I say, that is a matter for the Law Society. However, I should emphasise that it is the intention of the Lord Chancellor to use the powers which the Bill contains to maintain the standards of advocacy and to allow no lowering of those standards. Such standards are necessary to make the courts function effectively and to meet the needs of those represented. He would not approve proposals from either the Bar Council or the Law Society which had the effect of imposing inappropriate standards. He considers it important that high standards are maintained in both professions, although, of course, he will be ready to consider proposals for change which may seek to do things better or in a different way. He will also look to the legal services consultative panel, the Director General of Fair Trading and the designated judges for considered advice. I hope that provides some answer to the noble and learned Lord's question.

Lord Ackner

I have two points in answer to my noble and learned friend. First, he spent some of his riposte in relation to my submissions on Section 31. That comes next and therefore I shall delay dealing with that. My second point relates to what is in the Lord Chancellor's consultative paper, to which I make few references. In the foreword signed by my noble and learned friend the Lord Chancellor, the observation is made, the right to maintain properly high entry standards to a profession must not be misused to impose restrictive practices for the benefit of those already established in the profession". There is no warrant for that comment at all.

Then there is a reference at paragraph 2.5 which is equally hostile to the Bar on this particular subject. It reads as follows, The Government accepts that rights of audience should not become the subject of a 'free for all', and that these rights must generally be reserved to qualified members of the legal profession. However, the present position is over-restrictive. The Government does not agree that the majority of qualified lawyers should in most circumstances be debarred from appearing in the higher courts, which is currently the case". The only debarring was by the solicitors who either did not apply to get their rights of audience or, having got the rights of audience, did not exercise them.

Clause 30 agreed to.


Clause 31 [Rights of audience: employed advocates]:

Lord Thomas of Gresford moved Amendment No. 236:

Page 19, line 3, at beginning insert ("Subject to subsection (3),").

The noble Lord said: It is a real pleasure to address your Lordships at this scintillating hour. I notice that your Lordships are exhausted and bowled over by the generosity of the noble and learned Lord the Lord Chancellor in conceding so many amendments tonight.

Amendment No. 236 is a paving amendment to Amendment No. 238. As the noble and learned Lord, Lord Ackner, pointed out, we have already had a paving response from the noble and learned Lord, Lord Falconer. However, this amendment seeks to maintain the status quo so far as the rights of audience of the CPS and other employed government lawyers are concerned.

The whole purpose of the Crown Prosecution Service was to divorce the decision to prosecute from the investigation of the crime. I note in the White Paper that the purpose of the provisions was expressed in this way: We intend to sweep away the unjustified restrictive practice that prevents most qualified lawyers from appearing before the higher courts … This will help, in particular, the Crown Prosecution Service to provide a more efficient and effective service to the taxpayer and the law-abiding public". I challenge the assumptions that are contained in the White Paper.

The result of the Crown Prosecution Service taking over the role of prosecutor in the magistrates' court is that each qualified solicitor or barrister employed by the CPS has a very heavy workload. I recall that when my son was a pupil or in his first year of practice, he customarily made a living by taking on some 40 or 50 cases in the day, and getting paid by the day for the work that he was doing. That was the sort of workload that the qualified solicitor in the CPS had to take on.

So it is that in the higher courts the Bar provides a service with distinct advantages to the law-abiding public—never mind about the public which is not law-abiding. First, the barrister is independent: he is independent in the advice that he gives to the Crown Prosecution Service on matters pre-trial—for example, disclosure; on the charges that should be brought; and on the evidence that should be placed before the court. He is independent in his decision making during the course of the trial and is insulated from the pressures that could occur and do occur upon the Crown prosecuting solicitor who is in direct contact with the police. The independent prosecuting barrister is insulated from that type of pressure.

Secondly, and very importantly, he has time. One of the benefits of being at the independent Bar is that if research is required, one has time to do it. If the barrister who is appearing in the higher courts does not take that time to research and to produce his skeleton arguments, then he will face the dire consequences when he goes into court.

He has daily experience of going in and out of court before the same judges. He will gain knowledge of the judges, the particular areas in which he practices, and the particular courts which he attends; he will become accustomed to the procedures and customs of that court. He has flexibility. It is impossible to know in the profession where one will be next week, or the week after, largely because it is impossible to control the length of cases. That is why one has the return of briefs, to which reference was made earlier today. But he also has the expertise and training to pick up the brief quickly and to present it quickly. That is what he is paid for. He has low overheads because he does not have to carry a large office staff. It is a fact that the average solicitor will spend something in the region of 70 to 75 per cent. of his gross earnings—I have been a solicitor so I know—on office costs. At the Bar it is likely to be one-third or less. So he has flexibility, he has low overheads and he has a strict discipline imposed on him not merely by the rules of his profession but by the chambers of which he is a part, by the head of chambers and by the disciplinary procedures of the Bar. He is also able to appear in the higher courts without always having behind him the Crown Prosecution Service solicitor. It is extremely rare that a CPS solicitor will be in court. He may be at the initial conference with counsel. He is unlikely to be in court and he will be represented by a clerk. All those are the advantages of being a member of the Bar who is independent.

On the other hand, if one envisages the position of the CPS prosecutor, it is quite clear that a two-tier system must arise. Someone has to do the magistrates' court work. The experienced advocate will be sent to the higher courts—to the appeal courts—and he will become the upper echelon in a two-tier prosecuting system. He will still need support staff; he will still need to have the clerk sitting behind him in order to carry out all the necessary day-to-day work that that person performs; he will also be subject to the same problems of timing, clashes of his diary, and of having to attend a plea and directions in one court, a trial in another and a plea in a third.

When one comes to consider the public interest, the cost is a matter that has to be taken into account. Almost by definition, the CPS prosecutor will be paid less than the independent barrister. His salary will be less. Unless it is smaller, there is no point in having the system at all. There has to be a cost saving for the whole purpose of these provisions to go through. But to his salary has to be added the pension, the paid holidays, the working hours, subject to European directives, and so on. The effect of the lower salary and of these conditions will mean that the quality of the CPS prosecutor will be less than that of the independent barrister. In addition, he has a closer association with the police and he has to deal with promotion. The yardstick is success. He will be subjected to the temptation of overcharging and plea bargaining. Not even in Scotland are rights of audience given to the procurators fiscal in the higher courts, despite their centuries of experience. Yet, here we are, straightaway opening the entire system to the CPS employed lawyer.

The existing system allows for pilot schemes, which are actually taking place. There has been no research, no assessment of the pilot schemes that have taken place. Yet, as I say, the door is being flung open. I beg to move this amendment, and shall seek to move this series of amendments, in order to preserve the status quo.

Lord Bach

Although it is very late, I make no apology for dealing with one of the matters mentioned by the noble Lord, Lord Thomas of Gresford, in relation to his arguments as to why the independent Bar should be entitled to a monopoly on prosecuting in the higher courts. I shall deal with one only; namely, the noble Lord's proposition that there is effectively absolute independence for an independent prosecutor while he is in the process of prosecuting a case in the Crown Court.

The best independent prosecutors, of which there are many, will tell us that in this day and age the reality is that their decision-making powers are extraordinarily limited in the context of a case that they are prosecuting. Perhaps I may offer a brief anecdote. A few weeks ago. in a case in which I was involved, a prosecution witness of tender years completely changed his story in cross-examination. It was clear that the case was over; there was nothing else for it. The learned judge told the prosecutor to consider her position. Instead of taking the course of immediately saying, "It is my independent judgment as a prosecutor that no evidence should be offered in this case", the prosecutor said—and it was understood by everyone else in the court—that she had to go away and take instructions. That meant taking instructions from a lawyer who works for the Crown Prosecution Service in the area. It was only 35 minutes later, after she had no doubt given her advice but listened to his decision, that she came back to court and offered no evidence.

There may be contrary examples; however, my experience as someone who practises both as prosecutor and defender in these courts is that the independence of the independent prosecutor in ordinary Crown Court trials is extraordinarily limited and should not be put forward as one of the arguments for not allowing Crown Prosecution Service lawyers to appear in the courts.

Lord Kingsland

I support the remarks of the noble Lord, Lord Thomas of Gresford, in introducing his amendment and seek to speak briefly to mine, which is in the same grouping.

I wish to ask the Lord Chancellor two questions. First, in examining the overall cost position, about which he has said much in the three days that we have spent in Committee on the Bill, will he take into account any additional costs that the Attorney-General's Department will experience in relation to the CPS? In assessing the overall increase in expenditure of the Bill on criminal expenditure, we must add any increases in the cost of the CPS that derive from the terms of the Bill to whatever effect it has on the Legal Aid Fund in order to assess the overall cost implications.

Secondly, perhaps I may invite the noble and learned Lord to reflect, in the way that he did earlier on, on how he sees the development of the CPS in relation to the independent Bar. The noble and learned Lord will recall that, yesterday, he allowed himself to say that he did not think that the criminal defence service was likely to expand beyond some fairly minor incursions into criminal defence work. Would the noble and learned Lord take the same view about the Crown Prosecution Service in relation to the independent Bar practising in the criminal courts?

The Lord Chancellor

The amendments tabled by the noble Lords, Lord Thomas and Lord Kingsland, go to the heart of one of the Government's main proposals on rights of audience. They would deny Crown prosecutors the benefit of Clause 31 of the Bill, which prevents employed lawyers from being subject to restrictions on the exercise of their rights of audience which do not also apply to lawyers in private practice. The amendment tabled by the noble Lord, Lord Thomas, would go further and exclude all advocates in Crown employment from the scope of Clause 31.

That would mean that although the Bill would enable employed lawyers in the private sector to appear as advocates in the higher courts, those in public service would still be unable to do so while the rules of their professional bodies remain as they currently are. Perhaps I may try at this late hour to enliven the proceedings, I hope in a good natured way. The noble Lord, Lord Thomas, proves by this amendment that he is a barrister first and a Liberal second, a card-carrying member of the barristers' party, QC section. Bright and Cobden must be turning in their graves.

The Committee should be in no doubt that one of the intentions of the Government in bringing forward the Bill is to enable suitably qualified and experienced Crown prosecutors to prosecute in the Crown Court. Many people are amazed that Crown prosecutors cannot already prosecute cases in the higher courts. I see no reason why the overall costs of the CPS should increase as a result.

There are those in this House and outside it who have suggested that there are fundamental reasons why this is an improper reform. I do not find the arguments convincing. I try to look at the issue in a practical way. First, it seems to me bizarre that a distinguished criminal silk, like the current DPP and his predecessor, Dame Barbara Mills, forfeited their right to appear in the higher courts at the moment of appointment to Crown service.

The position of ordinary Crown prosecutors who would be able to exercise full rights of audience the moment they returned to private practice is equally anomalous. All those lawyers are professionals, paid to exercise their independent judgment and subject to the discipline of their professional bodies.

If there really were an objection of principle to prosecution by an employee of the state, how is it that we have tolerated a position in which Crown prosecutors prosecute in the magistrates' courts where 97 per cent. of criminal cases begin and end. How is it that the Scots tolerate prosecution by the procurators fiscal? How have we put up with a position in which the most serious criminal cases tried at the Old Bailey are prosecuted by senior Treasury counsel whose practices are, in effect, almost exclusively prosecuting crime?

It has sometimes been suggested that there is a constitutional principle that a prosecution in the Crown Court should be conducted by a lawyer in private practice and not by a Crown prosecutor. Constitutionally, prosecutions are brought in the name of the Crown and are subject ultimately to the control of the Attorney. Until fairly recent times it was common for the Law Officers to prosecute in person in particularly serious or important cases.

It is true that a prosecution lawyer or any lawyer is required to be independent. But the independence required is independence of mind. The chief difference between the Crown prosecutor paid by the state to prosecute a case and a criminal barrister in private practice paid by the state to do so is that the former has security of employment but the latter who is in private practice is potentially in a more precarious position because he is beholden to his dominant client.

Some members of the Committee may be tempted by the argument that someone who is paid a salary by the state cannot be truly independent. All that is needed to refute that argument is to look at the position of the judges whose independence is not questioned. The senior professional judiciary are full-time salaried servants of the Crown. No one has plausibly suggested to my knowledge that they would increase their independence if they went freelance and were paid for their services on a case-by-case basis, although the exigencies of life and the Consolidated Fund might make that welcome to them albeit on other grounds. I believe that those members of the Committee who are not barristers will recognise these amendments as a set of special pleadings by the Bar. I hope that the noble Lord, Lord Thomas, will agree to withdraw his amendment.

12.15 a.m.

Lord Thomas of Gresford

Since my integrity has been attacked I should inform the noble and learned Lord the Lord Chancellor that I fought two elections as a Liberal before I became a barrister. In those days I was a solicitor. I had the privilege of transferring from one side of the profession to the other. Let it not be thought that to transfer from one side of the profession to the other has ever had any effect on my political convictions.

The noble Lord, Lord Bach, does not appear to appreciate that, like him, I am in the kick and rush business. Both prosecuting and defending I am in daily contact with the courts. In certain circumstances one informs the CPS what one proposes to do before one does it. That does not mean that one asks for permission to do what one believes is right in a particular case.

My purpose in moving the amendment is not that ultimately I have any objection in principle to the CPS prosecuting in the higher courts. I seek maintenance of the status quo in order that the pilot schemes that are now going on can be evaluated. I firmly believe that the quality of the CPS prosecutor at the present time is not up to the kick and rush in the higher courts and appeal courts where the most difficult and complex criminal litigation takes place. It may be that I shall be proved wrong, but at the moment the pilots that are being conducted have not produced any results that convince me to the contrary.

Further, I do not believe that the terms of service of the CPS can conceivably attract the best qualified people. Overall, therefore, the public interest may be damaged because there will be weak prosecution in the higher courts. If one still has independent people defending in such cases a weak prosecutor will be out of his depth. Having said that, I do not press the amendment at this time of night. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey: My Lords, I beg to move that the House do now resume.

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

House resumed.

House adjourned at nineteen minutes past midnight.