AMENDMENT TO COMMONS AMENDMENT No. 142 (Hansard, 14 July 1999)

§ Lord Goodhart
My Lords, it is most unfortunate that Amendments Nos. 142A and 142B, arguably the most important amendments in the whole of this debate, and certainly among the most important, have come up at a time of night which makes it absolutely impossible to debate them properly. I do not blame the Government specifically on this occasion. I recognise that inevitably the Northern Ireland Bill had to have priority and therefore consideration of the Commons Amendments to this Bill had to be put back until that had finished. Nevertheless, this is simply a particularly bad example of a problem which seems to be facing your Lordships' House more and more. It is a lottery, when we are considering important amendments, whether they will come on at a time of day which makes it possible to debate them properly and, if necessary, to divide.
Needless to say, at this time of night, midnight—some five hours after we started this debate—I do not propose to move either amendment. Nevertheless this is the appropriate time to speak to them. I intend to do so as briefly as I can.
These amendments raise the issue, much debated in your Lordships' House and the other place—

§ Lord McIntosh of Haringey
My Lords, I think that the noble Lord should move his Amendment No. 142A, which we have in front of us.

§ Lord Goodhart
My Lords, as I understood it, we were on Amendment No. 142, but in so far as it is necessary to move Amendment No. 142A, I shall do so for the record.
I beg to move Amendment No. 142A as an amendment to Commons Amendment No. 142. These amendments raise the issue, much debated in your Lordships' House and the other place, of the exclusion of personal injury cases from legal aid except for cases of clinical negligence.
The problem, I believe, is the immovable belief of the noble and learned Lord the Lord Chancellor that conditional funding agreements are the answer to all difficulties. In his view they are the best thing since sliced bread, but like sliced bread, they are actually rather nasty.
The noble and learned Lord says that legal aid is not necessary in personal injury cases because the CFAs, together with cost insurance, will be available in any case with a good chance of success. Even he admits that this is not so in clinical negligence cases. He says that if he is wrong on CFAs, he can always make an order altering the exclusions in Schedule 2. That may be so, but I believe that a lot of harm will be done on the way. We say that this is being done the wrong way round. So far, CFAs only have a substantial track record in road 492 accidents and industrial injury cases. They are unproven elsewhere and there is good reason to believe that they may not be effective.
We should, therefore, retain the power to fund personal injury cases out of the community legal service until we are satisfied that CFAs do what the Lord Chancellor thinks they can do. Anything else creates a serious risk of injustice and it does so even though legal aid for personal injury cases does not save serious money.
I am sure that the noble and learned Lord is fully aware of the figures: £502 million was recovered in damages in the year 1996–97. The legal aid accounts show a net cost to the Legal Aid Fund of £34 million. However, if we take into account the fact that nearly £33 million was recycled back to the Treasury as VAT on counsels' fees, the net loss to the Treasury on non-medical personal injury was under £1.5 million. That is peanuts compared with the net cost to the Legal Aid Fund of family litigation, which is by far the largest burden.
This matter was raised in the House of Commons on Report when the House was divided by the honourable friend of the noble and learned Lord the Lord Chancellor, Mr Robert Marshall-Andrews, QC—perhaps friend is a euphemism in that particular case. I believe that when he divided the House some 19 Labour Members supported the amendment. Of all the issues in the Bill, this is the one which has led to the widest concern among the non-legal public.
I shall not go into the detail of how these amendments were intended to operate. They would simply have made it possible—particularly Amendment No. 1428, which is the one I preferred—to avoid what I believe will be a substantial injustice.

§ Lord Clinton-Davis
My Lords, I would prefer not to engage in a general debate about the advisability or otherwise of CFAs as we would simply revisit a matter that we have already discussed at considerable length—which would be especially redundant at this time of night.
There is considerable merit in not adopting an overly heavy-handed and bureaucratic approach to cases where a person, for very good reasons—whatever they may be—is genuinely unable to procure a conditional fee agreement. I hope that my noble and learned friend will feel that it is appropriate to consider this matter rather differently than he did in his introduction.
There are strong reasons to suppose that, in a minority of cases—and I think that it would be a minority; the Legal Services Commission should not face a heavy volume of applications when a conditional fee agreement is wholly appropriate and obtainable—solicitors could demonstrate that the cases were akin to clinical negligence cases. Those cases would be unusual 493 in nature and could be analysed swiftly as being appropriate for an approach of the kind envisaged in this amendment.
I agree with the point made by the noble Lord that it is difficult to debate this matter properly at this stage in the proceedings. It is an important matter precisely because a minority of cases will be affected. I support the noble Lord in his amendment.

§ Lord Phillips of Sudbury
My Lords, I rise to make two very short points. First, I support entirely what has already been said. Secondly, I put it to the noble and learned Lord the Lord Chancellor that there is no need to introduce a black-and-white reform such as this. Given the statistics that are compelling in terms of the almost negligible cost to the Exchequer of the existing system, there does not seem to be any reason why we could not run legal aid and the conditional fee system side by side and see what happens. Equally, if we are to go the whole hog and maintain legal aid for personal injury cases, there is no reason why conditional fees should not be allowed for those who are not within the legal aid limits.
Some of the most difficult claims and small claims of modest value—which are none the less enormously important to the litigants involved—are the sorts of cases that will get short shrift under the conditional fee system. Solicitors will be driven to have regard to their own self-interest and there will be cherrypicking and selection against the clients' interests. There are inherent conflicts and I cannot understand why the Government will not allow personal injury cases to remain within the ambit of legal aid.

§ Lord Monkswell
My Lords, I had not planned to intervene, but I was interested in the remarks of my noble and learned friend Lord Falconer on this matter. I think I heard him say that the Government would bring forward an amendment to deal with one of the aspects of this matter but would be doing it when the Bill goes back to the other place. Can my noble and learned friend explain to the House why the Government are planning to do that rather than table the amendment in this House so that it would then be available for the Commons to consider with all the other business that has to go back there from this end?

§ Lord Falconer of Thoroton
My Lords, that point was discussed earlier in the context of the Environmental Protection Act. We have agreed to an amendment of the noble Lord, Lord Goodhart, in relation to environmental protection with a view to amending this Bill when it goes back to the Commons. The end result will be that conditional fees will still be available in relation to the Environmental Protection Act. That covers both the procedural aspect and the substance of it.

§ Lord Goodhart
My Lords, I beg leave to withdraw the amendment.