COMMONS AMENDMENT (Hansard, 14 July 1999)

§ Lord Falconer of Thoroton

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 13. I shall speak also to Amendments Nos. 14 to 21, 47 and 48.

410 This group of amendments concerns the protection that a person assisted by the community legal service is given from having to meet the costs of the other side should the action that he or she brings with the help of public funds be unsuccessful.

Amendment No. 13 allows the general protection afforded by Clause 12(1) to be disapplied in prescribed circumstances. This power is necessary because, unlike the present legal aid scheme, the new commission will fund cases in a range of different ways. For example, Clause 7(3)(e) empowers the commission to provide help by making a grant or a loan to an individual to enable that person to purchase legal services for himself as a private litigant. Another option proposed by the Legal Aid Board in its draft funding code is to provide limited "litigation support" funding for a case that is principally funded privately—probably under a conditional fee agreement. We believe that it would be wrong if people helped in these ways were entitled to special protection from having to meet their opponents' costs.

Amendment No. 47 makes any regulations disapplying the protection available under Clause 12(1) subject to the affirmative resolution procedure.

Amendments Nos. 13 to 16 also effect drafting changes to make clear that protection against costs applies only while the commission is funding a case. There are circumstances when support from the commission may not be provided until after litigation has commenced when, for example, a person's means change so that he or she becomes financially eligible for assistance. Similarly, support may be withdrawn because the individual is no longer eligible financially or the case no longer passes the requirements of the funding code but the assisted person proceeds with the case nevertheless through some other means of funding. The amendments make clear that costs protection is limited to that part of the proceedings when an individual was receiving help from the scheme.

Amendments Nos. 19 and 20 rephrase and reposition Clause 12(3)(c) which deals with the payment of costs by the legal services commission to the opponent of an assisted person. At present, a court can order the Legal Aid Board to pay an opposing defendant's costs if he or she would otherwise suffer severe financial hardship. Regulations under this Bill will broadly replicate that position, although the Government hope to relax the test to plain financial hardship.

It is necessary to rephrase the paragraph to refer to the "costs incurred" by the opponent rather than those "ordered against" the assisted person. Otherwise the costs that the commission could be ordered to pay would be limited by the protection enjoyed by the assisted person. That anomaly did not arise with the previous drafting of Clause 12(1).

Amendments Nos. 21 and 48 are consequential on the repositioning of Clause 12(3)(c). The latter ensures that regulations under that paragraph remain subject to the affirmative procedure. Amendments Nos. 17 and 18 ensure the consistent use of tenses throughout the clause. I beg to move.