HL Deb 16 March 1999 vol 598 cc646-52

5.26 p.m.

Proceedings after Third Reading resumed.

Clause 11 [Terms of provision of funded services]:

The Minister of State, Cabinet Office (Lord Falconer of Thoroton) moved Amendment No. 3:

Page 8, line 23, leave out ("conduct such as is specified in section 9(2)(f)") and insert ("relevant conduct").

The noble and learned Lord said: My Lords, your Lordships may recall that at Report stage amendments were moved to Clause 9 on the funding code, and what was then Clause 10, on financial contributions, to narrow the definition of "conduct"—first, in relation to the factors taken into account in funding decisions under the code; and, secondly, in relation to contributions that an assisted person may be asked for. Thai was in response to the concerns that had been voiced at Committee, by the noble Lord, Lord Phillips, and others, that the definition of conduct in the Bill at that stage could be used to exclude cases where the applicant was, for whatever reason, unpopular. The same definition of conduct was given in each of the clauses.

Those amendments were welcomed by your Lordships. I am pleased to return to the subject now with a further narrowing of the definition of conduct as it relates to the making of financial contributions. This is because the definition of conduct as it stands in relation to the funding code allows conduct in previous proceedings to be taken into account. That is necessary so that the commission could, for example, take a previous fraudulent application into account in deciding whether to grant an application for funding. However, it would be wrong, once a person has been given funding for a case, to insist on a higher contribution towards the cost of that case because of any conduct other than the conduct in that particular case.

It is solely to confine the relevant conduct to that which occurs in the proceedings for which services are being funded that these amendments are now being moved. On that basis, I beg to move.

On Question, amendment agreed to.

Lord Falconer of Thoroton moved Amendment No. 4:

Page 8, line 31, at end insert— ("and in paragraph (b) "relevant conduct" means conduct in connection with the services (or any application for their funding) or in. or in connection with, any proceedings in relation to which they are provided.").

On Question, amendment agreed to.

Lord Goodhart: moved Amendment No. 5:

After Clause 12, insert the following new clause

DETERMINATION OF FINANCIAL RESOURCES FOR CONTRIBUTIONS AND COSTS

(". —(1) In determining for the purposes of sections 11 and 12 the financial resources of an individual, regulations shall provide that the first £100,000 (or such larger amount as may be specified) of the value of the beneficial interest of the individual in the equity of a dwelling house which is his only or principal residence shall be disregarded.

(2) For the purposes of this section "equity value" means the market value of the dwelling house after deducting the debts not exceeding £100,000 (or such larger amount as may be specified) secured on it by a mortgage or charge.

(3) Regulations may provide that the amount to be disregarded under subsection (1) may be reduced in specified circumstances where the equity exceeds £100,000 (or such larger amount as may be specified) and the individual does not have the sole beneficial interest in the equity.").

The noble Lord said: My Lords, this amendment is the same as one which I moved at Report stage but withdrew. Under the present legal aid regulations, an applicant for legal aid is not eligible if he or she has capital of more than £6,750. If he or she has capital of more than £3,000 but less than £6,750, the excess over £3,000 may have to be paid in contributions to the cost of an action. However, the equity in the dwelling house of the applicant is not treated as capital either for eligibility or liability to pay contributions unless it exceeds £100,000.

In Annex A to the Explanatory Notes, the Government announced an intention to change the regulations. Under the proposed new regulations, the value of equity up to £100,000 will still be disregarded when deciding whether the applicant is eligible for legal aid, but that equity will be taken into account for the purposes of liability to pay contributions. As a result, someone with equity of, say, £90,000 in a house could obtain legal aid, but if the case were lost he might find himself liable to pay tens of thousands of pounds, even the whole value of the equity, as a contribution. The payment of contributions can be deferred until the house is sold, but must be paid then and not carried over into the purchase of a new house. In the meantime, interest is payable.

The Law Society pointed out that for people whose only capital is equity in their home the risk of liability to pay contributions was an enormous disincentive to applying for public funding out of the community legal service. In practice, only those who are renting houses would be likely to apply for such funding. I therefore tabled an amendment to prohibit the equity in the house being taken into account so long as it was under £100,000.

I accept that the changes which this amendment seeks to prevent could be made under the existing powers to make regulations under the Legal Aid Act. However, it is an important amendment. It is not one I would normally have wished to bring back on Third Reading, but I do so now because I understand that the Government are willing to undertake to hold wide consultations before implementing changes to the relevant regulations with a view to drafting those regulations in ways which will minimise hardship. If that is the case, I greatly welcome it. I would like the statement of the Government's intention to be recorded in Hansard. I beg to move.

Lord Simon of Glaisdale

My Lords, Clause 12(1) provides that clothes, household furniture and the tools and implements of trade are disregards. I believe that those classes of property have always been a disregard in all forms of execution. They have certainly been disregards from the inception of the legal aid scheme. Moreover, my recollection is that a dwelling house has also been a disregard from the beginning of the legal aid scheme.

It is arguable how much a person with property should be required to contribute to his legal advice or representation, but the dwelling house has always been, and is today, regarded differently from other property. For example, the Government are considering benevolently exempting the dwelling house from the necessity of being sold as a contribution when an old person goes into a retirement home. If that is so, it seems to me equally applicable in this case. It is undesirable that something so intimate as a dwelling house should have to be sacrificed to the last farthing before aid in any form is extended by the Government. I understand from what was said by the noble Lord, Lord Goodhart, that the Government have an open mind on the matter. I hope that they may consider it also in relation to the contributions made when a pensioner moves into a retirement home.

Lord Falconer of Thoroton

My Lords, this amendment was originally tabled at the Report stage, but was withdrawn by the noble Lord after some debate. The Government's aim is greater fairness between people who have capital assets in different forms. At present, someone with £10,000 savings, perhaps as a result of redundancy, would not be eligible for legal aid at all; whereas someone who owned a £90,000 house might be eligible for free legal aid. That is basically unfair. In essence, it says that homeowners are uniquely deserving of more favourable treatment in exercising their legal rights.

However, we have always recognised that property in the form of a home is a special case. That is why we propose that equity up to £100,000 should not affect eligibility; and that any contribution should not be enforced at least until the house is next sold. This recognises that residential property is more than an investment —a point made by the noble and learned Lord, Lord Simon of Glaisdale. However, at the same time it does not put those with substantial equity in property in a stronger position than others, whose only assets may be a relatively small amount of cash, particularly if they have retired and sold their homes and moved into more limited accommodation.

I should remind your Lordships that our proposals on eligibility and financial conditions, as set out in the Explanatory Notes, would all be possible under the existing powers in the Legal Aid Act. The noble and learned Lord the Lord Chancellor is unwilling in principle to provide in the Bill for more restricted powers than exist now. Moreover, the changes are intended to be part of a balanced package, designed to be broadly cost neutral. The cost of changes that relax financial conditions will be offset by savings from those that tighten them. If the Bill were to preclude this proposal about equity, it might be necessary to abandon some of the other changes; for example, extending eligibility for advice and assistance. I am sure that your Lordships would not welcome that.

Nonetheless, I recognise the concerns that have been raised about how a scheme of postponed contributions from equity would work in practice. On behalf of the Government, I am therefore happy to undertake to consult widely about the details before implementing this or any of our other proposed changes to the existing financial conditions. Among other things, we could consider rules to ensure that contributions from equity were not enforced where that would result in hardship. We could also look at the extent to which it was appropriate to add interest to a liability for contribution postponed beyond the end of the case. I recall from Report stage that the noble Lord, Lord Goodhart, was particularly concerned about the effect of interest accruing on the debt, a point he has repeated today.

I believe that prospective changes to eligibility and financial conditions are best dealt with in regulations, as they are now. I repeat the undertaking to consult widely on the changes and, on that basis, I invite the noble Lord to withdraw his amendment.

Lord Goodhart

My Lords, I am most grateful to the noble and learned Lord for those comments. Obviously, a rigid application of the rule about contributions could cause great hardship, particularly for a family which needed to move because the size of the family was growing or for a family which needed to move from one part of the country to another in order to obtain a job. But no doubt such hardship will be looked at in the course of the consultation process. Therefore, I am happy to accept what the noble and learned Lord said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 [The Criminal Defence Service]:

Lord Falconer of Thoroton moved Amendment No. 6:

Page 10, line 22, leave out (", for dealing with an individual in respect of a sentence or") and insert ("(including proceedings in respect of a sentence or order),

(ba) proceedings").

The noble and learned Lord said: My Lords, in moving Amendment No. 6, I shall speak also to Amendments Nos. 7 to 12 inclusive. These are technical amendments to ensure that the term "criminal proceedings" is defined in a way which includes relevant proceedings and that the drafting is as clear as possible.

I shall deal first with Amendment No. 7. That will have the effect of deleting Clause 13(3)(e). That paragraph reflects an existing provision in the Legal Aid Act 1988 relating to proceedings for variation or discharge of a supervision order made under Section 15 of the Children and Young Persons Act 1969, or appeals under Section 16(8) of that Act.

I shall not delay this House by setting out the history of the consequential effect on these sections of subsequent provisions under the Children Act 1989. Suffice it to say that Clause 13(3)(e) is no longer necessary. Those criminal proceedings will fall within the scope of Clause 13(3)(b) and the first part of Amendment No. 6 puts that beyond doubt by adding the word "order".

The second part of the amendment places the reference to proceedings under the Extradition Act 1989 in a separate paragraph. Earlier amendments removed the necessity for reference to "an individual" in some parts of Clause 15(8) and Amendments Nos. 9 and 11 reflect that. The remaining Amendments Nos 8, 10 and 12 are intended to improve drafting without affecting the meaning of those paragraphs. I beg to move.

On Question, amendment agreed to.

Lord Falconer of Thoroton moved Amendment No. 7:

Page 10, leave out lines 31 to 34.

On Question, amendment agreed to.

Clause 15 [Representation]:

Lord Falconer of Thoroton moved Amendments Nos. 8 to 12:

Page 12, line 37, leave out ("for him").

Page 12. line 38, leave out ("for an individual").

Page 12, line 39, leave out ("by him").

Page 12, line 41, leave out ("an individual may select").

Page 12, line 42, at end insert ("may be selected").

On Question, amendments agreed to.

Clause 32 [Barristers and solicitors]:

[Amendment No. 13 not moved.]

Clause 40 [Permission to appeal]:

Lord Falconer of Thoroton moved Amendment No. 14:

Page 25, line 20, after ("court") insert ("or courts").

The noble and learned Lord said: My Lords, your Lordships will recall that on Report, I indicated that it was my intention, on behalf of my noble and learned friend the Lord Chancellor, to introduce some drafting amendments concerning the appeal provisions contained in the Bill.

Amendment No. 14 provides for more than one court to hear an application for permission to appeal. As I said in Committee, the Government support the principle that where a court which has made a first instance decision refuses an application for permission, it should be possible for a litigant to renew his application to the tier of court which would hear the appeal if permission were given.

Amendment No. 15 reinstates the effect of Section 54(6) of the Supreme Court Act 1981 which provides that there is no appeal from the decision of a single Lord Justice on an application for permission to appeal to the Court of Appeal. However, the amendment extends that principle also to the lower appellate courts, where there may in future be a requirement for permission.

The overall practical effect of Amendments Nos. 34 and 35 may be illustrated by the following example. Where in future a route of appeal lies from a circuit judge to the High Court, permission to appeal can first be sought from the circuit judge who gave the first instance judgment. If the circuit judge refuses permission, there is no appeal against that refusal but a further application for permission to appeal may be made to the High Court. The decision of the High Court judge on the application for permission will be final, as at present for the single Lord Justice.

Amendment No. 17 and the consequential Amendment No. 56 reintroduce in an amended form Section 58 of the Supreme Court Act 1981 which had previously been repealed by the Bill under Schedule 11. That will ensure that decisions made by single judges and court staff, in any application incidental to a matter pending before the Court of Appeal, can continue to be called into question by that court. At present, decisions of a single Lord Justice may be called into question by the full Court of Appeal and decisions of court staff, acting as deputy registrars, may be called into question by a single Lord Justice. Without that provision, our appellate procedures would not provide an effective route of appeal for such matters. Most applications that are determined at that level are plainly unsuitable for consideration by the House of Lords. They are extremely unlikely to obtain permission to appeal to that court—I am thinking of applications for an extension of time for setting down an appeal, for security for costs or for solicitors to be removed from the record. This amendment will maintain the existing means by which such decisions can be reviewed and I see no reason to alter this practice which has been found to work well in the past.

Amendments Nos. 14 and 15 retain existing provisions relating to applications for permission to appeal in the Court of Appeal and extend the provision to courts generally. Amendments Nos. 17 and 56 merely rectify a lacuna which would result from the repeal of Section 58 of the Supreme Court Act. I beg to move.

On Question, amendment agreed to.

Lord Falconer of Thoroton moved Amendment No. 15:

Page 25, line 24, at end insert— ("( ) No appeal may be made against a decision of a court under this section to give or refuse permission (but this subsection does not affect any right under rules of court to make a further application for permission to the same or another court).").

On Question, amendment agreed to.

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