HL Deb 17 March 2005 vol 670 cc15-7WS
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland)

My honourable friend David Lammy, the Parliamentary Under-Secretary of State, has made the following Written Ministerial Statement in the other place today.

With the agreement of the Secretary of State for Constitutional Affairs, I am pleased to announce a package of measures, some of which come into effect from 1 April 2005, that will encourage early and effective resolution in civil dispute cases, including family cases.

These measures give effect to proposals for reform of civil legal aid set out in the July 2004 Legal Service Commission (LSC) consultation paper A new focus for civil legal aid—encouraging early resolution; discouraging unnecessary litigation. The main theme of the paper was to refocus the civil legal aid scheme to encourage early resolution and the use of alternative dispute resolution (ADR) measures such as negotiation or mediation and away from contested litigation.

We have taken account of detailed and considered representations received during the consultation in finalising the measures announced today to deliver a reform package that acknowledges and addresses the key concerns expressed in consultation. I believe this represents a positive move forward for civil legal aid that we can build on in future years.

Following the consultation. I confirm that we will not be making reductions in financial eligibility except the aligning of levels described below or reducing the scope of services covered, save for minor amendments to the personal injury exclusion. We will also remove cost protection in family cases to deter unreasonable conduct by publicly funded clients, and introduce stricter controls over multiple and repeat applications in private law family cases. These controls will be enforced through improvements to processing systems that provide a reliable means of identifying previous legal aid applicants.

The consultation paper proposed significant changes to the funding of cases concerning financial provision in divorce (ancillary relief), including a power for the LSC to refuse legal aid for legal representation if private funding, by means of a loan or otherwise, is available and affordable in an individual case.

In principle, we believe that such a power would be appropriate, but we will only introduce it if satisfied that a good range of private funding arrangements is accessible to clients currently within legal aid eligibility limits. We will undertake further work on the availability and conditions of finance, in conjunction with our key stakeholders. I should emphasise that any new funding arrangements along these lines would apply only to those cases that do not reach any resolution during the financial dispute resolution hearing, but continue to full contested court proceedings.

To discourage unnecessary litigation, in clinical negligence cases and actions against the police most applicants will be expected to pursue any available complaints system before they are funded to take proceedings. This will give the potential defendant public body the opportunity to respond to the matters raised and provide an explanation or apology if appropriate before it is decided whether litigation is the appropriate remedy for the client. The LSC will consult further on when such an approach would not be appropriate and on guidance to further encourage the use of mediation in non-family disputes.

As urged by many respondents, we will also be improving the operation of the statutory charge, to encourage early repayment of legal aid costs. Our reforms package includes increasing the interest rates as an incentive to pay off the charge as soon as practicable. We also intend to introduce a discretion for the LSC to be able to decide whether the statutory charge should be postponed, subject to assessing the client's means. This will also include the power to review postponed charges at regular intervals. The LSC will also adopt a firmer approach when deciding whether a charge can be transferred to a new property. Finally, we propose to remove the exemption for the first £3,000 of money or value from property recovered, from the statutory charge.

We propose to strengthen the cost/benefit criterion when assessing applications for funding in claims against the police to ensure that the benefits obtained from a case are proportionate to the costs involved, and to improve general handling of police cases. We will also raise the minimum cost benefit requirements for clinical negligence damages claims to match those for other categories of case.

We will also be restricting the very high cost civil cases budget to ensure that disproportionately expensive cases do not preclude access to justice for smaller cases. In terms of the overall legal aid budget, the need to achieve substantial savings remains. If the Community Legal Service does not remain in budget, there is a very real risk that funding will have to be reduced in future, and consequently that the most deserving cases may not receive the assistance they need. With a limited budget, we need to ensure that legal aid funding is targeted on the most needy cases and to the priority areas.

These proposals are fully consistent with the Fundamental Legal Aid Review (FEAR) and represent the first phase of a co-ordinated continuing legal aid reform programme to achieve an appropriate long-term settlement for legal aid.

We propose to implement the eligibility changes in April and the remaining changes in July. A copy of the consultation response paper and the final regulatory and equalities impact assessment will be available shortly on the DCA website at www.dca.gov.uk.