HL Deb 30 July 1999 vol 604 cc232-3WA
Lord McColl of Dulwich

asked Her Majesty's Government:

Whether the Access to Justice Bill will address the legal aid costs rule which encourages low-value claims to be settled regardless of merits. [HL3952]

The Lord Chancellor

The fact that assisted parties rarely have to pay costs if they lose can deter their opponents from pressing their cases fully, regardless of the nature of the assisted party's claim, its value, or its merits. However, the Government do not believe that removing assisted parties' protection from paying costs would be the right action to take. To do so would leave assisted parties, who are among the poorest members of society, at the risk of facing large debts which they would never be able to pay off, and this could deter people from bringing important and meritorious cases.

Currently, if a successful unassisted defendant can satisfy the court that he would otherwise suffer "severe financial hardship", the court can order his costs to be paid from the Legal Aid Fund. I recognise that the severity of the test can cause hardship for an unassisted opponent of limited means and in future it is proposed that this test should be relaxed to "financial hardship" subject to the costs implications of such a change being addressed.

The new funding code, which will replace the existing merits test, will better ensure that weak or trivial cases do not receive public help in the first place. The code will reflect the strict costs and risks versus benefits questions which a prudent person would ask when deciding whether to run the risk of litigating privately at his or her own expense.