Select Committee on Northern Ireland Affairs Minutes of Evidence

Examination of Witnesses (Questions 20 - 39)



  20. May I next ask you, how will the reforms tackle the problems of delays in civil legal aid adjudication?
  (Lord Bach) It is very important that they do tackle those problems. One of the weaknesses of the system, and I am grateful to you for reminding me, is the delay in the adjudication of whether legal aid will be granted in a particular case or not. Indeed anyone who has looked at the latest Legal Aid Annual Report and, more particularly, the Report of the Lord Chancellor's Advisory Committee on Legal Aid, which goes with the Report, will see that really quite strong words were said about the failure as far as adjudication has been concerned. The Legal Services Commission will be responsible for legal aid in Northern Ireland once the Order in Council is passed. It will be under a duty to make sure that decisions are taken in an appropriate and speedy manner. I do not know if either of my colleagues want to say anything.
  (Mr Alan Hunter) The issue, of course, cannot be delayed until the new Legal Service Commission is in place, for all of the reasons the Minister has indicated. Indeed we anticipate that the Legal Services Commission will be very proactive in that area. There has been a recent review of the structure and how the processes within that particular section of the Legal Aid Department function. A new management structure has been put in place. That, we hope, will continue to lead to the kind of improvements that are there already and those improvements will continue. The existing structure in the Legal Aid Department has been looked at and there have been some changes made, with a view to increasing the turnaround time.

  21. One last question, if I may; you already mentioned that the reforms will include a capping of civil legal aid, one can understand that very much, but, of course, there is the inherent danger that too much of the budget may be spent too early in the year and that causes coming later in the year can suffer. How, in general terms, will you address that?
  (Lord Bach) There clearly could be problems unless we dealt with it right at the start. There is no alternative but to have capped budgets, the rest of Central Government has capped budgets and it is absurd for there not to be capped budgets in the field of legal aid, and there has not been up to now. A range of factors will determine whether individual cases will receive funding. They include priorities, which the Government will set, which the Lord Chancellor will set, subject to Parliamentary approval; the emergence of new areas of work; changes in demand for funding in high priority areas and, of course, the availability of funding. That is only one part of the factors that will be involved. The question that you ask serves to emphasise the need for a range of sources, not just public funding to enable litigants to pursue their legitimate actions. The way we have sought to do that in England and Wales is through conditional fee agreements in an important part, the personal injury part, of the civil field. We have to consider and listen to what advice we receive as to what we should do in Northern Ireland in order to make sure that the funding that we allow for civil legal aid covers all of the high priority cases. If there are problems we do not think it will be in the field of high priority cases, we feel that it is more likely to be in the field of low priority cases under the Funding Code. The Funding Code in England and Wales deals with a whole variety of priorities. If I just tell you, the key ones are the special Children's Act proceedings; civil proceedings where the client is at risk of immediate risk of loss of liberty or life; social welfare issues; domestic violence; proceedings concerning the welfare of children and proceedings against public authorities. These are priorities we have set in England and Wales and I cannot think they will be very different in Northern Ireland.

Mr Clarke

  22. I feel duty bound to thank you for calling my questions early and I feel as if I ought to apologise to our witnesses that I have to leave the meeting in a few minutes, no disrespect is intended. I wonder if I can move us on a little bit and ask a couple of questions in respect of the new Commission, to what extent does the Government expect the Commission to purchase legal services by contract?
  (Mr Alan Hunter) The position as set out in the White Paper is that the Government recognises that there are very peculiar legal service arrangements in Northern Ireland for that and for those reasons it may not be entirely appropriate to introduce contracted services in the same way as has been done in England and Wales. However, the Government has also decided that contracting will remain an option which the Legal Services Commission will have. The kind of areas where, in the first instance, the Legal Services Commission might consider purchasing legal services through contract might be in the not-for-profit sector, where they may grant contracts to deal with some of the areas under the social needs agenda. Equally, there are some specialist services which might be suitable for procurement through a contracted environment. This would all, of course, be subject to discussion with consultees much further down the road and obviously the Legal Services Commission would need to look very carefully at the impact it would have on the community before it deals with those kind of issues. The kind of areas which would be worth considering might be in terms of legal services in the traditional sense, it might be clinical negligence. Those are very specialist services where there are not very many cases arising in Northern Ireland and, therefore, there may not be a great pool of people who can conduct that type of litigation. I do not know if this is correct, I am speaking speculatively in terms of giving the kinds of areas the Legal Services Commission might be interested in.

  23. Would you be in a position to give the Committee a percentage of that £43 million budget that would be used in such a manner in terms of the purchase of legal services by contract?
  (Mr Alan Hunter) I have to say it would be a very, very insignificant proportion of that £43 million. I have also to say that one of the purposes of the agenda is in order to enable the Government to direct where the priority areas of spend are, so it may well be that if the Government decides, for example, that housing issues became a very big issue in Northern Ireland, or debt, or some of those Targeting Social Need matters became crucial in terms of priorities and wanted to direct a higher level of resources to that as proposed they would be enabled to do so, although that represents a very small proportion at present there would be a new environment in which it could operate.
  (Lord Bach) Could I add to that, the proof that we have listened to the consultees is to be found in this particular field. The consultees were pretty well agreed that they did not want to see block contracting coming in in Northern Ireland because of the nature of the legal profession there; there are a large number of very small firms, one solicitor or two solicitor firms across the Province, which is largely a rural area. It would be unfair to introduce contracting in the same way it has been done in England and Wales. I hope the Government has listened and that is why our original proposals are not to have block contracting in the way that we have in England and Wales. We keep that in reserve, of course, and that may be what is necessary in a few fields or in many fields, but this is an example where we have, I hope, listened.

  24. That is very helpful. It is also helpful when you suggested, rightly so, that the consultation process will continue. My next question is in respect of the Government's intention to look further at the introduction of CFAs, Conditional Fee Agreements or a Contingency Legal Aid Fund. There seems to be strong arguments against CFAs and as a Committee we have received a number of representations concerning practical difficulties with a Contingency Legal Aid Fund. Could you say what specific market that fund, the CFA, if introduced, would be aimed at?
  (Lord Bach) I am not entirely surprised you have had a number of representations on this particular issue. We have a decision to make as to what sort of system we have if we are not going to continue with civil legal aid in the way it has continued. You will know, I am sure, that we have asked the Advisory Committee to look at the possibility of a CLAF in Northern Ireland. I must make it quite clear that the Government is impressed by the way in which conditional fees have worked in England and Wales. It is early days; we think they have worked well and we think they have brought in many people who have been able to claim their civil rights, who were just outside the eligibility level when legal aid was available for personal injuries. They have been able to claim in that field and others. That is the great advantage of a conditional fee system, if you have a good case there is no reason at all why you should not get justice. What concerns us about CLAF—and we are not making any final decision on it until the Advisory Committee have reported, and we expect them to report by the end of June this year. It would be ridiculous to make a decision before they report and we know they are looking into it carefully—is the expense of setting it up, the funding that is necessary, the tendency for the merits test sometimes to be set too low. If the merits test is set too low in effect what happens is that when you have a clear-cut case, you do not go to CLAF, you just conduct the case. Why should you be prepared to pay some of your damages which you are entitled to into a CLAF fund. We see, as a Government, a lot of difficulties with CLAF. We want to wait and see what the Advisory Committee report says and then make a decision. We should also point out there are possible third ways, through insurance in Northern Ireland. Very interestingly, the present President of the Law Society in his annual dinner in December last year made it clear that he wanted the Government to look at third ways of financing civil matters where legal aid was no longer appropriate. That is something that we think the Advisory Committee will be looking into as well. The great advantage of conditional fees is that it, as I say, brings in everyone who has a good case. If they have a good case then they are likely to be able to use conditional fees and be rewarded for it. We will need a lot of persuasion that conditional fees are not appropriate, even in Northern Ireland.

  25. That fullness of your answer has pre-empted my next question, in fact answered my next question, which was there is a risk that such a fund might end up handling more marginal cases and the strong cases would not go through. I am grateful for that. Can I move us on to a quote from paragraph 70 of the White Paper, which refers to the possibility of, "Developing financially viable and attractive legal insurance based solutions to provide an alternative to private or public funding of litigation for cases seeking financial damages." Could you inform the Committee what sort of scheme the Government have in mind?
  (Lord Bach) I am going ask one of my colleagues to deal with this.
  (Mr Alan Hunter) I think that Ministers recognised, in their various visits to Northern Ireland and in the various discussions with many of the consultees, that the legal insurances markets in Northern Ireland have not developed in the same way or to the extent that they have developed in England and Wales. I think also some of the insurers may take the view that they provide in many instances already legal services insurance under their home contents policies and sometimes other policies. People are not aware that they already have that kind of cover which would enable them to pursue or defend various proceedings. I think that one of the points which that particular section of the Paper is trying to convey is that it is in everyone's interests that that market is not only developed, but that people do recognise that where they have those policies, that is something which they can go to their insurance companies about and avail themselves of that cover.

  26. In that answer is there an acceptance that it could be very difficult to encourage people to support a mode of operation that currently is not that prevalent?
  (Mr Alan Hunter) I think that certainly in discussions with some of the insurance representatives it was their view that the low uptake was more due to the fact that people simply did not realise that they had the cover, and perhaps in other cases may find it preferable to go by the traditional route of applying for legal aid, but it is perhaps more an educational point. Also I think that the market itself in Northern Ireland has not matured to the extent that it has in England, and that is something which, of course, is a matter for the insurance companies.

Mr McGrady

  27. Good afternoon, gentlemen. I would like to deal with the Funding Code. It seems to me that it is a key element in the proposed control of the legal aid costs budget. Would the introduction of the Funding Code indicate that there will be a stiffer test of the legal merits of a particular application? Could I also follow on from that and ask, will it also be subject to the additional resources test as well as a legal merits test? Give us a flavour of what the Funding Code would envisage in this context of testing.
  (Lord Bach) The first thing to say about the Funding Code is that it would have to be passed through Parliament under the affirmative resolution procedure, and changes to it as well would have to come through, perhaps on a negative procedure. Yes, it would set not necessarily harder tests, but new tests, as far as what kind of cases should be assisted by the legal aid system. In answer to a previous question, I set out what some of the key priority areas were under the Funding Code in England and Wales. I do not pretend they will be exactly the same in Northern Ireland, but I think everyone will agree that, for example, children's cases should have a very high priority in any funding code, wherever it was. Of course, a funding code is really a name to signify different merit tests for different types of legal aid work and cases, and by establishing those different tests we feel we can prioritise applications and target what are, as we have already discussed and as I think it is generally agreed, limited public funds. The Code will enable Ministers to ensure that all available resources are spent on those who need help the most. However, before the Funding Code is put into place and is put before Parliament, I say again, it will be the subject of strict consultation and will be informed by the research that will be conducted by the Legal Services Commission—it will be one of their responsibilities to conduct research—and pilot areas in various fields. Research will be conducted into what is the appropriate funding code for Northern Ireland. We think this is the most appropriate way of informing Government's decisions when the Lord Chancellor has to set out, establish and target priority needs. So the Funding Code will really be a way of trying to make sure that the most important cases are dealt with by way of public funding, and some cases that are not of the greatest priority can be dealt with in different ways.

  28. The point I was making was that the test of the legal merits would also be followed by or alongside the resources test, would it?
  (Lord Bach) Yes.

  29. They would both apply in the Code, is that right?
  (Lord Bach) Yes, that is right.

  30. In some of the submissions which were made to the Committee already there is a criticism, which I am sure you will appreciate we always get, of the proposed appeals mechanism whereby the applicants appeal. In effect, the Legal Services Commission would appear to be sitting in judgement on itself. That appears to be unsatisfactory in general terms and certainly in these particular terms. You might even have the irony of the applicant, having been refused in the first instance, making application for judicial review aided by legal aid cost, and there would be a double jeopardy cost. Can you give some flavour of that?
  (Lord Bach) I am glad you have asked the question, because it is an important point, and consultees have expressed concern about this point. Our plan or our proposal is, as you have said, that where an application for public funding is refused, the applicant will be able to appeal to an appeals panel, but it will be an appeals panel of the LSC itself and it will comprise—and this is important—two adjudicators from the LSC, of course not those who made the original decision; and either a lawyer or a not-for-profit representative, depending on who it is who has not had their application for legal aid allowed. If it is a solicitor, it will be a solicitor's representative. If it is a member of the Bar, it will be a member of the Bar. If it is a not-for-profit sector, it will be somebody from that sector. The appeals panel will consider the appeal as a fresh application and will either support the original decision or refer the matter back to the LSC for further consideration. The appeals panel will not have the power to overturn the Commission's decision. We think the reason—a good reason—for that is that the Legal Services Commission must retain sole responsibility for allocating resources, in keeping with the Funding Code, reflecting the Lord Chancellor's priorities. We fear—and I have to say this—that if it is taken outside the Legal Services Commission who will be given, as it were, the statutory duty to give legal aid, there is a danger that the Funding Code system may break down. We feel it is important and fair that it is done in this particular way because, as you have pointed out, Mr McGrady, the final decision of the Commission can, if it is outrageous, be challenged by way of judicial review. We are not encouraging judicial review, although I believe, of course, it is sometimes a step taken in Northern Ireland, and the Chairman may remember during his time there that sometimes that has happened. Also, of course, you would not be surprised if in the early days, the early months of this scheme, there are some judicial review proceedings. However, we need to point out that judicial reviews are not appeals as such, and they are reviews that, of course, can be helpful and informative in setting up the parameters within which the Commission will operate. The Code that would be the basis of whether legal aid is granted or not, I want to repeat, will of course be subject to parliamentary accountability. That is a very important point to remember.


  31. I think Mr Hunter wants to add to that.
  (Mr Alan Hunter) Yes, if I may make one observation. The procedures and so on in terms of the Funding Code, the Codes of Practice and so on, and the arrangements for the parliamentary scrutiny, will, of course, be subject to public consultation in the context of consultation of the proposed draft legislation. However, as you will be very familiar with, the arrangements in what is known as the reserved field under the Northern Ireland Act, in terms of what would be normal in the Westminster situation, translate into different arrangements in that particular area of reserved matters. So although the Funding Code would ordinarily be subject perhaps to an affirmative resolution procedure, the context in Northern Ireland may well translate that in due course, because of the arrangements under the legislation at Westminster, the arrangements for that will still be subject to some consultation in the context of the proposed legislation.

Mr McGrady

  32. I am sure it is an area which will provide much further debate and argument in the months ahead, but we will leave it at that for the moment and move on to another area. The purpose of the exercise, of course, is to improve the quality and the standards of legally aided service systems. There is a Working Group, I understand, addressing the development of quality standards. Could you indicate to the Committee what progress that Working Group has made, or is making, towards that objective?
  (Mr Alan Hunter) The Government decided that there were a number of areas where further close consultation with those directly involved in delivering these services was going to be necessary before practical effect could be given to many of these proposals. In that context, several working groups were discussed. The Working Group on Quality has not yet been established, but it will be established closer to the time of implementation of the legislation. It is interesting to note that the professions themselves have recorded the need for continuing education. The Law Society has recently introduced a requirement for continuing education. So there is movement in that area, but the Working Group itself will not be convened until much closer to the time of the implementation of the new system, because the new procedures, of course, cannot be given effect until the Order in Council itself is made.

  Mr McGrady: Thank you very much, gentlemen.

Mr Beggs

  33. Good afternoon. A key element in cost control appears to be the proposal for all-inclusive standard fees for the majority of cases. What progress has been made towards developing these?
  (Lord Bach) We are intending to set up a working party on remuneration. Indeed, in the last week I have written to both the Bar Council and the Law Society, with a view to setting up such a working party in the course of the next few months. We ourselves have done some work on what we feel standard fees are—not the level of them, but what the criteria should be for standard fees. They will be fixed by regulation. They will be all inclusive, with separate scales for preparation, advocacy and expert witnesses, but there will be separate arrangements for disbursements, which I think is something that will be appreciated by the professions in Northern Ireland. Can I briefly deal with the range of principles that will guide the level at which standard fees will be established. These include firstly, the time and skill which the work requires; secondly, the general level of fee income arising from the work; thirdly, the cost to public funds of the provision of the service; fourthly, the availability of resources; and lastly, public sector comparables. As I say, the working group will be set up, and we would give those criteria to that working group and see what they have to say. I dare say they will have quite a lot to say about them. As far as public sector comparables are concerned, that is a benchmark that includes a range of comparisons with other professions. Of course, on a true basis, the remuneration package has to include expenses such as pensions, sickness benefits, paid leave, support staff and office overheads, but I need to make it absolutely clear that the standard fees that are set will not necessarily bear any relationship with fees that are paid now, and it is very important that I make that clear to the Committee.


  34. I think that Mr Hunter wants to come in there.
  (Mr Alan Hunter) I have one observation to add, if I may. The increase in criminal legal aid is as a result of the statutory test enshrined in the current legislation, which fixes only one criterion for the assessment of fees, which is a fair remuneration as determined by those who independently know about these things and deal with them in terms of the Taxing Master at the High Court supervising the equivalent department. The clean-sheet basis upon which the new standard fees will be set is something which will take into account all the factors set out in the White Paper as being the criteria against which the new standard fees will be assessed. That is why there will be no direct link with the existing levels of fees.

Mr Beggs

  35. Given that the Government does not intend existing fees necessarily to be the starting point for fixing standard fees, is there still not a risk of creating a two-tier profession, with publicly funded work the poor relation of private work? Might such a situation act to reduce the choice of lawyer for those dependent on legal aid?
  (Lord Bach) We do not think that there will be a second-class service for legal aid litigants, for two reasons. First of all, we are determined that the standard fees and the payment out of legal aid for criminal work shall be on a quality assured basis to citizens. It is very important that there is quality assurance, and there have been moves by the professions in Northern Ireland to make sure that that is done, but we believe it has to be seen, and that is why we are going to set up the registration and the code of practice which will be crucial for anyone who wants to practise under legal aid. Secondly, we think it will secure the best value for money from the services purchased at public expense. In legal systems throughout the world there is no way in which publicly-aided work can keep pace with the kind of rates which can be found in private work. If we sought to do that, we would be chasing a very elusive runner, and it would be desperately unfair on other parts of the public service that require money as much as legal aid does. So to try to compare legal aid rates with private rates, for example, in commercial work is something that is pointless and something that we would not even consider. What is important is that the rate that we set is fair and represents the various criteria that I have tried to set out. There is, if I may say so—and this is true in Northern Ireland as well as in England—a great feeling about appearing for those who are not necessarily able to pay for their own defence or their own cases. Those who do public legal aid work—and I must say that a large part of my life was spent doing it in the criminal field—feel that you know you are not getting as much as people who are just doing private cases all the time, but you do get a satisfaction, I think, from doing that sort of work. I think that is a factor that the legal profession should bear in mind as well.

  36. Will the Legal Aid Advisory Committee continue in existence when the new system comes into being? If so, how will its role change?
  (Lord Bach) No, it will not. It will not, in the same way as the equivalent body in England and Wales has finished once the Legal Services Commission was established. I cannot say how grateful the Government is—and I am sure particularly the Chairman, from his time in Northern Ireland, will echo what I say—for what the Legal Aid Advisory Committee has done over many, many years, and it is still playing a very important part. Frankly, though, as paragraph 45 of the White Paper or the Decisions Paper makes clear, there will be no requirement for that Committee once the Commission is established; in effect, its function will be obsolete. However, that is not to say we do not recognise what a huge amount of work it has done in the last number of years.

  37. Thank you. What assessment has been made of the financial implications of transferring the administration of legal aid to the new Legal Services Commission?
  (Lord Bach) We have done some work on that. It is hoped, of course, to set up a shadow Legal Services Commission much nearer the time, so the new system can come in. We have set aside £½ million to cover expenses in setting up the new Commission; it is to cover the shadow Commission I have just referred to, Mr Beggs, and the new functions of the Commission—and there will be some new functions of the Commission—including research projects that are going to be important when we set up the priorities for the Funding Code and also setting up pilot areas too. So we have set aside money so that the Legal Services Commission can come in and, hopefully seamlessly, begin its very important work, taking over from the good work that we believe the Law Society has done up till now.

  Mr Beggs: Thank you very much.

Mr McCabe

  38. Thank you, Chairman. I want to ask a couple of questions about criminal legal aid. The first point is fairly straightforward. I wonder if you could give us some idea of what the likely practical impact will be of the change in the arrangements whereby the Commission, rather than the court, will now determine the number of counsel? I wonder if you could say something about the reasoning behind that, as well as the practical impact?
  (Lord Bach) I am going to ask Mr Hunter to deal with that.
  (Mr Alan Hunter) The new arrangements will, in terms of criminal legal aid, introduce some very new elements to the system, but in many ways will also recognise and will preserve the best of the system as it is there at the moment. The Government, for example, in future will decide how much lawyers are paid under the standard fee system and will prescribe what are exceptional cases which will go for independent assessment. Another feature on the costs side of the new criminal aid scheme is that at the moment there are no contributions from applicants for criminal legal aid, whereas in England and Wales since 1988 there have been applicants that are required to make a contribution towards the costs of their criminal defence, if their level of resources is sufficient to enable them to do so. The new arrangements, as set out in the White Paper, will enable the convicted defendant's costs orders to be made, but at the end of a case someone who has been convicted will, in appropriate cases, if they have resources and it is possible for them to do so, be required to make a contribution towards the costs of their defence. As against that, the quality assurance mechanisms, of course, which are being introduced in the code of practice, will require practitioners in the criminal field, as in the civil field, to meet a level of quality of service, and what those standards are has yet to be discussed and consulted with with the legal aid professions. The Legal Services Commission will have power to certify the number of counsel which should be assigned to a criminal case. That will be a new feature, because at the moment that is a matter which is reserved to the judiciary. The Government has indicated also in the White Paper that it does intend to look at the possibility of a public defender system—in other words, salaried defenders who will operate as the defence counsel in certain cases. That would obviously have to be piloted and would be subject to research. The Government has indicated its commitment to do that.

  39. Would it be fair to say that this is based on an assumption that the courts have been too free in allowing several counsel to be involved in particular cases? Is that the reasoning behind this?
  (Lord Bach) I think I should make it clear that the court will still be responsible for deciding whether it will be appropriate for the defendant to be allocated counsel in a particular case, which, of course, is in many ways a very important decision.

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