Select Committee on Northern Ireland Affairs Fourth Report


22. As we have pointed out earlier, the civil legal aid budgets will be capped, but with scope for moving funds between them. Lord Bach strongly defended the principle of capping[42] and considered that the proposed Funding Code would ensure that priority areas were adequately resourced. He implicitly recognised that restrictions on public funding meant that other sources were also needed to enable litigants to pursue their legitimate actions.

23. Three areas were identified to complement public funding. These were:

  • Conditional Fee Agreements (CFAs);
  • a Contingency Legal Aid Fund (CLAF);[43] and
  • development of the legal insurance market in Northern Ireland.

24. The White Paper commented that consultees had generally opposed these on grounds of principle. It commented "The Government is not convinced by these arguments of principle but accepts that, in practice, there is a long way to go before CFAs can be developed for Northern Ireland."[44] Lord Bach, however, seemed to take a more positive view of the potential for CFAs.

He commented:[45]

    ".... The great advantage of conditional fees is that it ... 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. Lord Bach was less optimistic about the potential scope for a CLAF in Northern Ireland. He commented that the Government saw "a lot of difficulties with CLAF".[46] The Legal Aid Advisory Committee is currently carrying out a detailed study into the merits of such a fund and we have seen a copy of the discussion paper it has issued.[47] We have also received evidence on this point from the Law Society[48] and others.[49] We understand from the Legal Aid Advisory Committee that there is strong support within Northern Ireland for a CLAF, although there is some divergence on what form it should take and that the Committee is seeking to undertake an appropriate form of viability assessment. We look forward to seeing a copy of its report to the Court Service, which we understand is expected to be produced at the end of June 2001.

26. In the White Paper, the Government indicated that it saw "considerable scope for developing a mature legal insurance market in Northern Ireland which will fund appropriate categories of litigation."[50] Mr Hunter suggested that there might be a lack of awareness on the part of many people that existing insurance policies might give them appropriate cover, and that the market for legal insurance was less mature in Northern Ireland than in England and Wales.[51] The Law Society, for its part, saw a number of dangers in too great a reliance on insurance companies in this area.[52]

27. Given that the Government clearly envisages that publicly-funded legal aid will play a proportionately smaller part in the future in the funding of legal actions, we welcome the proposed establishment of a working group to look into the establishment of financially viable and attractive legal insurance based solutions to provide an alternative to private or public funding of litigation for cases seeking financial damages. We note that this will include further examination of the use of CFAs or a CLAF. We also note the Government's assurance that this is not intended to lead to a reduction in legal aid spending,[53] but will allow the Government to target spending on cases which cannot be run without subsidy.

28. There remains, however, the question of ensuring that adequate provision is made in respect of cases not seeking financial damages. Lord Bach commented[54] that some may be appropriate for support under the Funding Code, but others may not. He conceded[55] that there was some risk that certain types of case may find it more difficult to get financial support through legal aid. We recommend that further consideration is given, in the context of the development of the Government's proposals, as to how best to ensure that adequate provision is available for supporting cases not seeking financial damages.

29. A key element in the Government's proposals is the introduction of a Funding Code. The White Paper states that this will be flexible and ensure that funding is allocated to high priority areas. There will be scope for the tests in respect of classes of action "to be made tighter or less stringent as may prove necessary taking account of priorities and the availability of resources."[56]

30. Although the Funding Code will need to be up and running when the new arrangements come into force,[57] Lord Bach envisaged that it would be the subject of "strict consultation" and informed by research conducted by the LSC.[58] As the scope for the LSC to conduct research will be limited in its shadow phase, Lord Bach made clear that the Government would be "absolutely ready to amend the Funding Code if research shows that it is not appropriate ...."[59]

31. Lord Bach announced that the Funding Code would be laid before Parliament and that the initial Code would be subject to the affirmative resolution procedure.[60] He envisaged that amendments to it would be subject to the negative procedure. However, given that experience and research may reveal a need for quite significant modification, we consider that there should be scope for modifications, too, to be subject to Parliamentary approval. We therefore commend to the Government, as an appropriate model, the provisions in the Public Processions (Northern Ireland) Act 1998 applicable to revision of the Parades Commission's Code of Conduct, procedural rules and guidelines.[61]

32. The Bar Council of Northern Ireland expressed concern about the lack of an independent appeal against a refusal by the LSC to grant civil legal aid.[62] Lord Bach defended this and argued that there was a risk that the funding code system might break down if decisions on legal aid were taken outside the LSC.[63] He recognised that this might lead on occasion to disappointed applicants seeking a judicial review of the LSC's decision.

33. A number of concerns have been expressed to us about the possible impact of the more widespread use of standard fees.[64] Lord Bach indicated that a working party was to be set up on remuneration and listed the factors that would be taken into account.[65] The fees will be fixed by regulation and Lord Bach added "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."

34. Lord Bach did not expect the introduction of standard fees to lead to a poorer class of service for legally aided litigants than privately funded litigants.[66] The Government intends standard fees to take proper account of factors such as overheads and Lord Bach noted "some reluctance to discuss those with us so far; we hope that may change."[67]

35. Standard fees may be expected to have a particular impact in relation to criminal legal aid, where Lord Bach noted that although there are standard fees at present for much criminal legal aid work "it has to be admitted that the exceptions to standard fees have been the rule rather than the exception for the last few years, so the standard fees system has not worked particularly well."[68] Mr Hunter commented:[69]

    "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."

36. The greater use of standard fees is expected to improve the speed of payment of criminal legal aid fees. The Legal Aid Advisory Committee had drawn our attention to the existing procedure for assessing these, which it described as "cumbersome and lacking in transparency."[70] Mr Thompson commented that standard fees should lead to a speeding up of such payments.[71]

37. As we have demonstrated earlier in this Report, the cost of criminal legal aid has increased disproportionately in relation to the number of cases. Mr Hunter outlined[72] a number of new factors besides standard fees which could be expected to bear down on costs in this area, while continuing to provide a quality service. One such factor is that the LSC, rather than the courts, would decide the number of counsel which should be assigned to a criminal case.

38. Lord Bach did not accept that things had been done wrongly in the past and that the courts had necessarily been too free in permitting more than one counsel, although he pointed out that there had been some strengthening recently of the criteria in England and Wales for more than one counsel because it had been felt there that on occasion two counsel were employed unnecessarily.[73] To the suggestion that the courts in Northern Ireland had been too free on this point, and that there might be an expectation that there may be less as a result of the LSC making the decision, he observed, in delphic fashion:[74]

    "I would not agree with the assumption, but I would say that what we are trying to do in this particular field is to make sure that the rate of increase in spend on criminal legal aid is to some extent cut down, but not the price of justice, and you can draw what implication you like from the way in which I put the answer to your question."

42  Q 21. Back

43  A CLAF operates on the general principle that successful litigants pay an agreed proportion of their award to the Fund. This provides the resources to meet the costs incurred on other cases. Back

44  Cm. 4849, p. 21. Back

45  Q 24. Back

46  Q 25. Back

47  Appendix 2, p. 27. Back

48  Appendix 12, p. 56. Back

49  See, for example, Appendix 6, p. 33, Appendix 8, p. 35, Appendix 10, p. 39, and Appendix 13, p. 59. Back

50  Cm. 4849, para. 69. Back

51  Q 25. Back

52  Appendix 12, p. 55-56. Back

53  Cm. 4849, p. 21. Back

54  Q 58. Back

55  Q 60. Back

56  Cm. 4849, p. 19-20. Back

57  Q 56-57. Back

58  Q 27. Back

59  Q 57. Back

60  Q 27. See also Q 31. Back

61  Schedule 2, paragraphs 5 to 8, and section 16(4). Back

62  Appendix 11, p. 43. Back

63  Q 30. Back

64  See, for example, Appendix 3, p. 28, Appendix 9, p. 37, Appendix 11, p. 44, 48, and Appendix 12, p. 54. Back

65  Q 33. Back

66  Q 35. Back

67  Q 5. Back

68  Q 18. Back

69  Q 34. Back

70  Appendix 1, p. 27. Back

71  Q 46 to 48. Back

72  Q 38. Back

73  Q 41. Back

74  Q 40. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 13 July 2001