Select Committee on Northern Ireland Affairs Appendices to the Minutes of Evidence


Memorandum submitted by the Central Claims Unit of Department for Regional Development


  1.1  This paper is in response to the invitation from the Clerk of the Northern Ireland Affairs Committee to comment upon the Government's proposals for the future of legal aid in Northern Ireland as contained in Cm 4849 and aims to address the issue from the perspective of a major public sector defendant. This paper considers the aspects of the Government's proposals which relate to civil litigation (non-matrimonial).

  1.2  Legal Aid reform has considerable significance for all bodies which are charged with duties to supply services to the public at large. The Department for Regional Development is charged with responsibility for the provision of inter alia, a road network, and water and sewerage service, both of which are areas which are susceptible to litigation. The Department handles all claims against it through its Central Claims Unit (CCU), on whose behalf this paper is written.


  2.1  At the heart of the issue is the principle of "access to justice". Without question, access to the justice system should not be determined by financial status. Access to justice is also the hall-mark of democratic society. However, even the most affluent litigant does not have unlimited access to legal services-considerations such as time, publicity, and value for money will also be part of the equation. To create equal access to justice, therefore, access to justice should not be unlimited, but, to use a favourite legal phrase, "reasonable in all the circumstances". However, that is a fundamental question for the legislature.

  2.2   Any assessment should include the strength of the case, the cost of the case, and the importance of the case to the claimant and society at large.


  3.1  Currently, the decision as to whether to grant a Legal Aid Certificate is two-staged, a financial assessment by DHSS, and a consideration of the merits of the case. Once the former stage is complete (a fairly factual mathematical exercise), the Legal Aid Department adjudicator will study the application form and decide whether or not a prima facie case is disclosed. The latter is adjudicated using a merits test which requires that the adjudicator must be satisfied that there are reasonable grounds for bringing or defending the proceedings, and that it is reasonable in all the circumstances to do so.

  3.2   The experience of DRD is that the vast bulk of claimants are financially eligible for Legal Aid, and that the issue of a Legal Aid Certificate is the determining factor in any decision to issue legal proceedings. This means that once a Legal Aid Certificate is issued, the assisted party runs very little risk. Very many of those claiming against the Department for personal injuries are unemployed, and so make absolutely no financial contribution to their own legal costs. They therefore have nothing to lose. Those employed claimants on low incomes will make contributions of various amounts depending on their means and that contribution is lost if their action is unsuccessful.

  3.3  However, most victims of "tripping accidents" are unemployed. Such litigants are in a far superior position to any party who does not have the benefit of a Legal Aid Certificate, and who could be risking all their worldly goods. If an action is supported by a Legal Aid certificate, (or "legally assisted") but fails, the court will make an Order for recovery of legal costs in favour of the successful party, but not to be enforced without a further court order. In effect this means that the successful can only recover their costs if and when they become aware that the unsuccessful party's financial situation has improved (for example if they win the National Lottery, or win compensation against another party). It is rare for such an order to be made and therefore DRD usually has to bear its legal costs in every case, whether successfully defended or not.

  3.4  It is not possible to give a breakdown of expenditure on legal fees in actions which were successfully defended, or indeed withdrawn, but in 1999-2000, 98 actions were successfully defended, and 54 actions were withdrawn.


  4.1  It might be helpful to briefly recite the history of public liability claims against the Department and its predecessor, the Department of Environment (Northern Ireland). In the mid 1980's there was a dramatic rise in the number of claims against Roads Service, which resulted in the matter being considered by the Public Accounts Committee in 1987. That Committee heard evidence of fraudulent claims being made, and of an increasing claims-consciousness in the population at large. Roads Service carried out research into the matter, and consequently the system of highway maintenance was improved, and the Central Claims Unit was set up, in order to investigate, settle or defend, the claims. In the following 10 years, the number of claims halved (from 6000 to 3000 claims), as did the resultant expenditure (compensation and legal costs, from six million to three million). In the meantime, claimants who explained their attempt to defraud the Department by saying that they regarded the compensation as being like "money from America", attracted considerable publicity and there followed a number of successful prosecutions for attempted fraud. There have also been a number of actions in which the presiding judge has commented on the existence of a Legal Aid Certificate, with some surprise.

  4.2  These circumstances were at considerable cost to the public purse, both in terms of the costs on the Legal Aid Fund, and in terms of the cost (legal and otherwise) to the Department. It should be remembered that the legal costs of defending a claim are relatively small compared to the enormous cost in time of the investigation in CCU, and in the Departmental Agencies (the consultation and hearing). The latter cost will never be recoverable. It was not unusual at that time for the legal costs to exceed the amount of compensation, and often, Roads Service spent more on legal costs than it paid in compensation.

  4.3  Currently, the Department routinely defends claims on the basis that it is not satisfied that the alleged accident happened in the way alleged, and frequently, the action is successfully defended both on the basis that the accident occurred despite the best efforts of Roads Service, and on the basis that the learned judge is not satisfied, on balance, that the accident happened in the manner alleged. It seems clear that there continue to be those who are prepared to submit false claims, although the extent can never be quantified. CCU's success in minimising expenditure on public liability claims depends on a robust attitude to investigation and a refusal to take decisions which are purely economic. However, there is no doubt that the Department is among those defendants which have to take decisions in an environment in which the major risk in litigation rests with the defendant. It is not easy for the Department to quantify the total cost to the Department of those cases which it successfully defends, but it is clear that expenditure on claimants' legal costs and expenses significantly exceeds the Departments own legal costs and expenses, which in itself demonstrates that there is such a cost.


  5.1   The Department has already submitted comments upon the reforms proposed in the Consultation Document "Public Benefit and the Public Purse", but the Decisions Paper "The Way Ahead" addresses the issue of administration of the scheme, rather than the alternative means of funding. It is in this context that this contribution is made.

  5.2   The bulk of the proposals at this stage are administrative, and therefore comment is limited. However, there are several points which are appropriate.

    (a)   The Department welcomes the proposal that the Legal Aid Commission be created, as this removes the perception that the legal profession is effectively deciding on financial backing for litigation which will be carried out by its members. It is understood that there has been comment that the proposals would result in Government deciding on financial support for claims against the Government. It is recommended that the independence of the Legal Aid Commission be emphasised and jealously guarded, as this will be crucial to its success.

    (b)  In relation to the creation of budgets, it is suggested that this aspect should be taken a stage further and that, for the reasons given above, the successful party should be able to recover costs from the Legal Aid Commission. The basis for using a budgetary system is the need to be more financially aware. It is suggested that the risk of awards of costs would emphasise this point in a highly practical manner. While it is arguable that it is an unnecessary bureaucratic hurdle, particularly in relation to costs orders in favour of other public bodies, it can be argued that it is justified by the need to support the budgets of "innocent" public departments. For example, money recovered in legal costs could be well spent on improved road maintenance. Roads Service should not suffer a reduced budget purely because an unsuccessful claim has been made. One of the reasons for compensation is to reinforce (financially) the fact that a compensator has made errors. Roads Service currently suffers financially irrespective of whether there have been errors, or negligence. There is even less reason for preventing private sector successful litigants from recovering their costs.

    (c)  From a purely practical point of view it is important that the funding test becomes more stringent than at present, for the reasons already given. It is suggested that the test ought to take the factors cited above at paragraph 2.2 into account.

    (d)  It is also important that a level playing field is created whereby the assisted party must be obliged to inform the other party of the degree of legal aid granted. Currently, the Defendant has no entitlement to any information about the nature of the legal aid certificate—limited or full. At present the defendant is only told that legal aid has been granted, but will not know whether the legal aid certificate is limited to, for example, obtaining a report from the consulting engineer, which would mean that the party is not "legally assisted" in relation to the costs associated with the hearing itself. There is also a degree of confusion as to whether a limited legal aid certificate provides protection against an order for costs.


  6.1   The Department welcomes the efforts to create a level-playing field, as it has suffered in the past from unnecessary time and money being expended on successfully defended claims. A more robust test could be helpful, as would the practical focus which would be brought by the introduction of the defendant's ability to recover costs from the Legal Fund itself. It is interesting to note that "tripping claims" made up nearly 10 per cent of all County Court proceedings in Belfast Recorders Court during the month of May 1998, according to the Civil Justice Reform Group's Interim Report, "Review of the Civil Justice System in Northern Ireland" at Appendix B. Clearly, this type of litigation is significant to the general public, and in particular to the legal aid system, which supports the bulk of the claims.

7 March 2001

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