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The Lord Chancellor: My Lords, I am sorry if I did not make my position clear. My position is this. I wish to devise a scheme which is applicable both to plaintiffs and defendants and therefore I do not intend to impose a cap of this kind as part of a regulatory mechanism. I thought I had made that clear; I am sorry if I have not done so.

Lord Irvine of Lairg: My Lords, I am much obliged. I, however, for my part, do not agree that Section 58 of the Act does no more than permit the noble and learned Lord the Lord Chancellor to prescribe the level of uplift and so does not permit, or impliedly precludes, a cap being imposed on the amount of the uplift. There is no bar, in my view, on his prescribing such a cap. The issue is whether he should do so.

I believe that both prongs of the argument of the noble and learned Lord, Lord Ackner, are well founded. The issue is the protection of the consumer. Why not, I ask, in the interests of the consumer, introduce the scheme on one or other of the bases proposed by the noble and learned Lord, Lord Ackner? My preference is for a 20 per cent. uplift and then to monitor the use of conditional fee agreements in practice to see whether they turn out to be widely used in practice and have succeeded in their objective, with the consumer subject to no more than a 20 per cent. uplift.

I predict that to begin with a maximum possible uplift of 100 per cent. will be seen in future years to have sold the consumer short. Even at this late stage I urge the noble and learned Lord on the Woolsack to revert to his earlier judgment of what the maximum uplift should be.

Lord Hacking: My Lords, before the noble Lord sits down I shall be grateful if he will assist me and the House by explaining how he proposes that capping should work when the assistance is provided to the defendant rather than to the plaintiff.

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Lord Irvine of Lairg: My Lords, I confess that I was addressing the situation of a plaintiff who gains a recovery and not of a defendant. However, I have made plain that my strong preference is for a 20 per cent. uplift, full stop.

4 p.m.

Lord Rawlinson of Ewell: My Lords, I felt so strongly about many provisions in the 1990 Act that, for the first time in 40 years in one House or the other, I was driven to vote against the party of which I have been a member all my life. I oppose this particular order because I cannot bring myself to accept any scheme which seeks to identify the reward of the lawyer with the result of the litigation. Parliament may have passed the 1990 Act, but that does not reconcile me to the principle. Any step which changes the English concept of the role of the lawyer is a very serious matter and one greatly to be deplored.

Many jokes are made about lawyers, but throughout the history of this country and the history of the common law the conduct of lawyers, standing for justice and principle, is something of which the country can and should be proud. Anything which alters that great tradition of the lawyer's role and his relationship with the client and the court is very serious. This is another step on the road to Americanising the English practice of the law, which is being accomplished step by step. It was commenced by a former government under a former Prime Minister who was bewitched by all things American, and whose voice is being heard again in the land engaged in the modern tradition of retired Conservative Prime Ministers of rubbishing the policies of the governments of their successors.

When I talk about the Americanising of the English law, I make it plain that I am a member of the American Bar Association. For nearly a quarter of a century I have been a Fellow of the American College of Trial Lawyers. I have great ties of family and blood with America. However, I do not admire the manner in which the Americans practise law, not only in the criminal law.

Noble Lords may have some experience of the practice of American criminal law, having seen it on their television sets recently. In the great debates five years ago about whether we should amalgamate the two professions it was said that there would be three lawyers—a QC, a junior and a solicitor—defending people. In the O.J. Simpson case I have seen six different advocates presenting the prosecution, under a prosecutor who has no command of the laws of evidence and is wholly unable to examine without asking leading questions. The conduct of the defence lawyers, the television coverage, the absence of any principles of contempt of court and the lack of authority of the judge, which is the most important aspect of all, present an idea of how the United States system can end up. That is a criminal case, but it illustrates the different attitude to the practice of law, which is founded on identification between the client and the advocate, the intimate association between the two, the planning done together, the interviewing of witnesses, the coaching of witnesses, the scheming, the PR activities and, above all, the reward identified with the result in civil cases.

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Compare that with the English system. The English advocate is not even allowed to interview witnesses, let alone coach or rehearse them. In the proper tradition (of course it is abused) of the English Bar and the English solicitor, counsel and solicitor are officers of justice with a duty to the court as well as to the client. The identification of the lawyer with the success of the suit by giving him a contingency interest at once alters the concept of independence and of integrity, and in this order "conditional" is the same as "contingency".

It will be said, "This is just a minor alteration. Why are you making such a great fuss? This is pursuant to what Parliament has approved. The effect will be to cut the legal aid bill", as I have no doubt the Treasury masters have told my noble and learned friend the Lord Chancellor he must. It is said that it concerns only certain cases and the civil field. Who believes that it will stop there?

If one is going to provide legal assistance and representation to people of little or no means there has always been a choice. One is the road of legal aid—publicly paid representation. It is an expensive road, but one which this country decided upon. It is a rather noble road. There has always been the other road—giving the lawyers a cut of the cake to persuade them to take on cases. That is the difference. An order of this kind, which is the first of many which will come before your Lordships' House, alters the whole concept of the practice of the law. We shall not be able to stop it now. It will progress step by step. It will be said that it saves the great legal aid bill.

There is the comical attitude of editors who say that the proposal is opposed by lawyers and that it is a very good scheme. Those editors are briefed by the legal equivalent of the "teenage scribblers" of the memorable phrase of my noble friend Lord Lawson. However, they are blind to what will ultimately happen. Inevitably there will come a time when there is the new tort of privacy and conditional fees will be available in cases of libel. Then there will be some squealing by the press as opposed to the Bar.

I shall not go into the detail, which has been dealt with by my noble and learned friend Lord Ackner. What does the uplift fee really mean? Of course it is linked to the amount of damages. First my noble and learned friend the Lord Chancellor decided on 10 per cent. Why did he do that? He had the advice and backing of his department. However, he has been driven to a 20 per cent. uplift, and then to a 100 per cent. uplift which, as The Times put it, is high enough to tempt lawyers to take on cases. What a noble prospect!

All that this order does is gingerly, gradually and piecemeal destroy the English concept of the practice of law and replace it with the system from across the Atlantic.

This is a matter of principle. It may be said that the principle has already been decided by Parliament, but in my 40 years in Parliament I have seen it change its mind sometimes. For that reason I oppose this order and shall support the amendment. That is the least that can be done to prevent a step which I feel takes the English law along a very dirty, ugly road.

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4.10 p.m.

Lord Nicholls of Birkenhead: My Lords, I apprehend that the only issue before your Lordships' House concerns the terms of the draft order and the draft regulations. There are those, including Members of your Lordships' House, who have been and still are much troubled about the whole concept of conditional fees. They are concerned that whatever the care with which it is watched, this new plant—it is not indigenous to England and Wales and has not previously been grown here—will inevitably become out of control rather like rhododendrons on the Welsh hillsides. That issue is not before your Lordships, the principle having been approved by Parliament.

As I understand it, the chief concern of those who are critical of the draft order is the possibility of abuse by lawyers. They are worried that high street solicitors acting for plaintiffs in personal injury cases will charge excessive uplifts in fees not justified by the comparatively modest risks involved in acting on a conditional fee basis in such work. They are concerned that there is an unequal bargaining position between lawyer and client.

Some risk of abuse must be inherent in any new scheme such as this. However, I suggest that one should not underestimate the extent today of real competition for work among high street solicitors. House sellers and buyers shop around. That has had a marked effect on the fees which solicitors can charge for conveyancing in the domestic field; likewise, charges for making wills. I can see no good reason why high street solicitors should not find themselves competing for this new type of work. That will serve a useful purpose in curbing any tendency to charge excessive uplifts in fees and take excessive profit margins.

When solicitors were first given rights of audience in the higher courts, there were those who feared that the established legal order would be shaken to its very foundations—likewise, some 20 years ago, when solicitors' scale fees for conveyancing were abolished, and, much later, when licensed conveyancers were introduced. But what has happened? The Royal Courts of Justice building stands as sturdily as ever. The Land Registry has not been struck by lightning.

There are real risks involved in the scheme, but I suggest that they are worth taking in pursuit of increasing access to justice. In the nature of things it is not a scheme which can be introduced experimentally on a piecemeal basis for a few months in one or two selected locations like a new form of credit card. As I understand it—I shall be corrected if I am wrong—the noble and learned Lord the Lord Chancellor has indicated, or will indicate, that he intends to monitor the progress of the scheme. On that footing I am content. I suggest that the scheme is worth trying, and that we should get on with it without further delay.

4.15 p.m.

Lord Mishcon: My Lords, perhaps I may copy the beginning of the extremely lucid speech of the noble and learned Lord, Lord Ackner, by stating the points I wish to make and the reasons why I make them. The points raised by the noble and learned Lord numbered three. I apologise for enlarging upon that number; mine number four.

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First, it is my duty, out of sheer courtesy, to say to the noble and learned Lord the Lord Chancellor that so far as I know and have heard the legal profession much appreciates the fact that he indulged in extensive consultation before coming forward with the order. I wish to acknowledge that factor, especially in view of other remarks I shall make.

The second matter I wish to acknowledge is the disturbing gap in our system of adjudication of the law and of rights as between subjects. The poor man is covered by legal aid; the wealthy man has his bank balance and bank manager. All of us who stand in between find that our legal system is so expensive in practice that we cannot enter the gates of the courts let alone the doorways of the Savoy Hotel.

The conclusion must be that there is something wrong with our system. The answer to that must be one of the main considerations of the noble and learned Lord, Lord Woolf, at this moment. The answer might lie in more conciliation than arbitration and alternative processes. We ought to be looking closely at the way in which these heavy bills arise. I belong to a profession which is responsible for such heavy bills; I admit it at once. But that does not necessarily mean that we have to embark on a course which is contrary to a tradition which goes back over the centuries, as has been said.

Thirdly, the noble and learned Lord, Lord Nicholls, was absolutely right. I refer to a phrase used, I believe, by the noble and learned Lord, Lord Ackner. The question of whether we go ahead with the scheme is water under the bridge with regard to the principle.

However, my fourth point arises out of something the noble and learned Lord the Lord Chancellor said, at which I trembled a little. If I remember correctly, and I took a note, he used the words "with a view to extending". I find those words very ominous. They are my excuse for going a little into the rights and wrongs and results of such a scheme. I plead with the noble and learned Lord. Let this scheme not be extended beyond personal injuries and liquidation matters without a great deal of thought and much experience. It is strange—is it not?—that an issue that was contrary to public policy yesterday seems to be at least partially in accordance with public policy today. There is every reason for considering whether that transformation has taken place.

I am a lawyer. I act for a client who asks my advice as to whether he has a case. He makes clear that he has not much money. When trying to assess his chances of success in the opinion that I give, I hope that I would be honest without having at the back of my mind that in a moment I am to discuss with him an agreement in which the question of the chances of success will regulate the surplus fee I intend to charge and discuss with him. I ask this rhetorical question: can one get a better example of conflict of interest at the commencement of my interviewing the client?

What happens in the middle of a case? I have forecast to that client that I believe he has a bad case and, therefore, please, my uplift is 100 per cent. If we embark on further litigation, apart from personal injuries, I reach the stage of discovery. I find that the other side has disclosed a document which sends the chances of my winning the case rocketing. That often happens. I am unfortunate

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enough on discovery to find documents that make my case worse, but that is a personal experience. Some of my professional colleagues are more fortunate. What is my duty then? Is it to summon the client and say, "No, the uplift we had in our original agreement was X per cent., but I can now tell you that the chances are greater. I ought therefore to alter it"? However, subsequently I receive a devastating blow. I interview a witness who, I have been told, is lucid and clear in favour of my client. I take a statement from him and find that he is a lamentable witness. I wonder whether I dare call him. Do I then summon my client back again and say, "Well, I told you we were in a far better position after discovery. I must now tell you, having interviewed this witness whom you told me about, that I am afraid that our chances have plunged. In those circumstances, shall we take out this agreement and come to another percentage?"

This proposal is supposed to be for the protection of the client. However, it is just not practical to say, "If you believe that I have unjustly charged you too high a percentage because of your chances in the case you have the right to go before the taxing master. He will adjudicate whether I have wrongly forecast your chances of success." I have a veneration for taxing masters, but they know nothing about judging the chances of success in litigation. I doubt whether some of the taxing masters, bless them, have ever conducted a piece of litigation in all their lives.


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