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Lord Campbell of Alloway: My Lords, before the noble Baroness sits down, I should like to say from these Back-Benches how greatly her contribution is appreciated. I have, in my professional life, acted for and against unions. She speaks with a wealth of accurate expertise. It is not for her to apologise for her contribution or those other lay contributions; it is for the lawyers to apologise for monopolising so many of your Lordships' debates.
Lord Byron: My Lords, fat cats, thin cats, and possibly even Lord Chancellors, need their dinner, so I shall not detain noble Lords for long. I shall apologise, since I have been invited to do so, by saying that I am yet another lawyer. I am a practising solicitor. I could have some interest in this matter, but the firm of which I am a partner does almost no legal aid work. So I am unlikely to be a loser. Whether I shall be a gainer depends, I suppose, upon whether conditional fee arrangements make their way into the commercial field.
I shall focus on just one or two points. There are some advantages in speaking at the end of the debate. I can tear up my notes, because everything that I was going to say has already been said by those much more eloquent than I am. There are three tests by which the proposals need to be addressed: are they necessary? Are they workable? Are they wise?
With regard to necessity, I believe that the noble and learned Lord has made out the case that something needs to be done to provide better access to the courts. But the case for sweeping away a whole tranche of legal aid has not been made out. As I understand it, the areas of legal aid which might be replaced are among the least burdensome on the Legal Aid Fund. Indeed, personal injury actions nearly wash their face. It is inevitable that some residual form of legal aid will be required, for many of the reasons so eloquently expressed by the noble Baroness, Lady Kennedy. I echo the suggestion made by the noble Viscount, Lord Bledisloe, that cases could perhaps be started on legal aid and then transferred at the appropriate time to a conditional fee agreement. That would overcome some of the hurdles relating to the start-up costs of which we have heard so
Are the arrangements workable? To get the scheme off the ground there will need to be underwriters prepared to provide an after-the-event insurance product in a wide range of possible cases. It was suggested by my noble friend Lady Oppenheim-Barnes, who I see is not in her place, that impoverished plaintiffs could avoid insuring in the knowledge that they would not be able to meet an adverse costs order. As I understand it, that is not the case, because solicitors financing and supporting plaintiffs would, under normal common law rules, be regarded as maintaining the action, and would themselves become liable for those costs. Insurance is necessary, whether the plaintiff has means or not.
It is difficult to be confident that there will be no substantial gaps in the insurance which can be offered. We have experience only in relation to personal injury where the vast majority of cases are successful and almost all defendants are insured. I do not believe that the present system has been operating sufficiently long for real assessments to be made of the way in which it is working. In relation to general claims for damages, even if we take 75 per cent. as a reasonable threshold expectation of success, there is a 25 per cent. risk of failure and a consequent adverse cost award. If in a substantial case the costs run to £40,000 there would be a possible premium of about £10,000. That is aside from the uplift element which a solicitor would be able to charge if the case were successful.
Practical problems abound. I wish to raise five points for the noble and learned Lord to answer not necessarily tonight but for future thought. First, is it intended that the Law Society's voluntary cap of 25 per cent. of damages should be made statutory? If not, does the noble and learned Lord the Lord Chancellor consider that there should be any restriction on the percentage of damages taken as a conditional fee?
Secondly, does the noble and learned Lord foresee any likely increase in awards of damages to compensate for the impact of conditional fees either as a result of legislation or as a judicial response to the operation of such fees? Thirdly, has there been any research into the attitude of litigants to conditional fee arrangements, including those who fail to get a solicitor to act under such an agreement? If so, with what results?
Fourthly, can the noble and learned Lord give any figures for the projected savings from the legal aid budget if all damages claims have to be brought by means of a conditional fee agreement? Fifthly, do the Government have any plans to address the problem of the inability of low income households to find the insurance premium and disbursements required to get a case off the ground?
So much for practicality. What about questions of policy? Are we right to make lawyers partners in a commercial joint venture with their clients? Perhaps I may give a couple of examples from the coalface of litigation. It has been said that expert evidence should be seen to be the independent product of the expert, uninfluenced as to formal content by the exigencies of
I turn to documents and the obligation to give discovery. I doubt whether there are many people, even including those in the legal profession, who understand the pressures put on a solicitor in the middle of a case who is handed a new file of documents which he has never previously seen; documents which will almost certainly be fatal to the case which he is running, but documents which nevertheless must be disclosed. As the system stands, judges as well as lawyers can be reasonably confident that those whose responsibility it is will ensure that the documents are disclosed. But once that confidence is shaken, one will be striking at the heart of the administration of justice as we know it.
It is said that the system is working well and that conditional fee agreements have not given rise to any of those difficulties. However, a few years is a short time. I suspect that all those lawyers who were brought up in a system in which they were denied any financial interest will, when they are given a financial interest, be doubly careful to ensure scrupulous behaviour. But situations can change over time and generations. A different generation may grow up with different expectations and interests and with a more commercial approach and we must be a little more cautious before rushing completely and wholeheartedly down that road.
Is the National Health Service seen as basically a means of keeping doctors in business? It can hardly be denied that it does keep them in business and without it, there would be fewer doctors and much less access to medical care. Society is happy to pay for that for we all fear that one day, we may grow old. It is perhaps fortunate that we do not dwell too often on the possibility that we may need to use the courts. I am sure that those who do are grateful that they are able to receive legal aid and no doubt disappointed when they cannot. Whatever else may be said about the proposal, it is patently wrong to suggest that it will promote access to justice for the really needy rather than, perhaps, to those who lie in the middle.
There are difficulties and with respect, I urge caution. I believe that we are on the right track and there is undoubtedly a will for these reforms. But I suggest that we are rushing a bit and I urge some caution on the noble and learned Lord.
Earl Russell: My Lords, the noble Baroness, Lady Dean of Thornton-le-Fylde, said that all the non-lawyers who had taken part in the debate were Baronesses. I do not know whether she took me for a lawyer or a Baroness but in either case, I thank her for the compliment but must in modesty disclaim it.
I must apologise also for intervening in the gap. When I had to decide whether to put my name on the list today, I had to calculate whether I should arrive in time for today's debate. I calculated that I did not have a 75 per cent. chance of success. I arrived in time due to the chances of a long Statement, a pupil who had not done his essay and finding a taxi within 30 seconds. That was not a 75 per cent. chance of success but here I am.
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