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Lord Roberts of Conwy: My Lords, in view of what the House has heard this afternoon, will the Minister give an assurance that he will consider all these applications for exemption and where there is an excellent case, such as the one we have dealt with this afternoon, he will give it his special attention?

Lord Haskel: My Lords, I can assure the noble Lord that the Department of Trade and Industry is looking carefully at these applications. Whatever encouragement is needed will be given.

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House of Lords: Reform

2.59 p.m.

Lord Hooson asked Her Majesty's Government:

    Whether they envisage that the future role of the House of Lords will be changed, having regard to the impending changes in the United Kingdom's constitutional framework and her future relationship with the European Union; and when they intend presenting their views on this matter to encourage public debate.

The Lord Privy Seal (Lord Richard): My Lords, it is unquestionable that this House plays an important and valuable role as a revising chamber and makes an important contribution to the legislative and political process. We envisage that this will continue after reform.

Lord Hooson: My Lords, is the noble Lord the Lord Privy Seal aware that the Government are giving the impression that they have embarked upon a journey with little idea of their destination? The Lord Privy Seal's Answer today reinforces that. In order to dispel this unfortunate impression, would it not be better for the Government to publish a preliminary paper on the possible enlarged function of this House in the future? That surely will govern how the House is to be constituted. Alternatively, are we to look forward to a future where this House as a second Chamber will depend entirely on patronage?

Lord Richard: My Lords, the answer to the noble Lord's last point is no. One should not look forward to a future where this House will depend upon patronage. I am happy to tell the noble Lord that the Labour Party manifesto was distinctly clear on the subject.

As regards the remainder of his questions, I do not think that we are on a blind journey. The Government are considering all the options, as one would expect a responsible government to do. When we have considered the options, we shall publish our conclusions. I hope that there will then be ample opportunity for public consultation.

Viscount Cranborne: My Lords, I welcome the last statement by the noble Lord the Leader of the House. I do not think that it was of great surprise to anyone who has followed his remarks in the past on this important question. However, he knows, as does the House, that the history of the reform of your Lordships' House has always foundered on the difficulty of deciding the form of stage two of the reform after the abolition of the rights of hereditary Peers. That is the easy part and constitutes stage one. Can the noble Lord the Leader of the House agree that the best guarantee of achieving the objective he has enunciated today is for any reform to take place simultaneously: that is, stage two simultaneously with stage one? We all recognise the temptation for any powerful government, in particular a powerful Prime Minister, to ride roughshod over the legitimate concerns of specific interest groups because

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of his majority in the other place. I imagine that above all this week students will readily understand the force of that argument.

Lord Richard: My Lords, the picture that the noble Viscount paints of this poor, defenceless House in which about 500 Conservative Peers shrink in the face of a Government who have a majority in the other place is somewhat fanciful.

I am delighted to welcome the noble Viscount's statement that the abolition of the hereditary Peers' right to sit and vote is easy. It will be easy if the Opposition accept that in principle. I am delighted to note that both the noble Viscount and his leader in another place, Mr. Hague, seem to be indicating that it is something they are now prepared to accept.

As to whether one has stage one first and stage two afterwards, I commend the noble Viscount to read the Labour Party manifesto.

Lord Bruce of Donington: My Lords, is the noble Lord the Lord Privy Seal aware that there is a growing volume of opinion in the United Kingdom that the role of the House of Lords, as distinct from its composition, needs but minuscule changes compared with the drastic changes that are required in the structure, powers and institutions of the European Union? Is he further aware that on present form and indications it is likely that your Lordships' House will be in existence long after the European Union?

Lord Richard: My Lords, resignedly, and somewhat wearily, I congratulate my noble friend on managing to bring the affairs of Europe into any single question. No doubt he will have ample opportunity to express his views in future, as he has had ample opportunity to do in the past--opportunities which he has taken, and no doubt will take in the future--but, with great respect, not on this Question.

The Earl of Lauderdale: My Lords, will the Minister assure the House that there is no intention to modify the powers of this House to veto any amendment on quinquennial action thereby delaying another general election?

Lord Richard: My Lords, at present I am not proposing any variation whatsoever in the powers of this House. Speaking for myself, I find it inconceivable that any government even, if I may say so, one composed of representatives of the noble Earl's party, would wish to remove that part from our constitution.

Lord Chalfont: My Lords, can the noble Lord the Lord Privy Seal at least say whether the Government expect to publish their views or intentions on the future composition of this House in the long term before any legislation is introduced into Parliament concerning the status of hereditary Peers?

Lord Richard: My Lords, I repeat what I said. The way in which the Government are approaching the issue is set out in the Labour Party manifesto which I have

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no doubt the noble Lord has read. We shall conduct our work inside the Government with, I hope, due deliberate speed. When we have done so, we shall publish our conclusions.

Lord Rodgers of Quarry Bank: My Lords, I hope that the noble Lord the Lord Privy Seal will appreciate that he cannot rely for ever upon the terms of the Labour Party manifesto. Your Lordships' House will expect to see a development of those ideas very soon. Not all of us share the argument that stage one must be accompanied by stage two. However, my noble friend Lord Hooson made an important point which I hope the noble Lord the Lord Privy Seal will accept. When we have stage one--and the sooner the better; I hope preceded by a Green Paper for full discussion in this House at least before the Summer Recess--the Government must clearly point to the direction of stage two. It would be inadequate to go through the first stage of reform without knowing what the final destination might be.

Lord Richard: My Lords, I am well aware that that is the view held by the noble Lord and his party--indeed, it is a view which I have heard often expressed.

Lord Taylor of Gryfe: My Lords, the Question refers to constitutional changes. Can I direct the Minister's attention to the major constitutional change that will take place in May of next year? Is my noble friend aware that from that date Scottish Questions will no longer be in order in the House of Commons? Can we have some assurance that similar strictures will not be applied in the House of Lords in these new constitutional arrangements?

Lord Richard: My Lords, I am aware of no rules of order in your Lordships' House which would prevent a noble Lord from putting down such Question.

Legal Aid

3.8 p.m.

The Lord Chancellor (Lord Irvine of Lairg): My Lords, with the leave of the House I should like to make a Statement on improving access to justice.

At present the legal aid system is failing us all. It is failing the many millions of people on modest incomes who do not qualify for legal aid and who simply cannot contemplate going to law because of the potential legal costs if they lose. It is failing people on legal aid, because the Government cannot direct money to those who need it most and to those cases where there is a public interest in seeing justice done. Finally, it is failing the taxpayer who year on year is being asked to pay more and more, and yet can rarely get help from legal aid when it is actually needed.

But even though legal aid is costing us all more and more with costs running away ahead of inflation, it is helping fewer and fewer people each year. It is, therefore, our intention to modernise the way in which civil cases are paid for. We want a system of civil justice

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which is there for everyone when they need it, not just for the rich or for the very poor. We intend to transform the legal aid scheme so that we ensure we get good value for money from those lawyers who are paid from legal aid; and so that we spend taxpayers' money on those who need it most and on those areas where it can do most good.

Achieving all of our reforms will require the approval of Parliament through new primary legislation. But even using existing powers we can start the process of change. It is this first stage that I wish to concentrate on today.

The publication of this consultation paper marks the first stage of our modernisation of legal aid and legal services. When I announced the programme of reform at the Solicitors Annual Conference in October last year I said,

    "it is essential that the details [of our proposals] are right ... We shall be consulting widely and openly".

That is precisely what we have been doing in the four months since October and will continue to do for a further two months of the formal consultation period. This is a listening Government and we are listening to views on these proposals--and we will continue to do so. We have had detailed discussions with the legal profession and with many interest groups. More are planned. Their comments have contributed to the development of these proposals. But we will not confine our listening to the legal profession, because our aim is justice for all.

The consultation paper invites views on a proposal that will allow the majority of people in England and Wales to secure access to justice. We propose to allow conditional fee agreements (no win no fee agreements) to be used in all except family and criminal cases.

Conditional fees offer a new way for people to bring their cases. Lawyers share the risk of litigation with the client by agreeing to work without a fee if the case is lost. If the lawyer is successful he or she is entitled to claim a success fee in addition to his normal fees. Although the maximum success fee can be up to 100 per cent., normally it is 50 per cent. or less. In nearly all cases the lawyers also voluntarily limit the success fee to no more than 25 per cent. of the damages in any event. Conditional fees have been available since 1995 for a limited range of proceedings--personal injury, insolvency and human rights cases and they are working well.

Over 30,000 people have taken advantage of this approach to bring personal injury claims. Many of them would have been unable to afford to pursue their claims at all without conditional fees--people only just above the legal aid limit, people who are far from well off. They are the great majority of the population who are in work--with families, mortgages, savings, or other assets, which mean that they are not eligible for legal aid, but who cannot contemplate the open-ended

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commitment of meeting lawyers' bills. Only the very rich can face the thought of lawyers' bills without any financial fears and even they must worry sometimes. To continue to restrict narrowly the use of these agreements is to deny an avenue of access to justice to the majority of the people in the country.

The consultation paper also seeks views on any changes to the current law and practice that might improve the operation and use of conditional fees, for example by allowing the success fee and the insurance premium to be recoverable from the losing party.

Secondly, the paper invites views on the Government's plans to begin modernising legal aid. Over the past seven years, the cost of civil and family legal aid has tripled to £671 million. The average cost has grown from £1,442 to £2,684--53 per cent. above inflation. The number of acts of help funded in 1996-97 fell by about 39,000. Taxpayers are paying more and getting less. That cannot be right and it cannot continue.

We need a modern legal aid system in which only cases which cannot reasonably be funded in any other way and which have the necessary priority are backed by the taxpayer. It has never been our intention to abolish civil legal aid, as has been wrongly claimed. We want to focus taxpayers' money where it is most needed and can do most good: on social welfare matters--employment; housing; debt; state benefits; and actions against officialdom and bureaucracy.

To achieve this clear focus on social welfare issues, the Government therefore intend that, in future, most money or damages claims will be funded through conditional fees. Consequently, they propose to transfer most money and damages claims currently supported by legal aid to conditional fees.

However, as I told the House on 9th December, we do not intend to remove legal aid from housing cases where very often the main purpose of the action is to achieve a home fit to live in. That is precisely the kind of area to which legal aid ought to be directed. In addition, the ability to challenge public authorities through judicial review is a necessary check on the use of the power of the state, and a positive encouragement to maintain high standards in public administration or by public bodies. The poor must also be able to exercise this right of challenge. Legal aid will remain available for those who qualify. We also believe that legal aid must continue to be available where a person claims to be the victim of wrongdoing by public authorities; for example, the police. Here too, the ability to challenge misdeeds is an encouragement to maintain high standards and proper behaviour to those over whom public bodies exercise authority.

The extension of the availability of conditional fee agreements will provide an alternative means for people to bring most money or damages claims without public funding. Our aim is to create the conditions in which anyone can use conditional fees to bring cases, regardless of their financial status, across the whole range of litigation in which money or damages are the main remedy sought. However, we recognise that

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solicitors' firms may not presently be financially structured to do this, and that the insurance and finance industry needs time to develop products to assist in the expansion of the use of conditional fee agreements. The Government, therefore, propose a measured approach to encouraging this change to take place.

The Government propose to remove from the scope of legal aid most personal injury actions by the middle of this year. Lawyers working in this area have considerable experience in taking cases using conditional fees. Similarly, the insurance industry has developed products with premiums which in most cases are £155 or less. The Government will be working with the insurance and banking industries to help them develop more and still better products to allow everyone, regardless of their financial standing, to bring cases using conditional fees. This combination of the experience of lawyers in this area of litigation together with developed insurance products is sufficient to allow these cases to be alternatively financed through conditional fee agreements.

In addition, there are certain categories of proceedings which the Government believe no longer have sufficient priority to command continued public funding. It is important that scarce public funds are directed to where help is most needed. The Government are not persuaded that cases which involve, for example, disputes arising from running a business, inheritance, partnerships or trusts meet this criterion. Nor do they believe that taxpayers' money should be used to help neighbouring landowners to settle disagreements over disputed boundaries. In these cases there will be assets at issue which would allow the case to be taken with a conditional fee arrangement. In any case, the issues will generally be too narrow or too specific to deserve the use of public money, when such support means less for other matters of greater public importance. The consultation paper seeks views on the proposals to remove these categories from the scope of legal aid.

The Government have been listening carefully to the comments we have received in relation to medical negligence cases. The Government believe that many lawyers practising in this area need to modernise the way they run their firms, so that they can structure their finances to enable them to take cases on behalf of clients regardless of their financial standing. We accept, however, that this will take time. The Government do not, therefore, propose to remove these cases from the scope of legal aid for the present.

We do, however, intend to do what we can to reduce the high failure rate of these cases. It cannot be right that it is only in as few as 17 per cent. of all the cases that are supported by a legal aid certificate that more than £50 is recovered in damages. Medical negligence cases should be conducted by practitioners who are experienced in this field of litigation. We cannot any longer allow inexperienced practitioners to take cases. I have no doubt that part of the reason that the failure rate is so high is that lawyers take these cases on without the necessary experience. They are, therefore, unable to

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make timely, informed decisions on the merits of a case or whether an offer of settlement is appropriate or reasonable in amount.

It serves no one's interests if cases are brought with little prospect of success--least of all the victims of the alleged negligence. The consultation paper therefore invites views on a proposal to allow only experienced practitioners to be able to take cases on behalf of assisted persons in this field. We propose that the Legal Aid Board should establish contracts only with lawyers of sufficient experience. Anyone who is granted legal aid to pursue a medical negligence case will be required to use a lawyer who holds a contract with the board. We are keen to hear what criteria could be used to establish whether a lawyer is sufficiently experienced to hold a contract to take cases on behalf of those receiving legal aid.

We intend to remove the remaining money or damages claims from the scope of legal aid as experience of conditional fees among lawyers and insurers develops and they become more widely and readily available.

The Government recognise that help will be needed during a transitional period to assist in the change of funding away from legal aid. There may be some extraordinary cases among those categories to be removed which the lawyers may not initially be able to fully support on conditional fees. In time, the Government believe that these cases will be able to be financed solely through conditional fees. Therefore, the Government intend to establish a limited transitional fund. This fund would provide support in cases, for example, where presently few lawyers' firms are structured financially to carry a very high costs case, because they could not afford the risks of losing, or where there are high investigative costs of establishing the merits of the case. We would expect that the need for the fund to support this kind of case will cease because in the long term the Government believe these cases will find lawyers who are financially structured to take them on under conditional fee agreements. The transitional fund would also provide help in those cases which we exclude from legal aid which demonstrate a significant wider public interest. This would allow us to begin to provide assistance in this kind of case under the transitional arrangements ahead of primary legislation to establish a public interest fund. The size of the transitional fund will be set each year according to other priorities for spending legal aid money and the diminishing extent to which the fund is needed.

The Government will develop a modernised legal aid system. We are working towards a system in which we can control expenditure; obtain good value for public money; and target legal aid where there is the greatest need and it will do most good. In future, the Government's main priority for using public money to provide legal services will be to assist those who are excluded from society because they are unable to exercise their legal rights. The Government will achieve this through the legal aid scheme and through the creation of a community legal service.

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This consultation paper sets out the steps towards that goal which can be taken now. By making conditional fee agreements more widely available, targeting civil legal aid on social welfare matters and creating a special fund for public interest cases what we propose will significantly widen access to justice. We welcome responses on the consultation paper and will consider them carefully before we arrive at considered decisions on specific proposals to bring before Parliament.

My Lords, that concludes the Statement.

3.24 p.m.

Lord Henley: My Lords, I offer my thanks to the noble and learned Lord the Lord Chancellor for coming to the House to make this important Statement on legal aid. I offer my apologies to the noble and learned Lord for the fact that it is I who is responding to the Statement rather than my noble friend Lord Kingsland, who is, I think all will agree, better versed to make such a response. My noble friend is, sadly, detained in court today--whether in receipt of legal aid, I do not know.

We share the concerns expressed by the noble and learned Lord about the ever-rising cost of legal aid. We also accept the point he made in the debate on 9th December, that any review of these matters should not be Treasury-led, as I believe he put it on that occasion, though I believe he would accept that when costs are rising in such a manner the Treasury has a perfectly legitimate interest in the size of the bill that the taxpayer is asked to meet.

Turning to the Statement itself, I believe that the noble and learned Lord will recognise that it was his predecessor, my noble and learned friend Lord Mackay of Clashfern, who introduced the concept of "no-win, no-fee"--conditional fee--agreements to increase access to justice, but did so by making it an add-on to the legal aid system. What the noble and learned Lord proposes is different. I would argue that, in proposing conditional fees agreements for personal injury cases, other than medical negligence cases, he is missing the point. Will he confirm that the overall legal aid costs are around £1.6 billion gross, which I understand is £760 million net? Is it not the case that the great bulk of those costs are incurred on criminal and matrimonial legal aid and immigration and that personal injury is the one area of legal aid which is largely self-financing? Can the noble and learned Lord say what the net costs would be without the medical negligence cases?

Is it not the fact, that if civil legal aid is withdrawn from personal injury cases and replaced by no-win, no-fee agreements, little, if any, money will be saved and a complex system will result which will damage the poorest litigants, with little benefit to anyone else?

Litigants will meet an elaborate system involving insurance against costs. We heard the noble and learned Lord talk about the insurance industry developing packages costing at most £155. I imagine that that figure would be greeted with a degree of cynicism by a great many people in that field. If a system is developed which involves insurance against costs in cases which do not succeed, and a reduction in damages, will not the

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poorer litigants, those who would not receive legal aid, be worse off and have less access to the courts? How much does the noble and learned Lord estimate the reductions will be? Will they not be significant, particularly in the more complex personal injury cases, where damages are badly needed?

I wish to put a number of other points to the noble and learned Lord on which I should be grateful for a response. The first relates to his comments about medical negligence. I wonder whether the noble and learned Lord could say a little more about the system that he proposes for licensing practitioners. It seems rather odd. In his Statement he refers to the fact that as few as 17 per cent. of all cases supported by a legal aid certificate recover more than £50 in damages, which he thinks is largely a result of cases being pursued by practitioners with insufficient experience. I should be grateful to know what evidence there is for that statement and what evidence exists to suggest that better figures would be produced if practitioners were licensed by the Legal Aid Board and were therefore more experienced.

My second point relates to some remarks made by the noble and learned Lord, Lord Brightman, and the noble Lord, Lord Goodhart, in the debate on 9th December when they referred to what I understand is described as CLAF, the Contingency Legal Aid Fund. The noble and learned Lord makes no reference to those suggestions. I do not think I need to go into detail here because they are dealt with in considerable detail by the noble Lord, Lord Goodhart, in that debate. The noble and learned Lord makes no mention of them in his Statement. Whether they are dealt with in the consultation paper I do not know because obviously I have not had it long enough to have studied it. But I know that the Bar Council has put further submissions relating to CLAF to the noble and learned Lord. I would be very interested to hear what his considerations are and what his conclusions are likely to be.

The final point I wish to make relates to timing. The noble and learned Lord referred to a consultation lasting some two months. The consultation paper itself refers to a consultation that ends towards the end of April, a little short of two months but very nearly two months.

Can the noble and learned Lord give us an assurance that we will at some point during the course of that two months, or possibly later on, have a full-scale debate in this House on these issues? They are very important issues, as the noble and learned Lord will discover during the course of the brief debate on this Statement. They are issues that need to be addressed in full by the House. I would be most grateful if he could seek through consultations with the usual channels an assurance that these matters will be given full debate at the appropriate time.

3.32 p.m.

Lord Thomas of Gresford: My Lords, I welcome the much less precipitate approach to change that this Statement suggests and that the April date for the commencement of these changes, which was initially announced by the noble and learned Lord the Lord Chancellor, has now been pushed back.

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We also welcome the absence in the Statement of controversial and dubious rhetoric about overpaid legal aid practitioners. These proposals either stand on their merits or they do not. The absence of that rhetoric means that the noble and learned Lord can expect much greater co-operation in consultation with the legal profession.

We are also glad to note that the 75 per cent. merits test has been dropped and does not appear in the Statement or the accompanying document. As we said in the debate on 9th December, it is meaningless to aim at a particular percentage of risk. The percentage has now been replaced by the phrase "strong prospects of success". That is a much more acceptable way of approaching the difficulty that practitioners feel in this area. The practitioner, after all, is faced with an inchoate series of facts by his client upon which he has to put some sort of legal form and decide the proper route to pursue. From his own experience he will get a feel as to whether the ultimate outcome will be successful, but his appreciation of the chances of success will vary as documents are disclosed, reports are revealed and witness statements come forward.

Legal aid has been phased so that conditional certificates are granted first of all, and the various stages of the action do not usually take place until counsel's opinion has been obtained to ensure that the prospects of success are still there. One of the problems of conditional fee agreements is that presumably, once one enters into a conditional fee agreement at the beginning, there is no subsequent point at which one can assess the way in which the case will go.

We also welcome the retention of legal aid in medical negligence cases. I suspect that that is a response to the problems that arise from the cost of initial disbursements for medical experts and the high risk of those cases. It may be that insurance cover is not available or is completely unaffordable. The 17 per cent. success rate to which the noble and learned Lord the Lord Chancellor referred in his Statement should not be thought to reflect upon inadequate advice or inexperience.

These are very difficult cases where, at the present time, the boundaries of liability are being pushed forward. It is very much the case that there are competing views as to whether there has been negligence in this type of case. It is only in this field that the noble and learned Lord has referred to block contracts. I would be glad to know whether he is now saying that block contracts are not suggested as the way to proceed in any other type of personal injury case. The problem with block contracts is that representation is confined to a number of firms. That means that there is liable to grow up a very narrow and tight industry in which there are professional witnesses on both sides appearing in case after case against each other. That cannot be in the interests of the public in the long term.

The retention of legal aid in housing and social welfare cases is also welcome, but what about the public interest cases to which the noble and learned Lord referred on 9th December, in particular issues arising under the Human Rights Act and multi-party actions

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where a large number of people are damaged in drug-related disasters? Is there any prospect that public interest cases of this sort will be funded by legal aid regardless of the injured person's level of income?

So far as concerns housing, a query still remains. It is not much good giving legal aid in housing cases if the small claims limit for housing cases is to be raised from the present £3,000 to £5,000. That means to say that there is no legal representation available if there is a claim that is below that £5,000 limit. The vast majority of cases are below that £5,000 limit. I hope the noble and learned Lord will take into account the representations made to him by practitioners in this field that the limit should be reduced from the current £3,000 in small claims cases to £1,000 so that there can be support for the poorest people who need representation to deal with issues such as enforcing landlords' obligations to repair, and resisting eviction proceedings or damages in housing cases. These are the people who are the most disadvantaged by poor literacy, very often poor English, and sometimes ill-health and mental health problems. For them, the small claims procedure, in which they must present their own case, is far more daunting than for middle income litigants.

Legal aid in personal injury cases, paid for by ordinary people out of taxation, redresses the balance between the most vulnerable groups in society and the insurance companies who are themselves funded by insurance premiums paid by ordinary people. Taxation is one way of getting money, but premiums paid to insurance companies who are on the other side is another. The ordinary people pay for insurance companies to defend to the utmost degree the cases that are brought against them. Conditional fee agreements do have their drawbacks. I would ask the noble and learned Lord the Lord Chancellor what research has been carried out on the out-turn of conditional fee agreements since their inception in 1995. I know of only one firm which has evaluated conditional fee agreements. Of the 450 conditional fee agreements into which it entered it found them to be only marginally profitable. A small firm is liable to be very considerably disadvantaged if conditional fee agreements become the main way in which personal injury cases are brought. That means that those numbers of people, particularly in the areas that I know in Wales, will be very considerably disadvantaged if there is no local firm of solicitors able to take their case.

The noble Lord, Lord Henley, referred to the fact that there is no mention in the Statement, nor so far as I can see in its accompanying document, to the Contingency Legal Aid Fund proposals that the Bar Council has put forward in its report, Access to Justice. It may that the Government remain unpersuaded on that, but I can give the noble Lord, Lord Henley, notice of a debate. I have an Unstarred Question down for next Monday during which I will be going into that subject in some detail. I shall leave further queries on that matter until then, when I hope to see the noble Lord, Lord Henley.

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3.39 p.m.

The Lord Chancellor: My Lords, the current expenditure plans for legal aid are: for 1997-98, £1,553 million, and for 1998-99, £1,602 million. It is not intended, as a result of these changes, either to increase or decrease expenditure on legal aid in real terms; so the object of conditional fees is not to provide savings to the legal aid fund but to focus limited resources on those most in need in the areas of social welfare law. It is estimated that with the extension of conditional fees the following amounts will become available to concentrate on social welfare cases: in 1999-2000, £69 million; and in 2000-2001, £100 million.

The noble Lord, Lord Henley, mentioned personal injury cases. What he must remember is that the eligibility limits are such that the vast majority of people in this country do not qualify for legal aid in respect of personal injury cases. The principal benefit which will flow from conditional fee agreements is the expansion of access to justice which they will bring. I understand that later today the biggest personal injury firm in the country is to make a statement to the effect that, having considered the Government's proposals, it judges that it will significantly expand access to justice and hopes that it will be supported in the interests of the public. I, too, hope that it will not be undermined because of a reluctance on the part of the profession to change.

The noble Lord, Lord Henley, asked about medical negligence cases. A 17 per cent. success rate in cases that go to trial is a very, very poor success rate. What it suggests is that legal aid is being granted in too many cases which are too weak to go forward. The likely reason for this abnormally low success rate is that lawyers of insufficient experience are undertaking these cases. That is why the Legal Aid Board should contract for the expenditure of public money with those of proven expertise in this field. I do not think one does any favours to those who have suffered severe injury for medical negligence, if their case is weak, to drag them through the courts for disappointment at the end of the day. Litigation that fails is a very traumatic experience for those who are involved in it. It is the fact that legal aid is currently being used to support cases which should not go forward.

After I made my Cardiff speech, if I may be a little anecdotal--I know the noble Lord, Lord Thomas of Gresford, will permit me to refer to the Principality-- I heard on the radio a solicitor from the Principality complaining about my proposals, which I had presented in outline. He said that he was very, very experienced in medical negligence cases, that he had brought many of them, that they almost always failed and that he could not possibly have brought them unless backed by legal aid. He was very frank, but that is the point.

I was asked about a conditional legal aid fund. We will be consulting on it and the consultation paper will deal with it. We envisage the possibility, and will consult on the possibility, of even taking powers to that effect. But I remain very sceptical about a conditional legal aid fund for this reason. I think the inevitable tendency would be for the profession to cream off the strong cases under conditional fee agreements and leave the weak cases for a conditional legal aid fund. I require persuasion that a

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conditional legal aid fund could work without outlawing conditional fee agreements, which I do not think anyone is proposing.

The noble Lord, Lord Thomas of Gresford, asked about the 75 per cent. merits test having been dropped. He is right, of course, that to specify an absolute figure is very difficult. He will, from his great experience, be the first to know that lawyers frequently advise without quantifying the prospects of success. They do not actually commit themselves to a prediction. I remain unrepentantly of the view that only really strong cases should go forward.

I also submit that contracting is the way forward, and contracting at fixed prices. Contracting is a means of guaranteeing quality assurance. I can assure your Lordships that nothing would concentrate the mind of a lawyer more wonderfully than if he had to contract at a fixed price. Any incentive to delay, any incentive to spin out a case, since paid on a time basis, would be gone.

3.48 p.m.

Lord Hooson: My Lords, perhaps I may ask the noble and learned Lord one question which relates to medical negligence cases. He referred to the 17 per cent. success rate at trial. My experience--and I did a fair amount of medical negligence cases during my career at the Bar--was that most of them settled. Does he have the statistics for cases that were started off under legal aid and were successful to the extent that they were settled? My experience from appearing for defendants was that one really fought the case if one was fairly certain of success. There is a difference between the cases that are started off and settled and those that are eventually fought. I have no idea what the statistics are, but I would be interested to know.

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