House of Lords - Explanatory Note
Access to Justice Bill [H.L.] - continued          House of Lords

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E. IMMUNITY AND INDEMNITY (Part VI - clauses 68-74)

SUMMARY

242. This part contains provisions that change the circumstances in which costs can be awarded against justices of the peace, justices' clerks and their assistants, General Commissioners of income tax and their clerks, and coroners.

243. The purpose of these provisions is to provide justices of the peace, General Commissioners of income tax and coroners, in the exercise of their duty, with statutory protection against personal liability for costs as a result of legal proceedings.

244. The Bill will:

  • provide General Commissioners of income tax with immunity against legal action in respect of any act or omission arising out of the execution of their duties.

  • extend the immunity against legal action currently enjoyed by justices of the peace and justices' clerks to justices' clerks' assistants exercising the function of a single justice.

  • provide justices of the peace, justices' clerks and their assistants, and General Commissioners of income tax, statutory immunity against being ordered to pay costs in legal proceedings about the exercise of their judicial functions, except where bad faith is proved.

  • provide for the costs of other parties in such cases, which would have been awarded against a judicial officer but for the immunity described above, to be paid by the Lord Chancellor, or in the case of General Commissioners in Scotland, the Secretary of State.

  • provide for justices of the peace, justices' clerks and their assistants, General Commissioners of income tax and their clerks, and coroners, to be indemnified for any costs that they reasonably incur in legal proceedings arising out of the exercise of their judicial functions.

245. The provisions relating to General Commissioners and their clerks extend to the United Kingdom. The Bill makes equivalent provisions for Northern Ireland in respect of immunity from costs for justices and their clerks, and indemnity for coroners.

BACKGROUND

246. There are just over 30,000 lay magistrates who are volunteers and are unpaid and - 92 stipendiary magistrates who are qualified lawyers. Justices' clerks are qualified lawyers appointed by magistrates courts committees. They give advice to Justices about law practice or procedure; and they and their assistants may do things which are authorised to be done by a single justice of the peace under the provisions of sections 45(1) and 45(2) of the Justices of the Peace Act 1997

247. General Commissioners are unpaid lay volunteers appointed by the Lord Chancellor, (or the Secretary of State in Scotland). There are approximately 3,800 General Commissioners and they sit in Divisions throughout the United Kingdom to determine appeals and other matters in respect of decisions of the Inland Revenue on a variety of tax matters. General Commissioners appoint a clerk in each Division who provides administrative support to the Commissioners, arranges appeal meetings and advises the Commissioners on points of law and procedure.

248. Coroners are appointed by local authorities in England and Wales. Most are part-time appointments of appropriately qualified lawyers or doctors. In accordance with the Coroners Act 1988, they conduct inquests into deaths (and treasure finds) in prescribed circumstances and deal with certain related matters.

249. At present, like all other judges, justices of the peace, and justices' clerks exercising the functions of a single justice, cannot be sued in relation to anything they say or decide when exercising their judicial functions. The Bill will extend this protection to General Commissioners of income tax and justices' clerks' assistants.

250. However, there are certain circumstances in which judicial officers may become involved in legal proceedings, not brought against them directly, but nonetheless arising out of their judicial decisions. These include judicial review proceedings, where the judicial officer appears or is represented as a respondent; appeals to the High Court by way of case stated; and applications to the High Court made by or under the authority of the Attorney General for an inquest or a fresh inquest. At present, justices of the peace, justices' clerks and their assistants, General Commissioners and their clerks, and coroners, may personally be ordered to pay the costs of other parties in these proceedings.

251. When this happens, under current legislation, justices of the peace, justices' clerks and their assistants may be indemnified, and in certain circumstances must be indemnified, against costs from the funds of their magistrates' courts committee. There is currently no equivalent statutory protection for General Commissioners and their clerks or coroners. In practice, General Commissioners may be indemnified on a non-statutory basis from central Government funds (the formal position is that they are treated in the same way as members of non-departmental public bodies). Similarly, coroners may in practice be indemnified by their paying local authority.

252. The Bill provides that in future justices of the peace, justices' clerks and their assistants, and General Commissioners should have immunity from being ordered to pay another party's costs in any legal proceedings arising out of the exercise of their judicial functions; except where it is proved that they acted in bad faith, or they are themselves subject to criminal proceedings. The Bill also provides that where the court could have made a costs order but is prevented from doing so, it can instead order the costs of a party to be paid by the Lord Chancellor (or the Secretary of State in the case of General Commissioners in Scotland).

253. The Bill also includes provisions relating to the indemnification of judicial officers for costs reasonably incurred in legal proceedings arising out of the exercise of their judicial functions. In the case of those judicial officers who will be given immunity against costs orders, this indemnity will mainly be relevant in respect of their own costs. The Bill:

  • amends the existing provision for magistrates' courts committees to indemnify justices of the peace, justices' clerks and their assistants, to provide that they shall not be indemnified if they are proved to have acted in bad faith.

  • provides for General Commissioners and their clerks to be indemnified by the Lord Chancellor (or, in Scotland, the Secretary of State) against costs reasonably incurred, unless it is proved that they acted in bad faith.

  • provides for coroners to be indemnified by their paying local authority against costs reasonably incurred.

254. In the case of General Commissioners' clerks and coroners, the indemnity will be relevant to costs orders as well other costs incurred. Coroners, who are funded by local authorities, will be indemnified, rather than given immunity, in order to avoid the need to make separate new funding arrangements to meet other parties' costs.

255. The provisions in this part of the Bill follow the consultation paper Liability of judicial officers and others for costs in court proceedings, Lord Chancellor's Department, August 1996.

COMMENTARY

Justices and their clerks

256. Clause 68: Justices and clerks: immunity from costs. This clause inserts a new provision in the Justices of the Peace Act 1997 (JPA 1997) to give immunity against costs orders to justices of the peace in proceedings arising from the execution of their duty. It also gives immunity to justices' clerks and those appointed to assist a justices' clerk in proceedings which arise from their exercise, under the provisions of sections 45(1) and 45(2) respectively of the JPA 1997, of a function which could be exercised by a single justice of the peace. It excludes proceedings in which bad faith is proved and makes clear that the immunity does not apply where the justice, clerk or assistant himself is the subject of criminal proceedings. The new section also provides for the court to order the payment by the Lord Chancellor of the costs of any party to proceedings against a justice of the peace or clerk where, but for the provisions of the clause, it would order the costs to be paid by the justice or clerk. It provides for the Lord Chancellor to make regulations covering how the court is to exercise the power to award costs and how those costs are to be determined

257. Under the provisions of section 54 of the JPA 1997, a justice or justices' clerk may be indemnified by their magistrates' courts committee against any costs order and in certain circumstances must be indemnified. Nevertheless the possibility remains that an individual could be faced with a costs order. This clause will remove the fear of costs orders by putting the position beyond doubt.

258. Clause 69: Justices and clerks: indemnity. This clause amends section 54 of the JPA 1997, so that justices of the peace, justices' clerks and their assistants may be indemnified by the magistrates' courts committee against costs orders in any proceedings, not only proceedings taken against them. It also removes the discretion to grant indemnity in non-criminal matters where bad faith is proved.

259. Despite the new immunity which will be provided by clause 68, there will be circumstances in which indemnification continues to be appropriate. These are: where a justice or clerk incurs costs other than costs ordered to be paid by him; where costs have been incurred before the new immunity takes effect; and where costs are incurred by a justices' clerk or assistant which are not covered by the immunity provisions (that is where the proceedings do not arise from the exercise of a function of a single justice).

260. Clause 70: Assistant justices' clerks: immunity from action. This clause amends sections 51 and 52 of the JPA 1997 in order to extend the immunity against action which is given to justices of the peace and justices' clerks to those appointed to assist a justices' clerk. Justices' clerks' assistants may, like justices' clerks, perform functions which are authorised to be performed by a single justice of the peace. The amendment made by this clause will provide consistency of treatment between them.

General Commissioners of income tax and their clerks

261. Clause 71: General Commissioners: immunity from action. This clause provides General Commissioners with immunity from action in respect of any act or omission in the execution of their duty. It brings the position of General Commissioners into line with that of justices.

262. Clause 72: General Commissioners: immunity from costs and expenses. This clause provide General Commissioners of income tax with immunity against costs orders in cases arising from the execution of their duties, unless bad faith is proved. It also provides for the court to order the payment by the Lord Chancellor, or in Scotland, the Secretary of State, the costs of any party to proceedings against a General Commissioner where, but for the provisions of the clause, it would order the costs to be paid by the General Commissioner. It provides for the Lord Chancellor, or in Scotland, the Secretary of State, to make regulations covering how the court is to exercise the power to award costs and how those costs are to be determined.

263. Clause 73: General Commissioners and clerks: indemnity. This clause provides for General Commissioners and their clerks to be indemnified in relation to costs or expenses which they reasonably incur, or are ordered to pay, in legal proceedings arising out of the execution of their duties, unless they are proved to have acted in bad faith. General Commissioners' clerks are not covered by the immunity against costs orders provided by clause 72. General Commissioners may have to be indemnified in respect of their own costs. The Lord Chancellor will indemnify the General Commissioners and their clerks, except in Scotland where it will be the Secretary of State.

Coroners

264. Clause 74: Indemnity. This clause inserts a new section in the Coroners Act 1988 to require the councils responsible for appointing coroners to indemnify them against certain costs which coroners, in their official capacity, may reasonably incur, or which they are ordered to pay, in the course of legal proceedings.

EFFECTS OF THE BILL ON PUBLIC SECTOR FINANCES

Funding of legal services

265. Part I of the Bill provides the framework for the reform of legal aid in England and Wales, and the establishment and development of two new schemes. There are no specific implications for total public expenditure emanating directly from the provisions of this Part. The intention is to gain control of what is now the civil legal aid budget, and to improve value for money over time. The general expectation is that, within the overall budget, savings generated in one area would be reapplied to other priorities.

266. During the first few years of the new scheme, there will be a transitional period. Bills for cases started under the existing legal aid scheme will continue to be received for payment, while new cases will increasingly be covered by contracts. Most legal aid is paid at the end of a case, whereas many contracts are likely to provide a regular stream of payment for on-going work. This creates the potential for a short term and temporary rise in annual expenditure, during the period when earlier contractual payments for new cases coincide with the payment of older bills for pre-existing cases. The intention is to phase the implementation of contracts in a way that seeks to contain this effect within the overall budgets set.

267. The development by the Legal Services Commission of common core quality standards for the CLS, on which local authorities and other funders can rely, may lead to small net savings by reducing duplication in this area. The Community Legal Service Partnerships should enable better use of resources by removing the need for each funder to develop a separate assessment of need, and by encouraging funders to target resources in a complementary way.

268. The changes to the legal aid scheme in Scotland are expected to cost a maximum of £45,000 per year.

269. There are no direct public spending implications from the changes to conditional fees.

Rights of audience etc.

Abolition of ACLEC

270. This will produce savings of the order of £750,000 per year. The Lord Chancellor's Advisory Committee on Legal Education and Conduct spent £884,660 in 1997-98 and received grants of public money totalling £939,613. In view of the excess of receipts over payments, £33,486 was deducted from ACLEC's grant in aid, so that the net cost of the Committee to the taxpayer in 1997-98 was £906,127. The largest items of expenditure were fees for the Committee's members of £101,075; staff costs of £362,385; and rent and rates of £235,772. Following the abolition of the Committee, it will be replaced by the Legal Services Consultative Panel. The Panel will be smaller than ACLEC and will not have its own staff or accommodation; instead its secretariat will be provided by the Lord Chancellor's Department. The Panel is expected to cost no more than £250,000 per year to run.

Rights of audience

271. The extension of rights of audience to Crown Prosecutors and other employed lawyers will in principle allow the Crown Prosecution Service, the Serious Fraud Office and other Government Departments to be represented in the higher courts by their own employees, instead of having to instruct and pay barristers in private practice. This is likely to be most significant in practice in relation to the Crown Prosecution Service, where Crown Prosecutors will gradually be introduced to the higher courts. To the extent that Crown Prosecutors are diverted from their existing work, however, others will have to do that work, so there unlikely to be any quantifiable savings in the short to medium term. In the longer term, the availability of employed barristers capable of appearing in the Crown Court will exercise a downward pressure on costs but it is not possible to calculate precise savings.

Appeals and court procedure

272. The proposals on civil appeals will not require an increase in public spending. Their aim is to reduce the workload of the Court of Appeal by drawing away cases which, by their nature, do not require the attention of the country's most senior judiciary. At the same time, by introducing a principle that, unless there are exceptional circumstances, there can only be one appeal of a case, the overall number of appeals will diminish. The proposal to allow the Court of Appeal to make more use of one and two judge courts will enable it to ensure the resources devoted to a case are in proportion to the nature of that case. This more efficient use of resources will result in savings in court time which in the short term will be used to address the existing backlog of appeals. The proposals will also ensure that the Court of Appeal is in a position to deal with the expected increase in cases arising from the implementation of the Human Rights Act.

273. The proposals relating to the High Court will also lead to the more efficient use of judicial resources.

274. The proposal on reporting Children Act proceedings may lead to small savings for litigants and the courts, by removing the need to apply for a separate injunction.

Magistrates

275. The provisions relating to the organisation, jurisdiction and management of magistrates' courts, and the unification of the stipendiary bench, are part of a wider programme of reforms, intended to increase the effectiveness and efficiency of magistrates' courts. As a whole, this programme is expected to lead to improved efficiency equivalent to savings of about £14 million per year. About a third of this is attributable to the provisions in the Bill. (Central Government funds 80% of the cost of magistrates' courts, and local government the other 20%).

276. The provisions relating to warrants are intended to enhance the credibility of fines and community sentences, by improving the effectiveness of their enforcement. This involves a transfer of resources from the police to magistrates' courts. The Government intends to consult individual MCCs about the additional resources they require to implement the transfer, but no significant change in overall public expenditure on this function is expected. Over time, it is hoped to achieve an increase in the proportion of fines collected of at least 5%. (In 1996-97, the courts imposed over one million fines, worth £144 million in total. In the same period, unpaid fines to the value of £52 million, mostly imposed in previous years, had to be written off).

277. The transfer of collecting and accounting responsibilities to justices' chief executives may also improve efficiency, and lead to the more timely payment of fines and fees revenue into the Exchequer.

Immunity and indemnity

Justices of the Peace, Justices Clerks and their Assistants

278. There should be no overall impact on public spending Expenditure which, under current arrangements, would be made from magistrates courts committees funds will in future be met centrally.

General Commissioners of Income Tax

279. There should be no changes in total public expenditure as a result of these clauses. Any additional monies paid out under these clauses will be found from the existing financial provision.

Coroners

280. Provision of indemnification for coroners is estimated to increase local government spending by about £50,000 per year, partly offset by costs already met by local councils.

EFFECTS OF THE BILL ON PUBLIC SECTOR MANPOWER

Funding of legal services

281. There is likely to be a temporary increase in public sector manpower during the transitional period, while the Legal Services Commission is responsible both for developing and managing contracts under the new scheme, and for assessing and paying bills for outstanding cases under the existing legal aid scheme.

282. In the longer term, it is estimated that the Commission will need broadly the same number of staff to administer the new schemes as the Legal Aid Board needed to run the old, although the nature of the work and responsibilities will change significantly over time.

283. In due course, there will need to be a transfer of resources from the Court Service to the Legal Services Commission to support the transfer of responsibility for funding representation in Crown Court cases. Initially this should mean no change in public sector manpower, but there should be efficiency savings over time as case-by-case payment is replaced by contracts.

284. The abolition of prospective means testing for representation in criminal cases should reduce magistrates' courts manpower requirements by the equivalent of about 260 posts across some 500 courts. It is likely that most of these staff will be redeployed to help reduce delays in the courts.

285. The introduction of salaried defenders could result in a small increase in public sector employment.

Rights of audience etc.

286. The Lord Chancellor's Advisory Committee on Legal Education and Conduct (ACLEC) has a secretariat of eight staff. Three of these are career civil servants who will be redeployed in the civil service following the committee's abolition. The secretariat for the new the Legal Services Consultative Panel will be provided by the Lord Chancellor's Department. The abolition of the Committee will therefore lead to a net decrease in public service manpower of five staff.

287. There are seventeen members of ACLEC, fifteen of whom are paid fees for their work on the committee. These posts will all be abolished. The number of members of the new Legal Services Consultative Panel will not be specified in legislation, in order to allow for flexibility, but it is envisaged that the number will not exceed eleven.

Appeals and court procedure

288. It is not expected that these proposals will require any additional manpower. These proposals are directed to making better use of existing resources by ensuring that only meritorious appeals are heard and that they are dealt with at an appropriate level in the civil justice system.

Magistrates

289. The provisions relating to the organisation and management of magistrates' courts are not likely to have a significant impact on public sector manpower.

290. The impact on public sector manpower of the provisions relating to warrants will depend on the extent to which magistrates' courts committees decide to employ civilian enforcement officers or make contractual arrangements with private enforcement agencies.

Immunity and indemnity

291. There are no implications for public sector manpower.

IMPACT ON BUSINESSES, CHARITIES & THE VOLUNTARY SECTOR

Funding of legal services

292. The reform of legal aid will not have a significant impact on business as a whole, or on charity. It will, of course, affect lawyers in private practice. As a result of the numerous decisions that will be made over time about priorities and the award of contracts, some lawyers will gain additional work and income, and others will lose. It is impossible to forecast the overall impact, or foresee any particular pattern. In any event, these impacts arise as a result of the Commission's activities as a purchaser of services, not from regulatory action by Government.

293. The move to contracting as the principal means of procuring services will benefit providers, because contracts will generally provide for earlier payment and a more predictable income stream than the current system, making it easier for contractors to plan and manage their businesses or organisations.

294. The voluntary sector as a whole will benefit from the reform, because it is intended to give greater priority to funding not-for-profit advice agencies. As a first step, the Lord Chancellor announced in October 1998 that a minimum of £20 million per annum will be set aside for not-for-profit agencies from the budget for legally-aided advice and assistance.

295. The co-ordination of funding and development of kitemarking, on the basis of common quality criteria, should release capacity in local legal services provided by the voluntary sector which would otherwise be engaged in satisfying separate funders with different criteria.

Conditional fee agreements

296. The provisions about conditional fees will change the way in which the award of legal costs between private litigants is regulated. A regulatory impact assessment is available from the Lord Chancellor's Department (Selborne House 54/60 Victoria Street London SW1E 6QW (210 8874)).

297. Briefly, the effect of the proposal to make conditional fee uplifts and related insurance premiums recoverable from the losing party in costs (see paragraphs 31 and 122 above) will be to redistribute the risks of litigation from the litigant to his or her lawyers and the losing party. The change should not in itself increase or reduce costs overall.

298. The provision to allow conditional fees in some family cases is a deregulatory measure. In theory, it has the potential to increase lawyers' income for allowing cases to proceed that would not otherwise have been affordable. This effect is expected to be small.

Rights of audience etc.

299. The opening up of rights of audience in the higher courts to solicitors and employed lawyers, and the authorisation of the Bar Council and the Institute of Legal Executives to grant rights to conduct litigation to their members, should lead to greater competition in the provision of legal services. This will benefit of business, charities and the voluntary sector as well as to the general public. Those non-legal businesses which have legal departments will have the opportunity to be represented by their employed lawyers in the higher courts should they choose, rather than instructing barristers in private practice. This may potentially lead to savings for certain businesses, although in practice the effect is likely to be slight. Charities and voluntary sector bodies which employ lawyers will similarly be able to call on the services of those lawyers as advocates in the higher courts when appropriate.

Magistrates

300. These provisions, which relate to the organisation and management of the courts, will have no specific impact on business, charities or the voluntary sector, except in so far as the provisions on warrants create an improved business opportunity for private enforcement firms, which will be better placed to compete against employed civilian enforcement officers for MCCs' enforcement work.

Appeals and court procedure; Immunity and indemnity

301. There is no impact.

COMMENCEMENT

Funding of legal services

302. The provisions of Part I of the Bill (The Legal Services Commission) will come into force on a day or days appointed by the Lord Chancellor by order. It is the Government's current intention to bring all or as many as is possible of the provisions into force on 1 January 2000.

303. The provisions of Part II (Legal Aid in Scotland) will come into force two months after Royal Assent.

304. Clause 27 and 28 (Conditional fee agreements; recovery of insurance premiums) will come into force on a day appointed by the Lord Chancellor by order. It is the Government's intention to bring this provision into force in October 1999, or as soon as possible thereafter.

Rights of audience etc.

305. The provisions of clauses 29-37 (The Legal Services Consultative Panel; Rights of audience and rights to conduct litigation) will be brought into force on a day or days appointed by the Lord Chancellor by order. It is the Government's intention to bring this provision into force in October 1999, or as soon as possible thereafter.

Appeals and court procedure

306. Part IV of the Bill will come into force two months after Royal Assent.

Magistrates

307. The following provisions of Part V will be brought into force on a day or days appointed by the Lord Chancellor by order:

  • clause 53 (Justices not to sit on committals for sentence).

  • clause 54 (Jurisdiction over offences outside area). It is intended that this change will take effect in January 2000.

  • clause 57 (Greater London Magistrates' Courts' Authority). It is expected that the Authority will be established in April 2001 (with a period of shadow running prior to commencement).

  • clauses 60-62 (role and functions of justices' chief executives). It is expected that these changes will be brought into effect on 1 April 2000.

  • clauses 63-67 (Execution of warrants). It is intended that magistrates' courts should assume full responsibility for the enforcement of financial warrants on 1 October 2000. The transfer of responsibility for the enforcement of arrest warrants in connection with non-financial penalties could be brought into effect at the same time, or a later date.

308. The other provisions of Part V (Territorial organisation; unification and renaming of stipendiary bench; areas and constitution of magistrates' courts committees outside Greater London; standard goods and services; qualification of justices' chief executives) will come into force two months after Royal Assent.

Immunity and indemnity

309. Clauses 68-73 (Justices of the Peace, Justices Clerks and their Assistants; General Commissioners of Income Tax and their Clerks) will be brought into force on a day or days appointed by the Lord Chancellor by order. It is the Government's current intention to bring these provisions into force as soon as possible after the Bill is enacted, once the necessary secondary legislation has been made.

310. Clause 74 (Coroners) will come into force two months after Royal Assent.

EUROPEAN CONVENTION ON HUMAN RIGHTS

311. Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). The statement has to be made before second reading. On 25 November 1998, the Lord Chancellor made the following statement:

    In my view, the provisions of the Access to Justice Bill [H.L.] are compatible with the Convention rights.

ANNEX A

COMMUNITY LEGAL SERVICE

Eligibility, Financial Conditions and Costs Rules

1.     A number of changes are planned to the financial conditions for publicly-funded help from the Community Legal Service fund, as compared to the conditions for civil legal aid. The timing of these changes will depend on how quickly the new systems can be developed to bring spending under control. The necessary regulation-making powers are contained in clauses 8, 10 and 11 of the Bill. This annex sets out the changes to the existing position which the Government intends to make in due course under those powers.

ELIGIBILITY FOR HELP

2.     Eligibility for advice and assistance is presently limited to those who would qualify for full legal aid without a contribution. We intend to change this so that in future, eligibility for advice and assistance and more substantial help are aligned at the same level. Both will be available free for people on passporting benefits (Income Support, Family Credit, Disability Working Allowance and income-based Job Seekers' Allowance) or whose disposable income and capital are below the relevant limit; and available subject to contributions for people between the free and upper limits.

3.     This change reflects the Government's intention to give greater priority to advice and assistance, especially in social welfare issues and from the not-for-profit advice sector, rather than litigation. It will also remove the anomaly created by the present eligibility limits, where some people are driven to apply for full legal aid (for which they are more likely to be eligible), when advice and assistance, which is generally cheaper, would have met the needs of the case.

FINANCIAL CONDITIONS

4.     Financial conditions are intended to target the neediest cases by requiring people to pay what they can reasonably afford, but not more, towards the cost of their cases; and by generating receipts to increase the overall amount of help that the system can afford to give. Several changes are planned.

Graduated contributory scales

5.     At the moment, all assisted parties asked for contributions for full legal aid pay one-third of their disposable income above the free limit, every month for the lifetime of the case. In future, it is proposed to introduce a graduated scale for calculating contributions, with those nearer to the free limit being asked for a smaller proportion of their income, and those with more being asked for more. Disposable income will be banded to decide the level of contribution, and the proportion for each income band will apply only to income in that band. This change will better reflect ability to pay.

Capital allowance

6.     At present, a contribution from capital assets towards the cost of a case can be required at two stages.

  • An assisted person has to contribute any disposable capital above a free limit of £3,000 at the start of the case. The property in dispute, and the first £100,000 of equity value that the assisted person owns in his or her home, are discounted when calculating disposable capital. People with disposable capital in excess of £6,000 are generally ineligible for legal aid.

  • If, at the end of a successful case, the Legal Aid Board needs to recover any outstanding costs that have not been recovered from the other side, a statutory charge applies to the property in dispute, including the full equity value of the family home if that was in dispute; but not including maintenance payments and the first £2,500 won in a matrimonial case.

    The assisted person's liability to contribute towards the cost of his or her case therefore depends on the nature of the case and whether or not home was in dispute.

7.     In future, there will be a single allowance (initially £3,000) covering both capital contributions and the statutory charge. Any unused allowance from the start of the case can be carried forward to defray the statutory charge. This will replace the £2,500 allowance in matrimonial cases, and produce a simpler and more coherent system with the same rules applying to everyone.

Equity value of the assisted person's home

8.     In addition, the full equity value of the home will in future be counted towards the calculation of disposable capital for the purpose of assessing contributions, with no initial exemption beyond the general £3,000 allowance. The first £100,000 will continue to be discounted for the purpose of assessing eligibility. But the assisted person will not be required to make a contribution from capital tied up in equity at the start of the case. It will only become payable at the end of the case, when the amount of any outstanding costs is known. Furthermore, as with the existing statutory charge, the Legal Services Commission will have discretion to postpone enforcing payment until the next time the home is sold.

9.     The entire equity value of the home in dispute is already liable to the statutory charge now. The position in these cases will not change significantly. This change will mainly effect people who own equity in a home which is not in dispute. They may be required to pay significantly more towards the cost of their case than now. But the ability to postpone enforcement will ensure that no-one is forced to lose their home in order to repay costs incurred by the CLS fund. This change is intended to provide more equitable treatment between people whose capital is held in different forms.

Statutory charge enforcement

10.     Where the statutory charge applies to a home, its enforcement is usually postponed until the next time the house is sold. Interest runs on the money due to the Board, but at beneficial rates: 8% simple interest, compared with around 12-14% APR on typical personal loans at the moment. Furthermore, unlike a second mortgage, there are no ongoing repayments (although it is open to an assisted person to repay the charge by instalments).

11.     In future, where the statutory charge is postponed, a realistic rate of interest will be charged. This change will help place assisted people in a position closer to that faced by private clients.

COSTS RULES

12.     The Government's view is that the rules governing costs between the parties in a case involving public funding should seek to ensure that people with worthwhile cases are not unreasonably deterred by the fear of costs they cannot afford; but that, so far as possible, they face a similar costs discipline as other litigants. The Government intends to make two changes to the costs rules under the Legal Aid Act 1988.

Costs protection for assisted parties

13.     Unlike the general position on costs, the court is currently required to consider the means of both parties, before ordering costs against an unsuccessful litigant in receipt of legal aid. Furthermore, the assisted party's home cannot be taken into account in assessing his or her means, or be subject to any enforcement process. In practice, costs are rarely awarded against litigants on legal aid.

14.     In future, assisted parties will retain most of their protection against paying inter partes costs. But where courts are considering costs orders against assisted parties, the value of their homes will be counted towards their assets and the statutory bar on enforcing against homes will be lifted. This limited change reflects the fact that most assisted parties are unlikely to be able to pay costs even if an order is made against them; but that who own their homes may have enough capital to pay costs. It also parallels the change to contributions from capital.

The costs position of unassisted parties

15.     Because costs are not normally awarded against assisted parties who lose their case, their successful opponents hardly ever get their costs back. But if a successful unassisted party who was defending a case can satisfy the court that he or she would otherwise suffer "severe financial hardship", the court can order their costs to be paid from the legal aid fund. In future this test will be relaxed to mere "financial hardship". Also, the procedure for seeking costs orders against an assisted person or the CLS fund will be simplified. The courts will consider costs immediately at the end of the case, instead of adjourning, because the parties will be asked to supply evidence of their means at the time of the trial.

16.     These changes will improve the position of successful unassisted opponents, which is a major cause of complaint against the existing scheme. The new funding assessment (see clause 9), which will replace the existing merits test, is also designed to reduce the number of weak cases that unassisted parties have to contest.

ANNEX B

EXECUTION OF WARRANTS

Warrants to be covered by an Order made under Clause 63

It is intended that an order made under Clause 63 should cover the following types of warrant:

    Non-Financial penalties

  • arrest warrants issued for the purpose of securing the attendance at court of a person who has breached the terms of one of a number of 'community orders'.

  • probation order: Criminal Justice Act 1991, Sch 2, para 2(1)(b).

  • community service order: Criminal Justice Act 1991, Sch 2, para 2(1)(b).

  • combination order*: Criminal Justice Act 1991, Sch 2, para 2(1)(b).

  • curfew order: Criminal Justice Act 1991, Sch 2, para 2(1)(b).

  • drug treatment and testing order: Criminal Justice Act 1991, Sch 2, para 2(1)(b), as amended by s.64(5) of the Crime and Disorder Act 1998.

  • supervision order: Children and Young Persons Act 1969, s.16(2).

  • suspended sentence supervision order: Powers of Criminal Courts Act 1973, s.27(1).

  • attendance centre order: Criminal Justice Act 1982, s.19(1)).

  • supervision part of secure training order: Criminal Justice and Public Order Act 1994 s.4(1).

  • detention and training order: Crime and Disorder Act 1998, s.77(1).

  • action plan order*: Crime and Disorder Act 1998, Sch 5, para 4(2).

  • reparation order*: Crime and Disorder Act 1998, Sch 5, para 4(2).

  • Warrants of distress are issued for the purpose of levying a sum adjudged to be paid. They allow the person executing the warrant to seize a fine defaulter's money or goods in lieu of the outstanding amount.

  • A combination order is an order requiring an offender to be both under the supervision of a probation officer and to perform unpaid work.

  • An action plan order requires an offender to comply with a three month action plan. Such a plan will impose certain requirements as to an offender's behaviour and whereabouts for the period of that order.

  • A reparation order requires a young person to make reparation to a victim of an offence or to the community at large.

 
 
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Prepared: 3 december 1998