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Lord Carlisle of Bucklow: My Lords, I think that the noble and learned Lord the Lord Chancellor is right in supporting conditional fee agreements. I believe that they can work perfectly well in many actions. I suspect--I am not sure whether rightly or wrongly--that many of those who appear before the Criminal Injuries Compensation Board, where there is no legal aid, probably have some form of conditional fee arrangements with their clients--in Scotland, at least.

I am surprised at the confidence with which the noble and learned Lord the Lord Chancellor says that he feels we can do away entirely with legal aid. Indeed, to some extent, as I understand it, by his own amendment, Amendment No. 55, he has attempted to meet this concern by saying that in individual cases he may waive those cases in the schedule for which legal aid is not available. I should have thought that there was a strong argument for retaining, in the short term at least, the possibility of people being allowed to have their cases funded by legal aid where a conditional fee agreement is found not to be practical.

However, I rise to ask a question, notice of which I informally gave to the noble and learned Lord, Lord Falconer, before the debate commenced today. I do not understand the relationship between what is now proposed and what I believe is the present green-form system. As I understand it, at present, anybody may go to a solicitor--the noble Lord, Lord Clinton-Davis, will correct me if I am wrong--and obtain a certain degree or period of advice which is dealt with on a green form and paid for accordingly through the Legal Aid Fund. Does that introductory advice apply to someone who is inquiring whether he has an action which would not be funded under the community legal service because it is an action for personal injury? In other words, if an individual goes into a firm of solicitors saying, "I had an accident at work yesterday and I want to know whether I have a claim for negligence against my employer for an unsafe system of work"--it may, as the noble and learned Lord, Lord Archer, said, in many cases involve a lot of exploratory work--is the solicitor entitled to any form of remuneration for answering the request and giving that advice?

Clearly, as I understand it, if the advice is, "Yes, you do have an action", the solicitor may decide whether or not he will take on that action on a conditional fee basis. He may or may not choose to do so. However, what if he says, "I am sorry; I've looked into the law and, in fact, you have no action"? Does that mean that the whole of the advice must be given free of charge or does the present provision for his remuneration through the green-form system apply although the potential action is

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one which is excluded, under the Bill, from the community legal service? I should be grateful if the noble and learned Lord who replies would try to elucidate the answer to my question.

Lord Clinton-Davis: My Lords, the noble Lord, Lord Carlisle, has asked an interesting and pertinent question. I do not know the answer to it. I suspect that it will not be possible to obtain advice under the green form system. I shall listen with interest, as he will, to whichever of my noble and learned friends replies.

I simply do not know what sort of contumely will befall me as a result of having the effrontery to put down certain amendments when my noble and learned friend--if it is he--comes to reply. I had better declare my interest. I do not say this with pride, and it is partly due to Brussels: I have not actually dealt with a legal aid case since 1984. I suppose I am with a fat cat firm of lawyers as many people are in this House. I remember and I keep in touch. I hear what the smaller firms, high street firms--call them what one will--have to say. They are not fat cats. By and large they are people who are very able and who have offered to provide a service in the interests of the community. One of my former partners came from a very large firm of City solicitors. Today he is certainly no fat cat. He is doing a wonderful job, as so many are.

It is all very well for my noble and learned friend, having had a very lucrative practice at the Bar himself--

The Lord Chancellor: Never!

Lord Clinton-Davis: Never? I believe that he has, and deservedly so. He was a very good barrister. It is no good pretending that the world is as he would like it to be. These people are dedicated and they should not be treated with disrespect as my noble and learned friend resorts to treating them frequently during the course of this debate. He says that he has a high regard for these people, but that does not always appear to be the case when he rises to his feet.

I turn to my own amendments which are designed to probe. I make that very clear. Amendments Nos. 51 and 52 are designed to see what my noble and learned friend will do if in fact he is faced by serious problems affecting personal injury cases. With whom is he going to consult about that, and where is he going to get his information? How do we know that he is actually looking at this matter with the intention of securing equity and justice? Or is he going to act on advice? This is a matter where my noble and learned friend needs to be closely involved with the practitioners in this area, and also with those such as the Legal Action Group and other organisations to which my noble and learned friend Lord Archer referred earlier.

We are saying here that legal aid should not be withdrawn from personal injury cases unless my noble and learned friend is sure--not on the basis of optimism--that adequate alternative arrangements are in place. There is a doubt about the efficacy of insurance arrangements. There is a doubt at the present time as regards some of the matters on which my noble and

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learned friend has formed an optimistic view. I have said some harsh things to my noble and learned friend and he has to me. I do not grumble. As he put it to me, this is a place where each one of us should take hard knocks. That is fair enough.

As regards conditional fees, I hope that my noble and learned friend will be absolutely right. I hope that all the anxieties that I and others have expressed will come to nothing. But can we be sure that that is the case? Unless he is prepared to take the view that it is right and proper at the time to remove what has been a protection for a very long period of time, I fear that it will be a judgment that we shall all regret.

Conditional fees should be used wherever they are appropriate. Cases which merit public funding, but for which conditional fees are impractical, should continue to be eligible for support. The legal services commission should not be swamped by applications.

We come to the question of compelling reasons. It may be that it is not the best form of words. I did not like "special reasons" for other reasons, as I said in Committee. However, I think there must be some way of making a judgment about this matter. I have tried to define a compelling reason in Amendment No. 62 which states:

    "A compelling reason for the purposes of sub-paragraph (1)(a) or (c) above exists where--

    (a) the case is one which a private client of sufficient means would be likely to wish to pursue or defend;
    (b) it is not practical for the case to be conducted on a conditional fee basis;
    (c) (in the case of sub-paragraph (1)(c) the circumstances are not such that a reasonably prudent person would have insured against the risk of a dispute arising")".

I refer to a private client of sufficient but not super-abundant means. I believe that this is not an unreasonable request. I hope that I may obtain a rather more reasonable response from my noble and learned friend on this occasion.

10.15 p.m.

Baroness Wilcox: My Lords, I support Amendment No. 53 which is a cautious approach to conditional fees. I can see why the noble and learned Lord the Lord Chancellor is in a hurry to take personal injury claims out of the legal aid budget. On the one hand, he has the interests of consumers in mind. He wants to revolutionise the way legal services are delivered. That is the point of the Bill and it is an admirable one. To do that he must free up money from a budget that at present leaves him little room for manoeuvre. Personal injury seems an obvious choice. An alternative method of funding has been developing over the past few years and it could well be a viable alternative for all or some people. In addition, conditional fees are much fairer to the winning opponent who will be able to recover costs.

On the other hand, the noble and learned Lord may remember that in previous debates I have expressed concern on behalf of consumers that we do not yet know enough about how conditional fees operate in practice. Saying that they have been running for three years does

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not tell the whole story. Over those three years there has been no monitoring of how they work from the point of view of clients. We still do not know how people manage to pay the upfront costs of experts and other expenses. We still do not know if good cases are being turned down purely because they are a little too complex or clients present special difficulties; for example, they are not articulate or have problems with the English language.

In the past the noble and learned Lord has listened carefully to the concerns of consumer groups about damages being eroded by the cost of insurance premiums and success fees. He helpfully proposes in this Bill to make them both recoverable from a losing opponent. But that seems to me yet another reason to take a measured approach. Would it not be better to let the new arrangements bed down for a year or two while his department monitors conditional fees, as I know it is planning to do? In the meantime, the Bill as amended would still allow personal injury cases to be turned down on a case by case basis provided the decision maker is confident that in a particular case a conditional fee is available. In that way a picture can be built up of cases that are particularly suited to conditional fees and those that are not. If that picture is distorted by lawyers cherry picking the easy cases for conditional fees, I shall certainly support measures the Government take to discourage that. But it is as well to discover and deal with cherry picking while an alternative is still available for those rejected for the wrong reasons.

I support conditional fees in theory. Properly implemented they can increase choice and access to justice for consumers. I also support many of the reforms the noble and learned Lord is trying to bring about with the money that will be saved from legal aid. But when we are withdrawing a safety net from poor people who have been injured--as we are here--we must be sure that we are not asking them to jump from a great height into a new net that is full of holes.

Therefore I urge the noble and learned Lord to accept this amendment of my noble friend Lord Kingsland with a review when the new arrangements have been properly tested through monitoring. It is my hope that during that time money for his other reforms will begin to be freed up as conditional fees find a market based not on compulsion but on real consumer choice.

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