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The Lord Chancellor: My Lords, that is certainly my understanding. The power for the commission to charge for accreditation services where the firm in question seeks accreditation for the purposes of promoting its business outside funded work is in a different category. But it is right to charge for such accreditation services and it will be for the public benefit because the consumer will have the advantage of an assurance of the quality of the service without the taxpayer having to foot the bill for accreditation.

However, wherever the commission seeks to exercise this power within the limits that I have described, it will simply be seeking to recover its costs in providing the service and not to make a profit. I hope that that is a sufficient explanation of the Government's intentions from these provisions.

Moved, That the House do agree with the Commons in their Amendment No. 7.--(The Lord Chancellor.)

On Question, Motion agreed to.

COMMONS AMENDMENT

8

Clause 5, page 4, line 34, leave out ("(7)") and insert ("(7A)")

The Lord Chancellor: My Lords, I have already spoken to this amendment. I beg to move that the House do agree with the Commons in their Amendment No. 8.

14 Jul 1999 : Column 407

Moved, That the House do agree with the Commons in their Amendment No. 8.--(The Lord Chancellor.)

On Question, Motion agreed to.

COMMONS AMENDMENT

9

Clause 6, page 5, line 3, at end insert--


("( ) The Lord Chancellor shall lay before each House of Parliament a copy of every determination under subsection (2)(a).")

The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 9. This amendment inserts a new subsection in Clause 6. Clause 6 deals with the community legal service fund that will replace civil legal aid. The new subsection places a duty on me to inform Parliament whenever I make a determination about the net budget for the community legal service fund.

Clause 6(2)(a) requires me to pay to the legal services commission such sums for funding services as I determine are appropriate. In practice I will determine an annual net budget for the fund each financial year. This figure will be published as part of the Government's spending plans and in supply estimates, and laid before Parliament in that context.

It would also apply should it ever be necessary for me to change my mind during the course of the financial year and make a fresh determination increasing or decreasing the budget. There has been a great deal of debate, both in and outside Parliament, about the danger that an unexpected overspend on the criminal defence service could eat into the community legal service budget.

The Government have explained how, on the one hand, contracting will help achieve better value for the money spent on criminal defence services and make that spending more predictable, while on the other hand precluding large and sudden cuts in CLS spending. However, we have equally made clear that no responsible government could guarantee to ringfence a particular spending programme against any unforeseen contingency. In the interests of transparency, however, I undertook in this House to inform Parliament if I ever made a significant in-year change to the budget for the community legal service fund.

Following a suggestion made by the National Consumer Council, Amendment No. 9 places this undertaking on a statutory footing. It is yet another example of this Government listening and responding to those who, while they are genuinely supportive, and generally supportive, of our reforms, have particular concerns and come forward with sensible suggestions to meet them which we feel able to accept.

Moved, That the House do agree with the Commons in their Amendment No. 9.--(The Lord Chancellor.)

Lord Goodhart: My Lords, as the noble and learned Lord the Lord Chancellor well knows, our great concern--probably our greatest concern in the whole of the Bill--was the fact that increases in the spending on the criminal defence service which are not cost-limited might eat severely into the budget for the community

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legal service which is cost-limited, and the total budget from the Lord Chancellor's Department which is also cost-limited.

That remains a severe worry and this amendment does not do anything of significance to prevent it from happening. Nevertheless, I accept that transparency is desirable in cases of this kind and I welcome the amendment so far as it goes. We are not in a position to press the matter further on the subject of our main worry.

On Question, Motion agreed to.

COMMONS AMENDMENT

10

Clause 9, page 7, line 14, leave out ("requiring the furnishing of information or imposing other") and insert ("imposing")

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their amendment No. 10. This is a minor drafting amendment to Clause 9 which deals with the code for determining applications for funding from the community legal service fund.

Clause 9(5)(b) currently states that the code may include provision requiring applicants for funding to furnish information or impose other conditions. The amendment changes the clause to refer simply to conditions without the specific reference to "information." It is, of course, still the intention that the code will include conditions about furnishing information. However, that is so clearly a requirement for any form of application that it goes without saying.

The main reason for Amendment No. 10 is to remove some superfluous words. The change may also serve to avoid any implication that the clause permits only conditions of a similar nature to conditions about furnishing information--that is to say, conditions relating to the application process. However, the intention is that the code should be able to set prior conditions of a more substantive nature; for example, conditions requiring the applicant to take some other step to resolve his or her problem before seeking funding under the scheme.

In particular, we intend to replicate in the code the requirement currently set out in Section 15(3F) of the Legal Aid Act 1988 to attend a meeting with a mediator before seeking legal representation in private law family proceedings. It may become appropriate in future to establish analogous conditions about other types of case or other forms of alternative dispute resolution.

On the basis of that explanation, I commend Amendment No. 10 to the House.

Moved, That the House do agree with the Commons in their Amendment No. 10.--(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

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COMMONS AMENDMENT

11

Clause 11, page 8, line 37, leave out from ("both,") to end of line 38

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11. I shall speak also to Amendment No. 12.

Amendment No. 11 makes a minor drafting change to shorten Clause 11. It removes some unnecessary words carried over from the Legal Aid Act 1988 about paying contributions from capital by instalments. The existing legal aid regulations about contributions do not make such provision. Under the amended Bill, it would still be possible to provide for instalments, relying on the words in Clause 11(3)(a) about "periodical payments" or "one or more capital sums."

Amendment No. 12 makes another minor drafting change to Clause 11. It clarifies Clause 11(4)(b) which allows interest to be charged on contributions that fall due after the costs to which they relate are incurred. It is not intended that interest should run from the moment any costs are incurred--whether that means costs incurred by the service provider or costs incurred by the commission in making payments on account to the provider under a contract. This provision is intended to allow for the possibility of regulations postponing payment of a capital contribution until after the end of the case, or--although the Government have no plans to do this--requiring contributions from income to continue after the end of the case. The amendment makes this clearer. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 11.--(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

12

Clause 11, page 8, line 43, leave out from ("payment") to ("or") in line 45 and insert ("in respect of the cost of services required by the regulations to be made by him later than the time when the services are provided,")

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 12.

Moved, That the House do agree with the Commons in their Amendment No. 12.--(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

13

Clause 12, page 9, line 22, leave out from beginning to ("shall") in line 25 and insert ("Except in prescribed circumstances, costs ordered against an individual in relation to any proceedings or part of proceedings funded for him")

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 13. I shall speak also to Amendments Nos. 14 to 21, 47 and 48.

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This group of amendments concerns the protection that a person assisted by the community legal service is given from having to meet the costs of the other side should the action that he or she brings with the help of public funds be unsuccessful.

Amendment No. 13 allows the general protection afforded by Clause 12(1) to be disapplied in prescribed circumstances. This power is necessary because, unlike the present legal aid scheme, the new commission will fund cases in a range of different ways. For example, Clause 7(3)(e) empowers the commission to provide help by making a grant or a loan to an individual to enable that person to purchase legal services for himself as a private litigant. Another option proposed by the Legal Aid Board in its draft funding code is to provide limited "litigation support" funding for a case that is principally funded privately--probably under a conditional fee agreement. We believe that it would be wrong if people helped in these ways were entitled to special protection from having to meet their opponents' costs.

Amendment No. 47 makes any regulations disapplying the protection available under Clause 12(1) subject to the affirmative resolution procedure.

Amendments Nos. 13 to 16 also effect drafting changes to make clear that protection against costs applies only while the commission is funding a case. There are circumstances when support from the commission may not be provided until after litigation has commenced when, for example, a person's means change so that he or she becomes financially eligible for assistance. Similarly, support may be withdrawn because the individual is no longer eligible financially or the case no longer passes the requirements of the funding code but the assisted person proceeds with the case nevertheless through some other means of funding. The amendments make clear that costs protection is limited to that part of the proceedings when an individual was receiving help from the scheme.

Amendments Nos. 19 and 20 rephrase and reposition Clause 12(3)(c) which deals with the payment of costs by the legal services commission to the opponent of an assisted person. At present, a court can order the Legal Aid Board to pay an opposing defendant's costs if he or she would otherwise suffer severe financial hardship. Regulations under this Bill will broadly replicate that position, although the Government hope to relax the test to plain financial hardship.

It is necessary to rephrase the paragraph to refer to the "costs incurred" by the opponent rather than those "ordered against" the assisted person. Otherwise the costs that the commission could be ordered to pay would be limited by the protection enjoyed by the assisted person. That anomaly did not arise with the previous drafting of Clause 12(1).

Amendments Nos. 21 and 48 are consequential on the repositioning of Clause 12(3)(c). The latter ensures that regulations under that paragraph remain subject to the affirmative procedure. Amendments Nos. 17 and 18 ensure the consistent use of tenses throughout the clause. I beg to move.

14 Jul 1999 : Column 411

Moved, That the House do agree with the Commons in their Amendment No. 13.--(Lord Falconer of Thoroton.)

On Question, Motion agreed to.


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