Select Committee on Delegated Powers and Deregulation Fifth Report



  Memorandum by the Lord Chancellor's Department

1.  This memorandum identifies provisions for delegated legislation in the Access to Justice Bill 1998. The object of the memorandum is to explain the purpose of the delegated powers taken; describe why the matter is to be left to delegated legislation; and explain the procedure selected for each power and why it has been chosen.

2.  The Access to Justice Bill contains a range of measures for reforming the provision of legal services, both publicly and privately funded, and the courts. It has five main strands:

  • to replace the existing Legal Aid Board and legal aid scheme with a Legal Services Commission to run two new schemes: the Community Legal Service and the Criminal Defence Service;
  • to reform the law on conditional fee agreements between lawyers and their clients, and on rights of audience and rights to conduct litigation;
  • to make changes to the system of appeals in the civil courts;
  • to facilitate various changes to the organisation and management of magistrates' courts, and to extend and clarify the powers of civilians to execute certain warrants; and
  • to provide certain judicial officers with immunity and indemnity against legal action and costs.

3.  More detailed information about the purpose and effect of the provisions in the Bill, and the background to the proposals, can be found in the Explanatory Notes published with the Bill.

Delegated Powers

4.  The Bill contains 31 clauses and 3 Schedules (in all 55 subsections and paragraphs) which contain powers to make orders or regulations by Statutory Instrument. It also contains clauses which clarify or extend the scope of Rules of Court made under existing powers, and clauses which give the Lord Chancellor power to give direction about various matters. The Annex to this memorandum identifies and explains all the relevant clauses.

5.  Most of the orders and regulations made under the powers in this Bill will follow the negative resolution procedure. This is because the Department considers that none of the considerations set out in paragraph 78 of the Second Report of the Joint Committee on Delegated Powers ("the Brooke Report") apply. The Annex identifies the 11 powers clauses where the affirmative resolution procedure is provided.

6.  The Committee may wish to note that a number of clauses effectively re-enact (with minor amendments), or take analogous powers to, existing provisions. This is true, in particular, of many of the powers taken in Part I (The Legal Services Commission), which creates a new framework for the public funding of legal services, replacing the framework established by the Legal Aid Act 1988; and in Part V (Magistrates), which largely amends existing provisions, especially the Justices of the Peace Act 1997. The Annex indicates whether or not the powers taken in each clause are novel.

7.  However, the new Community Legal Service is a fundamentally different scheme from civil legal aid, and this has a number of implications for the approach taken to delegated powers. Before considering the particular powers, the Committee may find the following general discussion helpful.

Legal aid

8.  The existing legal aid scheme consists of three main parts: advice and assistance under Part III of the Legal Aid Act 1988; civil legal aid under Part IV of that Act; and criminal legal aid under Part V.

9.  Part III advice and assistance covers both civil and criminal law. There is power to limit the scope of the scheme by affirmative procedure regulations. The main component of Part III is the Green Form scheme, under which solicitors can provide a limited amount of advice and practical assistance on almost any matter of English law. Also, the police station and magistrates' court duty solicitor schemes are established by regulations under Part III, although they are not mentioned specifically on the face of the Act.

10.  Parts IV and V provide for legal representation in civil and criminal proceedings respectively. Schedule 2 to the Act, which is amendable by affirmative procedure regulations, defines the scope of Part IV in terms of categories of proceedings.

11.  All three parts follow the same basic structure. They are demand-led, in the sense that any lawyer take a case under the scheme for clients who pass the relevant tests of means and merits. The details of the schemes are mostly in secondary legislation.

  • Lawyers' rates of remuneration are defined in negative procedure regulations. The Lord Chancellor is required to consider various statutory factors before making regulations.
  • Financial eligibility limits for advice and assistance and civil legal aid, and contribution levels for civil and criminal legal aid, are all defined in negative procedure regulations. So are the details of the system by which assisted persons must repay costs incurred on their behalf from assets recovered or preserved in the proceedings supported by the scheme.
  • The interests of justice test for criminal legal aid is defined in statute, and applied by the courts.
  • The basic principles of the merits test for civil legal aid are in statute, but the details of their application in practice are worked out in Notes of Guidance published annually by the Legal Aid Board (with further information in guidance issued by the Board to solicitors with delegated powers to take decisions on the Board's behalf).
  • Other negative procedure regulations deal with various procedural matters, such as forms of application, and how to appeal against decisions.

In all, 13 sets of regulations made under the Legal Aid Act are currently extant, with a total of 349 regulations and 24 Schedules.

The Community Legal Service

12.  The current legal aid scheme is essentially reactive. The Board (and other legal aid authorities) are responsible for assessing applications in terms of means and merits, and subsequently for assessing and paying lawyers' bills. The establishment of the Community Legal Service (and, to a lesser extent, of the Criminal defence Service) is intended to reverse this position. The starting point of the Community Legal Service (CLS) scheme is a positive assessment of the need for legal services and of priorities for funding that need. The Legal Services Commission (LSC) will then take active steps to procure the services that will enable it best to meet those priorities. The structures and powers in the Bill are intended to establish a system for identifying priorities and allocating resources in a rational, transparent and accountable way, while providing flexibility to deal with unforeseen demands and to adapt to changing needs and priorities and future developments in the ways legal services can be delivered.

13.  There are four key differences between the CLS scheme and civil legal aid.

  • First, the Commission will be under a new duty to undertake a wide-ranging assessment of needs and priorities, and to co-operate with other funders to determine how best the collectively available resources can be deployed to meet those priorities. This is the principal reason why a new Commission is being established. Regional Legal Service Committees (see below) will establish working partnerships with local authorities and others to determine local needs and priorities.
  • Secondly, the Community Legal Service Fund, which will be available to the LSC to fund services directly, will have a controlled budget. This will be set in the light of the overall assessment of need. The Lord Chancellor will have power to set a framework of national priorities and other policy objectives for the use of the Fund. The LSC will be under a duty to deploy the available resources to best effect and value within that framework. It will be able to set more detailed priorities within the national framework, which may vary between regions. It will do this on the advice of its Regional Legal Services Committees (RLSCs).[3]
  • Thirdly, the potential scope of the CLS Fund will be wider than that of legal aid (which is largely limited to the services of lawyers), in that it will extend to non-lawyer providers, the provision of basic information, and all forms of alternative dispute resolution. However, it will take some time to pay off the bulk of pre-existing legal aid cases, and to establish the contracts and other systems needed to bring the current budget under better control. Therefore, it will not be possible at first to afford a significant extension of scope in practice. In time, however, it should become easier to move away from the current situation - in which whole categories of case either fall within or outside the scope of legal aid - to one where cases are funded more or less readily according to the priority given to the category as a whole, and the relative merit of the particular case within that category. Similarly, it may become possible and appropriate to take a more flexible approach to financial eligibility than the absolute limits that exist now.
  • The final difference, which applies equally to the Criminal Defence Service, will be that the LSC will take a proactive approach to procuring services: mainly through contracts, but also through grants, loans and employed staff. The key point is that only those with whom the LSC decides to do business will be able to provide services under the scheme. Contracts will allow the LSC to define the services required, to achieve better value for money through competition and contract payment systems that encourage efficiency, and to adopt different approaches to fit different circumstances.

14.  The structure proposed for the new scheme reflects these differences. It adopts a range of different instruments to deal with matters, of which the equivalents under the current scheme are mostly contained in regulations.

  • The Lord Chancellor will be able to give directions to the LSC about his priorities and other policy objectives for the deployment by the LSC of the resources available to the CLS Fund. These might include directions about how much of the fund should be spent on contracts (etc.) for particular categories of service or case; and directions about the weight to be given to particular factors is assessing whether individual cases should be funded.[4] Directions may also authorise the LSC to fund exceptional cases in categories generally excluded from scope for the time being by Schedule 2.

These directions do not have a equivalent now, because it is not possible to set priorities under the current scheme. Directions are considered the appropriate instrument, because they will deal with how the LSC should exercise its administrative functions (as opposed to governing decisions about whether applicants are 'entitled' to legal aid).

  • The LSC will produce a annual plan setting out how it intends to allocate the resources of the Fund between regions and categories of service and case. This will be approved by the Lord Chancellor, published and laid before Parliament.

At present, the Legal Aid Board's Corporate Plan is not a statutory document or laid before Parliament. The regional strategies produced by the RLSCs, which will inform the plan, will also be published.

  • The LSC will also produce a funding code, setting out the procedures and criteria for deciding where individual cases should be funded. The LSC will take account of seven statutory factors and any directions from the Lord Chancellor. The code will be approved by the Lord Chancellor and laid before Parliament.

At present, the equivalent material about elaborating the statutory merits test, and guidance to decision-makers, is contained in Notes of Guidance published by the Legal Aid Board; while the procedural material is in regulations. The requirement on the face of the statute to provide a procedure to challenge decisions is new - the current system of appeals to Area Committees is entirely in regulations.

  • Contracts (etc.) will define the details of the service which particular providers are required to give, and their remuneration.

These are matters currently covered in regulations. But under the new system it will be possible to take different approaches to fit different circumstances. Contracts will be able to take account, for example, of the particular requirements of rural areas. And contract prices will reflect regional variations in general prices and market conditions, and the relative efficiency of different firms.

  • Regulations will set out the financial eligibility limits and conditions, and the rules regarding the award of costs. These affect the entitlements and obligations of the individuals helped by the scheme (and, in the case of cost rules, third parties).

Lord Chancellor's Department

December 1998

3   The LSC's powers to establish committees is in paragraph 12(2) of Schedule 1 to the Bill. Back

4   This reflects the two broad ways in which it is possible to give practical effect to priorities: by letting more or fewer contracts for particular categories of case; and through the tests which determine which cases within a given category should be funded. Back

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