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Baroness Young moved Amendment No. 89:


On Question, amendment agreed to.

Community Legal Service (Scope) Regulations 2000

Community Legal Service (Cost Protection) Regulations 2000

8.33 p.m.

Lord Bach: My Lords, I beg to move the first two Motions standing in my name on the Order Paper en bloc. With the leave of the House, I shall speak also to the Funding Code, although I shall later move that formally.

These instruments, together with negative procedure regulations that are currently lying before the House, and orders dealing with remuneration and transitional provisions that will be tabled shortly, constitute the framework for the community legal service fund that will replace civil legal aid in April this year.

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I am sure the House will agree that legal aid, created by the post-war Labour government over 50 years ago, has been and remains an extremely valuable and important public service. But in recent years the structure of the scheme has increasingly begun to show its age. It provides few effective mechanisms for controlling expenditure, with the result that spending can spiral, and in the recent past has spiralled, out of control. And it contains no mechanisms for targeting spending on priorities, with the result that the shape of the scheme on the ground is largely determined by the types of work that private-practice lawyers prefer to do and where and how they prefer to practise.

By contrast, the new scheme--the community legal service fund--is designed to enable the Government, through the new legal services commission, to target the public resources available for funding legal services on priority categories and the most worthwhile cases. This House hardly needs to be told that Section 8 of the Access to Justice Act requires the commission,


    "to prepare a code setting out the criteria according to which it is to decide whether to fund (or continue to fund) services as part of the Community Legal Services for an individual ... and if so what services are to be funded".

The Funding Code is the principal mechanism for achieving that.

Section 8(5) provides for the code to specify the procedures for making these decisions, including conditions that the individual must first satisfy and procedures for appeal. Section 8(8) requires a process of consultation before the code is submitted to the Lord Chancellor and Parliament for approval. In fact there has been a two-stage consultation conducted in the spring and autumn of last year.

As implicitly required by the Act, the code is in two parts: the first contains criteria, the second procedures. The latter broadly replicates provisions in the existing legal aid regulations; for example, about granting and discharging certificates. I do not intend to try the patience of the House by describing these procedures in detail or at all.

The code criteria are based on a number of levels of service, defined in sections 1 and 2--and I am referring to sections of the Funding Code and not of the Act and when I refer to sections in the remainder of my speech, I shall be referring to the code--and designed to ensure that the services provided are proportionate to the matter in hand. The most important levels are, first, legal help, equivalent to advice and assistance now; and, secondly, legal representation, broadly equivalent to full civil legal aid. Legal help is delivered under the Legal Aid Board's general civil contracts which noble Lords will know came into effect on 1st January this year. Legal representation, like civil legal aid, will usually be administered through the issue of a certificate in each case.

Section 4 lists standard criteria that apply to all levels of service: for example, the case must be within the scope of the Act and the client must be financially eligible under regulations. The heart of the code, however, is section 5--the general funding code. That contains separate criteria for each level of service (except those unique to family cases). The criteria for

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legal help in section 5.2 apply across the board to all categories of case. It would be neither appropriate nor practicable to apply more detailed and specific criteria when a client first seeks help.

On the other hand, the criteria for legal representation in sections 5.4 to 5.7 apply to civil cases (other than family cases) that do not fall in a priority or specialist category. Sections 6 to 13 replace or amend those criteria to reflect the priority or other special features of particular categories of case. The principle underlying most of the criteria in the code is that the public purse should support only cases that a reasonable and prudent private client, of adequate but not unlimited means, would choose to fund with his own money. The exception is where different criteria apply because the case has a significant wider public interest.

The most important criteria, reflecting the private client principle, concern prospects of success and cost benefit. In most circumstances, before cases can be considered for funding they must demonstrate prospects of success of at least 50 to 60 per cent at trial; and hence, a much higher chance of a successful settlement. Similarly, the commission will not fund cases where the likely benefit to be obtained by the client does not justify the likely cost. In the case of quantified financial claims, criterion 5.7.3 sets specific ratios of damages to costs, which vary according to the prospects of success. That provision reflects the kind of calculation that a private client would make before risking his own money. The cost-benefit test for unquantifiable cases is necessarily expressed in more general terms and will require judgment to apply. The intention is to take the quantified test as a guide when making such judgments, and in particular, to require cases with less strong prospects of success to demonstrate greater likely benefits relative to cost.

Sections 5.8 and 5.9 set out the criteria for support funding, which is the new type of funding designed, in particular, for exceptionally expensive personal injury cases. Support funding will be available where the case is pursued primarily under or with a view to obtaining a conditional fee agreement and the investigative or total costs exceed the thresholds prescribed in the criteria. There are requirements also relating to the form of the conditional fee agreement and the existence of adequate insurance against the opponent's costs. The other criteria are the same as those for legal representation.

Section 6 contains additional criteria that will apply in very expensive cases. Those are defined at C23 in the part of the code relating to procedures as cases likely to cost £25,000 to settlement or £75,000 if taken to trial. A few expensive cases take up a disproportionate share of the available resources and it is vital that they are particularly closely controlled. Criterion 6.3 requires all highly expensive cases to be subject to a satisfactory case plan for progressing the litigation. That will form part of an individual case contract between the commission and the lawyers. Criterion 6.4 requires the commission to consider the availability of resources before granting funding in highly expensive cases, other than those in top priority categories. The

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Lord Chancellor has issued a direction to the commission setting a central budget for that purpose and explaining in detail how it has been calculated. A copy of the direction is in the Library of the House.

Sections 7 and 8 set special criteria for judicial review cases and claims against public authorities alleging serious wrongdoing, abuse of position or power or significant breach of human rights. The priority given to such cases reflects the general public interest in ensuring that public bodies can be held properly to account through the courts. In particular, the House will note criterion 7.5.2 which provides that a presumption of funding will be granted in all judicial review cases where permission has been given by the court and the case has a significant wider public interest, overwhelming importance to the client or raises significant human rights issues.

Section 9 amends the normal criteria for clinical negligence cases, in particular by providing less stringent cost-benefit ratios. Those replicate guidelines introduced by the Legal Aid Board in December 1998, shortly before the specialist clinical negligence franchise category was created in February 1999. Funding was restricted to specialist practitioners from August 1999. Because those important reforms have been in place for so short a period, it was not thought appropriate to make a further change in the code at this stage. However, I am glad to say that there are already indications that the new guidance and the restriction to specialists are bearing dividends by excluding weak cases from the scheme. The future funding of clinical negligence cases will be kept under review.

Section 10 contains criteria for housing cases. That reflects the priority being given to social welfare law generally as part of the Government's programme for tackling social exclusion. Housing is the principal category within the area of social welfare where legal representation is most likely to be required for proceedings.

Section 11 is a comprehensive set of criteria for family cases. New levels of service are introduced for family cases. Help with mediation covers legal advice in support of the mediation process. General family help funds a solicitor to negotiate a settlement to a matrimonial or other family dispute without recourse to contested legal proceedings. The new levels exist to ensure that wherever possible family disputes are resolved without unnecessary or unduly adversarial proceedings in court. In relation to legal representation in family cases, top priority is given in criteria 11.7 and 11.8 to child care cases, for which funding is available automatically. Other cases concerning the welfare of children and domestic violence also have a high priority, reflected by the relatively generous criteria in sections 11.9 to 11.11.

On the other hand, the criteria for matrimonial cases about financial provision in section 11.12 are broadly similar to those in the General Funding Code, with the addition of a requirement to attend a meeting with a mediator before representation can be provided. In effect, that continues the approach currently applied

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under Section 29 of the Family Law Act 1996; that in certain circumstances, clients must explore the possibility of family mediation before receiving funding for litigation. The inclusion of this provision in the code accords with Section 8(3) of the Access to Justice Act which requires the Code to,


    "reflect the principle that in many family disputes mediation will be more appropriate than court proceedings".

Sections 12 and 13 contain criteria for cases before mental health and immigration tribunals. As noble Lords will know, funding for immigration tribunals has been available under existing powers only since January this year. It did not form part of the legal aid scheme when the Access to Justice Act was passed and for that reason the tribunals are not listed in Schedule 2 to the Act, which defines the scope of the scheme. The Community Legal Service (Scope) Regulations before us today rectify that omission by amending the schedule. The regulations further amend the schedule to exclude certain proceedings under the Crime and Disorder Act 1998; specifically, proceedings concerning anti-social behaviour orders, sex offender orders and related parenting orders. Although those are technically civil proceedings, they are closely akin to criminal proceedings and are more usually undertaken by criminal practitioners. The Government have therefore decided that it would be more appropriate for them to be funded as part of the Criminal Defence Service. In due course, they will be included in regulations defining the scope of the Criminal Defence Service. Meanwhile, legal aid remains available.

Finally, I turn to the Community Legal Service (Cost Protection) Regulations. Section 11(1) of the Access to Justice Act provides that,


    "Except in prescribed circumstances, costs ordered against an individual in relation to any proceedings ... funded for him [as part of the Community Legal Service] shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances, including--


    (a) the financial resources of all the parties to the proceedings, and


    (b) their conduct in connection with the dispute to which the proceedings relate".

That provides the same protection that legally-aided litigants currently enjoy under Section 17 of the Legal Aid Act 1988. Regulation 3 of the cost protection regulations prescribes the exceptions to this rule. Cost protection does not apply where the client receives legal help or help at court. That broadly reflects the position under the current Act which does not provide cost protection where a litigant-in-person receives green form advice and assistance but is not formally represented by the solicitor in the proceedings. However, regulation 3(2) slightly extends the existing protection to cover the case where a client receives legal help before the issue of proceedings in which he subsequently receives legal representation. Cost protection now applies to any costs incurred by the opponent as a result of steps taken under legal help before the issue of proceedings--for example, steps required under a pre-action protocol.

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Secondly, cost protection does not apply where the client receives litigation support or in most cases investigative support. These are the two forms of support funding in very expensive personal injury cases which I described earlier. These cases will primarily be pursued under a conditional fee agreement. That means that if the funded client's opponent loses the case, he or she will probably be liable to pay a success fee as well as normal costs. In those circumstances, we believe that it would be quite unfair if a successful opponent was unable to recover costs as a result of cost protection. It will therefore be a condition of litigation support that the funded client has insurance against the opponent's costs. The commission will approve the insurance policy in advance, and should the amount insured prove inadequate, Regulation 6 requires the commission rather than the client to meet the shortfall.

Regulation 4 deals with the enforcement of any costs order against the funded client, and broadly replicates the current position. Regulation 5 sets out the circumstances in which costs can be ordered against the commission in cases where cost protection does apply. This replicates the provision in Section 18 of the 1988 Act.

I have taken some time in going through the funding code and the regulations with which we are dealing. However, these are significant matters. These instruments are central to the new scheme that will replace civil legal aid in April. I commend them to the House.

Moved, That the draft regulations laid before the House on 21st February be approved [11th Report from the Joint Committee].--(Lord Bach.)


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