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Lord Smith of Clifton: My Lords, broadly speaking, we, too, support the order. I have two observations and two questions. My first observation relates to the membership of the commission and echoes a point made by the noble Lord, Lord Glentoran. We again see creeping into NIO language the word "representative". I thought that we had exorcised that term with the Administration of Justice Act, during the passage of which our amendment to include the term "reflective" was accepted. I reiterate that point.

My first question is: can the Minister reassure us that, in making the appointments, the noble and learned Lord the Lord Chancellor will consider factors other than both sides of the community—for example, gender and ethnicity? Secondly, when the commission draws up its funding codes setting out the criteria according to which a decision is to be taken on whether to fund legal services and the services to be funded, we should like reassurance that the code will not be so rigid as to exclude cross-cutting cases.

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My final observation is that the order also provides for the introduction of conditional fee agreements into Northern Ireland. In my experience, there is enough litigation in Northern Ireland without encouraging lawyers with that morsel.

I do not share the disdain of the noble Lord, Lord Glentoran, for ordinary people. I hope that there will be room for ordinary people as members of the commission.

Lord Laird: My Lords, the Ulster Unionist Party welcomes the principle of legal aid reform in Northern Ireland. It is the first major change to legal aid in Northern Ireland for nearly 20 years. Noble Lords will therefore agree that it is a vital issue. As such, I regret that the legislation is an Order in Council and not a full Bill, particularly as criminal justice is not a devolved issue. We strongly believe that an Order in Council procedure is wholly inappropriate for such a major change.

The order is largely skeletal. We are given little to go on. For example, how will the commission be set up? What are the running costs likely to be? Will the Minister assure us that the commission will not become yet another elaborate and expensive bureaucracy? The absence of details such as the time-frame for implementation must be addressed.

Article 9 states:

    —(1)"The Commission may not fund—

    (a) civil legal services, or

    (b) criminal defence services,

    relating to any law other than that of Northern Ireland, unless any such law is relevant for determining any issue relating to the law of Northern Ireland".

I seek clarification that that will not prevent cases that go before the European Court of Human Rights and the European Court of Justice from receiving legal aid.

Throughout the order, the Lord Chancellor is empowered to give directions and guidance to the commission. I draw noble Lords' attention to Article 47, in particular, which outlines the Lord Chancellor's role in making remuneration orders. If the intention in setting up a new non-departmental legal services commission was to provide an independent framework for the provision and administration of legal services, do not the extensive powers given to the Lord Chancellor undermine that independence? One of the Lord Chancellor's powers is to appoint members to the commission. In the light of recent revelations of a spy ring operating in the Northern Ireland Office, suitability of employment in the new legal services commission is worth highlighting. I therefore seek assurance that stringent security checks will be put in place to ensure that undesirables will not be at the heart of the commission.

I also draw noble Lords' attention to the fact that nowhere does the order say how cases are to be prioritised. What criteria will be put in place for prioritisation, and what conditions will dictate whether one case deserves priority over the next? In the

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Northern Ireland Grand Committee in another place, Miss Rosie Winterton said that it was vital that money was,

    "used to secure legal services for the most meritorious actions and for actions that are of most importance to the individual citizen and the community".

I remind noble Lords of the significant breach of human rights brought about by the bombing of Omagh. The Minister may wish to explain why legal aid was not granted to those campaigning to take civil action against two members of the Real IRA, which was responsible for the bomb, while the defendants, who are known to be independently wealthy, have been granted legal aid. I also seek assurance that that will not be repeated, or that it will not become the norm.

Will the Minister explain why, under Article 23(4),

    "The Commission may fund advice and assistance by different means—

    (a) in different areas of Northern Ireland, and

    (b) in relation to different descriptions of cases."?

Why should there be regional variations in such a small jurisdiction? In the interests of consistency and the provision of quality of service, should not everyone, regardless of where they come from in Northern Ireland, receive and have funded the same quality of legal aid?

I am also concerned about the provision under Part 3 of the draft order known as the alternative funding option. Part 3 is identical to legislation in place in England and Wales. The Law Society of Northern Ireland has already stated that those provisions are entirely unsuitable for Northern Ireland. It would appear that they have caused great difficulty in the English litigation process. The Law Society said that they have led to the,

    "unregulated operation of claims-management companies, such as Claims Direct; the exploitation of individual litigants; the domination of the market by the same insurers who operate the defence side of litigation; and the effective denial of choice of solicitor".

Will the Minister ensure that legislation is not introduced that will result in the same thing happening in Northern Ireland?

In conclusion, I ask the Minister to pay particular attention to the skeletal nature of the order, to the extensive powers given to the Lord Chancellor, which undermine the independence of the new legal services commission, and to the issue of prioritisation.

Lord Hylton: My Lords, the Minister has already been asked some difficult questions. I wish to highlight the most important question, which the noble Lord, Lord Glentoran, asked: what amount of money will be available in the coming financial year for legal aid? How much will that sum be diminished by the heavy layer of new administration proposed by the order?

We are all concerned with the interests of justice and with the interests of defendants in criminal and other cases and of other litigants. It is important to uphold those interests. We have heard from practising

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solicitors, including the noble Lord, Lord Phillips of Sudbury, how, in England, firms are being squeezed by the new standards and limits placed on legal aid. It would be desirable to avoid that, if possible, in Northern Ireland. I look forward to the Minister's reply.

1.30 p.m.

Lord Bassam of Brighton: My Lords, first, I ought to welcome the fact that there seems to be broad support for the measures throughout your Lordships' House, although several important issues were raised and some important questions asked during our short debate. I always give this apology: in advance, I say that, if I fail to address a point, we will try to pick it up and ensure that it is dealt with thoroughly in correspondence. That correspondence will be shared with all parties. I shall go through the points that arose and deal with them in turn.

Several noble Lords asked about the appropriateness of having the matter before us today. I understand that concern. However, legal aid is a reserved matter under the Northern Ireland Act 1998. That means that it is one of a range of issues that remain with Westminster at present but may, in due course, be devolved to the Assembly, when it is reinstated. I understand the concern that it is an Order in Council, but that is the standard procedure for making Northern Ireland laws in matters that have not been devolved to the Assembly.

I thought that I had set out clearly the fact that we had undertaken as wide a consultation as possible on the matter. Having reviewed the files, I must say that we have been extremely thorough and diligent. We have had many meetings with consultees on the proposals, and we have benefited from that consultation. The quality of the proposition on offer has improved greatly. I referred to the Select Committee on Northern Ireland Affairs, but we also benefit from the fact that the Assembly itself considered the legislation, as did the Grand Committee. There has been a great deal of preparation done, in getting to this point.

The noble Lord, Lord Laird, raised some concerns about the position and power, as it were, of the Lord Chancellor and his ability to direct and issue guidance. It is always a difficult balance to strike, but it is our view that matters of policy and priority fall to the Government, not the commission, and that we need to have flexibility in balancing the services provided with costs. The difference between the power to make regulations and issue directions, which lies with the Lord Chancellor, and the responsibility to advise and implement, which lies with the commission, is clear. It is an important difference, and the balance between them will depend on whether the matter is a non-executive government function or an executive service function.

The commission will be empowered to provide the Lord Chancellor with the advice that is considered appropriate and necessary in the circumstances. The commission will, after all, be the joint engine of reform with the Government, in a unique partnership. In view of the nature and scope of the responsibilities that the

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commission will exercise, it would not have been right to devise a detailed implementation plan in advance, without working with the commission, which would give us the advantage of being able to take on board any issues raised with it.

All noble Lords who spoke raised the issue of appointments to the Legal Services Commission. They will be made through open competition and will be consistent with the public appointments procedure laid down by the Office of the Commissioner for Public Appointments. Independent assessors have already been appointed to oversee the process, in keeping with the right procedures. The order makes it clear that, in appointing members of the commission, the Lord Chancellor must have regard to the desirability of securing that the commission includes members who, between them, have experience and knowledge of the provision of services that the commission can fund—civil legal services or criminal defence services—the work of the courts, consumer affairs, social conditions and management. Staff employed by the Law Society will continue to be required. Presumably, transfer arrangements will have to be put in place and negotiations conducted with regard to the move from one employer to the other.

The question of costs was raised. Costs for 2002–03 are estimated to be roughly 50 million. That will include running costs of 4 million. Costs for future years are up for discussion with the Law Society. The current number of staff is, I think, 130, and it is envisaged that, broadly speaking, that number will be required for the future. The cost of establishment was not the only cost issue raised. There was also the question of the remuneration of chairpersons and members. The chair will be paid 380 per diem, which equates to roughly 39,000 per annum. Members will be paid 279 a day, which equates to about 28,500 a year.

The other issue of substance, raised in particular by the noble Lord, Lord Laird, was the position of the victims of the Omagh bombing who sought funding for a civil action against the alleged perpetrators. It is a difficult area, and the noble Lord will appreciate that it would not be appropriate for a Minister to intervene in or comment on an individual case, although I accept that it is a very sensitive case. One would not want the case to be tainted in any way by the suggestion that there had been some degree of political interference. The general rubric is that the Lord Chancellor has a statutory power in Northern Ireland to grant funding in exceptional cases that are outside the scope of legal aid. It is our intention that that power will commence as soon as is practicable. The exceptional power can be exercised only in respect of categories of cases that are excluded from the scope of legal aid. I am sure that noble Lords will appreciate that point.

There was also some concern about the flexibility of the funding codes. The funding code will set tests to determine whether a case is strong enough to be the beneficiary of legal aid. If it is a high priority case, it will be easier to meet the criteria set out in the test. For example, cases involving the loss of liberty would be a high priority, and the test for getting legal aid for such cases in England is easier to meet than for, say, a

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neighbour dispute. The code will be important, and it will have flexibility. We will ensure that that flexibility relates to the seriousness of the cases involved.

The noble Lord, Lord Laird, rightly raised the issue of security vetting. A review of arrangements for security vetting in Northern Ireland was recently announced—the noble Lord is probably aware of that. We will monitor the outcome of that review and implement the appropriate level of vetting identified by it when setting up the commission.

The noble Lord also asked specific questions about funding for cases in the European Court of Justice. I can assure him that funding will be available for advice and assistance in such cases. If a case is referred to the European Court from one of the courts referred to in Paragraph 2(a) of Schedule 2, funding will be available for representation. As regards the ECHR, funding will be available for advice and assistance. Funding for representation before the ECHR is available from the court, not through the order.

Regional variation is an issue. In answer to the point made by the noble Lord, Lord Laird, the Legal Services Commission will be able to target the provision of services to meet established needs. It will also provide different means of addressing local needs and enable the commission to identify gaps in the provision of services and respond in what we believe to be the most appropriate manner.

I hope that I have answered all the points that were raised. I have tried to keep my responses brief and deal with the specific issues. This is an important order. It puts the provision of legal services in Northern Ireland on to a new, more modernised footing and enables us to target the most appropriate areas. It also enables the Law Society of Northern Ireland to get away from the difficulty that it shared with the Law Society of England and Wales when it was responsible for legal aid of potential conflicts of interest in their relationship with the courts, clients, structures of governance and so forth. I commend the order to the House.

On Question, Motion agreed to.

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