V. THE CIVIL LEGAL AID BUDGET
22. As we have pointed out earlier, the civil legal
aid budgets will be capped, but with scope for moving funds between
them. Lord Bach strongly defended the principle of capping
and considered that the proposed Funding Code would ensure that
priority areas were adequately resourced. He implicitly recognised
that restrictions on public funding meant that other sources were
also needed to enable litigants to pursue their legitimate actions.
23. Three areas were identified to complement public
funding. These were:
- Conditional Fee Agreements (CFAs);
- a Contingency Legal Aid Fund (CLAF);
- development of the legal insurance market in
24. The White Paper commented that consultees had
generally opposed these on grounds of principle. It commented
"The Government is not convinced by these arguments of principle
but accepts that, in practice, there is a long way to go before
CFAs can be developed for Northern Ireland."
Lord Bach, however, seemed to take a more positive view of the
potential for CFAs.
".... The great advantage
of conditional fees is that it ... brings in everyone who has
a good case. If they have a good case then they are likely to
be able to use conditional fees and be rewarded for it. We will
need a lot of persuasion that conditional fees are not appropriate,
even in Northern Ireland."
25. Lord Bach was less optimistic about the potential
scope for a CLAF in Northern Ireland. He commented that the Government
saw "a lot of difficulties with CLAF".
The Legal Aid Advisory Committee is currently carrying out a detailed
study into the merits of such a fund and we have seen a copy of
the discussion paper it has issued.
We have also received evidence on this point from the Law Society
We understand from the Legal Aid Advisory Committee that there
is strong support within Northern Ireland for a CLAF, although
there is some divergence on what form it should take and that
the Committee is seeking to undertake an appropriate form of viability
assessment. We look forward to seeing a copy of its report
to the Court Service, which we understand is expected to be produced
at the end of June 2001.
26. In the White Paper, the Government indicated
that it saw "considerable scope for developing a mature legal
insurance market in Northern Ireland which will fund appropriate
categories of litigation."
Mr Hunter suggested that there might be a lack of awareness on
the part of many people that existing insurance policies might
give them appropriate cover, and that the market for legal insurance
was less mature in Northern Ireland than in England and Wales.
The Law Society, for its part, saw a number of dangers in too
great a reliance on insurance companies in this area.
27. Given that the Government clearly envisages
that publicly-funded legal aid will play a proportionately smaller
part in the future in the funding of legal actions, we welcome
the proposed establishment of a working group to look into the
establishment of financially viable and attractive legal insurance
based solutions to provide an alternative to private or public
funding of litigation for cases seeking financial damages. We
note that this will include further examination of the use of
CFAs or a CLAF. We also note the Government's assurance that this
is not intended to lead to a reduction in legal aid spending,
but will allow the Government to target spending on cases which
cannot be run without subsidy.
28. There remains, however, the question of ensuring
that adequate provision is made in respect of cases not seeking
financial damages. Lord Bach commented
that some may be appropriate for support under the Funding Code,
but others may not. He conceded
that there was some risk that certain types of case may find it
more difficult to get financial support through legal aid. We
recommend that further consideration is given, in the context
of the development of the Government's proposals, as to how best
to ensure that adequate provision is available for supporting
cases not seeking financial damages.
29. A key element in the Government's proposals is
the introduction of a Funding Code. The White Paper states that
this will be flexible and ensure that funding is allocated to
high priority areas. There will be scope for the tests in respect
of classes of action "to be made tighter or less stringent
as may prove necessary taking account of priorities and the availability
30. Although the Funding Code will need to be up
and running when the new arrangements come into force,
Lord Bach envisaged that it would be the subject of "strict
consultation" and informed by research conducted by the LSC.
As the scope for the LSC to conduct research will be limited in
its shadow phase, Lord Bach made clear that the Government would
be "absolutely ready to amend the Funding Code if research
shows that it is not appropriate ...."
31. Lord Bach announced that the Funding Code
would be laid before Parliament and that the initial Code would
be subject to the affirmative resolution procedure.
He envisaged that amendments to it would be subject to the negative
procedure. However, given that experience and research may reveal
a need for quite significant modification, we consider that there
should be scope for modifications, too, to be subject to Parliamentary
approval. We therefore commend to the Government, as an appropriate
model, the provisions in the Public Processions (Northern Ireland)
Act 1998 applicable to revision of the Parades Commission's Code
of Conduct, procedural rules and guidelines.
32. The Bar Council of Northern Ireland expressed
concern about the lack of an independent appeal against a refusal
by the LSC to grant civil legal aid.
Lord Bach defended this and argued that there was a risk that
the funding code system might break down if decisions on legal
aid were taken outside the LSC.
He recognised that this might lead on occasion to disappointed
applicants seeking a judicial review of the LSC's decision.
33. A number of concerns have been expressed to us
about the possible impact of the more widespread use of standard
Lord Bach indicated that a working party was to be set up on remuneration
and listed the factors that would be taken into account.
The fees will be fixed by regulation and Lord Bach added "I
need to make it absolutely clear that the standard fees that are
set will not necessarily bear any relationship with fees that
are paid now."
34. Lord Bach did not expect the introduction of
standard fees to lead to a poorer class of service for legally
aided litigants than privately funded litigants.
The Government intends standard fees to take proper account of
factors such as overheads and Lord Bach noted "some reluctance
to discuss those with us so far; we hope that may change."
35. Standard fees may be expected to have a particular
impact in relation to criminal legal aid, where Lord Bach noted
that although there are standard fees at present for much criminal
legal aid work "it has to be admitted that the exceptions
to standard fees have been the rule rather than the exception
for the last few years, so the standard fees system has not worked
Mr Hunter commented:
"The increase in criminal
legal aid is as a result of the statutory test enshrined in the
current legislation, which fixes only one criterion for the assessment
of fees, which is a fair remuneration as determined by those who
independently know about these things and deal with them in terms
of the Taxing Master at the High Court supervising the equivalent
department. The clean-sheet basis upon which the new standard
fees will be set is something which will take into account all
the factors set out in the White Paper as being the criteria against
which the new standard fees will be assessed. That is why there
will be no direct link with the existing levels of fees."
36. The greater use of standard fees is expected
to improve the speed of payment of criminal legal aid fees. The
Legal Aid Advisory Committee had drawn our attention to the existing
procedure for assessing these, which it described as "cumbersome
and lacking in transparency."
Mr Thompson commented that standard fees should lead to a speeding
up of such payments.
37. As we have demonstrated earlier in this Report,
the cost of criminal legal aid has increased disproportionately
in relation to the number of cases. Mr Hunter outlined
a number of new factors besides standard fees which could be expected
to bear down on costs in this area, while continuing to provide
a quality service. One such factor is that the LSC, rather than
the courts, would decide the number of counsel which should be
assigned to a criminal case.
38. Lord Bach did not accept that things had been
done wrongly in the past and that the courts had necessarily been
too free in permitting more than one counsel, although he pointed
out that there had been some strengthening recently of the criteria
in England and Wales for more than one counsel because it had
been felt there that on occasion two counsel were employed unnecessarily.
To the suggestion that the courts in Northern Ireland had been
too free on this point, and that there might be an expectation
that there may be less as a result of the LSC making the decision,
he observed, in delphic fashion:
"I would not agree with
the assumption, but I would say that what we are trying to do
in this particular field is to make sure that the rate of increase
in spend on criminal legal aid is to some extent cut down, but
not the price of justice, and you can draw what implication you
like from the way in which I put the answer to your question."
42 Q 21. Back
CLAF operates on the general principle that successful litigants
pay an agreed proportion of their award to the Fund. This provides
the resources to meet the costs incurred on other cases. Back
4849, p. 21. Back
2, p. 27. Back
12, p. 56. Back
for example, Appendix 6, p. 33, Appendix 8, p. 35, Appendix 10,
p. 39, and Appendix 13, p. 59. Back
4849, para. 69. Back
12, p. 55-56. Back
4849, p. 21. Back
4849, p. 19-20. Back
27. See also Q 31. Back
2, paragraphs 5 to 8, and section 16(4). Back
11, p. 43. Back
for example, Appendix 3, p. 28, Appendix 9, p. 37, Appendix 11,
p. 44, 48, and Appendix 12, p. 54. Back
1, p. 27. Back
46 to 48. Back