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Mr. Andrew Dismore (Hendon): Will my hon. Friend give way?
Mr. Mitchell: I would rather not give way because I have a difficult argument to advance and with the need for speed my argument must be somewhat compressed.
Section 202 of the Local Government Act 1972 gives local authorities the power to set up local services. In many instances, that power has not been developed because of lack of finance. If we are to divert massive sums from the legal aid system, surely they should be used to provide community services such as law centres. What a difference a few hundred million pounds would make to law centres throughout the country, but that provision is not being made. Instead, it seems, proposals are to be implemented prematurely without consultation, research and adequate information. That can be said of the proposals that have emerged so far.
The abolition of legal aid for compensation cases and instead placing emphasis on conditional fees did not appear in the Woolf report. That report focused on giving the courts more control over the legal process. Conditional fees put lawyers back in the driving seat because they willhave a vested interest in pursuing cases. The Government's proposal was not recommended in the Middleton report either. Sir Peter Middleton did not endorse it. Sir Peter argued in his report that there could be a gradual transition from legal aid to conditional fees, but he did not recommend that legal aid should be scrapped and replaced entirely with conditional fees.
I have no great argument with conditional fees. I remember when the then Lord Chancellor introduced them from Scotland some years ago--an alien import into the British legal system--to cries of protest from the Law Society and from individual barristers. I would go further and have contingency fees. The legal profession must be able to compete in any way that it finds appropriate. The problem is that we are faced with an untried system and we do not know what consequences it will have. It is being put forward as a replacement for a system that is working and which protects the vulnerable.
My hon. Friend the Minister claims that the Government's proposals will open up justice to a range of people who are now excluded from it because at
present the legal system is pricing itself out of use by the people, even those with substantial means. The fact remains, however, that conditional fees, as a replacement, are untried. My hon. Friend has no authority for advancing such an argument. We do not know how conditional fees are working since they have been introduced. We do not know of the problems that ensue.
Mr. Dismore:
I specialised as a personal injury lawyer for 19 years. There have been conditional fees for the past two years and the system has been working extremely well, but I accept my hon. Friend's argument that they may not be suitable for every type of case. He may not be aware, however, that John Monks of the TUC, while speaking to representatives of the insurance industry on 3 November, made an interesting proposal that will be advanced to the Lord Chancellor, and that is to extend the trade union legal aid scheme to all people who are injured at work. Trade union schemes are a success story and they are not dependent on legal aid. Perhaps my hon. Friend will care to reflect on these points.
Mr. Mitchell:
I encourage the extension of the trade union legal aid scheme: it is obviously important. However, neither that scheme nor conditional fees can replace the substantial sums in legal aid that will be taken away. People who do not belong to a trade union and who are not able to get access to conditional fees will be particularly vulnerable.
It must be proved to me that conditional fees are not only working--I did not expect them to be a disastrous failure--but are working for the benefit of the people. All that we have is the research undertaken by the Policy Studies Institute, which involved 200 cases seen from the solicitors' and not the consumers' point of view. How difficult is it for consumers to obtain legal aid? What barriers are put in their way? How much are solicitors proposing to charge? How many cases were turned away because solicitors would not take them up? We know nothing of all that. All that we have is a study of 190 or so cases and the fees charged: we have nothing from the users' point of view. It is the users whom I am defending. It is wrong to put so much weight on conditional fees as an alternative to legal aid without any research.
Conditional fees are inherently loaded against the poor. Compensation cases incur substantial up-front costs, such as medical reports, which are expensive. Insurance premiums will be a substantial charge on the system. Insurance companies will want their own medical reports. A poor litigant will have to pay substantial up-front costs before he can even get his case to court. Present charges are £95 for road traffic accidents, £161 for personal injury cases, and a mere £15,000 for medical negligence cases, which are the most difficult. If insurance is to be required, it will load the odds against the poor. I hope that my hon. Friend the Minister will tell us that the Government will fund the insurance charges for litigants whose income is below a certain level. That would not solve the problem, but it would make the proposal more acceptable.
What cases will be taken? I am sure that conditional fees will work with a sure-fire winner, such as a simple, straightforward personal injury case, but it will be impossible for them to work in a medical negligence case, in drug cases and in consumer product cases. Cases of builders or hairdressers from hell will also be difficult.
Conditional fees will not be available in such cases, because the odds will be loaded against them and in favour of cases that will obviously be successful.
What will be the effect on legal practices? Practices devoted to legal aid will be driven out. Only fat practices with large incomes will be able to finance conditional fee litigation, because they will not get a quick return. They will need a large case load to carry them through the lean years. Small practices that presently provide devoted service to legal aid cases do not have large enough case loads: they lack weight and fat, so cases will go to the large practices.
All that is predictable. It is essential for the Government to acknowledge those consequences. I do not want them to abolish legal aid, but if they are going to replace it by conditional fees there should be a period of transition during which the one can be developed to replace the other. Let us have a transitional phase so that we can see that it works. That is the only sensible way to protect the people. The Government propose a sudden, overnight transition. It will take years: there will be no sudden savings. Under a smokescreen of a tax on fat-cat lawyers--with which I totally sympathise--legal aid will be abolished in compensation cases. That is not a responsible policy for any Government, but particularly not for a Labour Government whose commitment must be to protect and empower the poor and those who cannot afford legal services.
Legal aid was becoming expensive. Like the common agricultural policy--which the Government do not criticise much--it is demand led. However, there are ways of dealing with that problem short of abolition. We should consider alternative provisions, such as competition by employed solicitors, or an attack on the restrictive practices of the Bar, which enormously drive up expenses in court cases. It is interesting to note that Sir Peter Middleton has pointed out that these reforms will not damage the incomes of those at the Bar: it is obviously important to reassure the Bar that it will be protected against these changes. We could allow the Crown Prosecution Service to use its own barristers rather than force them to employ outside barristers. More paralegals could be used: legal aid for mediation is not proposed. The Government should not kick away the support provided for the people until they have provided an adequate, proven alternative to protect even more people more efficiently and economically. That is the prime need.
Mr. David Lock (Wyre Forest):
I am grateful to my hon. Friend the Member for Great Grimsby (Mr. Mitchell) for allowing me to speak in the debate. I want to bring a number of points to the Minister's attention, and to seek his assurance that they will be considered when his Department discusses publicly funded litigation.
I broadly welcome the commitment to conditional fees. They will give unity of commercial purpose between the lawyer and the client, and ensure that they are both striving towards the same goal. They will also open up
the courts to many who find the doors closed to them at present. It cannot be acceptable for the state to finance only those cases involving a sufficiently bad risk that no commercial practitioner would touch them with a bargepole.
There will have to be insurance against losing the case and having to pay the other side's costs. What discussions has my hon. Friend had with the insurance industry to ensure that insurance products are available?
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