House of Commons
Friday 21 November 1997
The House met at half-past Nine o'clock
PRAYERS
[Madam Speaker in the Chair]
Civil Justice and Legal Aid
[Relevant document: The Report to the Lord Chancellor by Sir Peter Middleton GCB on the Review of Civil Justice and Legal Aid.]
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Betts.]
9.34 am
The Parliamentary Secretary, Lord Chancellor's Department (Mr. Geoffrey Hoon): This debate concerns two interrelated issues: the Government's plans for modernising the civil justice system and taking control of the cost of legal aid. Those plans were outlined by my noble and learned Friend the Lord Chancellor in Cardiff a month ago. I am delighted that the House will have the chance today to debate their implications, giving all hon. Members the opportunity of setting out their views. This is an important part of a listening Government's consultation process.
It is a great mistake to look at the civil justice reforms and the legal aid reforms as separate questions. They are two sides of the same coin--two halves of the single package of ensuring that our legal system is reformed to face the challenges of the 21st century. It would be misleading, therefore, to look at one without the other. I ask hon. Members, therefore, to look at the whole picture, not simply individual elements, and to consider the effects of the entire package rather than merely focus on individual pieces.
The overall effect of the Government's proposals for reform will be to create a faster, cheaper and more open civil justice system that is available to everyone who needs it. It will be a civil justice system in which there is fairness between the very poor, the very rich and the very great majority in the middle. The Government's aim is to make access to justice a reality, not simply a slogan.
At the same time, we shall transform the legal aid scheme and allow it to bring help where it is most needed and can do most good. The present scheme is costing more and delivering less. Eligibility has steadily fallen because costs have risen. Over the past seven years, the cost of civil and family legal aid has tripled to £671 million. The average cost for proceedings that received full civil legal aid in 1990-91 was £1,442. If that cost had grown in line with inflation, that would represent £1,760 at today's prices. The actual average cost was £2,684. That represents an increase of 53 per cent. above inflation or an average increase of 8 per cent. per year. While civil and family legal aid continued to rise last year, the number of acts of help that it funded fell by 39,000. That cannot be allowed to go on; we are paying more and getting less from the lawyers.
How are we going to bring about those changes? In his speech to the Labour party conference, my right hon. Friend the Prime Minister spoke of the choices that will confront us in modernising this country to make it fit to face a changing world. Forging a new relationship between the state and the citizen is the key to that process of modernisation. The Government are bringing about constitutional change to ensure that our democracy is up to date. The protection of civil and human rights will be critical in a country where people will see themselves less as subjects of the state, and will want to be more able to assert their responsibilities as free citizens in a democratic country. At the same time, our policies to help the socially and economically excluded aim at giving people opportunities, not making them dependent.
At the heart of the Government's programme for democratic renewal is the concept of the active citizen, and the freedom and choice that come with greater self-reliance. To give those ideas substance, people need to be able to guarantee that their rights are observed. They need to know that in the last resort, they can assert their rights if the law is broken. They need to know, for example, that if they work hard and make provision for their old age, they can enforce their employment and pension rights.
People can be active citizens and can take on real responsibility for themselves, their families and their communities only if there is an effective legal framework on which they know they can rely. That is why access to justice is so high on the Government's agenda and so high on the agenda of anyone who understands and wants to address effectively the future of this country.
Civil justice today is too expensive and too exclusive. The very rich have access because they do not need to worry about the costs of litigation. The very poor have access because they are financed by the legal aid fund paid for by the taxpayer. However, the vast majority of people who go out to work and fund legal aid through their taxes dare not risk pursuing their rights through the courts. Those people cannot litigate because lawyers' fees are so high and because they cannot afford the risk of losing and having to pay their opponent's costs as well as their own. Every right hon. and hon. Member has experience of disgruntled constituents unable to secure legal aid because they are not financially eligible, even though they have paid their fair share of taxes.
There are many people in Britain who should be able to go to law. We all know from our constituency surgeries and postbags that people suffer because they need legal help but cannot afford it. If we are to oversee a renewal of civil society, so that citizenship, self-help and individual freedom develop as ideas rooted in reality, we must face up to the challenges posed by a civil justice system that seems to serve only a privileged minority because the doors of the civil justice system are barred to most ordinary working people. That is wrong. It is not just. The Government will not let those barriers stand. We plan to break them down in two ways.
First, we plan to make radical changes to the culture of civil justice, to its procedures and its structures. Since the Lord Chancellor's speech on 18 October, debate has been concentrated on our proposals for reform of the legal aid scheme. Our plans to modernise civil justice have been sadly neglected. Yet in his two historic reports, Lord Woolf identified five fundamental weaknesses in civil justice: excessive delay, excessive cost, undue
complexity, uncertainty over the amount of time and money likely to be involved in bringing a case and, perhaps worst of all, unfairness, where a financially stronger party can exploit all the other failings of the system to defeat an opponent.
Who could realistically dispute the assertion that there is something wrong with a system that allows 40 per cent. of the lowest-value claims to be subject to costs that come close to or exceed the total value of the claim--and that is the costs of one side only--or that there is a need to consider change to a system with an average case length of 28 months when there are no interlocutory applications to the court, rising to 50 months when there are seven or more such applications--almost two years more? Both examples come from Professor Hazel Genn's survey of litigation costs in the High Court, which helped to inform Lord Woolf's recommendations. Those recommendations, on which the Government's plans are based, are well known and widely supported.
The Government embrace Lord Woolf's vision of a more efficient civil justice system: a modern civil justice system designed for the 21st century, in which all citizens have equal access to simpler, faster procedures for securing their rights. Reducing delay and complexity in the courts, and fixing costs at the outset of cases, will reduce expense for the individual and ultimately for the taxpayer. It will promote certainty and restore confidence.
Civil justice today is a bureaucratic labyrinth in which it is all too easy to lose one's way. The Government are committed to simplifying and streamlining the justice system. In essence, we propose to create three paths to civil justice: an expanded small claims procedure, a fast track and a multi-track. The choice of which path a case will take will depend in part on its value and in part on its complexity.
The first path--small claims--has been the major success story of the civil justice system. It is simple, fast and cheap. In a study published in 1996, the National Audit Office found widespread satisfaction among users: 82 per cent. of claimants surveyed found the small claims procedure very or fairly cheap and 68 per cent. of claims were heard within 12 weeks of the defence being filed. The speed, simplicity and modest cost of the small claims procedure make it a model of its kind.
The previous Government raised the small claims limit from £1,000 to £3,000 in January 1996. The effects of that change have been monitored, as Lord Woolf proposed. It has proved a success. Therefore, the Government now propose to raise the small claims limit to £5,000 as part of the overall package of reform.
We have, however, recognised in one particular area the need for caution. Personal injury claims up to a value of £1,000 will continue to be dealt with under the small claims procedure. I recognise that that will be controversial with some solicitors who have pressed for personal injury to be taken out of small claims altogether. There is provision for cases that are too complex to be dealt with as small claims to be transferred out of the procedure. However, many of the cases that fall within that boundary are relatively straightforward, involving very minor injuries. It would be wrong, therefore, to deprive litigants pursuing claims for damages for such injuries of the speedy, cheap access to justice that they
enjoy at present. Conversely, the Government recognise that damages claims above £1,000 are likely to arise from more serious injuries, when the litigant may need professional assistance in pursuit of a just outcome. That is why we have rejected the suggestion that we should standardise the limit for all small claims.
As I said, the small claims procedure has been very successful, but I recognise that it is not suitable for every case. The Government have therefore decided to adopt Lord Woolf's proposals for more hands-on management of cases by judges, through the creation of the second and third paths--the fast-track and multi-track procedures. Power will be transferred from lawyers to judges. Judges will allocate cases to the appropriate track. The courts will have greater control over the progress, cost and length of cases as they move to trial. It will replace the present system where the lawyers decide those issues--running up costs and encouraging delay in the process.
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