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Mr. Dominic Grieve (Beaconsfield): The hon. Gentleman may have misunderstood the question. What is of interest to me and my hon. Friends is that presumably somebody in the Lord Chancellor's Department has estimated the cost of legal aid after the process is completed in, say, five or 10 years, so that some matching with the eventual saving from the introduction of the new system can be appreciated. I appreciate that it may be difficult to put a precise figure on that, but it would be interesting to hear what the Department thinks will be the cost to the taxpayer and the Government in five or 10 years after the changes have been introduced.
Mr. Hoon: I should make it clear that we shall spend precisely the same amount on legal aid and on supporting legal advice and the systems across the country. If the hon. Gentleman will bear with me, I shall say later how
we intend to refocus the savings that we anticipate on other areas of advice and assistance. Essentially, we shall be dealing with precisely the same amount of money, but intend to spend it in different ways and rather more effectively.
Mr. John Burnett (Torridge and West Devon): I understand that Departments give departmental estimates for three years ahead. I heard what the Minister said this morning on "Today" about legal aid expenditure not being reduced over the next two years. What is the original departmental estimate for expenditure on legal aid for the third year?
Mr. Hoon: Those figures are published in the Red Book. I apologise to the hon. Gentleman, but I do not carry them in my head. If he requires clarification, the figures can be secured for him, or I shall write to him. We do not plan to spend any less on legal aid this year or next as we develop the changes. I hope that it does not take five or 10 years, as suggested earlier, before we appreciate the benefits, in access to justice, that our proposals are designed to achieve. We hope that those benefits will be available more quickly. I recognise that the changeover will take longer, for the reasons that I have given, than other changes in Government funding.
We are aiming for civil justice reform that makes litigation more certain in terms of time, effort and cost, so the insurance market can refine the available insurance products as well as develop new products to meet particular needs.
I come now to the future of legal aid. In broad terms, our aim is to refocus legal aid on the problems of the less well-off and on those who need the law to help them struggle out from social or economic exclusion. We want to concentrate on social welfare issues, and on matters of public interest. The diversion of most money claims to conditional fees, to which I shall refer in a moment, will help, because we can then use the money that would have been used in traditional civil litigation to tackle more effectively areas such as housing, debt, employment, welfare benefits, immigration and matters of broad public interest.
One of Sir Peter Middleton's recommendations that we want to pursue is the idea of a separate fund for public interest cases. It is symptomatic of the new focus that the Lord Chancellor has rejected Sir Peter's recommendation that people should have to pay an up-front fee to get legally aided representation, no matter how poor they may be.
The legal aid scheme must be transformed. Rather than being a machine primarily for paying lawyers' bills, it needs to become a positive instrument for buying the services that people need. For that reason, the Government have accepted Sir Peter Middleton's recommendation that publicly funded legal services should be provided under contracts.
Contracting offers huge improvements. It will promote fair competition. For the first time, suppliers will have real incentives to look carefully at the quality of their services and the prices that they charge in order to secure a contract and be able to provide legally aided services.
On the quality front, the Legal Aid Board's franchising standards already provide a sound foundation, but in addition I would want to see the results of cases
measured--especially against the prediction of success. If a lawyer predicted success but too often lost the case, the board would be able to draw the line and stop buying services from that particular lawyer. I have no doubt that, with the help of its suppliers, the board will be able to develop new ways of measuring and assuring the quality of the services that are provided.
Competition should also lead to improved efficiency. The Legal Aid Board will be able to buy the services that people want at competitive prices, which will be agreed in advance. In that way, we shall be able to make the money go much further, pound for pound, in giving help to those in most need.
Contracting will also provide the way for bringing new types of services into the legal aid scheme. A contracted scheme will allow the board to purchase alternatives to lawyers' services and those of the courts. We are already piloting contracts with advice agencies and mediators, and in the longer term I see no reason why legal aid should not pay for other alternatives to traditional legal advice and representation.
Finally, contracting--when harnessed to a planning mechanism--will allow us to ensure that the available resources are concentrated on cases with the highest priority. The Government could then give guidance on the categories of case that they regard as being of high priority. Obvious examples would be domestic violence, cases involving the protection of children or the maintenance of a roof over a family's head.
Mr. Jeremy Corbyn (Islington, North):
On the question of housing, will my hon. Friend's proposals allow legal aid only in cases in which a family is threatened with homelessness, but not in cases of disrepair that is the fault of a local authority or another landlord?
Mr. Hoon:
That is not the case, and I shall deal with the point in a moment, if my hon. Friend will bear with me.
The regional legal services committees, which we are already putting in place, would advise on local needs and priorities and the best way of meeting them. It would then be for the Legal Aid Board to use the money allocated for civil and family legal aid to produce a plan showing the contracts that it would grant to reflect both national priorities and local considerations. Once agreed, the resulting contracts would be put in place.
I now come to the ingredient in our reform of legal aid that will have the most immediate effect and which perhaps has attracted most attention. Whatever our new power to use contracts to buy the right services at the right price for the right people and whatever the efficiencies that we achieve, we have to recognise that there is no new money. We have to recognise that resources are always likely to be scarce and to be exceeded by need, or at least by demand. It follows that we should not be spending legal aid on cases when there is an alternative that is just as good. For that reason, the Government have concluded that legal aid should not usually be available to people claiming damages or financial compensation.
We have reached that decision in the belief that conditional fees are a viable alternative even for poor people and that the money currently spent on such cases can be better spent in providing help where there is at present no viable alternative. The result will be that,
overall, poor people will receive more, not less, help. Further, by a side wind, we shall have made litigation fairer, because under a conditional fee arrangement, opponents will get their costs back if they are successful. That is a piece of simple justice at present denied to the opponents of legally aided parties.
Given that win-win outcome, both for the poor and for the broader public, the reactions of the legal professions have been depressingly, but all too predictably, hostile. Over the past half-century, the professions have become heavily dependent on taxpayers' subsidies, which allow them to avoid shouldering risk, but which guarantee profit. Those subsidies allow them to profit by taking on cases that no private person in their right mind would pursue. The subsidies also support inefficiencies in the way in which lawyers conduct and structure their businesses.
Of course, many lawyers want the subsidies to continue alongside conditional fees, so that they will still be paid, win or lose, under legal aid and be able to charge mark-up profits for the sure-fire winners that they take on conditional fees. For many lawyers, that position is rational in its self-interest, but not, I suspect, for the rest of us.
Since the Lord Chancellor made it clear at the Law Society conference in October that conditional fees will be extended and substituted for legal aid in most money claims, the real world has been on the move. The insurance industry is speaking to the Government and also to lawyers. The talk is of new ways of doing business; of insurance to cover a wider span of proceedings; and of ways to enable people to use conditional fees without having to pay an insurance premium up front.
I also hear, for example, that since the announcement, courses offering solicitors training in risk and project management have been heavily subscribed. What I hear is of go-ahead lawyers, insurers and others talking about a new world that is opening up and how they will meet the challenges and seize the opportunities. Dare I suggest that the dilemma facing the Law Society is that some of its more forward-thinking members may welcome all, or most, of the proposed changes? I note, for example, that--while the opening comments of the Solicitors Journal of 7 November bewailed the changes--on the back pages, a practising lawyer, who teaches on the master of business administration course at Nottingham law school, was claiming that it is "Time Gentlemen Please" for the legal professions. He said that the Government's proposals should be applauded and that
The second concern is that conditional fees will not be available for some cases that receive legal aid now, especially not those with a low chance of success. That is true, but I cannot see how it is fair to help people who
are less well-off to sue under legal aid in cases in which working people, whose taxes help pay for legal aid, cannot sue. I also cannot see why it is a criticism that our changes will keep weak cases out of the courts.
"the legal professions have been rumbled . . . for the intrepid, the future holds enormous opportunities".
Let us come down to some hard detail. Those who oppose substituting conditional fees for legal aid do so on three grounds. The first is that some cases by their very nature are not suitable for a conditional fee. Most commonly cited are landlord and tenant cases and dependants. The answer is that those cases will continue to receive legal aid unless someone can convince us that they could attract a conditional fee or should be excluded for some other reason. I hope that that satisfies my hon. Friend the Member for Islington, North (Mr. Corbyn).
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