Examination of Witnesses (Questions 40
- 59)
TUESDAY 10 NOVEMBER 1998
THE RT
HON THE
LORD IRVINE
OF LAIRG,
QC, MR IAN
BURNS
Mr Howarth
40. I want to turn to the question of conditional
fees first introduced in 1995. What proportion of cases that are
eligible to be dealt with by way of conditional fee is now conducted
on that basis?
(The Lord Chancellor) Such statistics are simply not
available. We have no means of knowing.
41. Is it your impression that the number of
cases is growing?
(The Lord Chancellor) It is our impression that a
very substantial number of personal injury cases have gone forward
under conditional fee agreements. I have seen a figure of about
47,000 in relation to the work of a single insurer alone, but
the statistics that you look for do not exist.
(Mr Burns) We are aware that the number of insurance
policies taken out is rising rapidly because some of the insurers
have shared their figures with us, but we do not know how many
cases have been launched on that basis because we do not have
access the data to show the type of client and the basis on which
individual cases have been funded.
42. Presumably, as the number of conditional
fee cases increases you will expect a withdrawal of legal aid
from those cases?
(The Lord Chancellor) First, it is important to make
clear that nothing has been withdrawn from legal aid yet as a
result of the extension of the availability of conditional fee
agreements. I intend to ensure when legislative opportunity arises
that the insurance premium and the amount of the uplift are recovered
from the unsuccessful defendant by the successful plaintiff. When
that state of affairs exists it will be timely to consider whether
legal aid can safely be removed from straightforward personal
injury cases. Medical negligence cases with heavy investigative
cost may be in a different category and one will have to proceed
with greater caution.
43. Without giving away what is likely to be
in the Queen's Speech, from your point of view is it a high priority
to introduce legislation to give further effect to conditional
fees?
(The Lord Chancellor) I think that any Cabinet Minister
would say that he gave a high priority to securing legislative
time for the principal concerns of his department.
44. But it is true that conditional fees are
still being used largely for personal injury cases which traditionally
have been self-financing anyway. That will leave the vast majority
of the really costly cases involving matrimonial disputes and
crime still covered by legal aid, so in essence the introduction
of conditional fees will not substantially reduce the legal aid
bill.
(The Lord Chancellor) I would be very surprised if
anyone round this table proposed that legal aid should be withdrawn
from defendants in criminal cases. I assume until someone challenges
me by a question it is taken as read that if the state brings
a prosecution against someone and there is a risk of imprisonment
and the individual cannot provide for his own defence a prior
charge—I use that word loosely but Members will know what
I mean—on the Legal Aid Fund should be the provision of
criminal defence services. You know as well as I do that the problem
with that is that if it is really a prior charge what is left
over is available for other purposes. Obviously, we give a very
high priority to family cases. That is why we attach enormous
importance to bringing the criminal legal aid budget, which is
a must, under control primarily through the medium of contracting.
45. Is there a case for increasing the small
claims court limit for personal injury claims from £1,000
to £5,000?
(The Lord Chancellor) I have thought about that carefully
and the conclusion to which I have come is no. The rationale of
up to £1,000 is that it is really cuts and bruises and minor
injuries that can be dealt with in the small claims court. Broadly
speaking, we are talking about anything in excess of that—any
limit is arbitrary—because personal injury cases are more
complex and deserve not to be dealt with in that court.
46. I understand that one of the responses to
your consultation document Access to Justice with Conditional
Fees produced in March of this year was the idea of a contingency
legal aid fund into which successful litigants would pay a proportion
of their compensation and that would fund the unsuccessful cases.
When you came before us last year in answer to Mr Hogg you said:
"At the moment, I am not very impressed by the idea of a
contingency legal aid fund. The basic reason for that is that
the winners would subsidise the losers." Are you still of
that view?
(The Lord Chancellor) Yes, and perhaps I hold it even
more strongly. If a CLAF (contingency legal aid fund) worked and
winners subsidised the losers the Bar or legal profession could
itself run it. The proposition is not that the profession should
run it but that the state should do it. There is a great deal
of evidence that conditional fee agreements are working very well
and will give millions of people who are outside it greater access
to justice. At present it is only the very rich or very poor who
can afford to litigate and all the millions in between cannot.
Conditional fee agreements will bring them access to justice,
and that is a very significant gain. To return to the CLAF, since
nobody who proposes it also proposes to outlaw conditional fee
agreements the real danger is that solicitors will take the strong
and successful cases and the weaker ones will go into the CLAF
and the CLAF will fail.
47. Even so do you agree that under those arrangements
the vulnerable—those who do not have strong cases, are poor
and cannot persuade solicitors to take their case or get insurance
to cover them because the premium is too expensive—will
still find it difficult because they will not attract the interest
of the lawyer on a conditional fee basis? Will they not fall through
the net?
(The Lord Chancellor) We have not heard that this
has been a problem. If one has a good case one will find a lawyer
willing to act and the success fee will reflect the risk. I return
to an earlier proposition. I do not think that weak cases should
go forward on public money, only strong cases. I do not think
that legal aid exists to put the poor in a better position from
the standpoint of bringing forward weak cases than people who
can afford to fund their cases out of their own resources. A lifetime's
experience of the law teaches me that litigation is a lot of grief
and misery. It is wonderful if you win but appalling if you lose.
In some of these cases involving very serious injuries to children
to fight on regardless, with all the trauma of litigation, only
to lose at the end is appalling. One figure that is quoted, which
is not entirely realistic because many medical negligence cases
settle and settlement may count as success, is that only 17 per
cent of cases that fight to a trial succeed. On any showing that
is a very poor outcome.
48. Having litigated myself, I am entirely in
agreement with you that litigation is to be avoided except in
extremis. The President of the Law Society, Mr Mathews, commenting
on the whole question of conditional fees and legal aid eligibility,
said: "When the last Labour Government left office over 70
per cent of the population was eligible for legal aid. The figure
is now below 50 per cent and most of those technically eligible
cannot in practice afford the contribution required of them."
As a Labour Lord Chancellor are you happy to preside over a situation
in which justice is less available to people than it was in the
past?
(The Lord Chancellor) You will remember that there
were 18 years between 1979 and 2 May 1997. I look at the position
as I inherited as on 2 May 1997 rather than the Halcyon days of
the government that lost power in 1979. But I have already given
an answer to this point. It remains my long-term aim to improve
eligibility but there are many other priorities besides.
49. I want to return to the question of insurance.
The Committee has always been concerned that as a pre-condition
to conditional fee arrangements there should be an accessible
insurance market to back it up. What has been the result of any
discussion that you have had with the insurance industry to ensure
that there is a wide range of affordable policies available to
the public?
(The Lord Chancellor) I can tell you a bit but I am
circumscribed to some extent by commercial confidence. My department
and I have had discussions with insurers because we are obviously
concerned about this. There are at least eight providers of a
range of policies. I could name names but there would be no point
in it. Many of those names would be recognised by you. There are
other insurers who have assured us that they will be coming on
the market. Therefore, I am completely confident that there will
be a broad range of affordable insurance packages coming from
the market.
Chairman
50. Is it your intention that all housing cases,
including those that contain a personal injury element, should
remain within the scope of legal aid?
(The Lord Chancellor) The straight answer is yes provided
it is not a personal injury case in disguise. If it was truly
a housing case with a personal injury element, the answer is yes.
51. Am I right in thinking that at the moment
housing cases for the purposes of contracts are considered as
part of family law?
(The Lord Chancellor) No.
(Mr Burns) Contracts have not yet been specified in
these areas, so there is not a precise answer to your question.
In some cases housing matters are a product of family law and
ancillary relief proceedings but, generally speaking, they do
not stand as family law cases.
52. When you come to award contracts will you
be awarding them for housing law specifically?
(Mr Burns) Yes.
53. What is your timetable for the introduction
of exclusive contracting to all areas of legal aid?
(The Lord Chancellor) The timetable is: January 1999
for medical negligence work; January 2000 for civil advice and
assistance and certificated family work; April 2000 for high cost
cases; and April 2001 for certificated civil non-family work.
The basic point is that people who receive legal advice and assistance
or representation through legal aid should have access to high
quality specialists and the contract is the quality assurance
for the public. Quality and expertise are really the names of
the game as far as we are concerned. You probably want to know
the position in relation to criminal work. Advice and assistance
contracts are to be contracted out by 2000, and all criminal defence
services are to be provided by solicitors, including advocacy,
by 2003.
54. Is it fair to say that one of the effects
of contracting out is to introduce a cash limit for legal aid
expenditure?
(The Lord Chancellor) I do not really see it that
way. I see it as a means of getting the budget under control,
value for money, the benefit of bulk purchase and quality assurance,
but not as a cash limit.
55. So, in February or March people will not
go to solicitors and be told that the budget for that year for
housing advice or whatever has been spent and they will have to
wait until April?
(The Lord Chancellor) I do not contemplate that, and
we would be in trouble if that were so.
56. The National Consumer Council has asked
why, given your objective of refocusing legal aid "towards
helping people secure their basic rights", you have proceeded
to cash limit advice and assistance schemes while the rest of
legal aid has been left open-ended?
(Mr Burns) The advice and assistance schemes have
always operated on a different funding basis from other legal
aid. There are already specific agreements about how much money
will be paid. Those pilot agreements and arrangements will stand
and be expanded. Perhaps it is a misunderstanding about that which
has given rise to the question.
57. There is to be no basic change in the existing
arrangements?
(Mr Burns) We do not seek to change the overall relationship
between the two, but advice and assistance is an area where at
the moment there is a series of pilot contractual arrangements
which we can use to help develop the services. We are using those
arrangements now to develop the services. With the Lord Chancellor's
encouragement, the Legal Aid Board has already used its contractual
abilities on advice and assistance to pilot contracts with the
not-for-profit sector. We could not have done that without those
contractual controls. The NCC may be commenting on the fact that
we are able to move faster in that field than in other areas where
those controls do not exist.
58. When you do contract out will you find a
shortfall of quality suppliers in certain specialisms?
(The Lord Chancellor) Yes.
59. How can that be addressed?
(The Lord Chancellor) Let us take a particular area
of concern: a lack of sufficiently highly qualified advisers on
immigration. As we develop the community legal service we must
be innovative in that way. We will have to give thought to providing
education and training through the medium of the Community Legal
Service budget to advisers who are insufficiently qualified at
present. But I agree that in certain areas there is undoubtedly
a skills deficiency.
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