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These notes refer to the Access to Justice Bill [Lords] ACCESS TO JUSTICE BILL [H.L.]
EXPLANATORY NOTES
INTRODUCTION1. These explanatory notes relate to the Access to Justice Bill brought from the House of Lords on 17th March 1999. They have been prepared by the Lord Chancellor's Department in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.
3. The Bill was introduced in the House of Lords on 2 December 1998. It received its Second Reading on 14 December 1998 (Official Report, cols. 1107-1127 & 1140-1201). The Committee Stage took place on 19 January 1999 (cols. 475-572); 21 January 1999 (cols. 701-752 & 771-792); 26 January 1999 (cols. 878-935 & 951-1008); and 28 January 1999 (cols. 1137-1193 & 1210-1278). The Report Stage took place on 11 February 1999 (cols. 329-384 & 390-456) and 16 February 1999 (cols. 551-571, 580-619 & 627-672). The Third Reading was on 16 March 1999 (cols. 611-628 & 646-693).
OVERVIEW
4. This Bill replaces the legal aid system with two new schemes; and makes provisions about rights to supply legal services, appeals and court procedure, magistrates and magistrates' courts, and the immunity from action and costs of certain officials exercising judicial functions. 5. The provisions in the Bill form part of the wide-ranging programme of reforms to legal services and the courts, described in the Government's White Paper, Modernising Justice, published on 2 December 1998. 6. Except where noted, the Bill only affects England and Wales.
7. These Notes are divided into five main parts, reflecting the main topics in the Bill.
A. Funding of Legal Services (Parts I & II and clauses 29 & 30 in Part III)
8. Part I of the Bill provides for two new schemes, replacing the existing legal aid scheme, to secure the provision of publicly-funded legal services for people who need them.
9. It establishes a Legal Services Commission to run the two schemes; and enables the Lord Chancellor to give the Commission orders, directions and guidance about how it should exercise its functions.
10. It requires the Commission to establish, maintain and develop a Community Legal Service. A new Community Legal Service fund will replace the legal aid fund in civil and family cases. The Commission will use the resources of the fund, in a way that reflects priorities set by the Lord Chancellor and its duty to secure the best possible value for money, to procure or provide a range of legal services. The Commission will also have a duty to liaise with other funders of legal services to facilitate the developments of co-ordinated plans for making the best use of all available resources. The intention is to develop a network of legal service providers of assured quality, offering the widest possible access to information and advice about the law, and assistance with legal problems.
11. The Commission will also be responsible for running the Criminal Defence Service, which replaces the current legal aid scheme in criminal cases. The new scheme is intended to ensure that people suspected or accused of a crime are properly represented, while securing better value for money than is possible under the legal aid scheme.
12. Part II makes two minor changes to the legal aid scheme in Scotland.
13. Clauses 29 and 30 (in Part III) relate to privately-funded litigation. They amend the law on conditional fee agreements between lawyers and their clients, and the recovery of insurance premiums as costs between the parties to litigation.
B. Rights of audience etc. (Clauses 31-39 in Part III) 14. The rest of Part III reforms the law relating to lawyers' rights of audience before the courts, and rights to conduct litigation.
C Appeals, court procedure and judges (Part IV - clauses 40-54) 15. Part IV reforms the system for appeals in civil and family cases.
The intention is to ensure that the appellate system reflects the principle, which underlies the Government's wider programme of civil justice reforms, that cases should be dealt with in a way that is proportionate to the issue at stake.
16. Part IV establishes the jurisdiction of the High Court to hear cases stated by the Crown Court for an opinion of the High Court. It enables these and certain other applications to the High Court to be listed before a single judge. It provides for the appointment of a Vice-President of the Queen's Bench Division. It also prohibits the publication of material likely to identify a child involved in proceedings under the Children Act 1989 before the High Court or a county court; and allows for under 14s to attend criminal trials.
D. Magistrates and magistrates' courts (Part V - clauses 55-75)
17. Part V contains a range of provisions relating to magistrates and magistrates' courts.
E. Immunity and indemnity (Parts VI - clauses 76-82)
18. Part VI makes provision about immunity from action and costs and indemnities for certain officials exercising judicial functions.
19. Part VII (clauses 83-88) makes general supplementary provisions.
A. FUNDING OF LEGAL SERVICES (Clauses 1-30)
SUMMARY20. The Bill reforms the legal aid system in England and Wales, and amends the law relating to conditional fee agreements between lawyers and their clients. It also makes minor amendments to the legal aid scheme in Scotland. 21. The Government's intention is to increase access to justice, by:
22. The Bill replaces the existing legal aid system with two separate schemes for funding services in civil and criminal matters. These will be known as the Community Legal Service and the Criminal Defence Service respectively.
23. The Legal Services Commission will have two main duties in respect of the Community Legal Service (CLS).
25. The Commission will develop a system of kitemarking, on the basis of common quality criteria. This should reinforce public confidence that the voluntary sector is a provider of good quality legal advice and help. 26. The Commission and the CLSPs will encourage innovation by the voluntary sector in the delivery of advice through increased use of information technology and mobile 'outreach' services providing help to people in remote communities. 27. Overall, the intention is to:
28. The purpose of the CDS is to secure the provision of advice, assistance and representation, according to the interests of justice, to people suspected of a criminal offence or facing criminal proceedings. 29. The Commission will be empowered to secure these services through contracts with lawyers in private practice, or by providing them through salaried defenders, employed by non-profit-making organisations. This will necessarily mean that suspects' and defendants' choice of representative is limited to contracted or salaried defenders, although the intention is to maintain an element of choice in all but exceptional cases. All contractors will be expected to meet quality-assurance standards and contracts will, where possible, cover the full range of services from arrest until the case is completed. (The current arrangements for criminal legal aid are fragmented: a person can receive assistance in respect of the same alleged offence under several separate schemes, each resulting in a separate payment for the lawyers involved.) 30. There will be a transitional period while contracts are developed and extended to cover the full range of services. The Commission will therefore be able to pay lawyers on a case by case basis for representation provided on a non-contractual basis, according to remuneration scales set in regulations (that is broadly on the same basis as the current criminal legal aid scheme). 31. As now, the courts will grant representation under the scheme to defendants according to the interests of justice. But the courts will no longer have to conduct a means test as well before granting representation. Instead, at the end of a case in the Crown Court, the trial judge will have power to order a defendant to pay some or all of the cost of his or her defence. The Commission may investigate the defendant's means in order to assist the judge. The intention is to abolish the system of means testing every defendant, which the Government considers an ineffective and wasteful aspect of the current scheme, while ensuring that in the more expensive cases defendants continue to pay towards the cost of their defence when they can afford to do so. Conditional fees32. The Bill reforms the law relating to conditional fees to enable the court to order a losing party to pay, in addition to the other party's normal legal costs, the uplift on the successful party's lawyers' fees; and in any case where a litigant has insured facing an order for the other side's costs, any premium paid by the successful party for that insurance (see paragraphs 46 and 48 below). The intention is to:
BACKGROUNDLegal Aid
33. The present scheme is contained in the Legal Aid Act 1988. 34. A common feature of existing civil and criminal legal aid schemes is that expenditure on them is demand-led. Any lawyer can do legal aid work for a client who passes the relevant means test (if any), and whose case passes the statutory merits test (in the case of civil legal aid), or the interests of justice test (in the case of criminal legal aid). Lawyers are paid on a case-by-case basis for each individual case or other act of assistance, usually at rates or fees set in regulations, but in some cases on the same basis as a privately-funded lawyer. 35. This means that there are few mechanisms or incentives for promoting value for money or assuring the quality of the services provided; and that neither the Government nor the Legal Aid Board is able to exert adequate control over expenditure or determine the priorities for that expenditure. 36. Over the last 6 years, expenditure on legal aid overall has increased from £620m in 1991/92 to £1,526m in 1997/98, a rise of 68%. In comparison GDP rose by 18% over the same period. Meanwhile the number of people helped overall has increased by 18% to 3.6m. In civil and family legal aid, expenditure rose from £330m to £634m, an increase of 92%, while the number of people helped has fallen by almost 10%. Average payments in civil and family cases have risen by almost 90%, from £1,598 in 1991/92 to £3,018 in 1997/98. The cost of criminal legal aid rose by 50% between 1991/92 and 1997/98, from £397m to £597m, while the numbers helped has remained at around 615,000. Over the period average payments to defence lawyers went up by 11% and 66% in the magistrates' courts and the Crown Court respectively.
Quality assurance and contract pilots
37. Since August 1994, the Legal Aid Board has operated a voluntary quality assurance scheme, known as franchising. Currently, some 2,703 solicitors' firms have franchises in one or more of the 10 subject categories in which they are awarded (criminal, family, personal injury, housing etc.) A further 2,030 applications for franchises are pending. The Board is continuing to develop the franchising scheme, and introduce new categories, in order to underpin the move to a generally contracted scheme under the reforms in this Bill. 38. In Autumn 1994, the Board set up a pilot scheme which showed that non-profit-making advice agencies could provide legally-aided advice and assistance to the same standard as solicitors' firms. In October 1996, a second pilot was established, involving a larger number of agencies, to develop systems for contracting for advice and assistance work. 39. In November 1996, the Board began to pilot contracts with solicitors' firms to provide advice and assistance in civil matters. A pilot of contracts to provide mediation in family cases under the legal aid scheme commenced in May 1997. A pilot covering advice and assistance in criminal cases began June 1998, and was extended to cover representation in the Youth Court in February 1999. 40. Since October 1997, the Board has set up a Regional Legal Services Committee in each of its 13 Areas to advise it about future priorities for contracting. 41. The Government has announced that all civil advice and assistance, and all family work will be provided exclusively under contract from January 2000. Only organisations with a relevant franchise will be eligible to bid for these contracts. Also, a new clinical negligence franchise came into effect in February 1999; and from July 1999 only firms with that franchise will be able to take these cases under the legal aid scheme. 42. Two documents recently published by the Legal Aid Board explain aspects of the approach to contracting:
43. There are over 1,500 non-profit-making advice agencies in England and Wales. They receive their funding - over £150 million a year in total - from many different sources, mainly local authorities, but also charities, including the National Lottery Charities Board, central Government, the Legal Aid Board, and business. 44. The provision of advice services is not spread consistently across the country. Some areas appear to have relatively high levels of both legal practitioners and voluntary outlets, while others have little or none. For example, the Legal Aid Board's South East Area has one Citizens Advice Bureau per 46,000 people, but in the East Midlands 138,000 people share a Citizens Advice Bureau. The Government believes that the fragmented nature of the advice sector obstructs effective planning, and prevents local needs for legal advice and help from being met as rationally and fully as possible. Conditional Fees
45. Section 58 of the Courts and Legal Services Act 1990 allowed the use of conditional fee agreements in such types of case as the Lord Chancellor specified by Order (and subject to any requirements made by him in regulations). Section 58(10) excludes from the potential scope of conditional fees all criminal and family proceedings. 46. Conditional fee agreements allow clients to agree with their lawyers that the lawyer will not receive all or part of the usual fees or expenses if the case is lost; but that, if it is won, the client will pay an uplift to the solicitor in addition to the usual fee. In July 1995, conditional fee agreements were allowed for a limited range of cases (personal injury, insolvency and cases before the European Commission of Human Rights). The maximum uplift that could be charged if the lawyer was successful was set at 100% of the normal fees. In addition the Law Society recommended that lawyers should voluntarily limit the uplift to a maximum of 25% of the damages if that was lower than the 100% uplift of fees. At the same time, insurance policies were developed which allowed the client to take out insurance to cover the costs of the other party, and the client's own costs other than the solicitor's fees, if the case should be lost. Generally the uplift and the premium are taken from any damages recovered by the client. In July 1998 the Government extended the availability of conditional fees to all civil cases (excluding family cases). 47. Since the introduction of conditional fees, the common law has been developed in two recent decisions by the courts (in Thai Trading Co. (A Firm) v Taylor, (1998) 3 All ER 65 CA; and Bevan Ashford v Geoff Yeandle (Contractors) Ltd, (1998) 3 All ER 238 ChD). In the first of these cases the Court of Appeal held that there were no longer public policy grounds to prevent lawyers agreeing to work for less than their normal fees in the event that they were unsuccessful, provided they did not seek to recover more than their normal fees if they were successful. (The latter was only permissible in those proceedings in which conditional fee agreements were allowed). In Bevan Ashford, the Vice Chancellor held that it was also lawful for a conditional fee agreement to apply in a case which was to be resolved by arbitration (under the Arbitration Act 1950), even though these were not court proceedings, provided all the requirements specified by regulations as to the form and content of the agreement were complied with. 48. There are also available insurance policies which can be taken out when someone is contemplating litigation to cover the costs of the other party and the client's own costs (including, if not a conditional fee case, the client's solicitor's fees) if the case is lost. Some of them were developed to support the use of conditional fee agreements but others are used to meet lawyers' fees charged in the more traditional way. For the same reason that the success fee under a conditional fee is being made recoverable, it is also proposed to make any premium paid for protective insurance recoverable too. 49. The principles behind the Government's desire to see an expansion in the use of conditional fee arrangements were set out in a consultation paper, Access to Justice with Conditional Fees, Lord Chancellor's Department, March 1998. COMMENTARYPrinciples
50. Clause 1: Principles applicable to Part 1. This clause establishes principles or objectives which apply to Part 1 of the Bill. Clause 1(2)(a) is about access to legal services and the machinery of justice for people who would otherwise be unable to obtain it on account of their means. Clause 1(2)(b) states that access is not to be impaired on account of disability or geographical location. Clause 1(2)(c) concerns the quality of services, and the resolution of disputes quickly, fairly and with the parties placed on a equal footing. 51. This clause was added to the Bill at Report Stage in the House of Lords. At Third Reading, the Lord Chancellor announced the Government's intention to seek to remove it in the Commons (col. 691). The Lord Chancellor argued that, by setting common objectives for both, the clause confused the distinct natures of the Community Legal Service and the Criminal Defence Service; and that, in certain respects, it expressed unrealistic expectations. The Commission
52. Clause 2: The Legal Services Commission. This clause establishes the new Legal Services Commission, and makes provision for appointments to it. The Commission will replace the Legal Aid Board. It is considered necessary to establish a new body to reflect the fundamentally different nature of the Community Legal Service (CLS) compared to civil legal aid. Within the broad framework of priorities set by the Lord Chancellor, the Commission will be responsible for taking detailed decisions about the allocation of resources. It will also be required to liaise with other funders to develop the CLS more widely. 53. The Commission will also have a wider role in respect of the Criminal Defence Service than the Legal Aid Board does in respect of criminal legal aid. The Board has very limited responsibilities for legal aid in the higher criminal courts. 54. Clause 2 is similar to section 3 of the Legal Aid Act 1988 (the 1988 Act), which established the Legal Aid Board. However, the membership of the Commission will differ from that of the Board, to reflect a shift in focus from the needs of providers to the needs of users of legal services. Also, the Commission is to be rather smaller than the Board: 7-12 members rather than 11-17. This is intended to facilitate focused decision-making. 55. Schedule 1 makes further provisions about the Commission. Paragraphs 1-10, 12 and 17, concerning the members, staff and proceedings of the Commission, mirror provisions about the Board in Schedule 1 to the 1988 Act. Paragraph 11 provides for the Commission's administrative budget, mirroring section 42(1)(b) & (2) of the 1988 Act. Paragraph 13 requires the Commission to provide any information requested by the Lord Chancellor; this mirrors provisions in section 5 of the 1988 Act. Paragraph 16 requires the Commission to prepare accounts and provides for them to be audited. This mirrors section 7 of the 1988 Act, except that the Comptroller and Auditor General, rather than an appointed auditor, will audit the Commission's accounts. 56. Paragraph 15 requires the Commission to prepare an annual plan, which will be laid before Parliament. This will include the Commission's detailed plans for allocating the resources available to the CLS fund. This is a new requirement. The Legal Aid Board produces annual Corporate and Business plans, but these are not statutory documents nor laid before Parliament. 57. Paragraph 14 requires the Commission to prepare an annual report on the discharge of its functions. This will be laid before Parliament. It will include a report on the impact of the Commission's activities on the supply and development of legal services within the wider CLS. (Section 5 of the 1988 Act provides for the Legal Aid Board's Annual Report). 58. Part II of Schedule 11 makes transitional provisions for the replacement of the Legal Aid Board by the Commission. Briefly, it provides that, on an appointed day, the Commission shall take over all the property, rights and liabilities of the Board. Staff of the Board will automatically become staff of the Commission, and their employment and pension rights are preserved. 59. The intention is that the provisions of the 1988 Act will remain in force for any cases that have already started when the new schemes come into effect. The Commission will be responsible for the continued administration of these cases. 60. Clause 3: Power to replace Commission with two bodies. This clause allows the Lord Chancellor, by order subject to the affirmative resolution procedure (see clause 25(9)), to split the Legal Services Commission into two separate bodies, one responsible for the Community Legal Service and the other for the Criminal Defence Service. 61. The intention is to allow for the possibility that, because of the different nature and objectives of the two schemes, it may prove more effective in the longer term to administer them separately. It would not be practicable to set up two bodies from the outset. This is because of the need to retain, in substance, the existing infrastructure and expertise of the Legal Aid Board to manage the transition from legal aid to the two new schemes. This involves both administering existing cases under the old scheme and developing contracting as the principal means of procuring services under the new schemes. 62. There is no definite intention to split the administration of the two schemes in future. Rather, the intention is to review the situation once the new schemes are firmly established, probably after about 5 years. 63. Clause 4: Powers of Commission. This clause gives the Commission similar general powers to those presently enjoyed by the Legal Aid Board (section 4 of the Legal Aid Act 1988). These powers will allow the Commission to do whatever it believes is necessary in the discharge of its functions, subject to any order made by the Lord Chancellor under Clause 4(5). Later clauses exemplify the ways in which the powers may be used in the provision of specific services (see clauses 7(3), 14(2) and 15(2)). The Community Legal Service
64. Clause 5: The Community Legal Service. This clause requires the Legal Services Commission to establish, maintain and develop a Community Legal Service (CLS). It sets out the purpose of the CLS and defines the services which may be provided under the CLS. These range from the provision of basic information about the law and legal services, to providing help towards preventing or resolving disputes and enforcing decisions which have been reached (clause 5(2)). The scheme will encompasses advice, assistance and representation by lawyers (which have long been available under the legal aid scheme), and also the services of non-lawyers. It will extend to other types of service, including, for example, mediation in family or civil cases where appropriate. 65. Clause 5(3) provides that the CLS does not cover services funded as part of the Criminal Defence Service, in order to avoid any overlap between the two schemes. 66. The purpose of the CLS (clause 5(1)) is in two parts, reflecting the Commission's two key roles. First, the Commission will facilitate the development of the wider CLS, by working with other funders of services, such as local authorities, to plan for the most appropriate use of available resources in order to match the provision of services to identified needs and priorities. Clause 5(5) describes this function further. The intention is to build on the work already being carried out by the Legal Aid Board's Regional Legal Services Committees in order to establish systems for determining (i) the need for legal services at regional level, and (ii) the ability of providers to supply those services, to the required standard, within the available resources. Secondly, the Commission will itself fund the provision of services through the CLS Fund (which is described further in clause 6). 67. The Commission will help to ensure that the services provided are of a high quality by setting and monitoring standards and establishing quality accreditation systems (clause 5(6) & (7)). The intention is that only accredited providers will be eligible for funding from the CLS fund and that other funders of legal services will be able to impose a similar requirement. 68. Clause 5(8) empowers the Lord Chancellor to give the Commission orders about how it should exercise its functions under subsections (5)-(7). These are subject to Parliamentary approval by the negative resolution procedure (see clause 25(10)). There are similar reserve powers in relation to the Commission's other main functions in clauses 7(4), 14(3) and 15(3)(b). 69. Clause 6: Funding of services. This clause establishes the CLS Fund and the mechanisms by which the Lord Chancellor will provide the resources to the Fund. Each year, as part of the general public expenditure planning process, the Lord Chancellor will set a budget for the CLS. This will take account of the receipts from contributions and other payments expected under the regulations made under clauses 11 and 12, with the balance of the budget provided by Lord Chancellor from money voted by Parliament. The CLS fund will therefore not be an open-ended fund, as the legal aid fund is now. 70. The Lord Chancellor will be able to direct the Board to use specified amounts within the fund to provide services of particular types. The intention is that the Lord Chancellor will divide the fund into two main budgets, for providing services in (i) family and (ii) other civil cases, while allowing the Commission limited flexibility to switch money between the two areas. The Lord Chancellor may set further requirements within these two budgets, by specifying the amount, or the maximum or minimum amount, that should be spent on, say, services from the voluntary advice sector, mediation, or cases involving a wider public interest. In this way, it will be possible to ensure that resources are allocated in accordance with the Government's priorities. 71. A duty is placed on the Commission to aim to obtain the best value for money - a combination of price and quality - when using the resources of the fund to provide services. Clause 5 describes how the Commission will seek to ensure that services are of high quality. Clause 6, in providing for a controlled budget, and clause 7 in setting out the ways, principally contracting, through which services will be procured, provide the means to control cost. 72. Clause 7: Services which may be funded. This clause builds on the general powers contained in clause 4, by setting out the ways in which the Commission may use the CLS fund to provide services. These include making contracts with or grants to service providers, or employing staff to provide services directly to the public. 73. These flexible powers are intended to give effect to one of the principal objectives of the reform of publicly funded legal services: that is the ability to tailor the provision of services, and the means by which services are to delivered, to the needs of local populations and particular circumstances. They will also allow the Commission to test new forms of service provision through pilot projects. 74. Clause 7 also gives effect to Schedule 2, which excludes from the scope of the CLS Fund specified types of service which would otherwise fall within the broad definition provided by clause 5. The Schedule may be amended by the Lord Chancellor, by regulations subject to the affirmative resolution procedure (see clause 25(9)). The Lord Chancellor may also issue directions to the Commission, requiring or authorising it to provide services within the excluded categories in exceptional circumstances; or, following a request by the Commission, authorising it to fund an individual case. For example, the Lord Chancellor may direct that for personal injury cases (which are generally excluded by the Schedule because most such cases are suitable for conditional fees) funding by the CLS fund should nonetheless be possible where exceptionally high investigative or overall costs are likely to be necessary, or where issues of wider public interest are involved. 75. The combination of the regulation and direction making powers is designed to ensure that a shift in the balance between public and private funding for particular types of case can be achieved in a gradual and flexible way, while ensuring that no category of case can be excluded from the scope of the Fund altogether without Parliamentary approval. 76. Schedule 2 establishes the scope of the CLS Fund for the time being. People (but not corporate bodies) will be able to receive information on any matters of English law. The Schedule provides for restrictions on the more substantial services that will be available in different categories of case. For some categories a full range of services will be available (subject to priorities). For some others, all services except representation at court by a lawyer will be available. Finally, for some categories, only the provision of information and basic advice will be possible. Subject to the changes described in paragraphs 77 and 78 below, the intention is that the scope of the CLS fund should initially mirror the current scope of civil legal aid; but that it may change over time. In particular:
77. The following changes to the scope of the current legal aid scheme will take effect immediately. In future, subject to any exceptions that the Lord Chancellor may make by direction, only basic information and advice will be available for:
78. In addition, funding for representation at proceedings before the Lands Tribunal or Commons Commissioners will no longer be available. Other services, including assistance with preparing a case, will continue to be available. 79. Clause 8: persons for whom services may be funded. This clause allows the Lord Chancellor, in regulations subject to the negative resolution procedure (see clause 25(10)), to set financial eligibility limits for people to receive services funded by the CLS fund. It allows him to set different conditions, or no conditions, for different circumstances or types of case or service. 80. In essence, the clause repeats provisions in the Legal Aid Act 1988 about financial eligibility: sections 9 (advice and assistance), 13B (family mediation), and 15 (civil legal aid). There are no immediate plans to make any substantive changes to the present financial eligibility limits, although it is intended to uprate them each Spring. In due course, the Government intends to expand the availability of advice and assistance to people who can afford to make a contribution (see Annex A to these Notes). 81. Clause 9: Code about provision of funded services. This clause provides for the Commission to prepare, and the Lord Chancellor to approve, a Code setting out the criteria for determining whether services funded by the CLS fund should be provided in a particular case, and if so what services it is appropriate to provide. The Code will also set out the procedures for making applications. 82. The funding assessment under the Code will replace the merits test for civil legal aid (set out in sections 15(2) & (3) of the Legal Aid Act 1988, and supplemented by Notes of Guidance published annually by the Legal Aid Board). The new assessment is intended to be more flexible than the existing merits test. It will be possible to apply different criteria in different categories according to their priority. It will also be possible to take account of factors, such as a wider public interest, which attach to particular cases, rather than those whole categories of case for which contracts might be let. The reform of the merits test, which regulates the demand that qualifies for help, complements the reforms of the supply of services outlined in clauses 5-7, with the intention of creating a flexible system for deploying resources to meet a range of priorities within a controlled budget. 83. Clause 9(3) lists a range of factors that the Commission must consider when preparing the Code. The criteria for funding the various types of service in different categories of case will be defined by considering these factors. The Code will define which factors are relevant in a given category, how they should be taken into account, and what weight should be given to them. For example, prospects of success will not be a relevant factor in cases about whether a child should be taken into local authority care. The Legal Aid Board published a draft Funding Code consultation in January 1999. This sets out in more detail how it is intended to apply the various factors in different circumstances. Copies of the draft Code can be obtained from the Legal Aid Board, 85 Gray's Inn Road, London, WC1X 8AA. The closing date for comments is 30 April 1999. 84. The Code is required to reflect the principle that in many family disputes mediation is more appropriate than court proceedings. This is intended to reinforce the development, under the Family Law Act 1996, of mediation as a means of resolving private law family disputes in a way that promotes as good a continuing relationship between the parties concerned as is possible in the circumstances. The Government believes that mediation is more constructive than adversarial court proceedings, and that litigation in these cases usually serves only to reinforce already entrenched positions and further damage the relationship between the parties. In addition, the cost of court proceedings is higher than that of mediation, and additional costs have to borne by the property of the family, reducing the amount available to the parties and their children in future. 85. Clause 9(9) empowers the Lord Chancellor to give orders to the Commission about the contents of the Funding Code. Such orders are subject to the affirmative resolution approval procedure (see clause 25(9)). 86. Clause 10: Procedure relating to funding code. This clause provides for an affirmative resolution before the Funding Code first comes into effect, and again for any subsequent changes to the criteria set out in the Code. Clause 10 also provides for an exceptional procedure so that urgent changes can take effect without delay. This procedure is only available for changes initiated by the Commission itself. All changes imposed by the Lord Chancellor by order will require an affirmative resolution before taking effect. The clause would allow the Lord Chancellor to certify a change as urgent. That change would take effect immediately, but fall after 120 days if not confirmed by affirmative resolution. 87. Clause 11: Terms of provision of funded services. This clause enables the Lord Chancellor to set financial conditions to apply to people receiving services funded by the CLS fund. Subject to two additions, the effect of clause 11 is generally to replicate the provisions of the 1988 Act. 88. As now, it will be possible to make regulations requiring people to contribute towards the cost of the services they receive by way of flat rate fees, contributions related to disposable income and capital, and from any property recovered or preserved as a result of the help given. In general, the intention is to replicate the existing regulations, subject to the changes described in Annex A. 89. Clause 11 extends the potential scope of financial conditions in two ways, although there are no immediate plans to use either of these powers.
91. Clause 12: Costs in funded cases. This clause contains provisions about determining the award of legal costs between the parties in cases involving persons supported by the Community Legal Service Fund. Subject to the changes described in Annex A, it is intended to replicate the position that currently applies under the legal aid scheme. (In effect, this clause brings together provisions which are presently contained in sections 12, 13, 17, 18 and 34 of the Legal Aid Act 1988.) 92. Clause 12 establishes limits on the liability of the person receiving funded services to pay costs to the unassisted party. It also provides that regulations may specify the principles that are to be applied in determining the amount of any costs awarded against the party receiving funded services and the circumstances in which a costs order may be enforced against the person receiving funded services. Regulations may also provide for the circumstances in which the Court can require the Commission to meet any costs award ordered against the party receiving funded services. Finally regulations may also provide for the principles that are to be used in determining any award of costs made in favour of the person receiving funded services; to whom any costs recovered in this way is to be paid, and governing which court or other body may undertake the determination of the amount of any costs due. 93. Those regulations which limit the circumstances in which the costs order may be enforced against the person receiving funded services, or the liability of the Commission to meet any costs order on behalf of the person receiving funded services, are made subject to approval under the affirmative resolution procedure (by clause 25(9)). Making these provisions subject to affirmative procedure regulations, rather than in primary legislation as at present, is intended to provide greater flexibility. At present, protection from costs can create too great an advantage in litigation for the person receiving legal aid. Flexibility is also needed to allow for the greater range of ways in which services may be provided under the Bill. Criminal Defence Service
94. Clause 13: The Criminal Defence Service. This clause places the Commission under a duty to establish, maintain and develop the Criminal Defence Service, for the purpose of securing that individuals involved in criminal investigations or criminal proceedings have access to such advice, assistance and representation as the interests of justice require. The Criminal Defence Service will consist of the advice, assistance and representation provided under clauses 14 and 15. 95. Clause 13(3) defines "criminal proceedings". These include criminal trials (subsection (3)(a)), appeals and sentencing hearings ((b)), extradition hearings ((c)), binding over proceedings ((d)), appeals on behalf of a convicted person who has died ((e)), and proceedings for contempt in the face of any court ((f)). Subsection (3)(g) allows the Lord Chancellor to add further categories by regulation. This power will be used, for example, to prescribe Parole Board reviews of discretionary life sentences. 96. The Legal Services Commission will gradually take over the functions currently undertaken by the higher courts in respect of criminal legal aid. At first, Court Service staff will continue to determine costs in many Crown Court cases but the numbers will diminish as the Commission increases the proportion of cases covered by contracts. Staff at the Court of Appeal (Criminal Division) and the House of Lords will continue to determine costs in cases before those courts, although the scope for the Commission to contract for these cases as well will be considered in due course. 97. Clause 14: Advice and assistance. This clause places the Legal Services Commission under a duty to provide such advice and assistance as it considers appropriate in the interests of justice for individuals who are arrested and held in custody, and in other circumstances to be prescribed by the Lord Chancellor in regulations. 98. Initially, it is intended that regulations will provide for advice and assistance in broadly the categories for which it is currently available to people subject to criminal investigations or proceedings. These categories include advice and assistance provided by duty solicitors at a magistrates' court, at a solicitor's office, to a "volunteer" at a police station or to someone being interviewed in connection with a serious service offence.
99. Clause 14 also enables the Commission to comply with this duty by securing advice and assistance through entering into contracts; by making payments to persons or bodies; by making grants or loans to persons or bodies; by establishing and maintaining bodies; by making grants to individuals; or by doing anything else which the Commission considers appropriate for funding advice and assistance except providing it itself. It also enables the Commission to secure the provision of advice and assistance by different means in different areas in England and Wales and in relation to different descriptions of cases. 100. The aim of this clause is to provide the Commission with a range of options for securing advice and assistance in criminal matters. Contracting with quality assured suppliers should provide greater control over both expenditure and the quality of the service provided; and better value for money. 101. At Third Reading in the House of Lords (col. 692), the Lord Chancellor stated that the Government would seek to reintroduce powers (removed by amendments at Report Stage) to enable the Commission to provide services through lawyers in its own employment. These powers are intended to provide flexibility if, for example, there is limited coverage by private lawyers in rural areas. Using employed lawyers should also provide the Commission with better information about the real costs of providing these services. 102. Clause 15: Representation. This clause places a duty on the Commission to fund representation for individuals granted a right to representation in accordance with Schedule 3. It enables the Commission to comply with this duty in the same ways as clause 14 does for advice and assistance. The power to make direct case-by-case payments to representatives (subsection (3)(b)) will allow the Commission to continue to pay non-contracted lawyers to provide representation during the transitional period while contracting develops; and possibly thereafter where that proves to be the best means of securing the necessary services. 103. Clause 15(3)(a) requires the Lord Chancellor to make remuneration orders to set rates for such direct payments. These orders will be subject to the negative approval procedure (see clause 25(10)) and paragraph 122 below). Clause 15(5) provides for reviews of, or appeals against, determinations of fees required for the purposes of a remuneration order. 104. Clause 15(7) provides that defendants granted a right of representation can choose their representative, restricted only as provided in regulations under clause 15(8). In due course, it is intended that regulations will, in particular, provide that a defendant's choice of representatives is limited to those holding contracts with the Commission. In time, the Commission will provide all, or nearly all, representation exclusively through contracted representatives, who it will require to meet defined quality standards. 105. In certain types of cases - such as serious fraud trials - defendants' choice may be further limited to representatives from a panel of firms or individual advocates who specialise in a particular type of case. Membership of a panel will depend on meeting pre-determined criteria. In this way, the Commission can ensure that defendants facing charges in these exceptional cases are represented by those with the necessary expertise, experience and resources. 106. Clause 15(8)(a) enables the Lord Chancellor to make regulations defining circumstances where a defendant will not have a right to a choice of representative, but will instead have a representative assigned to them. Such regulations will be subject to the affirmative resolution procedure (see clause 25(9)). This power might be used, for example, to assign an advocate to a previously unrepresented defendant charged with serious sexual offences where the victim/witness is a child. (Unrepresented defendants may not cross-examine child witnesses directly when charged with violent or sexual offences). 107. It is the Government's intention to reintroduce a power to enable the Commission to provide representation through its own employees (see paragraph 101 above). Clause 15(9) secures that regulations under clause 15(8) may not provide for the defendant's choice of representative to be restricted to Commission employees. 108. Schedule 3 deals with the grant of a right to representation, and in particular:
109. The Schedule provides for rights to representation to be granted to defendants or appellants in criminal proceedings where the interests of justice require it. The factors to be considered in assessing the interests of justice (paragraph 6(2)) mirror section 22(2) of the Legal Aid Act 1988. Other provisions in the Schedule also reflect provisions in the 1988 Act. 110. Clause 16: Code of conduct. this clause will ensure that salaried defenders employed by the Legal Services Commission - assuming the Bill is amended to allow this (see paragraph 101 above) - are subject to a code guaranteeing minimum standards of professional behaviour. The Code is to include duties: to avoid discrimination; to protect the interests of the individuals for whom services are provided; to the court; to avoid conflicts of interest; and of confidentiality. Before preparing or revising the Code, the Commission is required to consult. The Code will be approved by a resolution of each House of Parliament, and published. 111. Clause 17: Terms of provision of funded services. This clause sets out the circumstances in which a person will have to pay towards the cost of representation provided under the scheme. The clause creates a new power, subject to regulations, for a trial judge in the Crown Court to order that a defendant pay towards the costs of representation. The Commission may investigate a defendant's means in order to assist the judge in making an order. The clause enables the Lord Chancellor to make regulations setting out how the new power should be applied. 112. Under the current criminal legal aid scheme, most defendants (about 95%) are not required to make a contribution to their defence costs. Those who do contribute and are acquitted usually have their contributions returned. The cost of means testing and enforcing contribution orders is high in relation to the contributions recovered. In 1997-98, criminal legal aid contributions totalled £6.2 million, while the direct cost of administering the system was about £5 million. Means testing also leads to delays in cases being brought to court, because cases have to be adjourned when the evidence required to conduct the test is not produced. 113. Clause 18: Funding. This clause requires the Lord Chancellor to provide the necessary funding of criminal defence services secured by the Commission in accordance with clauses 13 to 15. As a result, like legal aid, the Criminal Defence Service will be a demand-led scheme. The clause also enables the Lord Chancellor to determine the timing and way in which this money should be paid to the Commission, and requires the Commission to seek to secure the best possible value for money in funding the Criminal Defence Service. Supplementary
114. Clause 19: Foreign law. This clause limits the scope of the CLS and CDS to providing information, advice and other services only in relation to the law of England and Wales (except where foreign law is relevant to proceedings in England and Wales). The Lord Chancellor is given a power to order further exceptions where this is necessary to fulfil the United Kingdom's international obligations. This restriction is no tighter than that currently existing. 115. Clause 20: Restriction of disclosure of information. This clause provides for the protection of information given to the Commission, the court or any other person or body authorised to undertake functions conferred by the Act. 116. It largely repeats the provisions presently found in section 38 of the Legal Aid Act 1988. But it allows information to be disclosed, subject to any regulations to the contrary, for the purposes of the investigation or prosecution of any offence or suspected offence. At present, information can only be disclosed for the purpose of prosecuting offences under the 1988 Act itself. This prevents information which indicates that other offences may have been committed from being made available to the appropriate authority for investigation or prosecution. For example, information provided to allow the Commission to assess the means of a claimant might show or suggest that a fraud was being perpetrated in relation to the receipt of social security benefits. This could not be disclosed under the 1988 Act, but it could be disclosed under the provisions made by clause 20. This clause also clarifies the provisions of section 38 of the 1988 Act by making clear that information may be disclosed about the value of payments made by the Commission to particular firms or lawyers. This reflects current practice. 117. Disclosure of information in contravention of this clause will be an offence punishable by a fine not exceeding £2,500 (on the current scale). (This mirrors the provisions of section 38(4) of the 1988 Act.) No prosecution may be brought without the written approval of the Director of Public Prosecutions. 118. Clause 21: Misrepresentation etc. This clause provides criminal penalties for people who give false information about their finances, or otherwise make false statements, in applying for publicly-funded help under the Bill. The clause largely replicates the equivalent provisions in section 39 of the Legal Aid Act 1988, but extends beyond the person receiving help to anyone who furnishes information. It sets out the proceedings and penalties where those seeking help fail to furnish information required of them under the Bill, or make false statements or representations in doing so. It also enables the Legal Services Commission to take proceedings in the county courts for recovering any losses caused by these acts. 119. Clause 22: Position of service providers and other parties. This clause provides that, unless regulations say otherwise, the fact that services are funded by the CLS or CDS schemes shall not affect lawyer-client privilege or the rights of any third party. This mirrors section 31(1) of the 1988 Act. 120. Clause 23: Guidance. This clause enables the Lord Chancellor to give guidance to the Commission about the discharge its functions. He will be required to publish any guidance. However, the Lord Chancellor may not give guidance about the handling of individual cases. The Commission will be required to consider any guidance given by the Lord Chancellor. 121. Clauses 24-26 and Schedule 4 make provision for consequential amendments, the procedures for approving orders and regulations, and interpretation. In particular, clause 25 includes provisions to regulate the manner in which the Lord Chancellor may make remuneration orders (under clauses 7(4), 14(3) and 15(3)) about the payments which the Commission may make to service providers. 122. Before making a remuneration order affecting payments to lawyers, the Lord Chancellor is required to consult the General Council of the Bar and the Law Society. This mirrors provisions in the current Act relating to regulations which deal with remuneration of lawyers. However the present statutory factors set out in section 34(9) of the 1988 Act are changed in clause 25(3). The Lord Chancellor will be required to have regard to the need to secure a sufficient number of competent practitioners; the costs to public funds; and the need to secure value for money. Legal Aid in Scotland
123. Clause 27: Regulations about financial limits in certain proceedings. This clause enables the Secretary of State by regulations to disapply the financial eligibility and contributions tests for assistance by way of representation in respect of certain proceedings. 124. Assistance by way of representation is a category of advice and assistance under the Legal Aid (Scotland) Act 1986. Advice and assistance, and assistance by way of representation are defined in section 6(1) of the 1986 Act. Advice or assistance is provided by a solicitor or counsel in relation to a matter of Scots law. Assistance by way of representation is provided by a solicitor or counsel in connection with any proceedings before a court, tribunal or statutory inquiry. At present, advice and assistance is available under Part II of the 1986 Act provided financial and contributions criteria are met. Section 8 of the Act sets out the income and capital limits for availability of advice and assistance. Section 11(2) provides for contributions to be paid by a person in receipt of advice and assistance up to maximum amounts set in regulations. 125. Under section 9 of the 1986 Act the Secretary of State may by regulations provide that Part II of the Act as it applies to advice and assistance also applies to assistance by way of representation. Therefore, the financial limits and contributions which apply to advice and assistance are also applicable to assistance by way of representation. The Secretary of State also has the power under section 9 to prescribe different provision for different cases and modify the financial limits which may apply to assistance by way of representation. However, it is not possible under section 9 at present for the Secretary of State to disapply the financial eligibility and contributions tests in their entirety. The Bill provides for certain proceedings, in particular mental health proceedings, to be so exempted from the financial eligibility and contributions tests. 126. Clause 28: Recipients of disability working allowance. This clause disapplies the financial eligibility and contributions tests from persons seeking or receiving advice and assistance who are in receipt of disability working allowance. 127. Advice and assistance is defined in section 6(1) of the Legal Aid (Scotland) Act 1986 as advice or assistance provided by a solicitor or counsel in relation to a matter of Scots law. Advice and assistance is available under Part II of the 1986 Act provided financial and contribution criteria are met. Section 8 of the Act sets out the financial limits for availability of advice and assistance. It provides the income and capital limits which shall apply for the purposes of advice and assistance. Section 11 sets out the contributions payable by a person in receipt of advice and assistance. Sections 8 and 11 provide that advice and assistance shall be available to a person without payment of contribution where that person is in receipt of income support, an income based job seekers allowance or family credit. Clause 28 adds to that category of exempted persons those in receipt of disability working allowance in terms of section 129 of the Social Security Contributions and Benefits Act 1992.
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