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Mr. Mullin: Returning to uplift, my hon. and learned Friend said that there are lawyers taking a 100 per cent. uplift. No doubt there are such lawyers, but he has read--indeed, he drew it to my attention--the Policy Studies Institute document, "The Price of Success", which has analysed conditional fee cases. The document says:
- "The average uplift is 43 per cent. The Law Society's voluntary cap which prevents more than 25 per cent. of damages being eaten up by fees has become virtually standard."
The Government do not have the necessary research on how the 20,000 cases based on conditional fee agreements have operated. Nor do they have any significant research on whether the insurance industry will flood in to pick up cases that were part of the welfare state, as the Government hope that insurers, as well as solicitors, will
do. All the evidence, including that from insurers themselves, suggests that they will not flood in to take on those cases.
An article in The Lawyer of 1 February was headlined, "Insurers to cherry-pick low risk legal aid cases", and said that
All I ask of the Government is that they accept an extremely limited amendment to the Bill to retain legal aid for personal injuries cases involving children, people who are reliant on benefits or pensions and those who are disabled within the definition of the Disability Discrimination Act 1995. That is not a great deal to ask. It would safeguard the poorest in society. If, in five years, it appeared that the system of conditional fees was otherwise working like a dream, the Government could return to Parliament and say that they were justified in taking that risk to give the poorest in society a break. At the moment, however, I have to say that many hon. Members did not come to the House to remove that protection of the welfare state from the poorest people in it.
There will be beneficiaries of the Bill. I repeat that I hold no brief for lawyers and I do not make my remarks on the basis that the measure will impoverish lawyers--quite the reverse. The Government's proposals will enrich many lawyers who are awaiting conditional fee agreements. There will be two types: one will be absolutely admirable and the other will be absolutely not admirable. The first type includes large firms, which are represented in the House. They will, of course, take on clients because they have an enormous portfolio of cases and have the ability to churn out cases and take on the portfolio of risk. They will accept a limited number of cases from the myriad legal aid solicitors who are at present responsible for operating, on the level of the high street, what I hope I have demonstrated is an excellent system.
The other lawyers who will, unhappily, benefit from the Bill are the charlatans. They will be prepared to accept, on conditional fee agreements, the cases of people who would otherwise have got legal aid. They will churn out those cases, settle them or push them when they should not be pushed, depending on how much it suits their commercial need. I do not know a single concerned lawyer in personal injury litigation, working for a large firm, who does not perceive those risks to be real and completely unacceptable.
My hon. Friend the Minister has repeatedly said that he receives letters. I have received many letters from some of the best and most radical firms of solicitors who deal with those cases, as well as those that involve a high degree of public service, and they are unanimous that the Government's proposals should be rejected.
I shall end on an entirely parochial note. The Chatham dockyard is in my constituency. It is well known that, year after year, many cases of industrial disease, including leukaemia and cancers, are emerging. It is almost certain that those cases result from nuclear exposure at the dockyard during the 1980s. I simply ask my hon. Friend the Minister, will those cases be covered by any exception in the Bill? At the moment, they are not. At the moment, those people would have a right--
Mr. Dismore:
Amalgamated Engineering and Electrical Union.
Mr. Marshall-Andrews:
No, they do not have trade union backing, and my hon. Friend knows perfectly well why--because they were working in a dockyard.
Mr. John Burnett (Torridge and West Devon):
The reaction of many people who are attending today's debate is that it could be just another occasion when lawyers seek to defend their vested interests and restrictive practices. Many Members who are not lawyers will come to this place with, at the back of their mind, the thought, "Och, it is time to zip up your pockets, because the lawyers want to retain the status quo, which suits them well." I hope that, in my speech, I shall disabuse the House of those ideas, explain why I think that much of the Bill is misguided, and suggest constructively what can be done to change the Bill and genuinely to improve access to justice without compromising the integrity of our legal system.
I must declare an interest. I am still a partner in a firm of solicitors, but I can tell the House that I shall be leaving my firm in the near future.
On 28 July 1998, hon. Members debated in Committee the draft Conditional Fee Agreements Order 1998. The Government are intent on solving what they perceive to be the budgetary problem of legal aid by greatly extending conditional fee agreements and making other changes. However, before I discuss conditional fee agreements--no win, no fee--I should like to be the first to agree with the Government that changes need to be made to legal aid, and that a preferable system should be introduced to open up justice to middle-income Britain.
Regarding legal aid, there are areas where change should and must be made, dealing first with the merits test. It is beyond me how the merits of a case are gauged, and I can illustrate that by taking the example of two cases.
In one case, a constituent, the defendant, sold a business many years ago. The plaintiff claimed that he had not got what he paid for. Not only did the plaintiff get legal aid in respect of the first case before a judge, which he lost, and for the second case before another judge, on the same
facts for the same claim, which he also lost, but he has now been given legal aid again, for an appeal. It is beyond me how that individual was granted legal aid for the third time, let alone the second. The state is effectively funding this case for the third time, while the defendant, who does not qualify for legal aid, has run out of money to hire a lawyer to defend him and must now do it himself.
The scandal is that that defendant has no hope of recovering the costs that he incurred earlier, despite the fact that he has won twice. That is an unfair element of the existing legal aid system. Time and again, the non legally aided party settles what are sometimes the most unmeritorious cases, simply because he is on a hiding to nothing. If he wins, he still loses his own costs and he may as well buy off the other party in respect of that sum in any event, right at the start.
Another case, from the opposite end of the spectrum, concerns a young girl with devoted and caring parents, who has suffered, and still suffers, from an illness that renders her weak and emaciated. She had treatment and was abused by a person who was supposed to be treating her. Omitting for a moment the criminal aspects of the matter, it is proving very difficult indeed to get legal aid for that person, whose condition has been severely exacerbated by the professional who was there to look after her. That is despite the fact that there is evidence in writing from two other professional people to the effect that they saw the young girl being subjected to inappropriate treatment, and the fact that the individual concerned was suspended some time ago in an internal inquiry that has been completed not in respect of the case of this particular girl but in respect of the case of two other girls subjected to similar treatment.
There is every good reason to look into how the Legal Aid Board measures the merits of the case, and I am glad to note that the Bill starts to address that problem. I believe that significant savings could be made if the right experts were available to measure merits on the basis that I have just outlined, and if the people with the right expertise were available to look into the means of applicants for legal aid. Subject to safeguards, I welcome the fact that the Bill contains provisions that will assist in more accurately measuring the applicants' means. I am convinced that there are savings to be made there, too.
The Government are providing that civil legal aid is to be administered through the community legal service. That will involve contracting and franchising. It will draw in citizens advice bureaux, independent advice centres and law centres--the so-called not-for-profit sector. I am delighted that the not-for-profit sector is now to be recognised, and I hope that it gets the funding that it deserves. Many of us are worried about how the system of contracting will operate, especially in rural and remote areas.
I believe that the idea behind franchising and contracting is sound. On 27 January 1999, we debated in Committee the draft Legal Aid (Prescribed Panels) Regulations 1998. I said then that specialisation should be encouraged, and I believe that it should be encouraged for those who seek to obtain contracts. Contracting will assist in monitoring standards and in fighting fraud--because, regrettably, there is fraud among a few solicitors. It should ensure that better value for money is obtained for the public purse.
What horrifies me is that the Government envisage only about 3,000 of what they inelegantly describe as outlets. There are now approximately 10,600 outlets for legal aid. I remind the House that it takes two to litigate, and that each party must be separately represented. There should be an element of choice. Three thousand outlets is simply inadequate, especially taking into account the needs of rural areas and rural towns. There will be large areas with no access and, effectively, no choice.
I should like to draw the House's attention to the matter of open-ended costs--another aspect where I believe that there is potential for containment of legal aid expenditure. Considerable work has been done by the Bar, the solicitors' profession and certain experts on a system of graduated and integrated fees.
In the past, some senior QCs have been paid inordinately large sums for certain well-publicised legal aid cases. It is not just the Bill that has precipitated a rethink of fees, especially legal fees; that has been going on for some time. The Lord Chancellor's Department now has full details of what is proposed by the Bar, the solicitors' profession and certain experts for a system of fixed, graduated fees, which are integrated. That means that clients, and the Legal Aid Board when granting a certificate, will not be signing a blank cheque. They will know what they are in for financially, except in the most unusual cases. That is an another area where money could and should be saved.
I have described some of the ways in which the existing legal aid system may be altered for the better--ways in which money can be saved and better targeted. Conditional fee agreements are the Government's proposed means for widening access to justice to middle-income Britain, but, as I have said in previous debates, they are deeply flawed in so far as they pitch the interests of the client against those of the lawyer. The temptation for the lawyer will always be to settle and get his money and his uplift instead of maximising his client's claim.
In any event, conditional fees cannot be made to work without after-the-event insurance covering defence costs, and there is no real sign yet that the insurance cover is available, and at what cost and on what terms. It is simply no good for the Minister to say that it is up to the market to come up with appropriate policies.
Before conditional fees are extended, the least that the Government can do is satisfy the House that insurance cover is available at a reasonable charge, and not with unduly restrictive terms and conditions. I warn the Government that premiums in relation to personal injury cases in which the prospect of success is over 90 per cent. have doubled in the past year. We can also be certain that that form of insurance will involve a significant cost, and that conflicts of interest between clients and lawyers will be as nothing when insurance companies come into the proceedings. They will dictate the terms; they will dictate the conditions; and they will dictate the settlement.
I also believe that only the very best cases will be taken on the basis of conditional fee agreements. Anyone with any knowledge or experience of litigation will know that only when proceedings progress is it possible to gauge the merits of a case. In many meritorious cases, justice will
be denied and individuals will be denied justice. The opportunities and temptations for lawyers to cut corners and not make proper disclosure will be abundant.
I am particularly disappointed that the Government have not seen fit to do far more work on the contingency legal aid fund. I believe that, under that system, access to justice will be truly opened to middle-income Britons and others. The integrity of the law can be retained if a lawyer has at heart not his own interests, but those of justice and his client. The Bill contains a tepid reference to that form of funding, which might be taken up in the near future. That, as I say, is disappointing.
The Bill contains serious flaws. Time and again, despite concessions made on clause 4 in the other place, it arrogates to the Lord Chancellor, effectively, powers to dominate and run the legal professions. Under the present arrangements, the Lord Chancellor must carry others with him. For example, in respect of the rights to conduct litigation, he must carry with him four designated judges: the Lord Chief Justice, the Master of the Rolls, the President of the Family Division and the Vice-Chancellor. The Bill, however, requires him merely to consult and then decide.
"legal insurers predict a slimming down of the number of cases receiving funding, rather than greater access to justice.
As if that was not ringing enough, the article continues:
'There's no question about it. The insurers will be more selective' says Christine Malkin, director of Amicus Legal.
Anthony Mowatt of Keystone Legal Benefits, meanwhile, likens potential cases to a big pie, part of which insurers will find unappetising. 'One clump will be chucked in the bin and we will all be fighting over what's left," he says."
"Derri-Ann Clark of Saturn Professional Risks is more concise: 'It's got to cut down access to justice for a number of people. There are occasions when you'd like to help someone but you can't take the risk.'"
That is the message which is coming loud and clear from the insurance industry. If the Bill is passed, each year we shall subject 75,000 cases of the poorest and most disabled people to the circumstances that have been projected.
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