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Mr. David Kidney (Stafford): I hope that the hon. Gentleman will clarify something for me. The Bill allows the Lord Chancellor, by direction, to disapply the bar on personal injury cases, and the explanatory notes state that the Lord Chancellor has in mind cases in the public interest or with high investigative costs. Amendment No. 99 states that the bar would be disapplied

Is that an attempt to insert into the Bill a statutory recognition of the explanatory notes, or will the "compelling reasons" go wider than the classes of case mentioned in those notes?

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Mr. Hawkins: My intention is that the words "compelling reasons" would go wider. The all- encompassing phrase in the amendment is intended to cover the types of cases that I offered as examples, and the points made by the hon. and learned Member for Medway. The amendment goes much wider than the disapplication of the bar proposed in the Bill and explained in the notes.

Finally, I shall quote from Counsel magazine, a publication covering the work of those who share my profession at the Bar. An article by David Bean QC, a distinguished employment lawyer, discusses the Bill's abolition of legal aid for personal injury actions and calls it puzzling.

The Government are not allowing those new powers to be used. They want the blanket removal of legal aid for personal injury. We think that that is wrong, and that "compelling reasons" should allow legal aid.

8.30 pm

Mr. Vaz: This has been a good debate, although short. I begin by thanking my hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) for ensuring that the House had an opportunity to discuss these matters.

I have enormous respect for my hon. and learned Friend and have admired him for many years. We are bonded through the threads of history, as we fought elections in the former Richmond and Barnes constituency in successive years. He got 8,000 votes, and I got 3,000, which makes him three times the man that I am.

My hon. and learned Friend raised some very important issues with his amendment, and I hope that I will be able to deal with them all in the short time available. I know what his views are, as I have read them in The Guardian. In an article published on 23 March, he described the Bill as "good, bad and awful". He made a passionate and eloquent case for the amendment, but I hope to convince him that the Government are as concerned as he is and that he need not worry, as all the groups that he mentioned will be protected under the Bill.

Amendment No. 95 would ensure that legal aid was available in personal injury cases for children, patients within the meaning of the Mental Health Act 1983, persons with disabilities and people in receipt of income support, unless the commission decided that a conditional fee agreement was available in an individual case. It has been made clear on many occasions that the Government have decided to withdraw legal aid from the vast majority of personal injury cases because they are satisfied that a conditional fee agreement will be available in that majority of cases. To insist that the commission examine every case individually to ensure that such an agreement is available would create enormous administrative expense, which would lead inevitably to a reduction in the money available to fund deserving cases.

Mr. Burnett: Who is expected to pay the insurance premiums for after-the-event cover of defendants' costs in respect of the conditional fee agreements?

Mr. Vaz: As I shall explain, the insurance premium point has been dealt with. The premium is recoverable in the event of a successful action, and practitioners should be able to bear the initial cost.

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There is no reason why those who lack the legal capacity to act for themselves should not be able to benefit from a conditional fee agreement. I accept that special provision may need to be made for individuals lacking legal capacity in the regulations governing the use of conditional fees. My Department will consult on draft regulations over the summer and will specifically seek views on this issue.

It is important that a litigation friend acting on behalf of a child or patient should fully understand the conditional fee agreement and any potential liability that he or she is accepting on the child's or patient's behalf. It is sometimes suggested that children and patients are unsuitable--for reasons of age or disability--for conditional fee agreements, because gathering the evidence required to establish whether there is a viable case is lengthy and costly. That may be so, but, as the Lord Chancellor and my predecessor have repeatedly pointed out, help will still be available where the initial investigation is exceptionally expensive. The hon. Member for Surrey Heath (Mr. Hawkins) cited the cases of Ben Smoldon and others. Under the directions already announced, that case, and most of the others quoted from The Lawyer, would clearly be eligible for legal aid.

It is asserted that it can be very hard to win cases because a court might not accept evidence from the people to whom I have referred. I acknowledge that that may be true, but I do not accept that we should commit public funds to support a case in which a solicitor knows that an individual--for whatever reason--has a very small chance of success. I would go further: everyone involved should think carefully before placing a vulnerable person in the position of taking forward litigation if they know from the outset that the chances of success are slim.

Mr. Grieve: The Minister said that the cases cited by my hon. Friend the Member for Surrey Heath (Mr. Hawkins) would have been eligible for the help that he is describing. He may say that with the benefit of hindsight, but he has also suggested that the help will not be available under the criteria that he will apply. He will deprive the litigant of the assistance required in precisely those cases in which it is most difficult to assess whether they will succeed at trial.

Mr. Vaz: I am surprised at the hon. Gentleman, who is a barrister. He was not listening to me. I said that most of the cases cited by the hon. Member for Surrey Heath would be covered. I also said that a case would be covered if there was a high investigative cost or if the wider public interest applied.

The amendment would offer similar protection to all individuals who have a disability within the meaning of the Disability Discrimination Act 1995. Some of those individuals will be patients under the Mental Health Acts, and I have already dealt with their position. For the rest, it is frankly insulting to assume that simply because a person has a disability, he or she is in some way less capable of running his or her own affairs and reaching an agreement with a solicitor than a person without such a disability would be. The amendment would extend legal aid to all people with disabilities, regardless of their means. That is not the position now, and I do not accept that it should be the position.

Finally, the amendment would give legal aid in personal injury cases to individuals on income support. It is alleged that many people on income support would

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be unable to afford even the modest insurance fees charged to support a personal injury case. That may well be so, but as the Lord Chancellor and others have pointed out, we do not expect such individuals to bear the cost of premiums. Insurance premiums and disbursements are generally low in personal injury cases, and we expect solicitors' firms to bear the costs as normal business overheads. Such cases are profitable for solicitors, allowing them to recover a percentage uplift in addition to their usual fee. There is no reason why they, like any other business, should not bear overheads before a profit can be realised.

I shall tell the House just how inexpensive the majority of cases are. In 1996-97, some 83,852 personal injury cases were funded by legal aid. Of those, 11,868 were clinical negligence cases, which will remain within the scope of the law. Of the remaining 71,984 cases, 89 per cent. cost £6,000 or less, 84 per cent. cost £5,000 or less, and 81 per cent. cost £4,000 or less. Those figures are total costs for the cases--all disbursement costs, including counsel's fees. With all costs included, the vast majority cost less than £4,000. The average amount of disbursements paid out by solicitors in cases costing £4,000 or less was only £304.

It is clear from the costs that those cases did not require exceptionally large amounts of work or expenditure by the solicitors. Nor were the costs of investigation particularly high. I do not accept that there is any reason why those on income support should be unable to benefit from conditional fee agreements.

Dr. Lynne Jones (Birmingham, Selly Oak): In such cases, where conditional fee agreements were available, people would not be eligible for legal aid under my hon. Friend's amendment. Is that not the case?

Mr. Vaz: Conditional fee agreements have worked in the cases that I have mentioned, and they will work. Since I took on this job, I have visited several legal aid firms. I have not come across a legal adviser who has not said that the schemes work. It is wrong to commit taxpayers' money for cases that have no chance of success. That is why we cannot accept the amendment.

On amendment No. 99, to which the hon. Member for Surrey Heath spoke, my predecessor said in Committee that we might have sympathy with such an amendment if it were intended to do no more than signpost the fact that the Lord Chancellor had direction making powers to make exceptions to the exclusions in schedule 2, and that he could be expected to use them. Unfortunately, the amendment would not achieve that. It leaves unclear who is to define what constitutes a compelling reason. It could be the Lord Chancellor, the commission or even the applicant. As drafted, therefore, it is a recipe for confusion with all the scope that that would create for wasteful satellite litigation. In so far as it would allow the Lord Chancellor to define "compelling reasons", it is no more than a signal of our clear intentions and, as such, strictly unnecessary. The Lord Chancellor has frequently said that he will use his powers under clause 6(8) to authorise the commission to fund cases where the initial investigative costs or overall costs are exceptionally high and in cases that raise matters of wider concern.

My hon. and learned Friend the Member for Medway mentioned hardship cases. We will consult on the funding code in the autumn. People will have the opportunity to

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comment on what he described as hardship cases. The commission already has power under clause 6(8)(b) to approach the Lord Chancellor to request him to authorise funding in an individual case, although he intends, quite rightly, to use that power only very exceptionally.

I stood at the last general election on the same manifesto as my hon. and learned Friend the Member for Medway. There is a belief that if people are cut, they bleed but that Ministers do not, even if they are stabbed in the back. We believe as firmly as he does in the need to protect all the people that he mentioned. The proposal will not prevent anyone who is going to get legal aid from receiving legal aid. We believe that our arrangements, with our approach to the funding code, which allows consultation and means that the funding code will have to come back to this House under the affirmative resolution procedure, will give people an opportunity to put forward their cases. I would not stand here at the Dispatch Box to ensure that any of those people would not get legal aid in such cases.

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