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Delegated Legislation Committee Debates

Draft Community Legal Service (Cost Protection) Regulations 2000


Fourth Standing Committee on Delegated Legislation

Thursday 16 March 2000

[Mr. Mike Hancock in the Chair]

Draft Community Legal Service (Cost Protection) Regulations 2000

4.30 pm

The Parliamentary Secretary, Lord Chancellor's Department (Mr. David Lock): I beg to move,

    That the committee has considered the draft Community Legal Service (Cost Protection) Regulations 2000.

The Chairman: With this it will be convenient to consider the draft Community Legal Service (Scope) Regulations 2000 and the Funding Code prepared by the Legal Services Commission.

Mr. Lock: I welcome you to the Committee, Mr. Hancock. This delegated legislation, together with negative procedure regulations and orders that are before the House, constitute the framework for the community legal service fund that will replace civil legal aid on 1 April.

I am sure the Committee will agree that legal aid, which was created by the post-war Labour Government more than 50 years ago, has been, and remains, an extremely valuable and important public service. We are now in the final month of the civil legal aid scheme, and I pay tribute to all the dedicated lawyers and administrators who have worked in it. In recent years, however, the grand old lady—legal aid—has increasingly shown her age. It contains no mechanisms for targeting spending on priorities, with the result that the shape of the scheme on the ground is largely determined by the type of work that private practice lawyers prefer, and where and how they prefer to practise. It provides few effective mechanisms for controlling expenditure, with the result that spending can, and recently has, spiralled out of control.

By contrast, the new scheme—the community legal service fund—is designed to enable the Government, through the new Legal Services Commission, to target public resources that are available to fund legal services on priority categories and the most worthwhile cases, and to work within a defined budget. In previous exchanges in Committee, we established that the Opposition have no plans or proposals to revert to an open-ended, demand-led scheme with an unlimited budget. The fixed budget, with priorities, is here to stay, which I think is acceptable to both sides of the House.

The funding code is the principal mechanism for achieving control. Section 8(1) of the Access to Justice Act 1999 requires the commission to

    prepare a code setting out the criteria according to which it is to decide whether to fund (or continue to fund) services as part of the Community Legal Service for an individual . . . and, if so, what services are to be funded.

Section 8(5) requires the code to specify the procedures for making the decisions, including conditions that the individual must first satisfy and procedures for appeal.

Mr. Nick Hawkins (Surrey Heath): While the Minister is dealing with that aspect of the code, will he confirm whether he is able to put all the guidance notes in the Library? I shall say more on that later, because there has been some controversy.

However, many hon. Members and I would be pleased to see the guidance notes, given that, according to the Law Society, they run to about 280 pages.

Mr. Lock: The guidance notes have been published and are in the Library. A few weeks ago, I spoke at a conference organised by the London Commercial and Common Law Bar Association for practising barristers, which explored the details of the guidance notes and how they would interlink with the funding code. It was clear that the draft code and the guidance notes that support it had been widely circulated.

Mr. Hawkins: I should be most grateful if the Minister would say when they were put in the Library. What he said—which I am sure is accurate—does not reflect the Law Society's briefing which I received by fax yesterday. We will come back to that.

Mr. Lock: I understand that those notes were placed in the Library on the same day that the funding code was laid before the House, which was on a date that I shall soon determine. [Laugher.]

Section 8(8) of the 1999 Act requires a process of consultation before the code is submitted to the Lord Chancellor and Parliament for approval. Two-stage consultation was conducted in spring and autumn of last year, leading up to the laying of the funding code before the House. It was placed in the Library on 28 February of this year.

As implicitly required by the 1999 Act, the code is in two parts. The first contains code criteria and the second procedures. The latter broadly replicates provisions in the existing legal aid regulations, for example, about granting and discharging certificates. I will not try your patience, Mr. Hancock, by describing the procedures in detail. The code criteria are based on a number of levels of service defined in sections 1 and 2. These are designed to ensure that the services provided are proportionate to the matter in hand. The most important levels are legal help, equivalent to the present advice and assistance, and legal representation, broadly equivalent to civil legal aid. Legal help is defined under the Legal Aid Board's general civil contracts that came into effect on 1 January this year. Legal representation, like civil legal aid, will usually be administered through the issue of a certificate in each case.

Section 4 of the funding code lists the standard criteria that apply to all levels of service. For example, the case must be within the scope of the Act and the client must be financially eligible under the regulations. The heart of the code, however, is section 5, the general funding code. This contains the separate criteria for each level of service, except for those unique to family cases. The criteria for legal help in section 5.2 apply across the board to all categories of help. It would be neither appropriate nor practical to apply more detailed and specific criteria when a client first seeks help.

The criteria for legal representation in sections 5.4 to 5.7 apply only to civil cases—other than family cases—that do not fall in a priority or specialist category. Sections 6 to 13 replace or amend those criteria to reflect the priority or other specific features of a particular category of case.

The principle underlying most of the criteria in the code is that the public purse should only support cases that a reasonable and prudent private client of adequate, but not unlimited means, would choose to fund with his or her own money. The exception is where different criteria apply because the case has a significant wider public interest.

The most important criteria reflecting the private client principle concerns the prospects of success and cost benefit. In most circumstances, before cases can be considered for funding they must demonstrate prospects of success of at least 50 to 60 per cent. at trial. Similarly, the commission will not fund cases in which the likely benefit to be obtained by the client does not justify the likely cost. In the case of quantified financial claims, criterion 5.7.3 sets specific ratios of damages to costs, which vary according to the prospects of success. This reflects the sort of calculation a private client would make before risking his or her own money. The cost-benefit test for unquantifiable cases is necessarily expressed in more general terms and will require judgment to apply. The intention is to take the quantified test as a guide when making these judgments, and to require cases with less strong prospects of success to demonstrate greater likely benefits relative to cost.

Sections 5.8 and 5.9 set out the criteria for support funding. That is the new type of funding designed for exceptionally expensive personal injury cases. Support funding will be available if the case is pursued primarily under or with a view to obtaining a conditional fee agreement and the investigative or total costs exceed the thresholds prescribed in criteria 5.8.1 and 5.9.3. There are also requirements about the form of the conditional fee agreement and the existence of adequate insurance against the opponent's costs. The other criteria are the same as for legal representation.

Section 6 contains additional criteria that will apply in very expensive cases. They are defined at C23 in the procedures as those likely to cost £25,000 to settlement or £75,000 if taken to trial. It is well known that expensive cases take up a disproportionate share of the available resources, and it is vital that they are particularly closely controlled. Paragraph 6.3 requires all very expensive cases to be subject to a satisfactory case plan for progressing the litigation. That will form part of an individual case contract between the commission and the lawyers. Paragraph 6.4 requires the commission to consider the availability of resources before granting funding in very expensive cases other than those in top priority categories. The Lord Chancellor has issued a direction to the commission setting a central budget for that purpose, and explaining in detail how it has been calculated. A copy of that direction is in the Library.

Sections 7 and 8 set special criteria for judicial review cases and claims against public authorities alleging serious wrongdoing, abuse of position of power, or significant breach of human rights. The priority given to those cases reflects the general public interest in ensuring that public bodies can be held properly to account through the courts. In particular, the Committee will note that criterion 7.5.2 provides a presumption that funding will be granted in all judicial review cases when permission has been given by the court and the case has a significant wider public interest, overwhelming importance to the client or raises significant human rights issues.

Section 9 amends the normal criteria for clinical negligence cases—many of which were previously known as medical negligence cases—in particular by providing less stringent cost-benefit ratios. They replicate guidelines introduced by the Legal Aid Board in December 1998, shortly before the specialist clinical negligence franchise category was created in February 1999. Funding was restricted to specialist practitioners from August 1999. Because those important reforms have been in place for so short a time, it was not thought appropriate to make further changes to the code now. There are, however, indications that the new guidance and the restriction to specialists are bearing dividends by excluding weak cases from the scheme, enabling help to be concentrated on those with good cases that are being taken forward by specialists. The future funding of clinical negligence cases will be kept under review.

Section 10 contains criteria for housing cases. That reflects the priority being given to social welfare law generally as part of the Government's programme for tackling social exclusion. Housing is the principal category within the social welfare field for which legal representation is most likely to be required for proceedings.

Section 11 is a comprehensive set of criteria for family cases. New levels of services are introduced for family cases. Help with mediation covers legal advice in support of the mediation process. General family help funds a solicitor to negotiate a settlement to a matrimonial or other family dispute without recourse to contested legal proceedings These new levels exist to ensure that, whenever possible, family disputes are resolved without unnecessary or unduly adversarial proceedings in court.

In relation to legal representation in family cases, top priority is given to child care cases under criteria 11.7 and 11.8, for which funding is automatically available. Other cases concerning the welfare of children and domestic violence also have a high priority, which is reflected by the relatively generous criteria in sections 11.9 to 11.l l. On the other hand, the criteria for matrimonial cases relating to financial provision under section 11.12 are broadly similar to those in the general funding code, with the addition of a requirement to attend a meeting with a mediator before representation can be provided. In effect, that continues the approach currently applied under section 29 of the Family Law Act 1996 that, in certain circumstances, clients must explore the possibility of family mediation before receiving funding for litigation. The inclusion of that provision in the code accords with section 8(3) of the Access to Justice Act 1999, which requires the code to

    reflect the principle that in many family disputes mediation will be more appropriate than court proceedings.

Finally, sections 12 and 13 contain criteria for cases before mental health and immigration tribunals. Funding for immigration tribunals has been available under existing powers only since January. It did not form part of the legal aid scheme when the Access to Justice Act 1999 took effect. That is why the tribunals are not listed in schedule 2 of the Act, which defines the scope of the scheme. The draft Community Legal Service (Scope) Regulations 2000 rectify that omission by amending the schedule.

They further amend the schedule to exclude particular proceedings under the Crime and Disorder Act 1998 concerning anti-social behaviour orders, sex offender orders and related parenting orders. Although these are technically civil proceedings, they are closely akin to criminal proceedings and are more usually undertaken by criminal practitioners. The Government have therefore decided that it would be more appropriate for them to be funded as part of the criminal defence service. In due course, they will be included in regulations defining the scope of the criminal defence service. Meanwhile, legal aid remains available.

Finally, I come to the draft Community Legal Service (Cost Protection) Regulations. Section 11(1) of the Access to Justice Act 1999 states

    Except in prescribed circumstances, costs ordered against an individual in relation to any proceedings . . . funded for him—

as part of the community legal service—

    shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances including . . . the financial resources of all the parties to the proceedings, and . . . their conduct in connection with the dispute to which the proceedings relate.

That provides the same protection that legally aided litigants currently enjoy under section 17 of the Legal Aid Act 1988.

Regulation 3 of the cost protection regulations prescribes exceptions to that rule. Cost protection does not apply where the client receives legal help or help at court. That broadly reflects the current Act, which does not provide cost protection where a litigant-in-person receives green form advice and assistance but is not formally represented by the solicitor in the proceedings.

 
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