APPENDIX 14
Memorandum submitted by the Central Claims
Unit of Department for Regional Development
1. INTRODUCTION
1.1 This paper is in response to the invitation
from the Clerk of the Northern Ireland Affairs Committee to comment
upon the Government's proposals for the future of legal aid in
Northern Ireland as contained in Cm 4849 and aims to address the
issue from the perspective of a major public sector defendant.
This paper considers the aspects of the Government's proposals
which relate to civil litigation (non-matrimonial).
1.2 Legal Aid reform has considerable significance
for all bodies which are charged with duties to supply services
to the public at large. The Department for Regional Development
is charged with responsibility for the provision of inter alia,
a road network, and water and sewerage service, both of which
are areas which are susceptible to litigation. The Department
handles all claims against it through its Central Claims Unit
(CCU), on whose behalf this paper is written.
2. ACCESS TO
JUSTICE
2.1 At the heart of the issue is the principle
of "access to justice". Without question, access to
the justice system should not be determined by financial status.
Access to justice is also the hall-mark of democratic society.
However, even the most affluent litigant does not have unlimited
access to legal services-considerations such as time, publicity,
and value for money will also be part of the equation. To create
equal access to justice, therefore, access to justice should not
be unlimited, but, to use a favourite legal phrase, "reasonable
in all the circumstances". However, that is a fundamental
question for the legislature.
2.2 Any assessment should include the strength
of the case, the cost of the case, and the importance of the case
to the claimant and society at large.
3. THE DRD EXPERIENCE
3.1 Currently, the decision as to whether
to grant a Legal Aid Certificate is two-staged, a financial assessment
by DHSS, and a consideration of the merits of the case. Once the
former stage is complete (a fairly factual mathematical exercise),
the Legal Aid Department adjudicator will study the application
form and decide whether or not a prima facie case is disclosed.
The latter is adjudicated using a merits test which requires that
the adjudicator must be satisfied that there are reasonable grounds
for bringing or defending the proceedings, and that it is reasonable
in all the circumstances to do so.
3.2 The experience of DRD is that the
vast bulk of claimants are financially eligible for Legal Aid,
and that the issue of a Legal Aid Certificate is the determining
factor in any decision to issue legal proceedings. This means
that once a Legal Aid Certificate is issued, the assisted party
runs very little risk. Very many of those claiming against the
Department for personal injuries are unemployed, and so make absolutely
no financial contribution to their own legal costs. They therefore
have nothing to lose. Those employed claimants on low incomes
will make contributions of various amounts depending on their
means and that contribution is lost if their action is unsuccessful.
3.3 However, most victims of "tripping
accidents" are unemployed. Such litigants are in a far superior
position to any party who does not have the benefit of a Legal
Aid Certificate, and who could be risking all their worldly goods.
If an action is supported by a Legal Aid certificate, (or "legally
assisted") but fails, the court will make an Order for recovery
of legal costs in favour of the successful party, but not to be
enforced without a further court order. In effect this means that
the successful can only recover their costs if and when they become
aware that the unsuccessful party's financial situation has improved
(for example if they win the National Lottery, or win compensation
against another party). It is rare for such an order to be made
and therefore DRD usually has to bear its legal costs in every
case, whether successfully defended or not.
3.4 It is not possible to give a breakdown
of expenditure on legal fees in actions which were successfully
defended, or indeed withdrawn, but in 1999-2000, 98 actions were
successfully defended, and 54 actions were withdrawn.
4. HISTORICAL
BACKGROUND
4.1 It might be helpful to briefly recite
the history of public liability claims against the Department
and its predecessor, the Department of Environment (Northern Ireland).
In the mid 1980's there was a dramatic rise in the number of claims
against Roads Service, which resulted in the matter being considered
by the Public Accounts Committee in 1987. That Committee heard
evidence of fraudulent claims being made, and of an increasing
claims-consciousness in the population at large. Roads Service
carried out research into the matter, and consequently the system
of highway maintenance was improved, and the Central Claims Unit
was set up, in order to investigate, settle or defend, the claims.
In the following 10 years, the number of claims halved (from 6000
to 3000 claims), as did the resultant expenditure (compensation
and legal costs, from six million to three million). In the meantime,
claimants who explained their attempt to defraud the Department
by saying that they regarded the compensation as being like "money
from America", attracted considerable publicity and there
followed a number of successful prosecutions for attempted fraud.
There have also been a number of actions in which the presiding
judge has commented on the existence of a Legal Aid Certificate,
with some surprise.
4.2 These circumstances were at considerable
cost to the public purse, both in terms of the costs on the Legal
Aid Fund, and in terms of the cost (legal and otherwise) to the
Department. It should be remembered that the legal costs of defending
a claim are relatively small compared to the enormous cost in
time of the investigation in CCU, and in the Departmental Agencies
(the consultation and hearing). The latter cost will never be
recoverable. It was not unusual at that time for the legal costs
to exceed the amount of compensation, and often, Roads Service
spent more on legal costs than it paid in compensation.
4.3 Currently, the Department routinely
defends claims on the basis that it is not satisfied that the
alleged accident happened in the way alleged, and frequently,
the action is successfully defended both on the basis that the
accident occurred despite the best efforts of Roads Service, and
on the basis that the learned judge is not satisfied, on balance,
that the accident happened in the manner alleged. It seems clear
that there continue to be those who are prepared to submit false
claims, although the extent can never be quantified. CCU's success
in minimising expenditure on public liability claims depends on
a robust attitude to investigation and a refusal to take decisions
which are purely economic. However, there is no doubt that the
Department is among those defendants which have to take decisions
in an environment in which the major risk in litigation rests
with the defendant. It is not easy for the Department to quantify
the total cost to the Department of those cases which it successfully
defends, but it is clear that expenditure on claimants' legal
costs and expenses significantly exceeds the Departments own legal
costs and expenses, which in itself demonstrates that there is
such a cost.
5. THE PROPOSED
REFORMS
5.1 The Department has already submitted
comments upon the reforms proposed in the Consultation Document
"Public Benefit and the Public Purse", but the Decisions
Paper "The Way Ahead" addresses the issue of administration
of the scheme, rather than the alternative means of funding. It
is in this context that this contribution is made.
5.2 The bulk of the proposals at this stage
are administrative, and therefore comment is limited. However,
there are several points which are appropriate.
(a) The Department welcomes the proposal
that the Legal Aid Commission be created, as this removes the
perception that the legal profession is effectively deciding on
financial backing for litigation which will be carried out by
its members. It is understood that there has been comment that
the proposals would result in Government deciding on financial
support for claims against the Government. It is recommended that
the independence of the Legal Aid Commission be emphasised and
jealously guarded, as this will be crucial to its success.
(b) In relation to the creation of budgets,
it is suggested that this aspect should be taken a stage further
and that, for the reasons given above, the successful party should
be able to recover costs from the Legal Aid Commission. The basis
for using a budgetary system is the need to be more financially
aware. It is suggested that the risk of awards of costs would
emphasise this point in a highly practical manner. While it is
arguable that it is an unnecessary bureaucratic hurdle, particularly
in relation to costs orders in favour of other public bodies,
it can be argued that it is justified by the need to support the
budgets of "innocent" public departments. For example,
money recovered in legal costs could be well spent on improved
road maintenance. Roads Service should not suffer a reduced budget
purely because an unsuccessful claim has been made. One of the
reasons for compensation is to reinforce (financially) the fact
that a compensator has made errors. Roads Service currently suffers
financially irrespective of whether there have been errors, or
negligence. There is even less reason for preventing private sector
successful litigants from recovering their costs.
(c) From a purely practical point of view
it is important that the funding test becomes more stringent than
at present, for the reasons already given. It is suggested that
the test ought to take the factors cited above at paragraph 2.2
into account.
(d) It is also important that a level playing
field is created whereby the assisted party must be obliged to
inform the other party of the degree of legal aid granted. Currently,
the Defendant has no entitlement to any information about the
nature of the legal aid certificate—limited or full. At
present the defendant is only told that legal aid has been granted,
but will not know whether the legal aid certificate is limited
to, for example, obtaining a report from the consulting engineer,
which would mean that the party is not "legally assisted"
in relation to the costs associated with the hearing itself. There
is also a degree of confusion as to whether a limited legal aid
certificate provides protection against an order for costs.
6. CONCLUSION
6.1 The Department welcomes the efforts
to create a level-playing field, as it has suffered in the past
from unnecessary time and money being expended on successfully
defended claims. A more robust test could be helpful, as would
the practical focus which would be brought by the introduction
of the defendant's ability to recover costs from the Legal Fund
itself. It is interesting to note that "tripping claims"
made up nearly 10 per cent of all County Court proceedings in
Belfast Recorders Court during the month of May 1998, according
to the Civil Justice Reform Group's Interim Report, "Review
of the Civil Justice System in Northern Ireland" at Appendix
B. Clearly, this type of litigation is significant to the general
public, and in particular to the legal aid system, which supports
the bulk of the claims.
7 March 2001
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