Select Committee on Northern Ireland Affairs Second Special Report


1.  The Government welcomes the Fourth Report of Session 2000/2001 of the Northern Ireland Affairs Committee, into the reform of the provision of publicly funded legal services in Northern Ireland.

2.  The Government is committed to the provision of high quality publicly funded legal services in Northern Ireland. The service must be tailored to meet the distinctive legal culture in the jurisdiction. The Government has clearly signalled our intention to ensure that funding for these services will be targeted to the most deserving cases, consistent with overall expenditure commitments, and that publicly funded legal services will be delivered through a modernised administration. The Government is pleased to note the broad agreement among consultees in support of the establishment of a Legal Services Commission to administer legal aid.

3.  Existing legal aid mechanisms in Northern Ireland are focused primarily, if not exclusively, on funding legal services provided by lawyers in the context of court actions. The Government is conscious that these services do not always address all the important life experiences in respect of which individuals require advice and someone to speak for them. The Government recognises also the valuable and important work undertaken by voluntary organisations in the provision of advice and representation in the areas in which they specialise. An important example of this is the area of advice on welfare benefits which attract little funding from legal aid. The Government is determined to commence targeting scarce public resources on important legal services which individuals require in a way which makes maximum use of the funds available.

4.  Work is progressing towards the publication of a proposal for a Legal Aid Order in Council, the legislative vehicle which will give effect to the Government's reforms. It is now anticipated that the proposal for the Order in Council will be published in Spring 2002, and not in Autumn 2001 as stated at the time of the oral hearing. It is also anticipated that the draft Order will be laid before Parliament in the Winter of 2002 leading to the establishment of the Legal Services Commission in the Spring of 2003. This still represents an extremely tight consultation and legislative timetable.

5.  Work has commenced prior to the establishment of a number of working groups to consider specific aspects of the reform programme, namely: the remuneration provided for the provision of publicly funded legal services; the establishment of quality mechanisms; and viability of alternative funding arrangements for financial damages claims. In this context the Government notes that several consultees recognised the importance of establishing benchmarks against which the quality of legal services provided at public expense can be assessed.

6.  In addition, the Government announced, on 27 March 2001, the draft criteria which the Lord Chancellor proposes to apply to applications for funding from an extra-statutory ex gratia Scheme established to provide funding for representation at exceptional inquests. This scheme and the proposed criteria have generated substantial interest by way of applications for funding and views from consultees on the proposed criteria. The Government will seek at the earliest opportunity a statutory power to grant legal aid in exceptional cases, which would not otherwise attract legal aid including but not limited to inquests.

7.  The Government's response to the issues highlighted in the Committee's conclusions and recommendations are set out below.

(a)  The Committee looks forward to seeing a copy of the Report of the Lord Chancellor's Legal Aid Advisory Committee for Northern Ireland to the Court Service on the case for a Contingency Legal Aid Fund in Northern Ireland, which we understand is expected to be produced at the end of June 2001. (Para 25 & 44)

8.  The Government is committed to developing alternative methods to enable money damages claims to be pursued outside the legal aid fund. In this context the Government appreciates the willingness of the Lord Chancellor's Legal Aid Advisory Committee to undertake a detailed study into the financial viability of establishing a Contingency Legal Aid Fund in Northern Ireland and reviewing the feasibility of introducing Conditional Fee Agreements in Northern Ireland.

9.  The Legal Aid Advisory Committee's final report was received by the Government on 31 July 2001. A copy of the Committee's report has been placed in the Library of both Houses of Parliament.

10.  The Legal Aid Advisory Committee's Report includes a detailed feasibility study on the establishment of a Contingency Legal Aid Fund. The Government will wish to give these matters detailed consideration before coming to a firm view on the way forward.

11.  The Government however emphasises the need to open up access to justice for all those people in income brackets who at present are sometimes unable to resolve their disputes because they cannot afford to.

(b)  Given that the Government clearly envisages that publicly funded legal aid will pay a proportionately smaller part in the future in the funding of legal actions, we welcome the proposed establishment of a Working Group to look into the establishment of a financially viable and attractive legal insurance based solutions to provide an alternative to private or public funding of litigation for cases seeking financial damages. The Committee notes that this will include further examination for the use of Conditional Fee Arrangements or a Contingency Legal Aid Fund. The Committee also notes the Government's assurance that this is not intended to lead to a reduction in legal aid spending but will allow the Government to target spending on cases which cannot be run without subsidy. (Para 27 & 44)

12.  The Government notes the Committee's endorsement of the serious commitment of the Government to work in consultation and partnership through establishing a Working Group to look into these important issues. The establishment of the Working Group is an indication of the Government's commitment to developing appropriate solutions to address the problems which exist in the provision of publicly funded legal services in Northern Ireland.

13.  The Government is satisfied that certain classes of action, particularly those involving claims for money damages, do not always necessarily require funding from the legal aid fund as other mechanisms could support such actions. The Government is grateful for the detailed study undertaken by the Lord Chancellor's Legal Aid Advisory Committee into these matters. The Government will give careful consideration to the analysis in support of the recommendations made in the Advisory Committee's report.

14.  The Legal Aid Advisory Committee's report raises several important issues of principle and practice which the Government will wish to explore further. The Government, therefore, proposes to establish a Working Group to look at the detailed feasibility study included in the Legal Aid Advisory Committee's report.

15.  In particular the Government will wish to consider whether a Contingency Legal Aid Fund will offer the following benefits:

(a)  open up access to justice to individuals whose means would either disqualify them from civil legal aid or be so limited that they could not afford the contributions required under the legal aid scheme;

(b)  embrace a wide range of money damages cases and offer a funding mechanism for classes of cases which do not attract legal aid at present;

(c)  include risk sharing between the solicitor and barrister and their instructing client;

(d)  ensuring appropriate costs protection to successful defendants in receipt of assistance and successful plaintiffs who finance their own action;

(e)  avoid adverse selection by attracting a disproportionate number of weaker cases;

(f)  transparent administrative arrangements;

(g)  guaranteeing no exposure to the public purse and being based on private sector resources;

(h)  meeting the requirements of competition law and policy.

16.  The Government is determined to ensure that public funds are providing the most appropriate services by high quality providers. In this context the Government is determined to ensure that public funds are made available to ensure that the individual's basic rights and entitlements are safe-guarded. Clearly within the existing legal aid structures in Northern Ireland the mechanisms do not exist which would enable the Government to target resources at those areas of greatest need.

17.  The Government is determined to target resources at those cases which are clearly a priority and to encourage other funding arrangements which will release scarce public funds to help a greater number of people.

18.  This approach is consistent with the Government's determination to ensure that public funds are directly targeted to those in society with real needs to ensure that the right services are available to help people at a time when they need legal help to advise them and to help them to ensure that their rights are protected.

(c)  The Committee recommends that further consideration is given, in the context of the development of the Government's proposals, as to how best to ensure that adequate provision is available for supporting cases, not seeking financial damages. (Para 28 & 44)

19.  The present legal aid scheme in Northern Ireland does not require different tests to be applied in consideration of different categories of action to determine if civil legal aid should be available. The Government intends to develop a new mechanism, a Funding Code, which will prescribe appropriate merits tests in respect of the discrete categories of action which will be eligible for funding. The merits test applicable to each of these categories of action would reflect the relative priority attached by the Government to those types of actions.

20.  Through the establishment of a Funding Code, the Government will ensure that priority is given to funding meritorious cases, including those which are not seeking money damages. This proposal is consistent with policy in England and Wales when the Lord Chancellor published the Community Legal Service Fund funding priorities in February 2000. In his direction the Lord Chancellor indicated that top priority should be given to:

(a)  special Children Act proceedings; and

(b)  civil proceedings where the client is at real and immediate risk of loss of life or liberty.

Other priority areas which were identified are:

(c)  help with social welfare issues;

(d)  domestic violence proceedings;

(e)  proceedings concerning the welfare of children; and

(f)  proceedings against public authorities alleging serious wrong-doing, abuse of position or power or significant breach of human rights.

21.  The priorities which the Lord Chancellor has established for England and Wales are not binding in the context of delivering publicly funded legal services in Northern Ireland. We would want to consult on those and take local considerations into account. The priorities already set for England and Wales do however provide an indication of the types of issues which the Government is likely to see as being priority cases when developing and consulting on priorities in Northern Ireland.

22.  The Government's intentions as to the management of the overall expenditure block are set out at paragraphs 48-52 of the White Paper >The Way Ahead'. The Government intends to establish the civil family and civil non-family budgets by reference to the volume of cases within the budget areas and the standard fees to be developed. To assist the Government to establish priority cases within these controlled budgets the Legal Services Commission will be tasked with undertaking research into the areas of greatest need. The White Paper makes clear that while it is envisaged that funds could be switched between these two civil budgets, they will be ring-fenced from the criminal budget which will continue to be demand-led.

(d)  Lord Bach announced that the Funding Code would be laid before Parliament and that the initial Code would be subject to the affirmative resolution procedure. He envisaged that amendments to it would be subject to the negative procedure. However, given that experience and research may reveal a need for quite significant modification, we consider that there should be scope for modifications, too, to be subject to Parliamentary approval. The Committee therefore commends to the Government, as an appropriate model, the provision in the Public Processions (Northern Ireland) Act 1998 applicable to revision of the Parade Commission's Code of Conduct procedure rules and guidelines. (Para 31 & 44)

23.  The Government is committed to consulting on the powers to establish and develop a Funding Code and will consult on the range of cases, which will be funded through the Funding Code, and the tests which will be applied to determine whether individual cases receive funding.

24.  The Government is grateful to the Committee for drawing attention to a specific model which could be used to establish and amend the Funding Code. This procedure will be given detailed consideration in the context of the proposed Legal Aid Order in Council.

25.  There is one other issue upon which we should elucidate i.e. the procedure for making and amending the Funding Code. The observations of the witnesses at paragraphs 27 to 31 (pages 18-19) of the Minutes of Evidence reflect that this issue remains to be resolved. If legal aid were categorised as a transferred matter under the Northern Ireland Act 1998, then any new legal aid primary legislation would be brought forward by way of an Assembly Bill. In this scenario subordinate legislation could be made by affirmative or negative resolution of the Assembly. As legal aid is still a reserved matter, and the Order in Council will be made by way of affirmative resolution at Westminster, it would be unusual to have subordinate legislation under the Order in Council also made by affirmative resolution.

26.  The Government will give careful consideration to the observations of the Committee and the model referred to, and in particular the mechanism to bring forward and amend the Funding Code will be the subject of consultation. In particular we shall consult on the appropriate procedure to apply to subordinate legislation made under an Order in Council.

(e)  The Government intends that the Legal Services Commission should initially be set up in shadow form and ,500,000.00 has been set aside to cover expenses and setting it up. Lord Bach was not able to give us a comprehensive assessment of the financial implications of the establishment of LSC. The Committee would like an updated assessment to accompany the Government response to this Report. (Para 40 & 44)

27.  The Government has set aside ,500,000 for the establishment of the Legal Services Commission. It is anticipated that the bulk of the expenditure against this sum will be incurred for the years 2002/03. The breakdown of the allocation of the projected costs against generic cost areas is set out in the attached Annex A.

Current Review

28.  The Legal Aid Department, as part of an ongoing programme of business improvement and development, is presently undertaking review.

29.  The intention of the review is to make the Legal Aid Department as effective and efficient as possible the results of which will have to be taken into account before the Legal Services Commission assumes responsibility. Recommendations from the ongoing review will have financial implications for the grant-in-aid requirement of the Legal Aid Department and for that of the Legal Services Commission.

Set-up Costs

30.  At the Committee hearing Lord Bach indicated that the Legal Services Commission will be set up in shadow form. ,500,000 had been set aside for the project.

31.  A table providing a breakdown of the ,500,000 is attached (Annex A). These costings are preliminary and are subject to any changes that may result from the review mentioned at paragraph 29 and from any pressures that arise from issues being addressed in the overall context of legal aid administration. The measures being taken are intended to assist the Legal Aid Department in moving to operate, as far as possible, as a NDPB.

32.  During the shadow period of approximately three months both the current Legal Aid Committee and the shadow Legal Services Commission will be in receipt of remuneration and expenses.

33.  The new Commission will have responsibility for a number of areas of work not currently carried out by the Legal Aid Department, particularly research and development of policy and

34.  There will also be a cost associated with meeting the increasing demands for improved


35.  As mentioned at paragraph 31 above the figures attached are preliminary and based on the assumptions contained in the foregoing. At this stage there are many variables that are difficult to quantify. The ongoing review, IT enhancements and negotiations with trade unions in relation to the transfer of staff will all have a potential significant impact on the final cost.

36.  The projected costs represent the best estimate at present, based on current rates and a number of critical assumptions.

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