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Session 2005 - 06
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Delegated Legislation Committee Debates

Draft Community Legal Service (Scope) Regulations 2005

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Ninth Standing Committee

on Delegated Legislation

Tuesday 12 July 2005

The Committee consisted of the following Members:

Chairman: † Mr. Greg Pope

†Bellingham, Mr. Henry (North-West Norfolk) (Con)

†Brennan, Kevin (Cardiff, West) (Lab)

†Brokenshire, James (Hornchurch) (Con)

†Djanogly, Mr. Jonathan (Huntingdon) (Con)

†Harper, Mr. Mark (Forest of Dean) (Con)

†Heath, Mr. David (Somerton and Frome) (LD)

†Henderson, Mr. Doug (Newcastle upon Tyne, North) (Lab)

†Hodgson, Mrs. Sharon (Gateshead, East and Washington, West) (Lab)

†Hunt, Mr. Jeremy (South-West Surrey) (Con)

†Jones, Mr. Kevan (North Durham) (Lab)

†Lazarowicz, Mark (Edinburgh, North and Leith) (Lab/Co-op)

†Linton, Martin (Battersea) (Lab)

†Morden, Jessica (Newport, East) (Lab)

†Prentice, Bridget (Parliamentary Under-Secretary of State for Constitutional Affairs)

†Riordan, Mrs. Linda (Halifax) (Lab)

Stunell, Andrew (Hazel Grove) (LD)

Ian Cameron, Committee Clerk

†attended the Committee

[Mr. Greg Pope in the Chair]

Draft Community Legal Service (Scope) Regulations 2005

4.30 pm

The Parliamentary Under-Secretary of State for Constitutional Affairs (Bridget Prentice): I beg to move,

    That the Committee has considered the draft Community Legal Service (Scope) Regulations 2005.

The Chairman: With this it will be convenient to take the draft Community Legal Service (Cost Protection) (Amendment) Regulations 2005 and the Revised Funding Code prepared by the Legal Services Commission.

Bridget Prentice: On behalf of the Committee, I welcome you to the Chair, Mr. Pope; I am sure that that you will guide us wisely through our proceedings.

I should say at the outset that I would have liked the regulations to have easier titles. I shall refer to them in a simpler fashion. We are dealing with a complex set of changes, but I will summarise the main issues as briefly as I can.

The funding code criteria and procedures are being modified under section 9 of the Access to Justice Act 1999. The regulations and the funding code are subject to parliamentary approval under the affirmative procedure. I will explain later what the changes are.

The Community Legal Service (Cost Protection) (Amendment) Regulations 2005 are made under section 11 of the Access to Justice Act 1999. That Act sets out the rules under which costs may be ordered against an individual funded by the community legal service fund. The Community Legal Service (Cost Protection) Regulations 2000 define the scope of a funded client's protection against full costs under section 11. Today's regulations amend the 2000 regulations to remove that protection from costs in specified family proceedings.

The Community Legal Service (Scope) Regulations 2005 are made under section 6(7) of the Access to Justice Act 1999. That enables the Secretary of State to make regulations in relation to schedule 2 to that Act, which sets out the services that are excluded from the scope of the community legal service fund. The regulations amend schedule 2 to redefine the exclusion in relation to personal injury proceedings, subject to directions from the Secretary of State that bring certain types of personal injury cases back into scope.

Let me explain why we are making the regulations. The changes are part of a wider package of reforms to civil legal aid on which we first consulted in July last year. The consultation paper ''A New Focus for Civil Legal Aid—Encouraging early resolution; discouraging unnecessary litigation'' was published
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jointly by the Legal Services Commission and my Department. The main theme of the proposals was refocusing the civil legal aid scheme away from contested litigation and encouraging the early resolution of disputes. The package of reforms represents a positive step forward for civil legal aid that can be built upon in future.

The reforms are consistent with other ongoing initiatives—for example, the fundamental legal aid review launched in May 2004. The report of that review, ''A Fairer Deal for Legal Aid'', was published on 5 July and sets out the Secretary of State's long-term strategy for legal aid. The paper summarises the review's findings and sets out proposals for our vision of legal aid in the civil advice and public law family system and the purchasing of criminal defence services, as well as other measures for reforming parts of the criminal justice system to improve overall efficiency and effectiveness. The aim is to guarantee continued fair and equal access to justice, to improve outcomes for those who most need publicly funded legal services and to provide those services in the most efficient way for the taxpayer. The new focus package is an important component of a co-ordinated and continuing legal aid reform programme.

In refocusing civil legal aid, we need to recognise that the legal aid budget is under pressure. We must ensure that legal aid funding is targeted on the most needy cases and on priority areas, yet still provides value for money for taxpayers . We expect the whole new focus package to save £56 million over this and the next two years. We announced the main proposals on 2 March and the proposals in relation to ancillary relief on 21 June. The package includes a range of proposals, some of which were implemented in April 2005, such as aligning the eligibility limits for legal help and legal representation. It was a difficult but necessary exercise to balance the needs of the vulnerable with demands on the budget, but we had a full and constructive engagement with stakeholders during the consultation and, as a result, we were able to make considerable modifications and improvements to our original package. I believe that the final package represents a sound foundation for the future of civil legal aid.

I have briefly outlined the changes that the regulations will make and turn now to the individual changes that we are debating, the first of which is the changes to funding code criteria and the procedures that we have laid before Parliament. The funding code was brought into being by section 8 of the Access to Justice Act. It was approved by the Lord Chancellor on 14 January 2000 and approved by a resolution of each House in March 2000. The funding code was drafted to provide the criteria by which the Legal Services Commission could operate legal aid under the 1999 Act.

Since the code came into force there have been no substantive amendments to the code criteria. There are a total of 36 amendments to the code criteria in the changes that the Committee is considering and 10 amendments to the code procedures. Many of the amendments are technical and minor and reflect updates in practice, changes of wording and the
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streamlining of existing services to ensure continued efficiency—for example, the removal of the term ''approved family help'', which covered general family help and help with mediation.

The most significant changes to the criteria introduced by the revised funding code are as follows. In relation to clinical negligence cases and police complaints cases, the Legal Services Commission will have wider discretion to refuse funding where it is considered more appropriate for the client first to pursue the case through the appropriate complaints procedure. Detailed guidance has been issued to ensure that cases remain eligible for legal aid where it would not be appropriate for a complaints procedure to be pursued, for example, when delay would seriously prejudice potential claims.

In ancillary relief cases—that is, applications for financial provision on divorce or separation—the Legal Services Commission will have a new power to refuse funding for legal representation where a client can reasonably be expected to obtain a loan or to use existing resources to fund the remaining stages of the case. I stress that that criterion will apply to cases only after the financial dispute resolution hearing has taken place without the case having been resolved. Again, guidance will restrict the application of that criterion to cases in which loans or assets are readily available to the client. The provision will typically apply to clients who are already paying significant monthly contributions under a legal aid certificate that would be comparable to typical monthly payments for a loan.

The clarification of the types of expenses that can be charged to the community legal services fund did not arise from the new focus consultation in July last year. Rather, it arose in response to a recent judgment that held that therapeutic assessments in public law children proceedings might be an allowable disbursement from the community legal service fund, under legal representation. The amendment to the funding code merely preserves the status quo prior to that case ruling: that is, payments from the fund relate to providing legal services rather than to paying for rehabilitative, educative or health assessments. The amendment also leaves open the possibility of disbursements of that sort being allowable if authorised by specific orders or directions from the Secretary of State.

Subject to the Committee's agreement, all those changes come into force on 25 July 2005, apart from the new provision on financial provision in divorce cases, which will come into force on 3 October this year.

The changes to the cost protection regulations will remove a legal aid client's protection from being ordered to pay full costs in a case. That is being introduced to provide a deterrent in family cases where costs are ordered primarily because clients behave unreasonably. An example would be when a funded client insists on proceeding to fully contested court proceedings despite being offered a resolution to the case that judge considers reasonable in the circumstances. In addition, that change will place a legal aid-funded client on the same footing as a privately funded client and will contribute to my
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Department's target to achieve earlier and more proportionate resolution of legal problems and disputes. Removing that protection will deter many legal aid clients from continuing proceedings unreasonably, where a privately-funded client might decide not to do so. We do not believe that that would deter well founded applications. We have excluded public law children cases and domestic violence proceedings from the change. The changes also complement the proposals announced in our Green Paper.

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Prepared 12 July 2005