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Lord Monkswell: My Lords, I thank the Chairman of Committees for introducing the report, to which I am sure that we shall all agree without dissent. However, perhaps I may ask a question about paragraph 2, which refers to facilities for disabled people. I am sure that we are all glad that the House is to bring its facilities up to the right standard for enabling disabled access. However, with regard to toilet provisions, what timetable is envisaged for the full provision of toilets accessible to disabled people? Furthermore, during that programme, will facilities be made available to ensure that female Members of this House, female staff and female visitors also have adequate toilet provision?

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The Chairman of Committees: My Lords, there is already in train some provision for improved toilet facilities for disabled people within the precincts of your Lordships' part of the Palace of Westminster. It is envisaged that that work will be completed during the coming summer Recess. On the noble Lord's other point, I shall write to him if I am able to give him any information on the timetable beyond that which I have already indicated.

On Question, Motion agreed to.

Proceeds of Crime Bill

3.7 p.m.

Lord Chesham: My Lords, I beg to move that the Bill be now read a third time.

Moved, That the Bill be now read a third time.—(Lord Chesham.)

Lord McIntosh of Haringey: My Lords, I rise briefly, not to delay the progress of the Bill which, as the noble Lord, Lord Chesham, well knows, has our full support, but to raise a matter which could not conveniently be raised as an amendment but which remains outstanding. I apologise to the noble Lord for not having given him notice of the matter but it came to my attention only in the past hour or so.

I refer to an undertaking that was given at Report stage of the Bill in another place on 31st March. The undertaking was given by Mr. David Maclean, the Minister of State at the Home Office, in response to an amendment proposed by Mr. John Greenway about the extension of the provisions of the Bill to the Copyright, Design and Patents Act 1988, the Trade Descriptions Act 1968 and the Trade Marks Act 1994. The Minister expressed sympathy with the amendment and said that an interdepartmental exercise was under way. He stated that,

    "considerable progress is being made, and I should be in a position to make known the outcome of our deliberations shortly. I certainly expect to be able to do so before the Bill completes its parliamentary passage".

The Minister told Mr. Greenway:

    "I assure him that the Government will consider very sympathetically the addition of these offences to schedule 4 by means of an order".

He added:

    "I should be able to inform the House before the Bill has completed its parliamentary stages".—[Official Report, Commons, 31/3/95; col. 1306.]

If the Bill is now passed, that is the end of its parliamentary consideration. I wonder whether the Minister in this place has anything to say on the matter. I apologise to her for not having mentioned it previously, but I know that the Home Office has been aware of the issue over the past few days.

The Minister of State, Home Office (Baroness Blatch): My Lords, if the House will permit me to respond to that point, the noble Lord is right that the Minister of State in another place explained that the Government were considering adding certain counterfeiting and copyright infringement offences to Schedule 4 to the Criminal Justice Act 1988 with the aim of bringing them within the reach of the confiscation

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legislation but that they had not completed their deliberations when the subject was debated on Third Reading in another place.

As the Minister explained in another place, the addition of offences to Schedule 4 of the 1988 Act is not entirely straightforward, and, as a result, it was necessary to set in train an interdepartmental consultation process before the Government could agree to the addition of the offences in question.

I know that promises were made. The noble Lord is absolutely right to press us on that point. Progress has of course been made since the matter was discussed in another place, but the Bill's rapid progress through this House has not permitted all the issues involved to be resolved before now.

The Government have decided that the question of the funding of the provisions must be resolved before the statutory instrument can be made. On that point, I expect a decision to be reached by a very early date, and I propose to make known the outcome to the House shortly. I trust the noble Lord is satisfied that the work is in hand and that our commitment will be met, but not within the timescale that we had envisaged.

Lord McIntosh of Haringey: My Lords, I thank the Minister.

On Question, Bill read a third time.

Lord Chesham: My Lords, I beg to move, That the Bill do now pass.

Moved, That the Bill do now pass.—(Lord Chesham.)

On Question, Bill passed.

Statute Law (Repeals) Bill [H.L.]

3.10 p.m.

The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I understand that no amendments have been set down to this Bill or to the other three consolidation Bills standing in my name on the Order Paper and that no noble Lord has indicated a wish to move a manuscript amendment or speak in Committee on any of them. Therefore, unless any noble Lord objects, I shall beg to move in each case that the order for recommitment be discharged. I beg to move.

Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)

On Question, Motion agreed to.

Merchant Shipping Bill [H.L.]

The Lord Chancellor: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.

Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)

On Question, Motion agreed to.

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Shipping and Trading Interests (Protection) Bill [H.L.]

The Lord Chancellor: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.

Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)

On Question, Motion agreed to.

Goods Vehicles (Licensing of Operators) Bill [H.L.]

The Lord Chancellor: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.

Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)

On Question, Motion agreed to.

Conditional Fee Agreements Order 1995

3.13 p.m.

The Lord Chancellor rose to move, That the draft order laid before the House on 20th April be approved [17th Report from the Joint Committee].

The noble and learned Lord said: My Lords, I beg to move, that the draft Conditional Fee Agreements Order 1995 which was laid before this House on 20th April be approved. At the same time, I shall speak to the second Motion standing in my name relating to the Conditional Fee Agreements Regulations 1995 and hope to move that Motion formally later.

Section 58 of the Courts and Legal Services Act 1990 empowers me to prescribe the types of proceedings in which conditional fee agreements should be available, the maximum percentage uplift which solicitors can charge on their fees when they take a case on that basis, and any other requirements of an agreement. It is those matters which are set out in the draft order and regulations which are before your Lordships. These drafts have now been approved in their current form in another place without a Division.

The consultation exercise which has given rise to the order and regulations has been a lengthy and extensive one. I am required by Section 58 to consult the Lord Chief Justice, the Master of the Rolls, the President of the Family Division and the Vice-Chancellor, and also the Law Society and General Council of the Bar. In addition to the statutory consultees, I approached consumer bodies and other organisations with an interest, including my Advisory Committee on Legal Education and Conduct. Drafts of the order and regulations were circulated to numerous members of the profession and to members of the public.

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In developing the conditional fee scheme as it now stands, I have given a great deal of consideration to the advice which I have received from all sources. My purpose has always been to develop a scheme which will increase access to the courts and consumer choice. That cannot be achieved by stifling the scheme with over regulation. Clients and solicitors must be given the freedom to reach an agreement which reflects their mutual interests according to individual circumstances. Of course that must take place within a framework which provides protection for the client, who is naturally in the weaker position at the negotiation stage because he or she is unlikely to have much knowledge of the law and procedure. It is that balance which I have sought to achieve within the order and regulations.

I propose that conditional fee agreements should be allowable in personal injury cases, insolvency actions and cases before the European Commission of Human Rights and the European Court of Human Rights. A limited scheme of that kind should enable us to observe how conditional fees work in practice, with a view to extending the scheme to cover other cases if it appears sensible to do so. I also propose that the maximum permitted percentage uplift which a lawyer may charge on his fees should be set at 100 per cent. That figure is exactly what has been allowed since August 1992 under the Scottish speculative fee scheme, and that percentage was decided by the Scottish courts not the Government. It is this proposal which has perhaps provided most discussion and is at the root of many of the misgivings which have been expressed. I therefore wish to take this opportunity to explain the reasoning which led me to the conclusion that 100 per cent. was the right figure at which to set the maximum uplift.

First of all, I must again emphasise that the whole purpose of conditional fees is to extend access to justice. The fact that lawyers can charge an uplift of up to 100 per cent. will encourage them to accept cases with a 50:50 chance of success, which, if the uplift were lower, it would not be appropriate for them to take. With a low uplift of, say, 10 per cent.—which was the first proposal—the range of cases which would be taken would be very much more restricted.

In approaching this matter one has to assume that the ordinary fees that lawyers charge are based on the view that they will be paid those fees for the work done with a reasonable level of profit as part of the practice of their profession. Therefore, their fees do not include any element for the risk of litigation so far as concerns the outcome for the client. That is the right way of doing it.

It is obvious that if one is to take a case which involves a degree of risk, the correct balance is to allow the proper percentage of risk to be taken into account in fixing the fee. For example, if one takes a case where the chance of success if 50:50, the correct uplift for that—unless one is going to charge other clients for that case—is 100 per cent. Of course, if one has a case in which the risk is much less then it is appropriate that the uplift should also be much less. Under Section 58 I am entitled to fix a maximum uplift that may be charged. That is what I have done and that is why, in response to the consultation, I took the view that that was the right figure.

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Those who oppose the 100 per cent. uplift must recognise that as an inevitable consequence the range of risk which can appropriately be taken is thereby reduced. I can see no good reason why those clients who have a viable case, but for whom the prospects of success are of the order of 50:50, should not be able to take advantage of the scheme if they wish to do so.

It follows that if the lawyer is successful he or she will receive an uplift in fees of 100 per cent. That is seen as conferring a great benefit on the lawyer but the other side is that there is a 50:50 chance that for all the work done the lawyer will receive nothing.

I would add that I do not anticipate the figure of 100 per cent. becoming the normal uplift for all conditional fee cases. There has been a suggestion in some papers that that will happen, but I do not accept that. I must determine the maximum percentage uplift. Nor can I see why it should be assumed that that will happen in practice. My intention has always been to provide sufficient scope for the conditional fee scheme actually to work. We will not be serving the interests of the consumers of legal services by stipulating a low maximum uplift and effectively limiting the kind of actions which solicitors would be prepared to take on a conditional fee basis to those of low risk.

In relation to the concern which has been expressed about the 100 per cent. uplift, there have been calls for the regulations to impose a statutory cap to ensure that only a certain percentage of any damages recovered can be taken by way of the uplift. I do not believe that I have the power to do that under Section 58 of the Courts and Legal Services Act 1990. The power given to me is to prescribe the maximum percentage increase on the lawyer's normal fee. However, it seems to me that there would be other difficulties with imposing such a cap even if I had the power. How would a cap, imposed by regultaion, operate in cases in which there is a structured settlement whereby the plaintiff may receive a lump sum and then a regular payment during his or her lifetime? A statutory cap may also have the same effect, as I have mentioned with regard to lower uplift, in discouraging lawyers from accepting cases with a high risk. The relationship between cost and the amount in claim varies a great deal, in practice, with the amount that is claimed.

It may well be that a cap such as the Law Society recommends in its model agreement will prove a useful tool. It certainly helps to focus attention on this aspect of the matter in discussions between the lawyer and the client. However, it is important for the client to be aware of the implications of the uplift and it is for this reason that I have included within the regulations a requirement for the agreement to state whether or not there is to be a cap on the amount of damages to be taken by way of the uplift. This will ensure that the matter is addressed in all cases if the agreement is to be a conditional fee agreement obtaining the protection of the law and therefore enforceability.

I ought to emphasise another aspect of the matter. An additional safeguard against excessive costs will be provided by taxation, which will be available to clients under a conditional fee agreement in respect of all the fees in question. The proposed taxation amendments have

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been circulated for consultation among taxing experts and I expect them to come into force within the next few months. That is on the assumption that your Lordships approve the draft order.

It may also be helpful if I direct your Lordships' attention to the other requirements in the regulations which will provide protection to the client. The regulations require a conditional fee agreement to state, first, to which proceedings or parts of them it relates. It is possible to have a conditional fee agreement relating only to part of what would otherwise be a composite proceeding.

Secondly, it should state the circumstances in which the legal representative's fees and expenses, or part of them, are payable. That is to define what is to be success for the purpose of the agreement. It is most important that client and solicitor should have their minds focused on that matter, which may vary according to the circumstances of the case.

Thirdly, it should state what payment is due upon partial failure of the specified circumstances, irrespective of the specified circumstances occurring and upon termination of the agreement for any reason. In other words, the agreement must state what happens if for any reason it is to be terminated or what happens if the result or outcome is only a partial not a full success within the meaning that the parties have agreed upon for success.

Fourthly, it should state the actual amount payable in the event of success or, if that is not specified, the method to be used to calculate it. However, the client and solicitor must direct their attention at the outset to the question of how fees are to be calculated if the amount of the fee in question is not specified.

Fifthly, it should state whether the amount payable is to be limited by reference to the amount of any damages which may be recovered on behalf of the client. In other words, the lawyer and the client are to discuss and agree the question of whether there is to be a cap on the amount of the fee which can be taken under the agreement by reference to the amount of damages in question. Of course, that can vary and it is a matter for the parties to agree upon.

In addition, the agreement must state that before it was entered into the legal representative drew the client's attention to the availability of legal aid and taxation and the liability of the client for the costs of his legal representative and for the costs of any other party to the proceedings. These requirements, supported by the guidance and recommended forms of agreement, which I know the Law Society is to distribute to solicitors, will, I believe, provide an appropriate degree of protection to the client.

I believe that the conditional fee scheme will provide greater access to justice and will increase choice for the consumer; and I thank the Consumers' Association for its view that,

    "conditional fees offer a means of support for those who would otherwise be deterred from pursuing their legal rights by the fear of legal costs".

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The scheme that I propose combines consumer protection with sufficient flexibility to encourage take-up of the scheme and the adjustment of protection to the particular circumstances of the client and the proceedings in question.

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