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Lord Boardman: My Lords, I am most grateful to my noble friend for giving way, but as he is well versed in the Law Society's figures, I wonder whether he can say how it managed to secure insurance cover against the other party's costs for less than £100 if the risks of losing were so substantial.
Lord Coleraine: My Lords, I am not in the cognisance of the Law Society on that matter. I consider that the question of insurance is a complete irrelevance. Whether or not they get insurance is entirely up to the clients. The only effect of the insurance is, if it is correct, to make it possible for litigants to litigate without risk. I am not sure that that is a good idea. I do not know the answer to my noble friend's question, but I hope that the House will reject the amendments and support my noble and learned friend on the Woolsack.
Lord Campbell of Alloway: My Lords, before my noble friend sits down, does he also consider irrelevant the difficulties explained in some detail by the noble Lord, Lord Mishcon, as regards the assessment of risk, which is fundamental to the scheme? Does my noble friend consider that irrelevant?
Lord Coleraine: My Lords, no, indeed I do not. I recognise that there will be cases where it is difficult to find an acceptable conditional fee agreement. On the other hand, there will be many cases where it is possible to do so. I am asking the House to let this proposal go forward. As it works out, we shall discover where it is necessary to amend it and what type of agreements are practical and what are not.
Lord Allen of Abbeydale: My Lords, I am not a lawyer and like the other two lay Members who ventured to intrude into this lawyers' paradise, I can claim no expert knowledge of the subject. So it is with some diffidence that at this late stage of the debate I make a modest contribution. I derive some comfort from the fact that it is, after all, the non-expert, the non-lawyer, the ordinary person, who is intended to be the beneficiary of the proposals put before us by the noble and learned Lord on the Woolsack.
It could not be denied that most of today's critics intensely dislike the whole concept of conditional fees. That has been made abundantly clear. It is true that it has always been followed by the disclaimer that one has to accept the will of Parliament, but the melody, as it were, lingers on.
I looked back at the debates on the Bill leading to the 1990 Act, and I see that not only did I welcome the relevant clause but also that I incurred the grave displeasure of some of my legal friends by rather rashly moving, without success, an amendment which would have given the Lord Chancellor even greater powers. I therefore greatly welcome the order and regulations laid before us today, with only the regret that we have had to wait so long and possibly also with the feeling that they might have covered rather more types of case.
As it is, almost the whole argument has centred on just one categorynamely, personal injury casesand that, too, from the point of view of the plaintiff only. The arguments which have been put forward with considerable forensic skillthat if there is to be a mark-up, 20 per cent. would be better than 100 per cent.have lamentably failed to convince me at all; 100 per cent., just on the arithmetic, strikes me as being unobjectionable in a 50:50 case. There is some weakness in the argument that that is too much because in the vast majority of cases personal injury claims are straightforward and almost always succeed, since it seems to me that the argument disguises the fact that a number of cases which are not so clear and which might indeed be 50:50 are never brought under the present circumstances, and that is one of the points at which the proposals are aimed.
It has been suggested that 100 per cent., or something near it, might become the norm. I do not believe that that will be possible. With all deference to the noble Lord, Lord Campbell of Alloway, I believe that there is something in the argument that the citizen would be able to shop around. We know that when there is competition, as in conveyancing, even legal fees can come down quite a bit.
One can hardly expect the noble and learned Lord the Lord Chancellor to welcome the other part of the suggestion made by the noble and learned Lord, Lord Ackner, for a specific cap on the proportion of damages which can be taken by way of fees, when he takes the view that the statute gives him no power to do that. In a long life in public affairs, I have found that on the whole it pays to take advantage of the legal views reached by the Lord Chancellor.
A good deal of the problem is met by the provision in the regulations that the amount payable to the lawyer is to be limited with reference to the amount of damages recovered, or that there is power for that to be provided in the agreement, which at any rate will ensure that the matter is discussed between the lawyer and the client. Although some scorn has been poured on the taxation arrangements, the fact remains that they provide some safeguard. The arguments, very skilfully put, as one would expect, by the noble Lord, Lord Mishcon, would apply, it seems to me, to any form of uplift and are not conclusive on the question of whether one would go for 20 per cent. or 100 per cent., which is the main issue
There is one crucial difference between this scheme and the American scheme which is not to be overlooked and which has only just been touched upon. That is that the American contingency fee system works only if there is a prospect of damages from which the lawyer's fee can be deducted, whereas the Lord Chancellor's scheme works on both sides of the litigation. So the citizen who finds himself as a defendant in a personal injury claim will be able to make use of it. Indeed, I would not be all that surprised if the insurers for their part got round to seeing considerable merit in the scheme.
I recognise that the question of costs, which has been touched on from time to time, presents a problem which does not arise in the United States. The possibilities again will have been discussed between lawyer and client before the agreement is signed, and, although it is not a complete answer, the insurance scheme worked out by the Law Society, which I do regard as relevant, can go some way towards coping with that problem. It will apply only when the solicitor's firm is a member of the Law Society's accident line scheme and is an approved participant in the insurance arrangements. That incidentally should ensure that the client is helped by lawyers who know their way around. It will not cover some types of case, including medical negligence and pharmaceutical drug and tobacco-related actions, but where it is applicable cover will be provided for a pretty modest premium.
There is just one other point. I noticed that on previous occasionsI believe on one occasion this evening alsoreference has been made which suggests that the speculative fee arrangement in Scotland, which bears a family resemblance to what is now proposed, has fallen into complete disuse. I have made some inquiries, and my understanding is that those reports of the scheme's demise are considerably exaggerated and that it is not the case that it has been found to be generally unacceptable.
As a conscientious Cross-Bencher, I naturally support the Government when the Government are right. It is not my fault that so often they prove to be wrong. However, tonight I believe that the Government's proposals are right. Much as it grieves me to differ from my fellow Cross-Bencher, the noble and learned Lord, Lord Ackner, I hope that the House will reject his Motions and approve the order and regulations.
Lord Hacking: My Lords, almost every participant in the debate has acknowledged that Section 58 is in the Courts and Legal Services Act and that Parliament has decreed the introduction of conditional fees. However, it is clear from most speakers today that there is deep opposition to conditional fees and that if they are to be introduced they should have minimal effect. That will be the consequence of the House agreeing the amendments
We would then be left with, as was described by the noble Lord, Lord Mishcon, the disturbing gapI would describe it as the ever-increasing disturbing gapbetween the poor man covered by legal aid and the rich man supported by his bank balance. When your Lordships debated the matter in November I quoted certain figures as regards the fall in eligibility for legal aid. I told your Lordships that at the beginning of the 1980s about 70 per cent. of families within the jurisdiction of England and Wales were eligible for legal aid. By the end of the 1980s, that figure had fallen to about 50 per cent. and has been falling ever since.
The Consumers' Association in a survey dated June 1993 ascertained that one-third of people in this country who considered taking legal action did not do so and that a significant factor in that was concern about the cost of legal proceedings. Therefore, the question is: what is to be done? Alas, the answer cannot come with a revival of the legal aid scheme as I remember it as a young member of the Bar in the early 1960s.
We therefore have before us the proposals of the noble and learned Lord the Lord Chancellor. Your Lordships may not like the proposals but I say firmly that many outside the House support the scheme; members of the Consumers' Association, members of the Law Society and others who come face to face with clients and the issue of costs.
Being also a member of the Bar of the State of New York, I am tempted to address your Lordships on the contingency fees system and perhaps that alien creature to which the noble and learned Lord made reference. However, I shall turn to what I believe to be the vital issue before your Lordships; it is the curious situation which we now face in this debate. The consumers clearly support the proposals. The opposition comes almost entirely from the lawyersfrom some sections of the legal profession and the judiciaryon the grounds, I emphasise, that lawyers will abuse the system by dishonest practices because of financial interest in the outcome
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