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18 July 2006 : Column GC45
Grand Committee
Tuesday, 18 July 2006.
The Committee met at half-past three of the clock.
[The Deputy Chairman of Committees (LORD HASKEL) in the Chair.]
The Deputy Chairman of Committees (Lord Haskel): Before the Minister moves that the first order be considered, I remind noble Lords that, in the case of each order, the Motion before the Committee will be that the Committee do report that it has considered the order in question. I should perhaps also make it clear that this Committee is charged only to consider orders, not to approve or not approve them. The Motion to approve will be moved in the Chamber in the usual way.
I also remind noble Lords that if there is a Division in the Chamber while we are sitting, the Committee will adjourn at the earliest convenient moment after the Division Bells are rung and will resume after10 minutes.
Criminal Defence Service (Representation Orders and Consequential Amendments) Regulations 2006
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland) rose to move, That the Grand Committee do report to the House that it has considered the Criminal Defence Service (Representation Orders and Consequential Amendments) Regulations 2006.
The noble Baroness said: I shall speak also to the Criminal Defence Service (Financial Eligibility) Regulations 2006, and the Criminal Defence Service (Representation Orders: Appeals etc.) Regulations 2006. These are three sets of draft regulations that will give effect to the changes introduced to the Access to Justice Act by the Criminal Defence Service Act 2006.
Noble Lords will recall that the Criminal Defence Service Bill completed its passage in March this year. The finished product benefited from the constructive debate in your Lordships' House and another place. Since then, officials in my department have been working closely with stakeholders to ensure that the draft regulations deliver a system which will be easy to understand and quick to administer. The regulations will also achieve the underlying aim of helping to control spending on criminal legal aid to ensure that legal aid resources are balanced and refocused to where they are needed most.
The draft regulations were first published during the passage of the Bill. A further version reflecting many of the points raised during the helpful debates was published and circulated to key stakeholders in April. Those include the Law Society, the Criminal Law Solicitors’ Association, the General Council of the Bar, the Legal Aid Practitioners’ Group, the London Criminal Courts Solicitors’ Association, the Criminal Bar Association, the Magistrates’ Association, senior
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Noble Lords will recall that the Criminal Defence Service Act provides for the introduction of a financial eligibility test for the grant of criminal legal aid and transfers the power to grant legal aid to the Legal Services Commission. The granting of legal aid will cease to be a wholly judicial function administered by court staff. That will allow the Legal Services Commission to exercise greater control over expenditure and ensure consistency. Court staff will remain responsible for the scheme’s day-to-day operation, governed by a service-level agreement between the Legal Services Commission and Her Majesty’s Courts Service.
The Act includes powers to introduce means-testing in the Crown Court, and we are currently considering what that detail of the scheme should look like. We will publish detailed proposals for consultation shortly, with a view to implementing the system in Crown Courts by the end of 2007. The main body of the new scheme for the magistrates’ court is set out in the draft financial eligibility regulations. Those provide for the financial eligibility criteria which defendants must meet in order to receive publicly funded representation.
The transfer of responsibility for the grant of legal aid from the court to the Legal Services Commission is provided for in the representation orders and consequential amendments regulations. The procedure for appeals about the interests of justice test is set out in the appeals regulations.
Under the new system, to qualify for legal aid an applicant will need to satisfy the existing interests of justice test as well as the new means test. There will be an upper threshold above which no representation order will be granted, and a lower threshold under which a representation order will be granted. For those who fall between the two, there will be a more detailed assessment of their financial circumstances. Individuals in receipt of certain qualifying benefits, such as income support and the income-based jobseeker’s allowance, are automatically eligible, as are those under 16, or under 18 and in full-time education.
The means test will measure affordability by weighting an applicant’s income to reflect individual family circumstances and household composition. An individual will be eligible for a representation order if his gross annual income, adjusted to take account of partner or children, is £11,590 or less, and ineligible if it is £20,740 or more. Where it falls between these amounts there will be a more detailed assessment. The individual’s annual disposable income will be calculated, making deductions in respect of any income tax, national insurance, council tax, housing expenses, childcare costs, maintenance and cost of living expenses from the applicant’s adjusted income. If his annual disposable income does not exceed £3,156, the individual is financially eligible.
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One of the concerns that noble Lords will recall was raised during the passage of the Bill was about the need to avoid introducing delay. It is essential that measures to control and refocus legal aid expenditure all support our objective of making the criminal justice system as speedy and efficient as possible. There are therefore a number of elements built in to the new system to militate against the risk of delay. For example, the old system required applicants to provide substantial supporting documentary evidence of means before legal aid could be granted, and that led to adjournments. Now, in most cases, applications will need to be accompanied only by the most recent monthly wage slip. Where an applicant is in receipt of benefits, their national insurance number will be sufficient, as court staff will have a dedicated real-time link to the Department for Work and Pensions database to check it.
It is anticipated that correctly completed forms will be processed well ahead of the first hearing, so that in the majority of cases a defence solicitor knows from an early stage whether or not his client is eligible. Solicitors will also be under a duty to advise their client to apply for a representation order immediately after charges are brought. However, where there is a delay in reaching a determination of eligibility, the early-cover scheme will apply. That will allow for a fixed-fee payment to defence solicitors to cover initial preparatory work and representation at their client’s first hearing, where an application is received within two working days of charge, no decision on that application has been made before 9 am on the day of the first hearing and the eventual decision is that the case passes the merits test but the defendant does not pass the means test. If the defendant arrives at court for the first hearing unrepresented, representation can be provided through the duty solicitors’ scheme. The early-cover scheme will also be extended to cover cases where the client has been remanded in custody pending appearance.
During the passage of the Bill, noble Lords argued that there was a need for an appeal to the court on financial eligibility. The Government accepted an amendment in another place to enable regulations to provide for the Legal Services Commission to refer a question to the High Court for its decision. We have provided for that in the financial eligibility regulations, which also set out that, where an applicant believes there has been an administrative error or miscalculation in determining his financial eligibility, he may apply to the Legal Services Commission for an administrative review of the determining officer’s decision. The appeals regulations also provide that, in circumstances where it is alleged that the interests of justice have been applied incorrectly, there will be a right of appeal to the court. In cases where the court overturns a decision reached in respect of the interests of justice, any application will still have to be referred back to the grant teams for a formal determination of financial eligibility.
The draft regulations recognise that while the means-testing scheme is sensitive to individuals’ circumstances, there will be occasions where applicants may fail the means test and yet may genuinely be unable to pay for their defence costs. That may be because of unusually
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Throughout the development of the Criminal Defence Service Act and the supporting regulations, we have listened to stakeholders and are confident that, in doing so, we have struck the right balance between fairness and efficiency. We believe that the new system will be easy for defendants, solicitors and court staff to use. I therefore commend the regulations to the Committee.
Moved, That the Grand Committee do report to the House that it has considered the Criminal Defence Service (Representation Orders and Consequential Amendments) Regulations 2006.—(Baroness Ashton of Upholland.)
Lord Kingsland: First, I thank the Minister, the noble Baroness, Lady Ashton, for giving us such a clear exposition of three rather complex orders. During the progress of the Bill, she kindly provided us with some insight of what was likely to be in these measures; and, to that extent, the comments that I am about to make can be reasonably moderate, if not largely complimentary.
One of the big issues that has, rightly or wrongly, been decided and which lies behind these orders, is whether or not decisions about financial eligibility should in future be made judicially or administratively. That battle has already been fought and lost by the Opposition; and I do not intend to re-open it again. However, I have an observation about the timing of these orders.
We are now in the foothills of the implementation of the Carter report, which is taking an overview of all legal aid matters. If the noble and learned Lord the Lord Chancellor takes up even 50 per cent of what is in the report, it looks as if we are in for dramatic changes. Would it not have been better for the Government to have held their hand on the question of costs in magistrates’ courts until the key decisions on Carter had been made? I ask that not only in relation to the detail, but with respect to the overall financial envelope.
We know that, in Crown Court cases, 50 per cent of the money is spent on 1 per cent of the cases. We fervently hope that the noble and learned Lord will introduce a system that dramatically cuts that amount. If that is the case, can the noble Baroness assure us that, if big savings are made, these eligibility figures will be reviewed? I would not like the lower and upper limits contained in the financial eligibility order to be set in stone for any longer than it takes the
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In addition to those general comments, I have one or two questions of detail, none of which will surprise the noble Baroness. She is well aware of an issue that formed the background to the discussions on Carter, and which was the subject of several speeches made during the progress of the Bill. It will come as no surprise to her that one of our concerns is with regard to the geographical distribution of solicitors, in particular, and, more generally, that of other legal advisers, implied by the financial eligibility test. We do not know what impact it will have on the business viability of legal advisers and we would like to think that the department will keep this matter under constant review.
Sometimes, for example, we may find that someone qualifies under the financial eligibility criteria and yet, because they are a long way away from a solicitor, they are unable in reality to take advantage of it, or they will be penalised despite the fact that they qualify. I know that the citizens advice bureaux often provide a useful stand in but they themselves are under great strain at the moment.
3.45 pm
In the other place, the Minister, Mrs Vera Baird, suggested that the telephone line system which operates at the moment may provide a viable substitute—and that may well be true in certain cases—but, in my submission, someone who appears as a defendant at a magistrates’ court, particularly if it is for the first time, would probably not feel that they had had the kind of comprehensive legal advice they would have liked to have had just through a telephone call. I say that simply as an observation on an issue that the noble Baroness should keep under review.
One of the costs of not being legally represented, and therefore having to represent oneself, is that, as a consequence of one’s unfamiliarity with the law and procedure, cases tend to go on longer. If, as a result of this, the percentage of unrepresented defendants increases in magistrates’ courts, and consequently the length of trial extends, we may find that all the savings we had hoped to make by these measures are lost because of the extra costs of running the courts. So that is another factor that I hope the noble Baroness will keep under review.
I do not know whether this is a fair question to put to the noble Baroness in conclusion, but I am going to put it anyway. She indicated in her closing observations that we were a few months away from a similar system being brought to your Lordships’ House to deal with Crown Court matters. Plainly, the department has already been looking at that in some detail and will already have taken a view about the extent to which what is going to be proposed is similar to the magistrates’ court system and the extent to which it is different. I hope the noble Baroness, in her concluding remarks, will be able to say something about that.
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I expect that the key difficulty, the sand in the machinery, of the financial eligibility order—if, indeed, there is to be some sand in the machinery—will occur in relation to Regulation 14. Plainly the system is at its most vulnerable where there is a proceeding in a magistrates’ court which is likely to go on for a long time. You may find that someone does not qualify for a representation order because their disposable income is above £20,000 a year and yet they are faced with a very long case in the magistrates’ court. Paragraph 14 provides for that situation; but it seems to me to be quite a stiff hurdle for an applicant to negotiate. I would like the noble Baroness’s assurance that she is aware of that and will be particularly concerned to keep that matter under review.
Having said all that, I thank the noble Baroness for bringing these matters to the Committee and, with no more ado, sit down.
Lord Thomas of Gresford: I, too, thank the noble Baroness for her exposition of these three sets of regulations relating to the Criminal Defence Service. When the state-funded Criminal Defence Service was started up some years ago, I opposed it and the passage of the legislation through the House. I subsequently discovered that it was in fact providing a spirited and independent service in the few centres where it had been set up—in Birmingham, Liverpool, Cheltenham and elsewhere. I was very impressed with the work it was doing, not least because I was instructed by it to appear in the divisional court in certain cases, where I thought a very independent line was being taken. I have since addressed its annual conference and a quote from me appears in its annual report. So I hope the noble Baroness appreciates my point of view.
In my early years as a solicitor, I spent my time in the magistrates’ court learning my trade. It did not pay in the early 1960s and it certainly does not pay now. One reason why I moved from one side of the profession to the other was that I was the one partner in the firm who was not making any money. I got fed up with my brother and others making a lot of money, so I decided that it was time to go.
One of the problems arising here has been touched upon by the noble Lord, Lord Kingsland—the coming together of this approach in these orders with the Carter report. The report, for the first time, seems to address the very important issue of how you build into the legal aid system incentives to do cases quickly and efficiently. One of the problems causing the expenditure to which the noble Lord, Lord Kingsland, referred—50 per cent of legal aid expenditure goes on 1 per cent of cases—is the culture whereby a case can run on and on, with various applications being made, some of little worth, because the way in which people were paid encouraged time-wasting. That has been addressed by the Carter report, but I do not think that these orders deal with that sort of problem.
One difficulty is in the eligibility rules: £20,740 is not a very high income. If you earn more than that, you get no legal aid at all. It says in the accompanying notes that only 1 per cent of those who appear in
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The area between £11,000 and £20,000 is where the problem lies. Means-tested legal aid has been tried before and, as the noble Baroness knows, it was a failure. It cost so much to deal with the bureaucracy involved in proving income, and so on, that it did not save any money. The proposal now is that a person’s wage slip for one month will be sufficient, or their national insurance number if they are in receipt of benefits. I do not see that system lasting for very long because it is open to all sorts of abuse.
I think it is likely that less legal aid will be available. That is the purpose of the order—to cut down on costs. That means that it will become even more unprofitable to do cases in the magistrates’ court than it was in my early years. What follows from that and from the Carter report is that firms simply will not undertake legal aid. Something like 2,700 firms of solicitors take legal aid cases at the moment, but I can see that figure dropping rapidly. Solicitors do not provide a public service for nothing; obviously they have to make a reasonable income out of what they do. Undoubtedly there will be deserts in the country where representation will not be readily available because a solicitor is sometimes needed at very short notice. I fear that this will be an enormous disincentive to the legal profession to be involved in legal aid work and that it will therefore lead to a lack of representation.
I make this point. A defendant who is represented and whose case is put, one hopes, succinctly and well by professionals to a court saves money. A person who represents himself will go on for ever. Your Lordships will know that from the fact that the professional lawyers in this House talk at much shorter length than others.
Lord Thomas of Gresford: I may as well say that—we all know what interests I have to declare. My point is that a case well put will be put without delay and money will be saved. The appeal system, which was put in after some pressure following consultation, will enable appeals to be made only on the ground of the interest of justice and not on financial grounds. But, of course, constant applications and appeals cost money and cause delay, and what is gained by reducing legal aid may be lost by the greater time spent in court dealing with cases where people are appealing or where, alternatively, there is no representation at all.
As the noble Lord, Lord Kingsland, said, setting these arbitrary financial limits may cause an imbalance. Average incomes are higher in London than they are, for example, in Wales, and one can see that we will have an imbalance in that people whose standard of living is no higher in metropolitan areas
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I understand that a national agency is to be set up. National agencies have been a disaster. The Criminal Assets Recovery Agency, of which I have some experience, has cost taxpayers around £60 million since 2003 and has recovered £8 million. It is easy to farm these things out to agencies but is it cost-effective? The difference there of something like £70 million or £74 million would, in any event, pay for a fair amount of magistrates’ court representation over a year. So setting up an agency and taking this work away from the magistrates’ court or from government departments generally is not necessarily the best way to proceed.
My verdict on these orders is: wait and see—the traditional Asquithian view. I strongly suspect that there will be unforeseen consequences and that the scheme will have to be revised, just as the abolition of means-testing was revised by these orders. It is the ongoing problems that I am sure will come before us again in the not-too-distant future.
4 pm
Baroness Ashton of Upholland: I thank the noble Lords, Lord Kingsland and Lord Thomas of Gresford, for the spirit in which they have debated these regulations. I accept that noble Lords have indicated a number of areas where they want to make sure the department and Ministers involved keep an eye on what happens. In my closing remarks I will tackle some of the questions they have raised.
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