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Lord Carmichael of Kelvingrove: I am grateful to the noble and learned Lord for explaining the issue. He will accept that there is a great deal of verbosity in the regulations and an assumption that we are fully aware of what preceded them.
I should like briefly to discuss the Advice and Assistance (Financial Conditions) (Scotland) Regulations 1997. I am grateful to the noble and learned Lord the Lord Advocate for going through them so thoroughly. The problem is that this measure does not mean that people can still afford to go to law. It is most inadequate from that point of view.
For instance, under the Legal Aid (Scotland) Act 1986, the disposable income limit for eligibility for legal aid rises from £162 to £166 a week. The regulations increase the weekly disposable income above which a person is required to pay a contribution from £67 to £69;
and they prescribe the scale of contributions to be paid where the weekly disposable income exceeds £69 but does not exceed £166.The point about the eligibility uprating is that the regulations should be welcomed in so far as they allow slightly greater access to justice for people who cannot afford to fund their own court action. Since the eligibility changes in the 1993 legislation, the Scottish Legal Aid annual report for 1995-96 indicates that an increasing number of people who have been offered legal aid refuse to take it up to pursue their court action. The figures given for 1994-95, of which I am sure the noble and learned Lord will be aware, show that 2,888 persons had been offered legal aid but refused to take it up. In 1995-96, that figure had risen to 3,420.
The reason for that can be easily explained, as the society contends, by the massive increase in contributions which are sought by the Scottish Legal Aid Board to fund actions. In 1995-96, 5 per cent. of persons receiving legal aid to pursue court action in the sheriff court were required to make a contribution of between £500 and £1,000, and 3 per cent. were required to make a contribution of over £1,000.
We do not want to look a gift horse in the mouth. But it is a very poor gift horse when people still have to produce sums like that from a very small income of something like £120 a week. So, while it would be wrong not to allow the legislation to continue, it would also be wrong not to point out the fact that the legal aid provided is only a very small help to a very small number of people. The numbers I quoted of people who are unable to take it up are evidence of that.
Perhaps the noble and learned Lord the Lord Advocate will be kind enough to deal with the points I have made. They must be very familiar to someone as elevated in the legal profession as he is. It would be helpful to me to know just how easy or how difficult it is to obtain legal aid.
Lord Mackie of Benshie: My Lords, the noble Lord, Lord Carmichael, has obviously received the same brief from the Law Society. I, too, was disturbed by the figures. The rise in the rejection of the offer is disturbing. I understand that the recent Act enormously increased the contribution required from people.
Another point made by the Law Society in its brief is that the people who bear the brunt are single women on lower incomes and women trying to sue brutal partners. That is very disturbing. It would be nice if the noble and learned Lord could reassure us that the rise in the rejection of legal aid is due to some other factor. At the moment the explanation appears to me to be quite straightforward: it is due to the rise in the cost.
Lord Mackay of Drumadoon: My Lords, I am grateful to the noble Lords, Lord Carmichael and Lord Mackie for raising their concerns. I do not have a copy of the brief to which they refer; however, I am aware of the anxieties that are expressed from time to time.
It is important for noble Lords to bear in mind that the contribution level, if any, that a legally aided person is required to pay depends on that person's disposable
income--that is, income after allowance has been made for certain essential living expenses. All sources of income are considered when the calculation is carried out; but equally, so are essential living expenses.In some instances when the calculation is carried out, those who are eligible for legal aid have to pay what they consider to be a substantial contribution. But, if that is the position, it simply reflects the fact that the resources available for expenditure on legal aid have to be targeted as efficiently and effectively as possible. It is quite obvious from reading the annual reports of the Scottish Legal Aid Board that there has been a substantial increase in recent years in the total payments coming out of the Legal Aid Fund. There is a measure of acceptance on all sides that it has to be controlled in a realistic manner.
Dealing with the specific point raised--the reason why offers of legal aid are refused--the matter was examined in a small research study undertaken by the Scottish Legal Aid Board. The results of the study indicate that there are a variety of reasons why people refuse offers of legal aid. Some applicants simply decide that they do not wish to continue with their action. Their personal or financial circumstances may have changed.
I turn to the specific example of single ladies who may be the victims of violence. It is well recognised that, from time to time, having been involved in the most unpleasant of situations which is distressing for such ladies and their children, they become reconciled with their partner and the need to proceed with litigation evaporates, at least for a time, until another incident occurs.
Some applicants take the view that they are not prepared to make any contribution to the Legal Aid Fund towards the cost of their case. That choice is open to them, but if they exercise it then the consequences are that legal aid cannot and, in my submission, should not be made available. We believe that it is right that those who are assessed as being able to make a contribution towards the cost of the case should be expected to do so. It is important to bear in mind the further consideration that, if at the end of the day the case costs less than the maximum contribution, that contribution is restricted to the actual costs of the case. That applies to cases of personal injury when damages are being sought: if the applicant for legal aid wins his or her case and recovers damages and expenses, it may result in a refund of the contribution taking place either in whole or in part.
I am well aware that concerns are expressed from time to time about the extent of legal aid, the limits on eligibility, but it must be accepted that there has to be a scheme for assessing who is eligible and who is not. The regulations provide a modest relaxation in the eligibility limits which are consistent with the recent uprating of social security benefits. On that basis, I invite the House to approve the regulations.
Lord Carmichael of Kelvingrove: My Lords, I thank the noble and learned Lord for his full explanation. It is disappointing that we all thought that
legal aid would mean that no matter what your circumstances, if you had a case in law you could pursue it. We are now clear that help is given by increasing the rates but it still falls far short of what is needed. It means that the poor and even the not-so-poor cannot afford to go to law. However, obviously we cannot do much now. We can only thank the noble and learned Lord the Lord Advocate for small mercies--and I mean small.On Question, Motion agreed to.
Civil Legal Aid (Financial Conditions) (Scotland) Regulations 1997
Lord Mackay of Drumadoon rose to move, That the draft regulations laid before the House on 11th February be approved [12th Report from the Joint Committee].
The noble and learned Lord said: My Lords, I beg to move the second statutory instrument standing in my name.
Moved, That the draft regulations laid before the House on 11th February be approved [12th Report from the Joint Committee].--(Lord Mackay of Drumadoon.)
On Question, Motion agreed to.
Contract (Scotland) Bill
7.44 p.m.
Lord Mackay of Drumadoon: My Lords, I beg to move that this Bill be now read a second time.
In January last year, the Scottish Law Commission published a report entitled Three Bad Rules in Contract Law. It recommended the abolition of the following rules: first, that a buyer of heritable property cannot recover damages for certain types of breach of contract unless the house is returned to the seller; secondly, that contract terms agreed between the buyer and seller of a house--for example, that the central heating system would be in working order--are superseded by the subsequent conveyance or deed transferring title into the name of the purchaser unless specific steps are taken to contract out of that rule; and thirdly, that where a contract appears to have been embodied entirely in writing, extrinsic evidence is not admissible for the purpose of proving additional terms.
The commission argued in its report that those three rules were having inequitable results and that the uncertainty surrounding them had led to a substantial body of conflicting case law. The Contract (Scotland) Bill now before us seeks to implement the recommendations of the Scottish Law Commission and we hope it will thus clarify and simplify the law. When the draft proposals for legislation were published, they were widely welcomed and they have the support of, among others, the Law Society of Scotland and the CBI (Scotland). When the Bill was before another place, it received unanimous approval from all sides.
It may be helpful if I explain briefly what the existing rules are and how their abolition under the provisions of the Bill will reform and improve the law.
Under Clause 1, the present rule on extrinsic evidence which restricts proof of additional contract terms will be replaced. Clause 1 thus reforms the law of evidence rather than any substantive law. For example, it does not affect any rules for the constitution or formal validity of a contract.
Some concern has been expressed that this clause would remove the current degree of certainty as regards written contracts. The Scottish Law Commission considered, however, that the provision of a rebuttable presumption combines the advantage of certainty with the means of avoiding possible injustice. Clause 1 does not have the effect of adding additional clauses to a contract or allowing parties to add clauses to a contract after it has been signed. It simply affects how parties prove whether an additional clause formed part of the original contract.
Clause 2 abolishes the existing rule of law on supersession. The effect of that rule is that, regardless of the intentions of the parties, a contract is entirely superseded by the execution or delivery and acceptance of a conveyance or other formal deed in implement of the contract. Perhaps a most common example of the operation of the supersession rule is to be found where missives have been agreed for the sale of heritable property. The Scottish Law Commission was of the opinion that freely negotiated provisions, for example, as to the condition of the property should be enforceable even after the delivery by the seller to the purchaser of the disposition conveying title to the property to the name of the purchaser. Under the present law, however, such provisions agreed in missives may not survive the delivery of the conveyance and the genuine intentions of the parties may thus be frustrated. In recent years, much unnecessary litigation has been caused as a result of the rule.
The new provisions will mean that, unless the parties agree otherwise, a contract will only be superseded by the execution of a formal deed to the extent to which the terms of that formal deed in fact implement the contract. Any unimplemented or unfulfilled term of the contract will remain outstanding and in force unless the parties have agreed a specific agreement to the contrary effect.
Finally, Clause 3 abolishes the present rule that in cases other than those coming under the Sale of Goods Act a buyer who claims there has been a breach of contract by a seller is not entitled to retain the property in question and claim for damages. The most common and invidious application of this rule is in relation to house sales, where the Scottish Law Commission considered that it was unreasonable to expect a buyer to reconvey a house to the seller before being able to raise an action for damages.
Under the new provision, a house buyer will be able to retain the property when suing for damages for a breach of contract. The Scottish Law Commission recommended that the assessment of those damages should be left to the general law of damages rather than allowing the purchaser to claim a monetary sum based on the value of the subjects being worth less than that
which had been paid for them. Such a rule would add to the complexity of the clause and would, it is believed, introduce an unnecessary anomaly into the law.The new rule will affect the sale of land or houses or incorporeal moveable property, such as shares, but not, I stress, goods defined in the Sale of Goods Act, to which the rule did not apply. The law will thus be consistent for all property.
I believe that the provisions contained in the Bill may be of a technical, legal nature. However, they are uncontroversial. They represent much needed simplification and clarification of the law of Scotland, which I believe will be welcomed by lawyers throughout Scotland, by the business community and by private members of society who may have occasion to purchase and sell a domestic property. Accordingly, I commend the Bill to the House.
Moved, that the Bill be now read a second time.--(Lord Mackay of Drumadoon.)
7.50 p.m.
Lord Mackie of Benshie: My Lords, I apologise to the noble and learned Lord for those sotto voce remarks, which were entirely complimentary. I meant to say that this is such a good Bill that there is no need to explain it. I realise, however, that for the record it has to be mentioned.
This is a good Bill. It must be an enormous pleasure for the noble and learned Lord the Lord Advocate to put forward a Bill which is full of virtue, unlike most of the Conservative Government's Bills with which I am sure he struggles greatly. The Law Commission recommended the abolition of those three bad clauses. The Bill strengthens the Scottish system of contract even further and improves the superiority of Scots law as against English law. It is wholly to be commended.
For myself, my education has been much improved. I knew what "intrinsic" meant, and now I know what "extrinsic" means. I commend the Bill to the House.
7.52 p.m.
Lord Macaulay of Bragar: My Lords, from this side of the House we welcome the Bill in so far as it attempts, as the noble and learned Lord the Lord Advocate said, to simplify the law. I was quite ready to take it on that basis and follow what the noble Lord, Lord Mackie of Benshie said. But having listened to the noble and learned Lord explain the Bill for five minutes, it seems to me that we are again walking into a lawyer's paradise. I do not condemn the Bill in any way. The Law Commission has done its job. We shall just have to see how this measure works out in due course in relation to the matters which it covers.
Having heard the explanation of the noble and learned Lord the Lord Advocate of what the Bill is all about, I have now--only in the past three or four minutes, to be honest--acquired some grave reservations whether it will simplify the law or whether the lawyers will be
back in the field again. Whether it is a level playing field, as we discussed last night, is another matter. We do not of course oppose the Bill.
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