111. It largely repeats the provisions presently found in section 38 of the Legal Aid Act 1988. But it allows information to be disclosed, subject to any regulations to the contrary, for the purposes of the investigation or prosecution of any offence or suspected offence. At present, information can only be disclosed for the purpose of prosecuting offences under the 1988 Act itself. This prevents information which indicates that other offences may have been committed from being made available to the appropriate authority for investigation or prosecution. For example, information provided to allow the Commission to assess the means of a claimant, might show or suggest that a fraud was being perpetrated in relation to the receipt of social security benefits. This could not be disclosed under the 1988 Act, but it could be disclosed under the provisions made by clause 19. This clause also clarifies the provisions of s38 of the 1988 Act by making clear that information may be disclosed about the value of payments made by the Commission to particular firms or lawyers. This reflects current practice.

112. Disclosure of information in contravention of this clause will be an offence punishable by a fine not exceeding £2,500 (which mirrors the provisions of section 38(4) of the 1988 Act) and no prosecution may be brought without the written approval of the Director of Public Prosecutions.

113. Clause 20: Misrepresentation etc. This clause provides criminal penalties for people who give false information about their finances, or otherwise make false statements, in applying for publicly-funded help under the Bill. The clause largely replicates the equivalent provisions in section 39 of the Legal Aid Act 1988, but extends beyond the person receiving help to anyone who furnishes information. It sets out the proceedings and penalties where those seeking help fail to furnish information required of them under the Bill, or make false statements or representations in doing so. It also enables the Legal Services Commission to take proceedings in the county courts for recovering any losses caused by these acts.

114. Clause 21: Miscellaneous. This clause provides that, unless regulations say otherwise, the fact that services are funded by the CLS or CDS schemes shall no affect lawyer-client privilege or the rights of any third party. This mirrors section 31(1) of the 1988 Act.

115. Clauses 22-24 and Schedule 4 make provision for consequential amendments, the procedures for approving orders and regulations, and interpretation.

Legal Aid in Scotland

117. Assistance by way of representation is a category of advice and assistance under the Legal Aid (Scotland) Act 1986. Advice and assistance, and assistance by way of representation are defined in section 6(1) of the 1986 Act. Advice or assistance is provided by a solicitor or counsel in relation to a matter of Scots law. Assistance by way of representation is provided by a solicitor or counsel in connection with any proceedings before a court, tribunal or statutory inquiry. At present, advice and assistance is available under Part II of the 1986 Act provided financial and contributions criteria are met. Section 8 of the Act sets out the income and capital limits for availability of advice and assistance. Section 11(2) provides for contributions to be paid by a person in receipt of advice and assistance up to maximum amounts set in regulations.

118. Under section 9 of the 1986 Act the Secretary of State may by regulations provide that Part II of the Act as it applies to advice and assistance also applies to assistance by way of representation. Therefore, the financial limits and contributions which apply to advice and assistance are also applicable to assistance by way of representation. The Secretary of State also has the power under section 9 to prescribe different provision for different cases and modify the financial limits which may apply to assistance by way of representation. However, it is not possible under section 9 at present for the Secretary of State to disapply the financial eligibility and contributions tests in their entirety. The Bill provides for certain proceedings, in particular mental health proceedings, to be so exempted from the financial eligibility and contributions tests.

119. Clause 26: Recipients of disability working allowance. This clause disapplies the financial eligibility and contributions tests from persons seeking or receiving advice and assistance who are in receipt of disability working allowance.

120. Advice and assistance is defined in section 6(1) of the Legal Aid (Scotland) Act 1986 as advice or assistance provided by a solicitor or counsel in relation to a matter of Scots law. Advice and assistance is available under Part II of the 1986 Act provided financial and contribution criteria are met. Section 8 of the Act sets out the financial limits for availability of advice and assistance. It provides the income and capital limits which shall apply for the purposes of advice and assistance. Section 11 sets out the contributions payable by a person in receipt of advice and assistance. Sections 8 and 11 provide that advice and assistance shall be available to a person without payment of contribution where that person is in receipt of income support, an income based job seekers allowance or family credit. Clause 25 adds to that category of exempted persons those in receipt of disability working allowance in terms of section 129 of the Social Security Contributions and Benefits Act 1992.

Funding

122. The new section 58A seeks to make recoverable any enhancement to the lawyer's fees payable to the lawyer under a conditional fee from the losing party. Paragraph 31 above sets out the reasons for this change.

123. Section 58A also removes the prohibition on the use of conditional fee agreements in family proceedings exclusively concerned with financial issues or property. This will allow some people, who might previously have been deterred by fear of the cost, to pursue their cases. All cases involving issues about the welfare of children will remain outside the scope of conditional fees.

124. Clause 28: Recovery of insurance premiums by way of costs. This clause makes provision to allow the court to include in any costs it may award against the losing party, any premium paid for an insurance policy against the need to meet legal costs. It is not limited to insurance policies taken out alongside a conditional fee agreement.

B. RIGHTS OF AUDIENCE etc. (Clauses 29-37)

SUMMARY

• abolish the Lord Chancellor's Advisory Committee on Legal Education and Conduct (ACLEC) and create a new body, the Legal Services Consultative Panel, which will take over ACLEC's functions in advising the Lord Chancellor on changes to authorised bodies' rules and the designation of new authorised bodies and on legal education.

• simplify procedures for approving changes to rules and the designation of new authorised bodies.

• give the Lord Chancellor power, with the approval of Parliament, to change rules which do not meet the statutory criteria set out in the Courts and Legal Services Act 1990 as amended by these clauses.

• establish the principle that all suitably qualified advocates, whether in private practice or in employment, should enjoy full rights of audience.

• establish the primacy of an advocate's ethical duties over any other civil law obligations.

BACKGROUND

127. Rights to appear as an advocate in court (rights of audience) and rights to do the work involved in preparing cases for court (rights to conduct litigation) are governed by the Courts and Legal Services Act 1990. The 1990 Act leaves it to 'authorised bodies' (currently the Bar Council, the Law Society and the Institute of Legal Executives) to set the rules which govern the rights of their members, subject to a statutory approval process in which new or altered rules must be submitted for the approval of the Lord Chancellor and the four 'designated judges' (the Lord Chief Justice, Master of the Rolls, President of the Family Division and Vice-Chancellor). Before making their decisions the Lord Chancellor and designated judges receive and consider the advice of the Lord Chancellor's Advisory Committee on Legal Education and Conduct (ACLEC) and of the Director General of Fair Trading. Applications for the designation of new authorised bodies are subject to a similar procedure, but the designation of the new body is made by Order in Council subject to approval by both Houses.

128. The Government believes that the existing approval procedures are convoluted and slow, and that rights of audience are currently too restrictive. Some applications for approvals have taken several years to be processed, in part due to the need for applications to meet the approval of several parties. Rights of audience in the higher courts (the House of Lords, Court of Appeal, High Court and Crown Court) remain restricted to barristers and a small number of solicitors in private practice.

129. The Bill simplifies and expedites the approval procedure, and enacts the principle that rights of audience in the higher courts should be exercisable by all suitably qualified solicitors and by employed lawyers such as Crown Prosecutors. ACLEC will be replaced by a smaller and less expensive committee, the Legal Services Consultative Panel. The functions of the new Panel will not be prescribed in detail in statute, and its composition will be left to the Lord Chancellor to determine. This will enable the Panel to develop flexibly, in response to the matters on which the Lord Chancellor requires expert independent advice, and will leave the Lord Chancellor free to appoint the best candidates to the Panel. The Bill will also give the Lord Chancellor a new power to call in and if necessary replace professional rules affecting rights of audience or rights to conduct litigation, which he considers are contrary to the public interest. The exercise of this power will be subject to Parliamentary approval.

130. The Bill will make the Bar Council and the Institute of Legal Executives authorised bodies for the purpose of granting rights to conduct litigation to their members. At present the Law Society is the only body able to grant these rights; so currently only solicitors are able to conduct litigation. It will also put into statutory form the principle that an advocate's or litigator's first duties are to the court in the interests of justice, and to his profession's ethical standards and that these cannot be overridden by any other civil law obligations, such as a contract of employment.