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Lord Carter: I do not know whether the noble Lord is aware of the passage in the Companion which says that other speakers are expected to keep within 15 minutes, and I see that the noble Lord has been speaking for 24 minutes.

Lord Phillips of Sudbury: I confess that I am relatively new to the House and was not aware of that rule. I apologise for my excess. I should like two minutes to finish, given that I am on a lone horse.

I do not believe that the central components of the thesis are valid. I do not believe that tender prices will be significantly lower than current rates. I do not believe that quality will be maintained, let alone raised, by the tendering process. I do not believe that access will not be damaged or blitzed. I believe that the Government must abandon competitive tendering. They must find a better way of dealing with legal aid and remuneration. That is in the hands of the Legal Aid Board, if it were only humble enough to grasp it.

There is already a fast and rapid increase in franchising. Something like double the number of firms have put in for it in the last month. With better checks, we can maintain the patchwork of legal services better and utilise the community services that the Government intend to introduce and which we all support. With further consultation and co-operation, the Bill could succeed, but I am convinced that unless reform is effected on the lines of Amendment No. 77, it will not. I beg to move.

Lord Clinton-Davis: I promise that I shall not exceed five minutes. Although I agree with many of the points

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just made, one central ingredient of the legal aid system has been missed by the noble Lord. I refer to firms that practise in areas where there is little or no private work, which are wholly dependent on legal aid. Such firms practise because they have a sense of obligation to the public, to which the noble Lord referred. They are certainly not the fat cats. They subsist on incomes that are very low. I can vouch for that because I had a practice in East London where, at the time, I was able to rely on a good deal of private work to subsidise legal aid. Such private work is not available in that area now on any scale.

I wish that it were possible for some of my ministerial colleagues to see some of those firms for themselves, rather than relying on hearsay, and observe the difficulties under which they work on a day-to-day basis. At the same time, those firms provide a fantastic service. Yes, they make mistakes, but who does not? Even Ministers, Members of Parliament and Members in all parts of your Lordships' House make mistakes from time to time.

Noble Lords: No! Withdraw!

Lord Clinton-Davis: Some of my noble friends are living in a sort of grandiosity.

The fact remains that, on the whole, such firms provide an excellent service. I worry that if legal aid work dries up--I am not sure that the calculations are right--the profession will attract younger people who are content with doing some pro bono work only when they are involved with big firms. I do not decry that. It is a good thing that they should--but it will not answer the Bill.

It is imperative that we keep an eye open with regard to what future entrants to the profession will be like. Will they feel that they can afford to undertake, with a sense of nobility, the vital work of serving working-class people? I know that we are not supposed to talk about working-class people these days, but I refer to those in areas of extreme poverty. Will young people want to enter that part of the legal profession when they can much more easily obtain work in some of the bigger firms in the City and provinces? I worry about that. I made that point at Second Reading.

I have spoken for three minutes and it is right that my noble and learned friend should answer many of the invaluable points put by the noble Lord, Lord Phillips. However, the noble Lord is not the only practising solicitor in this House; I just want to point that out. I see behind me another practising solicitor as well as the noble Lord, Lord Hunt--my noble friend in every sense. So there are four of us present; the noble Lord, Lord Phillips, did not do us any service by arrogating to himself a sense of exclusivity.

10.15 p.m.

Lord Falconer of Thoroton: The noble Lord, Lord Phillips, eloquently expressed his concerns about these proposals, as it is true to say he has done on several previous occasions, notably in this Chamber on the Second Reading of this Bill. However, I cannot

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help pointing out that his speech on Second Reading was shorter than the speech he has delivered at this stage.

Identifying the lines of battle precisely is of value. The amendment of the noble Lord, Lord Phillips of Sudbury, proposes that every single solicitor who meets the quality standard should be entitled to be funded by the Legal Aid Board or its equivalent. He shakes his head, but that is what he has been arguing; that is what his amendment said. What is more, he said that there should be no competitive tendering. He said that the legal services commission should be a unique hirer of services in this country, obliged to buy from whoever can meet the standards set; in other words, let the providers of services be in the unique position where they can force upon the buyer of those services the need to buy them.

The noble Lord shakes his head, but that is what the amendment says; that is what he has been arguing and that is what he specifically said in the course of his speech today. He said it was only a coincidence that he was a solicitor and that this is not special pleading for solicitors; but the way it came across sounded like solicitors seeking a special and privileged position in relation to their funding.

Perhaps I may make clear to the noble Lord what we do not dispute in what he said. We do not dispute that many solicitors do a splendid job; nor do we dispute that there are things that solicitors do that no advice centre or citizens advice bureau could possibly do; nor do we dispute that there are cases where the work they put in is second to none. My noble friend Lord Clinton-Davis should not say that we are unaware of the splendid service that solicitors provide.

Lord Clinton-Davis: I was not saying that. I was saying that Ministers may not be aware of the day-to-day problems solicitors face. Many judges have no idea of them at all.

Lord Falconer of Thoroton: I am not speaking for the judges, but many Members of this Committee, including myself, are aware of the problems that solicitors face. I am also aware of the fact that they are not a tranche of extremely rich people. However, that does not mean that we can fail to deal with the problem of a legal aid budget that is out of control.

The noble Lord's concern was that the Bill, as he put it, will severely restrict people's access to publicly funded legal services. I and those promoting this Bill fully share the objective of securing the widest possible access to quality services. It is not the intention of the Bill to reduce quality access; nor do I believe that that will be the effect. Although the pattern of provision will undoubtedly change to some degree, the community legal service will improve and extend access in a variety of ways while ensuring the quality of the service provided.

As I pointed out, the purpose of the amendment of the noble Lord, Lord Phillips, is to ensure that all legal service providers who meet the quality standards

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defined by the legal services commission under Clause 5(5) would be entitled to provide services under the scheme if they chose to do so. The terms of the remuneration would be set, according to his amendment, by the commission after consultation with the lawyer applying to take a case. I cannot accept that amendment and, if I may, I should like to take some time to explain why.

I have written to the noble Lord on this subject since Second Reading, as he kindly pointed out, and for the benefit of all your Lordships I shall set out the points, in addition to those that he kindly attributed to me, that I made to him, in that correspondence.

It has become increasingly clear that in using the phrase "exclusive contracting" we, on this side, have not been sufficiently explicit. That has, not unreasonably, led some to understand that phrase to mean that there will be only one provider in any given geographical location. That is not the intention of the amendments. Exclusivity was only ever intended to refer to the fact that the proposals contained in the Bill move away from the present position where any solicitors' firm may undertake legal aid work to a position in which the commission will enter into contracts with as many quality assured suppliers as it needs in order to meet the demand or need for services. In that sense, contracts will be "exclusive" to them: for instance, it is only those with a contract who can be funded by the legal services commission. The type of contracts and the number will be determined by local need within the overall priorities of government. That will allow us to provide real access to justice in areas where access is most needed.

Contracts are extremely flexible instruments. They can incorporate any terms agreed by the parties to them. We see that flexibility as the great merit of contracting and as the means of delivering publicly funded legal services. We have tried, in the White Paper and elsewhere, to give an indication of the sorts of contracts that we see as being typical in the future. For most types of civil litigation, for example, we would expect to use fixed-price and volume contracts covering all but very high-cost cases. However, that model should not be seen as a straitjacket into which everything will be forced. On the contrary, it will be possible to adopt different approaches in different circumstances so as to achieve the best overall outcome in terms of access, quality and price. That may lead, for example, to different types of contracts in rural and urban areas. Indeed, in time we hope to be able to use the opportunities offered by contracting to improve access in those areas where there is little or none at present.

Providing access to lawyers does not require that whatever may have gone on before has to be continued in perpetuity: that any and every attempt to concentrate on particular suppliers is a diminution of effective access. The board has suggested that in order to provide adequate access for the first phase of contracts, for advice and assistance and full legal aid for family cases, it needs in the region of 3,200 suppliers. The cry has gone up that that is too few. The cry from the noble Lord, Lord Phillips of Sudbury, is not only that that is too few, but that everybody who passes the quality standard should be allowed to supply.

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The figure of 3,200 comes from the Legal Aid Board's consultation paper Reforming the Civil Advice and Assistance Scheme, published in April 1998, and it is the board's estimate of the numbers needed to provide adequate coverage; it is not some arbitrary limit or target. As a result of that assessment, the board has, in some areas of work, been able to guarantee contracts in the initial round of contracting to all firms who presently hold franchises. That has been possible for family work where the board expects contracts broadly to maintain the existing pattern, and in immigration and mental health work where there are currently relatively few franchisees.

That figure of 3,200 has to be compared, for example, with the number of Jobcentres in England and Wales, of which there are 881. The noble Lord sneered at that comparison. He said that the people who go to jobcentres are fit and healthy men and women who are all looking for jobs and that they do not need the sort of outreach access that solicitors provide. The noble Lord also sneered at the comparison with benefit offices. I referred to 546 of them in my letter. He also said--and I find this quite hard to believe--that it is hale and hearty people who go to benefit offices. If the noble Lord were to visit a benefit office, he would realise that that is not correct.

We must be clear that part of the ethos of the community legal service will be to provide an integrated network of services where people can go to obtain advice. Some of the services will be funded directly through the community legal service fund by contracts with not-for-profit organisations. There are some 1,500 advice agencies with over 3,000 outlets. All contracts will include a tolerance margin, typically perhaps 10 per cent., representing the proportion of work that the provider may undertake outside the named contract categories. This provides an additional element of flexibility, in particular to cover cases outside the established franchise categories and clients with complex problems covering several categories.

Finally, if a particular problem with access is highlighted, it will be perfectly possible to require lawyers' firms or not-for-profit advice agencies to offer what are described as outreach facilities; that is, bringing the advice to the people who need it, whether through home visits or occasional but regular attendance at a local venue. All these things are possible under the scheme that we envisage. The touchstone for whether they will be necessary is the need to make access a reality. As I explained, I believe that access will always mean access with choice among a number of suppliers, such suppliers all reaching the standard set by the legal services commission.

It is worth perhaps setting out how we propose to take forward the move to a fully contracted system. The change will be implemented in careful stages. The Legal Aid Board and, in due course, the commission will continue to test different types of contract in pilot schemes before rolling them out more widely. This will not only enable the commission to determine the best arrangements to fit different circumstances; it will also ensure that providers have time to adapt to change. For example, from January 2000, representation in family

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litigation will be provided by firms with a family franchise. These initial contracts, mostly running for three years, will in essence be licences to continue to take on family cases with payment remaining on a case-by-case basis at existing prescribed fees and rates. For the second round of contracts, however, I would expect the commission to develop contracts that fix price and caseload and introduce an element of competition in the way that contracts are awarded. A similar phased approach to contracting for other types of case is envisaged in due course.

It will be perfectly possible for firms of all sizes to obtain contracts. There will be no bias in favour of larger firms. The commission will make plain the need it is seeking to meet and the contracts it needs to let. Of course, smaller firms will not be expected to provide the same quantity of services as larger firms. They will be expected to deliver the same quality and value for money, but that is only right. I do not see in our proposals any reason for smaller firms to feel that they are to be excluded from this work. Quite the reverse. In simple business terms, what we are offering for those who secure contracts is a certain cash flow for a defined amount of work.

This last point is an important one and demonstrates the fundamental shift in the task of the commission as purchaser, which we are determined to achieve. We want the commission to become a proactive purchaser of legal services and not, as the present board largely is, a reactive payer of lawyers' bills. We cannot hope to ensure that legal aid money is used to the best effect if we cannot be sure both about the amount of services that are being supplied and the price that we can expect to pay for them. I can think of no area of economic activity where a purchaser of services is required simply to purchase services from whoever wishes to supply him without having any right to chose who should supply him and at what price. I believe that that holds just as true when the Government are purchasing services.

It is for that reason--and this is at the heart of the debate--that we cannot accept the noble Lord's amendment. If it were carried into the Bill it would give a guarantee to any solicitor's firm which met the quality standard a right to do legal aid work irrespective of the amount of work that was done. It would place the commission back in the place of a reactive payer of bills. Moreover, the commission, in seeking to agree remuneration, would be in a position of considerable disadvantage because of the guaranteed right of the lawyer to do the work. If such a thing were possible, it might lead to a worse position than we have presently. It would make it impossible in future to refocus resources on priorities, or to improve value for money by introducing an element of competition. Also, any requirement to define in statute or regulations the standard that created the guarantee would tend to stifle further development of the existing franchising system (for example, streamlining its bureaucracy and introducing outcome monitoring).

I know that the noble Lord, Lord Phillips, is concerned that by excluding firms whose work is primarily in the private sector we shall exclude expertise which these firms can bring to legal aid work and

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perhaps exclude idealistic young lawyers. I have to say to him that I do not believe that will be the outcome. I cannot accept that the kind of expertise to which the noble Lord refers does not exist in firms who may undertake a substantial part of their work for legally aided clients. I am also sure that idealism can be found among lawyers working for legal aid firms, both among younger and older lawyers. In the light of my remarks I respectfully ask the noble Lord to rethink his position and withdraw his amendment.

10.30 p.m.

Lord Phillips of Sudbury: I am prepared to withdraw the amendment at this stage but I shall wish to revisit this principle at Report stage. I hope it is appropriate to respond to the noble and learned Lord's comments now. If I may say so, I believe the noble and learned Lord has proceeded on the basis of a distortion of Amendment No. 77, which is tied both to quality and remuneration that is "broadly fair". I believe that would give the Legal Aid Board or its successor ample opportunity to ensure that the Exchequer was protected.

Further, lawyers do not simply bowl up to the Legal Aid Board clutching their bills; they have to have clients who want them to do the work. I have heard nothing in what the noble and learned Lord, Lord Falconer, has said which in any way assuages my sense that the outcome of this provision will be little saving on cost, considerable loss of quality and radical loss of access. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 78 and 79 not moved.]

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