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Lord Clinton-Davis: The noble and learned Lord, Lord Ackner, is quite right that there is a relationship between the two. My concerns in relation to contingency fees mirror those pointed out by the noble Lord, Lord Goodhart, who referred to the experience in the United States where litigation is out of control. There is some attribution of responsibility for that condition to the operation of contingency fees. In any event, that is my view.
I am not really in favour of lawyers having a share of the financial action, so to speak, because that promotes an interest which is less than objective. But I do not wish to argue that point now.
I wish to ask my noble and learned friend whether, during the later stages of the Bill--either here or in another place--he proposes to deal with the disparities between lawyers and non-lawyers; for example, claims assessors and so on who are able to operate contingency fees. And yet, the essential difference between the two is something which my noble and learned friend has lost
no opportunity of emphasising throughout our debates; that is, quality control. There is no quality control in relation to claims assessors and people of that character.Does my noble and learned friend intend to do something about that? In the White Paper he envisaged some possible controls over non-lawyers giving legal advice, but no concrete proposals have emerged in that respect save for the one announced recently in the field of immigration. A proposal is to be introduced by the Home Office because in that sector it is quite clear that a number of those non-legal so-called experts have been guilty of aberrant behaviour to the great disadvantage of people appearing before immigration tribunals. It is right that the Home Office should take action to deal with the matter.
But why should there be no quality control over other people who are in direct contact with clients and--it must be said--whose qualities are extremely variable indeed?
I am not suggesting that legitimate and properly controlled agencies giving advice and carrying out representation at tribunals should be curbed; but there is an important point to be made in relation to quality control in some other sectors. Inexperienced people are vulnerable when it comes to claims assessors. They are not told and do not know how claims are made. It is easy to under-assess a large claim--I believe that happens. I do not want to argue the entire case now, but I should like to know whether my noble and learned friend is able to indicate at this stage whether he has any plans to deal with that specific sector.
Lord Donaldson of Lymington: Perhaps I can intervene before the noble and learned Lord rises to his feet, otherwise he will be bobbing up and down again. I entirely support the idea behind the amendment. My dislike of contingency fees is tempered only by my dislike of conditional fee agreements for precisely the reasons given by the noble Lord, Lord Clinton-Davis. Fortunately, when I was a trial judge, I never had two plaintiffs in front of me--the litigant and his lawyer. That is what one is faced with under conditional fee agreements.
My point is that if Amendment No. 213A is accepted, it will be impossible to give statutory or regulatory effect to a rule which is imposed by the Law Society; namely, that the increase--though within whatever may be the permitted percentages (I believe it runs up to 100 per cent.)--should not exceed 25 per cent. of the amount recovered. That cap, whether or not it exists, seems to be extremely healthy and one which the Lord Chancellor might like to be able to impose by an addition to Section 58 through Clause 27. However, if this amendment is included in this form, he cannot do that and that would be unfortunate.
Lord Ackner: My noble and learned friend is probably not aware that I put forward that 25 per cent. should be the top and that that should be incorporated in the regulations. I was defeated.
The Lord Chancellor: I do not believe that even at this hour of the night I was being either illogical or
emotional but, as ever, entirely reasonable. What I say to the noble and learned Lord, Lord Ackner, is that the real vice of the contingency fee agreement, properly so-called, is that it gives the lawyer interest in the outcome of the action. Where the damages are very high, theoretically there is no limit to what percentage of the recovery the lawyer may claim and that can result in sums which are much greater than would be recovered under the uplifts in conditional fee agreements.Another reason why conditional fee agreements are entirely different is that, under the Bill, the amount of the uplift will be recovered from the unsuccessful defendant and will therefore not come out of the plaintiff's compensation.
The noble Lord, Lord Clinton-Davis, asked about the work of claims' assessors and related categories. Those are people who offer to recover compensation for members of the public arising, for example, out of personal injury, for a fixed percentage of the damages recovered. I have to say that I have to share his anxieties in that regard. I and my department have received complaints from lawyers about the activities of those people and indeed other practitioners whose activities fall short of the work of litigators and who are otherwise not currently regulated. It is alleged that the services of claims assessors, which are paid for out of settlements, are unduly costly and that the settlements that they achieve fall far below the level that a competent lawyer would achieve.
The Government have a duty to ensure that consumers are protected, especially in the case of legal services where many clients can be ill informed and where the consequences of poor advice can be very severe indeed. If there is a need for regulation in this area to protect the consumers of legal services, I would not hesitate to promote the necessary measures. As the noble Lord, Lord Clinton-Davis, mentioned, the Government are already committed to taking steps to control unscrupulous immigration advisers. The Home Secretary and I have agreed proposals on that subject which he will shortly put before Parliament. Apart from that, although there is limited anecdotal evidence of poor service, there is not yet a detailed picture; nor do I know what measures would be effective; nor the views of legally qualified practitioners. However, I can assure the Committee that I am considering, as a matter of urgency, how best the necessary investigation and research can be undertaken. I hope that I shall shortly be in a position to announce what I intend to do.
The noble and learned Lord, Lord Donaldson of Lymington, made the point that an unlooked-for consequence of the amendment, if acceded to by the Committee, would be to outlaw the recommendation of the Law Society, which I think is generally adhered to in practice, that uplifts shall not exceed 25 per cent. of the recovery. That appears to be another reason why, on reflection, the noble Lord, Lord Kingsland, should withdraw the amendment.
Lord Kingsland: I thank the noble and learned Lord the Lord Chancellor for his extremely thoughtful and, I discern, constructive response to the amendment. He
said that he will go away, reflect, and consult on it. In those circumstances, I beg leave to withdraw the amendment.Amendment, by leave, withdrawn.
Lord Goodhart moved Amendment No. 214:
The noble Lord said: The Bill rightly prohibits CFAs in criminal proceedings. However, the amendment permits a CFA to be made in a housing disrepair case under the Environmental Protection Act. Such cases are brought by tenants against landlords in the magistrates' courts and, nominally, they are criminal proceedings. However, they are much more akin to civil proceedings for a mandatory injunction. If we have to have CFAs, those proceedings seem perfectly appropriate for funding by a CFA. I beg to move.
Lord Falconer of Thoroton: The purpose of this amendment is to allow conditional fee agreements to be used in bringing prosecutions under Section 82 of the Environmental Protection Act 1990. That section provides for summary proceedings by persons aggrieved by a statutory nuisance. Technically, as the noble Lord pointed out, proceedings under Section 82 are criminal proceedings. As such, they would be excluded under the general exception of criminal proceedings from proceedings in which conditional fees may be used. It is not without interest that part of the effect of the decision in the Thai Trading court case, which Clause 27 of this Bill is seeking to bring into statute, was to approve the use of something similar to conditional fee agreements in cases under Section 82. It is interesting that the Thai Trading case overturned an earlier decision in the case of British Waterways Board v. Norman which said that they could not be used in such a situation--in the latter case an agreement between the solicitor and the client that if a prosecution under Section 82 were unsuccessful the solicitor would not seek to recover costs against the client. That agreement was held to be unlawful and unenforceable in the latter case.
It was not the intention of the Lord Chancellor for Clause 27 to have the effect that has been described accurately by the noble Lord, Lord Goodhart. I would like, if I can, to be able to reach a consensus with him on the best way of addressing the difficulty that he has described. As I have just said, I accept that the courts have explicitly approved the use of what will become conditional fee agreements in the types of cases outlined by the noble Lord, even though they are technically criminal proceedings. However, I ask for a little more time to consider this amendment and to decide what should be done, if necessary, by talking to the noble Lord. Accordingly, I ask him not to press the amendment in those circumstances.
Lord Goodhart: I am grateful for that helpful reply. Naturally, in the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Page 16, line 1, after ("proceedings") insert (", save those brought under section 82 of the Environmental Protection Act 1990").
9.30 p.m.
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