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Lord Archer of Sandwell: My Lords, before my noble and learned friend sits down--and I am most grateful to him for giving way--of course I accept what he says about my Amendment No. 56 and I shall not move it. However, for the removal of a misapprehension, he has twice said that my Amendment No. 50 would entail that the commission in every case would have to satisfy itself that no alternative source of funding was available. My amendment is designed precisely to avoid that problem. It would be for the applicant to satisfy the commission in any particular case that he had looked for alternative funding and failed to find it.

The Lord Chancellor: My Lords, I appreciate that that is so as a matter of drafting, and indeed as a matter of substance. Nonetheless, in any case in which an applicant so contended and applied for legal aid considerable resources would be involved in investigating whether or not that was so.

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Lord Ackner: My Lords, before the noble and learned Lord sits down, can he assist me on the following matters? What monitoring is currently being carried out by the Lord Chancellor's Department into the effectiveness and justness of the way in which the conditional fee system is working? Secondly, can the noble and learned Lord assist us with the results of his department's inquiry into what is available on the insurance market? Finally, in regard to the cases that have averaged £4,000, £5,000 and £6,000, did any of them actually reach the court--not reach the court doors, but get through the court doors?

The Lord Chancellor: My Lords, at this hour these are questions of considerable detail. We are in discussion with the professions and we are about to commission research in relation to the operation of conditional fee agreements. The question asked by the noble and learned Lord about the insurance market calls for a very detailed reply subject to commercial confidentiality. We have had many conversations and discussions with many insurers and that is the basis of my confidence. As to the detail of the personal injury cases, that is much more suitable for a detailed letter.

Lord Goodhart: My Lords, I listened with care to what the noble and learned Lord the Lord Chancellor said. At this time of night I certainly do not intend to comment on it in any detail. The one point I would make is that, as I recall, the noble and learned Lord said that 85 per cent. of the non-clinical negligence cases involved costs of no more than £6,000. That means that 15 per cent. of them did, and that (again if my recollection is right) means more than 10,000 cases, which is a very substantial number. Of course I accept that not all of those cases may be ones where CFAs would not be appropriate.

I very much regret that the noble and learned Lord was not able to be more forthcoming on this matter. Once again, after half past ten at night it is hardly appropriate to seek the opinion of the House and I do not intend to do so. I shall read with great care what the noble and learned Lord the Lord Chancellor said. We may feel the need to bring this issue back before the House for a final attempt. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 50 to 53 not moved.]

The Lord Chancellor moved Amendments Nos. 54 and 55:

Page 5, line 12, leave out ("give directions under section 4 requiring or authorising") and insert ("by direction require").
Page 5, line 14, leave out ("by the directions") and insert ("in the direction, and
(b) may authorise the Commission to fund the provision of any of those services in specified circumstances or, if the Commission request him to do so, in an individual case.
(8) The Lord Chancellor shall either--
(a) publish, or

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(b) require the Commission to publish,
any authorisation under subsection (7)(b) unless it relates to an individual case (in which case he or the Commission may publish it if appropriate).").

On Question, amendments agreed to.

[Amendments Nos. 56 and 57 not moved.]

Schedule 2 [Community Legal Service: excluded services]:

[Amendments Nos. 58 and 59 not moved.]

Lord Archer of Sandwell moved Amendment No. 60:

Page 54, line 37, at end insert--
("(ii) cases for children and people suffering from a mental disability,
(iii) cases where the overall costs are likely to exceed £25,000,
(iv) cases where the costs of investigation are likely to exceed £3,000,
(v) complex cases where damages are likely to exceed £50,000,
(vi) cases involving multiple causes of action,").

The noble and learned Lord said: My Lords, my noble and learned friend has been patient with us, but I am sure that he appreciates that there are some deep anxieties here. If funding by the community legal service is to be denied to personal injury cases other than for clinical negligence, I hope that my noble and learned friend will look again to ensure that some exceptional categories of case are protected. I accept, as he said a few moments ago, that their number will not be large.

I am grateful to the Legal Action Group for the benefit of its advice and experience in setting out the list which I have in this amendment of the categories which occasion the greatest anxiety. First, there are the cases for vulnerable clients. I have suggested two classes of vulnerable people: children and people suffering from a mental disability.

Since 1990, children have been able to make their own applications for legal aid and the financial assessment is that of their own resources. This has meant that they are not dependent either on their parents' willingness to apply or on their parents' means.

There are a number of reasons for making special provision in this case. First, children and people under a mental disability may have greater than average difficulty in finding a solicitor prepared to act under a conditional fee agreement and in negotiating a fair agreement with him. Secondly, there is likely to be an increased need for initial investigation and an increase in the time needed to take instructions. If there is a cherry-picking process, they will be the least colourful cherries.

Thirdly, negotiations for a conditional fee agreement may have to be conducted through a next friend, who may feel very exposed to criticism in bargaining away a proportion of their entitlement. Fourthly, I suspect--though I concede that I have no evidence--the insurers will be inclined to load the dice against them for actuarial reasons. I have read that 53 per cent. of legally-aided personal injury victims are children. So it

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may be that I was wrong to concede that it may be a very small category. I hope that my noble and learned friend will agree that they are very much a special case.

The second category of special case comprises those where the costs are likely to be unusually high. Not only may solicitors be reluctant to invest the initial disbursements--and we have discussed that already--but insurers may charge high premiums to provide cover. I am told that cover against liability for costs up to £25,000 would normally attract a premium of about £1,650. Cover for costs up to £100,000 could be as much as £6,000. That outlay seems likely to fall on the client.

The Policy Studies Institute some time ago studied 197 conditional fee agreements undertaken by 120 firms of solicitors. I do not know whether these figures are already at my noble and learned friend's fingertips but I hope that he will take account of them at some stage during our debate. The insurance against liability for costs was taken at the expense of the client, not the solicitor, in 99 per cent of cases. I can understand the reluctance of solicitors to speculate to that extent with their own money. With premiums at that level clients would be virtually excluded in a high percentage of cases from seeking redress. I am aware that the Legal Aid Board knows about the problem because paragraph 7.13 of the funding code makes the point. I shall not trouble your Lordships at this hour by reading it out.

The next category I have sought to list is where the investigating costs exceed £3,000. I would not go to the stake for that specific figure. As I understand it, this is the factor which influences my noble and learned friend in excluding clinical negligence cases from Schedule 2. I point out that there may be other cases where investigative costs are exceptionally high. If that is prohibitive the client may never even discover whether he has an arguable case.

This overlaps with the next category that I list: complex cases where damages are likely to exceed £50,000. Frequently, they can be the test cases that establish a basis of liability for many other claimants--whether a particular product is toxic, whether a particular situation can give rise to a cause of action or which of two links in the marketing chain is responsible for the damage. If they have to rely on conditional fee agreements it is doubtful whether the early claimants relating to human growth hormone could have brought proceedings.

My final category is where more than one cause of action is involved against the same defendant. There may be a claim for false imprisonment and personal injury. It would be virtually impossible to pursue part of the claim through C.L.S. funding and the other part by CFA funding. I would not go to the stake for my list, but I hope that my noble and learned friend recognises that there are exceptional circumstances where there may be a high risk of injustice. I hope that he will set everyone's mind at rest and agree to write those obvious special categories into the Bill.

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