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The Lord Chancellor: My Lords, I shall give thought to that point. I can assure your Lordships that I, for one, am the enemy of delay and that I contemplate only such period of time as is reasonable to enable the accounts to be prepared immediately upon the end of the financial year in accordance with ordinary standards of business efficiency in the public sector.

On Question, amendment agreed to.

Schedule 2 [Community Legal Service: excluded services]:

Lord Kingsland moved Amendment No. 27:

Page 59, line 5, leave out ("for clinical negligence") and insert ("specified in sub-paragraph (2)").

The noble Lord said: My Lords, this amendment would allow the community legal service to fund help for certain types of claimant in respect of personal injuries. It would assist parties under a disability, together with those entitled to a retirement pension, or the disabled who are in receipt of disability living allowance or the disability working allowance.

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Under the present provisions of the Bill, legal aid will be withdrawn from personal injury cases save for clinical negligence cases. The noble and learned Lord the Lord Chancellor will have the power, under Clause 7, to direct the commission to fund the provision of services, otherwise excluded by Schedule 2, in specified circumstances.

The noble and learned Lord has indicated that that power is likely to be used in personal injury cases where there are particularly high investigative costs. Essentially, the noble and learned Lord believes that conditional fees can provide a satisfactory alternative to the funding of all other cases which would otherwise merit support from public funds. But conditional fees will not provide the desired extension to access to justice unless it is possible to provide after-the-event insurance to cover the risk of payment of the opponent's costs if the case is lost. On that criterion, there remain some categories of case where it will be particularly difficult to use conditional fees.

There will also be clients who cannot readily afford insurance or disbursements. Although the noble and learned Lord has suggested that conditional fees will be profitable for solicitors, in reality firms will have to take a view with respect to the proportion of cases they can afford to run on a risk basis.

This amendment seeks to give priority to the interests of the vulnerable who might otherwise not secure access to justice. Those who are disabled, whether by reason of their personal injury or otherwise, and in receipt of relevant benefit, are unlikely to have the resources available to fund premiums and disbursements themselves. Entitlement to a retirement pension should also properly act as a passported benefit.

One of the few extensions to the scope of legal aid in recent years came when the previous Lord Chancellor, my noble and learned friend Lord Mackay of Clashfern, decided that the resources of children should not be aggregated with those of their parents. It is surprising, therefore, that the present Government wish now to exclude legal aid from children for personal injury actions. I beg to move.

Lord Ackner: My Lords, for the reasons which have just been given by the noble Lord, Lord Kingsland, I support this amendment, and there is nothing I can usefully add.

The Lord Chancellor: My Lords, these amendments together would put on the face of the Bill a number of exceptions to the exclusion of personal injury cases from the scope of public funding. They are exceptions which have been moved with the understandable intention of protecting those members of society who are considered to be most vulnerable. At Report my noble and learned friend Lord Archer of Sandwell put forward an amendment covering similar ground. He sought to keep in scope cases involving children and people suffering from a mental disability. He was concerned that they would have greater difficulty than others in finding a solicitor prepared to act under a conditional fee agreement and in negotiating a fair agreement.

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In the long debates that we have had about personal injury during the passage of this Bill, many of your Lordships came up with examples of cases which, it is alleged, solicitors would not be prepared to undertake. I must say that the more I thought about this the more I found it to be almost an indictment of the profession by the very people who have often sought to maintain the status quo in other respects. The Jonahs are everywhere. Cases are either too risky, they require planning of payments over the duration of the case, they are too complex or they involve vulnerable members of society. The list goes on.

I do not believe that clients will be turned away by lawyers simply because they are minors, aged, are mentally ill or are physically disabled. If they have good cases they will certainly find lawyers willing to take them. People, whatever their physical or mental state, will find it hard to secure lawyers who will work on conditional fees if they have poor cases. That must be right, because we do not wish to encourage people to take cases which do not have a sufficient prospect of success. They may have a difficulty if their case requires considerable expenses before a decision can be taken about the prospects of success.

However, only yesterday the Royal and Sun Alliance insurance group, through First Assist--its legal expenses subsidiary in association with the brokers Willis Corroon group--launched its new conditional fee insurance product. The essential features of the product are that it removes from the client the risk of having to pay disbursements, and provides unlimited cover for an opponent's costs. The insurance premium is only payable if the case is won, and then only at the end of the case. It provides for the majority of solicitors costs and expenses, including counsel's fees if he is not working under a conditional fee agreement, to be met if the case is unsuccessful. Also it can be extended to include appeal costs. The premium is assessed by the insurers on the likelihood of success and merits of the case. The eventual premium will be expressed as a proportion of the solicitor's basic fees.

I should add that a non-refundable fee of £200 plus VAT is required with the proposal form to cover the underwriters' costs of carrying out the assessment of the claim. I predict that in practice solicitors will be willing to bear that fee because they too benefit from the cover provided by the policy, and it is a small investment for a solicitor to make in order to secure his client's case.

So I believe, as I have long predicted, that the insurance industry is bringing forward the products which will underpin conditional fee agreements. However, I have said repeatedly and I say again that I will be ready to use the power given to me in the Bill, if necessary, to ensure that provision is made to assist in meeting high investigative costs. There may be difficulties there, at least until lawyers have become more accustomed to working with conditional fees, have restructured the financial base of their practices and gained experience of the insurance products that are going to come on to the market. However, I repeat what I have said before: I am ready to make provision for assistance to be given in funding cases where unusually high investigative costs arise.

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I also accept that it may be necessary, particularly for those who lack legal capacity such as children and the mentally ill, for specific provision to apply where a conditional fee agreement is offered. I do not believe that in principle there is any reason why such people will not be able to use conditional fee agreements. Currently, next friends or guardians ad litem need to consider how best to retain the services of a lawyer to represent children and the mentally ill. I accept that it may be necessary to ensure that regulations address the different situation of the lawyer being retained by a third party on behalf of a person under a legal disability.

It is important that the person who makes an agreement with a lawyer on behalf of such a person and gives the necessary undertakings as to an opponent's costs is fully informed about all options for funding the case and the consequences of specific options, not least any success fee. This can be provided for by regulations under the proposed Section 58(3)(c) of the Courts and Legal Services Act 1990, as inserted by Clause 29 of the Bill. I take this opportunity of saying that I would welcome any proposals that any of your Lordships may have on provisions that ought to be included in regulations.

So of course making the success fee recoverable will benefit all users of conditional fee agreements, including children. It will ensure that the damages are not eaten up by the success fee. The availability of conditional fees gives everyone, old and young, healthy or infirm, greater access to justice, particularly if they are not eligible for legal aid and not rich enough to self-finance. If I am wrong in my assessment of how the profession will respond in offering conditional fee agreements--and I see no reason why I should be--and if specific groups find themselves unable to secure lawyers to work under a conditional fee agreement (for reasons that I have to confess escape me at present) I will be ready to use the powers that I have mentioned to ensure that no group nor any individual is excluded simply because they lack legal capacity, are old or are disabled.

I firmly believe that this flexible approach to personal injury cases will benefit everyone. It will encourage the successful growth of the conditional fee market and so increase access to justice for millions who currently do not have adequate access. It will provide, too, many profitable opportunities for lawyers and it will ensure that scarce taxpayers' money will be deployed in the areas where those moneys are most needed. And with the powers to make directions, I shall be able to respond to any market imperfections which truly prove to be a real problem. On that basis, therefore, I invite the noble Lord to withdraw his amendment.

6.30 p.m.

Lord Kingsland: My Lords, the reply of the noble and learned Lord the Lord Chancellor has not satisfied the terms of my amendment. However, I have to say that it is the fullest and, I believe, the most sympathetic reply he has yet given to an amendment on this issue. I trust that his faith in conditional fees and their efficacity

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will prove justified. But, if not, I am heartened by the fact that he said he will react flexibly and sympathetically in those circumstances where they are seen not to work. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 28 not moved.]

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