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The Countess of Mar: My Lords, I am sorry to interrupt the noble Lord. There are two organisations. There is the National Gulf Veterans and Families Association and the Gulf Veterans Association.

Lord Clement-Jones: My Lords, I thank the noble Countess for that intervention. I am very well aware of that, but her case was that the relationship between both associations and the law firm in question was poor. As I understand it, the relationship between the Gulf War Veterans Association and the firm in question is cordial and, if anything, closer with the National Gulf Veterans and Families Association. So the law firm in question has attempted successfully to keep good contact with those associations. In terms of the change of representation in June of last year, that took place in June and was communicated in July. There was no way in which communications to the experts could have been carried out any faster. In terms of the supervision of the cases, the same senior partner of Hodge Jones & Allen has undertaken the supervision of those cases since April 1998. So the supposed break in ability to assess expert evidence is illusory. I suspect that some of the facts on which the noble Countess is relying derive from mischief-making

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by one of the experts. I am not going to name him, but I think it is fairly clear that that is where some of the mischief arises.

An impression is being given in this case that injustice is being done to the claimants and that poor management is taking place. From my investigation of these cases that does not appear to be the case. With regard to the allegation about the communications in this case, I have seen the regular newsletters that go out to the claimants in these cases. The organophosphates newsletters in particular are regular and very clear. They make it utterly clear where the case now stands. With regard to the allegation regarding the expertise of the counsel available, it is well known that the counsel who has now been chosen by the law firm in question is highly competent. I believe there is little to be gained by casting doubt on his expertise.

Finally, I turn to the question of the veiled threat in the letter from the senior partner--a very serious allegation to make--of the law firm in question. The paragraph to which I assume the noble Countess alludes states:

    "I have discussed your concerns with my leading barrister. We are both very worried that a public debate about these issues will adversely affect the interests of sheep dip farmers in the litigation. Any details raised in this debate will be seized on by the defendants and used if possible to argue that legal aid should be withdrawn from the farmers".

I do not believe that is a veiled threat. The noble Countess had already tabled her Unstarred Question by that point, as I understand it, or at least had indicated her intention of doing so.

I hope that to some degree I have helped to redress the balance of the facts in this case. If the facts are in dispute then clearly the Legal Services Commission will take the necessary action under its own powers. If the Lord Chancellor indicates his wish to do so, I am quite sure that the law firm in question would be only too delighted to take the Legal Services Commission through, yet again, the facts of the case and the work that it has done on the case to date.

Strangely enough, at the end of the day my concerns lie not with the conduct of the current cases or the extent of legal aid assistance granted in these cases, or indeed its cost effectiveness, but with the prospects for the future of this kind of case. The funding code by which the Legal Services Commission operates rightly emphasises the public interest as a determining factor in whether legal aid is granted in these cases. That said, however, the eligibility levels for income by which a judgment is made whether or not to fund legal aid are lower than they were for this kind of case before April this year.

The real problem, however, is the fact that the commission seems to believe that it can set hourly rates at an impossibly low level, lower than are now received under the previous regime, and expect to attract good solicitors and barristers to work in this field in the future. I ask this question: what leading counsel of the Lord Chancellor's acquaintance is prepared to work for £80 or so an hour? The skills required in these cases are considerable. Good team management, excellent

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budgetary control and outstanding litigation expertise are necessary. I fear that the claimant with small means in these large multi-party cases is going to be unable to get redress against the big battalions of business and government in the future. The argument of the Lord Chancellor's Department and the commission is that if these cases are successful firms will recoup their full costs. The fact is, however, that a law firm cannot afford to lose even one case of this type. After all, on winning, a firm is able to receive only its proper costs and no more than that.

As a harbinger of this I cite the recent tobacco case. It was taken on on a speculative basis and the solicitor involved, Martin Day of Leigh Day & Co, has said that the firm cannot afford to fight this type of case any more. I think that that demonstrates that at least we should have some fears for the future.

6.58 p.m.

Lord Kingsland: My Lords, unlike the noble Lord, Lord Clement-Jones, I do not have sufficient intimacy with the facts of this case to pass judgment on the submissions of the noble Countess, Lady Mar. But such is the reputation of the noble Countess in your Lordships' House for probity and for fearless advocacy on behalf of those in distress, that I know the noble and learned Lord the Lord Chancellor will be taking what she has had to say to your Lordships very seriously indeed.

Whatever the ultimate facts about the causal link between the distress in which these large numbers of people have found themselves and its alleged cause, organophosphates, there is no doubt that there are a large number of bewildered people who do not understand the legal processes into which they are, together with the public purse, pouring a great deal of money. At the end of the day, it may be that the problem turns out to be not so much one of bad advice, but rather the inability of lawyers to communicate with their clients about what they are doing on their behalf. That may prove to be a lesson for all lawyers, not only those who are Members of your Lordships' House--including myself--but those outside as well.

This type of case is extremely complex. It also has a particular characteristic in that it requires a great deal of money to be paid up front before a proper assessment can be made of the likelihood of success or failure. Although I was one of the sternest critics of the Access to Justice Bill of the noble and learned Lord the Lord Chancellor, one thing I applauded was his decision to single out for special treatment this kind of dispute.

As the noble Lord, Lord Clement-Jones, has already said, the noble and learned Lord the Lord Chancellor has set up a multi-party panel of solicitors. I believe it comprises 16--

Lord Clement-Jones: My Lords, it comprises 18 lawyers.

Lord Kingsland: My Lords, I am obliged to the noble Lord for that correction. Moreover, a new multi-party unit has been set up within the commission. It is there to supervise the disposition of funds.

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In this case, the decision has been taken to instruct a single group of lawyers to deal with the problem of causation. This group of lawyers has moved from one firm to another. In the end, it will be for the newly established commission to decide which group of lawyers in which firm will deal with which case. That is not a decision upon which I am in a position to comment. Only the noble and learned Lord the Lord Chancellor, using the brief that he will receive from the commission, will be able to give a definitive answer to that.

I know that this matter is causing great distress to many people. The noble Countess, Lady Mar, should be warmly congratulated on her efforts in raising it on the Floor of the House. I now look forward to hearing what the noble and learned Lord the Lord Chancellor has to say in response.

7.2 p.m.

The Lord Chancellor: My Lords, multi-party actions are claims brought by several different parties who have been affected by a single incident, like a major transport disaster or a common cause such as an allegedly harmful chemical. It is common for the Legal Aid Board--from 1st April this year, the Legal Services Commission--to fund one test case in the first instance.

Because the defendants in these cases are typically large organisations with substantial resources available to them, there is a great deal at stake in the claims. It is therefore important that public funds are made available to help litigants to pursue such claims before the courts. The Legal Services Commission has special arrangements for handling these complex and costly cases to ensure that they are pursued as efficiently as possible.

In most, individual clients may retain their own solicitors, but the generic work, which includes all the key issues of law and fact in the case, is handled by an expert solicitor drawn by tender from the quality assured panel of legal firms which make up the multi-party action panel. To win a place on the panel, solicitors' firms must show that they have recent experience of co-ordinating or handling generic work and sufficient resources to handle actions of this size.

As has already been said, contracts for the generic work in each multi-party action are managed by the commission's own multi-party action unit. Each contract has a dedicated case manager, a senior solicitor experienced in handling multi-party actions and employed by the commission. The aim of these managers is to ensure that cases are taken forward effectively in the interests of the clients, consistent with the need to protect the public purse. If the unit is dissatisfied with a firm's conduct of a case, it can terminate a contract and may enter into a new contract with another firm. Significant decisions on multi-party actions made by the unit can also be referred to the multi-party action committee, which is made up of representatives of the legal profession and consumer associations and the Legal Services Commission.

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Perhaps I may turn now to the two multi-party actions to which the noble Countess has referred. I take it that she favours the grant of public funding for these cases and of course her vigour in publicising the concerns of the Gulf War veterans and sheep farmers is, as has been noted by the noble Lord, Lord Kingsland, well known to this House. The first is an action by a group of ex-servicemen who fought in the Gulf War. They allege that they sustained injuries as a result of exposure to substances, including organophosphates, used, they say, without proper precautions. Some claims concern birth defects said to arise from the fathers' exposure to these substances.

Around 500 legal aid certificates have been issued. The amount spent so far on generic work--that is, work on the issues common to all the certifications--is just under £0.9 million. The action is still at the investigation stage and expert evidence is being assembled. No proceedings have yet been issued. As to the future, it is not the practice to make public projected fundings for actions supported by legal aid lest that information give any forensic advantage to defendants. The generic work is being handled by the firm Hodge Jones & Allen.

The second multi-party action is a claim by farmers and their workers against the manufacturers of products containing organophosphates used in sheep dips for alleged failure to make the products safe or to give full advice on their safe use. Seventy-two legal aid certificates have been issued so far. To date, a total of £1.1 million has been paid, of which £0.8 million relates to the generic issues. This action is more advanced than the Gulf War case. Full statements of claim and applications for specific disclosure are now being considered. The generic work is again being handled by Hodge Jones & Allen.

Both the Gulf War and the sheep farmers' multi-party actions were originally, as has been noted, handled by Dawburns, a Norfolk firm. That firm was also handling a third multi-party action involving alleged damage caused by a vaccine. The facts of what happened are these. In 1998, the team handling the three multi-party actions moved from Dawburns to the London firm, Hodge Jones & Allen. The contracts for all three cases were transferred to Hodge Jones & Allen, which formed a large team to handle the cases, including the members of the original Dawburns team. In July 1999, however, the team split. The individuals originally from Dawburns decided to move to another firm, Alexander Harris.

It has to be said that both Alexander Harris and Hodge Jones & Allen are experienced personal injury firms who are members of the commission's multi-party action panel and are capable of handling complex multi-party actions. After some discussion in that new state of affairs, Hodge Jones & Allen and Alexander Harris jointly proposed that the Gulf War and sheep farmers' cases should remain with Hodge Jones & Allen and that the vaccine case should transfer to Alexander Harris. The two firms issued a joint statement to inform their clients of the proposals.

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At that stage, the Gulf Veterans Association approached the Legal Aid Board to express its disquiet at the upheaval that would follow the splitting up of the team and to raise some complaints about the handling of the case thus far. These were the only representations made to the Legal Aid Board. None was received from the larger representative body, the National Gulf Veterans and Families Association. There is no evidence of which I am aware of any general client dissatisfaction with the handling of the claims either by Hodge Jones & Allen or the by the Legal Aid Board, now the Legal Services Commission.

Of course it is disquieting for clients when there is a split of this kind in a legal team. The Legal Aid Board recognised that there was subjective client loyalty to the original Dawburns team. However, the board's responsibility was to make an objective assessment of how the cases could most effectively be taken forward in the interests of the clients. In agreeing that the Gulf War and sheep farmers' cases should remain with Hodge Jones & Allen, the Legal Aid Board took into account the following factors.

First, the three actions had grown to such an extent that it was doubtful that any one firm could effectively manage all three. Secondly, there was a particularly strong overlap of scientific issues in the Gulf War and sheep dip claims--because both actions related to the use of organophosphates--indicating that a single firm should be responsible for both. Thirdly, imposing a division of the work contrary to the agreed proposals of the two firms might have delayed progress while the firms contested the decision and could have jeopardised future goodwill and co-operation between them. Fourthly, although the resources at Hodge Jones & Allen were initially severely reduced by the move, Patrick Allen of that firm was able in a short period to assemble an impressive team of eight solicitors and scientific and support staff, including Mark Mildred, one of the most experienced multi-party solicitors in the country. Finally, although expertise had been lost from Hodge Jones & Allen, the

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same would have been true had the work been placed with Alexander Harris, which would have had to replace the support staff and the medical and scientific expertise which had chosen to remain with Hodge Jones & Allen.

I hope that these general explanations reassure your Lordships and the noble Countess that the Legal Aid Board, now the Legal Services Commission, does take account of the interests of clients and the taxpayer at every stage in the handling of multi-party actions. Of course, I cannot possibly comment on the allegations made by the noble Countess, having only just heard them. They are quite worrying allegations to make against professional men and women. If the level of dissatisfaction that she expresses is really there and widely there, that is troubling.

It appears to me that this is a matter for the Legal Services Commission rather than for me. However, I can certainly say from this Dispatch Box that the Legal Services Commission will be more than happy to meet those who are complaining and to evaluate the nature of the complaints. Having listened to the noble Countess, however, I believe that the Legal Services Commission would find it much easier to assist if the complaints were set out in writing, in detail, so that they could be considered in advance. Certainly, the Legal Services Commission will listen with care to all complaints that are made, as it is its objective to ensure that the interests of clients and the beneficiaries of legal aid are advanced.

Financial Services and Markets Bill

Returned from the Commons with an amendment disagreed to but with an amendment proposed in lieu thereof; with an amendment agreed to with an amendment; and with the remaining amendments agreed to. The Commons amendments ordered to be printed.

        House adjourned at a quarter past seven o'clock.

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