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Wednesday, 14 March 2012.
3 pm
Prayers-read by the Lord Bishop of Newcastle.
Leave of Absence
3.06 pm
The Lord Speaker (Baroness D'Souza): My Lords, the Association of European Senates is meeting this week in Paris. Accordingly I seek leave of absence from your Lordships' House on Friday 16 March.
Finance: Credit Rating Agencies
Question
3.07 pm
To ask Her Majesty's Government what is their assessment of the influence exercised by the credit rating agencies in the world economy.
The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, investors value the role of credit rating agencies to provide market participants with a neutral opinion of credit quality. However, to reduce the procyclical effects of ratings changes, it is important that market participants do not rely mechanistically on credit rating agency opinions and that those ratings are not hardwired into legislation. Therefore, the Government strongly support G20 efforts to reduce the overreliance on credit rating agency ratings, and fostering competition through reducing barriers to entry.
Lord Giddens: I thank the Minister for that Answer. In the excellent report that was produced in this House, a whole range of proposals were made for the reform of the credit rating agencies, which I see as urgent and important for the world economy. One of those proposals was that the cartel of the big three agencies should be opened up to greater competition. How in practice does the Minister think this will be achieved? Has any progress been made to that end? Does he by any chance support the idea of compulsory rotation with some of the smaller agencies, a proposal that has been endorsed by a Treasury Select Committee inquiry that is going on at the moment?
Lord Sassoon: The noble Lord, Lord Giddens, has gone absolutely to the heart of the matter. Certainly your Lordships' Committee, the Government and most commentators would like to see competition introduced, but that is extremely difficult, as the noble Lord knows. It is a highly concentrated industry and entry is difficult because it takes time to build up a track record. A number of steps need to be taken. As I have already said, the hardwiring of credit ratings needs to be taken out wherever possible from investor mandates and from legislation and regulation in many countries.
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We need to improve the transparency and comparability of the ratings of the agencies and generally lower the regulatory barriers to entry. I believe that Europe has taken some steps, but it needs to take more. For example, under the new registration processes, 16 credit rating agencies are already registered in Europe and another 15 more have applied to be registered, so there are a lot more out there already than the three that get all the focus. As to rotation, it is actually part of one of the two rounds of European directives that have come in since the financial crisis that analysts need to be rotated within firms, which is probably the proportionate response.
Lord Forsyth of Drumlean: My Lords, will my noble friend indicate what view he thinks the credit agencies will take of the Government's proposal to issue 100-year bonds. If these bonds are bought by the Bank of England as part of a quantitative easing process, what will be done to avoid the problem of the value of the bonds falling as interest rates rise and being eliminated by inflation over that period of time?
Lord Sassoon: My Lords, my noble friend conflates a number of interesting questions. The key point is that the UK is in a very strong position to look at ultra-long or perpetual bonds. We have historically very low rates of interest and significant investor demand, particularly from the domestic funds, for very long-dated gilts. In response to that situation, we think that it is right to consult the market, as my right honourable friend the Chancellor of the Exchequer has indicated we will do, and to see what it has to say, but we will not make any issue unless it represents good value for the taxpayer.
Lord McFall of Alcluith: My Lords, given that the credit rating agencies have demonstrated a consistent lack of accuracy, have failed in their governance, are flawed in that the person paying for the rating has to ask for it, and competition is non-existent, will the Minister encourage investors in the City to establish their own credit rating agencies on a not-for-profit basis? At a stroke, they would remove conflicts of interest, introduce healthy competition and establish accurate credit rating figures. Let us remember that all the credit rating agencies gave Northern Rock a AAA rating immediately before its demise.
Lord Sassoon: My Lords, while we should not underestimate the difficulties with the credit rating agencies historically, equally we do not want to make the situation sound more dramatic than it is. On sovereign ratings, the IMF's analysis in the autumn of 2010 indicated that the rating agencies had performed relatively well and that, in all cases of sovereign default since 1975, they had had those sovereigns on speculative grade ratings at least one year ahead. I have already given some answers as to how we should introduce competition. If one of the vehicles that comes in is of the sort which the noble Lord, Lord McFall, mentioned, that would be up to the market and it should not be prevented from using it.
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Lord Harrison: My Lords, I know that the Minister has read closely our report on the sovereign credit rating agencies, which was published last November and is available to Members of the House, but does he share my concern that the three major credit rating agencies are American? Does he also share our concern, as expressed in the report, that to generate an agency from within the European Union would not be well received by the markets and that it is therefore essential to ensure that there is open, free and fair competition to establish markets for new players to come in and compete with the existing three?
Lord Sassoon: I am certainly very happy to commend again the report, Sovereign Credit Ratings: Shooting the Messenger?, to which the noble Lord, Lord Harrison, referred. It is an excellent report, which said among other things:
"The criticism that credit rating agencies precipitated the euro area crisis is largely unjustified"-
so it offered a very proportionate and measured response to the criticism. I do not think that we should mind the nationality of the rating agencies; it is the competition that we want. In that connection, the Government believe that it would be wrong to create a public European credit rating agency because that would just serve, among other things, to crowd out the competition.
Baroness Kramer: My Lords, until the mid-1970s, investors paid the credit rating agencies, not the issuers. The change was driven very much by the awareness of credit rating agencies that they could gouge more money from issuers. Does the Minister agree that there is no evidence that the so-called private conversations that now take place between the credit rating agencies and the issuers because of their relationship have in any way improved the quality of credit rating? Does he further agree that returning to an investor-paid system would take out the key conflict of interest?
Lord Sassoon: My Lords, I agree that the conflict of interest question is important. I draw my noble friend's attention to the fact that in the two rounds of legislation to date since the crisis, one of the things that has been done is to ban credit rating agencies from providing a paid advisory service. So some attention has already been given to this issue by Europe.
Education: Skills
Question
3.15 pm
To ask Her Majesty's Government whether the key skills and functional skills requirements in the Apprenticeships, Skills, Children and Learning Act 2009 are compatible with the Equality Act 2010 in relation to accessibility for dyslexic and other disabled conditions.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, the apprenticeships provisions within the Apprenticeships, Skills, Children and Learning
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Lord Addington: I thank the Minister for that Answer and draw attention to my declared interests. Does my noble friend agree-I have shown this to her-that I have some legal opinion which might contradict that? Does she acknowledge that, at the moment, there are people who are failing to pass the English qualification because of dyslexia who could be helped through to degree level if they chose that path? There is also evidence which shows that people are having problems because those who administer these tests do not know what they could do. Under these circumstances, does not our Government have a duty to make sure that something which has been brought forward as a great saviour of our skill force-the apprenticeship-is made fit for purpose?
Baroness Wilcox: The noble Lord is an expert on this subject and I think carefully about the answers that I give him. Yes, he had already given me sight of the Question he was going to ask. There is no evidence to suggest that the Apprenticeships, Skills, Children and Learning Act is not compliant with the Equality Act. The Equality and Human Rights Commission is a critical friend in order for us to be assured of continued compliance, and it stays alongside us. On tackling the colleges and providers, where a college or provider is not using appropriate access arrangements they may lose their right to deliver these qualifications as an approved centre. We will be watching that situation very carefully. Both English and mathematics, of course, are ongoing problems for people with dyslexia but, where barriers to access remain, as a last resort individuals can be exempted from up to two or three of the assessed components within the functions skills-I have checked this and found it to be right-speaking, listening, communication, reading and writing. In the last event, two or three of those components can be removed to make it as accessible as possible.
Perhaps I might add that the employers are very keen that everyone should have basic English and mathematics, and we know how difficult this is for many people with dyslexia. However, it is important, if we can, to keep people with disabilities and dyslexia inside the system and to help them to be as much a part of our community as everyone else. So, wherever it is possible to keep people inside the community, we will. I am sorry that my answer was long but the issue is important.
Lord Martin of Springburn: My Lords, does the Minister agree that many of our excellent tradesmen and tradeswomen would readily acknowledge that when they were young they were not too good at passing exams? We must be very careful when encouraging young people to come into apprenticeships that we do not make exams a barrier.
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Baroness Wilcox: That is absolutely right, and that is why it is important for us to have functional skills, which are much more accessible to people with disabilities. I would be happy to talk to the noble Lord further on that matter.
Lord Storey: My Lords, the Minister will be aware that those students who go to university who have special needs are supported, perhaps through a scribe or assistive software, but that is not the case with apprenticeships. How would the Minister advise on this case? An apprentice electrician had an outstanding report on his practical skills from his employer. However, as he failed his key skills component, his employer was unable to retain him and he is now, sadly, unemployed. What advice would the Minister give to that young person as to the support that we could give him and other apprentices?
Baroness Wilcox: I am very sorry to hear this. We have just commissioned Peter Little to carry out research and recommend improvements to the accessibility of these apprenticeships. In April we will publish his report and a plan setting out exactly what we will do to improve and to help the situation.
Lord Foulkes of Cumnock: My Lords, since this Question refers to disabilities other than dyslexia, is the Minister aware of the report published today by the Scottish Association for Mental Health about discrimination against people with mental illness in employment? Will she get a copy of it and consider its recommendations and applicability to England and Wales?
Baroness Wilcox: Thank you very much indeed. Yes, I will get a copy.
Police: Vehicles
Question
3.20 pm
To ask Her Majesty's Government what recent discussions they have had with police authorities about the cars they purchase.
The Minister of State, Home Office (Lord Henley): My Lords, Ministers frequently meet police authorities. In 2011 the Government made regulations that require police vehicles to be provided through a specified national framework agreement. Decisions about what to buy from that framework are for chief constables and their police authorities.
Lord Hoyle: My Lords, I thank the Minister for that reply, but does he agree with me that as all the police authorities in the north-west and many throughout the country are changing from buying Vauxhall vehicles to buying Hyundai, that is a kick in the teeth for Vauxhall workers who are trying to keep the efficient car plant in Ellesmere Port open? Could he give an indication that any Korean police authorities are thinking of buying British-built vehicles?
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Lord Henley: My Lords, I do not speak for the Korean Government and cannot speak for the police authorities in Korea, so I do not know what police cars they are buying. I am aware of the noble Lord's concern about matters in relation to his own police area, and I understand that it is buying Hyundai. But I can give an assurance that, if he looks at the figures, he will find that Vauxhall is still the largest supplier of lower and intermediate-performance police cars, which are manufactured in his own area of Ellesmere Port. The important point is that police authorities and chief constables should be able to buy the cars that they believe are suitable for their needs, and deal within the framework in doing so.
Lord Low of Dalston: I do not much mind what kind of cars the police use, but could the Minister use his influence with the police to persuade them to moderate their use of sirens, which are such a widespread source of noise pollution in our cities? The siren is for use in a real emergency, and not just when the officer is in a hurry to get home for his tea.
Lord Henley: My Lords, I am aware of this complaint from a number of noble Lords who have put it to me on a number of occasions. I understand that there might be one or two occasions when police cars are using sirens in an inappropriate way. Again, that should be a matter for the police authorities, but I hope that they will bear in mind what the noble Lord has to say.
Lord Jones of Birmingham: I draw noble Lords' attention to my declared interests. Would the Minister agree with me that it is becoming increasingly difficult for the businesses of this nation to believe that Her Majesty's Government want business to employ more people and pay more tax when they buy their ships from South Korea, their police vehicles from Korea, their trains from Germany and their cars from Japan? Further, would he agree that the EU procurement rules talk about best value and not best price, and that the Government increasingly show that they know the price of everything and the value of nothing?
Lord Henley: My Lords, I would not want to go down the line that the noble Lord is suggesting, which smacks, dare I say it, of protectionism. I want the police authorities and chief constables to buy the cars that they feel are best for their needs. That is why I am particularly grateful, as I said in answer to the noble Lord, Lord Hoyle, that Vauxhall is the largest supplier of one category of cars, which are being built in Ellesmere Port, very close to where he comes from.
Baroness Trumpington: May I ask what the police do with their cars when they have finished with them? Do they send them to auction? A few years ago my husband bought the ex-chief constable of Cambridgeshire's car and we drove happily at all kinds of reckless speeds because everybody thought it was the chief constable's car.
Lord Henley: I am very grateful that I was not driven in that car by my noble friend or her late husband. Police cars do not last that long because they
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Lord West of Spithead: My Lords, when I was a Minister in the Home Office I was shocked at how little co-ordination there was across police forces in terms of procurement, and I tried to change that. Can the Minister reassure us that, notwithstanding some differentials between police forces, they are quite minimal and there would be a huge gain to the public purse if we could co-ordinate procurement?
Lord Henley: My Lords, the noble Lord refers to his time in government. I was trying to make clear in my original Answer that there have been considerable changes since then. That is why we have brought in the framework, which brings in co-ordination of a great deal of procurement across all police forces that we believe will save something of the order of £350 million a year. This is money that we need to save.
Baroness Doocey: My Lords, do the Government agree that there is no justification for the Metropolitan Police keeping 32 luxury cars not for security purposes but to chauffeur senior officers to and from their homes?
Lord Henley: My Lords, obviously I cannot comment on decisions made by the Metropolitan Police Authority -that is a matter for the mayor's office. If it is spending money inadvisably, I hope that it would look carefully at the circumstances in which it could possibly save money in the future.
Baroness Worthington: Would the Minister comment on the appropriateness of the list of activities in the leaked tender document by the West Midlands and Surrey police forces? Alongside the management of the vehicle fleet, these included a whole host of activities that ran to almost everything apart from the powers of arrest.
Lord Henley: My Lords, I am not sure that that is directly relevant to the Question. We are talking about the purchase of vehicles. I want to make it clear that that is a matter for the chief constables and we want them to buy the appropriate cars for the job that has to be done.
Lord Grenfell: My Lords, prompted by the very pertinent question put by the noble Baroness, Lady Trumpington, can I ask the Minister if, when these police cars are no longer considered roadworthy, they are put out to grass and placed at the disposal of the Prime Minister and his friends?
Lord Henley: My Lords, as I made clear in my earlier answer, they are sold for the best possible price.
Baroness O'Cathain: My Lords, can I ask my noble friend to make sure that the opinions in response to this Question do not make noble Lords go away with a feeling that the British motor industry is in a bad
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Lord Henley: I am very grateful to my noble friend for her comments. I remind her about the announcement made about Nissan and the extra jobs that will be available there as a result of decisions that Nissan has made about further inward investment in this country.
Lord Brooke of Alverthorpe: On the day when it has been announced that 2.7 million people in this country are unemployed, and the likelihood is that that figure will continue to rise for some time, is it not important that we take such factors into account when we address issues such as public procurement? Can one conceivably believe that the French, German or Belgian Governments would do some of the things that we do in this country?
Lord Henley: Yet again, the noble Lord is heading down the road of protectionism, which I do not believe is the right answer. The answer that I gave to my noble friend Lady O'Cathain about the success of Nissan addresses that point exactly. Why have we attracted so much inward investment? It is because we have the right conditions to do so. The Nissan announcement is one that even the noble Lord should welcome.
Viscount Simon:Is the noble Lord aware that ACPO is reviewing the use of police vehicles with a view to standardisation, which will result in reducing the cost of those vehicles?
Lord Henley: My Lords, again, I answered that point earlier when I dealt with the co-ordination that we have brought to this matter through the national framework. That is why we are looking to make savings of the order of £350 million a year, compared to what used to happen under the previous Government on proper co-ordination of all police procurement.
Armed Forces: Vehicles
Question
3.30 pm
To ask Her Majesty's Government whether fighting vehicles supplied to British troops in Afghanistan provide adequate protection against Taliban attacks using improvised explosive devices.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): My Lords, the current range of fighting vehicles supplied to British troops in Afghanistan has been optimised for that particular environment and offers the most suitable form of survivability in that theatre of operations. However, no vehicle can currently withstand a blast of infinite magnitude and there will always be gaps in a vehicle's protection. The strengths and weaknesses of the different types of platform that make up the
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Lord Empey: My Lords, we were all shocked by the tragic deaths last week of six of our service personnel in Afghanistan. Can the Minister assure the House that the flat-bottomed Warrior fighting vehicle is the most suitable equipment to protect our Armed Forces from improvised explosive devices? Can he further assure the House that financial constraints on the provision of equipment or modified equipment are not delaying the deployment to Afghanistan of the best possible protection for the brave men and women of our Armed Forces?
Lord Astor of Hever: My Lords, my thoughts are also with the families and friends of those six soldiers. Every death and injury reminds us of the human cost paid by our Armed Forces to keep our country safe. The Warrior is optimised to protect our Armed Forces from IEDs and is suitable for the task that it is required to do. It has a good track record in both Iraq and Afghanistan. The protected vehicle fleet in Afghanistan comprises a mix of armoured capabilities, some of which have flat-bottomed hulls with tracks and others have V-shaped hulls with wheels. This provides commanders with a range of operational capabilities to match the threat. Despite financial constraints, there is a successful programme that allows the Treasury to fund urgent operational requirements to procure equipment within a shortened timescale. Since 2001, more than £5.5 billion has been spent on UORs for Afghanistan.
Lord Morris of Aberavon: My Lords, it is many years since I had ministerial responsibility, under the noble Lord, Lord Healey, for the equipment of all our Armed Forces. My advisers then sought to prioritise needs for research and development. I believe that the Taliban is skilful in simplifying the components of IEDs, which may be part of the problem. Has any priority been given to technological means of counteracting IEDs? If so, when was priority given to research and development in this field?
Lord Astor of Hever: My Lords, this is a very important question. Survivability is measured by a number of factors, not just the width of the armour. A vehicle's ability to manoeuvre around a battlefield, its firepower and its situational awareness capabilities all contribute to its survivability along with other factors such as tactics and procedures. A platform's relative strength in one of the areas of survivability will result in a corresponding trade-off against another. For example, a highly mobile platform will have to be lightweight and therefore cannot have heavy armour, such as the Jackal and the Coyote, whereas a well armoured platform will lack mobility, such as the Mastiff. The same is true of lethality as the greater the firepower the more the weight will increase, which means less armour and less mobility. As tactics change, so does the optimal platform of choice.
Lord Burnett: My Lords, as my noble friend knows, when assessing an armoured vehicle, a balance has to be struck between physical protection, mobility and
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Lord Astor of Hever: My Lords, the Warrior is very popular with our troops. I was out in Afghanistan two weeks ago and I spent quite a lot of time talking to members of the Armed Forces who work with this bit of equipment. They are very impressed by it. It is seen by insurgents as a tank and they will normally melt away on its arrival. It provides excellent mobility and survivability and is able to operate over the most difficult terrain. I need to be careful what I say for security reasons but I can say that the recent incident was a combination of several really unlucky combinations. No vehicle in theatre, including one with a V-shaped hull, would have survived a similar explosion. Warrior has been extensively upgraded, particularly to deliver enhanced protection against IEDs. I have copies of the upgrade work on the Warrior, which has been security cleared. I am very happy to distribute them to any noble Lords who would like to see them.
Lord Davies of Stamford: My Lords, anybody who knows anything about this subject will know that the noble Lord is absolutely right. There is a level of weight of explosive which will destroy any vehicle, including a main battle tank. That is just one unfortunate fact of life. In my time I think that I ordered eight new armoured vehicles, seven of which were procured specifically for Afghanistan under the UOR initiative. I hope that all of them were successful in their way. Does the noble Lord agree with me that the outstanding success among them has been Mastiff 2 and that there must be a very strong case, even though Mastiff 2 was ordered under the UOR programme, for keeping that permanently in inventory, where almost certainly its qualities will be necessary in any other deployment we make in a third world context?
Lord Astor of Hever: My Lords, this Government take the protection of our Armed Forces against IEDs very seriously. I know that the previous Government did so as well and I pay tribute to them for what they did in this area, particularly as regards equipment such as the Mastiff. I take seriously what the noble Lord says about Mastiff in the future. We are looking at that very closely.
Business of the House
Timing of Debates
3.38 pm
That the debate on the Motion in the name of Lord Howell of Guildford set down for Friday 16 March shall be limited to three and a half hours and that the debate on the Motion in the name of Lord Sassoon set down for Thursday 22 March shall be limited to five hours.
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Lord Barnett: I take the opportunity of asking the noble Lord the Leader of the House why we have not yet had an opportunity to debate the serious matter of access by Members of the House to the Peers' car park. When I last raised it, the noble Lord's deputy told me that it would be a matter of course. But in practice we have been prevented by putting down Written Answers. If an early opportunity is not given, I will have to put down a Motion myself to allow the House to decide.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde): Of course, the noble Lord is free to do whatever he wishes to do within the rules as laid down in the Companion to the Standing Orders. However, I am prepared to have a discussion with the Chairman of Committees.
Misuse of Drugs Act 1971 (Amendment) Order 2012
Statistics and Registration Service Act 2007 (Disclosure of Social Security and Revenue Information) Regulations 2012
Immigration and Nationality (Fees) Regulations 2012
Schedule 5 to the Anti-terrorism, Crime and Security Act 2001 (Modification) Order 2012
Motions to Refer to Grand Committee
3.39 pm
Moved by Baroness Anelay of St Johns
Legal Aid, Sentencing and Punishment of Offenders Bill
Report (4th Day)
Relevant documents: 21st Report from the Constitution Committee, 22nd Report from the Joint Committee on Human Rights.
14 Mar 2012 : Column 278
3.40 pm
Clause 26 : Choice of provider of services etc
119: Clause 26, page 21, line 11, leave out subsection (2) and insert-
"( ) Notwithstanding subsection (1), the Lord Chancellor's duty under section 1(1) must include a duty to secure that a person eligible to legal aid advice is able to access it in a range of forms at the outset, including securing the provision of initial face-to-face advice."
Baroness Grey-Thompson: My Lords, the amendment is also in the names of the noble Lords, Lord Bach, Lord Newton of Braintree and Lord Pannick. It seeks to remove the provisions for both a mandatory telephone gateway and the delivery of legally aided services exclusively by telephone. Instead, the amendment would insert a duty to promote the plurality of provision and the delivery channels in order to have regard to the needs of clients when procuring services.
The Government have said that they will introduce the mandatory gateway initially in four areas of law. However, the Bill gives the Government wide powers to make legal aid services available exclusively by telephone or other electronic means in the future. I move the amendment for several reasons. A telephone-only service may work for a large number of people. However, it may adversely impact the most vulnerable clients, who may struggle to explain complex problems over the phone. I should like to ask the Minister to share with us how the coalition Government will identify the groups of people for whom this service is not suitable, and the criteria that will be used, given that the Government acknowledged the difficulty in their impact assessment, which stated:
"Disabled people may ... find it harder to manage their case paperwork through phone services. They may also find it harder to communicate via the phone or manage any emotional distress more remotely".
Indeed, it may be hard for many people even to access a telephone suitable for dialling in. Many people in current times do not have a land line but only a mobile. Accessing a telephone gateway via a mobile could be expensive. Due to waiting times, credit may even run out before a conclusion has been reached. Also, fewer public phones are available, and they are perhaps not the best way to try to resolve issues. I am also concerned that people with language or speech difficulties may be deterred from seeking advice. Without early intervention, it is likely that their problems will become more complex and costly to resolve at a later date, and their problems will be pushed to another area.
We must also think carefully about training operators. It is my understanding that they will receive some training, but there will be no formal legal training. As a result, operators may not be able effectively to interpret the nuances of complex cases put to them, let alone cases put to them by clients who may be confused or have some difficulty in communicating.
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The Government's savings from their proposals will be negligible, and they may in fact cost more. The June 2011 impact assessment predicted savings of between just £1 million and £2 million-a relatively small amount. In fact, a study by the Legal Services Research Centre found that telephone advice can take longer to resolve problems than face-to-face advice. Face-to-face advice is important in many cases for fostering trust and building relationships in order to get to the right resolution.
We could also lose the current streamlining. Much good work has been done by local advice agencies, which collaborate to streamline advice, whereby clients need to go through the advice journey only once. The mandatory telephone gateway will fracture this again, because clients would need to phone in first and then be referred to special advice elsewhere.
During the Bill's Second Reading and Committee stage in your Lordships' House, Peers from all sides expressed the view that a telephone-only legal aid service would not be appropriate for all users. While I accept that it may suit many, those with language difficulties, learning difficulties or mental health problems may be disadvantaged. Vulnerable clients, perhaps those experiencing bereavement, loss of a job or debt, or those with low self-esteem or poor literacy or numeracy, are much more likely to be disadvantaged.
The Government risk excluding vulnerable people from accessing meaningful and effective legal advice. I beg to move.
Lord Phillips of Sudbury: My Lords, I started in a Suffolk solicitor's office in the late 1950s. As was common then and now, a lot of preliminary advice, particularly to people who could not pay anything, was given by junior members of staff. Ever since, I have been imprinted by early recollections of how difficult it is for some people to give instructions at all. Later, I became non-executive director of a company that ran the first telephone helpline in the country, and observed first-hand, as one might say, how that worked. Of course, a great many people in the present age feel perfectly comfortable with telephones. Provided that there is no cost factor, to which the noble Baroness, Lady Grey-Thompson, referred, that may prove an adequate way to give instructions. However, we know that there are many, even now, who are not comfortable with telephonic communication and for whom, if the matter they are seeking advice on is painful to them or arouses great emotion, it is not a satisfactory way to try to impart instructions.
If one thinks of poor people-perhaps I should not have said poor people, because they can be highly articulate, but inarticulate people and those who cannot begin to analyse their problem and do not know quite what it is-the telephone is unlikely to be an effective means to impart information without which the adviser cannot hope to help them to best effect. We are all wholly aware of the Government's need and wish to save expenditure on legal aid, but I put it to my noble friend that this is the falsest of false economies. Anyone who has given such advice will readily say that the cost in the adviser's time is released when the client is in front of them, when they can help the client, who is often confused or emotional, to give them the precious
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I end by saying that where the person needing help is poor, confused and deprived, the notion that one should add to that catalogue of disadvantage the inability to access the only advice that will work for them-face-to-face advice-would be a terrible indictment of our claim to be a democracy where we are equal before the law.
Lord Wigley: My Lords, I shall speak briefly in support of Amendment 119, moved so persuasively by the noble Baroness, Lady Grey-Thompson. The amendment removes the provision contained in Clause 26 for the Lord Chancellor to make legal advice services available by telephone gateway or other electronic means. It would instead place a duty on the Lord Chancellor to ensure that individuals eligible for legal aid advice are able to access that advice in the forms most suited to their needs, including initial face-to-face contact.
Clause 26 is perhaps one of the most controversial elements of the Bill and has attracted widespread criticism from disability groups and campaigners. The clause contains provisions to establish a compulsory telephone gateway and to make this gateway the only method by which advice in certain categories of law is available. These proposals will in effect disfranchise individuals with learning difficulties or disabilities that impair their ability to communicate efficiently from being able to access advice. As Scope has pointed out, many legal aid clients experience complex and multifaceted problems that would be difficult to explain over a telephone, while those with limited English or with language or speech problems may be deterred from seeking advice at all. Common sense suggests that cases that are not dealt with at an early stage will be more costly to resolve at a later stage.
The proposals represent a retrograde step that would put up shocking barriers to equal access to justice. The Government acknowledged this in their own impact assessment, recognising that:
"Disabled people ... may find it harder to manage their case paperwork through phone services. They may also find it harder to communicate or manage any emotional distress via the phone".
What is more, as pointed out once again by Scope, these proposals could end up costing the Government more money, as opposed to making savings. The impact assessment published in June 2011 predicted modest savings of about £1 million to £2 million, while a study compiled by the Legal Services Research Centre found that advice provided over the telephone can unnecessarily prolong cases, as was mentioned a moment ago, and thereby make them more difficult to resolve.
In summary, Clause 26 adds further stress to already distressing situations and risks excluding vulnerable individuals from accessing legal advice altogether. The proposals go against the principle of equality of arms before the law and, frankly, display a cavalier attitude
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The Lord Bishop of Chichester: My Lords, I, too, support the amendment. Quite a number of people find it quite hard to find their own voice and need the support of a friend. As a priest I know how many of the clergy spend a lot of time accompanying people and enabling them to speak for themselves: not providing a voice for the voiceless but enabling the voiceless to find a voice. It seems that a lot of people are simply not able to put their own case individually over the telephone and need to have friends and supporters with them. It seems essential that this alternative means, the face-to-face interview, is available for those people so that they can have friends and advocates with them.
Lord Roberts of Llandudno: My Lords, I join in supporting the amendment. In recent debates we have spoken about Jobcentre Plus and how, when young people are looking for work, face-to-face interviews are far more effective than sitting before a computer or dealing over the telephone. This also holds true for those who need advice. I understand that all those under the age of 18 will be able to have face-to-face interviews. This should be extended because people are asking for advice at the most vulnerable time in their lives, with turbulent economic situations, job losses and so on. They need advice, and as the right reverend Prelate stated, and as I know as a minister of the Methodist church, the telephone has its uses, a helpline has its uses, but you sometimes need to sit face to face with a person-to have a personal relationship within which they find far greater comfort and guidance than they would otherwise. I am happy to give my support to the amendment.
Lord Newton of Braintree: My Lords, perhaps I may intervene briefly once again in these debates, in complete support of the points that have been made, not least by the noble Baroness, Lady Grey-Thompson and my noble friend Lord Phillips of Sudbury but to a degree by everyone who has spoken.
As it happens, I have other recent brief experience of this in my capacity as a trustee, along with the noble Lord, Lord Rooker, of the National Benevolent Fund for the Aged, which is concerned with isolated elderly people. We have recently been lobbying Ministers about the apparent assumption that everyone can deal with things on the telephone or through the internet. That is essentially-dare I say it?-a middle-class presumption that does not necessarily apply to the areas that we are talking about now. To their credit, the Ministers whom we have lobbied are, I think I am right in saying, having a round-table discussion tomorrow on how the problem might be dealt with, and I recommend that the Ministry of Justice joins in.
Anyone who has been an MP will have been confronted in their surgery by people who just need to talk to someone, with a sense of the body language, to sort out one to one what may be important in their case, what is not relevant to an appeal and so on. I notice
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In a curious way, the Government have acknowledged that in the briefing that I have here. It says that, although it is a telephone gateway, there has to be a careful assessment of whether the advice can be provided face to face or over the telephone. Indeed, they have already decided not to include in the single telephone gateway debt, in so far as it remains in scope, discrimination and special educational needs, as well as, I think, community care. What is it that makes these things so different from other forms of advice? There will be many community care cases, and there are also welfare benefit needs, as well as a need for advice on a lot of other aspects of people's lives. Why is this to be exempted but not the other things? In a way, therefore, I think that the case has been conceded. The costs cannot be large and the need is great, and I think that we are entitled to ask the Government to reconsider this proposal.
Lord Pannick: My Lords, I added my name to the amendment and I did so for a very simple reason: this amendment is truly about access to justice. The concern surrounding the Bill is that legal aid should not be provided only by means that are simply inaccessible to a number of people, as explained comprehensively and persuasively by the noble Baroness, Lady Grey-Thompson.
The Earl of Listowel: My Lords, coming late to this debate, I regret that I may have missed some of its complexities, but I ask the Minister for reassurance on one point. I very warmly welcome the publication this week of the Government's social justice strategy and the proposal for an early intervention foundation. The Secretary of State, Iain Duncan Smith, has recognised for a very long time how important it is to intervene early with families if their children are to have good and successful lives. Therefore, my concern over this issue is whether it is going to provide a further barrier to parents who need vital services. Will they find it difficult to attain those services and get access to the law, and will their children suffer as a result? I understand that children under the age of 18 will have access to a person if they need to speak to someone, but I am worried about disabled parents, parents who are very challenged and perhaps poor parents who, as a result of this change, may not get the support that they need and their children may suffer as a consequence.
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Lord Quirk: My Lords, I very much support the amendment. As the noble Lord, Lord Newton, reminded us, communication is by no means dependent solely on ears and eyes. It is multisensory and-as the noble
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Lord Campbell of Alloway: My Lords, I will take very little time. I am very concerned about the situation, for all the reasons that were given-and that were put better than I could have put them. I ask only that consideration be given, and an assurance of further consideration, so that this proposal will not simply be cast away in some form of dismissal. That is all I ask for: an assurance that consideration will be given.
Lord Bach: My Lords, I am proud to be associated with the amendment in the names of the noble Baroness, Lady Grey-Thompson, and the noble Lords, Lord Newton and Lord Pannick. The amendment is of the greatest importance, and many people outside the House are following it with exceptional interest.
It is perhaps important to remind the House that the mandatory gateway will apply only to those elements of social welfare law that are still in scope-including, of course, for the moment, welfare benefits because of a decision that the House took last week on an amendment moved by the noble Baroness, Lady Doocey. That is a statement of the obvious, because those areas of social welfare law that the Government intend to take out of scope will be quite irrelevant for these purposes. There is no possibility of legal aid in those cases. In effect, the Government are saying that people with those legal problems will have to fend for themselves if they have no money. That is a pretty shocking state of affairs.
We have had a short but powerful debate in this House today-and we had a very powerful one almost three months ago at the end of the first day of Committee, on 20 December 2011. Very powerful speeches were made. I have in mind that of the noble Lord, Lord Shipley, whose final words were:
"There are real dangers that some of those most in need of help will fail to secure it through a mandatory telephone gateway".-[Official Report, 20/12/11; col. 1764.]
The noble Lord, Lord Phillips of Sudbury, made yet another powerful speech today. The one he made on that occasion was powerful, too. He said:
"If it is mandatory for those seeking assistance to go through a telephone gateway, we will cast adrift a significant minority of our fellow citizens who will never use a telephone gateway for the sorts of problems with which they are confronted".-[Official Report, 20/12/11; col. 1766.]
The Minister says from a sedentary position that there is no evidence of that. What an unbelievable response. One only has to know from human nature-from living in the real world rather than the world of Whitehall-that that is how people are. It is about time that the Government started taking people as they are rather than as they want them to be. There were powerful speeches also from the Liberal Democrat Benches on that occasion.
I made the point that it was nearly three months ago because we have had no hint of a concession in all that time. We know from a letter that a telephone call will not be free, as was suggested at the time. There will be a cost to the client who has to make the call. It will not be huge, but it will be there-and that is another factor that will apply. It is simply common
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The Bolton CAB is a large CAB which covers all these fields and has a legal aid contract. It runs an advice surgery from time to time. Yesterday it tried an experiment. Every client who came in had their tale told in general terms by way of a tweet, in other words on Twitter, so that one could read each one of these cases during the course of the morning and afternoon while this surgery lasted. One could see from reading these how the world of a busy CAB or law centre or advice centre actually worked in practice. There were 126 clients who sought legal advice on social welfare issues and they covered practically everything that you could think of. I have no doubt that some of those clients were well able to make a telephone call and start proceedings in that particular way, and I am an undisguised fan of telephone advice when it is appropriate. But are the Government really saying, as I suspect they are, that all 126 of those clients would have been able to do this? Are they saying it is not highly advantageous to have face-to-face contact in some cases? And are they really saying that someone who turned up to a CAB should be turned away and told to call a hotline, as will happen unless this amendment is passed? Can you think of a more bureaucratic, fussy and less efficient system and one that is less reflective of the way people actually live their daily lives? I would argue that it is an absurd proposition which is un-British in the sense that it is one-size-fits-all and too dirigiste and inflexible an approach.
Sometimes Governments just get things completely wrong and Parliament has some sort of duty to say so. It actually helps Governments in the long run if they do not charge off in the wrong direction. Here is a short story. I remember when I was a Minister sitting where the Minister is, in the same department, putting forward some foolish, to put it mildly, proposition and then seeing, when the vote was called, many of my own supporters walking past in order to vote in the Opposition's Lobby and losing the vote for the Government by a large amount. It was the right thing for them to do. Actually, there was so many of them that none of them could be picked out and dealt with later. There is an advantage in numbers sometimes. And they need not even be afraid on this occasion of the noble Lord, the Deputy Chief Whip of the House. Frankly, I would argue that this is one of those instances. If the Government are defeated on this issue and if the Liberal Democrats could just bring themselves for once to vote against the Government, the world would not stop, the Government would not fall, but an enormous mistake might be averted and Parliament would have done the right thing.
The Minister of State, Ministry of Justice (Lord McNally): My Lords, in case my colleagues on the Liberal Democrat Benches missed it, that was a subtle attempt by the noble Lord, Lord Bach, to woo them into the Aye Lobby. All that I can say in this technological age is, just think what the noble Lord, Lord Bassam, will be tweeting about them if they do not do as he suggests.
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Throughout this Bill it has been very difficult to reply to a debate, trying to deal with very narrow, specific terms, when the noble Lord, Lord Bach, constantly makes his case in the broadest terms. We are not forcing everybody through a telephone gateway; we are doing a specific and very narrowly drawn test. I ask noble Lords to make their decision on the facts.
We make jokes about this House and its otherworldliness, but we are living in the most communications-savvy generation in our history. I do not just mean teenagers and young people; I mean silver surfers and people right through. They buy on eBay; they use telephones and new technology in a very broad way. It is patronising to assume that people cannot make use of it. Of course, we are aware that there may be exceptions. That is why, when noble Lords come to vote, it would be worth listening carefully to what we actually propose to do and what safeguards we are putting in place, rather than what I would call the broad-brush approach adopted by the noble Lord, Lord Bach.
There will be safeguards. Face-to-face advice will remain an option in the exceptional circumstances when there are callers for whom adaptations cannot be made to ensure that there is an appropriate level of service. Our starting point is that telephone advice is effective and efficient. The Community Legal Advice helpline figures for 2010-11 show that more than half a million calls were made to the service. The 2010 survey of clients who subsequently received advice from the specialist service showed that 90 per cent of clients found the advice given helpful.
The benefits of electronic services generally and the Community Legal Advice helpline service in particular are twofold. The first benefit is access. These services particularly help people with specific needs who find it difficult to get to face-to-face services; for example, those living in remote areas or who have a physical disability. Callers can access the Community Legal Advice helpline service at a time and place convenient to them. The second benefit is quality. Contrary to the assumption that face-to-face advice is always better, specialist telephone advice providers are currently required to meet higher quality standards than their face-to-face counterparts. For both these reasons, the Government believe that the Community Legal Advice helpline should be the mandatory gateway for applying for legal aid.
However, I can confirm today that the Government have listened to concerns and will not proceed with the proposal to include community care as one of the initial areas of law for which clients will be required to use the mandatory single gateway. We acknowledge particular challenges in delivering a quality service to community care clients. The Government have always recognised that this is a complex area of law and said in the impact assessment that around half of clients in this area would require face-to-face meetings with legal representatives even where only legal help is being provided.
We have heard since from stakeholders that individuals' circumstances can be so unique that face-to-face meetings are frequently required to deal with problems in this
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Lord Newton of Braintree: My Lords, I acknowledge that point. I would also like to acknowledge that I inadvertently misquoted the briefing. I referred to community care but I also said that debt, discrimination and special educational needs were covered-I got that wrong. However, I come back to my basic point. What distinguishes the potential recipients of community care from the recipients of welfare benefits and a lot of other things? The same people will have needs elsewhere, and they will need face-to-face help not only with their community care needs.
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Lord McNally: That is what I call a second bite of the cherry on Report. However, I was in fact about to clarify, for the benefit of the House, that indeed the noble Lord was wrong, and that the first gateway areas of law will therefore be debt, discrimination, and special educational needs.
As the House is aware, the Government have been working with a range of groups, including equality organisations, to discuss the many adaptations and adjustments already in use through the existing community legal advice helpline. As a result of this work, we are comfortable that meaningful access to legal aid services for the majority of callers in the areas of law that are to be covered by the mandatory gateway is very much achievable. The mandatory gateway will, therefore, be relatively narrowly drawn, and we will proceed sensibly and prudently. This is precisely about ensuring that services remain accessible.
We believe that these are the right areas to begin with, because the community legal advice helpline already offers specialist telephone advice on debt, special educational needs and some discrimination cases. We trust that this provides sufficient knowledge on which to base our volume estimates and have a good sense about the realism of ensuring accessible services. Now that we have made further movement on the issue-a matter that I know the noble Baroness feels strongly about-I hope that she may be able to meet us halfway, particularly given the safeguards that we are also putting in place, which will apply across the three remaining areas.
The Government are not only committed to a review of the whole implementation, including operation, of the gateway in the three areas of law, but will ensure that face-to-face advice continues to be available where it is genuinely necessary. All callers will need to be assessed on a case-by-case basis to determine whether they should be offered advice only over the telephone. Those making the assessment will be required to have an awareness of the difficulties faced by callers, who may have various conditions such as learning impairments, hearing impairments, and mental health conditions. Where they assess callers as not being suitable, even
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As I have previously stated, specialist telephone advice providers are currently required to meet higher quality standards than their face-to-face counterparts. I understand that the LSC is reviewing the quality standards of all contracts in order to ensure that they remain appropriate and fit for purpose once this Bill is implemented. However, while the precise detail is still being developed, I can assure the House that the tender process, overall quality requirements and contract management approach for the specialist telephone advice providers will mean that they will continue to meet a higher service standard than that expected of equivalent face-to-face advice providers, and that this will include a specific requirement for appropriate training both in relation to understanding individual needs and the assessment process itself. Noble Lords should therefore rest assured that access will be protected under these plans.
A number of specific points were made. My noble friend Lord Roberts argued that the face-to-face guarantee for under-18s should be extended to age 25. Again, I must say to him that those aged 18 to 25 must be the most telephone-friendly generation in our history, and I do not think that we would extend it to 25.
The noble Baroness, Lady Grey-Thompson, made the point that helpline operators are not legally qualified. No, but they are fully trained to identify key words or issues from the client's description, and then-and this is important-pass the client on to the appropriate legally trained adviser. She also asked how we will assess whether a person is in need of special attention. As I have said, all callers will be assessed on a case-by-case basis to determine whether they should be offered advice over the telephone or assessed for direct face-to-face advice. It is also possible for callers to have an authorised third party to make the initial call for them. Therefore, one should look past the broad brush swept by the noble Lord, Lord Bach, and the suggestion that this is a fundamental bar to access to legal aid.
I say to the noble Lord, Lord Pannick, that earlier this year I went to the Law Society awards ceremony for the best law officers of the year. I was extremely impressed by how many of the prize winners gave distance advice either by telephone or via the internet. It is the age in which we live.
In this explanation, I hope that noble Lords will understand that this is a narrow scope attempt at using a telephone gateway. Built into it, in training the people undertaking it, is the discretion to refer to other specialists and the right of those specialists to offer face-to-face advice if an inquiry warrants it. Noble Lords can see that that is a far road from that painted by some of the speeches today. We have also made a significant move in response to the representations made to us. Based on the facts and the arguments, I hope that the noble Baroness will withdraw her amendment and that, if not, noble Lords will support me in the Division Lobby this afternoon.
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The Earl of Listowel: Before the noble Lord sits down, I thank him for clarifying the guidance to those who will take these telephone calls. Will the Minister consider giving these people guidance on the fact that a disabled person may have parental responsibilities, so that if they have children additional thought might be given to a face-to-face meeting? If for some reason this does not work, we harm not only the adult but also the children.
Lord McNally: I would certainly consider that. As so often with suggestions from the noble Earl, that is well worth considering. However, to put it to him the other way round, if the person phoning has children the benefit of being able to get advice at a distance by telephone at a time of their choice could also be an advantage.
Lord Campbell of Alloway: I thank the noble Lord. His speech opened the gateway, for which I am grateful, to the face-to-face, one-by-one necessity which arises in a lot of desperate cases. Therefore, on that basis, I accept that the Government will do the right thing.
Lord McNally: I am very grateful that my eloquence has won the noble Lord over. I would ask the House to consider what he has rightly drawn attention to: namely, that some people may be in need of an hour-long chat, which is why the gateway is important for the volume that we are dealing with and for making sure that people get the right and the best advice as quickly as possible.
Baroness Grey-Thompson: My Lords, I thank the Minister for his response and I recognise that there has been much positive movement. I also thank all noble Lords who contributed to the debate and have expressed their support. I will not précis each contribution, but I feel that there is significant support on all sides of the House. Perhaps I may quote the noble Lord, Lord Wigley, who said that this section is controversial. It is about respect and dignity.
In his response to the noble Lord, Lord Bach, the Minister said that there is no evidence that people will be reluctant to use the telephone gateway. I am afraid that I disagree, and I do not believe it is patronising to say that people will have difficulties with or will be put off from communicating in certain ways. The noble Lord, Lord Pannick, said that it is about access to justice. People should be able to access justice in the most appropriate way. I still do not feel that we are in the right place yet because some cases are incredibly complex. While I welcome the clarity on the training of operators-it is very positive news that the operators of the telephone lines will be better trained than those who do face-to-face interviews-it still comes down to the ability of the client to use the right keywords. If they do not do that or are not able to express things in the right way, I am very concerned that we will be doing a great disservice to a huge number of people.
Again, I thank the Minister, but I do not believe that he has gone far enough, and I wish to test the opinion of the House.
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Contents 234; Not-Contents 206.
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Lingfield, L.
Linklater of Butterstone, B.
Liverpool, E.
Loomba, L.
Lothian, M.
Luce, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Magan of Castletown, L.
Mancroft, L.
Maples, L.
Mar and Kellie, E.
Marks of Henley-on-Thames, L.
Marland, L.
Marlesford, L.
Mayhew of Twysden, L.
Miller of Chilthorne Domer, B.
Montrose, D.
Morris of Bolton, B.
Naseby, L.
Neville-Jones, B.
Newby, L.
Noakes, B.
Northbrook, L.
Northover, B.
O'Cathain, B.
Oppenheim-Barnes, B.
Palmer of Childs Hill, L.
Palumbo, L.
Perry of Southwark, B.
Popat, L.
Randerson, B.
Razzall, L.
Rees-Mogg, L.
Rennard, L.
Renton of Mount Harry, L.
Ribeiro, L.
Risby, L.
Roberts of Conwy, L.
Ryder of Wensum, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selkirk of Douglas, L.
Selsdon, L.
Shackleton of Belgravia, B.
Sharkey, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shipley, L.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Storey, L.
Stowell of Beeston, B.
Strasburger, L.
Strathclyde, L.
Sutherland of Houndwood, L.
Swinfen, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Tope, L.
Trefgarne, L.
Trenchard, V.
Trimble, L.
True, L.
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Tyler, L.
Verma, B. [Teller]
Vinson, L.
Wade of Chorlton, L.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Waverley, V.
Wei, L.
Wilcox, B.
Willis of Knaresborough, L.
Willoughby de Broke, L.
Younger of Leckie, V.
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Schedule 3 : Legal aid for legal persons
Schedule 4 : Transfer of employees and property etc of Legal Services Commission
Lord McNally: My Lords, with the implicit trust that the House has in me-I am glad to see the noble Lord, Lord Bach, nodding vigorously-I assure the House that these are minor technical amendments. They are really a belt-and-braces exercise to ensure that there are no gaps between the Bill coming into force in April 2013 and various contractual arrangements that we must have. They are minor technical amendments to cover an eventuality in which things did not quite knit together in passing from one Bill to another. I hope that the House will accept that assurance. I have written explaining in detail, and the letter is in the Library of the House. I beg to move.
125: Schedule 4, page 164, line 7, at end insert-
"(2) The Lord Chancellor may by regulations amend or otherwise modify the definition of "the transfer day" in sub-paragraph (1)."
Amendments 124 and 125 agreed.
Clause 38 : Consequential amendments
126: Clause 38, page 28, line 2, at end insert-
14 Mar 2012 : Column 293
"(2) Where the Lord Chancellor considers it appropriate as part of the arrangements for effecting the transition from the operation of Part 1 of the Access to Justice Act 1999 to the operation of this Part of this Act, the Lord Chancellor may by regulations make provision requiring or enabling prescribed 1999 Act services to be made available to individuals or other persons under this Part for a period specified or described in the regulations.
(3) In subsection (2) "1999 Act services" means services which, immediately before the day on which the first regulations under that subsection come into force, may be funded under Part 1 of the Access to Justice Act 1999.
(4) Where the Lord Chancellor considers it appropriate for the Legal Services Commission to cease to exist before this Part is brought fully into force, the Lord Chancellor may by regulations make provision for the purpose of requiring or enabling the Lord Chancellor and the Director, or persons authorised by the Lord Chancellor or the Director, to carry out LSC functions for a period specified or described in the regulations.
(5) In subsection (4) "LSC functions" means functions conferred or imposed on the Legal Services Commission by or under Part 1 of the Access to Justice Act 1999.
(6) Regulations under subsection (4) may not include provision requiring or enabling the Lord Chancellor-
(a) to take decisions about whether services should be funded in individual cases, or
(b) to give directions or guidance about the carrying out of functions under Part 1 of the Access to Justice Act 1999 in relation to individual cases.
(7) Regulations under this section-
(a) may amend, repeal, revoke or otherwise modify Part 1 of the Access to Justice Act 1999, this Part of this Act, any other Act and any instrument made under an Act;
(b) may describe a period, in particular, by reference to the coming into force of a provision of this Part of this Act or the repeal of a provision of Part 1 of the Access to Justice Act 1999.
(8) The requirement for regulations under this section to specify or describe a period does not prevent the making of further regulations under this section.
(9) The powers to make regulations under this section are without prejudice to the generality of the powers to make regulations under the other provisions of this Part and under section 138.
(10) In this section "Act" includes an Act or Measure of the National Assembly for Wales."
Clause 40 : Orders, regulations and directions
127: Clause 40, page 28, line 11, leave out "specified period" and insert "period specified or described in the order, regulations or direction"
128: Clause 40, page 28, line 28, leave out "subject to subsection (6)" and insert "unless it is an instrument described in subsection (6) or (9)"
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Lord McNally: My Lords, the amendment deals with matters on which I have written to colleagues; the letter is in the Library of the House. It is in response to the report of the Delegated Powers and Regulatory Reform Committee, which recommended that the procedures for regulations under Clause 10(1)(b) should be subject to the affirmative resolution procedure. These regulations will set out the merits criteria for civil legal aid and set out rules around the prospects of success and cost-to-benefit ratios. The Government accepted this recommendation subject to allowing for a provision as in the Access to Justice Act to allow changes to be made without delay where appropriate. I hope that noble Lords will see this series of amendments as putting those recommendations into place. I beg to move.
129: Clause 40, page 28, line 34, at end insert-
"( ) regulations under section 10(1)(b), other than regulations in respect of which the Lord Chancellor has made an urgency statement;
( ) regulations under section 12(9);"
131: Clause 40, page 28, line 41, at end insert-
"( ) regulations under section 38 that amend or repeal a provision of an Act (as defined in that section), other than regulations revoking such regulations or inserting or repealing provision previously repealed or inserted by such regulations;"
132: Clause 40, page 29, line 2, at end insert-
"(8) An urgency statement is a statement that the Lord Chancellor considers that it is desirable for the regulations to come into force without delay for the reasons given in the statement.
(9) Where a statutory instrument contains regulations under section 10(1)(b) in respect of which the Lord Chancellor has made an urgency statement-
(a) the regulations may not come into force before the instrument and the statement are laid before Parliament, and
(b) the regulations cease to have effect at the end of the period of 120 days beginning with the day on which the instrument is made unless the instrument is approved by a resolution of each House of Parliament before the end of that period.
(10) In reckoning the period of 120 days no account is to be taken of any time-
(a) during which Parliament is dissolved or prorogued, or
(b) during which both Houses are adjourned for more than 4 days.
(11) Where regulations cease to have effect under subsection (9) that does not affect-
(a) anything previously done in reliance on the regulations, or
(b) the making of further regulations."
Amendments 131 and 132 agreed.
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132A: Before Clause 43, insert the following new Clause-
"Qualified one-way cost-shifting and uplift in general damages
(1) Before making an order to commence sections 43, 45 or 46 the Lord Chancellor must-
(a) establish a one-way cost-shifting for civil litigation in accordance with this section; and
(b) increase the quantum of general damages for pain suffering and loss of amenity by 10% above the levels awarded immediately before this Part comes into force.
(2) A "one-way cost-shifting for civil litigation" means a regime that applies to a claimant regardless of means, where that person has entered into a funding arrangement by which he or she receives legal services to pursue proceedings against a defendant covered by insurance or self-insurance.
(3) Subject to subsection (4), the general rule that the court will order an unsuccessful claimant to pay the costs of a successful claimant shall not apply to a claimant within the regime.
(4) The court may apply the general rule where the court finds-
(a) the claim was fraudulent;
(b) the claim was so unreasonable that it was or could have been struck out on the grounds that it was frivolous, vexatious or an abuse of process; or
(c) in respect of a claim for damages, the cost consequences under Part 36 of the Civil Procedure Rules apply, save that the proportion of a defendant's costs payable by a claimant within the regime, whether fixed or assessed, shall be limited to 10% of the damages awarded to the claimant.
(5) In the event that a claimant within the regime discontinues his action, the general rule shall not apply, unless the court on application finds the action to have been fraudulent, frivolous or vexatious.
(6) In this section, a "funding arrangement" means an arrangement where the claimant has-
(a) entered into a conditional fee agreement or a collective conditional fee agreement which provides for a success fee within the meaning of section 58(2) of the Courts and Legal Services Act 1990; or
(b) taken out an insurance policy to which section 58C of the Courts and Legal Services Act 1990 (recovery of insurance premiums by way of costs) applies."
Lord Beecham: My Lords, once again I declare an interest as a non-paid consultant of a firm of solicitors in which I was a senior partner. Having slipped and fallen on my way to my office at Fielden House, I am tempted to declare an interest as a potential claimant against Westminster City Council. But even I would not have the effrontery to pursue such a claim. There may be no shortage of noble Lords who would proffer their services, although I am doubtful about that, but I may consult one of my clinical colleagues before the day is over.
Today we reach Part 2 of the Bill, a part that has received little scrutiny in either House or in the media. Yet it deals with matters of profound importance. The conditional fee agreements system, which replaced and supplemented some areas of legal aid, is as important in ensuring access to justice for people of moderate means and all people in certain areas of law not within the scope of legal aid as legal aid has been to the poorest. Without a robust and easily accessible civil justice system, victims of terrible wrongs-industrial
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Today's debate therefore matters to potentially millions of people in terms of securing access to justice and redress for harm. Part 2 is not driven by the need to reduce public expenditure, which is repeatedly cited as the justification for the drastic reductions in legal aid when we were discussing Part 1, and for which Part 1 now effectively provides. Part 2 instead seeks to implement some but, crucially, not all of the recommended reforms of the civil litigation system proposed by Lord Justice Jackson after an exhaustive review of it.
We heard in debates on Part 1 that the Government have studiously ignored the strong advice on retaining the scope of and eligibility for legal aid, but it does not stop there. They are also ignoring Lord Justice Jackson's recommendations for a modest increase of general damages to help successful claimants meet the cost of success fees and "after the event" insurance. Hitherto these have been met by defendants under the conditional fee system. Furthermore, they are not implementing an important recommendation to protect claimants with an arguable case from paying defendants' costs by introducing qualified one-way costs shifting, except in personal injury cases. Qualified one-way costs shifting would mean that an unsuccessful claimant would not be liable to pay the costs of a successful defendant.
In this new system the losers would be successful claimants who forfeit part of their damages to pay success fees and the cost of "after the event" insurance, and successful defendants and their insurers under the QOCS system. The losers also include people who would be deterred from bringing a claim by the cost of "after the event" insurance to cover their own disbursements. The winners will be unsuccessful claimants, whose liability for costs would be met by the defendants, and losing defendants. It might be thought a somewhat perverse set of outcomes.
It is as well to remember the rationale for introducing success fees in the first place. This was to encourage lawyers to take on riskier cases, some of which would be lost, at no cost to their clients; the lawyer is compensated for the risk by the success fees in cases which they win. The Lord Chancellor and some Members of your Lorships' House have suggested that the Government's proposals of limited success fees to be paid by successful claimants will lead to a competition between lawyers and drive down success fees. However, the corollary of that is that lawyers will be less disposed to take cases with a significant degree of risk so that the legally squeezed middle will find themselves denied access to justice in the same way that 650,000 people and their dependants will be denied access. For them, legal aid will no longer be available unless they have a high prospect of success.
We are proposing that QOCS, recommended by Lord Justice Jackson, should be embodied in the Bill and not be delegated as a subject for the Civil Procedure Rule Committee, a point made in Committee by the noble and learned Baroness, Lady Butler-Sloss. We agree
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Subsection (4) of my amendment identifies the circumstances in which liability for costs would not shift, including cases where a claimant fails to beat a reasonable offer made by the defendant. The second limb of the amendment deals with an uplift of damages by 10 per cent, proposed by Lord Justice Jackson, to help offset the cost to successful claimants of the new requirement to pay the success fee out of damages recovered-limited, it should be said, to 25 per cent of the damages. The cost of ATE insurance would no longer be recoverable from the defendant.
The Government appear to want to hand responsibility for such a decision to the courts. That is not acceptable. After all, it is some 13 years since the Law Commission called for general damages in injury cases to be increased by between a third and a half, and there has been very little movement in that direction. Three eminent cost judges who do not support the abolition of recoverable success fees and ATE premiums point out that 10 per cent would have been adequate to compensate for the additional amount that would be lost by a successful claimant. It is interesting that today's Guardian reports that the Master of the Rolls has written to the Ministry of Justice, saying that the 10 per cent uplift cannot be assured unless it is included in the Bill. What is the Minister's response to that? If he is confident that the Master of the Rolls is wrong, will he not accept that the provision needs to be in place before Clause 43 is implemented, if enacted? For our part, although we would have preferred a higher figure, we are prepared to accept the Jackson recommendation.
I have mentioned "after the event" insurance. It is not strictly the subject of the amendment but it is frequently prayed in aid by Ministers as the answer to the withdrawal of legal aid and for people above the financial limits in any event. However, I have received a letter from the Legal Expenses Insurance Group, which represents 60 per cent to 80 per cent of the "after the event" insurance market, which casts considerable doubt on ministerial assertions in this matter. Astonishingly, if it is correct, it would appear that,
- "the government has not consulted with or approached the independent providers with a view to discussing alternative and workable business models".
The Legal Expenses Insurance Group believes that,
- "unless some form of ATE premium recoverability is preserved, access to justice will be significantly affected, both for personal injury and non-personal injury risks. ATE insurers have made proposals during the consultation process to assist the government but the proposals have been ignored".
It goes on to say that without amendment-this is the crucial point-it would be completely unrealistic for the "after the event" market to respond positively to the intended reforms.
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Even with the system of QOCS, "after the event" insurance will still be needed to cover a claimant's own disbursements. According to another group of insurers, premiums could range from £900 for an employer's liability claim to £1,900 for a disease claim and as much as £11,000 for a contributory negligence claim. The figures apparently reflect average success rates and are based on these insurers' experience of unsuccessful claims. I call on the Minister to tell us what discussions have taken place over this critical issue, with whom and with what result, and what he has to say about this disturbing communication. This all demonstrates the need for the Jackson recommendation on QOCS to be implemented and, crucially, extended well beyond personal injury claims.
Having effectively demolished the legal aid system, Ministers are now, by their selective implementation of Jackson, threatening further to limit access to justice by undermining the conditional fee system. Their preference appears to lie with "before the event" insurance, which is beyond the reach of a significant proportion of the population and is, in itself, inherently uncertain, administered as it is by an industry second only to banking in the depths of public esteem.
Our amendment would ensure that the Government could implement the proposals to limit victims' access to justice contained in the Bill only if they implement the counterbalancing proposals that Lord Justice Jackson envisaged as promoting access to justice. Together, they aim to bring down the cost of litigation for all.
Might it be that some reforms could be adopted later than others? The answer to that question is no. To target one feature of the landscape will not work. That question and its answer are not mine; the question was posed and answered by Lord Justice Jackson himself in a recent edition of the New Law Journal. Therefore, the question that the Government must answer, should they choose to oppose this amendment, is: if they intend to implement both aspects of Lord Justice Jackson's plans, why do they oppose an amendment that would ensure that they are implemented simultaneously? In that event, how will the Government ensure that access to justice is continuously facilitated? I beg to move.
Lord Thomas of Gresford: My Lords, conditional fee agreements-no-win no-fee arrangements-were first permitted by the legislation introduced by the noble and learned Lord, Lord Mackay, in 1990. In the beginning they were limited to personal injury cases, insolvency cases and cases before the European Court of Human Rights. They were a radical breach with the principle that a lawyer ought not to have a financial interest in the outcome of a case, and drew at the time much opposition from Law Lords and the Law Commission. Your Lordships are familiar with the way this system now works. If the case is lost, the lawyer receives no fees and therefore he needs to win or to settle to earn a living. To recompense him for the risk of losing, he is paid a success fee when he wins, a percentage uplift of his standard fees, which in theory recompenses him for those completely unrelated cases he has taken on and lost. He recovers the standard fees, which are payable by the losing defendants, but the initial concept was that the winning claimant
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Under the normal costs-shifting rules, the losing claimant was open to pay the tax costs of the defendants. He was not protected, as he would have been under a legal aid certificate, from the costs that the defendants had incurred in defending the case. Under legal aid an order was very often made that a losing plaintiff-as he then was-should pay the costs of the defendant. However, it was almost never enforced, so effectively he was not at risk of paying the defendant's costs; but if he was, he could not pay. In answer to a query from Lord Hailsham, who was concerned that defendant insurers were left out of pocket even when they won, the noble and learned Lord, Lord Mackay, said:
"I understand that the Law Society is in the final stages of organising a form of insurance policy to protect clients against a costs order under a conditional fee agreement ... If that is implemented it will be a complete answer to the anxiety to which my noble and learned friend has just referred".-[Official Report, 18/7/94; col. 5.]
So "after the event" insurance was born to protect the losing claimant against the defendant's costs.
There are further matters to which I may refer later such as caps on damages, but in 1999 the noble and learned Lord, Lord Irvine of Lairg, as Lord Chancellor, extended conditional fee agreements to all civil proceedings except family law. However, the most radical change he introduced was that the success fee and the "after the event" insurance premium should then be paid by the losing defendant. In a debate on 23 July 1998 he resisted Lord Ackner's amendment that success fees should be capped. I said on that day:
"There has been no research as to whether solicitors overestimate the risk in order to justify an excessive uplift of the fees. There may be a doubling of fees now that 100 per cent. uplift is permitted. But the solicitor who is charging the fees, who determines that uplift, has to justify that uplift, assessing the risk himself. Is he doing it properly?".-[Official Report, 23/7/98; col. 1112.]
Even then, in 1998 when I was speaking, the evidence suggested that the cherry picking of risk-free cases was occurring. I was a teller for Lord Ackner on that amendment, which was, unfortunately, lost. I hope that your Lordships will forgive me for quoting my own speech but it indicates that I was involved at an early stage in the discussions that were taking place in 1999.
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We now know what has happened. Whipped up by dubious marketing forces and claims farmers, litigation in smaller claims has increased. Success fees are charged at 100 per cent in every case that goes to trial, not the most unlikely cases-which was the original reason for the introduction of such fees. That occurs even under a system of fixed uplifts that have been agreed with the insurance industry. The claimant does not care. If he loses, he does not pay even his lawyer's standard fees, only his disbursements for expert reports and court fees. If he wins, the defendants have been paying the standard fees and the uplift, or success fee. This is the point relating to the amendment of the noble Lord, Lord Beecham: after-the-event insurance
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Ministers and Members of this House have been buffeted from all sides over the past few weeks by the lobbying of interested parties-claimant solicitors, defendant solicitors, "after the event" insurers, the Bar, the Law Society, concerned organisations of lawyers and so on. What is the best way forward? I have tabled some amendments that I shall deal with at a later stage. However, perhaps I may say in response to the amendment that it is essential, as the noble Lord, Lord Beecham, said, that the introduction of one-way costs-shifting in CFA cases should go hand in hand with any alterations that there may be to conditional fee agreements. I latched on to the word that was used-I think it was by my noble friend Lord McNally-in Committee: that it should be "synchronised" with the CFAs.
The only issue I have with the noble Lord, Lord Beecham, is whether that provision needs to be in the Bill or whether we on these Benches can accept assurances from our Government that these issues will be dealt with by way of regulations. It is government policy that has been announced from the Front Bench that there will be one-way costs-shifting. It has been announced that that will happen in synchronisation with any alteration to the CFAs and that there will be a 10 per cent uplift in general damages to cover the changes that are being made to conditional fee agreements. All I have to say to the noble Lord, Lord Beecham, is that the amendment seems to be unnecessary in the light of government assurances that we on these Benches are bound to accept.
Lord Faulks: My Lords, I should like briefly to add to what the noble Lord, Lord Thomas, has said. I entirely endorse his comments. One of the problems with ATE premiums is that they are, in effect, unchallengeable because there is an assertion of what a case costs a particular litigant and, when it comes to an assessment, no alternative is put forward. Thereby, a defendant will always have to pay that.
My second and final point is that the noble and learned Lord, Lord Wallace, said in earlier debates that the Government were proposing to increase bereavement damages by 10 per cent, along with damages for pain, suffering and loss of amenity-which, of course, are general damages assessed by judges. I understand that this proposal was made because those damages are statutory and there would need to be a formal amendment or some other device. I would be happy to accept the assurance, which I understand to be coming, that QOCS is on the way and that there will be the appropriate method of bringing it in.
Baroness Kingsmill: My Lords, I should like to speak to the amendments in my name. I am encouraged to do so because, as a former personal injury lawyer, I have a deep commitment and engagement with accessibility of claimants to fair and appropriate redress when they are suffering personal injury.
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There has been a lot of discussion about the so-called compensation culture in our legal system, but I refute that: there is no such thing as a compensation culture. In fact, if you exclude motor claims, the total number of claims has fallen from 116,380 in 2001 to little over 100,000 in 2010-11. It is 15 per cent lower than that it was in 2001. The Motor Insurers' Bureau states that total claims provision and expenditure fell by 10 per cent compared to 2009. It is important that we all understand that the so-called compensation culture is a myth, a perception which is very far from reality.
That is why I have tabled some of the amendments. They are technical. It is possible that there have been oversights by the Government. I know that a 10 per cent increase in general damages has been discussed as a possibility. The Government have said that they will implement the 10 per cent increase by unenforceable means, such as requiring the judiciary to increase damages all round, but that is not enough. It is appropriate and important that that should be in the Bill. I should like to hear the Minister's comments on that. When we are talking about something as important as access to justice, people should not be burdened with additional uncertainty about what the costs will be.
I speak also to Amendment 141ZC, which would protect claimants against excessive costs in the event that they lose their claim. It is fully in the spirit of Lord Justice Jackson's recommendations. As other speakers have said, the amendment implements Lord Jackson's proposals for qualified one-way costs-shifting by including them in the Bill. That seems a very sensible proposal. It means that claimants would not be scared off by the risk of astronomic costs in the event that they lose. That will encourage access to justice. There is nothing quite as scary for claimants as the feeling, when there is uncertainty about their case, that they will be stuck with a very large bill at the end of it. I would like that to be stated clearly in the Bill and I join noble colleagues in asking the Minister to consider the amendments.
Lord Mackay of Clashfern: What is the justification for the costs-shifting system in the case where a person has been able to get a funding arrangement? If a person decides to take his case without a funding arrangement, why should he not have the benefit of the costs-shifting system just as well as the other? Why should the fact that someone has managed to agree with his solicitor be an important point as between the claimant and the defendant? I have said before, and I repeat briefly, that I have heard many expositions from the late Lord Simon of Glaisdale about the unfairness of the legal aid provision in that it deprived successful defendants of their right to recover their costs. This is an even more difficult situation. This is nothing to do with the state and the state's grant of legal aid but is a question as between the client and solicitor. The client may well decide, "I don't want to pay this success fee in any event. I am prepared to take my case and if I lose, why should I have to pay the costs of the other side when my colleague, who decides to pay a big success fee to the solicitor, is going to be protected?".
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The Advocate-General for Scotland (Lord Wallace of Tankerness): My Lords, we have, as the noble Lord, Lord Beecham, indicated, moved on to Part 2, but I open by saying that on my walk from Dover House to the House this afternoon, I, too, fell. I went over on my ankle on what I think was a crack in the pavement, so I have every sympathy with him and I trust that he will need neither medical nor legal assistance as a result. Indeed, I hope I will not either.
Part 2 implements the Government's reforms to civil litigation funding and costs following, as has been discussed already in this debate, Lord Justice Jackson's recommendations. These reforms have a number of important components. Abolishing the recoverability of success fees and "after the event", or ATE, insurance is key to the Government's aim of returning a sense of proportion and fairness to the current regime. My noble friend Lord Thomas of Gresford talked about premiums going sky-high. I will return to these issues in more detail in the course of responding to specific amendments.
As part of these reforms, the Government will introduce QOCS-qualified one-way costs shifting-for personal injury cases. This is an area of law where most claimants are individuals, acting under CFAs, and most defendants are insurers or other well-resourced organisations which can well afford to defend themselves. My noble and learned friend Lord Mackay of Clashfern asked a very specific question, to which I hope that by the time I conclude my remarks I can give him an answer, about those who are funding themselves and not acting under a CFA. The Government agree with Lord Justice Jackson that QOCS in these cases is the right way forward and strikes a fair balance between claimants and defendants. In particular, it means that in many cases claimants will no longer have to take out expensive ATE insurance.
On ATE insurance, the noble Lord, Lord Beecham, asked what engagement there had been with the insurance industry on these matters. I am advised that insurance both "after the event" and "before the event" can certainly help. It is self-evident that it could help with legal costs. The "after the event" insurance market has developed alongside the current CFA regime and, of course, there is substantial financial interest in seeing that regime continue. It is not surprising, therefore, that the ATE industry's public stance is to lobby hard against the proposals that we are bringing forward. Ministry of Justice Ministers and officials have met a significant number of different insurers as the proposals have been developed since Lord Justice Jackson's recommendations were published early in 2010. Although we acknowledge that some ATE insurance providers have said publicly that they will pull out of the ATE market if the changes go ahead, others have indicated that they will look positively at developing products which meet new market needs as the details of these proposals are finalised. We are also introducing a 10 per cent increase in damages for non-pecuniary loss, such as pain, suffering and loss of amenity, which is being taken forward by the senior judiciary.
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I accept that the 10 per cent uplift in general damages could be achieved through primary legislation. It is something that we considered and discussed with the
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"Method of achieving the adjustment. The Consultation Paper states at para 97: 'adjustments to the level of general damages have hitherto been regarded as a judicial issue for the courts rather than the Government'. I agree and have not included this item in the list of reforms requiring legislation. It will be recalled that in so far as the Law Commission's recommendations for increasing personal injury damages were accepted, those increases were implemented by means of a guideline judgment handed down by a five member Court of Appeal, presided over by the Master of the Rolls: see Heil v Rankin ... The same procedure could be adopted for implementing any future increase in the level of general damages".
We also want to ensure that the increase in the level of damages does not, unlike the proposal in Amendment 136E, apply simply to personal injury but, where appropriate, to general damages for torts, of which pain, suffering and loss of amenity are examples. It is not practical to identify all of these in legislation and any formulation that is designed to be a catch-all provision runs the risk of excluding some.
My noble friend Lord Faulks referred to the increase in bereavement damages under the Fatal Accidents Act. As he said, those damages are statutory and fall to be increased under the statutory process, whereas the general damages for non-pecuniary loss are different. However, I repeat what I said in an earlier debate-we are minded to increase these as well.
QOCS and the 10 per cent uplift in damages do not need to be implemented through primary legislation and so have not been included in the Bill. We believe that the same legal effect will be achieved through other means. I know that this is a matter of considerable importance not only to my noble friend Lord Thomas, who has raised it with me on a number of occasions, but to the House in general. We certainly intend to introduce QOCS at the same time as the relevant provisions in Part 2 are implemented in April 2013.
The noble Baroness, Lady Kingsmill, and the noble Lord, Lord Beecham, have tabled amendments that would seek to put QOCS in the Bill, rather than including it in the Civil Procedure Rules. Amendment 132A would also extend QOCS to areas of litigation other than personal injury. In Committee, I spoke about the reasons for including QOCS in the rules rather than in primary legislation. The Government
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On the extension of QOCS to different types of cases, the Government believe that Amendment 132A is too broad and that it leaves itself open to possibly unintended interpretation. It is not difficult to imagine the potential consequences if the amendment were accepted. Perhaps I may give two examples, because I think that the circumstances in which it is proposed that QOCS might apply would be in cases of breach of contract. We could have a situation in which a premiership footballer pursued a claim for contractual damages at no financial risk, or a builder could sue an insured homeowner over a building contract at no financial risk to what might be one of the country's biggest building companies. We would be powerless to amend the rules to allow for some degree of financial risk for these claimants in such circumstances. We believe that Amendment 132A could become a speculative claimant's charter, and it goes against the principles of the reforms in Part 2, which are intended to reduce the scope for speculative litigation.
The amendment would also restrict the future development of QOCS. Currently, any extension of QOCS to other areas of litigation beyond personal injury cases may be achieved through changes to the rules. Being too restrictive in primary legislation could restrict the scope for the expansion of QOCS in the rules. For example, while it may not be appropriate to have an initial financial means test for QOCS in personal injury cases, this is unlikely to be the case in, for example, defamation or privacy cases. To list in statute different types of cases where QOCS should apply would mean that any future expansion might also need to be effected through primary legislation, which could be a lengthy and complex process.
The noble Lord, Lord Beecham, asked about the financial test for QOCS. We agree that, for personal injury cases, there should not be an initial financial means test. We are in discussion about whether there should be a financial contribution, although we recognise the arguments that there should not be. The Civil Justice Council, chaired by the Master of the Rolls, is helping the department on the way forward. We are in full consultation with stakeholders and very much appreciate the considerable support of the Master of the Rolls and the Civil Justice Council.
My noble and learned friend Lord Mackay of Clashfern made a point about the applicability of QOCS in circumstances where a claimant raises his or her own funding. I recognise that it is fair to point out that there will be cases where someone cannot or is unwilling to obtain a conditional fee agreement. We have said that QOCS will apply in all personal injury cases, however funded. Although typically they are run under CFAs, different considerations may apply in other cases that we would need to consider carefully if the types of cases covered by QOCS were to be extended.
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As I indicated, we do not believe that it is appropriate to put these provisions in the Bill. There is a precedent for the 10 per cent uplift being taken forward by the senior judiciary, and we would look to that happening in this case. I also give an assurance that QOCS will be brought in at the same time as Part 2 of the Bill, so the flexibility that will go along with having it in the rules will certainly outweigh the advantages of having it in primary legislation. We also believe that the extent of the noble Lord's amendment is far too wide. For these reasons, I invite him to withdraw it.
Lord Ramsbotham: My Lords, before the noble and learned Lord sits down, perhaps I may ask whether he has considered the position of two groups of families who may be considering making civil claims against the Government following inquests. I refer to the families of members of the Armed Forces and of those who die in either police custody or prison.
Lord Wallace of Tankerness: My Lords, this may not be quite what the noble Lord was thinking about, but in some cases, as my noble friend Lord Faulks indicated, if there is a question of a claim following a bereavement, we have indicated that we intend that there should be an uplift in these cases.
On the question of why we are not introducing QOCS for judicial review claims-this may be the circumstance to which the noble Lord was referring-the responses to the consultation indicated that conditional fee agreements were less commonly used outside the area of personal injury and were not frequently used in judicial review proceedings.
Lord Thomas of Gresford: I hope my noble and learned friend will forgive me for mentioning that I have tabled an amendment dealing with precisely that point. It is for debate at a later time and proposes that QOCS should apply in cases where, for example, there is a death in custody-and to other matters referred to by the noble Lord, Lord Ramsbotham.
Lord Wallace of Tankerness: I am grateful to my noble friend. Debate on his amendment might allow a better exploration of the important point raised by the noble Lord, Lord Ramsbotham.
Lord Beecham: My Lords, that exchange was quite useful because it illustrated the argument against what the noble and learned Lord seeks to persuade us to agree to; namely, the proposition that these are matters for the Rules Committee. The noble Lord, Lord Thomas, has tabled a sensible amendment that covers the situation raised by the noble Lord, Lord Ramsbotham. However, under the Bill these will not be matters for Parliament. The scope of access to justice will not be in the Bill and will not be the subject of legislation. The matter will be in the hands of the Rules Committee. That is a delegation of responsibility too far in a very significant area of public policy. Therefore, I cannot accept the arguments of the noble and learned Lord.
The noble Lord, Lord Thomas, has tabled amendments that we will debate later. I say in advance that I have sympathy with some of them, including the one to
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In respect of one or two other matters, the Heil v Rankin decision is based on a particular level of damages. It is not a binding provision, applicable across the piece, as is suggested in terms of the 10 per cent uplift. It seems to us, and not only to us, that it is imperative, given that we are now dealing with the matter of principle of access to justice via this particular method, that the legislation should encompass the range of issues that arise. It can do so in the form of a starting position and provide for additional regulations to be approved by Parliament later. That would have been an option. I would like to think it might still be an option but I am not getting much encouragement from the noble and learned Lord. I cannot accept that the Government's position is satisfactory. I am grateful up to a point for an indication that one object of these amendments will take place-that is to say that change will be synchronised. I wish that the noble and learned Lord and I had not synchronised our stumbles today. But in terms of legislation, that is a welcome assurance. Nevertheless, there are significant points of principle here and in the circumstances I wish to test the opinion of the House.
5.25 pm
Contents 189; Not-Contents 237.
Adams of Craigielea, B.
Adebowale, L.
Adonis, L.
Ahmed, L.
Alton of Liverpool, L.
Anderson of Swansea, L.
Andrews, B.
Armstrong of Hill Top, B.
Bach, L.
Bakewell, B.
Barnett, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Berkeley, L.
Bilston, L.
Blackstone, B.
Blood, B.
Borrie, L.
Bradley, L.
Bragg, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Carter of Coles, L.
Clancarty, E.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corston, B.
Coussins, B.
Cox, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Dean of Thornton-le-Fylde, B.
Donaghy, B.
Donoughue, L.
Drake, B.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Evans of Watford, L.
Falconer of Thoroton, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Ford, B.
Foster of Bishop Auckland, L.
14 Mar 2012 : Column 307
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Gilbert, L.
Golding, B.
Gould of Potternewton, B.
Grantchester, L.
Grenfell, L.
Grey-Thompson, B.
Griffiths of Burry Port, L.
Grocott, L.
Hall of Birkenhead, L.
Hanworth, V.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
Kennedy of Southwark, L.
King of Bow, B.
King of West Bromwich, L.
Kingsmill, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Knight of Weymouth, L.
Layard, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lister of Burtersett, B.
Low of Dalston, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mandelson, L.
Martin of Springburn, L.
Masham of Ilton, B.
Massey of Darwen, B.
Maxton, L.
Mitchell, L.
Monks, L.
Morgan, L.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Manchester, L.
Myners, L.
Newcastle, Bp.
Noon, L.
Nye, B.
O'Loan, B.
O'Neill of Clackmannan, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prescott, L.
Prosser, B.
Puttnam, L.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Robertson of Port Ellen, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Saltoun of Abernethy, Ly.
Sandwich, E.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sherlock, B.
Simon, V.
Singh of Wimbledon, L.
Smith of Basildon, B.
Smith of Finsbury, L.
Smith of Gilmorehill, B.
Snape, L.
Soley, L.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Turnberg, L.
Turner of Camden, B.
Wall of New Barnet, B.
Walton of Detchant, L.
Warner, L.
Warnock, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wigley, L.
Williams of Elvel, L.
Woolmer of Leeds, L.
Worthington, B.
Young of Norwood Green, L.
Young of Old Scone, B.
Aberdare, L.
Addington, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Allan of Hallam, L.
Anelay of St Johns, B. [Teller]
Armstrong of Ilminster, L.
Arran, E.
Ashton of Hyde, L.
Astor, V.
Astor of Hever, L.
Attlee, E.
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Barker, B.
Bates, L.
Benjamin, B.
Berridge, B.
Best, L.
Black of Brentwood, L.
Bonham-Carter of Yarnbury, B.
Boothroyd, B.
Bottomley of Nettlestone, B.
Bowness, L.
Bradshaw, L.
Bridgeman, V.
Brinton, B.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Browning, B.
Burnett, L.
Buscombe, B.
Butler-Sloss, B.
Byford, B.
Caithness, E.
Cathcart, E.
Chalker of Wallasey, B.
Chidgey, L.
Clement-Jones, L.
Cobbold, L.
Colville of Culross, V.
Colwyn, L.
Cope of Berkeley, L.
Cormack, L.
Cotter, L.
Courtown, E.
Craig of Radley, L.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
Dannatt, L.
De Mauley, L.
Dear, L.
Deben, L.
Dholakia, L.
Dixon-Smith, L.
Dobbs, L.
Doocey, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Emerton, B.
Empey, L.
Erroll, E.
Falkner of Margravine, B.
Faulks, L.
Feldman, L.
Feldman of Elstree, L.
Fellowes, L.
Fellowes of West Stafford, L.
Fink, L.
Finlay of Llandaff, B.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Freeman, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Geddes, L.
German, L.
Glasgow, E.
Glenarthur, L.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Grade of Yarmouth, L.
Greenway, L.
Hamwee, B.
Hanham, B.
Hannay of Chiswick, L.
Harries of Pentregarth, L.
Harris of Peckham, L.
Henley, L.
Heyhoe Flint, B.
Higgins, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Home, E.
Howarth of Breckland, B.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Hussain, L.
Hussein-Ece, B.
Inglewood, L.
James of Blackheath, L.
Jenkin of Kennington, B.
Jenkin of Roding, L.
Jolly, B.
Jones of Birmingham, L.
Jopling, L.
Kirkham, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Kramer, B.
Laird, L.
Laming, L.
Lawson of Blaby, L.
Lee of Trafford, L.
Lester of Herne Hill, L.
Lindsay, E.
Lingfield, L.
Linklater of Butterstone, B.
Listowel, E.
Lloyd of Berwick, L.
Loomba, L.
Luce, L.
Luke, L.
Lyell, L.
Lytton, E.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Magan of Castletown, L.
Maginnis of Drumglass, L.
Mancroft, L.
Maples, L.
Mar and Kellie, E.
Marks of Henley-on-Thames, L.
Marland, L.
Marlesford, L.
Mayhew of Twysden, L.
Meacher, B.
Methuen, L.
Miller of Chilthorne Domer, B.
Montrose, D.
Morris of Bolton, B.
Morrow, L.
Neill of Bladen, L.
Neville-Jones, B.
Newby, L.
Newton of Braintree, L.
Noakes, B.
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Northover, B.
Norton of Louth, L.
O'Cathain, B.
O'Neill of Bengarve, B.
Oppenheim-Barnes, B.
Palmer, L.
Palmer of Childs Hill, L.
Palumbo, L.
Pannick, L.
Patten, L.
Phillips of Sudbury, L.
Popat, L.
Ramsbotham, L.
Randerson, B.
Razzall, L.
Rennard, L.
Renton of Mount Harry, L.
Ribeiro, L.
Risby, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rowe-Beddoe, L.
Ryder of Wensum, L.
St John of Bletso, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selkirk of Douglas, L.
Selsdon, L.
Shackleton of Belgravia, B.
Sharkey, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shipley, L.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Storey, L.
Stowell of Beeston, B.
Strasburger, L.
Sutherland of Houndwood, L.
Swinfen, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tope, L.
Trefgarne, L.
Trenchard, V.
True, L.
Trumpington, B.
Tyler, L.
Verma, B.
Vinson, L.
Wade of Chorlton, L.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Wasserman, L.
Waverley, V.
Wei, L.
Wilcox, B.
Williamson of Horton, L.
Woolf, L.
Younger of Leckie, V.
5.37 pm
132AA: Before Clause 43, insert the following new Clause-
"Exception in respiratory (industrial disease or illness) cases
The changes made by sections 43, 45 and 46 of this Act do not apply in relation to proceedings which include a claim for damages for respiratory disease or illness (whether or not resulting in death) arising from industrial exposure to harmful substance."
Lord Alton of Liverpool: My Lords, in speaking to Amendment 132AA, I shall speak also to Amendments 136, 141 and 142, which relate to Clauses 43, 45 and 46. In speaking to them I return to the issue of mesothelioma and its victims, the question that I raised on 22 November at Second Reading, at some length in Committee on 30 January, and during Oral Questions on 29 February. At the outset, may I thank the Minister for his courtesy in meeting the noble Lord, Lord Avebury, and myself yesterday, and for listening so carefully to the arguments that we advanced to him?
Anyone who has ever contested a parliamentary by-election knows that it is the most special way of entering Parliament. It is something that I share with the noble Lord, Lord Avebury, and it is 50 years to the day since the noble Lord, Lord Avebury, entered the political lexicon as Orpington Man. Over the many years that have passed since then I have always found
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Some 18 Members of your Lordships' House are signatories to a letter supporting this amendment. They include the noble Lords, Lord Bach, Lord Beecham, Lord Brennan, Lord Elystan-Morgan, Lord McColl, Lord McFall, Lord Monks, Lord Newton, and Lord Wigley, the right reverend Prelate the Bishop of Blackburn, my noble and learned friend Lady Butler-Sloss, and my noble friends Lady Finlay, Lord Martin, Lord Patel and Lord Walton of Detchant. I give those names to your Lordships' House to demonstrate the breadth of support for this amendment from all sides and they include distinguished lawyers, distinguished medics and representatives of working people's interests.
Noble Lords may also have seen a letter which appeared in the Times on 3 March signed by several Members of this House. In conclusion, it states that,
- "asbestos victims should not, and financially cannot, subsidise other claimants' access to justice, nor can they afford to defend test cases run by rich insurers".
In a nutshell, that is the principle we are debating today. We must decide whether it can be right that asbestos victims should be required to surrender as much as 25 per cent of their damages for pain and suffering to pay for legal costs. Let me repeat, the clauses we are now debating required terminally ill asbestos victims who succeed in a claim for compensation against negligent, guilty employers to pay up to 25 per cent of their damages for pain and suffering in legal costs associated with the conditional fee agreement system, the CFA.
Let us also be clear about what we are not debating. This is the Legal Aid, Sentencing and Punishment of Offenders Bill. Into which of those categories contained in the Title do people suffering from mesothelioma fall? As the Bill aims to restrict legal aid and to curtail what has been described as a compensation culture, it is worth nailing two myths at the outset. First, these mesothelioma cases have not been legally aided and are not legally aided now. They have not been legally aided for some 12 years. Secondly, they are not part of the compensation culture. I know that the Minister concurs with those propositions.
Mesothelioma cases receive no legal aid. They are not fraudulent cases and do not involve fakery. On that much we can be agreed. As one victim put it to me, "I can understand the need for legislation to prevent the trivial and no-win fee claims but how can the claim of a mesothelioma sufferer be 'lumped in' with 'ambulance chasers'? Mesothelioma has only one outcome and that is loss of life. It is not trivial, and patients need help not hindrance".
Currently, solicitors are paid a success fee by the losing defendant to fund very difficult but meritorious cases. This replaces the funding which was available under legal aid. One claimant will have to pay for another claimant's chance to gain access to justice if we agree the provisions in the Bill. Important test cases which determine the right of mesothelioma sufferers to claim would never have been run under the new prescription. Those who tabled this amendment argue
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What else do we agree about? We are all agreed that this is a terrible disease. The Minister movingly described to us in Committee how a member of his own family had their life cruelly ended by this fatal disease. We are all agreed that once diagnosed the victim's life is drastically curtailed. Many doctors say that the average lifespan from diagnosis to death is likely to be around nine months to one year. Some 30,000 people have died to date and as many as 60,000, according to official figures, could die in the future.
What have been the lines of disagreement? The Government have argued that conditional fee agreements, as currently constructed, mean that win or lose a claimant risks nothing but that has encouraged frivolous and fraudulent claims to flourish. Yet those who tabled this amendment argue-as I have said, the Government have said that they agree-that the claims of dying asbestos victims can never be frivolous or fraudulent. So who is responsible for exploiting CFAs? The Government and the insurance industry are quite clear: road traffic accident claims, which make up over 70 per cent of all personal injury claims, particularly whiplash claims, are to blame. In total, whiplash claims add up to a staggering £2 billion annually. We argue that RTA problems will not be solved by punishing asbestos victims. As one victim explained to me:
"My life has been turned upside down, and I really didn't want to think about anything except spending my last days with my family. I worked all my life and paid all my N.I. and taxes, so this seems unfair".
That is expressing it with commendable understatement.
5.45 pm
Those who tabled this amendment argue that the victims suffer enough. It is iniquitous that they should lose their modest compensation to reduce solicitors' costs. Those costs can be reduced directly and access to justice preserved, but not by scapegoating asbestos victims. Many sufferers are so defeated by their illness that they never make a claim as things stand now.
The Government additionally argue that claimants must take some of the risk and have an investment in a claim-"skin in the game". This in my view is an ugly, awful phrase and it is telling. If you consider that mesothelioma sufferers have given their health and their lives because unknowingly they took unwarranted and fatal risks, it is obscene that they of all people should have some "skin in the game". A contributor to a family asbestos forum said:
"The whole point of making a claim is to make a guilty party pay attention and take responsibility. As the 'victim', why should we 'pay' again? Is our life not enough?".
This is not like a win on the lottery or a windfall, it is about restoring victims to something like the position they were in before diagnosis, and making proper provision for them and for their families. Making mesothelioma sufferers pay legal costs will not result in greater competition, thus driving costs down, or give mesothelioma sufferers "skin in the game". Instead, it will inhibit claims, thus adversely affecting access to justice.
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Another perverse outcome will be that challenges to insurers' appeals to limit liability for mesothelioma claims will be unaffordable, as will taking a case to trial, a point raised by me and by the right reverend Prelate the Bishop of Liverpool during our recent exchange at Question Time with the Minister. The perverse effect of making claimants responsible for success fees will be to make one claimant pay for another's chance of taking a claim-an extraordinary prospect for mesothelioma sufferers.
Let me also say a word about "after the event" insurance. It has been said that qualified one-way costs-shifting will resolve the issue of claimants paying ATE insurance. Leaving aside the punitive qualifications, that is true, but the Government failed to add that mesothelioma sufferers will face heavy disbursements in the form of court costs, medical reports and so on, which are not covered by QOCS. If ATE insurance is available for disbursements, the premiums are expected to be about two-thirds of the present premiums. These fall to the claimant. If the punitive qualifications regarding the behaviour of the parties and their financial status are unchallenged, claimants will not risk their savings and perhaps their houses to make a claim.
Let me end by returning to the Government's best argument, that changing the law will turn claimants into a rod for the back of recalcitrant lawyers. Let us think about that. What dying man or woman is going to do this? Would you or I? It is simply fallacious to argue that making claimants pay costs will mean that they will shop around for the best deal. Dying asbestos victims have already invested enough, and given their pitiable condition, it is risible to suggest that they will shop around. Terminally ill and dying people will simply not have the energy, and they have other things on their mind than looking for a lawyer to give them a better rate.
Whatever else now divides the House on how the increased costs of litigation should be resolved, surely we can see the force of the practical and the moral case to exempt people who are dying of mesothelioma from the strictures and provisions of the Bill. Once again, I am indebted to your Lordships for the widespread support for these amendments and to the Minister for the courtesy he extended yesterday in listening to the arguments. I hope that the amendments will commend themselves to a majority in your Lordships' House and I beg to move.
Lord Avebury: My Lords, I congratulate the noble Lord, Lord Alton, on the effectiveness and the tenacity with which he has pursued the issue of mesothelioma victims, and I am also grateful to him for his kind reference to my 50th anniversary, which falls today. I also join him in the thanks he has expressed to my friend Lord McNally for the sympathetic and careful hearing he gave us yesterday to discuss these issues.
The horrors associated with these diseases go back four decades and more, when it first became known that the ingestion of tiny amounts of asbestos could lead to painful and invariably fatal diseases. Even then, it was in the teeth of opposition from the manufacturers of asbestos products that health and safety measures were finally enacted to remove the use of this deadly product from the workplace and pave the way for the existing health and safety at work legislation.
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When we discussed these amendments in Committee, the first reaction of my noble friend the Minister was to classify them as yet another in the series of amendments calling for an exception to some aspects of the Bill's architecture. As my noble friend Lord Thomas of Gresford pointed out, Lord Justice Jackson was not looking for an architecture that involved everything but for what was right in particular categories of case, which must be the right way to proceed.
As we know, this is not an area of the Bill where there is public money to be saved, other than in cases where public authorities are defendants. What we are arguing about is whether some of the costs of this very special group of victims of mesothelioma disease in CFA cases should be borne by the claimant rather than the defendant or the insurers. Nor is this one of the areas of the Bill on which there has been lobbying by lawyers or insurance companies, as the noble Lord, Lord Alton, said.
Furthermore, it is not an area in which, as my noble friend the Minister put it, we are trying to create a structure that squeezes out an inflationary element of the process. Between 2007 and 2011, there was a 6.6 per cent reduction in employer liability cases, of which most respiratory claims are a subset, and it is expected that mesothelioma claims will peak in 2015, or perhaps a little later, because of the elimination years ago of asbestos from the working environment. During that same period, 2007 to 2011, road traffic accidents increased by 43 per cent to nearly 800,000 cases. That is where there may well be the abuse referred to by my noble friend. Unscrupulous claimants may be able to fake road traffic injuries, but not mesothelioma or asbestosis. It is impossible for the victims of these horrible diseases to launch a frivolous or fraudulent claim, and it is unconscionable that people on their deathbeds should be mulcted of thousands of pounds out of the damages that they are awarded by the courts.
As matters stand, the claimant pays nothing if he loses. He takes out "after the event" insurance which will pay the defendant's costs as well as the ATE premium if the case is lost, and the claimant's solicitor bears his own costs if he loses under the no-win, no-fee arrangement. If the claimant wins the case, the defendant pays the claimant's solicitor's base costs plus disbursements, including medical reports, court fees et cetera, plus the success fee and the ATE insurance premium; that is, all the costs. So, with ATE insurance, the claimant pays no costs, win or lose.
Under QOCS, which is not in the Bill, as we have heard, but is due to be implemented by order-we are glad to hear that it will be coterminous with the introduction of this part of the Bill-the defendant again pays the claimant's solicitor's base costs whether the claimant wins or loses. ATE insurance will not have to be taken out to cover the contingent liability. Whether a market will develop in this area remains to be seen, as the noble Lord, Lord Alton, said, but assuming that it does, we are advised that the premium could amount to at least two-thirds of the current ATE premium in a similar case.
14 Mar 2012 : Column 314
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