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The noble and learned Baroness, Lady Butler-Sloss, outlined her wish list. I think that she understands why the Government are unable to accept at the moment that legal aid should be available for these prevention matters. We find it difficult to see how the orders covered would be used in practice for prevention of removals in situations of urgency for which a case for funding is made, rather than for securing return after removal. If a child was in the process of being abducted and the situation was an emergency, legal aid would be available for the purpose of securing their return. It is more difficult to see why legal aid should be available to fund applications that are more contingent in nature, where there is no imminent danger of abduction or associated emergency but the measure is being sought on a precautionary basis. Very often those cases will be the stuff of general private family law proceedings, and we see the risk of such orders being sought for the benefit of funding in what are general disputes over where a child is to live and with whom-which, as we made clear in other areas, we will not fund.
Having said that, I welcome the co-operation that there has been, and very much appreciate the comments made by the noble and learned Baroness about the officials who worked on this and productively engaged with her and with those who advised her. I hope that what we brought forward meets the concerns raised. I have no doubt that we will be reminded of the wish list
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"( ) an order under section 34 of that Act for the child's return;"
"(1A) Civil legal services provided to an individual in relation to the following orders and applications where the individual is seeking to secure the return of a related child who has been unlawfully removed to a place in the United Kingdom-
(a) a prohibited steps order or specific issue order (as defined in section 8(1) of the Children Act 1989);
(b) an application under section 27 of the Family Law Act 1986 for registration of an order relating to the child;
(c) an order under section 33 of that Act for disclosure of the child's whereabouts;
(d) an order under section 34 of that Act for the child's return."
(a) there has been a conclusive determination that the individual is a victim of trafficking in human beings, or
(b) there are reasonable grounds to believe that the individual is such a victim and there has not been a conclusive determination that the individual is not such a victim.
(2) Civil legal services provided in relation to a claim under employment law arising in connection with the exploitation of an individual who is a victim of trafficking in human beings, but only where-
(a) the services are provided to the individual, or
(b) the individual has died and the services are provided to the individual's personal representative.
(3) Civil legal services provided in relation to a claim for damages arising in connection with the trafficking or exploitation of an individual who is a victim of trafficking in human beings, but only where-
(a) the services are provided to the individual, or
(b) the individual has died and the services are provided to the individual's personal representative.
(a) the exclusions in Part 2 of this Schedule, with the exception of paragraphs 1, 2, 3, 4, 5, 6 and 8 of that Part, and
(b) the exclusion in Part 3 of this Schedule.
(6) For the purposes of sub-paragraph (1)(b) there are reasonable grounds to believe that an individual is a victim of trafficking in human beings if a competent authority has determined for the purposes of Article 10 of the Trafficking Convention (identification of victims) that there are such grounds.
(7) For the purposes of sub-paragraph (1) there is a conclusive determination that an individual is or is not a victim of trafficking in human beings when, on completion of the identification process required by Article 10 of the Trafficking Convention, a competent authority concludes that the individual is or is not such a victim.
"employment law" means an enactment or rule of law relating to employment, including in particular an enactment or rule of law conferring powers or imposing duties on employers, conferring rights on employees or otherwise regulating the relations between employers and employees;
(a) a person responsible for administering the individual's estate under the law of England and Wales, Scotland or Northern Ireland, or
(b) a person who, under the law of another country or territory, has functions equivalent to those of administering the individual's estate;
Lord Wallace of Tankerness: My Lords, Amendments 15 and 17 bring into the scope of legal aid cases in which the victims of human trafficking seek damages in either the civil courts or an employment tribunal. They would also provide legal aid to this group for immigration advice. The Government have always anticipated that legal aid would be available under the exceptional funding scheme for these damages claims, where such cases met the test for exceptional funding under what is now Clause 10 but which we came to know as Clause 9 during the earlier passage of the Bill. However, we listened to the concerns raised by noble Lords about whether in practice this would always be appropriate. I am pleased to say that we have responded positively to the concerns, and not least to the case made at Second Reading, in Committee and on Report by the noble and learned Baroness, Lady Butler-Sloss.
The House should be aware that paragraph 40 of Part 1 of Schedule 1 already provides for legal aid to be granted to victims of sexual offences to bring damages claims in relation to the offences. People who have been trafficked for the purposes of sexual exploitation and who wish to claim damages through the civil courts will already be able to get legal aid.
As I indicated on Report, we also considered whether legal aid should be available for the immigration aspects of trafficking. We listened to and accepted the arguments on this, given the particular vulnerabilities of this group of people. We plan to set out in regulations further provision on when it is appropriate for a victim of human trafficking to qualify for civil legal aid for immigration matters. Our intention is not to restrict numbers, and we will ensure that all victims for whom it is appropriate to provide advice will receive it. However, we cannot have a completely open-ended commitment for all immigration matters; otherwise, it is conceivable that victims of trafficking who, for example, apply for a student visa 15 years down the line will continue to qualify for legal aid for no good reason. The regulations will limit eligibility to a period relevant to the experience of being trafficked. We are discussing the most appropriate period of time, but we intend that it will be no less than an individual's discretionary leave to remain, which can be up to three years.
I am pleased that we have been able to have a constructive engagement and hope that these amendments address the concerns that have been raised. This amendment includes legal aid for immigration advice for victims of trafficking. I beg to move.
Baroness Butler-Sloss: As the co-chairman of the All-Party Group on the Trafficking of Women and Children, I again congratulate the Government and express my gratitude not only to Ministers in this House and in another place but to the government lawyers and officials. The people who were so helpful on the previous set of amendments have been equally helpful on this, and I and those behind me are enormously obliged to them for the care with which they have gone through this and their ability to recognise, listen to, take on board and accept the points that have been made which are now reflected in this excellent amendment.
I wonder whether I might again produce a wish list for consideration at some later stage. There are four points that I would like to make. First, there are those who have been trafficked who do not know that they have been trafficked and will need advice about whether they have been trafficked. Secondly, there are implications for referral to the national referral mechanism. That point was discussed with the government lawyers. I understand why Ministers do not want to help those who do not refer themselves, but there will be a group or groups of people who will fall through the net. Thirdly, there are those who do not know whether they may have an entitlement to leave to remain other than by an asylum claim, such as discretionary leave to remain. That group will also not be covered. The fourth group is rather different. It is those who would wish to challenge a decision by the Home Office that they do not come within the NRM. Those are perhaps matters for another day. At the moment, those behind me and I are enormously grateful for what we have already got.
Baroness Hamwee: My Lords, I, too, welcome these amendments and add my thanks to the officials who have dealt with them. My file of print-outs of e-mails
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The Minister mentioned conditions, and I understand the concern about possible overuse-abuse would be the wrong term here-of the category of victim of trafficking for immigration applications far in the future. During the discussions last week about what has ended up as these two amendments, there was a suggestion that there might be a reference to prescribed conditions and then a decision that what is now Clause 11 could cover matters, as the Minister said. Will he tell the House whether there are any other concerns that the Ministry has in mind at the moment-it may find others-apart from the time limits?
The noble and learned Baroness mentioned concerns about the workings of the national referral mechanism and time limits. Like her, I hope that that will be kept under review. I have two other areas of concern around this. If legal aid is not available until there has been a reasonable-grounds decision, will the Border Agency put the immigration case on hold? In the mean time, what happens if the individual is in detention or is without housing and food? At the previous stage of the Bill, I referred to the complex needs of trafficked people and mentioned housing and benefits. Immigration is often the gateway to them. Article 12 of the convention refers specifically to accommodation and generally to subsistence, and I suspect the Government would prefer to be clear about this rather than find themselves with claims under what is now Clause 10. The importance of identifying victims of trafficking is a moral matter, but it is also important because of their role in detecting and prosecuting traffickers, and it may take some time for a victim to be identified or to self-identify, so I am adding to the list of considerations. The Government have said that they will keep matters under review and they now have a mechanism to do so. Therefore, I welcome the amendment, although there may still be work to be done.
Baroness Gale: My Lords, I am pleased that the Government have brought forward these amendments that give the victims of human trafficking the same support as that provided for the victims of sexual exploitation, as set out in Schedule 1. There is support around the House today for these government amendments and we, too, support them. They will make sure that the victims of human trafficking will be treated fairly and given the support that they need. The Minister has listened to your Lordships' House and responded to the arguments which were so well rehearsed by the noble and learned Baroness, Lady Butler-Sloss, on Second Reading, in Committee and at Report in trying to convince the Minister of the need for these amendments. I am sure that the Minister will listen to the wish list as well as he has to the other arguments put before him. He promised that he would address these matters and we are all grateful that he has tabled these amendments. We fully support them.
Lord Wallace of Tankerness: I am grateful for the general welcome that has been given to the amendments, and indeed for the work that has gone in behind the scenes to get us to where we are today. The noble and learned Baroness, Lady Butler-Sloss, has indicated that she will continue, and that she has a further wish list. The fourth point in her wish list was to find out how to challenge a decision of the national referral mechanism. I am advised that that would be done by way of judicial review, which is within the scope of legal aid.
My noble friend Lady Hamwee raised more detailed questions about the operation of the provision. I will look at those matters and try to write to her with an answer. She also asked whether there are any plans to limit immigration legal aid in this context, apart from the time limits under regulations. The answer is that there are currently no plans to do so. In referring to the progress of these amendments and this issue through your Lordships' House, my noble friend also remarked that the noble and learned Baroness, Lady Butler-Sloss, has kept at it. I have no doubt that, even after this legislation becomes law, those who take a keen interest in the serious-appalling-issue of the abuse of individuals will keep a watchful eye on the issue and keep at it, and I am sure that the Government will certainly be made aware of any concerns that arise. On that basis, I hope that the House will agree to the amendment.
"( ) Civil legal services provided for the purposes of sub-paragraph (1) include legal advice and assistance in respect of that individual's financial circumstances, including any eligibility for housing benefits, where those circumstances have led or directly contributed to the relevant court order for sale or possession, or eviction."
Lord Best: My Lords, Amendment 16 consolidates earlier amendments that I have brought before your Lordships to keep within the scope of legal aid the legal advice and representation that can prevent homelessness. I am now trying one last time to convince the Government that it would be a costly mistake to remove key components of this work from the scope of legal aid. These are the components of the current legal assistance, including negotiation on welfare benefit matters, that prevent homelessness by addressing the cause of the arrears which otherwise lead to a household losing their home.
This kind of work currently accounts for 20 per cent to 25 per cent of the funding for cases where the home is at risk. Removing the opportunity for legal aid to embrace these matters is likely to make the remaining 75 per cent to 80 per cent of expenditure far less effective. Without this amendment it will not be possible to continue to support a client by handling negotiations with housing benefit officers at the local authority or those at the Department for Work and Pensions dealing with support for mortgage interest. If such representation can happen only in the context
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Even more frustratingly, where a case is adjourned for four weeks-as it often is-it will not be possible to use the time to straighten out the issues by expert negotiation with the relevant officials on behalf of the household concerned. When the matter returns to the court four weeks later, none of the work that currently goes on will have been accomplished. The only way to get the benefit officials into a dialogue at that stage would be to issue witness summonses to bring those officers to the court, taking them away from their other work, probably for the day. This is a very inefficient way of proceeding, wasting the time of officers and achieving a much less satisfactory dialogue. The chances of saving a family from the horrors of homelessness are much reduced, all because the change in legal aid funding stops the matter being resolved during the adjournment.
The Minister explained that "general advice" will be available from various sources but he underlined the point that legal aid will not be available to negotiate on welfare benefit issues on behalf of a client. I cannot believe that this is a sensible approach, not least at this time of huge changes to the housing benefit system, which will inevitably mean mistakes by the administrators that will require technical experts to unearth and sort out. The value of this legal aid work will become of even greater importance in the future with the transition of benefit support for housing costs to the Department for Work and Pensions from local authorities, and a whole new system of universal credit, which undoubtedly will take some time to bed down.
I was grateful for the Minister's clarifications but I fear they confirm the essence of the problem with this part of the Bill. Restricting the scope of legal aid to exclude assistance with these matters will clog up the courts with more and longer cases, and more adjournments, that could and should have been handled outside the courtroom. There will be costs to the state from an inevitable increase in the numbers who become homeless for lack of the legal assistance that could have sorted out the problem. Worst of all, there will be the injustice of people losing their homes unfairly or unnecessarily.
I hope that this amendment, which compresses and consolidates our earlier discussions on this matter, will prove acceptable even at this late stage. I dedicate it to a man who became a mentor and hero for me, Lord Newton of Braintree. I beg to move.
Baroness Hollis of Heigham: My Lords, I support the noble Lord, Lord Best, in his Amendment 16. Like him, I am a refugee from the Welfare Reform Act and, like him, I am deeply concerned that the new system of universal credit, which I strongly support, is coming together with huge cuts in housing benefit. This will produce uncertainty and complexity at the same time as withdrawing legal aid-unless the Commons supports the amendment previously passed by your Lordships' House and unless the House supports the noble Lord, Lord Best, today.
To introduce a new system, with the implications for the tenants of my housing association of losing up to £1 million a year, means that some will face homelessness, eviction and bed and breakfast accommodation, or alternatively will flood the tribunals and the courts system. To withdraw legal aid at the time of introducing these cuts and changes to housing benefit, as well as universal credit, creates a perfect storm that no Government should wish to whirl up. I hope very much that the noble Lord, Lord McNally, will respond positively to the amendment moved by the noble Lord, Lord Best.
Lord Beecham: My Lords, I support my noble friend Lady Hollis and, of course, the noble Lord, Lord Best, in moving this amendment. They have made a very powerful case, which was rehearsed on Report. At that time, I quoted Shelter and the Nottingham Law Centre, two separate organisations from the not-for-profit sector, which strongly urged the Government to change their position on this. They are the organisations that provide legal help and advice, not necessarily extending to court proceedings, on the benefits side as well as the remainder of the housing issue-some of which, in fairness, the Government are including within scope.
This is a classic case, as my noble friend has implied, where there is a potential modest saving to the Ministry of Justice budget but a potential extra cost to other departments. If homelessness ensues, particularly where children are involved, very substantial costs are imposed on the budgets of the local authority, and maybe also on the Department for Work and Pensions, which in certain circumstances may be devolved; for example, special needs payments or crisis loans, which a family on the streets may clearly require.
In this context, cost is a consideration which, if anything, tells against the Government's proposals rather than the other way round. I hope that the Government will recognise the strength of arguments from those dealing with this directly-not from the legal profession in this case, but from the advice sector-and provide for the possibility of timely advice being given to avoid worse consequences for the individuals and their families and, for that matter, the public purse. I hope that the Minister will reconsider the position the Government have hitherto adopted.
Lord McNally: My Lords, the noble Lords, Lord Beecham and Lord Best, acknowledge that this is one more time on which we have discussed these matters. We had detailed discussions in Committee and on Report. Amendment 16 is intended to bring into the scope of legal aid advice and assistance in relation to
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It may reassure noble Lords if I reiterate a few brief examples of where legal aid will be available under the loss-of-home provisions in paragraph 34 of Part 1 of Schedule 1. First, legal aid will continue to be available before a case is brought to court. It will be available where possession or eviction action is contemplated. Where an individual receives a letter which threatens possession action, legal aid will be available at that point. For example, legal aid will remain available to a person threatened with possession action for mortgage arrears to negotiate with their mortgage lender.
In the context of welfare benefits, it is important to recognise that, where a landlord threatens their tenant with possession proceedings, legal aid would be available to the tenant to reach agreement with a landlord to delay the possession action pending the resolution of the welfare benefits issue. If possession proceedings are issued, legal aid will be available to an individual to argue for an adjournment-for example, if they are likely to be able to make the necessary payments if an underlying benefits dispute is resolved in their favour. Where an individual loses a welfare benefits appeal and subsequently faces possession action for rent or mortgage arrears, legal aid will be available in relation to that action. We will also retain legal aid provision for judicial reviews about welfare benefits decisions and for welfare benefits matters which relate to a contravention of the Equality Act 2010.
This amendment would go much wider and would generally provide for legally aided advice and assistance on the financial circumstances of an individual-such as for underlying debt or welfare benefits issues-where these are linked to loss of home. This would run contrary to our approach. At a time when the country is recovering from a genuine fiscal crisis we need to focus limited resources on the highest-priority matters. As I have said before, we cannot agree that legally aided advice and assistance should be generally available in relation to a person's financial circumstances-such as for debt or welfare benefits issues-in the situations covered by the amendment.
There is no doubt that people, including those in potential loss-of-home situations, find advice useful in areas such as debt and welfare benefits. But we are firmly of the view that what those affected often need is practical advice rather than legal advice funded by legal aid. Individuals who have debt problems often need advice on managing their finances better and on practical measures to resolve their situation, and can access that advice through a range of specialist organisations. It will come as no surprise to the House to hear me repeat that the Government greatly value the not-for-profit sector and the good-quality free advice which it provides to people in their communities on these sorts of matters.
My department is working closely with the DWP to improve the quality and effectiveness of initial decision-making in applications for social security, reconsideration within the DWP and the system of subsequent tribunal appeals. This work should make it easier for claimants to receive the right benefit provision. Moreover, welfare benefits appeals matters are resolved through a tribunal which is designed to be accessible without legal assistance, and general advice on welfare benefits is available from a number of sources.
I know that this issue has been raised at every stage. After these debates, we do not just close the book and not take any notice. We go back to the department and the Ministers and advisers have a discussion. There is also a discussion about the issues raised with other departments. This is not a decision taken lightly but we believe that the loss-of-home proposals in the Bill get the balance right in terms of focusing limited public funds for legal advice and assistance in the most appropriate circumstances. We have listened to the appeals made by the noble Lord and considered them. At this point, we cannot agree with them. I ask him to withdraw his amendment.
Lord Best: I am grateful to noble Lords who have spoken. I am also grateful to my noble and right reverend friend Lord Harries of Pentregarth, who put his name to this amendment but has had to leave us. I thank the noble Baroness, Lady Hollis, for talking of the perfect storm at a time of housing benefit change when advice will be incredibly important to people. Things will change dramatically on the benefit front and mistakes will be made by the officials concerned. Experts will be needed for support and assistance. I am grateful to the noble Lord, Lord Beecham, who reminded us that Shelter, Citizens Advice and such bodies are behind this amendment rather than the lawyers. He also mentioned the extra costs that homelessness always brings.
This is a cost-saving amendment. The noble Lord is right that much remains within scope. Some 75 per cent to 80 per cent of the work currently being done remains within scope, which is great, but a lot of that is wasted if the remaining 20 per cent to 25 per cent is cut out. Where possession is threatened is the bit where the argument can be taken up with the administrators, the housing benefits officers. With their negotiating skills and expertise, they can fix it and sort it. Cutting that out renders a lot of the rest of the expenditure much less worth while.
(i) it is necessary to make the services available to the individual under this Part to prevent specific injustice in a particular case; and
(ii) it is appropriate to do so, in order to prevent such injustice, from the funds (if any) which the Lord Chancellor in his discretion makes available to the Director for the purposes of this paragraph."
Lord Pannick: My Lords, this amendment is in my name and in the names of the noble and learned Lords, Lord Mackay of Clashfern and Lord Woolf, and the noble Lord, Lord Hart of Chilton. Its purpose is simple-to implement more effectively the Government's proposal to include an exceptional cases category for legal aid as set out in Clause 10. The problem which this amendment seeks to address is that Clause 10 is too narrowly drafted and will prevent the very flexibility that it is designed to provide. That is because the exceptional cases category set out in the clause applies only if the refusal of legal aid would amount to a breach of rights under the European Convention on Human Rights or would create a risk of doing so.
The case may concern a difficult and important question of statutory interpretation in the Court of Appeal or in the Supreme Court in a type of case generally excluded from the scope of legal aid. This amendment would confer a power on the director of legal aid to fund litigation if both of two conditions are satisfied. The first condition is that the director considers that funding the litigation is necessary-a strong term-to avoid injustice. I have adopted in the amendment the suggestion made in Committee by the noble and learned Lord, Lord Mackay of Clashfern, that the discretion should be defined not as a power to promote justice, but as a power to avoid specific injustice, a much narrower concept. The noble and learned Lord has asked me to express to the House his apologies for not being able to be here today.
The second condition which would need to be satisfied before the power could be exercised by the director is that the director considers that the case is an appropriate one for use of the funds, if any, made available for this purpose by the Lord Chancellor. That wording is designed to ensure that funding remains entirely within the discretion of the Lord Chancellor. The amendment, I emphasise, does not require additional funds to be found. The amendment leaves it to the Lord Chancellor to decide what funds, if any, to provide for this purpose.
If then the Lord Chancellor is not required to provide funds for this exceptional category of cases, your Lordships will wish to know what is the purpose
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Noble Lords should not approve a Bill confining legal aid in the manner proposed by the Government without including in it a provision which at least allows the Lord Chancellor, in his discretion, to provide some funding for the exceptional cases about which I am concerned. Parliament may not have a chance to address legal aid issues again for some time. I very much hope that even at this late stage the Minister will be able to accept the amendment, which confers power on the Lord Chancellor to allow funding for exceptional cases but imposes no duty on him to do so. I beg to move.
Lord Hart of Chilton: I support the amendment, which is also in my name. Interested bodies such as Citizens Advice, Justice for All and the Law Society have all pointed out that the Government's exceptional funding safety net does not stretch wide enough for the reasons so clearly given by the noble Lord, Lord Pannick. I emphasise that the amendment of itself imposes no extra financial burden on the Lord Chancellor; it simply provides an opportunity for a discretion to be exercised if it is necessary-I emphasise the word "necessary"-to prevent a specific injustice occurring. If it was decided to use this power, the costs would be provided from discretionary funds made available to the director by the Lord Chancellor.
The amendment should be seen as a simple, practical and positive act of assistance to the Government, who, if they accept it, will have the flexibility to act in the circumstances provided for. Legislative opportunities for any Government are few and far between. In my view, this opportunity should be seized and the helpful amendment accepted.
Lord Woolf: My Lords, in the courts, many cases have three judges involved in determining what should be the outcome. If one judge gives a judgment on the provision which the other two judges think is totally convincing and where they have nothing useful to add, they just say, "I agree". I agree with the speeches that have been made in support of the amendment.
Lord Wallace of Tankerness: My Lords, the House had the opportunity to debate issues similar to those raised in the amendment during detailed discussions in Committee and on Report. As the noble Lord, Lord Pannick, indicated, my noble and learned friend Lord Mackay of Clashfern came up with the phrase "in the interests of justice to prevent injustice", which I said at the time had a certain seductive charm and
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I can assure the House that we have thought about these points. The Government believe it is right that there should be an exceptional funding scheme to provide an essential safety net for the protection of an individual's fundamental rights of access to justice, and Clause 10 achieves this important end. It will be necessary to provide services to an individual under Clause 10(3)(a), where a failure to provide some measure of legal aid would, for example, clearly amount to a breach of Article 6 of the European Convention on Human Rights, which guarantees an individual's right to a fair trial and access to the courts.
As has been said on a number of occasions when we have debated exceptional funding determinations under what was Clause 9 but is now Clause 10(3), they will be made in accordance with the factors that the domestic courts and the European Court of Human Rights have held to be relevant in determining whether publicly funded legal assistance must be provided in an individual case.
In considering whether legal aid should be provided in an individual case engaging Article 6, the director will need to take into account, for example, the importance of the issues to the individual concerned and the nature of the rights at stake; the complexity of the case; the capacity of the individuals to represent themselves effectively; and the alternative means of securing access to justice.
It is not lost on me that the noble and noble and learned Lords who tabled the amendment have carefully mirrored the existing formulation of the clause in their proposed addition. I thank, particularly, the noble and learned Lord, Lord Mackay of Clashfern, for triggering this discussion and this line of thought in Committee. I again assure the House that I have considered the alternative formulation carefully. However, as I said on Report, we are satisfied that the provision that the Bill currently makes in respect of excluded cases is both appropriate and sufficient.
First, it is extremely important to make the point that, under the existing draft of the clause, the director will be able to provide funding for cases to prevent a specific injustice in so far as that injustice also amounts to a breach of the European convention or relevant European Union law. The Government believe that it is more appropriate to use this legal benchmark as a means of determining whether an applicant would suffer injustice. Article 6, in particular, provides a suitably serious threshold, guaranteeing the right to a fair trial and an individual's right of access to the court.
Obviously, I cannot provide a blanket guarantee that every matter that noble Lords would consider an injustice would be covered by our formulation of this clause. However, at this point, I take the House back to the fundamental structure and architecture of the
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I recognise and appreciate that the second limb of the carefully crafted amendment, as the noble Lord, Lord Pannick, has indicated, goes some way to meeting concerns that were expressed on Report about the potential breadth of such an amendment. Under the proposal, the director will only be able to use such funds as the Lord Chancellor decides to make available for the purpose of this subsection. However, I ask your Lordships to reflect on the fact that this approach would create a rather peculiar arrangement that would be at odds with the safeguards concerning the independence of the director, which we believe are fundamental to our proposals and which we have strengthened in response to valuable debates that have been held throughout the Bill's passage.
I accept and recognise that the motivation is to give some leeway or discretion to the Lord Chancellor. The noble Lord, Lord Hart, said it would help the Government. Nevertheless, giving the Lord Chancellor a discretionary fund that he could allocate to the director at the time of his choice would risk politicising decision-making and eroding the clear boundaries that this statute seeks to create between the Lord Chancellor and the director.
For example, let us envisage a scenario in which the director wishes to make funding available for a particular case but there are no funds available for him to do so. What is he meant to do in these circumstances? Would it be appropriate for the director to have to enter into discussions with the Lord Chancellor about the provision of funding for a particular case? Indeed, would it be permissible under the Bill, given that Clause 4(4) explicitly prohibits the Lord Chancellor from giving directions or guidance to the director in relation to individual cases? It is difficult to see how the Lord Chancellor could meaningfully give his assent to the provision of such funds without breaking the spirit-if not the letter-of that prohibition. Clause 4(4) guarantees the objectivity of the decision-making process for both in-scope and excluded cases, and is there to serve as a safeguard against political interference in the making of any individual exceptional funding decisions in the future. We do not wish to put that at risk by establishing a discretionary funding stream, as envisaged in this amendment.
If we accept this amendment, we risk undermining not only the decision-making safeguards that the Bill creates but the general scope of our reforms of civil legal aid. These are important points, which weigh in the balance against this amendment. For the reasons given, I invite the noble Lord to withdraw his amendment.
Lord Pannick: I am grateful to the noble and learned Lord for his consideration of this matter and to other noble Lords who have spoken. The noble and learned Lord raised two points, as I understood him. His first concern was that this amendment would somehow politicise the functions of the director. It would not. The Lord Chancellor would remain responsible for funding questions and would decide whether it was appropriate to provide additional funding. It would be entirely a matter for the director to decide on the allocation of such funding, if any. There is no question of any politicisation of these responsibilities.
The noble and learned Lord also suggested that it was satisfactory for the exceptional cases category to be confined to those cases in which an issue arises pursuant to the European Convention on Human Rights. In my view, that is not adequate. The exceptional cases category should be sufficiently broad to cover exceptional cases whether or not an issue is engaged under the European convention.
I suggest to noble Lords that there is no basis for resisting this amendment. The Government agree that there should be an exceptional cases category-and they are right. This amendment would ensure that the exceptional cases category is sufficiently broad to enable the director to deal with exceptional cases, if and when the Lord Chancellor provides funding. This amendment imposes no duty whatever on the Lord Chancellor and requires no funding to be provided. It is purely permissive, and I invite noble Lords to support it on that basis. I wish to test the opinion of the House.
Lord McNally: My Lords, the House will recall that my noble friend Lord Macdonald was most persuasive in Committee so that during Report a government amendment was agreed that removed the power to introduce means testing and make regulations setting criteria for determinations in relation to advice and assistance for individuals in custody. Amendment 20 is a government amendment that removes references to determinations under Clause 13, on police station advice and assistance, from Clause 21, which concerns financial resources. This is a consequential amendment in light of the Government's amendment accepted on Report to remove the power to means test police station advice and assistance. This technical amendment is required to remove from Clause 21 the reference to regulations under Clause 13. I beg to move.
The changes made by sections 46, 48 and 49 of this Act do not apply in relation to proceedings which include a claim for damages for international human rights cases as defined in section 58(C)(2B) (Recovery of insurance premiums by way of costs) of the Courts and Legal Services Act 1990, as inserted by section 48 of this Act."
Baroness Coussins: My Lords, the other amendments in the group are clearly consequential, in the case of Amendments 22, 23 and 26, and directly consequential, in the case of Amendment 27. These amendments are designed to preserve the status quo in our justice system for victims of international corporate human rights abuse. I am very grateful to the Minister for the further meetings he has had with me and with others
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I do not believe that the Government have adequately understood the impact of the Rome II regulations, which are binding on the UK as an EU member state, let alone the additional restraint and restrictions that this Bill would provide. Figures to illustrate this are very hard to come by, because of the small number of cases of this sort that have been settled over the past decade, so many have included a confidentiality agreement as part of the settlement.
However, I will illustrate the impact of the Rome II regulations with one brief example that is in the public domain: the Trafigura case, which is probably also the most well-known case, where toxic waste was dumped on a large community in the Côte d'Ivoire. There were 30,000 claimants in this case, who shared £30 million in damages-£1,000 per head. It is estimated that under the Rome II regulations, the damages would have shrunk to £6 million, making it £200 a head. Yet the "after the event" insurance premium would still have cost over £9 million. If £200 a head seems a very small amount of compensation for loss and damage to life, homes, health and community, how much less compensation would there be under the provisions of this Bill? It makes it far too costly and risky to bring the cases in the first place.
It is a question of straightforward arithmetic, added to which there is no cost to the taxpayer whatever as a result of these amendments. We have a very good system in place already, which is the envy of many other countries in the world that are looking to us to build their own system to deal with international corporate human rights cases. I appeal to the Minister even now to accept my amendments, but if he cannot then I hope that the House will support me in trying to prevent the clock being turned back for poor and vulnerable victims of human rights injustices at the hands of UK companies, which should remain accountable in practice as well as in theory. I beg to move.
Lord Howarth of Newport: My Lords, if the Government think it appropriate that the private disputes of Russian oligarchs should be settled in our courts, how much more appropriate is it that poor people in countries such as the Côte d'Ivoire, who have been treated utterly disgracefully by a large international corporation, should also be able to seek remedy in the British courts? Should we not be proud to make that a possibility?
Lord Judd: My Lords, the noble Baroness is to be congratulated on having persevered so well and firmly with this cause, right up to Third Reading. I remember in my early days as director of Oxfam that I was in north-west Brazil where, having travelled overnight in
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I had gone with my colleague to discuss agriculture-wells, tools, seed and irrigation-but what became very clear was that these people were preoccupied totally with justice. They wanted to have some resources to be able to go to the regional court and put their case before it. I can remember us sitting over some beer and doing some rough calculations, and reckoning that we could find a bit of money to help support them to go off to the regional court. One of my best moments in those formative years as director of Oxfam was when I heard at headquarters in Oxford that having taken their case before the regional court, the local judge was in prison and they were back on their land.
I tell this story because I have repeatedly found in my work with the Third World that what holds people back is a lack of justice and fairness, and what they are wanting is a fair crack of the whip. If this is true within the context of their own societies, when we move into a globalised society-with the vast power of the biggest international companies and the almost limitless resources that they have at their disposal for legal undertakings, cases and the rest-the case becomes even more obvious. I am very unhappy with this whole Bill, and have been from the beginning, because it is about limiting access to justice when surely a cause in a civilised society is to increase access to justice. If we have a serious commitment to the people of the Third World, as the Government keep demonstrating that they want to have, nothing is more important than ensuring that they can get access to justice. I really will be very despairing if the Government, even at this 11th hour, cannot respond to what the noble Baroness has argued.
Lord Thomas of Gresford: My Lords, I have huge sympathy with the claimants in the Trafigura case, who received £30 million in damages, and if I thought that access to justice for people in their position were being blocked by this Bill I would be entirely with the noble Baroness. Unfortunately, the costs in that case were £100 million, reduced on taxation to £40 million. I do not feel particularly proud of a legal system which produces such a disparity between the damages that were actually received by the claimants and the lawyers who acted on their behalf.
Lord Brennan: My Lords, the topic under debate appears to involve general agreement that this class of case is a proper one to be brought in the courts of this country. The critical question therefore is: is it financially possible to bring such a case under the proposed
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The idea that such a case can readily be brought and financed under these reforms is one with which no one whom I know in the law agrees. I have been involved in four of these 10 or 12 cases in the past decade and they have all involved millions of pounds on both sides. In Trafigura, the published costs of the defendants without a trial were £14 million. I await with interest to hear from the Minister any mathematics or economic analysis that explains to this country how lawyers here under these new arrangements-a reduced success fee and no "after the event" insurance-could fund such a case. Everyone I speak to says, frankly, that it is impossible.
If the Minister comes forward with some mathematics that are realistic and not ethereal, and if he gives us financial analysis that is not far distant from reality, the House might still be persuaded. As yet, no one in public has produced such material. The result is that we expect the developing world to open its doors to our great companies to make large profits for the benefit of our country but, when those investments produce adverse consequences, we in this country close our doors of justice to the people who have suffered. That cannot be acceptable, and the Government should think again.
Lord Stevenson of Balmacara: My Lords, the noble Baroness, Lady Coussins, has introduced this group of amendments with her customary fluency and passion, and she has been joined by other speakers who have made the case well. As has been pointed out, this measure risks damage to the UK's reputation for justice to those people who have suffered damage to their human rights caused by companies based in the United Kingdom. I am sure that none of us wishes to see that happen.
We have support from all around the House, and we are grateful to those who have joined in on these amendments. The settled view of your Lordships' House is clearly that there is a real danger that, if this Bill goes through in its present form, the changes that it makes to the way in which international human rights cases are to operate, combined with the restricted damages that the Rome II regulations impose on the level of damages that can be awarded to claimants, will make it impossible for such cases to be mounted in the UK in future.
As the House has heard, several very important independent charities have been lobbying hard on this issue. Several meetings have been held with the Minister and correspondence has been exchanged. We hoped that an accommodation could be reached, and we went to see him yesterday in the hope that that might be possible. He e-mailed us today to say that he could not accept our amendments.
It is clear to me that while on the one hand the Government do not want to be responsible for preventing these cases continuing in future, they have not so far been convinced that it is highly probable that they will occur in future. Why is that? The arithmetic, as has been said, is very clear. We seem to be in a situation where the department's overriding concern that the architecture of the Bill should be retained is working here against good legislation. What other arguments can there possibly be? We have heard from those directly involved in these cases and we know what the figures are. It is clear that the facts outlined by the noble Baroness, Lady Coussins, and my noble friend Lord Brennan that the Government are wrong. I hope that when the time comes the noble Baroness will test the opinion of the House, and we will be supporting her in the Lobby.
There have been a number of comments about costs and indeed about the Trafigura case. What strikes me most about that case is that the £30 million that was won in damages worked out at about £1,000 per victim-against, as has already been accepted, legal costs that at one time, until they were beaten down, were running at £100 million. To me, that is an obscene system.
With regard to the reforms that we brought forward, we have said that we believe CFAs will continue. We are also introducing damages-based agreements. Far from welcoming them, though, the CBI and others worry that those may well provide funding in this area. So, it is not that the Government are opposed to bringing companies to account for their behaviour. I just do not believe in the rather broad claims by the noble Lords, Lord Brennan and Lord Judd, that this issue will dramatically affect the lives of people in developing countries. There are other areas of policy that are going to do much more than that.
I make clear that the Government strongly support claims arising from allegations of corporate harm in developing countries being brought, and we support the protection of damages for personal injury. Where we disagree with the supporters of the amendment is that we do not believe that our plans would prevent such cases being brought or ultimately damage the ability of NGOs and others to hold big business to account.
An exception along the lines proposed is in our view neither necessary nor justified. It is not necessary because reformed "no win no fee" arrangements will still allow cases to be brought. It is not justified because it would undermine the wider rationale for the Jackson reforms in Part 2 of the Bill, which should apply across civil litigation without any exceptions. In doing so, it would introduce unfairness between different types of claimant.
We recognise, however, that, following the Rome II regulations, damages in these cases can be relatively low, and they will not be subject to the 10 per cent increase available for other claims. The costs awarded can nevertheless be extremely high, as was demonstrated by the Trafigura case. The question is whether any
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The Government have listened to this debate and those that went before, and we have reflected carefully on the points raised. We have held many meetings with interested stakeholders and NGOs over the past months, and the Government are fully aware of the strength of feeling on this issue. I have looked again at the evidence that has been presented, including reports by Professor Rachael Mulheron of the University of London and Mr Smith of First Assist. Both reports make the general case for recoverable success fees and insurance premiums to continue in these cases, but they do not present any figures showing why these cases could not be brought in future. During our discussions with the NGOs we have asked for such evidence but it has not been forthcoming, even though we have asked them for more detailed figures.
The truth is that the available evidence shows that these cases, though few in number-about 10 in a decade-have historically been highly profitable for the legal firms involved. Although under our plans the margins available would be reduced, they are still likely to remain attractive. I remind noble Lords of the sums involved. Since the previous Government introduced the recoverability of success fees and insurance premiums in 2000, we know that there have been only around 10 of these cases, mainly undertaken by a single firm of solicitors. Most of these cases have succeeded or settled, but some claims have been pursued in which costs have not ultimately been recovered. The figures suggest that in those cases that were not pursued to trial, there were disbursements of some £131,000 and legal costs in the region of £1.4 million. I appreciate that those figures will not cover all costs in all cases but they should be a fair ball-park indication. £1.4 million sounds like a lot of money for a firm to bear in what are effectively losses on a case not pursued and won until the substantial sums that have been received in success fees are considered. We know that in the case of Trafigura alone, success fees-intended to cover the costs in lost cases-of around £29 million were allowed by the Court of Appeal. Those figures amount to a net gain for claimant lawyers from these cases over the past decade of more than £27 million from the success fees for Trafigura alone. That does not include all the success fees in the other successful cases.
These figures speak for themselves. They cast all emotion aside and demonstrate the substantial gains in legal costs from these cases and the proportionately much lower costs expended. When the ratio of earnings to losses is more than 10:1, the current system can, to put it mildly, bear some reform. Therefore, while I recognise that claims against multinationals can be complex, the changes that we are making to the CFA regime will not prevent these cases being brought in the future. They can still be brought but the costs will be more proportionate. As Lord Justice Jackson recognised, a greater incentive for claimants' lawyers to work more smartly is needed so that they incur only costs that are justified when bringing a claim, rather than allowing costs to escalate.
It is worth pointing out, as I have previously in the House, the criticism by the Court of Appeal of the costs claimed by the claimants in the Trafigura case. In that case, the court itself questioned whether some of the work undertaken by the claimants' lawyers was necessary. It criticised them for seeking costs of £100 million in a case that resulted in payment of £30 million in damages. It is not for me to question the conduct of those involved, but it needs to be borne in mind when looking at the extraordinary costs claimed in that case alone. I should add-again, as I have pointed out to the House previously-that in that case the defendant's costs were approximately £14 million, which is around one-seventh of the costs claimed by the claimants.
I turn now to Amendment 27, which seeks to allow for the recoverability of "after the event" insurance premiums to pay adverse legal costs, including expert fees and other disbursements. In doing so, the amendment goes much wider than just the cost of funding the expert reports for which we have provided in the special situation of clinical negligence cases. The amendment would potentially cover paying the other side's costs, too, but this is not necessary because we are introducing a system of qualified one-way cost shifting in personal injury cases, which will protect losing claimants from having to pay the other side's costs. We have discussed making exceptions in relation to expert reports in other contexts, but we do not believe that an exception is more needed here than in other cases. As I have said, the costs recovered in successful multinational cases have been substantial and could provide funds towards paying up front for reports where needed.
As I indicated on Report, on several occasions my officials and I have met representatives of the NGOs that support these cases. However, we have not been persuaded that such cases cannot continue to be brought when our changes are implemented. Nor are we persuaded that they justify an exception in the Bill that would be unfair to other, no less deserving claimants.
The House will be aware of all the arguments that I have rehearsed today, in Committee and on Report. We have treated subsequent discussions with the seriousness they deserve, and we have listened carefully. However, the Government continue to believe that reform is unavoidable, necessary and overdue. In this case in particular, we should not mix up a challenge to overgenerous costs with a denial of access to justice. Access to justice is precisely what the reformed CFA regime will protect, but as part of a more proportionate and balanced system. Therefore, I urge the noble Baroness to withdraw her amendment.
Baroness Coussins: My Lords, I thank all noble Lords who have contributed to this debate and the Minister for his very detailed and thoughtful reply. I am only sorry that, although we started from the same place, we have not reached the same conclusions.
There has been much reference in this debate to costs running into millions of pounds. However, the Rome II regulations provide for damages paid to successful victims to be calculated according to the costs in the country where the abuse took place, whereas
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In a case with thousands of claimants, of course the costs will run into millions. If there are 1,000 claimants, there will be 1,000 medical reports and 1,000 toxicology reports to get. There will be travel and translation costs. Of course it will be expensive. The firm of solicitors to which the Minister referred, Leigh Day & Co, which has conducted most of these cases, routinely cross-subsidises its human rights work by taking on many other types of case. That enables it to take on those human rights cases. In the case of Trafigura, for example, in which each victim was awarded £1,000, it was not extraordinarily disproportionate for the company to have achieved £3,000 in costs, given the kind and amount of work and the length of time that such cases involve.
"(7) To the extent specified in regulations made by the Lord Chancellor by statutory instrument, the amendments made by subsection (4) and section 48 and the repeal made by section 49(1), do not apply in relation to a costs order made in favour of a party to proceedings of a description specified in the regulations.
Lord Pannick: My Lords, this amendment is in my name and that of the noble Lord, Lord Alton of Liverpool. It seeks to confer on the Lord Chancellor a power to disapply provisions of Part 2 in particular categories of case. Noble Lords will know that Part 2 removes the power of the court to make unsuccessful defendants pay success fees and "after the event" insurance. Successful claimants would need to make these payments out of their damages. Concern has been expressed in your Lordships' House that this may deter or prevent claimants bringing meritorious claims and may operate unfairly by effectively reducing the damages which they obtain. This concern has been expressed in a wide variety of legal contexts from industrial injuries to insolvency claims.
The Minister's response to these criticisms has been to express the hope, and sometimes the belief, that Part 2 will not have the adverse consequences for access to justice which critics of these provisions fear. The reality is that neither the Government nor the critics of Part 2 can be sure what effect it will have on access to justice in practice. The Minister will, I hope, accept that it is possible that after the Bill is enacted and comes into effect, experience may show that in specific contexts the concerns expressed by those of us who are worried about the implications of Part 2 are justified, and that access to justice is being impeded.
This amendment would confer a discretion on the Lord Chancellor to respond to any problems that are seen to occur after enactment by excluding defined categories of case from the statutory provisions if he thinks it appropriate to do so. The new provision would confer a power in Part 2 equivalent to the Lord Chancellor's power in Part 1 under Clause 9(2) to modify Schedule 1 in relation to the scope of legal aid-a power for the Lord Chancellor which the
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Parliament is unlikely for some time to have another opportunity to look at these important matters. Given the importance of the changes that we are making in Part 2, given the concerns that have been expressed about their impact on access to justice, and given that these matters may look very different indeed in some legal contexts in the light of experience after these changes are made, it is surely wise to add to the Bill a power for the Lord Chancellor whereby it would be entirely within his discretion to modify the effect by excluding categories of cases. I beg to move.
Lord Alton of Liverpool: My Lords, I shall be brief. I support the amendment in the name of my noble friend Lord Pannick. Just over a week ago, your Lordships were reminded by no less a person than Her Majesty the Queen that during her time as monarch she had signed more than 3,000 pieces of legislation enacted by Parliament. All of us who have been Members of this House and the other place know that we have a penchant for passing vast swathes of legislation that we never revisit subsequently. We all know that we sometimes legislate in haste and repent at leisure. I have had the feeling during the passage of this legislation that we will later regret some of the measures we have passed.
The problem then is what we are able to do about it. Although we sometimes add sunset clauses, and Select Committees can revisit legislation and make recommendations, we often do not put in the kind of belt-and-braces provision that my noble friend Lord Pannick has placed before your Lordships' House this evening. It is eminently reasonable. It is perfectly good for Parliament to say that if things were to work out in the worst-case scenarios in the way that your Lordships at various stages in Committee and on Report have suggested may happen, and if the Minister is proved not to be correct in what I am sure he sincerely believes regarding the way in which this legislation will be interpreted in due course, there ought to be some way of doing something about it if it is to be found wanting.
Giving this discretionary power to the Lord Chancellor and making it consistent with Part 1, as my noble friend has just described, seems to be the perfect way of dealing with the problem. It is eminently reasonable and, like my noble friend, I cannot see any good reason why the Government would want to resist something that requires no expenditure and does not place on them any duty but simply gives them a discretionary power. I hope that the amendment will commend itself to your Lordships.
Lord Beecham: My Lords, the Opposition certainly support the amendment moved by the noble Lord, Lord Pannick, in his customary and eminently reasonable way. He clearly draws the analogy between the changes that the Government, to their credit, accepted in relation to legal aid and what is being advocated here. It
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In this case, discretion is the better part of legislative valour, and I hope that the Government will accept the amendment. It does not bind them to anything but provides an opportunity for corrective measures to be taken, if that should prove necessary, in precisely the same way that they have accepted in relation to legal aid.
Lord McNally: My Lords, the noble Lord, Lord Pannick, has tabled his amendment along the lines he suggested on Report. He suggested then that it might be sensible to have a power to disapply the effects of Part 2 in relation to the abolition of recoverability of success fees and insurance premiums in respect of particular categories of case. The amendment now seeks to achieve that.
I have referred on several occasions during the passage of the Bill to its central architecture. The Government's view, quite simply, is that the current recoverability regime is wrong in principle. It is wrong in principle to impose substantial additional costs on losing parties, whether in relation to success fees or insurance premiums. Those costs add to the already significant costs of civil litigation and allow for risk-free litigation by claimants and what I earlier described as inflation in our legal system.
I have explained the rationale for our proposals and why we consider that they should apply across the board without exception, and I do not propose to repeat those arguments now. The amendment seeks to allow different recoverability in different classes of case. We are implementing a package of reforms, not all of which are contained in the Bill. This package has been carefully put together to be fair between claimants and defendants.
I understand the noble Lord's intentions. I understand that he thinks it sensible to allow for exceptions to be made at a later date. However, we are legislating now on what we consider to be a fair and overdue basis. Funding arrangements need a degree of certainty. Claimants and defendants need to be able to plan and adapt to the new regime. The amendment would only create uncertainty. Will an exception be created? For what and when? Rather than settling the issue of CFAs, as this Bill seeks to do, the amendment would open the door to constant campaigning and calls for individual exceptions. The amendment may be well intentioned but it is fraught with difficulty. It would provide uncertainty and confusion where we are seeking to introduce clarity. It would provide increased costs where we are seeking to reduce costs. It is wrong in principle and unnecessary. I urge the noble Lord to withdraw it.
Lord Pannick: My Lords, I am grateful to noble Lords who have spoken in the debate. I simply do not understand how the amendment undermines certainty any more than does the equivalent provision in Part 1. I repeat that it would simply confer a discretionary
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(a) interference with personal information or breach of privacy; or
This is a simple but important issue. However, I do not want to delay the House, as we have had a number of debates on these matters. The amendments in this group would retain the recovery of success fees and "after the event" insurance premiums from the losing side in privacy and defamation cases. The Bill removes these costs and puts them on to the complainant, and I consider that to be fundamentally wrong, particularly in view of what we have seen of late in the way of actions by the press.
It is argued that such recovery of fees may prevent defendants-normally powerful and wealthy people in the media, and in this case the press-defending themselves against a complaint of breach of privacy. I understand that point but I would give more weight to an individual complainant who had suffered breach of privacy from the media or the press. The absence of conditional fee arrangements will prevent the complainant with no personal financial resources seeking legal redress in a case of breach of privacy. Indeed, in this type of case the defendant and complainant are not on an equal footing, and we have to take that into account.
I have benefited from the current no-win no-fee arrangement in pursuing my case against the Murdoch press and the Metropolitan Police. I would not have been able to pursue that case without such an arrangement because, quite simply, I would not have been able to afford it. This Bill strengthens the media's case by reducing their costs, even if they are found guilty and damages are awarded against them. However, not only does it reduce their costs but it transfers the costs to the successful complainant. However one looks at it, it is not justice for the person who wins the case to be penalised by further costs.
Perhaps I may take my case as an example, although this is not just about me; it would apply to most people in the same situation. The average level of damages awarded in these cases is approximately £40,000. So, in my own case, £40,000 was awarded in damages, there were £40,000 of costs on my side and £40,000 of costs on the media's side. Put together, that is a considerable cost to be carried by the complainant. However, added to that is the success fee, which is compensation for lawyers taking on difficult cases. In a case such as mine, the success fee would be carried by the people who lost the case. The other type of cost is insurance. If you are going to gamble on winning a case, you have to take out insurance so that it is the insurer and not you who pays the costs. Those success fees and insurance costs are now to be transferred in some form to the side that wins the case, so in a case like mine the damages would not completely cover the costs.
If there has clearly been a serious breach-in my case, it was phone hacking, criminal acts and all the things that we are aware of from the Leveson inquiry-it cannot be right for the complainant who has suffered from those acts to be poorer. More importantly, it cannot be right that the press should have their costs reduced. I understand that it is a heavy cost but that is part of the penalty. The situation is almost like that of the polluter pays. You should think very carefully before you say some of the things that you say and you should not carry out what are clearly criminal acts. If you commit the offence, you pay the price of legal
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The Government are shifting the balance of payments and costs on to the complainant, even when the complainant is found innocent and the defendant is found guilty. I do not think that that is right. I have tried to think of the Government's reasons for doing this. In some of the debates it has been argued that it is down to the cost to the public, but no evidence has been given for that. What is the cost to the taxpayer? I agree that there are probably heavy legal costs and I have referred to some of them, but if you want to do something about that there are plenty of regulations and powers that can be used. It could be argued that in some cases that is what is happening now. The burden should not be put on those who make the complaint. The defendant in this case should carry the full costs.
Then one wonders who is demanding this change. Clearly, the Government agree with it but who is pressing the Government? The answer is: a very powerful body of media. I know that because they tried to get the previous Labour Government to make this change in the law but they would not agree to it as they thought it was unfair. I see a look of puzzlement on the Minister's face. Jack Straw may have felt that there was something in it but there was no government decision on it. I leave it at that-we refused to go along with it. However, when this Government came in, I do not know whether it was at a dinner at No. 10 but they obviously got together with some very powerful people and said, "Right, we're going to do this for you". It is clear that they want this change and I have given some of the reasons. The innocent parties who have suffered from breach of privacy or phone hacking are not calling for these changes. To be frank, they could not have taken up their cases without the no-win no-fee arrangement. The only people who seem to have argued powerfully for it are the media, and I am not just talking about the red tops or Murdoch. I have referred before in this Chamber to a survey of all the media-the press and television-in which they said unanimously that they wanted their costs to be cut. They did not argue that those costs should be transferred to the claimant; they just wanted their costs cut, and they were unanimous in that.
The people who have certainly not asked for this change are the McCanns, the Dowlers or Mr Jefferies. They sent a letter to the Prime Minister asking him not to do this as it would disadvantage people like themselves who had been injured by the actions of the press. We should take that into account. I noticed that in the Naomi Campbell case, curiously, the British press argued that a change should be made to human rights law. That is not usually their line on human rights but in this case they claimed that their human rights had been damaged by Naomi Campbell. She is a very rich lady and could certainly afford to bring a case. However, that is not the norm. We have to think of people such as the McCanns and the Dowlers, who have been greatly affected, as has become clear from the Leveson inquiry.
The issue is clear; it is about justice. On which side will we apportion the change? Where does the balance lie between the strong and the weak? That is what we
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Baroness O'Neill of Bengarve: My Lords, I know that it is Third Reading and at this point I shall speak to process and not to substance. We already have in the Bill two exemptions from certain provisions relating to success fees and cost recovery via insurance-Clauses 44 and 45. The existing exemptions for those two clauses relate to respiratory disease and industrial disease, particularly when there has been a breach of a duty of care.
Amendments 25 and 28, to which the noble Lord, Lord Prescott, has just spoken, and to which I am speaking, seek to establish parallel exemptions for proceedings that include a claim for damages or other relief that relate either to personal information or breach of privacy or defamation. This is simply not the moment to try to alter the costs regime in actions pertaining either to privacy or defamation. The tectonic plates are shifting in this area. We have around us many cases that relate to criminal breaches of existing legal protections of privacy as, after all, not all have been settled. We also have a report by the Joint Committee on Privacy and Injunctions from only a fortnight ago to which nobody has yet been able to give much attention, but it deserves some attention. We have notably Lord Justice Leveson's ongoing inquiry and we have a number of parallel inquiries going on into other aspects of the phone-hacking scandals that came to light last summer.
In some quarters, it is an expectation that defamation legislation will have a place in the Queen's Speech. Is that a rumour? I do not know, but in some cases I think that it is a firm assumption. I know that nothing can be said about that, but in short, this is simply not the time to alter the costs and fees regime relating to cases in this area. If defamation legislation is coming forward in the Queen's Speech, then will be the time to think about that. If not, there will be time to think about these other things that are ongoing.
I believe that there would be one other way that might seem to offer the Government a route for dealing with this difficulty of timing, which I accept is not something that could have been anticipated, but it is a severe difficulty. That would be to take advantage of Clause 152, which permits different parts of the Bill
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Lord Bach: My Lords, we have heard two powerful speeches on this matter. I say from the Front Bench that we support the amendment in the name of my noble friend. Legal aid has never been available for redress in this field, so no-win no-fee has become an essential bulwark for the impecunious citizen of moderate means against for the main part much more powerful media corporations. Such actions, as the House knows, recently led to the exposure of systematic wrongdoing at News International that saw innocent people's lives just taken apart. We have heard reference already to the Dowlers and the McCanns, and to Mr Jeffries, too. But even politicians, such as the right honourable Simon Hughes, has been a victim, and have relied on no-win no-fee to get justice.
The Jackson reforms on road traffic accident personal injury cases, which we welcome very much on this side, comprising 75 per cent of all claims, are recognised as having a potentially devastating effect on this area of law. The Liberal Democrats in the other place agreed with us when they tabled amendments exempting privacy and defamation actions. I very much hope that they will be consistent if the matter is taken to a vote tonight. That is what they proposed in the other place, so will they really vote against it tonight? The Joint Committee is looking at the draft Defamation Bill. Everyone owes a huge debt to the noble Lord, Lord Lester of Herne Hill, who I am delighted to see in his place. He is unusually silent on this matter tonight but perhaps I can understand why.
Lord Bach: That is a first. I am delighted to hear it. The Joint Committee looking at the draft Defamation Bill agreed with the point that I am attempting to make now. It said of the Government's proposals that,
The Government are trying to stay the House's hand-many Members of this House are concerned about the impact on these cases-by saying that they will deal with the issue in the Defamation Bill. That is not good enough. In some ways, we will break the civil justice system in this Bill and the Government are saying, "Don't worry; we'll fix it later". That is not good enough. Even if the Government change the definition of defamation, what will they do to make
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The Government are doing everything they can to make these cases impossible to bring in the future. They are even refusing to put qualified one-way cost shifting in the Bill, which is an essential protection against adverse costs should a litigant lose in this kind of case. The House should not think that it is good enough for the Government to say, "Trust us; we'll fix it all later". The amendment should be supported because, as the noble Baroness said in her thoughtful and impressive speech, it is not good enough just to rely on some Bill that may or may not appear in the next Queen's Speech whose contents we know not.
Lord Lester of Herne Hill: My Lords, I listened with great interest to the speech of noble Lord, Lord Bach. He will remember that when he was a Minister in the previous Government, his master, the right honourable Jack Straw, decided that the present regime of costs was oppressive and unfair because it imposed a chilling effect on the publishers of newspapers and other media. Mr Straw decided that it was an abusive system because of the effect that it had on free speech. The effect arose from the fact that unscrupulous, greedy or perhaps simply normal lawyers acting for claimants were taking advantage of success fees and running up enormous legal costs that dwarfed any claim for damages, leaving a publisher defendant, for example, with a damages claim for £20,000 accompanied by a costs claim for £250,000.
In the Naomi Campbell v Mirror Group Newspapers case, the European Court of Human Rights found that the circumstances breached the right to free speech enshrined in Article 10 of the European convention. In that case, exactly what I described happened in a gross and abusive way. Mr Straw and the previous Government recognised that the system was an abuse and proposed a rather crude mechanism to cut down success fees to an arbitrary figure. Although this House passed the measure, the other place refused to do so and it fell.
As I shall explain in a moment, I have great sympathy with the problem. However, at the moment I am dealing with the existing abuse. I begin by dealing with it because the amendments in this group, which refer to defamation, privacy and breach of confidence, would leave in place precisely the scheme that has been held to be contrary to the European Convention on Human Rights, on free-speech grounds. They would leave in place the exact conditional fee agreement and success fee scheme, with all its capacity for abuse. For that reason, the amendments should be resisted.
Of course, I agree with the noble Lord, Lord Prescott, and others who spoke, that there is a problem in defamation and privacy cases. It is that the normal costs regime does not work very well in those cases, where often what are sought are not massive damages but other forms of remedy that cannot be dealt with
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The question is: what is the best way of meeting this legitimate aim? A means must be found of dealing with the David and Goliath problem-both ways. In one case there may be an extremely rich and powerful claimant and an impoverished defendant-let us say a citizen critic, or a little NGO, who cannot afford to pay the costs of the claimant. In another case the claimant may be a weak or impoverished individual who is up against a powerful newspaper or other big corporation, and the same problem will arise. We need to find a scheme that ensures equality of arms-a level playing field-between the strong and the weak in these cases such as privacy and defamation claims where the remedy in the Bill is not suitable.
Sir John Whittingdale's Joint Committee on Privacy and Injunctions drew attention, in its report published yesterday, to the need for this to be dealt with in some way. I agree with the committee on that. However, the amendments cannot solve the problem because all that they would do would be to leave in place the present, bad system without any change. Therefore, what is needed is a reply from my noble friend the Minister explaining the Government's approach to changing the costs regime. This does not have to be in a defamation Bill. As I understand it-although this needs to be confirmed-there is ample power for costs rules to be altered, especially for privacy and defamation cases, without the need to write the power into a defamation Bill. If I am right, whether a defamation Bill is in the Queen's Speech hardly matters; the point is that the Minister will have the power to make adjustments. Since I strongly support the introduction of a defamation Bill-as do many noble Lords-I hope that the changes will be made as part and parcel of a Bill, and will therefore be worked out.
I am sorry to have taken so long. I am trying to say, with respect, that the amendments are misconceived; I hope that the House will not divide on them. They would violate the European Convention on Human Rights and would retain the very abuses of which the right honourable Jack Straw was so conscious. They would not fit the Bill as a matter of process. What is needed is for the Minister to reply, to recognise that there is such a problem and to indicate whether the Government have the power to tackle it in the way that I suggested.
Lord McNally: My Lords, my noble friend is catching something that perhaps I should not call Pannick disease. The noble Lord, Lord Pannick, has a habit of asking questions and then giving the answers. We will have to see whether I will be able to satisfy my noble friend on the questions that he raised.
As I explained, the basic rationale for the proposed reforms to no-win no-fee conditional fee agreements is to squeeze the inflation out of our legal system. It is to rebalance the system to make it fairer as between claimants and defendants. They do this by correcting the anomaly whereby those who bring cases have no incentive to keep an eye on the legal costs. Right now, the recoverability of success fees and insurance premiums from the losing side can have the perverse effect of preventing defendants fighting cases, even when they know they are in the right, for fear of the disproportionate legal costs involved if they were to lose.
High and disproportionate costs have a negative impact not just because they can deny access to justice but more broadly because they can lead people to change their behaviour in damaging ways because of the fear of claims. Nowhere is that more true than in relation to responsible journalism, as well as to academic and scientific debate. The judgment of the European Court of Human Rights, to which my noble friend Lord Lester referred, in January 2011 in Mirror Group Newspapers v the UK-the so-called Naomi Campbell case-found the existing CFA arrangements with recoverability in that instance to be contrary to freedom of expression under Article 10 of the convention. Editors and journalists have long warned of the chilling effect of the current libel regime and argued that part of the problem is the huge costs that no-win no-fee cases impose. However, defendants are not always rich and powerful newspapers; they are also scientists, NGOs, campaigners and academics.
I have already made the general argument that any exception to reforms intended by Lord Justice Jackson to apply across the board is invidious and likely to lead to unfair anomalies with special treatment for some areas of law but not others. In the case of defamation, I additionally argue that these amendments are premature because, as the noble Lord, Lord Lester, explained, these issues need to be considered in the context of the defamation Bill, which we aim to introduce as soon as a legislative opportunity arises.
Lord McNally: The noble Lord will have to wait and see. One thing is certainly true: I have made every effort to make sure that defamation is not engulfed in a tsunami from Leveson. If we really want to reform defamation and not get caught up in a much wider privacy law, what I am trying to do is the way forward. Stunts like dividing the House tonight will show that, on this Bill, the noble Lord is still more interested in short-term political gain than in making progress.
Baroness O'Neill of Bengarve: Before the Minister finishes winding, will he explain to the House why he does not think that these exemptions-the noble Lord, Lord Lester, may be entirely right-are the right way
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Lord McNally: We are talking about a Bill that does not come into effect until 2013. Given that defamation legislation is in process, I do not think the fact that there is a slight lacuna is a major problem in terms of the issues that the Bill will deal with. If it takes a little longer, that is a problem, and I will return to that.
That Bill and associated measures seek to reduce the costs of litigation and discourage unnecessary litigation in the area of defamation. We seek to do so, very broadly, by introducing a range of substantive and procedural changes and also by focusing on alternative dispute resolution, which is quicker, at lower cost, and offers more meaningful redress.
Any exceptions for defamation or privacy cases from the changes in Part 2 are unnecessary because our CFA reforms should not prevent strong cases being brought. I share the concern that individuals who are not wealthy or powerful sometimes need to bring defamation or privacy cases. Nothing in our proposals should prevent that where a case is a good one.
The noble Lord, Lord Bach, sometimes makes me gasp when he starts lecturing our Benches on consistency. The noble Lord, Lord Prescott, asked why this was happening now. Perhaps I may quote an expert on these matters:
Those were the words of the noble Lord, Lord Bach, as Justice Minister, when he rushed attempts to reduce success fees before this House just before the election. We have already heard what happened in the grand coalition that was the Labour Government when the proposal went down the other end. Nevertheless, the noble Lord, Lord Bach, told this House:
Lord Bach: My Lords, I stand by those remarks. If the Minister thinks that there is something wrong-for example, the difficulty in relation to damages where, under his Government's scheme, claimants will have to pay up to 25 per cent of the damages they get-what is he going to do to change that? He is in government now.
Lord McNally: We are doing what they did not do. We are bringing forward a Defamation Bill that will address many of these problems. The noble Lord says that he does not know what is in the Defamation Bill. A Defamation Bill was brought into this House by my noble friend Lord Lester two years ago, when this Government first came in. In reply to that, I said from
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We have played this by the book. We have not tried to rush through legislation, as the noble Lord did in the dying days of his Government. We have carried out a sensible look at defamation. The noble Lord knows the conventions. I am very hopeful that we will find parliamentary time in the very near future.
As I have already said, the legislation in this Bill does not come into effect until 2013. The Defamation Bill and the procedural reforms that we intend to take forward with it are of course about reducing the complexity and therefore the expense involved. In order for those aims to be achieved, we will look at the rules on costs protection for defamation and privacy proceedings for when the defamation reforms come into effect. I can give the House the assurance that we will do so. Bearing that in mind, I hope that the noble Lord will withdraw these amendments. We are on course for a reform of our defamation laws.
Lord Lester of Herne Hill: My noble friend the Minister accused me of asking questions to which I knew the answer, but this question I do not know the answer to. Is the Minister saying that there will be adequate powers, either under existing law or the future legislation, to create any cost changes that are needed to secure a level playing field and equality of arms? If that is what he is saying, I am completely satisfied.
Lord McNally: That is precisely what I am saying. I have not brought this Bill this far to score such an enormous own goal. Noble Lords, particularly those who have been in government, know full well how these processes are carried forward. Nothing will happen that will not be fully and thoroughly debated in both Houses of Parliament. I know that various groups have been briefing and arguing for action now. I do not think that these amendments carry us forward in any way.
I give noble Lords as full an assurance as I can. Bills have to go through Cabinets and Cabinet committees, et cetera, but they also have to go through two Houses of Parliament, where this issue is extremely live. I cannot imagine that the kind of issues that the noble Lord, Lord Prescott, has raised tonight will not be dealt with fully in that Defamation Bill. With that, I urge the noble Lord to withdraw his amendment.
"( ) the legal services relate to any other claim or potential claim for damages arising out of circumstances involving personal injury or death,"
Lord McNally: My Lords, I committed on Report to bring back at Third Reading amendments to address issues raised by my noble friend Lord Hunt of Wirral in respect of Clause 57. Amendment 29 addresses situations where the referral fee for an ancillary claim, such as for damage to a motor vehicle involved in a road traffic accident, in addition to a personal injury claim, may be inflated to include a payment for a referral fee for the personal injury claim. Amendment 30 makes it clear in the Bill that the payment of referral fees to a third party, whether or not they are regulated, will not avoid the prohibition on the payment of referral fees. This gives both practitioners and regulators a clear marker and removes doubt as to the effect of the clause. We do not wish to place additional burdens on regulators and these amendments will remove the potential for confusion on what is and what is not covered by the ban.
I wish to put on record my thanks to my noble friend for tabling his amendments, which have enabled the Government to strengthen and clarify the ban on referral fees in personal injury cases. I beg to move.
I warmly applaud the coalition Government's intention to ban referral fees in personal injury cases. The amendments establish greater clarity around the operation of the ban on referral fees to ensure that there must be no side-stepping of the intention to ban them. I thank him warmly for bringing forward these amendments at Third Reading.
Lord Beecham: My Lords, it is with some relief that I return to the question of referral fees for positively the last time in the course of the Bill. The Opposition have no objection to these amendments in the circumstances and we congratulate the noble Lord, Lord Hunt, on having suggested them to the Government.
I do not know whether the noble Lord read the Daily Telegraph last Monday- which I think informed the speech of the noble Baroness, Lady Deech, with its suggestions about the Labour Party's alleged scheme for referral fees, about which I spoke at our previous meeting-but there is a certain irony in the amendment. He may not know-I did not know until after the event-that no less a body than the Daily Telegraph runs a referral scheme, including for personal injuries. It is interesting that that newspaper should have run a story criticising the Labour Party for something that does not exist when it has precisely the same scheme. Apparently it has a scheme with a firm called Irwin Mitchell, of which the noble Lord will have no doubt heard, which levies referral fees. Oddly enough, the Daily Telegraph did not disclose that in the piece that it ran.
"including, where the person affected agrees to this, reparation by means of restorative justice"."
Lord Woolf: My Lords, the amendment is supported by the noble Lords, Lord Ramsbotham and Lord Beecham, and the right reverend Prelate the Bishop of Liverpool. I am afraid the hour is such that I am not sure that those who put their name to the amendment, apart from the noble Lord, Lord Beecham, are in their places. It is a modest amendment, which has benefited considerably from the discussions that have taken place on the subject of restorative justice through the earlier stages of this Bill. Indeed, this is my third attempt to find an amendment to which the Government could not possibly object. I have had discussions with the Government and all I can say about this amendment is that I have not yet heard-although I look forward to the Minister's speech-any reason why they can possibly take any exception whatever to the amendment.
Restorative justice is a relatively new arrival on the criminal justice scene. I indicated in the earlier proceedings that it is part of the rather rare good news in the criminal justice area. For those who take an interest in improvements in the way in which we deal with offenders and victims, it offers evidence that things can be done better than they were in the past. Although restorative justice is possible, there is no provision in legislation yet, as far as I am aware, that makes clear in express terms, using the expression "restorative justice", what is the precise, core role of the courts. There are indications that the role can include restorative justice but I respectfully suggest that nothing appears clearly in legislation covering the position now. I hope and believe that the Government have plans, but cases have to be decided day in and day out, up and down the country. The courts look to Section 142 of the Criminal Justice Act 2003, which has a menu of what the purposes of sentencing are. One of those includes effecting "reparation", by unspecified means.
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