Legal Aid, Sentencing and Punishment of Offenders Bill

My Lords, once again I declare an interest as a non-paid consultant of a firm of solicitors in which I was a senior partner. Having slipped and fallen on my way to my office at Fielden House, I am tempted to declare an interest as a potential claimant against Westminster City Council. But even I would not have the effrontery to pursue such a claim. There may be no shortage of noble Lords who would proffer their services, although I am doubtful about that, but I may consult one of my clinical colleagues before the day is over. Today we reach Part 2 of the Bill, a part that has received little scrutiny in either House or in the media. Yet it deals with matters of profound importance. The conditional fee agreements system, which replaced and supplemented some areas of legal aid, is as important in ensuring access to justice for people of moderate means and all people in certain areas of law not within the scope of legal aid as legal aid has been to the poorest. Without a robust and easily accessible civil justice system, victims of terrible wrongs—industrial disease, clinical negligence, privacy violation, such as that suffered by Bob and Sally Dowler, and even grotesque human rights abuses, as in the case of Trafigura about which we will hear more later this afternoon—will not get justice. Today's debate therefore matters to potentially millions of people in terms of securing access to justice and redress for harm. Part 2 is not driven by the need to reduce public expenditure, which is repeatedly cited as the justification for the drastic reductions in legal aid when we were discussing Part 1, and for which Part 1 now effectively provides. Part 2 instead seeks to implement some but, crucially, not all of the recommended reforms of the civil litigation system proposed by Lord Justice Jackson after an exhaustive review of it. We heard in debates on Part 1 that the Government have studiously ignored the strong advice on retaining the scope of and eligibility for legal aid, but it does not stop there. They are also ignoring Lord Justice Jackson's recommendations for a modest increase of general damages to help successful claimants meet the cost of success fees and ““after the event”” insurance. Hitherto these have been met by defendants under the conditional fee system. Furthermore, they are not implementing an important recommendation to protect claimants with an arguable case from paying defendants' costs by introducing qualified one-way costs shifting, except in personal injury cases. Qualified one-way costs shifting would mean that an unsuccessful claimant would not be liable to pay the costs of a successful defendant. In this new system the losers would be successful claimants who forfeit part of their damages to pay success fees and the cost of ““after the event”” insurance, and successful defendants and their insurers under the QOCS system. The losers also include people who would be deterred from bringing a claim by the cost of ““after the event”” insurance to cover their own disbursements. The winners will be unsuccessful claimants, whose liability for costs would be met by the defendants, and losing defendants. It might be thought a somewhat perverse set of outcomes. It is as well to remember the rationale for introducing success fees in the first place. This was to encourage lawyers to take on riskier cases, some of which would be lost, at no cost to their clients; the lawyer is compensated for the risk by the success fees in cases which they win. The Lord Chancellor and some Members of your Lorships' House have suggested that the Government's proposals of limited success fees to be paid by successful claimants will lead to a competition between lawyers and drive down success fees. However, the corollary of that is that lawyers will be less disposed to take cases with a significant degree of risk so that the legally squeezed middle will find themselves denied access to justice in the same way that 650,000 people and their dependants will be denied access. For them, legal aid will no longer be available unless they have a high prospect of success. We are proposing that QOCS, recommended by Lord Justice Jackson, should be embodied in the Bill and not be delegated as a subject for the Civil Procedure Rule Committee, a point made in Committee by the noble and learned Baroness, Lady Butler-Sloss. We agree with the Civil Justice Council that the system should be simple. It should apply to all forms of litigation, not just personal injury, and it should be neither means-tested nor subject to a minimum payment by the claimant, as has apparently been suggested by the Ministry of Justice. Perhaps when he replies the Minister will comment on the Government's intentions in those respects. Subsection (4) of my amendment identifies the circumstances in which liability for costs would not shift, including cases where a claimant fails to beat a reasonable offer made by the defendant. The second limb of the amendment deals with an uplift of damages by 10 per cent, proposed by Lord Justice Jackson, to help offset the cost to successful claimants of the new requirement to pay the success fee out of damages recovered—limited, it should be said, to 25 per cent of the damages. The cost of ATE insurance would no longer be recoverable from the defendant. The Government appear to want to hand responsibility for such a decision to the courts. That is not acceptable. After all, it is some 13 years since the Law Commission called for general damages in injury cases to be increased by between a third and a half, and there has been very little movement in that direction. Three eminent cost judges who do not support the abolition of recoverable success fees and ATE premiums point out that 10 per cent would have been adequate to compensate for the additional amount that would be lost by a successful claimant. It is interesting that today's Guardian reports that the Master of the Rolls has written to the Ministry of Justice, saying that the 10 per cent uplift cannot be assured unless it is included in the Bill. What is the Minister's response to that? If he is confident that the Master of the Rolls is wrong, will he not accept that the provision needs to be in place before Clause 43 is implemented, if enacted? For our part, although we would have preferred a higher figure, we are prepared to accept the Jackson recommendation. I have mentioned ““after the event”” insurance. It is not strictly the subject of the amendment but it is frequently prayed in aid by Ministers as the answer to the withdrawal of legal aid and for people above the financial limits in any event. However, I have received a letter from the Legal Expenses Insurance Group, which represents 60 per cent to 80 per cent of the ““after the event”” insurance market, which casts considerable doubt on ministerial assertions in this matter. Astonishingly, if it is correct, it would appear that, "““the government has not consulted with or approached the independent providers with a view to discussing alternative and workable business models””." The Legal Expenses Insurance Group believes that, "““unless some form of ATE premium recoverability is preserved, access to justice will be significantly affected, both for personal injury and non-personal injury risks. ATE insurers have made proposals during the consultation process to assist the government but the proposals have been ignored””." It goes on to say that without amendment—this is the crucial point—it would be completely unrealistic for the ““after the event”” market to respond positively to the intended reforms. Even with the system of QOCS, ““after the event”” insurance will still be needed to cover a claimant's own disbursements. According to another group of insurers, premiums could range from £900 for an employer's liability claim to £1,900 for a disease claim and as much as £11,000 for a contributory negligence claim. The figures apparently reflect average success rates and are based on these insurers' experience of unsuccessful claims. I call on the Minister to tell us what discussions have taken place over this critical issue, with whom and with what result, and what he has to say about this disturbing communication. This all demonstrates the need for the Jackson recommendation on QOCS to be implemented and, crucially, extended well beyond personal injury claims. Having effectively demolished the legal aid system, Ministers are now, by their selective implementation of Jackson, threatening further to limit access to justice by undermining the conditional fee system. Their preference appears to lie with ““before the event”” insurance, which is beyond the reach of a significant proportion of the population and is, in itself, inherently uncertain, administered as it is by an industry second only to banking in the depths of public esteem. Our amendment would ensure that the Government could implement the proposals to limit victims' access to justice contained in the Bill only if they implement the counterbalancing proposals that Lord Justice Jackson envisaged as promoting access to justice. Together, they aim to bring down the cost of litigation for all. Might it be that some reforms could be adopted later than others? The answer to that question is no. To target one feature of the landscape will not work. That question and its answer are not mine; the question was posed and answered by Lord Justice Jackson himself in a recent edition of the New Law Journal. Therefore, the question that the Government must answer, should they choose to oppose this amendment, is: if they intend to implement both aspects of Lord Justice Jackson's plans, why do they oppose an amendment that would ensure that they are implemented simultaneously? In that event, how will the Government ensure that access to justice is continuously facilitated? I beg to move.