Legal Aid, Sentencing and Punishment of Offenders Bill

My Lords, I thank my noble friend for his amendments. It will come as no surprise to the House if I yet again echo what has been said on numerous occasions on Report: the architecture, as my noble friend Lord McNally referred to it, of this part of the Bill seeks to ensure that there is fundamental proportionality and fairness across the board in these claims, and that is why we have adopted the proposals of Lord Justice Jackson. The cumulative effects of Amendments 132B, 132C, 132E, 133B, 133E, 139D, 140A, 141ZA, 141ZB and 142B would be, as my noble friend said, a refinement on what has been proposed. When the noble Lord, Lord Beecham, talks about my party and my noble friend's party as being a party of conscience, it is because we feel that some of the fees that have been charged have been unconscionable under the existing scheme. That is why we wish to address the issue. My noble friend wishes to introduce staged success fees. I am very grateful to him for his complex set of amendments; he has set out what the fees would be at different stages, on the multi-track approach. His proposals would introduce staged success fees in ATE insurance premiums, the cost of which would be split between the losing defendant and the successful claimant. Some recoverability of success fees in ATE insurance premiums would therefore remain. I assure my noble friend and the House that we have given the amendments careful consideration, even at this late stage. They are proposed as a compromise and are supported by some but not all personal injury claimant representatives. It is fair to recall that these proposals are not entirely new. In his report, Lord Justice Jackson made primary recommendations that have essentially been adopted by the Government in Part 2. He also made an alternative set of recommendations which, while not identical, bear some considerable similarity to the proposals put forward by my noble friend. The Government consulted on both sets of proposals in their consultation. However, the respondents to the consultation expressed relatively little support for that alternative. Having given full consideration of all the responses, the Government announced almost a year ago its way forward in line with the primary recommendations of Lord Justice Jackson's report. The proposals, which the Government essentially endorsed, amount to a package of measures, which are carefully balanced to be fair to claimants and defendants. They are based on the abolition of recoverable success fees and insurance premiums, but have some supporting features which are intended to balance the abolition of recoverability. These include a 10 per cent increase in the level of general damages and the introduction of qualified one-way costs-shifting, or QOCS, in personal injury cases. In addition, measures to improve the arrangements for offers to settle under Part 36 of the Civil Procedure Rules are also seen as part of the package. Although the detail of all these proposals has not yet been finalised, the essential architecture is in place and is there to be seen. Our concern would be that revisiting these essential features, which would be the consequence of accepting my noble friend's proposals, would require us to reconsider the whole package, and in particular whether the balancing features, such as the Part 36 sanctions, or the specific exemption of clinical negligence cases, would remain as originally proposed. We do not believe that the alternative proposals would address the high costs under the current regime. As my noble friend indicated during the passage of the Bill, he generally supports the Government's decision to transfer the burden of the success fee to the successful claimant. However, these amendments would allow elements of success fees to continue to be recoverable. In the same way, the ““after the event”” insurers argue for their insurance premiums to be paid by the other side. In some of the more serious cases, these amendments would see successful personal injury claimants paying an increased amount from their damages in legal fees. Again, part of the architecture that we have talked about it is a cap to protect damages, which would mean that damages for future care and loss, which can run into millions of pounds in catastrophic injury cases, would not be taken into account and would be free from any claim in terms of the success fee. Our concern would be that these amendments would see some of those carefully calculated, necessary but often substantial damages going not to the claimant but as additional fees to lawyers. While I accept my noble friend's point that his amendments seek to limit recovery of success fees and ATE insurance premium at the point of allocation, we do not believe that this is right or fair. In particular, although we have no doubt that the amendments were moved with the best of intentions, they could lead to a continuation of the current problems by other means. They could see unnecessarily high costs for defendants, and a greater deduction from claimants' damages than we propose. The Government have tried to weigh up all the arguments, and balance the respective interests, and we believe that the proposals that we have introduced achieve that balance. They were consulted on and have been set out in the Bill, and we are not persuaded at this stage that this fundamental change—it is not a narrow refinement—is justified. With regard to some of the specifics on QOCS to which my noble friend referred, we intend to introduce them at the same time as the relevant provisions in Part 2 of the Bill, as they are implemented in April 2013. My noble friend also seeks to place QOCS in the Bill—we had a debate about that earlier this evening—and he sets out limited exceptions for fraud, vexatious claims and abuse of process. I indicated earlier why we believe that this matter should be done by way of the Civil Procedure Rule Committee and should not be in the Bill. I do not intend to rehearse these arguments again, but it may be that through these rules we can get a kind of flexibility which would allow at a later stage some of the other points to be raised, perhaps more than would be possible if the rules were set out in statute and would therefore require primary legislation. We believe that the rules allow for sufficient accountability. The Lord Chancellor would remain accountable for the policy of QOCS, and that would be set out publicly by the Lord Chancellor so that he could be answerable to it. The rules themselves would be made by the Civil Procedure Rule Committee, which includes the Master of the Rolls, and are agreed by the Lord Chancellor. They come into effect by way of statutory instrument. There is an established procedure which would involve consultation as appropriate. It would be relatively straightforward to devise a QOCS scheme regime for personal injury cases. Although there are many such claims every year, as a class they contain typical features which simply do not exist in other types of claims. Other types of claims have been mentioned. My noble friend mentioned, particularly, environmental claims. Amendments 139 and 140 in a later group will no doubt explore this further, but as he may have anticipated the Government still believe that the protective costs order ought to provide better cost protection in environmental judicial review cases. We hope that it will be clear from the outset what costs the claimant would have to pay if the claim was unsuccessful while ensuring that some contribution is made towards the costs of public bodies that have successfully defended a claim. The Government believe that this is the right approach, but we are considering how best to deliver this in the light of recent developments. The Government are currently consulting on proposals to codify the current case law on protective costs orders in relation to judicial review claims which fall under the Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters; it is much easier to say ““the Aarhus convention””. That consultation closed on 18 January this year and the Government will announce their way forward in the near future. The reason for which we wish to make a distinction is that, while personal injuries have typical features which allow us to go down the road of QOCS at this stage, different considerations apply in other types of cases. ““Before the event”” legal insurance may be available for professional negligence cases. Legal aid is available in judicial review cases. We will keep this under review, and having the matter dealt with by the Civil Procedure Rule Committee but with the Lord Chancellor setting the policy subject to consultation, and no doubt subject to accountability to Parliament, will allow a greater flexibility for these matters to be looked at in the future if there was a case made to extend the QOCS system. We are not persuaded that the refinements proposed by my noble friend would lead to a fair or workable solution. We believe that we have struck the right balances, abolishing the recoverability of success fees, and ATE insurance premiums will mean that claimants have an interest in the cost being curbed on their behalf, which will help to restore proportion and fairness in the current regime. We are also clear that special damages for future care and loss, which provide for necessary care and equipment, should be protected and not apportioned among those representing the claimant. I cannot accept that to change the overall package in this way at this time would lower the costs of civil litigation across the board. Against that background I urge my noble friend to withdraw his amendment.