FIFA
Baroness Deech Excerpts(10 years, 1 month ago)
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Lord Faulks
It will be a question of fact in relation to each allegation as to whether it comes within the jurisdiction. As the noble Lord may well be aware, the Bribery Act 2010 came into force in July 2011, which has to some extent extended criminal jurisdiction. The timing of any alleged offence will be crucial, but if there are any offences we are not going to be restrained if there is a prima facie case of infringement of criminal law within this jurisdiction.
Baroness Deech (CB)
My Lords, will the Minister take this opportunity to acknowledge the fearless part played in this by British investigative journalism, and the importance of a fearless and not overregulated British press?
Lord Faulks
I have absolutely no difficulty in acknowledging that, particularly the contributions by the Sunday Times and “Panorama”.
Divorce: Effect on Children
Baroness Deech Excerpts(10 years, 7 months ago)
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Baroness Deech
To ask Her Majesty’s Government what is their assessment of the survey findings reported by Resolution on the adverse effects of divorce on children.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, the Government agree with Resolution that parents need to minimise conflict when separating or divorcing to reduce adverse impacts on children. We encourage the use of mediation rather than litigation to resolve disputes about children and finances. Court processes now require consideration of mediation in such cases.
Baroness Deech (CB)
Does the Minister appreciate that mediation cannot work if the law is as uncertain as it is, especially now that legal aid has been removed and more than 50% of the money cases involve at least one litigant in person? Will he undertake to do an impact assessment on the removal of legal aid from the family courts, which has resulted in the strain that Resolution has pointed out? Will the Government commit to reforming the law on financial remedies on divorce to save money and remove some of that strain from the families and the children?
Lord Faulks
The noble Baroness is, of course, taking through this House her own Private Member’s Bill, which makes various recommendations for giving greater clarity to the arrangements on divorce. The Government are considering that, together with the Law Commission’s report on prenuptial agreements and financial arrangements after divorce. Certainty is of course desirable, but at the same time flexibility may be necessary to deal with difficult cases. The Government have already made it clear that they do not propose to bring forward legislation in this Session. The next Parliament will have an opportunity to consider not only the Law Commission’s thorough consultation but all the good work that the noble Baroness is doing in respect of her Bill.
Divorce (Financial Provision) Bill [HL]
Baroness Deech Excerpts(10 years, 7 months ago)
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Baroness Deech
Baroness Deech (CB)
My Lords, I will speak also to the question of whether Clause 6 stand part of the Bill. All these amendments, starting with this one, have at their heart the protection of children and assistance to middling and lower income families, who are facing terrible problems now that legal aid has been removed from assistance in divorce law, and with the exceedingly high number of divorces that we have every year.
The law needed reform anyway, but the urgency that now arises comes from the removal of legal aid. Only this week, the Bar Council reported an 88% increase in the number of people having to represent themselves in the courts. Throughout the Bill, I am trying to provide a framework that is just but which also promotes autonomy, clarity and entitlement. Given that legal aid has been removed—and I do not envisage an improvement in that situation for years to come—we have to help the poor families who are struggling at one of the worst moments in their lives with something expensive and complicated. Noble Lords will all have seen the accounts of cases in which couples have assets of, let us say, £1 million—not so difficult if you have a house—half or three-quarters of which goes on lawyers’ costs because they cannot reach an agreement; they have no firm framework within which to do so.
This first amendment emphasises what was implicit—it would now make it clearer—that the Bill is not meant to affect the existing provision for children, let alone make it worse. This amendment has the effect of retaining untouched Section 25(1) of the Matrimonial Causes Act 1973—note that this House has not revisited that law since 1973—and retains a provision that in dealing with finance after divorce the interests of children under 18 are the first consideration for the court. They are not “paramount”, which is an even stronger word that is used as regards decisions about their residence.
There is of course scope in the Bill, as there has been previously, for the matrimonial home to be preserved for the use of, let us say, the mother and young children until they reach majority, even if a half share has already been allocated to the father but its realisation or liquidation postponed. From that follows the deletion of Clause 6, which spelt that out in a different way. This amendment also serves to preserve Section 25A of the Matrimonial Causes Act—the desirability of the clean break.
We are not talking about child maintenance as such, because there is a new Child Maintenance Service, successor to the Child Support Agency, and that law will continue as ever. I might also add at the beginning for clarification that the noble and learned Baroness, Lady Butler-Sloss, who cannot be in her place today, supports this, and the noble and learned Lord, Lord Mackay, has specifically authorised me to give his view to the House. He says:
“I support your Bill and support the amendments. I think it vital that the law should contain a provision setting out a generally suitable formula for the division of the assets of a divorcing couple that would guide them without recourse to the courts. It would not harm this concept that a discretion should be available to the court to depart from it on cause shown”.
In fact, a general consensus is building up through the courts that something must be done about this law. It is for the run-of-the-mill divorcing couple who can no longer afford legal representation. I beg to move.
Lord Kennedy of Southwark (Lab)
My Lords, I am sure that the House is very grateful to the noble Baroness for bringing forward this Bill for consideration, and I hope that we can make progress today through the Committee stage. I am supportive of what the Bill seeks to do. It is a fact that relationships break down, and proposals to make financial settlements between parties as simple as possible, enabling both parties to retain a greater proportion of their assets, are to be welcomed. As the noble Baroness has explained, this group of amendments seeks to leave untouched Section 25(1) of the Matrimonial Causes Act, which makes it clear that the interests of the children are the first consideration when dealing with finances after divorce. It is also proposed in this group, as a consequence of that amendment, that Clause 6, which dealt with children, should no longer stand part of the Bill, as it would be confusing and could conflict with provisions already in place. These are very sensible amendments, which I hope will find favour with the Government.
Baroness Deech
Baroness Deech
My Lords, in moving Amendment 2, I speak also to Amendments 3, 4, 20A, 21, 22 and 26. What the amendments in this group have in common is that they are minor and technical. I had great assistance with the drafting of this Bill over the summer, as your Lordships will have noticed, and these amendments arise from the refinement of the drafting as it took place in reaching the final state of the amendments.
Amendment 2 is simply a correction, while Amendment 3 is a clarification. Amendment 4 ensures that this law, as I hope it will turn out to be, applies equally to civil partnerships and same-sex couple marriages. Clearly, a new law must apply to all different sorts of couples, whoever they are, who may go through the courts. Amendment 20A has come about simply because there has been a redraft. Amendments 21, 22 and 26 arose from the fact that there has been a preservation of flexibility of lump sums in distribution of property. This entire group is technical. I beg to move.
Lord Kennedy of Southwark
My Lords, this is an important technical group of amendments, which follow on from the previous group in clarifying that the provisions of Section 25(1) of the Matrimonial Causes Act remains in force and that we are referring only to subsection (2), for all the reasons that noble Lords gave in the previous debate, along with Amendment 3, which again makes it clear that we are referring to the Act in the amended form. The addition and clarification of the 2004 and 2013 Acts, as the noble Baroness advised the House, will clarify that the new law will apply to civil partnerships and same-sex couples, but not to cohabiting couples, who are the subject of a different Bill, to be introduced by the noble Lord, Lord Marks, which will have a Second Reading shortly.
The second part of the group removes subsections 5(1) and (2), which deal with the issue of periodical payments, discussed during the Second Reading debate in your Lordships’ House. They seek to address an issue that everyone recognises needs to be looked at; on these Benches we were concerned that there appeared to be a one-size-fits-all approach. In a later group, we will look at amendments that seek to take on board concerns expressed in the Second Reading debate and elsewhere.
Amendments 21, 22 and 26 make clear the divide between lump sum payments and ongoing periodical payments.
Baroness Deech
Baroness Deech
““relevant financial order” means—
(a) an order for lump sum provision in favour of a party to a marriage under section 23(1)(c) of the 1973 Act,(b) a property adjustment order in favour of a party to a marriage under section 24(1) of that Act,(c) a pension sharing order under section 24B of that Act,(d) a pension compensation sharing order under section 24E of that Act,and also includes any order under the corresponding provisions of the 2004 Act and the 2013 Act.”
Baroness Deech
My Lords, I rise to move Amendment 5. Consequent on it is whether Clause 2 stands part of the Bill. This provision, as amended, is rather more technical, but also flexible. It brings together the definitions of the relevant financial order—the sort of things that the court may deal with—and defines and spells out what was implicit in the original draft, the various types of order that the court may make. After some discussion, lump sum orders are included, as they may assist flexibility in dividing up the total assets. This will assist the court in achieving maximum flexibility. My aim throughout is to promote sufficient clarity to enable people to arbitrate and mediate and yet preserve a little bit of discretion, which is a good hallmark of our law. I beg to move.
Lord Walker of Gestingthorpe
My Lords, this amendment, as the noble Baroness said, introduces a definition of a new expression, “relevant financial order”. The most significant feature of the new definition is that it does not include an order for periodical payments, but to leave it there would perhaps be a rather meagre explanation. In the long run, it might be helpful to considering some later amendments if I speak very briefly about the terminology and structure of the Matrimonial Causes Act 1973.
Many of your Lordships will recall that the concept of no-fault divorce was introduced in England and Wales by the Divorce Reform Act 1969. Scotland followed suit in 1976. The 1969 Act did not contain any provisions altering what was then, in the old-fashioned phrase, called ancillary relief. New provisions were brought in by the Matrimonial Proceedings and Property Act 1970, which for the first time gave the court power to direct the transfer of specific assets, rather than dealing simply with sums of money. The 1969 and 1970 Acts were consolidated in the Matrimonial Causes Act 1973. My noble friend Lady Deech, with great respect, is not quite right in saying that the Matrimonial Causes Act 1973 has not since been revisited by Parliament. On the contrary, it has been amended at least 12 times. I may have got that number wrong, but it is a very much amended Act. However, the noble Baroness is quite right in saying that what Parliament has not revisited is the essential provision in Section 25(2), the guidance as to how judges are to exercise their very wide discretion. As the supporters of the Bill say, that is the provision that cries out for a simpler and more workable test.
The 1973 Act, unusually for a consolidating Act, introduced two entirely new definitions: first, a financial provision order, which was either an order for periodical payments or an order for a lump sum; and secondly, a property adjustment order, which reflected the introduction by the 1970 Act of a power to direct the transfer of particular identifiable assets. The difference between those two forms of order is essentially that between orders for a sum of money and orders relating to identifiable assets. The powers of the court were extended further in 1999 by the introduction of pension sharing orders, and in 2008 by pension compensation sharing orders following the introduction of the pensions compensation Act. That is the range of powers open to the court at present. The new definition of “relevant financial order” includes all the types of order—that is, property adjustment orders, pension orders and lump sum orders, but not orders for periodical payments. The shape of the Bill as we seek to remould it reflects that. Clauses 2 and 4 are concerned primarily with the scope of “relevant financial orders”, as they now would be defined. Clause 5 would be concerned with periodical payments orders, which are treated and stand on their own and to which the Bill adopts the attitude of discouraging them as a long-term measure except when they are essential.
The Bill seeks to amend what is by now a very complex situation. I hope that this definition adds a little clarity to that. Perhaps I may add that if the Bill does go through, it certainly would be high time for there to be a further consolidating Act to replace the much amended 1973 Act.
Lord Kennedy of Southwark
My Lords, this next group of amendments, or one amendment and one clause stand part, seeks to improve the Bill from its original form, taking into account matters brought out on Second Reading. I think that all noble Lords who spoke in that debate thought that the Bill was seeking to address issues that had not been addressed for far too long, so what we are seeking to do here today is very welcome. Amendment 5 in the names of the noble Baroness, Lady Deech, my noble friend Lord Grantchester and the noble and learned Lord, Lord Walker of Gestingthorpe, sets out clearly what a relevant financial order is so that there can be no ambiguity about it. As the noble Baroness, Lady Deech, said, lump sum orders are also included as they may assist in providing flexibility in dividing up total assets. The noble Baroness, Lady Deech, is opposing that Clause 2 stand part of the Bill, as there are amendments down that better define what is sought to be achieved here. If agreed, those amendments will be an improvement to the Bill as it is presently drafted. I can see the logic here and the clarification that that brings.
Baroness Deech
My Lords, I wish to say simply that of course the noble and learned Lord, Lord Walker, is right—that is why he is learned and I am just a noble Baroness and not learned. However, my point is that this House has not revisited the principles of financial provision on divorce in more than 40 years, despite all the changes in society and all the things that have happened—the changes in the position of women, women going out to work and the rise in divorce. It is really crucial to do so now because of the removal of legal aid and the need to help those who mediate and arbitrate and give them a starting point. The Government favour mediation yet there has been a decrease in the use of mediation. How can people mediate if they do not know what the starting point is? To mediate means to find a middle way, and therefore we need a parameter. That is why we are trying to clarify this law.
Lord Faulks
I am sure that all noble Lords realise that what the noble Baroness meant by saying that the 1973 Act had not been revisited was that the approach that was set out in that Act has not been changed since that date. Although there have in fact been a considerable number of amendments to the Act, as the noble and learned Lord, Lord Walker, pointed out, the overall thrust of the noble Baroness’s point remains the same. Amendment 5 moves, in amended form, the list of financial orders in Clause 2 so that they now form the definition of “relevant financial orders” in Clause 1, which deals with interpretation. This amendment goes with the proposal that Clause 2 does not stand part of the Bill, as the provisions for financial orders would as a result be dealt with elsewhere in the Bill.
The Bill as amended will limit the court to making relevant financial orders only to the extent that a binding prenuptial or post-nuptial agreement did not “deal with the matter”, and only in relation to matrimonial property, as defined by the Bill.
Baroness Deech
“Orders limited to matrimonial property
(1) In this Act “matrimonial property” means all property and interests in property, including any pension rights, which could be the subject of a pension sharing order or a pension compensation sharing order, belonging to the parties or either of them at the date of the relevant financial order which—
(a) was acquired—(i) during the marriage; and(ii) otherwise than by gift, inheritance or succession from a third party; and(b) does not directly or indirectly represent property acquired by them or either of them before the marriage.(2) For the purposes of subsection (1)(b)—
(a) any premises and household goods acquired before the marriage for use by them as or in their home shall be treated as acquired during the marriage;(b) if any property that would otherwise fall within subsection (1)(b) is used and applied so as to increase the value of any matrimonial property the property so used or applied shall be treated as matrimonial property;(c) if any matrimonial property belonging to one party is used or applied so as to increase the value of an asset which belongs to the other party, and is not matrimonial property, a proportionate share (by value) of that asset shall be treated as matrimonial property; and(d) paragraph (c) shall also apply if by exceptional personal skill or effort a party to the marriage increases the value of an asset which belongs to the other party, and is not matrimonial property.(3) Subsections (2)(b) to (d) do not apply in relation to any asset if it appears that the costs of investigation and valuation required for the application of the relevant paragraph in subsection (2) would be likely to exceed one-fifth of the amount of the proportionate part or adjustment.
(4) Except as provided in section 3 (pre-nuptial and post-nuptial agreements), no relevant financial order shall be made otherwise than in relation to matrimonial property.”
Baroness Deech
My Lords, I rise to move Amendment 6 and in so doing I propose to speak to Amendments 14, 15, 15A, 16, 18 and 19. They all stand together, forming one of the great pillars of the Bill, which is to seek to bring the law into line with what the Supreme Court in its judgments has more or less inched its way towards—to bring our law into line with Scottish law and the law applying in most of North America and the continent of Europe. In brief, it is that when the court is dividing up the matrimonial property, it should divide only the property acquired after the marriage by the couple. That would aid greatly simplicity and negotiation. Of course, it is not absolutely rigid. The family home will always be treated as matrimonial. I assure your Lordships that there are many provisions and precedents in the law for manoeuvring that situation to ensure that children, and usually their mother, stay in the home until they leave for university or careers. Incidentally, it is an interesting question whether one should treat children as ending their childhood at 18 or whether, as it is now so common for school-leavers to go to university or college, one should say that they need the protection of the law in that respect until they are 21.
There is, however, room for manoeuvre in this amendment. It is modelled on New Zealand and Scottish law and makes provision for how to treat property that was separate but has been increased in value by the assets or efforts of the other party. It is not the case that selfishness will be promoted. If one spouse works on the premarital property of the other, a proportion would be regarded as reverting to the ownership of the one who has put in the effort.
Again, this is a law, and this is an amendment, for the average couple. Very wealthy couples will always be able to afford lawyers and may make prenups and sort out the property between them. This is for the hundreds of thousands of couples who get divorced every year and are clogging up the courts and having to face each other in court without representation and with no clear guidance on what would be a fair and equitable settlement. If this Bill is passed, this provision in particular would give them a steer.
Noble Lords may have seen the report last week that a couple spent £1 million on lawyers and experts while fighting over the division of assets worth £2.9 million. There was a call to cut excess litigation costs and for cost caps. However, you cannot cut unless you make the law simpler and clearer and give couples a starting point for mediation. A cartoon in the Times yesterday showed two lawyers expressing shock and horror over the case I mentioned and at the fact that one-third of the assets was used up in costs. A final box in the cartoon says, “Absolutely shocking! When I did a divorce case, we used up half the assets”. This situation cannot be allowed to continue. It would be better to have broad-brush justice to help those struggling without legal aid and lawyers. I mean no criticism of the Supreme Court. Its judgments have been sophisticated and compassionate. But only the richest people reach the Supreme Court and the level of detail and sophistication that its judgments have provided does not help the man or woman in the high street battling over how to divide up their sparse assets, and where every penny spent on costs takes money away from the children.
Amendment 14 would simply change the date on which the valuation of the assets is calculated. I was advised by judges that I should make this change, which would change the date on which the financial order is made. Amendment 15 is consequential drafting. Amendment 15A would provide maximum flexibility by allowing people to carve up their assets by using lump sums, not necessarily chopping the house in half or having to sell it but using such assets as they have to reach a 50:50 settlement in their negotiations. Amendments 16, 18 and 19 spell out the ways I mentioned earlier of departing from a 50:50 split in certain circumstances, mostly where one party has put in extra effort or, indeed, for the protection of the children. Flexibility would be maintained but couples who know nothing about the law would be able to start with the presumption that whatever they acquire after they get married should be divided in half. I used to run an all-party parliamentary group on family law in this House and members of the public attended its proceedings. They did not always understand the niceties but one message came through from the hundreds of people who attended the proceedings. They said, “Please, can’t we have a booklet when we get married to tell us what our rights and duties are and what’s going to happen to us—what we will owe—when we get divorced? We ask people and nobody can tell us”. This is what I am trying to provide. Here is a guide to what will happen in the unfortunate event of people getting divorced. I beg to move.
Lord Grantchester (Lab)
My Lords, I thank the noble Baroness, Lady Deech, for her great efforts to allow the courts to bring certainty to this situation. As regards her last comment, I hasten to add that I do not think people enter marriage with the idea that they are going to get a divorce. Similarly, I do not believe that anybody turns up to work with the intention of fouling up, but these things happen. I support the amendment as it would bring certainty and enable couples facing divorce to be given clear advice on what their future situation will be and how the matrimonial assets will be divided. The starting point for this process should be that of defining what the matrimonial assets are.
Baroness Deech
I completely appreciate the Government’s concerns on this. We are united in wanting to ensure that the costs of litigation are removed or reduced and that people get fair shares. It is a very difficult issue. I do not want to withdraw the amendment at this stage, but given that the Bill will have many more stages to go through—including, I hope, in the House of Commons—I and others would be happy to enter into discussion with the Government on this very tricky issue of how to define what should be shared, bearing in mind that the Supreme Court has already indicated, in a number of judgments, that sharing matrimonial property is the way forward. That has to be our starting point, even if we try to refine it in the many stages that lie ahead of us before the Bill becomes law.
Baroness Deech
Baroness Deech
My Lords, in moving Amendment 7, I will speak to Amendments 8 to 13 as well. What binds them together is that they concern prenuptial and post-nuptial agreements.
First, let me counter criticisms I have heard. Unfortunately, it is no good saying that nobody ever contemplates the end of their marriage. Only too sadly, it is unavoidable to think of it. There cannot be anyone in this House who has not had a member of their family go through divorce—or, indeed, has not been divorced themselves. It is a very current feature of life. I know the arguments that the Bishops might have put forward, had they been here: that having a prenuptial agreement somehow undermines marriage. That is not so. Such agreements are common in every country in Europe and in North America. In all those places the divorce rate is lower than it is here, except possibly in the United States. I do not think it can be argued that they in any way undermine marriage. Moreover, the Supreme Court swept away the public policy issue that there is somehow something wrong with making an agreement about the end of a marriage in the famous case of Granatino v Radmacher, which was unusual in that it was the wife who was very wealthy and the husband, although comfortable, was not quite so wealthy.
First in this group, I took account of what was a glaring omission in the first draft. The prenuptial or post-nuptial agreement must of course be in writing. That is covered by Amendment 7. This was a mere oversight. It follows the recommendation of the Law Commission in its report on matrimonial property agreements and it follows practice abroad. There can be hardly any dissent from that. Amendment 8 is an improved draft: a way of saying that prenuptial and post-nuptial agreements are binding.
Amendment 9 is about disclosure. Obviously, if people are making a prenuptial or post-nuptial agreement they ought to tell each other what their assets are before they sign it. This amendment seeks to deter legal challenges to an agreement if a small or unimportant asset was overlooked and not declared. For example, if a wife omitted to mention in her list of assets her second-hand car kept somewhere else in the country, one would not want the agreement voided for that unimportant failure to disclose. How many of us could at any time make a completely comprehensive and accurate list of everything we own? Therefore, the amendment provides that a failure to disclose will not ruin the prenup or post-nuptial agreement provided that the asset is not of great significance. I have been advised by judges that there is no need to make any fresh statutory rules about disclosure—hence Amendment 12.
Amendment 11 is meant to prevent someone who would not be damaged taking advantage of non-disclosure. Others will give more substantial examples of that. For instance, if a wife failed to disclose her second-hand car, she could not rely on that to destroy the prenuptial agreement so as to give her an advantage. The idea is that, set against a background of clarity in dividing up assets, the court will accept the prenuptial or post-nuptial agreement as binding.
The Supreme Court has already almost worked into that position, but it attached so many conditions in the well known case of Granatino v Radmacher that about a dozen other cases followed where couples argued simply over whether the prenuptial agreement was binding. If they start going to court to argue about that, the very point of the agreement is undermined and costs accumulate.
The provisions in this group of amendments cumulatively will give very strong, although not complete, force to the binding nature of a prenuptial or post-nuptial agreement. Because the normal laws of contract will apply, if there is a mistake, duress or fraud, it will be possible to undermine a prenup. Section 35 of the Matrimonial Causes Act provides, in limited circumstances, a way to attack a post-nuptial agreement, so that is already quite common.
The great advantage of this provision is the encouragement that it will give people to get married. The noble Baroness, Lady Wilcox, who apologises for not being in her place today as she has been called abroad on urgent business, told me enthusiastically about her feelings and those of other Members of this House of riper years who might contemplate a second marriage. People who do so, having once been widowed or divorced, may well say to themselves, “But if I get married again, all the property that I inherited from my first husband or everything I have worked for might, in the event of a second breakdown, go to the second spouse and his family”. I think that most people of a riper age who are thinking of getting remarried would prefer to keep their property for their original family, and the existence of a prenuptial agreement would encourage and help them.
The prenuptial agreement is very common in other countries. Of course, as your Lordships know, there is many a transnational marriage these days. People who were married abroad get divorced here and vice versa. An English person marries someone from abroad who takes it as a matter of course that there should be a prenuptial agreement. Years ago, I had a student at my college in Oxford who got engaged. She came bouncing in to see me and said, “I’m engaged, Mrs Deech. I’m engaged. Who do I go to? Which lawyer do I see about my prenup?”. That was about 20 or 30 years ago, and one can well imagine how my jaw dropped. However, she was Canadian, from Quebec, and that is what they do in Quebec, in France, and in other places. Having decided to get married, the young couple go off and see a lawyer to discuss what they call the “matrimonial regime”, where they talk about what sort of property ownership will apply. It does not undermine their marriages in those countries. As I have said, their divorce rate is lower than ours.
I find it very curious that when the average couple in this country spend £20,000 on arranging a wedding, and spend years doing it—we all know just how complicated these things are—they do not spend just a few pounds on going to see a lawyer to decide who is going to own the property and how things are going to be sorted out. It runs contrary to our nature—or at least it used to. However, I think, and hope, that the noble Baroness, Lady Shackleton, will explain to us that these prenups and post-nups are catching on, because, sadly, none of us can be unaware of how these things can go wrong and what it will cost us. As I said, the Supreme Court has already pretty much worked itself into this position.
Therefore, I very much hope that your Lordships will accept this group of amendments, which will make prenups and post-nups binding against a background of dividing up assets fairly on divorce and will give couples a clue as to what is fair when drawing up a prenup. Alternatively, they might say, “No, I’m not going to draw up a prenup. Don’t you love me? We don’t need a prenup”. I am sorry to say that that would be a bit naive these days but this group of amendments would greatly improve the situation for couples with a foreign element, older couples embarking on a second marriage and couples where there is a great disparity of wealth: the model who marries the footballer, the singer who marries the Russian oligarch and so on. It is perfectly understandable that they might want to discuss how those assets should be owned and divided up. It is too late for me, I am afraid, but not necessary anyway. However, I very much hope that this House and the Government will recognise that that is modern society and that the amendments would greatly help a number of couples. I beg to move.
Baroness Shackleton of Belgravia
My Lords, I support the concept behind this pillar of the Bill. It is vital that there is more clarity as to when, why and where prenuptial agreements should be binding. If they are made de rigueur in this country, as they are in other countries, there will not be any romance in it; it will just be like trotting along to get your marriage licence. There will be WH Smith forms and, if the couples do not take legal advice, they will be protected.
There are problems because the current law does not provide for binding prenuptial agreements but there is a lot of travel within the European Community. People come to this country having signed a prenuptial agreement which is not a prenuptial agreement: it is a property regime which, with no legal advice, is translated into a prenuptial agreement in this country, and it causes a lot of problems. If people know in clear terms that those are not going to work, then they will know where they stand. They will know what will work and they can be given appropriate advice before they arrive here if they are intending to come to this country.
My noble friend Lady Wilcox believes that this proposal will positively encourage marriage, and I support that wholeheartedly. Unfortunately, I see a cottage industry in my profession of stepchildren encouraging divorce. It is forced upon a parent so that the parent can, putting it crudely, collect the money before they die because there is no prenuptial agreement. Therefore, divorce is being promoted by stepchildren so that assets on one side of the balance sheet can be collected and they can profit by inheritance. That is ugly. A prenuptial agreement would avoid such circumstances.
Also, second marriages are often broken by stepchildren. If those stepchildren know that their financial security is intact and protected by law, there is every chance that the marriages will survive. Speaking in my other capacity as a patron of the Marriage Foundation, I believe that everything should be done to enhance the prospect of people remaining married. Prenuptial agreements protect people because they know what will happen to them should the ghastly event of divorce happen. It is very important that people get independent legal advice because at the time they get married they are, in my experience, concentrating on the dress, bridesmaids, venue and canapés and not what may go wrong. To have people in love not being properly shown the horrors of divorce is a mistake.
I wholly agree with this measure becoming part of the statute. I was the lawyer for Mr Granatino and it was an ugly shock when the Supreme Court decided to apply contractual measures to something that had hitherto, as part of the Matrimonial Causes Act, not been legally enforceable.
Baroness Deech
My Lords, it might surprise the noble Lord, Lord Cormack, to know that I am absolutely with him on the importance of marriage. I have spent much of my academic career writing about it in an atmosphere where I was almost a lone voice. I am with him all the way. I wish there was more we could do about it without being accused of claiming the moral high ground and so forth.
Nevertheless, I have studied the situation and realised, as the noble Baroness, Lady Shackleton, pointed out, that this is going on. The Supreme Court has recognised it. It is for this House to grab a hold of it. We should grab hold of all this law, which has been interpreted and elasticised and twisted around by the judges for 40 years without this House getting a grip on the principles. Now is an opportunity to recognise that we are where we are with 100,000 couples divorcing every year, leaving aside the many more breakdowns of cohabitation—and possibly in the future, civil partnerships and the relationships of same-sex couples who have not turned up in the statistics yet. My heart is absolutely with the noble Lord.
Lord Kennedy of Southwark
My Lords, this group of amendments starting with Amendment 7 in the names of the noble Baronesses, Lady Deech and Lady Wilcox, and my noble friend Lord Grantchester are all to Clause 3, which concerns prenuptial and post-nuptial agreements.
I see the arguments made that these agreements, which were not very common a few years ago, are on the increase and can provide certainty to both parties as to the division of assets in the result of a breakdown of the relationship. I recall the comments of the noble Lord, Lord St John of Bletso, when he told us at Second Reading that these agreements had in no way encouraged the breakdown of marriage. Also, the noble Baroness, Lady Wilcox, spoke about people who had been widowed or divorced and were afraid to marry again where there were assets they wished to protect and who were reluctant to commit again, fearing a potentially financially disadvantaged position at a time of life when starting again would be almost impossible. The noble Lord and other noble Lords spoke about this again today.
The amendments themselves seek to provide further clarity as to what this Bill seeks to do in respect of pre and post-nuptial agreements and build on the comments and points raised both inside and outside your Lordships’ House.
Lord Faulks
The noble Lord makes an important point. What I did say was that the Government had not yet concluded how they proposed to respond to the Law Commission’s recommendations. The Law Commission has said that it considers it appropriate to override an agreement in some cases. I take entirely his point that if, as it were, the court is going to have a free rein to override an agreement simply because it thinks it fairer in the circumstances to come to a different conclusion, that would significantly undermine the degree of certainty which can be obtained by a prenuptial agreement. However, at the heart of what the Government will have to decide on this is to respect all the advantages that one can obtain from having a prenuptial agreement for the reasons that have already been outlined in the debate, yet not making it iniquitous in some circumstances—limited circumstances, I would imagine—where it is manifestly unfair for a party to be restricted by the scope of that agreement.
Baroness Deech
My Lords, I am sure that the Minister will agree that the best should not be the enemy of what is workable and good going forward. I am also sure that the Minister and I are united in the deep concern I have about the unfortunate couples who are wasting their money as they go through the process at the moment. I am willing to try almost anything because this has been a concern of mine for the past 40 years. We need a framework for couples that is more in line with what is tried and tested in New Zealand, Australia, Scotland, North America and Europe. While appreciating that this is an issue in flux and the fact that the legislation I am proposing would still have to go through the Commons, I hope very much that the noble Lord will be open to discussion with me and other concerned parties about how to get exactly the right wording in relation to proper disclosure—I absolutely understand his concerns—and the flexibility that is necessary. I am convinced that we must do this and I believe that the Minister shares that concern.
Baroness Deech
Baroness Deech
Baroness Deech
Baroness Deech
Baroness Deech
Baroness Deech
My Lords, Amendments 23 to 25 are all about what we specialists call periodical payments, which, I ought to explain to the House, are ongoing maintenance payments that many people are familiar with, whereby usually a husband, although not always, is ordered to pay his ex-wife a monthly or annual sum, year in, year out. A Member of this House has told me that he is still paying maintenance to his ex-wife after 30 years and many intervening marriages.
In fact, only about 12,000 such orders are made every year, although, as I have said more than once, there are more than 100,000 divorces every year. Not many of these orders are made, which must mean that people are reaching their own agreement: they are settling the matter once and for all by a lump sum, or, very likely, there simply is not any money to go around. As I have said before, the law that I am trying to reform affects largely lower and middle-income people. Of course, as we know, in the lower income bracket, people may well be living on benefits with a great deal of state subsidy; there simply is no money to go around and no order is made.
Noble Lords will recall the great difficulty there has been over the decades in trying to extract from fathers, who have no reason to object, ongoing maintenance for their children after a divorce. It has been like trying to get blood out of a stone, and so it remains. I suspect that in many of these divorces no order is made because one or both of the couple are living on benefits.
In many ways, the current law is regressive. Reverting to an analogy I have used before, were I or any other noble Baroness in this House so fortunate as to marry a footballer for a brief period, we could expect at the end of the marriage, which undoubtedly would come about, to be kept in that particular style for ever and ever—it really is not that amusing; that is the law at the moment—whereas if a noble Baroness in her youth was so altruistic as to marry a vicar she would get absolutely nothing, or next to nothing, on divorce. I have said for many years—and I have been involved in educating women all my career—that the message that goes out is, “Find that footballer and sit back”.
The Law Commission has said that periodical payments—maintenance—should be a transition. In an era when women, mothers included, are expected by the Government not to claim benefits once their child is six, it is very hard to argue that once a woman has children she should always be kept after the end of the marriage, let alone if she has no children or those children have grown up. I am sure that noble Lords know from their acquaintances the inequity and rather arbitrary nature of what goes on.
The Law Commission has said that maintenance should be a period of transition to full independence. We know that this may be hard on the older woman but it may very well be that there are lump sums and a division of assets. Moreover, I have shown in these amendments that I am listening to the concerns of the Government. At Second Reading they said that this may be hard. These amendments therefore say that maintenance should last in the first instance for five years—which represents the average period between the end of one marriage and the beginning of another—and that they may continue where there is evidence of “serious financial hardship”.
To change the law in this way would be only to bring us into line with what goes on, as I have said before, in North America, the rest of Europe, Scandinavia, Australia and New Zealand. It is very hard to argue, when our divorce law, rightly or wrongly, is no longer based on fault but on irretrievable breakdown—“This marriage has come to an end; it is nobody’s fault”—that a man should continue to keep his ex-wife in the style to which she became accustomed for ever and ever until the end of their joint lives. It does not actually happen—as I said, there are only 12,000 cases.
I will quote briefly from some of the blogs. Whenever I mention this in public, the public come back and say things such as,
“desperately needed reform of financial proceedings on divorce … The financial interests vested in the current lawlessness are colossal … all that comes out of court is injustice, direct/indirect discrimination … It is fundamentally unfair and an affront to the rule of law that the outcome of cases should vary randomly to such a degree”.
Even the Law Commission reported that its consultees said that operating financial provision in divorce for a judge is like a bus driver being given a bus and told to drive it but not being told where that bus is to end up.
What is the objective of maintenance at the end of divorce? The House has not really got to grips with this ever since the change in the divorce law in 1969. Actually, periodical payments are withering on the vine. It is time for us to give a steer. I absolutely understand that the Government have concerns and think that people will end up on benefits, but the people who are likely to do so are living on benefits already.
I have provided in Amendment 24 that the period may be extended. Again, I quote from some of the consultees:
“Many people going through divorce have grown sick and tired of hearing that the legal profession has spent the decades since the Matrimonial Causes Act was enacted failing to develop a coherent set of straightforward principles to govern division of income and assets on divorce”.
Another says:
“ The Scottish system”—
which I am copying here—
“is by no means perfect, but it does at least provide a framework for dealing with financial provision. Legislation will always be open to interpretation by lawyers … The public should however be able to rely on and understand a basic set of provisions regulating the division of matrimonial property on separation and divorce”.
Another said:
“Nobody knows where they stand. The judge you get on the day can do virtually anything based on a whim”.
That is how it seems—a point made strongly by the noble Baroness, Lady Shackleton, at Second Reading.
Moreover, one must remember that many women now, especially younger women, are earning more than their husbands. Men somehow seem to take it on the chin when they have to pay maintenance to their ex-wives, but there is nothing like the fury of an ex-wife who already feels that she has been betrayed by the man she married who is earning less than her when she realises that she is going to have to keep him for the rest of his life. I beg to move.
Baroness Deech
Criminal Justice and Courts Bill
Baroness Deech Excerpts(10 years, 11 months ago)
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Baroness Lister of Burtersett
I oppose Clause 68 standing part of the Bill. The Joint Committee on Human Rights welcomed many aspects of the Government’s original proposals on cost capping, as have others. However, as the noble Baroness, Lady Campbell of Surbiton, pointed out, we are very concerned about Clause 68. We said that it has the potential to limit very severely the practical effects of PCOs in protecting access to justice. We quoted in our report the supplementary written evidence given to us by the Bingham Centre for the Rule of Law, which stated:
“A PCO that cannot be obtained until it is too late to prevent the chilling effect of uncertain and unlimited costs exposure is a pointless PCO: it does not achieve the aim of enabling access to justice for those who cannot expose themselves to substantial costs risk”.
In essence, that is very much the argument put forward by the noble Lord, Lord Pannick. Therefore, in the JCHR’s view, Clause 68 is too great a restriction and will undermine effective access to justice.
The committee also shares the concerns of others that both Clauses 68 and 69 give the Lord Chancellor unreasonable Henry VIII powers. We noted that the Government have not explained the necessity for giving the Lord Chancellor “such an extensive power”, and one which has serious implications for the separation of powers between the Executive and the judiciary. Therefore, we recommended that those powers be removed from the Bill.
It is worth noting the JCHR’s wider observation that the judicial review proposals as a whole,
“expose the conflict inherent in the combined roles of the Lord Chancellor and Secretary of State for Justice”.
We warned that the kind of politically partisan arguments put forward by the Lord Chancellor in support of these proposals—for example, in the Daily Mail of 6 September 2013, which I think was referred to in earlier debates—
“do not qualify as a legitimate aim recognised by human rights law as capable of justifying restrictions on access to justice, nor are they easy to reconcile with the Lord Chancellor’s statutory duties in relation to the rule of law”.
I am well aware that it was my own Government—a Labour Government—who combined these two roles, but such a politically partisan approach has led the JCHR to suggest that the time is approaching for there to be a thoroughgoing review of the effect of combining in one person the roles of Lord Chancellor and Secretary of State for Justice. Personally, I think that Part 4 of the Bill means that that time has now come.
Baroness Deech (CB)
My Lords, I intervene very briefly, again as one who has been judicially reviewed—indeed, as one who is constantly being judicially reviewed. There is something of a flavour here that judicial review is always a case of David versus Goliath. However, it has to be remembered that sometimes it is a case of David versus David. Although the first David may passionately believe that what is being done in their name is in the public interest, the person on the other side may equally strongly and decently believe that what they are standing up for is also in the public interest. They are not necessarily a well funded public organisation. That is why I have some sympathy with the retention of Clause 69(2), and with giving some support to the other party who also believes that their costs should be capped because they are defending something that they believe is in the public interest. Other than that, I think that the general tenor of the argument that judicial discretion should prevail is the right one. I support the general thrust of the amendments, subject only to our remembering that the person who is not the claimant—the respondent—may have an equally innocent and good case and believe that they are standing up for the public interest.
Lord Davies of Stamford
My Lords, in my view there is a lot of mischief in this clause and the best solution would certainly be to leave it out of the Bill altogether. I want to touch on three particular pieces of mischief which lie within it.
Subsection (3) has already been dealt with by the noble Lord, Lord Pannick, in proposing his amendment to remove that subsection from the Bill. No one doubts the great importance and value of having a costs-limiting facility available in judicial review. The Government are not arguing that there should be no such scope for costs-limiting orders, and no one else has argued that there should not be such scope. I think no one would deny that if there were no possibility of getting costs-limiting orders, some very meritorious applications that were very much in the public interest would not be made. That would be a great loss to our legal system. As the Government have not argued against the principle of costs capping, I do not think that I need say more than that.
Equally, I do not think that anyone can deny that if the Bill is introduced in this form and subsection (3) proceeds on to the statute book, an awful lot of the value of costs capping will be negated because applicants will be exposed to very significant financial liabilities—almost certainly incalculable financial liabilities—before they get to the point when a costs-capping order can be considered by the court. Therefore the effect of the costs-capping order would itself have been negated and a large number of potentially meritorious applications will not be able to proceed at all and will not be started. That would be a great loss to the system. If the Government said that that was their intention, they would at least be straightforward about it. In actual fact, however, I think they are again in a state of contradiction, saying on the one hand, “Yes, we do want to have a costs-capping provision”, but, on the other, “We want to introduce a measure that will in practice negate very largely the benefit of that provision”.
My second problem with this clause concerns subsection (6), which states:
“The court may make a costs capping order only if it is satisfied that … (b) in the absence of the order, the applicant for judicial review would withdraw the application for judicial review or cease to participate in the proceedings”.
What exactly does that mean? Once again I ask for clarity because the law ought to be clear. This means that the court has to be satisfied that the applicant would actually withdraw the application if a costs-capping order is not provided. Is that based on the applicant saying that he or she would withdraw the application if no costs-capping order is given? If so, does that create an obligation for the applicant to withdraw if the costs-capping order is denied? It is perfectly possible that a costs-capping order might be asked for in very good faith by an organisation with very slender means or by an individual with very slender means who later finds that his or her cause is backed by a rather wealthier supporter. Therefore it is possible that the application could be saved after the denial of a costs-capping order, by some other party coming in to support the application, with all the liabilities attaching to that which we discussed this morning. Would that eventuality be denied by this provision in the Bill? We should be absolutely clear about that, because the word “satisfied” is a very strong word, it seems to me. How do you know that the applicant would withdraw in those circumstances? How can you possibly know such a thing unless the applicant has given such an undertaking? If the applicant has given such an undertaking, presumably that undertaking is enforceable. We are not told that in the Bill, but we ought to be told by the Minister whether that would be the effect that the Government seek.
Finally, I object very strongly to subsection (9), which has already been referred to as a Henry VIII clause. However, it is a Henry VIII clause of pretty extraordinary dimensions. One is used to Henry VIII clauses in legislation. There are far too many of them. There is one later on in the Bill under Clause 73. Clause 73(1) states:
“The Lord Chancellor or the Secretary of State may by regulations make consequential, supplementary, incidental, transitional, transitory or saving provision in relation to any provision of this Act”.
That is the sort of role that we associate with Henry VIII clauses—that is, adding something that is technical, that fills in some gaps at some point, but that does not change the main thrust of the primary legislation at all and merely makes it perhaps more easily implementable. That is an acceptable Henry VIII clause in principle. However, we are faced with the following in Clause 68(9):
“The Lord Chancellor may by regulations amend this section by adding, omitting or amending matters to which the court must have regard”.
In other words, the Lord Chancellor can rewrite the whole of the clause. That is an extreme form of a Henry VIII clause. It would probably be better described, by using some rather sinister terms from European history, as an Ermächtigungsgesetz or a plein pouvoir. To use a commercial analogy, I suppose that it is rather like a bidder or tenderer in a commercial contract who sends in a bid and says, “The price will be the following, the delivery date will be the following, the specifications will be the following”, and then adds a final clause saying, “The bidder may, at his discretion and without penalty or limitation, change any of the above at will”—in other words, devalue the whole document. The whole thing is complete nonsense because you cannot be certain that any of it will actually remain or that any of the apparent purposes in the text will actually influence reality in the future. The whole of this could be a complete waste of time by Parliament because, as I read subsection (9), the Lord Chancellor could go away and change anything in this clause at all, including the major substantive provisions: the terms, conditions and criteria by which a costs capping order can be considered. For the reasons that I and others have set out in this debate, that is actually a very important exercise.
Again, this is a completely unacceptable clause for government to put forward in any legislative context, and certainly in this one. I hope that the Government will withdraw the provision. I hope, better still, that the Government will withdraw the whole clause.
Criminal Justice and Courts Bill
Baroness Deech Excerpts(10 years, 11 months ago)
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Lord Elystan-Morgan (CB)
The noble and learned Lord, Lord Mackay, makes the very proper point that there is ample precedent for Parliament to deal with the issue of judicial review. Indeed, he traced historically how prerogative writs developed, how they were placed on an administrative basis and how, ultimately, they became the subject of specific legislation. One point must be made, however, and I am not sure that the noble and learned Lord did not touch upon it in his powerful address: that when legislation intervened in this area, it did not diminish to the slightest degree the rights of the individual, or, indeed, any of the relative positions in relation to the various powers that judicial review seeks to deal with equitably. In other words, the boundary was not moved a single inch.
My second point has already been touched on: it is about the rule of law. Many here will have read the excellent treatise by the late Lord Bingham, in which he reminded us that there are two boundaries in relation to the rule of law. The most obvious is whether a law has been technically and lawfully passed through both Houses of Parliament and received Royal Assent. However, Lord Bingham went on to make it perfectly clear that if a law was unconscionably wrong, even though it had proceeded through all those stages in a thoroughly proper and technical way, it would still be in breach of the rule of law.
The point that Lord Bingham makes is that there are two boundaries: one is the technical parliamentary boundary; the other, of course, is a boundary beyond that. Indeed, it is in that context that this whole debate is taking place. The boundary that we are talking about is the boundary of the inherent jurisdiction of the High Court, something which has been built up over many centuries and not spelt out by Parliament but which is nevertheless a very real and massive boundary.
If I am right—and I suggest that it most certainly is the case—that Clause 64 breaches that boundary and undermines it, there is a very strong case for changing it. That is the real relevance of the excellent debate that we have had today.
Many speakers have made the point about Clause 64 in the context where the result would have been no different. I would ask in how many cases the following situation applies. A party is elected to government after a hard-fought election. It has set out very clearly in its manifesto exactly what legal changes will be brought about in various fields of law. It will invoke procedures which are already set out in statute to make those changes. Those proceedings will, of course, involve consultation. However, every thinking person knows that that is something entirely chimerical. There will be consultation, yes, but the consultation will make no difference to the determination and resolve of that new Government to bring about that change. If you say that that consultation does not really matter, what can you do? You do not challenge the ultimate right of that party to bring about that legislation, but you can challenge the right of that party to make a mockery of the procedures of law. That is exactly what is entailed here.
Consultation does not, of course, mean that you have to weigh in the balance the views that are tendered to you, but it does mean that you have to look carefully at what is said and give a reasonable period and a reasonable prospect for people to be able to make such representations. The idea that those count for nothing is, I suggest, utterly inimical and utterly contrary to our concept of the law as we have it.
Baroness Deech (CB)
My Lords, I am not a practising lawyer, but I have experience of being judicially reviewed, and after much hard thought, I speak in support of the noble Lords, some of whom are learned, who have put their names to this amendment and similar ones. After much thought, I think that this is the wrong clause, and I think that the way in which it is drafted will open doors to as much costly litigation as it is intended to prevent.
I can well imagine the sort of thing that the Government had in mind in bringing this forward. For example, in my experience, a student would challenge a poor grade or a failing grade on the ground that some tiny bit of procedure had gone wrong, something had not been put up on the notice board at the right time or whatever, and one knew perfectly well that, no matter how many judges looked at it, this student would still, in the end, be a failing student or a student with a poor grade. I quite understand that. However, I do not believe that this is the way to tackle it. There are procedural problems that ought to be tackled first. There are too many opportunities to ask, and ask again, for leave to judicially review something, and then to appeal against it. There are very many bites at the cherry. Although one may know very well that in the end the judicial review will not succeed, for a year or two an expensive dark shadow hangs over the body that might be judicially reviewed while lawyers are having to cope with the case.
Nevertheless, despite those drawbacks, I support this amendment. I call on the Government, instead, to look at procedural reform that would make the whole procedure quicker, cleaner and cheaper.
Divorce (Financial Provision) Bill [HL]
Baroness Deech Excerpts(11 years ago)
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Baroness Deech (CB)
My Lords, this is a Bill for every woman who ever felt that her marriage ended unfairly; it is a Bill for every man who was left with the impression that he had been deprived irrationally of everything he had worked for; it is a Bill for every child whose future material needs are jeopardised by the waste of parental assets in fighting over money; and, above all, it is a Bill to reintroduce transparency, democracy and understandability into an area of law which has moved a very long way from its statutory basis in the Matrimonial Causes Act 1973, Section 25, and needs to be reclaimed and revised by Parliament. I am not alone in this view; it is shared by the Law Commission, the Centre for Social Justice and Resolution, all calling for a fresh start.
The Bill is now urgent because legal aid has been removed from this area of the law. I regret it but we have to adapt. Litigants without representation are a new and large phenomenon. Hundreds of thousands of ordinary people turn up in court at the most emotional moment of their lives, with no clear law to guide them. The burden of steering litigation has fallen on the family judges—and it is definitely not their proper role to conduct the litigation—with the resulting delay and distortion of the way that litigation should be conducted.
The judiciary will no doubt tell you that maximum discretion and flexibility are the right way to handle cases, but that does not help most people. The judges are not there when divorcing couples have to live through months of negotiations through solicitors, with mounting costs; the judges are not there to give advice when a divorcing couple face each other across the table to start sorting it out; they are not there to advise the litigant in person. As the Supreme Court said the other day in the assisted suicide case, there are certain issues that affect many in the population where Parliament, not the judges, must take the lead.
I echo the theme of the previous Second Reading debate in attempting to speak for consumers, not the professionals. There are about 119,000 divorces every year in England and Wales. When divorce was based on fault, there was a rationale for maintenance. That has gone: it is now a law in search of a principle. Divorce itself is not much more than an administrative process, over quite swiftly, but the division of property and assets between spouses is often contentious, long drawn out and expensive. In practice, people of modest means can do nothing other than hope to be rehoused by the local authority; middle income couples will probably have to sell the house to provide two smaller ones; and in the case of very wealthy couples, the sky is the limit. The wife who is least likely ever to have put her hand in cold water during the marriage is the one most likely to walk off with millions, regardless of her contributions or conduct. Hence we find that London is the divorce capital of the world for the wealthy, and the phrases “gold digger” or “alimony drone” have been coined.
The law is uncertain in application because layers of interpretation have been superimposed on the statute. It has been developed by the judges in the past 30 years, during which it has not been debated in Parliament. There have been changes in society, such as civil partnerships, of which there is a rising number of dissolutions, women claiming equality at work and in education, and changed attitudes to divorce and the family. All have left judges scrambling to keep up. They have tried manfully to do so but the result of their ever changing formulation of principles to underpin the law has been to leave couples and their lawyers unable to predict what is the right settlement for them. Stories abound that one has to pick one’s judge, for different judges have varying views about these issues and the settlement may well depend on the predilection of that judge.
The leading judgments in the field inevitably arise from big money cases that go to appeal all the way to the Supreme Court, and their pontifications are not necessarily helpful for low-income families. No matter what one’s opinion of possible solutions, it is impossible to deny that this is an area that desperately needs public and parliamentary input. Go to any of the blogs about this and see the misery of couples who spent a fortune on settling, who do not understand why what seems to them very relevant issues about conduct are not taken into account. Read the many reports that have tried to reform this area and you uncover an area of misery, expense and incomprehension.
One of the ideological arguments which this House must face is the value of judicial discretion as opposed to more formulaic broad-brush law about dividing assets. We have, I posit, the best judges in the common- law world, wielding discretion in each case that comes before them with care, generosity and sensitivity, but the result is uncertainty and unpredictability. Couples are left to bargain in the shadow of the law but they do not know what the law is, or how to find out what it is. I used to run an all-party parliamentary group on family law here and there was one matter on which the members of the public who came were agreed: they wanted a booklet when they got married and when they got divorced telling them what their rights and duties were and what the law was. We fail in terms of the rule of law if the law is unpredictable in advance and far removed from the words of the statute. Not only that, but this state of affairs makes mediation very difficult. And now the Government are calling on all separating couples to try it. This reform would help.
When a couple can afford lawyers, look at what it costs them. In Jones v Jones, the court criticised the racking up of costs of £1.7 million relating to the division of assets of £25 million. Costs spiral out of control as couples appeal up the court structure because, scenting victory, a new principle may emerge or need to be clarified. In another case, a husband ended up after appeal with an award of £50,000 but the costs were £490,000. In another case, £16,000 was spent on dividing up £42,000. I know of at least one case where the costs swallowed up the entire assets and of another where an inheritance from parents was entirely dissipated. I could go on. Although I have great respect for the skills of practitioners in this area, one must take some objections from them to reform with a grain of salt. We have to face a situation where, either because of lack of means to pay a lawyer or in order to reduce discord, couples need to know what the law is and apply it themselves or get a clear, quick opinion on the right division.
The Supreme Court recently said that prenuptial agreements may be binding in principle, with a number of qualifications, and so has the Law Commission recommended. However, with all the exceptions, this invites litigation to challenge every prenuptial agreement, if they were to catch on. One couple recently spent £600,000 litigating over whether or not the prenup was binding. Another spent £2 million. In the most recent issue of Family Law Reports, one prenup was upheld, one was overwritten—even though the husband had signed it three times—and another half a dozen conditions were added for determining whether they should be binding. My Bill will make prenup and post-nup agreements binding, with very few exceptions.
It has been asserted by a bishop that thinking about prenups and the end of marriage may encourage the breakdown of marriage, but most countries where prenups are common have lower breakdown rates than we do. Given that 40% of marriages end in divorce, one can hardly hide one’s head in the sand, and indeed the ability to sign a prenup may even encourage some people to get married who otherwise would have held back for fear of the eventual consequences. The Home Office called for prenups to be binding as far back as 1998, and Resolution did so in 2004. A YouGov poll in 2009 found that 60% of the respondents agreed that they were a good idea.
The rest of the Bill deals with the couple’s assets in so far as they are not dealt with by any prenup. It proposes a system, common abroad and in Scotland, often called the “division of post-marital assets”. There would be a presumption that a fair starting point is the equal division of all the property and pensions acquired by the couple after marriage. Assets owned before marriage, inheritances and gifts would remain in the possession of the owner and not be available for distribution. Thus in a short marriage there might be little to divide, but in a long marriage where the couple started with little, everything would be divisible. There is flexibility in the Bill to allow for the home to be retained for the accommodation of, say, a mother with children. This law has worked in Scotland for 30 years with efficiency and very little litigation.
As I have discovered from the letters and e-mails that I get every time I lecture on this topic, members of the public cannot understand why misconduct is totally ignored in financial settlements by judges while only domestic abuse attracts opprobrium. I have been inundated with sad and angry letters from men and women describing how a family business has been ruined, or a wife has remained in the former matrimonial home with her new boyfriend and the children while the husband has nowhere to live, or a second wife has had to go to work in order to support the first, or a working woman has found that her assets and pension have gone to an ex-husband who treated her badly and has gone to live with a younger woman. In my proposed system, where the fair baseline is a 50:50 division, there will be a good starting point for negotiation and mediation. There ought to be far less need for lawyers to be involved, at least until the point of court appearance, and far fewer court hearings.
The Bill combines autonomy with fairness. It will give women entitlement, not a discretionary allocation depending on the judge. It will protect the family business and the worth of a working wife. It has the potential to save millions in litigation costs, whether met privately or by the state. It will give a sensible basis for starting mediation and negotiation. It will restore some dignity, certainty, economy and clarity to family law. I may have bitten off more than I can chew—I would remind the House that noble Lords who put forward Private Members’ Bills get no help with the drafting—but these proposals are firmly based in reports by responsible organisations and the law of other countries. My noble and learned friend Lady Butler-Sloss is in support, although she cannot be here today, as are many other noble Baronesses in this House. What better credentials can there be?
The Law Commission, which has reported on this issue, has estimated that it will have to do another five years’ work on the matrimonial property element of its proposals, which might end up in a formulaic system. In the mean time, the Law Commission suggests that the needs of divorcing spouses should be defined by the Family Justice Council. The council is a group of senior family law professionals who are being invited to gather together and give guidance to litigants in person and the courts. But not only would such guidance be opaque and not binding, it would bring into question the role of Parliament. It is for Parliament to make the law, and when it is deficient to make it again, not to leave it to a group of professionals whose job is to apply the law, not make it.
There is a plea from many, not just me, to the Government to take this seriously and urgently, and not to leave it until after the next election. It is not a party matter, but I realise that Governments do not like to tackle it because of the emotional and moral issues that it stirs up. To the best of my belief, there would be gratitude from the affected public, so many of whom are almost destroyed by the current system. They would prefer the certainty of misery to the misery of uncertainty that they suffer now. We cannot wait another five years while another million people suffer and their children are even further deprived and stressed.
I have been bold but I should point out that I am a distant relative by marriage of the late Leo Abse MP, who fought a long and slightly eccentric battle to reform divorce law in the 1960s. I, too, shall return to the fight. I have no vested interest in this. Fortunately, I have never been divorced, or earned anything in connection with it. I am but an academic who has studied the subject for 40 years and wishes to see the lot of divorcing couples, and women in particular, reformed and clarified. There may be disagreement in this House and outside about the details but there is consensus that Parliament must take control of this law, with its three pillars: binding prenups, an equal division of post-marital assets, and some curbing of maintenance. I beg to move.
Baroness Deech
My Lords, it has been a privilege to hear from experienced noble and learned Lords in this debate. In particular, the wisdom of the noble and learned Lords, Lord Hope, Lord Scott and Lord Mackay, has been invaluable, as well as the wisdom of those who have been through divorce or who have been involved in helping others. That means a great deal to me and to all those who think that the law should be reformed.
I am the first to admit that the drafting of the Bill is not perfect. How could I have overlooked the need for agreements to be in writing? Of course, they have to be in writing. But it has been a lesson to me, in that it is one thing to criticise a draft when you have it in front of you, but it is quite another—I could never begin to be parliamentary counsel—to start with a blank sheet and draft a law. Undoubtedly, if the Government give us a fair wind, as I hope they will, professional draftsmen must be let loose on this Bill. It is not something that someone like me can draft exclusively. I am most grateful to all those who have made utterly sensible drafting suggestions. They are all absolutely right. I agree with the noble Lord, Lord Davies, about disclosure of liabilities and all the other suggestions that have been made.
I want to clarify what the Law Commission has done. After some years of work, it has made proposals about prenuptial agreements, but I find it difficult to see how those can stand alone, if they are to be enforced, without reforming the rest of the law. The Law Commission has not completed its work on the sharing of matrimonial property and has stated in the report that it needs another five years of work to do that. It will not advance the cause for most couples just to enact, if that were to be the case, a Bill about prenuptial agreements; one has to tackle the whole thing. No further advice will come from the Law Commission, as it said, for about another five years. It is not as if the Law Commission has come to any firm conclusions about the division or sharing of matrimonial property.
We have to learn from the recent reforms that Scotland has made. England and Wales is the odd man out on this. We have all referred to Scotland, but most of Europe and most of North America have a law which is much more like the law proposed in the Bill than our existing law.
I value the feminist compliment from the noble Baroness, Lady Bakewell, and the moving speech by the noble Baroness, Lady Wilcox. I value, too, the experience brought forward so clearly by the noble and—I cannot call her learned—deeply experienced Baroness, Lady Shackleton. I welcome the contributions from the noble Lords, Lord St John and Lord Grantchester, and others who have spoken. In none of them have I heard anything to undermine the principles and the three pillars of reform that I have put forward: prenuptial agreements being binding, splitting assets and curbing lifelong maintenance. People may think that it should last for three years; others may think that it should last for five. Those are matters for discussion. I simply point out to the Government that the widows’ bereavement allowance lasts for only one year these days and that it is now expected that women should seek work when their youngest child reaches six. The Government have therefore abandoned the notion of the housewife staying at home until the children reach 21 or some such age. The Bill would simply bring our law into parallel with developments around the rest of the world and developments in the Government’s own law relating to benefits and social security.
I therefore hope that the Minister will agree to see me to arrange a way forward for this Bill, because I do not believe that we can wait another five years for the conclusions of the Law Commission when 119,000 couples are getting divorces every year. While I appreciate the sensitivity and generosity underlying the comments made by the Minister, were they to be followed through to their logical conclusion, it would take us back full circle to a law where nobody knew what the outcome should be and where people continued to waste half their combined assets on paying for the litigation and the lawyers involved in the case.
I shall move shortly that the Bill be committed to a Committee of the Whole House, but I welcome the suggestion of the noble Lord, Lord Kennedy, that committal to a Grand Committee, where a lot of small details could be ironed out, might be a sensible way forward, given that I sense a certain consensus that there is a need not only for a broader reform but for a lot of work on the detail. I would welcome such a way forward.
Civil Legal Aid (Remuneration) (Amendment) (No. 3) Regulations 2014
Baroness Deech Excerpts(11 years, 2 months ago)
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Baroness Deech (CB)
My Lords, I cannot compete with the expertise of other speakers before me, but I declare a couple of interests. First, I am a regulator of the profession—but not its representative. Secondly, despite what the noble Lord, Lord Bach, said, I have been involved in several judicial reviews and have won three and lost one, albeit ably represented by the noble Lord, Lord Pannick, with the noble Lord, Lord Lester, on the other side. I am in the middle of yet another. Bitter experience though it was, this does not deter me from supporting the noble Lord, Lord Pannick, in asking the Government to think again.
Why do we spend so much time in this House attempting to perfect the laws that come to us from the other place and our own? The ultimate way of enforcing them and making sure that they are good law is by judicial review—or at least the threat of judicial review. Many public bodies which make important decisions do so acting in the shadow of judicial review, expecting it to come. Knowing this makes them take much more care over how they apply our law. This House and the other House will be the losers if judicial review is restricted.
I tweeted this morning that we spent £9 billion on the Iraq war, spent £11 billion on the Olympics and may well spend £50 billion or more on HS2. Our legal system stands at risk for the sake of £200 million, which, in the global way of looking at things, is very little. I know that the Law Society and the Bar Council have put forward to the Ministry other ways of saving that money.
How will this particular reign of the current Lord Chancellor be remembered in the history books? It will be remembered as one of impending chaos. We now have a situation where, because of the attempts to save money, important fraud cases collapse because no barrister will work for the sum offered and the family courts are clogged up with emotional litigants in person thereby causing judges to have to run cases in a way that they really should not have to. Speaking as a regulator, I can say that altruistic young people, very often from black and ethnic minority backgrounds, are being deterred from taking up law as a profession because criminal law and family law will no longer offer them even the most modest of incomes with which to start out, bearing in mind that they have debts from university. I could not in all honesty encourage them to take up the profession right now. That means that 10 or 20 years down the line, there will be yet more complaints about the lack of social mobility and diversity in the profession. There will continue to be calls for more ethnic minority and female judges, and they will have been cut off right now because of these attempts—well meaning, I suppose—to save £200 million.
Why is this coming about? If one goes back a bit, the blame has to lie with the former Prime Minister Tony Blair, who made a constitutional change for which we are now paying. When I was a law student, I learned that the British constitution was never roughly pushed around; it simply inched along, changing a bit here and there, in response to circumstances. The position, however, of the Lord Chancellor was rather brutally changed a few years ago. True, the old-style Lord Chancellor offended against the separation of powers. He was a Speaker, he was a member of the Cabinet and he was a judge. But look where we are now. Our system of justice lacks a champion. The rule of law needs someone to look after it who is not looking for political preferment, looking to the next job or looking to save money and thereby garner acclaim. The system of justice needs an old-style champion complete with curly wig, stockings and all the rest of it, because that symbolised someone who was above it all, who had reached the top of the tree and whose only concern was access to justice and the smooth running of the system.
I am afraid that the current Ministry of Justice, so-called, might one day be called by the history books the “Ministry of Injustice”. What is going on is not right and I think that everyone in this Chamber, no matter what side they are sitting on, knows that very well. I support the noble Lord, Lord Pannick, and I congratulate him. I call upon the Ministry to think again.
Criminal Defence Service (Very High Cost Cases) (Funding) Order 2013
Baroness Deech Excerpts(11 years, 7 months ago)
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Baroness Deech (CB)
My Lords, I speak in support of the noble Lord, Lord Carlile. The extent of the concern about this is evident in the noble and learned Lords and noble and legally aware Lords who are gathered here tonight. In fact, the cuts to legal aid and the way in which they are being implemented are set to take their place in the great pantheon of government failures, which were foreseen but went ahead anyway. The list includes home improvement packs, ID cards, the Millennium Dome, child support and so on. I predict with confidence that, in a few years’ time, people will look back at the legal aid cuts and add them to that list. They amount to the suffocation of the criminal Bar and the weakening of the quality of the judiciary who would have been expected to emerge from it.
I have an interest to declare as the regulator of the Bar, but not as its representative, so I am reluctant to comment on the level of the cut—30%—to payments to the Bar, but the effects are clear to a regulator. They will damage the administration of justice, the rule of law and equality and diversity at the Bar. There will be too few advocates ready to take cases at those miserly rates, as we have seen. They are dropping them now, mid-case, and will refuse new instructions at those rates. We are talking about contracts entered into before 2 December where the case will be heard after 31 March, so advocates are being forced by the statutory instrument to take a 30% cut in their contracted rates mid-case.
The Ministry of Justice may be relying on the profession’s sense of duty to continue the case at 30% less, but if the case is dropped, it will end up spending more because of the cost of getting another advocate to repeat months of work already undertaken. The Ministry of Justice is breaching contracts retrospectively and placing future VHCC cases in the statutory instrument category, not the former contract mode.
As a regulator, I say right now that the retrospectivity of the statutory instrument is the most offending feature. If the Government simply changed the date of effect, so that only new instructions offered in future were subject to the cuts—objectionable although they are—some of the worst effects on the administration of justice would be mitigated. Will the Minister tell the House why that should not be the case? Retrospectivity is contrary to the law of contract and the rule of law. For example, when income tax rates are cut, the Government do not expect the payer to take advantage of the new rates before the starting date. In fact, such cuts are normally given a starting date well in advance, to allow parties to plan their affairs accordingly.
The Government have tried to make the UK the world’s pre-eminent destination for swiftly resolving international high-value legal disputes. That is increasing revenue. The UK legal sector output was £27 billion in the most recent figures, and is set to grow. It has exported £3.6 billion of services and is the largest, by a long way, in Europe. Some 14% of the world’s largest law firms are headquartered in London. The Government should not trumpet the excellence of the UK—as indeed it is—as a global legal centre whose success and desirability depends on the utter reliability of adherence to the rule of law and the quality of its lawyers, and then cut at the roots of access to justice and the development of lawyers here. I can describe it only as double standards.
There cannot have been a proper impact assessment of the cuts in terms of lost business, delayed trials and the effect on equality and diversity at the Bar. The Bar is proud of its record in enabling the underprivileged and those from non-traditional backgrounds and ethnic minorities to enter the profession. Up to 19% of pupillages in recent years have gone to such young people. That cannot now be maintained. Young people cannot be expected to go into criminal or family law at those rates when they have higher than ever university debts behind them and, of course, the cost of qualifying as a barrister. In the past, they were happy to take that on the chin because they knew that at the outset, they would get some legal aid work—low rates though they were, they were enough to survive on. Now, in all conscience, how can we encourage them to join the Bar?
Civil Legal Aid (Financial Resources and Payment for Services) Regulations 2013
Baroness Deech Excerpts(11 years, 11 months ago)
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Lord Pannick
My Lords, I thank the noble Lord, Lord Bach, for moving this Motion. Over the past three years he has played an essential role in identifying with forensic skill and great eloquence the defects in the series of measures that this Government have brought forward to limit legal aid in our society. The noble Lord has repeatedly pointed out, accurately and with some degree of force, that legal aid is a vital cement in our civil society. There is no point whatever in this place conferring rights unless people have the opportunity to vindicate them. It would be a great shame if there were further reductions in the ability of persons other than the wealthy to vindicate their rights by legal process.
The essential defect in these regulations is their treatment of the capital sums owned by persons who are otherwise eligible for legal aid. I cannot understand why the regulations apply different criteria to capital from the criteria that are applicable in welfare law. Regulation 8(2) provides that any person with more than £8,000 in capital will be denied legal aid, even though welfare benefits law provides that persons qualify for means-tested benefits even though they have up to £16,000 of capital.
There is a further discrepancy in that the welfare benefits system ignores the value of a person’s home. These legal aid regulations will disregard only £100,000 of equity in property, under Regulation 39; and £100,000 of any mortgage, under Regulation 37. The inevitable result is that many people who own their own homes will be excluded from legal aid, even though they cannot in practice access the capital.
All this is very unfortunate, given that the Legal Aid, Sentencing and Punishment of Offenders Act has already reduced the scope of legal aid so that it is now skeletal. I am very concerned that even within the much reduced scope of legal aid under that Act, people who have no income and who are therefore eligible for welfare benefits will be unable to obtain legal advice and assistance. As the noble Lord, Lord Bach, said, there is a vital need in the regulations for more flexibility.
The Minister will no doubt tell us, as he usually does, that funds are limited and that economies are needed, but to adopt criteria, as the regulations do, which are more onerous than the criteria applied to welfare benefits is simply irrational and fails to understand the vital function of legal aid itself as a welfare benefit for the needy in our society. My essential question for the Minister is this: why are the criteria for capital in these regulations different from, and more onerous than, the criteria for welfare benefit law?
Baroness Deech
My Lords, I shall speak in support of my noble friend Lord Pannick and the noble Lord, Lord Bach, who is also my friend but not technically my noble friend. I want to put the regulations in perspective and to inquire whether the Government realise the pressure that these calculations will place on other parts of our society. I will mention just two issues.
This Government and their predecessors have pushed very hard to widen house ownership in the past 20 or 30 years. It has been successful. Ownership, of modest homes, has spread to all corners of society. To include their value in the assessment of legal aid places an unfair burden on a modest number of the population who have striven to own their own home. Not only that, but having owned one’s own home one now finds that it has to be sold to pay for one’s care in old age. It may have to be sold to raise money if one has the misfortune to be involved in expensive litigation. Not only that but, heaven forbid, it might even come to a mansion tax. In other words, one is putting much too much pressure on that wide swathe of population that owns a home of relatively modest value. They might have bought it for a five-figure sum years ago, but they will now find their house in that more than £100,000, and then £8,000, asset rank, depriving them of legal aid. The assessment costs will bite into the limited funds that are available for legal aid, because given the way in which the legislation is drafted, assessing whether someone is eligible for legal aid will involve quite a complicated process.
Legal Aid
Baroness Deech Excerpts(12 years ago)
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Baroness Deech
That this House takes note of the effect of cuts in legal aid funding on the justice system in England and Wales.
Baroness Deech
My Lords, I declare an interest as a regulator of the Bar, but not its representative. My remarks today are informed much more by my decades as an academic lawyer in the home of lost causes and a law reformer rather than by any concerns about barristers’ income.
What we are debating today is the health of one of the great pillars of our democracy and liberty; namely, our legal system and the way citizens may benefit from or challenge laws which, as this House knows well, are painstakingly established for the good of the community. Access to justice is every bit as vital to our societal health as access to health services. In an ideal and affluent world, the need to fund legal services would be seen to be as compelling as the NHS and as deserving of ring-fencing, albeit with controls to prevent malicious or frivolous use. Our courts are like the NHS but with a far older pedigree. Our justice system has been the admiration of the world and a model for emerging democracies elsewhere. This is the country that litigants come to, if they can afford it, to seek justice that they feel is denied to them at home. This is the country that sends judges and barristers overseas to help new countries establish a decent legal system. I need hardly point out, in this week of Middle East chaos, how crucial and yet how fragile the rule of law can be.
The regulatory objectives for the legal profession, such as consumer protection, the rule of law and a strong, diverse and independent legal profession, are a fundamental pillar of the Legal Services Act 2007 and the basis upon which successful regulation of the legal profession is measured. My overarching concern with the proposals set out in the Ministry of Justice consultation, Transforming Legal Aid, is that they will undermine these objectives to such an extent that regulators and lawyers will not be able to mitigate the risks that arise as a result. Moreover, since the LSA is primary legislation, I consider that the Ministry of Justice should not pursue a policy which either is, or risks being, inconsistent with it without full parliamentary debate. I ask the Minister to provide that opportunity by giving the House the chance to debate primary or other legislation before such profound changes are made.
It is commendable that the Lord Chancellor has listened to the representations made to him so far and has recognised that choice has to remain in the allocation of a lawyer to a person accused of a crime. So far, so good, but in the complex area covered by the paper, much remains to be challenged.
Our system of judicial review, which it is proposed will be cut back, enables every citizen to challenge officialdom. Even when the chances of a successful JR are low, the shadow of it creates a climate in which officials know that they must stay within the legal boundaries and observe human rights; otherwise, they will be brought to book. Any diminution of this, no matter how severe our national financial situation, must be treated with the utmost seriousness. That is because everything we do, especially in this House, is built on our centuries-old acceptance of a functioning rule of law that is there to defend and protect all of us. JR is like knowing that the policeman is on the beat somewhere—if only.
The recent peddling in the media of the notion of greedy lawyers and litigants drunk on public money obscures a fundamental principle of our system. I have heard the Minister characterise the professionals I regulate as “fat cats”. The reality is the perception that government can use cuts in legal aid to reinforce the application of unpopular policies by choking off challenge and redress. How are people going to be able to challenge medical negligence, housing problems and treatment in prison? The silence that will fall as the proposals are implemented will allow future Governments to say that problematic policies have in fact succeeded because they were not challenged—it will have become impossible to challenge them.
Of course the Government need to save money. Here we are talking about £220 million a year, although some say that the sum does not take account of recent falls in the outlay on legal aid. This sum pales when one thinks of, say, expenditure of taxpayers’ money on council credit cards and failed NHS IT systems, or Apple and Vodafone not paying tax. Shave a little off HS2, and we would have it, although the profession has in fact come up with other ways of saving money that would render unnecessary the Ministry of Justice proposals. It is not helpful to compare our legal aid expenditure with that of other countries because they have inquisitorial systems whereby the work equivalent to that carried out by our barristers is done by officials before the court hearing. Those costs have to be on the state balance sheet somewhere. They could be cut by putting more of the legwork of an offence trial on to other organs of the state. They could be cut by reducing the outflow of new criminal offences from the legislature. They could be cut by removing some children’s cases from the criminal system and shifting them elsewhere. The organisation Justice has calculated that releasing around 6,500 prisoners from custody every year would make up the necessary savings in the justice system. We need to take a holistic view of expenditure. We need to know whether the ministry has calculated the additional costs that would be incurred if its proposals were to be implemented, quite apart from the broader balance of social benefit and detriment. I am not convinced that the deep calculations, allowing for the slowing down of the legal system and more failed cases and appeals, have been carried out or revealed. The knock-on effects may well wipe out the savings.
Others will speak about children and mental health, but I hope that the Minister will bring forward a proper impact assessment of what the cuts will really save and what they will not save. There is a clear risk to the most vulnerable and even the middle class in society. A threshold of £37,000 per household is unsubtle and will lead to defendants not having equality of arms when representing themselves against the police and a barrister acting for the Crown on the other side. Nor is there provision in the proposals for vulnerable defendants who simply cannot cope on their own. What of the impact of cross-examination on his alleged victims by an accused acting in person, about which we read so much in the media? Prisoners are to lose legal aid in relation to what happens in prison. The consultation is possibly over-optimistic in stating that the prisons complaints system can replace legally aided advice for prisoners. I have heard estimates that the complaints system is as expensive, if not more so, as using a solicitor.
Women have been especially hard hit by the Legal Aid, Sentencing and Punishment of Offenders Act, known in the trade as LASPO, which commenced the restrictions in legal aid. This is the second bite of the cherry. The impact of that first Act has not yet been observed, although we know that there has been a 27% increase in disputed cases concerning children. Social welfare law and family law have become largely ineligible for aid. Some 57% of those affected are women, who bring 73% of the education cases and, a few years ago, formed 62% of the applicants for family legal aid. It pains me to say it, but women may be less able to represent themselves than men and lawyers in general. In sum, the interests of the public could be damaged in that there may not be competent representation, and the criminal justice system may fail to convict the guilty and acquit the innocent.
The big money saver, according to the consultation, will be the introduction of price-competitive tendering. Giving out contracts based on cost alone removes any incentive on the providers to exceed the minimum standards of service. Going for the cheapest ignores the reality that defence lawyers have to work with the individuals they represent; they have to work at weekends and be ready to deal, by definition, with the weakest members of society and cope with their wider problems—rather like the NHS, which we have just debated. Tendering for this legal work cannot be an accurate or exact measure because the length and complexity of cases are unknown. Currently, lawyers in the local community have experience and reputations that are known to the local police and courts. Mergers of small firms may destroy that, along with the availability of specialist skills, for example, in human trafficking or war crimes which are not to be found in the large new corporate pile-them-high and sell-them-cheap providers. The supermarkets and haulage companies who will hold themselves out to do this are unlikely to send the appropriate cases to barristers, thereby reducing the calibre of advocacy and future judicial material. Once they have secured the work and closed down the local firms, they will of course put up their prices.
I am particularly concerned about the tapered fee. We are all innocent until proven guilty and have the right to plead innocence and face trial. That is not inefficient; it is the rule of law. There must be no influences brought on a decision to plead guilty, such as a higher fee for the adviser or the inability of a solicitor to conduct a trial if the client were to plead innocent. The client, even now, should be inquiring of his or her representative as to whether that representative has any interest in an early guilty plea.
It is irrational to propose, as the MoJ has done, to reduce fees on a daily basis if the trial is a long one. The number of witnesses may be necessary, the jury may take time, and the legal arguments and cross-examination may be complex. Let us imagine a health system in which the longer the operation takes, the less the surgeon will be paid. We should either have fee cuts of 17%, as proposed, or PCT interference in the market. We do not need both. If there is to be a 17% cut in fees, firms should be left to work out how they will manage. If there is PCT, the price should be allowed to be settled that way.
What about the barristers whom I regulate? Criminal lawyers earn a great deal less than MPs and have to bear their own expenses. The Bar has worked hard to improve diversity but there are now only 400 pupillages a year, of which about 19% go to black and ethnic-minority pupils. I fear that the profession will become exclusively the domain of white, middle-class, self-financing advocates because young people will have no assurance of even a modest legally-aided income as they set out at the Bar. I do not see how they can survive with the education debts they are chalking up these days, not to mention the cost of qualifying as a lawyer. No wonder social mobility is less than it used to be. I do not wish to read any more exhortations from diversity tsars to increase the number of young people from underprivileged backgrounds in the legal profession. The Government want universities to lower the entrance requirements to this end, but they may be making it impossible to attract poor young people to the legal profession.
I was sorry to read that the Lord Chancellor commented to the Justice Select Committee that the Bar has not engaged with the Government in contemplating the changes that need to be made. On the contrary, the Bar is putting forward its own suggestions. It will be ready, I am sure, to help in delivering efficiencies through what are known as alternative business structures. It would be ready by now, but is being held back from getting them off the ground by the excessive red tape and overregulation that is built into the Legal Services Act 2007.
I hope the House will agree that there ought to be primary legislation for an issue of such constitutional magnitude to ensure that whatever changes are proposed after consultation will receive the scrutiny typical of this House. The proposed changes are of the order of those achieved in the LASPO statute and deserve as much attention. Even the judiciary, which is normally reticent in such political situations, has criticised the proposals. I am convinced that the protection of the profession and of the public that is enshrined in Section 1 of the Legal Services Act will be undermined by the proposals of the Ministry of Justice as they stand. I beg to move.
Baroness Deech
My Lords, I have the impression that there is no time left save for me to thank all noble Lords and all noble and learned Lords who have joined in from different perspectives. They have been almost unanimous in encouraging the Government: first; to make sure that there is primary legislation; secondly, to undertake a real impact assessment; and thirdly, to take a holistic view of the costs of the legal system in order to make cuts where they are most needed.
I thank the noble Lord, Lord McNally, for listening. I remind him that the Bar could certainly move faster were there not so much red tape and duplication in the Legal Services Act 2007, but I am sure that it will do its best. I look forward to further proposals from the Government to rescue this most important pillar of our democratic society.