Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Bach Excerpts

Wednesday 1st February 2012 Lords Chamber

[Lord Thomas of Gresford]

My Lords, it is a relief to know that the Ministry of Justice, like New York, never sleeps. No doubt the opinion will be pored over and there will be further discussions before we get to Report.

I invite my noble friend to do this now. He says that the proper way to proceed is for one-way cost-shifting to be introduced by tailored Civil Procedure Rules. Your Lordships will recall that on Monday the noble and learned Baroness, Lady Butler-Sloss, and I made the point that there should be guidance from Parliament, not simply a discussion between the Executive and the Civil Procedure Rule Committee, about the parameters of those rules and what the boundaries and structure are to be. I would be grateful to know from the Minister the position on this particular point. He is shifting the burden of the success fee and the ATE premium over to the successful claimant. Is that going to be co-ordinated and timed to come into effect at the same time as one-way cost-shifting? That is the key issue. If you do not have one-way cost-shifting, you are shifting to the claimant the liability for the defendant’s entire costs, if he should lose, and consequently an enormous premium. We heard of premiums of £900,000. I am familiar with a premium of £80,000. I think that the standard is in thousands for any sort of claim. If, on the other hand, one-way cost-shifting comes in and the defendants’ costs are paid by the defendants win or lose, we will be concerned with a premium for a much smaller thing, which is the disbursements of the claimant, should he lose. The risk is that much smaller.

[Lord Bach]

We on this Front Bench agree absolutely with the question that the noble Lord, Lord Thomas of Gresford, has asked the Minister. It is crucial. To broaden the point slightly, the great danger in the Bill is that we are changing the current arrangements, but the way that they will work in practice is subject to regulations of which there is no sight at present. We need from the Government a statement about how they intend to implement this part of the Bill if they get it through. We have no idea at all. The example that the noble Lord gave is the best one of all. It is critical, but there are other examples where a great deal relies on regulations that are to be made at a later stage, sometimes to be passed by affirmative resolution, sometimes by negative resolution. It is not really a satisfactory way of changing the civil law in such a fundamental way. I would be grateful if the Minister, in his reply to the noble Lord, Lord Thomas of Gresford, would deal with the general point as well.

[Lord De Mauley]

He did.

[Lord McNally]

The noble Lord is absolutely right. I have given my reply. That was the reply of the noble Lord, Lord Thomas, to my reply. But I am very happy to take the point. We are considering a consultation. We have said that our judgment is that it is better in rules rather than in the Bill.

[Lord Bach]

Should all that not have been done before the legislation comes before one House, let alone a second House of Parliament? The result of the consultation, or the Minister’s consideration of it, will probably not be known until this Bill has become law. Is that not much too late and entirely the wrong way round?

[Lord McNally]

The pained look with which the noble Lord, Lord Bach, comes to the Dispatch Box and implies that the Government is the first Government in the world to bring forward legislation with further consultations needed about specific regulation is a bit rich. The implications of this Bill will come into force in April 2013. We have a period of time for such consultations. As I said before, I take the point that there has to be a synchronisation in these matters. I do not think we are doing anything unusual by legislating in this way, but we take on board the points made in this debate.

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[Lord McNally]

My Lords, in 1962—which is now, sadly, 50 years ago—part one of my degree course contained a subsidiary paper on English legal institutions. About the only thing I can remember from that course is the concept of champerty and maintenance. It therefore came as something of a shock to be told that it no longer applied, and indeed had not applied for some time.

[Lord Bach]

The Minister has been misleading us all along. He has played the role of a non-lawyer with immense skill during the debate. I have asked him many questions in our debates but now the truth is out—he is a lawyer.

[Lord McNally]

I have been trying to keep that quiet. The paper I mentioned was one of nine papers that I took in 1962 for my economics degree. The other day I found the statistics paper, which evidently I had passed. However, not only did I not know the answers to the questions, I could not understand the questions.

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[Lord Neill of Bladen]

I support this amendment. The practice that it outlaws seems to be absolutely disgraceful, with an insurance company being paid by its own side—by the defendant—and then approaching the plaintiff to try to do a cheap deal with him for the benefit of the defendant. It seems to me that the conflict of interest is so gross that it ought not to be permitted at all. I am a little surprised by the words in the amendment, which mention knowing that the plaintiff is represented, because I am not quite sure how the amendment would cover a situation where the plaintiff had no representation. When thinking about how one would refine the language, I think one might consider taking out that qualification, because, with a general ban on this practice, your Lordships would simply agree with the amendment.

[Lord Bach]

My Lords, we welcome Amendment 164 in the name of the noble Lord, Lord Thomas of Gresford, and Amendment 164ZA in the name of my noble friend Lord Dubs. I also welcome the remarks of the noble Lord, Lord Neill of Bladen.

Amendment 164 is really about motor insurance and motor accidents. All Members of the Committee will agree that motor insurance is a social good. It is unique among financial service products in that it is not just necessary but carries with it the coercive powers of the law. As we all know, failure to insure a motor vehicle is a criminal offence with a fixed penalty of having the vehicle wheel-clamped, impounded or destroyed or facing a court prosecution and the imposition of a maximum fine.

That is all well and good and we all agree with that philosophy, but the private industry that delivers this social good is, as has already been said in this short debate, frankly deeply dysfunctional at present. That is perhaps an understatement. Its protagonist, the road traffic personal injuries sector, which comprises 75 per cent of all litigation, has developed deeply dysfunctional behaviours too. The arms race between road traffic personal injury lawyers and the insurance industry is completely dysfunctional.

The Transport Select Committee in another place has studied this twice in the past year. My right honourable friend Jack Straw has led a campaign to fix these structural issues in a market that is very flawed. We have seen the rise of an industrialised road traffic accident personal injury market, aggressively marketed as though it were a consumer good and operated a bit like a sweatshop, with non-lawyers hired at cheap rates to process hundreds of thousands of claims a year. This number is still growing at a startling rate.

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[Lord Carlile of Berriew]

There is certainly that possibility.

I wanted to add something else about hospitals. When I was a Member of another place, I often visited a celebrated orthopaedic hospital in the next county. At that time—I cannot say whether it is the case now—at the end of a long corridor in that hospital there was a solicitor’s office. That was an unusual arrangement but one that no doubt brought some rent to the hospital. I have real reservations about that kind of arrangement. I am all in favour of general advertising and it is right that solicitors’ firms should be able to advertise in local and national newspapers so that people are aware of the kinds of specialist services that they provide. But we must take this opportunity to reject anything that smacks of ambulance-chasing.

[Lord Bach]

My Lords, the Committee seems to be at one in its attitude towards the amendments, and I include those of the noble Lord, Lord Hunt, as well as those in the name of the noble Lord, Lord Clement-Jones, who has spoken so persuasively. I hope that we are as one and that that includes the Minister. The amendments really cannot be argued against.

I intend to be pretty short in what I have to say as there is other business waiting to get on and we have had a long session today, but I have to say to the noble Lord, Lord Hunt, who talked about the Jackson report, that it is wrong to ally the Jackson conclusions with the conclusion that the Government have reached on his report. Lord Justice Jackson’s balance obviously appeals to the noble Lord and no doubt to many others, but it did not appeal to the Government, who have picked and mixed from Lord Justice Jackson’s findings.

In particular—I am afraid that I have used this example before and no doubt I will use it again—Lord Justice Jackson could not have been clearer that he did not believe that civil aid should be cut further, particularly with regard to clinical negligence. Indeed, when the Government decided that that was exactly what they were going to do, Lord Justice Jackson made his now quite famous Cambridge speech, which attacked—if that is the right word; a better word might be “criticised”—the Government for the stance that they have taken. So there is a difference between what Lord Justice Jackson said in his report and how the Government have responded. I am not saying that any other Government would have taken everything that Lord Justice Jackson said, although of course he saw it as a package. But I am saying that in this instance there is a difference.

On the question of claims management cases, I shall briefly mention that my right honourable friend Jack Straw, whose name has come up already in discussions today, gave the example in another place of a friend of his who, just like the noble Lord, Lord Carlile, was bombarded with texts and personal calls from claims management firms following a minor accident in which he suffered no injury. In that case, apparently, the details had been sold to the claims management firms by his own insurance company. I just wonder whether that might have been a possibility in the noble Lord’s case, although it may be that his insurance company did not know about the accident. Actually, there is no reason why it should have known as he suffered no injury and he was a back-seat passenger. It is interesting to consider exactly how the company found out in the time that it took for him to get back to Heathrow, but the point that he makes is clear.

Unsolicited spam, which we are talking about here too, is incredibly intrusive. Worse than that, it must be appalling to have a minor prang and find people trying to prey on you for, effectively, a quick buck. This is a real problem.

It is not as though whiplash does not exist; it does. There are genuine cases and it can cause real pain, discomfort and disruption in people’s lives. However, when ordinary people are encouraged or persuaded to exaggerate their symptoms, knowing that it is difficult for a doctor to diagnose the degree of impairment in a particular case, that is when the problem really shows itself. We support the amendments and hope that the Government can indicate today their intention to bring forward amendments on Report in these or similar terms.

Once again, I put to the Minister a question that—inadvertently, I am sure—he failed to answer on an earlier amendment but which is relevant now. Do the Government intend to move on Report the contents of the Private Member’s Bill that my right honourable friend Jack Straw moved in another place?

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[Lord Clement-Jones]

My Lords, I thank the Minister for that reply. Apart from the metaphorical slap on the wrist at the end of his response, it was generally helpful. I thank those who have spoken to the amendments. The noble Lord, Lord Hunt, made some interesting contributions and it is good to hear that the Minister is looking favourably on those amendments. The phrase about removing the excess from the system is very powerful. My noble friend talked about commoditisation and the possibility of litigation futures. The lawyers are probably salivating at that prospect. A number of noble Lords have recounted their experiences in this area. I will not add to the list of those who have spoken on that. However, I have even received a text message when I have not had an accident, which just shows the assiduity with which these characters operate.

I enjoyed hearing the noble Lord, Lord Bach, going well off piste when discussing the Jackson report in responding to my humble reference to a single aspect of that report, which was then inflated into a general reference to the whole of the Jackson report.

[Lord Bach]

I say with the greatest respect to the noble Lord that of course I remember his comment on Lord Justice Jackson’s report, but in this instance I was referring to what the noble Lord, Lord Hunt, said about that report.

[Lord Clement-Jones]

It is very useful to explain it in that way.

I thank the Minister particularly for his sympathy for Amendment 165. I very much hope that he will carry that forward to Report. Having looked at the existing legislation, I think it would be extremely useful to signpost that measure explicitly in this legislation. I also thank him for his assurance about pooled marketing and legitimate activities on the part of those pooled marketing schemes. They perform a very useful service and it would be a retrograde step if they were not able to continue. I will read with great care what the Minister said about Clause 55(9). I beg leave to withdraw the amendment.