Oral Answers to Questions
Debate between Lord Clarke of Nottingham and Andy Slaughter(13 years ago)
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Mr Andy Slaughter (Hammersmith) (Lab)
Last week the Secretary of State confirmed that he was taking legal aid away from brain-damaged children and disabled people unlawfully denied benefits. In answer to questions from my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), the Minister with responsibility for legal aid, the hon. Member for Huntingdon (Mr Djanogly), admitted that the Department of Health pays up to £183 an hour for legal advice, Work and Pensions pays £201 an hour and Communities and Local Government pays £288 an hour. Some of those well-paid Government lawyers will be up against our unrepresented constituents, especially on appeal. Does the right hon. and learned Gentleman think that that is fair?
Mr Clarke
Most of those do not get legal aid now, and most personal injury cases are not brought using legal aid. They are brought using no win, no fee arrangements. As the hon. Gentleman knows, in the new proposals for how no win, no fee ought to work, we have made special arrangements for particularly difficult cases and the insurance of the costs of medical reports.
Legal Aid, Sentencing and Punishment of Offenders Bill
Debate between Lord Clarke of Nottingham and Andy Slaughter(13 years ago)
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Mr Slaughter
This is an important group of amendments to part 2 of the Bill, which deals with a complex and vital area of access to justice. Because there are only 20 minutes left to debate this group, and I want to be fair to the Minister and give him 10 minutes to reply, I shall speak quickly in the hope of getting through the main part of my argument. I should make it clear at the outset that I wish to press to a vote amendment 21, which would undo the destruction of conditional fee agreements that the Government are pushing through in the Bill. I also ask, with the leave of my hon. Friend the Member for Rhondda (Chris Bryant), the lead signatory to amendment 163, that we press that amendment to a vote.
Conditional fee agreements, also known as no win, no fee agreements, were brought in by a Conservative Government to preserve access to justice for those on moderate means at a time when vast areas were being removed from the scope of legal aid and eligibility criteria were being removed. The provisions were amended, with a remarkable lack of contention from the Conservative Opposition, in the Access to Justice Act 1999, to create their modern form.
The idea of contingency fee agreements was to create a viable market in legal services by introducing success fees paid by losing defendants—wrongdoers, in other words—to compensate lawyers for the cases that they lost, for which, of course, they received no fees. For lawyers, that form of payment by results meant not that they would take on spurious cases, but that they were allowed to take on cases that might be 75:25 or 50:50. That has created a system that works, for the main part, very well. It has created a viable market in legal services and permitted access to justice for millions since it was introduced.
What sort of people have availed themselves of contingency fee agreements? More than half of those who have used them have had an income below £25,000 a year and only 18% have had an income of more than £40,000 a year. Government Members carp on about footballers and models using them, but the average claimant is the average constituent.
How do the Government’s proposals work? First, winning claimants will lose. Victims will have to pay the costs of their insurance and their lawyer’s success fees from their damages—up to 25% of damages, aside from damages for future care, can be taken by the lawyer, and the insurance premium will take up even more of those damages, perhaps wiping them out altogether. To make up for part of those losses, the Government plan a 10% increase in damages for pain, suffering and loss of amenity. Simple maths should be sufficient to show that that will not make up for all losses.
Losing claimants, including those bringing speculative and nuisance claims, will gain. They will benefit because it is unlikely that they will have to pay the costs of the winning defendant—that is part of the perverse, qualified one-way cost-shifting scheme that the Government intend to introduce when the Bill passes.
Losing defendants—wrongdoers, in other words—and their insurers will gain. Wrongdoers will benefit, because they do not have to pay the cost of after-the-event insurance or the victim’s lawyer’s success fees, thus limiting their liabilities and those of their insurers. Winning defendants will lose out. A winning defendant will no longer be able to reclaim the cost of their defence, thanks to qualified one-way cost shifting. To summarise, winners lose and losers win. That is simply wrong.
There was a time when the Conservative party worried about access to justice, but now it appears to be nothing more than the parliamentary wing of the insurance lobby, which according to an investigation by The Guardian has donated £4.9 million to the Tories since the Prime Minister became leader.
I have spent the past few months speaking to victims who have used contingency fee agreements to get justice. I have heard them tell me how our justice system helped them, and their fears that others who suffer in future will not get the help they need. A number of areas of law will be badly—
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
Will the hon. Gentleman give way?
Mr Slaughter
I would love to give way to the Secretary of State, but I have very little time—[Interruption.] If I have time at the end I will do so.
A number of areas of law will be badly affected by this legislation, and I should like briefly to touch on a few of them—[Hon. Members: Give way!]
Mr Clarke
I am sorry that the hon. Gentleman had to be bullied to give way to me, but there we are. I do not want him to exaggerate his case. No win, no fee was introduced by the Major Government and worked perfectly satisfactorily until the previous Government amended it. We are talking about how much winning lawyers are paid. The principles of access to justice and of no win, no fee are agreed on a bipartisan basis. They are not threatened at all by the Bill.
Mr Slaughter
I began my speech by informing the house how contingency fee agreements came about. Because the Secretary of State has merely repeated that, I will penalise the Minister by taking a minute off his time.
The Secretary of State believes that there are faults in the current system whereby lawyers are unjustly enriched—he may be right, and my right hon. Friend the Member for Blackburn (Mr Straw) and I, and many other hon. Members, would probably agree with him—but let us cure those faults. Let us not throw the baby out with the bathwater.
Oral Answers to Questions
Debate between Lord Clarke of Nottingham and Andy Slaughter(13 years, 2 months ago)
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Mr Clarke
As I suggested a moment ago, I regard it as just a little disingenuous—I hate to say that about UN agencies—to suggest that we are in any way undermining the jurisdiction here for dealing with racial discrimination or serious personal injury cases involving British companies. What we are talking about is how much the lawyers are paid by way of success fees and other costs. The Trafigura case was a classic scandalous personal injury case involving a British company and an incident in Côte d’Ivoire, in which £30 million in compensation was awarded by the British courts to the plaintiffs and £100 million was paid in legal costs to those who brought the action. All we are doing is going back to where no win, no fee used to be—in getting the costs and the claims back in proportion to each other.
Mr Andy Slaughter (Hammersmith) (Lab)
What we are talking about is whether such cases will get into court at all under the regime that the Government are proposing. It appears they will not listen to Her Majesty’s Revenue and Customs on insolvency, or to Amnesty International, Oxfam or the United Nations on multinational cases. Now, Admiral, the leading specialist motor insurer, is saying that premiums will go up as a result of the proposals. Is it not time to think again, and to stop favouring insurance companies, crooks and multinationals over their victims?
Mr Clarke
If the hon. Gentleman wants to widen this argument, which is perfectly legitimate, to include a general proposition as well as multinational company cases, the questions must be: how much is proportionate to the claim when it comes to paying costs, and what effect does no win, no fee, since it was changed, have on the judgment on both sides? We do not want such cases to be such a high earner for the plaintiffs’ lawyers that they are prepared to bring more speculative cases, which is happening at the moment. Nor do we want pressure to be put on defendants who have a perfectly sound defence, forcing them to say, “We cannot defend ourselves, because it will cost us less to pay a nuisance fee by way of settlement.” Justice involves striking a balance between what the lawyers are paid and what the plaintiffs get by way of compensation.