Civil Legal Aid (Remuneration) (Amendment) (No. 3) Regulations 2014

Lord Faulks Excerpts

Wednesday 7th May 2014 Lords Chamber

The noble Lord, Lord Pannick, has characteristically done the House and our system of justice and those who seek justice an important service by tabling his regret Motion. If he had decided to take it to a vote the Opposition and I believe many other Peers would have supported him. I understand that is not his intention. However, the Government should take very seriously the substantial critique of their proposals made by two bipartisan committees—one in each House—and by speakers from around the Chamber tonight, with and without direct legal experience. The points they have raised go to the heart of our legal system. The Minister has been given an unenviable brief tonight. I know that he will take back what has been said to his ministerial colleagues. I hope they will have the good sense and moral purpose to reflect on what has been said here and to change their position. It would not be a sign of weakness; it would be a sign of strength to acknowledge that they have not got things right and that they can put them right at the very least by securing proper parliamentary approval for any changes that they see fit to bring forward.

[The Minister of State, Ministry of Justice (Lord Faulks)]

My Lords, I am grateful for the opportunity to accept the invitation to gird my loins and to respond to the noble Lord, Lord Pannick, and others—lawyers and non-lawyers alike—who have spoken in this debate this evening. As the noble Lord, Lord Pannick, said, many of us are veterans of the LASPO Bill, and I count myself as one. I declare an interest as until recently I was a barrister who practised in, among other areas, the field of judicial review, acting for both applicants and respondents, so I have some experience of this procedure. I should explain to the House the Government’s position on the regulations concerning the remuneration for legally aided judicial review permission applications that were laid before the House on 14 March and came into force on 22 April.

The debate has ranged far and wide this evening. We have had references to the separation of powers, a reminder of Montesquieu, a magisterial analysis of the developing role of the Secretary of State and the Lord Chancellor and a call to the reversion of the status quo ante, whereby the Lord Chancellor had a rather different and separate role. We have had a critique by the noble Lord, Lord Howarth, of the whipping system and of the machinery of government as a whole; an implied undertaking to repeal the Fixed-term Parliaments Act; a criticism of reforms of the national health system; and an attack on the Government as a whole. We have also had criticisms of the exceptional funding arrangements in the LASPO Bill and of the social welfare law provisions. To respond to all these issues would take several hours. I hope that noble Lords will understand if I do not do so but concentrate on the rather prosaic matter of these particular regulations.

During the course of the speeches of great quality which we have had this evening, a dispassionate observer would have thought that the Government were abolishing judicial review. Such a course would of course be of fundamental importance and would indeed fall foul of the many criticisms that have been ranged against it this evening. I entirely accept that judicial review is a critical check on unlawful action by public bodies and that it is wholly right that individuals should be able to access this mechanism. The many cases cited by the noble Baroness, Lady Stern, are examples of successful judicial reviews. The noble Baroness, Lady Campbell, quite rightly drew attention to the many actions that have been assisted by judicial review to right wrongs. Nothing about these modest regulations will do anything to erode that.

Civil legal aid for most judicial review cases will remain within the scope of the legal aid system. These regulations relate solely to the remuneration of legal aid providers and will ensure that limited legal aid funds are not used to remunerate weaker cases. The detail—prosaic though it is—does matter. It is a long-standing feature of our legal aid system that there should be limits on access to funding based on the strength of the case. To qualify for civil legal aid, cases must satisfy a merits—or prospects of success—test. Broadly speaking, a judicial review case must have a 50% or greater prospect of success at the final substantive hearing. However—there has not been a great deal of reference to this in the debate—noble Lords will be well aware that before any substantive judicial review hearing, the court must first give permission to proceed. Permission will be given if the court considers that a case is arguable and therefore merits full investigation. The permission stage therefore acts to filter out weaker cases at an early stage in the process.

Providers are well placed to assess whether or not the court is likely to grant permission before they issue an application. They will not be required to make a random guess before taking the risk to issue proceedings. That is because their assessment is undertaken following the pre-action stage of the process during which time providers gather the relevant information about the strength of the case. Noble Lords may be familiar with the protocol that applies in these cases. It is that information that enables them to make an assessment as to whether to issue proceedings. Under the policy, work to investigate the strength of the case and engage in pre-action correspondence would not be at risk. A case that has received legal aid and so has been assessed as having a 50% or greater prospect of success at the final hearing should be more than capable of satisfying the lower arguability threshold.

However, Legal Aid Agency data indicate that a significant number of legally aided cases—751 in 2012-13—apply for permission and fail, with potentially substantial sums of public money being expended. The commentary on civil procedure contained in the White Book, with which all lawyers will be wholly familiar, states as follows in rule 54.4.2, which deals with the permission application:

“The purpose of the requirement for permission is to eliminate, at an early stage, claims which are hopeless, frivolous or vexatious and to ensure that a claim only proceeds to a substantive hearing if the Court is satisfied that there is a case fit for further consideration”.

That is a synthesis of the case law. It was quoted in the consultation, to which there has been some reference. The Government do not consider it fair or justified that limited taxpayers’ money should be used to fund such cases. The legal aid merits criteria provide an important control, but it is clear that they are insufficient by themselves to address the specific issue that we have identified in judicial review cases. These regulations will therefore introduce a further control by placing remuneration for the work on a judicial review at risk from the point at which proceedings are issued—that is, when an application for permission for judicial review is made to the courts. Providers will be paid for this work if the court gives permission.

Permission may be applied for but a case may of course also conclude prior to the court’s decision, a point made by a number of speakers. In those circumstances providers should seek to recover costs, either through agreement with the other party or by a costs order made by the court which orders the public body to pay the legal costs. Where this cannot be achieved, the regulations enable the provider to apply to the Legal Aid Agency for a discretionary payment. These regulations do not—as I think the Motion of the noble Lord, Lord Pannick, seems to suggest—make legal aid in judicial review cases solely dependent on the court granting permission to proceed.

This policy was the subject of extensive public consultation. The Government have listened carefully, and gone to lengths to modify the proposal to ensure that payment will continue to be made in meritorious cases. In response to concerns raised in the first consultation that strong cases will often conclude pre-permission, without costs being recoverable—a perfectly fair point made by a number of noble Lords—we moved to introduce a discretionary payment mechanism. In response to concerns that this discretion would be too inflexible—for example, that it could penalise providers who acted reasonably throughout but where new information subsequently came to light which altered the strength of the case—we modified the factors that the LAA would have regard to, and ensured that these would be non-exhaustive.

Remuneration will continue to be paid for the earlier stages of a case, where investigations are carried out into the prospects and strengths of a claim and pre-action correspondence is exchanged with the defendant. The regulations would not affect subsequent work in respect of the substantive hearing, once permission has been given. Nor would they place at risk any reasonable disbursements which arise in preparing the permission application, such as expert’s fees and court fees. Work relating to applications for interim relief will also not be at risk. Of course, providers can always discontinue the process, either following the pre-action stage where providers can decide not to issue proceedings on the basis of their assessment of the evidence, or after proceedings have been issued, where providers may seek to discontinue the case if they consider that the prospects of success have been materially altered.

The regulations only and specifically put at risk work on the permission application, in accordance with Part 54 of the Civil Procedure Rules 1998 or Part 4 of the Tribunal Procedure (Upper Tribunal) Rules 2008, where an application has been issued. By way of example, this would include work on drafting the grounds of claim, and preparing the claim form or application for permission and the bundle of documents. I have been somewhat surprised by arguments that providers would be unclear what work would and would not be at risk. These are matters with which any legal aid provider who carries out litigation will be very familiar, for example for the purpose of preparing a statement of costs.

[Lord Lester of Herne Hill]

I am sorry to interrupt, given the lateness of the hour, but what my noble friend is saying perplexes me. Would he please look at Regulation 5A(b)? This deals with the situation where neither a refusal nor a granting of permission takes place, and the Lord Chancellor is then given discretion where he considers it is reasonable in the circumstances to pay remuneration, taking into account (i), (ii) and (iii). I will not embarrass the Minister by reading those out, because everyone would laugh if I did. But looking at (i), (ii) and (iii), and putting himself back in the days when he was a barrister appearing for applicants, how on earth could he reasonably predict the outcome, so far as costs are concerned, with those criteria?

[Lord Faulks]

I will endeavour to answer my noble friend’s question when I come to deal with the discretion.

We do not expect that these regulations will result in providers leaving the market—one point that was made—or that there will be an insufficient number of providers remaining. We do of course expect some providers to take on fewer judicial review cases. Indeed, it is the purpose of the policy to provide a disincentive to providers taking on unmeritorious cases and thus to ensure that limited public funding is targeted at the cases that justify it. While I wholly agree with my noble friend Lord Cormack about the importance of the rule of law and the appropriate endorsement of Lord Bingham’s book, he seemed anxious to encourage any sort of case on the basis that some case might emerge from the morass of unmeritorious cases. We are keen to reduce the size of the trolley of the noble Lord, Lord Carlile, so that those who are contemplating bringing judicial review proceedings think long and hard before going on to make these applications.

The Government firmly reject the accusation that these regulations will undermine access to justice. There is nothing novel about the principle of expecting providers to work at risk and receive remuneration only where it is established that their case is meritorious. A similar system has existed for some time in immigration and asylum Upper Tribunal appeals, where remuneration for a permission application is not paid where the application for permission is refused. There has been little about interim relief, but I have made it clear to the House that these will not be caught by the restriction on legal aid that these regulations involve.

I now respond to the argument that further guidance should be issued on the Legal Aid Agency’s discretion. During the consultation process, the proposal was criticised for prescribing too rigid a list of criteria that the agency would consider. The Government responded by modifying the criteria and making it clear that these would be non-exhaustive factors that the Legal Aid Agency would take into account, in particular when considering all the circumstances of the case.

That is important, as it will enable the agency to take into account the full range of circumstances in which a judicial review case may conclude prior to a permission decision. No two cases will be identical and the agency will necessarily need to look at the facts of each individual case in addition to the factors set out in the regulation. This provides the agency with greater flexibility to ensure that work on meritorious cases continues to be paid, which I hope all noble Lords will support. However, the corollary of this approach is that it would simply be impractical for guidance to be issued that attempts to cover all possible circumstances. The consultation response sets out in further detail how the LAA will apply the factors that we have set out and we do not consider that additional guidance could add anything further to this.

As noble Lords will be aware, the House of Lords Secondary Legislation Scrutiny Committee issued a report criticising the regulations, which has been much referenced. We have responded to the report and a copy of the letter has been placed in the House Library. I hope that noble Lords have had an opportunity to see it. The Government will also respond to the report of the Joint Committee on Human Rights in due course. Many of the questions posed in that report were repeated by the noble Lord, Lord Beecham. We will respond in detail to that report and most of the questions that he posed will be answered. We will, of course, keep the operation of these regulations under review as part of the planned post-implementation review of the totality of changes brought in by the LASPO Act, due to take place in the next two to four years.

I acknowledge that the Government have made a number of significant changes to the civil legal aid system since we came to power. The underlying rationale for all these, including the regulations that we are debating tonight, has been to bear down on the cost of legal aid. That is necessary in the current financial climate, which was acknowledged, despite severe misgivings about these regulations, by the noble and learned Baroness, Lady Butler-Sloss. We need to ensure public confidence in the legal system by targeting limited legal aid resources at the people and cases where funding is most needed. These are the aims that I believe the public firmly support.

There has been a great deal of criticism of my right honourable friend the Lord Chancellor and his role. I do not think it is appropriate for me to go into the detail of the attacks that have been made on him. I am sure that noble Lords are sufficiently generously spirited to perhaps construe his referring to left-wing causes as a bit of hyperbole on his part. It matters not, of course, whether the applicant is left wing, right wing or has no political view at all. The question is whether the case is meritorious and whether it should be supported by what are sparse legal aid funds. It is important that the limited availability of legal aid should be targeted appropriately. What this regulation does is not to abolish judicial review, but to limit—in very specific circumstances—the recoverability of legal aid, once the information is available, and subject to the discretion which I have attempted to describe. We may have further arguments, I suspect, when the Bill referred to by the noble Lord, Lord Pannick—the Criminal Justice and Courts Bill—comes before your Lordships’ House. That Bill has various other provisions which do, to some extent, restrict the scope of judicial review, but certainly do not abolish it.

I will, of course, take back the comments made by noble Lords from all round the House to my right honourable friend the Secretary of State and Lord Chancellor, and will convey the anxiety expressed about this erosion, as it characterised, of a constitutional principle. I ask noble Lords to look at the reality of what these regulations propose and not to be too exercised by what has been, I think, somewhat exaggerated in terms of their effect in restricting judicial review. I respect the rule of law, as I hope noble Lords will accept. I accept the value of judicial review and I would not wish to be part of any Government who abolished judicial review. It remains an important constitutional provision begun, as my noble friend Lord Lester described, in the 1970s and developed since, but it is not an illegitimate aim to look at where resources can be properly targeted and to make appropriate adjustments to make sure that only cases which are really worth the public’s expenditure are reaching the court.

My noble friend has expressed his regrets, with his characteristic economy of words. I hope his regrets have been somewhat mollified by this response.

[Lord Maclennan of Rogart (LD)]

My Lords, before the Minister sits down, would he give some consideration to the unanimity of the view which has been expressed in this House—which I have audited—that this measure is a constitutional monstrosity? Would he consider, and represent to his departmental colleagues, the possibility that Parliament may come to grips with these issues and take the decision? This is one which, because of its constitutional extent, should be decided not by a Minister but by a Minister in Parliament.

[Lord Faulks]

I hope I have made it clear that I would take back the observations that were made during the course of the debate. I will, of course, add to that the comments made by my noble friend just now.

[Lord Pannick]

My Lords, the poor quality of these regulations has provoked a debate of the highest quality. I thank all noble Lords who have participated in identifying defects in these regulations. I also thank very sincerely the Minister, who has put the Government’s case without any support whatever from the Benches behind him. It is no reflection on the noble Lord’s very considerable powers of advocacy to say that the arguments he has advanced tonight in support of the Government’s position are, to use a phrase commended during the debate, wholly without merit.

The Minister emphasised that the Government are not abolishing judicial review. We must be thankful for small mercies. It is no defence to a charge of criminal damage for the defendant to say, “I have not committed a murder”. The Minister says—and who could disagree?—that hopeless cases should not be funded by judicial review. Of course they should not, but the Minister will appreciate that the thrust of this debate is that the test imposed by these regulations does not distinguish between hopeless and other cases, as would be the case if the judge were to have a power to determine for the purposes of legal aid whether the case is hopeless. I am pleased that the noble Lord has given a commitment to ask the Lord Chancellor to reflect on what has been said tonight. I hope that the Minister will be able privately to add his concerns to those expressed in the House.

I have one other point: your Lordships will have a proper opportunity in the next Session for detailed scrutiny of the Lord Chancellor’s attempts to neuter judicial review in the most regrettable proposals in the Criminal Justice and Courts Bill. I am confident that, as the noble Lord, Lord Cormack, said of these regulations in his powerful speech tonight, there will be in the next Session a coalition of Peers from all sides of the House who will express their concern about the Lord Chancellor’s proposals and, I hope and expect, in relation to that Bill will demonstrate their commitment to the rule of law in the Division Lobbies. Like so many of your Lordships and so many outside this House, I regret these regulations. I beg leave to withdraw the Motion.