Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Wallace of Tankerness Excerpts

Monday 30th January 2012 Lords Chamber

[Baroness Turner of Camden]

I am not a lawyer, and this is a very complicated set of amendments in a single group. My concern arises because for many years I was a trade union official with responsibility for the legal cases service that we provide to our members. My concern, and that of the TUC, is that the Bill changes the balance away from people who are poor who have had an accident at work and want to seek compensation for their injuries. It has destroyed the balance, as they see it, between the wrongdoer and the injury victim, denying claimants access to the courts and with the money taken from them simply serving as a windfall for negligence defendants and sometimes for their insurers. Even if representation can be obtained, many on a low or middle income may not claim because they are unable to fund disbursements upfront or because of a general feeling regarding the costs, or the risk of the costs, involved. Trade unions collectively assist up to 150,000 personal injury claimants a year. There is a concern that their ability to look after their members will be impacted by the Bill, and in particular by Clauses 43 and 45, which we are currently discussing with this group of amendments.

As has already been explained, back in 1999 mechanisms were put in place to ensure that all reasonable legal costs could be claimed by a successful claimant from the negligent party to protect access to justice, particularly for those on a low or modest income, and to protect claimants’ entitlement to their compensation in full. Such costs include success fees and “after the event”, or ATE, legal insurance. In our opinion, Clauses 43 and 45 would probably reverse that position, destroying injured claimants’ rights.

Clause 43 stops recoverable success fees. Currently, claimants can find lawyers to take on their cases on a no-win no-fee basis using a conditional fee arrangement because the lawyer is paid a success fee. This is an additional cost paid in successful cases to cover the risk of running a whole basket of claims, some of which will be lost. It is the recoverability of this success fee from the insurer that the clause will ban. Instead, the claimant might have to pay up to 25 per cent of their damages to their lawyer as a success fee—if they can find a lawyer to take the case. As Jackson knows—we have been talking about the Jackson report because it is on his recommendations that a lot of this legislation is based—this will harm claimants, and he proposed an increase in damages for the injury alone of 10 per cent to compensate. However, this will not work. Those pursuing employer liability claims will lose out, and this uplift may prove largely unnecessary if the Bill relates only to RTA claims. We are concerned not about that but about accidents at work in this particular briefing.

So far as concerns accidents at work and industrial injury, there is a further concern that if this legislation takes effect there will be a reduction in the number of compensation cases that can be pursued, and that that in turn will have an effect on safety at work, health and safety legislation and so on. That is another impact that this legislation will have on compensation for injuries that workers may sustain in their employment.

Clause 45, at the stroke of a pen, stops a claimant recovering the cost of ATE insurance to cover the risk of paying a defendant’s costs or disbursement. Without ATE, many claimants will not be able to take the risk other than in very straightforward cases.

For those reasons, those of us who are concerned with trade union cases and with work injuries and so on are worried about the impact that this legislation, if not amended, will have on the possibility of people injured at work being able successfully to pursue compensation cases. The Government sometimes seem determined to prevent individuals who feel that they need compensation pursuing their cases. I sometimes think that they have been taken in by all the publicity in recent years about our becoming a compensation culture. I do not think that that is true at all. It is obviously true that many people feel that, if they are injured at work or through somebody else’s negligence, they have a right to claim compensation for their injury and they therefore looks for means to secure that compensation. Sometimes they go to a union if they belong to one, or they may go to other organisations that provide advice and support to individuals. Those individuals will not feel able to do so if there is a risk that they will not get their case taken, or will be landed with fees that they have to pay themselves because they will not get full recovery, having had to pay the compensation success fee to the lawyer involved.

That is terribly unfair, and I hope that during the passage of this Bill we will be able to table amendments that will deal with some of those concerns. Some of the amendments in this group will deal with the concerns that I have voiced this afternoon. They were expressed previously when we had Second Reading and I do not want to repeat everything that was said then, but I want to emphasise that I am talking about people who have very little money. When they are injured at work, often the compensation is no more than £3,000, which may not appear to be a very large sum of money, but to somebody working as a cleaner, it is an enormous sum. Certainly, it is not a trivial amount. People with small claims, who feel that they have been injured and are entitled to compensation for their injuries, may have doubts about whether they can proceed, and they will not find people willing to take up their case. That would be a great pity; it would block people’s access to justice. I thought that in any reform, we should be concerned with improving access to justice. The Bill, especially in these clauses, does not do that. I hope that we can amend them during our discussions.

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

My Lords, I join the noble Lord, Lord Beecham, and my noble friend Lord Phillips, in thanking my noble friend Lord Thomas of Gresford for introducing this compendious set of amendments. It is useful to do that because it brings together all the different strands of this package. As the noble Lord, Lord Beecham, said, my noble friend Lord Thomas introduced the issue and spoke to the amendments with great clarity. In doing so, he raised a number of important issues to which I hope to respond. I shall, obviously, deal with the amendments, but if accepted, they would completely undermine the reforms that we are trying to make to civil litigation costs.

I shall try to take the amendments together in some of the natural groupings: Amendments 118 to 120 and Amendments 127, 131 and 133 all relate to Clause 43; Amendments 138, 143 to 146, 147A and 148A all relate to Clause 45; Amendments 158, 159, 160 to 162 and 190 to 193 all relate to Clause 53; and Amendments 137B and 137C would insert a new clause.

To respond to the general comments that have been made, both by my noble friend Lord Thomas and the noble Lord, Lord Beecham, perhaps it is worth emphasising the importance of Part 2 of the Bill, even though I shall not go down the Shakespearean historical paths of the noble Lord, Lord Beecham. Part 2 includes provision to implement fundamental changes to the current no-win no-fee conditional fee arrangements regime. As my noble friend Lord Thomas has indicated, it is taking us back to the regime introduced by my noble and learned friend Lord Mackay of Clashfern when he was Lord Chancellor in the 1990s. We believe that the Bill will restore a fair balance to civil justice. It is worth reminding ourselves that conditional fee agreements were used successfully then without the substantial additional costs that have followed the changes introduced by the previous Government in the Access to Justice Act 1999. Under our changes in this Bill, meritorious claims will be resolved but at a more proportionate cost, while unnecessary or avoidable claims will be deterred from progressing to court. We believe that these changes can help businesses and other defendants who have to spend too much time and money in dealing with avoidable litigation—actual or threatened. It is worth reminding ourselves that if a defendant feels pushed into a position where they feel they have to settle a claim that they think does not have any merit at all because of the potential costs that they might incur if they proceeded to defend the action, it is not justice. It is not justice if unmeritorious claims are allowed to succeed.

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[Lord Martin of Springburn]

I apologise for being late for the Committee; I was travelling from Scotland. I am sure that the noble and learned Lord will acknowledge that cases that involve 100 per cent recovery are those that go to court. There are stages where settlements can be made. The defendant can make an offer that can be accepted. If it is done at an early stage there will not be the 100 per cent costs that we were talking about.

[Lord Wallace of Tankerness]

My plane from Edinburgh, too, was delayed today; I understand the noble Lord's difficulties. He mentioned the arrangement for making offers. Part 36 arrangements were spoken to by my noble friend Lord Thomas when he moved the amendment. I will come to the matter in responding to the debate.

As I indicated, very often these cumulative costs can lead defendants to feel under pressure to settle a claim when they have no legal reason to do so, through fear of incurring payment of excessive costs as the case proceeds.

Without Clauses 43 and 45, high and disproportionate costs in civil litigation will continue. Access to justice will not become more meaningful for all parties, as we intend. If all the amendments to Clause 43 were agreed, the fundamental elements of the Government's reform package would be lost, and defendants would continue to be liable for significant additional costs across a range of cases. It is useful to put the level of costs in some context. My noble friend Lord Phillips pointed out that one general liability insurer indicated that, in 1999, claimants’ solicitor’s costs were equivalent to just over half the damages paid; by 2004, average claimants’ costs were roughly the same as the damages; and, by 2010, average claimants’ costs represented one and a half times the damages received by the injured victims, and indicated that while average damages paid have increased by one-third since 1999, average claimants’ costs have increased by two and a third times over that period. These figures reflect Sir Rupert Jackson’s findings that claimants’ costs are substantially higher than defendants’ costs, and that claimants’ costs in CFA cases are substantially higher than in non-CFA cases.

[Lord Beecham]

If damages had increased, as recommended in 1999, and kept pace with inflation, that ratio would not be quite as wide, would it?

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[Lord Wallace of Tankerness]

We will come to increased damages. Damages are totally to one side in this. The point I was making was about the difference between claimants’ costs and defendants’ costs. For example, in clinical negligence cases in the period 2005 to 2010, claimants’ costs paid increased by 45 per cent while the NHS Litigation Authority’s legal costs declined by about 30 per cent. That reflects Sir Rupert Jackson’s findings that claimants’ costs are substantially higher than defendants’ costs. That is one of the things that we seek to address.

It might be helpful if I indicate at this stage our current timetable for the implementation of Lord Justice Jackson’s proposals in Part 2—subject, of course, to parliamentary approval. We believe that these are important measures and we want to implement them as soon as possible in order to control the costs of civil litigation. However, I will reflect on some of the specific issues that were raised by my noble friend Lord Thomas. These proposals will require the making of new regulations and changes to the Civil Procedure Rules. We wish to make sure that we get the details of these regulations and rules right, and that will inevitably take some time.

We are also conscious that stakeholders will need appropriate notice of when the changes will be implemented and how the details will affect them. We have already announced that the legal aid provisions in Part 1 will be implemented in April 2013, subject to parliamentary approval. For these reasons, I can inform the Committee that, subject to parliamentary approval, the Government intend to implement the Jackson provisions in Part 2 in April 2013 as well.

As I have outlined, Amendment 127, tabled in the name of the noble Lord, Lord Martin, if allowed to stand, would allow continuation of the current regime of recoverable success fees—which, for the reasons I have indicated, we are determined to tackle. Therefore, we will resist that amendment.

I turn to Amendments 118 to 120. The Government have said that in personal injury cases there will be a cap on the amount of damages that may be taken as a success fee. It is important to remind ourselves that the cap of 25 per cent in personal injury cases is a maximum in order to protect claimants’ damages. Lawyers do not have to charge a success fee of 25 per cent of damages. Indeed, in many personal injury cases where there is little risk of difficult legal issues arising, it may well properly be the case that a zero success fee, or a much smaller success fee, would be appropriate. Indeed, there is no need to claim a success fee at all. As my noble friend Lord Thomas said, an element of competition will start to emerge, and no doubt some firms of solicitors will get a reputation for taking on cases with very modest or no success fees, whereas other firms prepared to take on more risky litigation would have higher success fees. The cap will be set at 25 per cent, but that is intended in personal injury cases only and is to protect claimants’ damages. In particular, it will not apply to damages for future care and loss, which can be very substantial. I do not accept that the amendments tabled by my noble friend are necessary, because he mentioned some non-personal injury cases where that 25 per cent cap will not apply, albeit that the fee under the Bill would refer to a percentage of damages. Obviously, in non-personal injury cases, the 25 per cent rule would not apply. Amendment 118 would allow lawyers to increase the notional fee and overall costs, whereas the policy intention is to reduce these costs. Therefore, we do not believe that Amendments 118 to 120 are necessary or appropriate.

Amendments 131 and 133 seek to exempt certain types of claim from our package of reforms to the existing CFA regime. We cannot accept these amendments as they undermine the Government’s reform of civil litigation funding and costs. Under our reforms, people will still be able to bring cases on CFAs in areas where they are currently used. We are also making improvements that will help claimants wishing to fund claims on a CFA that were not available previously, and we are protecting claimants’ damages. I just referred to the 25 per cent cap; as has also been recognised, there will be a 10 per cent increase in non-pecuniary general damages such as those for pain, suffering and loss of amenity. This change is being taken forward by the senior judiciary.

Amendment 131 proposes that the success fee should be recoverable where,

“the defendant has been unreasonable (in whole or in part)”.

This relates to the recoverability of success fees from the defendant, which we do not believe should be the case. To allow for recoverability where the defendant is alleged to have been unreasonable, at least to some extent, is a recipe for satellite litigation and even more costs being generated. It will introduce uncertainty and the opportunity to allege unreasonable behaviour in every case—one can see the certain incentive to do so—which would not be acceptable.

I will return later to the point made by the noble Lord, Lord Martin, but we are introducing changes that will require defendants to behave properly in relation to offers. The changes to Part 36 of the Civil Procedure Rules—Offers to Settle—are touched on in Clause 53 and the amendments that have been moved in relation to that. The changes will incentivise defendants to make earlier and better offers; otherwise, they will suffer increased financial penalties. With regard to Amendment 133 and the question of funding of appeals, the same general arguments apply as for unreasonable behaviour by the defendants. The Government are not persuaded that any special provisions need to be made in respect of appeals, and appeals can be funded on the same basis as cases in the first instance.

As has been acknowledged in this debate, in personal injury cases we are introducing a system of qualified one-way cost-shifting—QOCS—which will protect losing claimants from having to pay the defendant’s costs. Although these measures are being taken forward outside of the Bill, including through the Civil Procedure Rules, they are an important feature of the overall package. To maintain a level playing field, these changes should apply equally and to all categories of cases. Otherwise, in cases covered by these amendments, the losing party will still be liable to pay not just the winning party’s ordinary costs but all the additional costs associated with CFAs, without any justification.

The effect of Amendments 137B and 137C is almost identical, the difference lying only in the amounts they suggest. I have spoken about the changes we are making to CFAs. As part of his package of reforms, Lord Justice Jackson recommended that the level of general damages in tort cases such as for pain, suffering and loss of amenity should be increased by 10 per cent. The Government have accepted this recommendation, and the increase will apply to all cases, however they are funded.

However, Amendment 137B seeks to make this increase part of primary legislation by incorporating it into the Bill. Amendment 137C specifies that the increase should be 33 per cent. I believe that an increase of 33 per cent would be an overcompensation. As well as exceeding the level of the proposed cap on success fees, it would be a substantial windfall for claimants not on CFAs, who would not be liable for any success fee. It would also increase the burden on defendants, which goes against the grain of these reforms.

I understand that noble Lords wish to see a commitment to a 10 per cent increase in the Bill. However, we have given the matter much thought and we do not believe that to do so is either necessary or practical. The level of general damages has historically been for the judiciary to decide. This was so in the Court of Appeal case of Heil v Rankin, which increased the level of such damages. Again, we believe it would be appropriate for the senior judiciary to take this increase forward, as indeed it is.

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[Baroness Butler-Sloss]

Perhaps the Minister will not mind if I add a very few words. I had not intended to intervene but, as a former chairman of a rules committee, I have to say that I have considerable faith in the good sense of the way in which it does its work. But the points that have been made are extremely relevant. It is not really the business of a rules committee to change something so dramatic. As the noble Lord, Lord Thomas of Gresford, has said, I would add that “unreasonable” is extremely difficult. The words used by the noble Lord are the standard words that have been used from time immemorial, as the lawyers say. “Unreasonable” is nothing like as serious as the other term but is liable to cause considerable difficulties of interpretation.

[Lord Wallace of Tankerness]

My Lords, it is very evident from the three interventions that this matter is clearly exercising the Committee. I certainly note from the experience of the noble and learned Baroness, Lady Butler-Sloss, having chaired a rules committee that perhaps we are going into territory which we may not have been in before. As to what my noble friend has said, I sometimes hesitate to put things on the face of the Bill because, as we all know, once there, they limit what a rules committee might be able to do if faced with an obvious set of circumstances where it does not believe there should be one-way costs shifting, and it can inhibit that. However, I take the point that unreasonableness could be going too far towards the other extreme in terms of its lack of clarity.

My noble friend asked: if it is not possible to put something in the Bill, what assurances could be given? That is something we shall certainly want to reflect on when considering these contributions. I am sure that we shall have an opportunity to address this again at the next stage of the Bill, and if there are assurances that can be given, I would hope that we would be able to do so. Perhaps I may leave it at that for the moment. We recognise the importance of the points that have been made.

I should restate that there already appears to be broad agreement that there should not be a primary financial threshold in personal injury cases for QOCS, although that would not necessarily apply were QOCS to be extended at some later date to other categories of personal injury. I hope that reassures my noble friend on that particular point.

Amendments 143 and 144 seek to replace the Lord Chancellor’s discretionary power under Clause 45(2) with a duty to make regulations in respect of the recovery of “after the event” insurance premiums relating to expert reports in clinical negligence cases. I can give the Committee the assurance that we intend to allow for this recoverability so that poor people can get expert reports in clinical negligence cases without having to pay for them upfront. However, we have deliberately kept a degree of flexibility around the drafting of the regulations.

The effect of Amendments 144A to 144D is to extend the recoverability of ATE insurance premiums to all civil cases. Unlike the current exception for clinical negligence, the proposed exception is intended to apply to ATE insurance which covers the risk of paying opponents’ costs as well as funding expert reports.

[Lord Thomas of Gresford]

My Lords, with great respect, I advanced the amendments in the context that one-way cost shifting will go through, as the Government say it will, in which case the defendant’s costs are immaterial. The only ATE insurance that will be required will be for the disbursements of the claimant himself, which would not otherwise be covered. That is the area to which I am referring in those amendments.

[Lord Wallace of Tankerness]

My Lords, we believe that the package of proposals seek to end ATE insurance premiums being charged to the defendant with the specific exception of clinical negligence cases. To start unpicking it in such an important respect would not retain integrity of the proposals as a whole. I hope that I am not misinterpreting what he said, but my noble friend has suggested that it might be possible to split or share the recoverability of success fees or ATE insurance premiums. Indeed, I think that the Bar Council has suggested that some success fees or ATE insurance premiums should be payable by the losing side with the remainder payable by the claimant. Lord Justice Jackson made alternative recommendations on partial recoverability of success fees and ATE insurance premiums in the event that his principal recommendations were not accepted. But the Government had a full public consultation on both the primary recommendations and the alternatives and gave careful consideration to the responses. We decided to take forward the primary recommendations—abolishing the recoverability of success fees and ATE insurance premiums—as the best way of restoring proportion and fairness to the CFA regime.

It has been suggested, as referred to in Amendment 146, that the market may not provide for or adjust itself sufficiently to take account of these. The amendment requires the Lord Chancellor to,

“have regard to the financial and commercial viability of the insurance market”,

in making regulations under Clause 45(2). I accept that the changes the Government are seeking to implement are fundamental, but we expect the insurance market to respond positively to them. It is easy to say ahead of an event that all sorts of appalling things will happen, but after 1999 the market certainly adjusted to the opportunities with ATE premiums, and it is not surprising that those who wish to maintain the status quo are making substantial representations to that effect.

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[Lord Martin of Springburn]

On the incentive to settle early—I am trying to put this in layman’s terms—is the noble and learned Lord saying that a claimant can, through his solicitor, put it to the defendant that it would be a reasonable settlement, for example, to pay X amount or to print something in a particular magazine that would help the defendant to get his reputation back? Is the noble and learned Lord saying that, if such an offer is refused by the defendant, that would be taken into consideration by the court?

[Lord Wallace of Tankerness]

I think I understand what the noble Lord is saying and I think I gave an indication on that point. Let me just try to find that—

[Lord Thomas of Gresford]

May I help by saying that my Amendment 162 goes directly to that point?

[Lord Wallace of Tankerness]

As I said in response to my noble friend Lord Thomas, we do not believe that that is necessary because it is the Government’s intention that such matters would be included in the definition of non-monetary benefit awarded to the claimant in any event should the additional penalty be calculated in that way. Clause 53 gives us the flexibility to do that so that the rules can be made across all categories of law. It is our intention that they should be. However, perhaps I may put that in writing, in a letter to the noble Lord that I will circulate to other Members of the Committee, to explain the matter in more detail.

[Lord Thomas of Gresford]

My Lords, I am most grateful to all noble Lords who have spoken in this debate and, in particular, to the noble and learned Baroness, Lady Butler-Sloss, for her support on the issue—which I regard as having constitutional significance—about whether the Civil Procedure Rules should be formulated without Parliament having any input into them at all. It seems to me that it is for us to decide, one way or the other, what the particular parameters should be.

Let me just pick up on two points. First, should the means of the claimant come into it at all? The insurance industry does not want that, but the proposal in the Bill is that the claimant’s means should be taken into consideration. What about the meaning of “unreasonable”? The meaning is so broad that it should really be narrowed down. On that issue, I want to hear further from my noble and learned friend and I shall be talking to him about it between now and Report. I will take the issue further if necessary.

Secondly, on the question of splitting the burden of the insurance premium, it seems to me that that is a sensible way to go forward. The corks from the champagne bottles will be popping down in the City when people read my noble and learned friend’s response that the premium will fall entirely upon the claimant. Why should it not be split? There would be advantages both ways in splitting the premium: first, there would be an incentive for the claimant to ensure that premiums are not too high and are not, as at the moment, left completely in the air; on the other hand, if you split the premium in the staged way that my amendment proposes, there would be a great incentive on the defendants to settle. The course that I have suggested includes advantages beyond the mere way in which the liability falls. I would like to hear a little bit more about why the Government prefer Lord Justice Jackson’s first proposal, as opposed to his alternative proposal, which I am not persuaded is the better one. I shall certainly return to that matter again.

I remind my noble and learned friend that, on this side, I have accepted that the success fee should be paid by the claimant from his damages, subject of course to a limitation of up to 25 per cent. I agree with him—in fact I made the point earlier—that the probability is that solicitors involved in non-risk litigation will advertise, “No success fee payable here”. Those bigger firms that get involved in the riskier litigation will do a very determined assessment of what risks they are prepared to carry in advertising their own services subject to a success fee. I see that there is an advantage in that. I shall read and study what the Minister has said and, I hope, discuss the matter further with him and come back on specific issues at Report. At the moment, I beg leave to withdraw my amendment.

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[Lord Newton of Braintree]

My Lords, given that this is Committee, perhaps I may intervene again. I forgot to say, because I stood up in some haste, that the numbers point is interesting, as a consequence of what I call the slow burn, where a lot of cases that are appearing now relate to injury caused many years ago. My understanding is that cancer is one of the few whose incidence is, if anything, increasing rather than decreasing, because of the delay from the time of causation in such cases coming through. I think I have got that right, but whether I have or not I am delighted that the noble and learned Baroness, Lady Butler-Sloss, joined us in support of this point.

[Lord Wallace of Tankerness]

My Lords, perhaps I may deal with Amendments 121, 122, 129, 130, 134, 136A, 136B, 151, 152, 156AA, 156AB and 156C together. All seek to exempt certain types of cases from the Government’s reforms of no-win no-fee conditional fee agreements—CFAs. My noble friend Lord Newton described some of these amendments as being parts of a blunderbuss approach. I think that the noble Lord, Lord Beecham, described it as a bit of a shopping list. I shall come on to the issue relating to mesothelioma sufferers.

The amendments clearly stem from concerns that individuals may be unable to afford to bring certain personal injury cases. My noble friend Lord Newton of Braintree anticipated later amendments in the group beginning with Amendment 137A, which will be moved by the noble Lord, Lord Alton. I recognise that other issues arise such as the difficulty in trying to track down previous employers. I know that my noble friend Lord McNally will respond to that group of amendments and bear in mind what my noble friend Lord Newton said. When I was a Justice Minister in Scotland, I remember the plight of many mesothelioma sufferers, who were trying to get the process expedited so that their cases could be brought to court because many of them had a very short life expectancy. I certainly recognise the importance of those cases and I am sure that there will be a fuller debate on the back of the amendments to be moved and spoken to by the noble Lord, Lord Alton.

The difficulty with the other amendments in this group, as my noble friend Lord Newton said, is that when taken together they do not leave very much of the original intention of the Bill. With regard to recoverable or non-recoverable success fees being shifted to the defendants, it was pointed out in the previous debate that such fees have led to an escalation of costs. A plaintiff does not have the same interest, or may have no interest, in seeking to contain costs in those circumstances. One amendment relates to situations in which the defendants are public authorities. Some people have to pay the price of these additional costs. In motor insurance cases, we pay them through increased premiums. Council tax payers will no doubt bear some cost when escalating costs are picked up by public authorities.

The changes that we are bringing about will lead to costs becoming more proportionate. Equally, claimants will still be able to bring necessary and meritorious claims, and receive damages when they are due. However, as with privately paying clients, claimants on CFAs may have to pay some of their legal costs out of damages recovered. However, as I have indicated, we are introducing a number of measures that will help claimants to pay their solicitors’ success fees. The point was well made by my noble friend Lord Thomas of Gresford, in response to the previous debate, that in many cases no success fee is charged and some solicitors may have a selling point: “We will litigate for you, and no success fee will be charged”. That is more than likely to happen.

We must also remember that there will be a 10 per cent increase in general damages for non-pecuniary loss such as pain, suffering and loss of amenity. There will be a cap on the success fee at 25 per cent of damages awarded but, significantly, that will not apply to damages for future care and loss in personal injury cases. That will help to protect a claimant’s damages.

We have already discussed qualified one-way cost shifting. That will mean that losing claimants in personal injury cases who act reasonably will not have to pay a winning defendant’s costs, which in turn will reduce the need to have expensive ATE insurance products. Amendment 156AB is intended to ensure that the changes to the ATE insurance arrangements under Clause 45 do not come into force until the QOCS regime has come into force. I assure the Committee that we intend the package of reform to come into force at the same time.

On Amendment 156C, Clause 46 prohibits membership organisations from claiming the costs incurred by self-insuring against risk. That point was made by the noble Baroness, Lady Turner, in our previous debate. As I understand it, under the Access to Justice (Membership Organisation) Regulations 2005, bodies are listed by the certification officer. Trade unions represent an important number of those bodies, but a number of others have also been listed under Section 30 of the Access to Justice Act 1999.

As has been said on many occasions, the Government have decided to abolish the recoverability of ATE insurance premiums, and believe that this change should apply equally to arrangements for membership organisations. Retaining the recoverability of ATE insurance premiums for membership organisations would create an unfair advantage and mean that defendants in claims brought by members of such organisations would continue to be liable for significant additional costs in such cases and be placed at a disadvantage.

Lord Justice Jackson made no formal recommendations in reference to member organisations. In such a compendious report, one may wonder why not. Nevertheless, in his response to the consultation, he supported the Government’s proposal that changes to the recoverability of ATE insurance premiums ought to apply equally to the arrangements for membership organisations in order to remove any unfair advantage. That view was shared by 63 per cent of respondents to the consultation, who thought that retaining recoverability of the self-insurance element for membership organisations would create an unfair advantage. It is to ensure that that unfair advantage does not occur that we resist the amendment, and I invite the noble Lord to withdraw it.

[Lord Beecham]

My Lords, I reassure the noble Lord, Lord Newton, that this is a group of probing amendments to see which, if any, the Government might feel on reflection ought to be accepted and the scope of the current scheme in effect retained. Clearly, the answer has not been one to encourage optimism on this side of the House, but there are cases, particularly the last one to which the noble and learned Lord referred, where the Government are trying, as so often, to have it both ways.

In previous debates we have heard trade unions invoked as a source of advice and support for their members once legal aid goes. This is an area in which trade unions have for a long time been active in promoting the interests of their members. They will now lose that benefit. In my view, there is a strong case for the Government to look again at the position. I accept that they want organisations such as trade unions to support their members in the field of legal advice, but if so, they ought to endeavour to facilitate that, not at the Government's expense but by retaining success fees and the self-insurance element that the noble and learned Lord proposes to remove.

Asbestosis is probably the most acute of the diseases involved, and when we will come to a debate on it I will strongly support the noble Lord, Lord Alton. It is sometimes forgotten that it is not just direct exposure to asbestos that causes problems and has resulted in litigation but indirect exposure. There have been cases in which wives dealing with laundry and clothes that have been contaminated with asbestos fibres have themselves suffered injury. They have eventually succeeded in obtaining compensation, but that is an illustration of the kind of difficulty and complexity that can arise. There may well be other cases. Every few years, a new condition reaches the courts. Asbestosis was one; miners’ lung disease, pneumoconiosis, was another; and there are others. Although it is certainly true that, as the noble and learned Baroness, Lady Butler-Sloss, pointed out, some lawyers rather exploited the position in some of those cases involving minters, on the other hand many lawyers took these cases on over a very long period at considerable risk to themselves before obtaining settlements. That eventually led to the sensible outcome of a national scheme that determined a scale of damages and, for that matter, the scale of costs. There will be other cases. One imagines that cases may arise over time in the nuclear industry. There have already been some in which radiation has caused damage. I hope that at the very least the Government will look at those cases sympathetically.

The noble and learned Lord referred again to the number of cases that are being pursued. However, I remind him of the figures that I quoted in the first debate: the very detailed analysis of 69,000 cases showed that a third would simply not have been brought under the proposals presently in the Bill. A significant proportion of cases would therefore be pursued, many of them no doubt successfully although others not.

If we are still in the business of trying to promote access to justice by spreading the risk so that it is not always against lawyers’ interests to run cases with a lesser probability of success, that is something that the system should encourage. The fear is certainly that cases with less than a 75 per cent chance of success will just not reach the courts. A very respected firm, Thompsons, which acts for a number of trade unions, indicates that at the moment it takes cases with a risk level as low as 50 per cent, and it cannot see how it could conceivably do that in the future. Yet some of the very cases that we have been talking about involving asbestosis, pneumoconiosis and so on started off with a probable success rate of 50 per cent at best and arguably even worse. If we are not to close the door on emerging cases of that kind or on cases with perhaps a two-thirds chance of success, we have to have a balance to which success fees can contribute. The Opposition’s case is that that ought not to be simply a matter for successful defendants; it ought to be a collective insurance risk. That is the position that we seek to get to.