Community Legal Service (Funding) (Amendment No. 2) Order 2011

Earl of Listowel Excerpts

Wednesday 26th October 2011 Lords Chamber

[Lord Scott of Foscote]

My Lords, I, too, support this Motion and agree with nearly all the remarks made by my noble friend Lady Deech. The statutory instrument is an extremely worrying document, proposing as it does to reduce by 10 per cent the remuneration payable to lawyers for legal services in cases covered by a legal aid certificate. What is the reason for this? The purported reason is set out in the Explanatory Memorandum. Paragraph 7.2 explains that,

“the Government considers that it needs to ensure that it only pays those fees that are absolutely necessary to secure the level of services that are required”.

That is an entirely acceptable proposition but I suggest that it is weasel words.

The reason is not that legal aid should not have been granted in a number of cases or that the remuneration assessed under the present regulations exceeds a reasonable charge for the work done or that the work done was unnecessary. The reason is that assistance is needed from the Ministry of Justice to help reduce the budget deficit. Why that could not have been explained as the reason in the Explanatory Memorandum, I know not. But the reason plainly is simply to assist in reducing the budget deficit.

Are others who do work for the Government as independent contractors, such as barristers or solicitors, to have their remuneration reduced to assist in reducing the budget deficit? I have not heard of such a suggestion. Why are legal aid lawyers being singled out for this attention? The effect of the 10 per cent reduction needs to be thought about. A number of lawyers may decline to accept legally aided work, bearing in mind that they will receive 10 per cent less than the sum which would have been reasonable remuneration under present standards. Why reduce what has been assessed as reasonable remuneration?

A second possible result has already been referred to by my noble friend Lady Deech. The number of litigants in person may increase and their presence in court almost invariably means that the case takes much longer. It often means that there will have to be adjournments. The judge with litigants in person before him, particularly if there is one litigant in person on one side and counsel for a paying party on the other side, is placed in the position of having to appear sometimes like counsel for the litigant in person. The judge thinks of points that the litigant in person has not thought of that might assist their case. The judge puts those points forward and then it appears that he is taking the side of the litigant in person. It is an unedifying spectacle but all judges will have experienced it. I have myself. Those are the possible adverse consequences.

What are the beneficial consequences? There would be a reduction in the legal aid bill, but that would depend on the additional costs occasioned by the number of adjournments that litigants in persons may bring about. The Law Society has circulated some documents suggesting that the notion that costs will be saved by these so-called reformed are misconceived. It may be only pie in the sky but the proof of the pudding will be in the eating and the disadvantages, I suggest, are apparent.

More important than the disadvantages to which I have referred is the effect on the civil justice system, for which I have a great affection. I have worked in it all my working life. It is not an optional extra but a system that behoves every government to supply for the benefit of all its citizens. Without a civil justice system self-help would become the order of the day in the settlement of issues between citizens. The civil justice system is there to settle issues between citizens and the Government. A feature of an acceptable civil justice system is that it must be accessible to all who need to use it. The legal aid scheme enables that to be achieved. Some types of litigation are removed from the benefit of the ability of litigants to conduct their cases under legal aid, but, broadly speaking, the legal aid scheme seeks to ensure that access to the civil justice system is available to all, which is right and proper. As I have said before, it is not an optional extra to be paid for only by those who can afford it.

The need for lawyers in that system is apparent also and those lawyers need to be paid for. The notion that that can be avoided by Government is no more realistic than saying that any other necessary service which it behoves Government to provide should be paid for by those who work in it. Are doctors and nurses supposed to contribute to the cost of the National Health Service? Certainly not. How is it different where legal aid lawyers work in cases where legal aid has been granted? A functioning and healthy civil legal aid system is essential. The implications of this statutory instrument are that the Government do not regard it in quite that light but think that these impositions can be made on the lawyers who work in that system in order to reduce the cost that would otherwise fall on government.

The 10 per cent reduction does not perhaps matter very much for senior barristers who have established a practice. They will have some privately funded work. They will have established good will among solicitors and clients that they can rely on in legally aided work as well. They will survive the 10 per cent reduction. The ones who will be struck by it and who may not survive it are the new entrants to the profession. Those men and women enter the profession with trepidation. It is a profession which provides no security. There is no firm that will pay you a salary that you can fall back on. You stand or fall on your own efforts and rely on the fees that you earn. Almost every entrant to the profession will wonder how long he or she can manage to continue before the financial difficulties become too great. The statutory instrument separates counsel providing advocacy services under the legal aid scheme into senior barristers who have been in practice 10 years or more and juniors who have been in practice less than 10 years. Those who have been in practice for 10 years or more can be expected to have built up some degree of practice and good will. They probably have some privately funded clients. They probably have some good will with solicitors who do legal aid work. They can probably avoid suffering too much from this 10 per cent reduction in their legal aid income. But what about those new entrants with five years’ call or less? They have no security at all. They will have a meagre income. They will be hoping that it builds to something respectable. For many of them it does but for some of them it does not. Practically every barrister who enters the profession does so in the knowledge that he or she may be unable to afford to continue for long enough to establish a practice on which they can reasonably live. They may have to take a bolthole, so to speak, into employment in a solicitors’ firm or in the legal department in some commercial company. The ones who have to take that course, who cannot wait the length of time necessary to build up a practice they can survive on, will be those who have no advantages of family support to help them in their difficult years. This statutory instrument is going to make those first five years much more difficult. Let us imagine somebody on an employment salary, not a very large one, being told that he or she must suffer a 10 per cent reduction for the future. There will be a drift away from the barrister’s profession and into firms and commercial companies, to which I have already referred. It will do a disservice to the civil justice system, which depends on a stream of lawyers coming up through the system and becoming available eventually as potential judges.

I respectfully suggest that this is a bad statutory instrument. If my noble friend Lord Bach puts his Motion to a vote, I shall vote for it.

[The Earl of Listowel]

My Lords, I regret that I, too, must support the Motion of the noble Lord, Lord Bach, because of my concerns about the impact on child welfare. I regret doing so, because I know that the Government take the welfare of children very much to heart, and I thank the Minister for ensuring that domestic violence issues have been kept out of the scope of the order and that tandem representation of children in private law cases will be untouched.

I remind the Minister and other Members of the House of Article 3.1 of the United Nations Convention on the Rights of the Child, which states:

“In all actions concerning children”—

whether undertaken by legislative bodies or other institutions—

“the best interests of the child shall be a primary consideration”.

I should be very interested to hear from the Minister how the best interests of children have been considered in this move by the Government to cut legal aid.

Children need the best experts and lawyers in the immensely complex cases that they are often drawn into. My concern is that those experts will be driven out by the further cut in their finances. Expert witnesses to the family courts—including paediatricians, child and adolescent psychiatrists, educational psychologists, adolescent psychotherapists and independent social workers—are all subject to the 10 per cent cut, having already had their fees seriously cut. For clinicians working in London, the situation is worse, because London-based practitioners are allowed to charge only two thirds of the amount charged by those based outside London. As everyone knows, it is more costly to practise in London.

I am concerned that because of the impact on expert witnesses there will further delays for children in the courts and that poor decisions will be made. If a child is taken into local authority care and the wrong decision is come to, it will stay with that child for the rest of his life and possibly for the rest of his children’s lives. We need to get those decisions right and we need the right expertise.

A further concern of the expert witnesses is that they cannot deal directly with the Legal Services Commission but have to work indirectly through solicitors. Perhaps the Minister could look at that, because it would certainly be an improvement if they could deal directly with the commission.

I look forward to the Minister’s response. I hope that he can give some comfort to your Lordships.

[Lord Marks of Henley-on-Thames]

My Lords, I rise with a heavy heart to speak against this annulment Motion. It is with a heavy heart because, for all my professional life, I have been a devoted supporter of legal aid. I declare an interest as a barrister who over the years has done a great deal of publicly funded work. My first ever motion to a Liberal Democrat conference was on the promotion of legal aid. The Liberal Democrat Lawyers Association, which I chaired for a number of years, drank a toast every year at its annual dinner to the Legal Aid Fund, a toast proposed by a prominent lawyer. It is noteworthy in the context of today’s debate that the toast was changed some 10 years ago to “justice for all”, as an ironic response to cuts in civil legal aid made by the then Labour Government. I chaired a policy group entitled A Right to Justice, which helped to define Liberal Democrat policy on improving the legal aid scheme. My party has always taken as its starting point for discussion on this topic that access to justice is a crucial right and that legal aid funding provides a vital public service. There is no point in having rights enforceable at law if citizens cannot secure those rights in courts of law. I know from many years’ experience of him that that is the position my noble friend the Minister takes as well.

However, while there was much to agree with in all the speeches that have been made so far in favour of the Motion, we live in difficult times. As the noble Lord, Lord Bach, fairly acknowledged, savings must be made. The provisions of the order are estimated to deliver £120 million of the £350 million of savings that the Ministry of Justice is required to make in legal aid over the spending review period from 2011-15. If we do not make those savings, matters can only get worse and later cuts will have to be deeper.

On a personal note, in Greece, my wife's home country, I have seen at first hand the effects of the extreme austerity measures cutting back public expenditure. The cuts could have been much less harsh had the Government there got a grip on the public purse earlier when all the signs of overspending were plain for all to see.

The need to make savings in the legal aid budget was recognised by the Labour Party in Government who made some 30 attempts to limit it, reducing fees in real terms across the piece as they did so, between 2006 and their leaving office. Furthermore, that was before the full extent of the deficit became apparent and the need for deficit reduction and cuts across the board became as clear as it is now. On 18 May 2009, the noble Lord, Lord Pannick, asked whether the Labour Government would maintain the rates of legal aid payments in family law cases. The noble Lord, Lord Bach, replied:

“Family legal aid costs have risen unsustainably from £399 million per year to £582 million per year in the past six years. We need to control these costs in order to protect services for vulnerable clients”.—[Official Report, 18/5/09; col. 1201.]

In the consultation paper sent out by Ministry of Justice in July 2009, for which the noble Lord, Lord Bach, as legal aid Minister, was responsible, its proposals were described as follows:

“Our legal aid system is one of the best funded in the world. We spend around £38 per head on it annually in England and Wales, compared to £4 in Germany and £3 in France. Even countries with a legal system more like ours spend less; for example, both New Zealand and the Republic of Ireland spend around £8 per head”.

I regard the fact that we still spend considerably more than comparable countries on legal aid as a matter for pride. That is still the case but it highlights the degree to which the legal aid budget must bear its share of the economies that have to be made.

The Labour Government's consultation paper continued:

“While we devote considerable resources to legal aid—£2bn annually—”

the figure is now £2.2 billion—

“our resources are limited, and we need to review regularly how legal aid funds are being spent, and whether we are securing value for money for the taxpayer and providing the services that the public need”.

The Government's response to the consultation, published in January 2010 and signed by the noble Lord, Lord Bach, said:

“The Government wants to ensure that we rebalance the legal aid budget as far as possible in favour of civil help for those who need it most. But we also need to ensure that the resources we currently devote to civil legal aid are being targeted appropriately, and that the rules for granting funding are as robust as they need to be to ensure that resources are expended on meritorious cases … The intended effects are to redirect resources onto higher priority areas, and to ensure that funding is only granted to eligible clients”.

The words “rebalance” and “redirect resources” would inevitably have involved real terms reductions in fees. Labour’s 2010 election manifesto said:

“To help protect frontline services, we will find greater savings in legal aid and the courts system”.

When this Government's consultation paper on legal aid was published, the noble Lord, Lord Bach, very fairly said, as he said tonight:

“It would have been hypocritical of Labour to say we would not cut anything. If we had, we would be rightly criticised”.

It is beyond doubt that the reductions in fees embodied in the order, which the noble Lord seeks to annul, do make it more difficult for the already hard-pressed community legal practitioners, mentioned in the Motion, to thrive and will make it more difficult for barristers, junior and senior, who work on publicly funded work. We agree entirely with the noble Lord, Lord Bach, that such practitioners carry out an essential service for those least able to afford it. This order does involve a 10 per cent cut in their fees and in the fees of barristers for publicly funded work across the field of civil and family law, not just social welfare law. It includes—I would suggest rightly—a limit on experts’ fees for the first time. It is going to be more necessary than ever for lawyers to practise as efficiently as they can and the harsh reality is that they will earn less from legal aid work. However, I am far less clear that their core viability is threatened.

We will be debating these issues—and the other issues about the scope of legal aid mentioned by the noble Lord, but not the subject of this order—in full when the Legal Aid, Sentencing and Punishment of Offenders Bill comes to this House shortly. I hope we will also be able to explore during the course of this Parliament other ways in which savings might be made without damaging the quality of the justice system. Progress is being made in exploring the achievement of savings through alternative dispute resolution procedures. I believe there is also room for improvement in the efficiency of the court system to produce savings. In the family field, I look forward with great hope to the final report of the Family Justice Review chaired by David Norgrove.

I would make it clear from these Benches that we have been, and are, heavily involved in discussions with practitioners and others , including many civil and family law practitioners, both barristers and solicitors, who have quite rightly expressed their concerns to us. We will examine closely with Ministers whether, and how far, the Bill achieves fairness and the protection of the vulnerable in the use of extremely limited resources. We would hope and expect that in due course, in a reviving economy, any gaps in provision that emerge will be refilled. However, that there must now be some cuts in fees is inevitable in these straitened circumstances.

In advancing this annulment Motion I suggest that the noble Lord and the Labour Party need to tell us what choices they would have made, or would make now, in cutting the legal aid budget. What were the cuts that he was intending to implement? How would they not have threatened hard-pressed community practitioners? Until those questions are answered fully, I suggest that, however regrettable the need for fee cuts in civil and family proceedings, it would not be sensible to divide the House on this Motion.