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

Lord Bach Excerpts

Wednesday 26th October 2011 Lords Chamber

Moved By

[Lord Bach]

That a Humble Address be presented to Her Majesty praying that the Community Legal Service (Funding) (Amendment No. 2) Order 2011 (SI 2011/2066), laid before the House on 24 August, be annulled, on the grounds that the reduction in civil standard and graduated fees for Legal Help and Help at Court will seriously undermine access to justice because it threatens the financial viability of already hard-pressed community legal practitioners who carry out an essential service to those least able to afford it, including the most vulnerable in our society.

[Lord Bach]

My Lords, in moving this Motion, I make it crystal clear that we on this side believe that there must be cuts to the legal aid budget. Over the past 30 years or so, perhaps until a few years ago, the amount spent on legal aid went up a great deal, year on year, and that was particularly true in the criminal legal aid field until the amount spent on criminal legal aid, compared with civil legal aid, was totally out of kilter.

As part of the necessary cuts, we, when in Government, took action to reduce legal aid spending and I do not apologise for that. Almost the last act we took in government, before the general election of 2010 was called, was to cut criminal legal aid advocates’ fees in the higher courts over a three-year period. It was not popular but it was necessary. Incidentally, that gives the lie to the present Government’s claim that we, the previous Government, were not prepared to tackle the deficit. If we had won that election, we would have cut further. My personal view is that there are large savings indeed to be made in our whole criminal justice system. In any event, we had published a White Paper, Restructuring the Delivery of Criminal Defence Services, which, if followed through, would have made considerable savings.

However, there are two considerable differences that exist between our proposals and those of the Government. First, Her Majesty’s Government are intent on cutting legal aid much too far and much too fast. They have not given any—certainly not enough—thought to the consequences of their policies, either in human or in financial terms. That leads me on to my second point. One of the areas in which they have chosen to axe legal aid, take it out of scope altogether and make savings in fees, is precisely the wrong area of law. They intend to remove welfare benefits advice and representation at all levels, including up to the Supreme Court; employment advice; much housing advice and even more debt advice; and some community care advice and education advice—in other words, advice to the poor and the vulnerable. They intend to save the sum of about £50 million per year through those cuts. Today, of course, we are not strictly debating the rights and wrongs of such an approach, but we shall be able to do that in short order when the Bill, currently in another place, comes to this House.

Tonight we are debating an order that in one fell swoop cuts 10 per cent from all—I repeat, all—civil fees, including family fees. To describe it as a rough and ready figure would be a gross understatement. It is a crude and ill thought-out measure with no evidential justification whatever. Although I am particularly concerned with the 10 per cent cuts to social welfare and community lawyers, the lowest paid of all the lawyers who do civil and family work, I acknowledge the powerful case put forward by other civil and family lawyers to me as a result of my Motion being tabled. I thank all those who have made their case. There may well be champions for them tonight, although I know that because of the lateness of the hour, various noble Lords whose contributions would have been very welcome on all sides have not been able to stay.

Interestingly, there are no comparable cuts on the criminal side—for example, in the sister order that accompanies this particular statutory instrument. This shows that the Government are quite ruthless when it comes to civil and family legal aid and as soft as butter when it comes to criminal legal aid. It is as though they have no sense at all of the fantastic value social welfare law has in our society, allowing, at comparatively cheap costs, early legal advice for many of those who could not possibly afford to get it, with the result that issues are solved and the courts are not full of hopeless cases and litigants in person. Noble Lords will perhaps have seen the concern of some Justices of the Supreme Court in the newspapers this morning. For some reason, the Government are determined to decimate social welfare law and drive out those hard-working, dedicated and, I would argue, poorly paid lawyers who practise in this field.

Who are these lawyers? They are often the not-for-profit sector; they work in law centres, citizens advice bureaux and other advice centres. Some are solicitors and barristers in private practice. Many, wherever they come from, sacrifice more lucrative legal careers in order to practise this type of law. If they do not practise it, who will?

Their fees are fixed fees brought in in October 2007 and raised by 2 per cent in 2008 but untouched since then. They are not overgenerous. We as a Government brought in the fixed fee and it undoubtedly caused problems in itself. We set up a study with many experts from this area of law to look into those problems, and we produced a document entitled a Study of Legal Advice at Local Level in order to attempt to tackle them. We as a Government refused at any time, and particularly during the recession, to cut legal aid spending on social welfare law. We increased it significantly from £151 million in 2007-08 to £208.4 million in our last year, 2009-10. We increased eligibility by 5 per cent, bringing in 750,000 more people, and increased the number of new matter starts. I am proud of what we did.

The proposed fees are set out in Table 1 of the order, to be found on page 4. These cases often take many hours’ work. They involve face-to-face contact. Often the lawyer, having seen the client, has to speak to third parties in order to resolve the problem. They are by no stretch of the imagination well paid. There is an exceptional threshold, but a case has to be very long indeed and very complicated to come into that category.

There are currently 52 law centres in England and Wales. They are not profit-making. They have had to make efficiency savings with the introduction of the fixed-fee system. Many rely heavily for the excellent work that they do on legal aid. Eight generate over 70 per cent of their income through legal aid contracts. None of these law centres has a 10 per cent surplus and at present they monitor cash flow on a weekly basis. There is no fat to them at all. All eight are at risk of closure. Four centres are particularly vulnerable, two in London and two outside the capital. Eight hundred thousand pounds is immediately to be taken from law centres’ funding overall by the 10 per cent cut. In the medium term, the combined effect of the 10 per cent cut plus the proposed scope cuts is that £8 million out of the £9 million in legal aid contracts that law centres enjoy will disappear. Eighteen law centres out of 52 will just not be viable—it may be more. Where, I ask, will people go to in order to get their legal issues sorted out?

I could make the same points about CABs, the citizens advice bureaux, which have a very high reputation, as do law centres, in Parliament and outside. Obviously CABs do not rely so heavily on legal aid, but many still rely on it, and at a time when local authority funding is, frankly, declining, CABs will also close as a consequence of this order. Noble Lords will remember that a few months ago there was news from Birmingham about the state of CABs in Britain’s second largest city.

Private sector firms that do this work also work on the same legal aid rates. All day long I have been receiving e-mails from solicitors who do this work. Sometimes, of course, other parts of these firms subsidise the social welfare law part of a firm, but I have been told that the amount of money that legal aid lawyers of many years’ standing get per year would make an extremely interesting database. It is much less, of course, than that of a solicitor who does not do that work and compares extremely badly with other professionals—very badly indeed. Those who practise in this field and who do this absolutely invaluable work do not expect enormous rewards, but nor do they expect to be penalised even further.

I end with the story of Law For All. Law for All was in west London, and many noble Lords may have heard of it. It was quite a large organisation. It provided legal help in the fields of debt, employment, family law, housing and welfare benefits. It also provided representation for many people over many years. However, it has now been forced to close down in anticipation of the reduction in the fixed fee and, of course, the fact that 90 per cent of their work is being taken out of scope in the Bill that is currently going through Parliament. This is a tragedy for local people, who received legal help in 1,500 cases last year. The local authority in that part of west London is generous, but the Government’s proposals have meant that Law For All has closed its doors. I have spoken this afternoon to the chief executive —or should I say ex-chief executive?—who confirmed that the 10 per cent cut that we are debating tonight and the taking out of scope have driven it to close.

It is important to point out that even where the area of social welfare law is not to be taken out of scope altogether, such as in some housing cases and some debt cases connected with housing cases, the order that we are debating tonight means that the continuing work in housing, for example, will be reduced by 10 per cent. All housing work that stays in scope will be affected.

Noble Lords may want to know how much this will save. It is estimated that the saving from the whole order, including the 10 per cent cut in civil and family legal aid across the board, is worth £45 million. The cuts as they affect social welfare law fees are all of £5 million. That is a figure that the Legal Action Group has confirmed. Of course it is a rough figure but it shows just how much or, rather, how little will be saved by this order. Saving £5 million in fees when Her Majesty's Government intend to spend £250 million on ensuring that there are weekly rather than fortnightly collections of rubbish is absolute nonsense. Have we not got our priorities entirely wrong?

In the Hansard published today, the Minister has answered a Question that I asked him. The information is that:

“In cash terms, spending on legal aid in 2010-11 was … some £66 million (3 per cent) below provision”.—[Official Report, 25/10/11; col. WA 137.]

Yet the aim is to save £5 million by cutting these fees by 10 per cent.

I am not allowed to seek to amend this order and I therefore have to pray against it as a whole. Whether I vote against it tonight will depend on what other noble Lords say in the course of the debate that I hope will follow and, of course, particularly on what the Minister says. I beg to move.

[Baroness Deech]

My Lords, I declare an interest as chairman of the Bar Standards Board. The Bar Standards Board is the regulatory arm of the Bar Council, not the representative one, and I have no direct concern with the pay that barristers earn. My job is to further the objectives laid down for the Bar in the Legal Service Act 2007. There are eight in Section 1, including protecting and promoting the public interest, improving access to justice and encouraging an independent, strong, diverse and effective legal profession. What I have to say tonight when I encourage your Lordships to annul this order is based entirely on the application of those objectives in the regulation of the education and working lives of barristers.

Last Sunday, an advertisement appeared in the Sunday Times headed,

“Helping the most vulnerable in Society”.

It was for a new chief executive of the Legal Services Commission, which hands out legal aid. I quote from the ad:

“Our role is to ensure through our providers that independent, high-quality legal advice and representation is available to vulnerable people who cannot afford it themselves. We enable people to protect their rights and defend their interests”.

This order flies in the face of the aspiration in that advertisement and of the achievements of the objectives in the Legal Services Act and the profession.

Let me turn first to the effect it will have on women and black and ethnic minority barristers. This is a central plank of the work that we do at the Bar Standards Board in encouraging and retaining those very barristers. The effect of this order is to cut the rates payable in family advocacy by 10 per cent. It will be felt hardest by women and black and ethnic minority barristers, who are disproportionately represented in dependence on legal aid, while white men are the least dependent sector. There has been considerable government pressure to open up the legal profession still more to entrants from all backgrounds, albeit that it is already a very diverse profession.

Alan Milburn’s report of 2009 singled out the legal profession in his survey of social mobility, even though the Bar and solicitors go to enormous lengths to explain and reach out to young people all over the country. The Bar has a record to be proud of, with over 15 per cent of pupillages going to black and ethnic minority students in a very competitive market. The cuts in fees in this order undo all that work, and make the Government appear two-faced.

Sixty per cent of the family Bar are women, and they do 66 per cent of legally aided children work. Half the family Bar relies on public funds for more than 60 per cent of its turnover. From their gross earnings, modest though they are, barristers have to pay overheads to chambers and clerks—typically 20 per cent—and in addition meet their own pensions, illness and professional insurance cover and expenses. The King’s College London survey of barristers in 2008-09 indicated that 80 per cent of them intended to abandon legally aided public work. This generation of young people have university tuition debts and huge fees at Bar school, and the modest but reliable income that was once their support in the early years at the Bar is now to diminish to such an extent that they cannot earn a living. There is no point in the great efforts put into outreach in this situation.

It continues on into the judiciary. The noble Baroness, Lady Neuberger, reported on judicial diversity in 2010. A less diverse profession means a less diverse judiciary, and fewer women judges. The diminution of the profession also means more litigants in person taking up more court time, not less, with problems being stored for several years down the line because they cannot be settled in court in a proper and timely way.

As with other demanding professions, women are being lost to the Bar after five to 10 years in practice, because of the costs of childcare. It is unaffordable and will be even more so. Twice as many women leave the Bar as do men for that reason. The cut in fees in this order will weaken retention. It will also damage the children who are the subject of court orders, because now the experts who give evidence in child cases are placed within this table of reduced fees, and the fees are set at below the level needed to maintain their practices.

The Government have given no evidenced reason for cutting by 10 per cent, and they have not waited for the outcome of the Family Justice Review, chaired by David Norgrove. In March of this year, its interim report commented on the adverse impact that cuts would have, the lack of data about case-handling and flow through the court, and the contribution made by the lawyers in the cases. In the 2009 study Family Law Advocacy by the very experienced researchers John Eekelaar and Mavis Maclean of Oxford University, it was shown that where lawyers were involved in family law cases concerning money and children, the majority of cases were resolved without court process or contested hearing. Even where the cases went to court, in the highly charged emotional atmosphere that one would expect, the presence of specialist family lawyers enhanced the prospects of resolution and shortened the court process, for they are minded to act collaboratively and in the interests of the children. Additional damage has already occurred to women and children through the closure, because of already instituted cuts, of the advice agencies Refugee and Migrant Justice, the Immigration Advisory Service and Law for All, as the noble Lord, Lord Bach, has just mentioned.

There are more constructive ways to save money. First of all there is too much judicial review, now used as the citizen’s right of appeal. I was surprised to find when I was the Independent Adjudicator for Higher Education, running an alternative dispute resolution service for students, that those students obtained legal aid to challenge our decisions. There should be a push back against the notion that human rights mean that any and every decision can be judicially reviewed at great cost to the public. As for human rights, the real denial of those is to the middle classes, who are neither poor enough to be eligible for legal aid, nor can afford to go to law at their own expense. They are therefore the real victims, who cannot access justice.

The other substantive reform needed is to bring certainty into the law of maintenance on divorce. An obvious model for this is the continental European system of community of property, to which the Scottish system is similar, which entails a fixed fifty-fifty split of post-marital property and little ongoing maintenance. Broad-brush justice it may be, but it is cheap and efficient to arrange. As long as we have our Rolls-Royce discretionary system of settling property issues on divorce, couples will continue to waste sums they can ill afford—sometimes amounting to as much as the property in dispute—on deciding who gets what.

This order should be annulled. The Government should await the Family Justice Review report and change substantive law to get a more efficient system without damaging the profession and its diversity.

--- Later in debate ---

[Lord Bach]

My Lords, I thank all noble Lords who have taken part in this debate, and especially the Minister for his winding up. I will give the House the good news, which is that I certainly do not intend to divide the House. I would very much like to, particularly given the degree of support for my Motion from around the House tonight—I am most grateful to noble Lords who have supported me—but it is too late to call a vote tonight, and in any event I am not certain that it would be the right thing to do, given that the Bill is due to come to this House next month. I will not be calling a vote, so anyone who wants to go now, please feel free.

I am afraid, though, that it was not the Minister’s arguments that persuaded me not to call the vote—indeed, if he had gone on much longer I might have been tempted to call it in any event. I shall make a few points and then the House can move on. Some very good speeches were made, if I may so. The noble Baroness, Lady Deech, talked about the Bar with great experience and knowledge. The noble and learned Lord, Lord Scott of Foscote, made some very important points, one of which I will come back to at the end of what I have to say. The noble Earl, Lord Listowel, and the right reverend Prelate the Bishop of Ripon and Leeds were both right on the spot with their concern for children law, if I may call it that. My noble friend Lord Beecham, with his experience, made very telling points as always. Last, but certainly not least, the noble Lord, Lord Newton of Braintree, made a very telling contribution, and one to which I think the Government side should listen with some concern.

As to the speech of the noble Lord, Lord Marks, of course I admired his loyalty, perhaps rather more his loyalty to the Government and to the Minister than to his party, which as I understand it has already made it clear at conferences twice this year that it does not like the way in which the Government are behaving towards legal aid. He asked me to state which cuts my party would have made in Government. I am not sure that he was listening with his usual care to what I said in my opening remarks, which was that the Labour Lord Chancellor and myself put out a White Paper called Restructuring the Delivery of Criminal Defence Services, which we would almost certainly have put into effect had we been elected—which we were not—and which would have saved a great deal of money. It would have been controversial and I have no doubt that there would have been debates in this House too in that event.

I did notice that in his interesting speech there was nothing at all about social welfare law and nothing about whether he felt it was right to attack social welfare law. What I had to say earlier was very much based around that part of the order. He said very little about criminal law, either, and about whether savings might be made in that field. He quoted figures and speeches that I had made, in which I, like legal aid Ministers down the years—as they no doubt will in the future—had said how generous our legal aid system was compared to the ghastly rest of the world. I did use those phrases, and there is some justification in them, but to be honest, not perhaps quite as much as I used to think when I spouted those words. For example, we compare ourselves with New Zealand, another common law country, and say, “My gosh, New Zealand gives a much smaller amount for legal aid than we do”. However, the situation in New Zealand is quite different. There, for example, there is no liability compensation, which costs a great deal in this country. There are other considerations as well.

Let me be frank: when we were in Government, I have no doubt that we made mistakes in this field. I am sure we did. There is no doubt in my mind that his Government are making mistakes now as well. Perhaps the noble Lord, Lord Marks, will remember next time he speaks to the House on these matters that we are dealing with what his Government are intending to do, not with what my Government did or did not do when they were in office.

The Law Society has suggested savings of up to £350 million as an alternative to the legal aid cuts that the Government are putting forward. As we did not hear it tonight, we look forward very much to hearing what is wrong with the Law Society’s—

[Lord McNally]

What is wrong with the Law Society’s figure is that it does not save public expenditure to shuffle costs around Whitehall to other departments or to propose extra taxation on alcohol. That is not saving public expenditure; it is shuffling the pack.

[Lord Bach]

If the noble Lord is right, perhaps he will explain this decimation of social welfare law, with its few savings for the Ministry of Justice, and how it will cost infinitely more to the state as a whole when problems are not solved, people are chucked out of their houses, debts grow bigger, families break down and children commit crime. Other departments will have to pick up the pieces for the paltry savings that the Ministry of Justice will make. Please do not give us that stuff about public spending. The truth is that these Ministry of Justice savings—we have said that we accept that the MoJ has to find a number of savings—will cost the state and the community much, much more.

As the noble and learned Lord, Lord Scott of Foscote, said, civil legal aid is not an optional extra. The concern is that this Government are treating it just as an optional extra and the cost will be much greater. We could see which way the Government were going on legal aid way back in June or July 2010 when out of the blue they removed the grants that were given by the Legal Services Commission for young legal aid lawyers to get legal contracts with legal aid firms. It cost a few million pounds a year, if that. But the Government abolished them at the start and we should have been wise as to what they were planning to do now. There was absolutely no reason for doing that and there cannot be any reason for doing what they are intending to do now to social welfare law.

Legal aid in the civil field is well worth protecting. I shall end with a quote from Supreme Court Justice Lewis F Powell who spoke about the American system but it could just as easily be applied to the British system. He said:

“Equal justice under law is not merely a caption on the facade of the Supreme Court building, it is perhaps the most inspiring ideal of our society. It is one of the ends for which our entire legal system exists … it is fundamental that justice should be the same, in substance and availability, without regard to economic status”.

He was right. I hope only that the Government change their mind. I beg leave to withdraw the Motion.

Motion withdrawn.