Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Lloyd of Berwick Excerpts

Monday 16th January 2012 Lords Chamber

Moved by

[Lord Lloyd of Berwick]

28: Schedule 1, page 115, line 5, at end insert—
“Clinical negligence(1) Civil legal services provided in relation to the obtaining of one or more expert reports in clinical negligence proceedings.
(2) In this paragraph—
“clinical negligence proceedings” means proceedings which include a claim for damages in respect of clinical negligence;“clinical negligence” means breach of a duty of care or trespass to the person committed in the course of the provision of clinical or medical services (including dental or nursing services);“expert report” means a report by a person qualified to give expert advice on all or most of the matters that are the subject of the report;“proceedings” includes any sort of proceedings for resolving disputes (and not just proceedings in court), whether commenced or contemplated.”

[Lord Lloyd of Berwick]

My Lords, we now to come to the first of 60 or so amendments dealing in detail with Schedule 1. It is safe to assume that all of those amendments would be likely, in one way or another, to add to the cost of legal aid. The amendment now before your Lordships is different. It is true that Amendment 28 would add £6 million to the legal aid bill, but, coupled with Amendment 139, to which I shall also be speaking, it will save the taxpayer at least three times that amount, and probably a great deal more.

It is because of that special feature that I wrote to the noble Lord, Lord McNally, on 16 November and asked to see the Lord Chancellor and the Minister in charge of the Bill in the House of Commons. I received a very courteous reply from the noble Lord, Lord McNally, on 1 December, for which I am grateful. It refers to the point which I had raised in some little detail, but, if he will forgive me for saying so, it does not actually answer the point. It is a point, I hasten to add, which is not my point, but is a point which has been made by Lord Justice Jackson. I would not normally refer to the views of a member of the judiciary in moving an amendment, but as he is the author of the report on costs in litigation which forms the whole basis of Part 2 of this Bill, it seemed right to make an exception in this case.

So what, after all that, is the point? As I suspect your Lordships know all too well, clinical negligence cases are currently funded in two ways: either by legal aid or by conditional fee agreements—CFAs—supplemented in almost every case by “after the event” insurance. The purpose of taking out the “after the event” insurance is, of course, to cover the claimant against an adverse order for costs. The premium is paid by the claimant, as one would expect, but since 2000, when the 1999 Act came into force, the cost of the premium has been recoverable from the defendant—usually, although by no means always, the National Health Service—whether the claimant wins or not. That is the whole point.

It was hoped that in that way the cost of legal aid would be reduced. But of course it has not worked out, as these things seldom do, exactly as intended. The reason is the huge increase in the cost of taking out such insurance. It is now a major element in the cost of bringing clinical negligence proceedings. It is also a cost which, as I have said, currently falls on the National Health Service, one way or the other, and is therefore ultimately borne by the taxpayer.

Therefore, the Government’s original intention, as one can well understand, was that the cost of ATE premiums should cease to be recoverable from the National Health Service. That was clear enough; whether one agrees with it perhaps does not matter. However, the Government then listened to representations and decided to make an exception in the case of expert reports. They had a principle but then made an exception. The point was made very clearly by the Minister in the other place, Mr Jonathan Djanogly, when he said:

“One particular aspect of clinical negligence cases is the significant up-front costs involved in obtaining expert reports. Following consultation, the Government are seeking a tightly drawn power in the Bill to allow the recoverability of after-the-event insurance premiums in clinical negligence cases”.—[Official Report, Commons, 31/10/11; col. 710.]

Perhaps even more clearly, on 2 November he said:

“Such reports, which can be expensive, are often necessary in establishing whether there is a case for commencing proceedings, which raises particular issues if recoverability of ATE insurance is abolished. In responding to these concerns, clause 43”—

Clause 45, as it now is—

“provides, by way of exception, for the recoverability of premiums in respect of ATE insurance taken out to cover the cost of expert reports in clinical negligence cases”.—[Official Report, Commons, 2/11/11; col. 1027.]

I imagine that we would all agree that, if clinical negligence claims are not to be covered in toto by legal aid, there should at least be legal aid to cover the cost of expert reports, including legal advice, without which a claim for clinical negligence simply cannot get off the ground. I suspect we would all agree with that. The trouble is that the Government have set about achieving that result in the wrong way. You have only to look at Clause 45, which is the subject of the other amendment to which I am speaking, to see why. In a lecture given in Cambridge on 5 September last year, Lord Justice Jackson did not mince his words. He described Clause 45 as,

“the most expensive and inefficient mechanism which it is possible to devise in order to achieve”—

the Government’s “policy objective”. Those words are repeated in the recent report of Professor Cookson of King’s College in paragraph 8.3.4.

In the article in the Guardian to which the noble Lord, Lord Howarth, referred, the Lord Chancellor said that it was his ambition to simplify and deregulate civil litigation. We would all say amen to that; nobody could seriously quarrel with it. However, if we look at Clause 45—starting with “unless” at line 29—we find the exception to which the Minister in the other place referred in the passages which I have read out. How is that exception to be achieved? The Lord Chancellor must make regulations concerning all manner of things, including the contents of the policies and the maximum premiums to be charged in any policy. The subject matter to be covered by these regulations takes eight sub-paragraphs and 20 pages of text. One can only imagine what the regulations themselves would look like if the subject matter is as lengthy as that. If the Lord Chancellor wants to simplify and deregulate civil litigation, surely Clause 45 is not the way ahead. It would be far simpler and better to allow legal aid to remain for the very limited purpose of obtaining reports in clinical negligence cases.

--- Later in debate ---

[Lord Wallace of Tankerness]

I thought that I was going to be diverted down the tracks of coroners’ inquests. However, I take the point which my noble friend makes. We believe that the relevant provision already covers the matter. He draws a comparison between measures within the same clause. We will have an opportunity to return to that matter when we come to Clause 9. It is only right that I should consider the point, which I am sure was made with helpful intent.

The question of relative costs has been raised and one or two noble Lords have pointed to the reservations made by the NHSLA. It is fair to point out that as regards the King’s College research which has been referred to, the Department of Health has confirmed that in the context of the reforms as a whole, which include all the Jackson reforms, the costs to the NHS are expected to reduce substantially and not to increase. It is important to look at the matter in the context of the overall impact of our reforms: namely, that the costs will decrease.

The noble and learned Lord, Lord Lloyd, has sought to contrast what he believes will be the cost of his amendment with the costs he believes will be incurred under Clause 45(2). He will be able to reply shortly. He quoted my honourable friend the Minister, Mr Djanogly. I think that the noble and learned Lord recognised that Clause 45(2) is a clear attempt to address the concerns which are shared not just by him and me but by the Committee as a whole. His view is that it would be more expensive to go down this route than to adopt his amendment. One of the differences between our proposal in Clause 45 and the use of legal aid for clinical negligence is that it would be restricted to those who are otherwise eligible for legal aid where the ATE power of recoverability will provide access to justice to everyone.

I think that the noble and learned Lord acknowledged my next point when he gave his figures. We do not readily recognise his figures. We feel that the costs of the ATE market as adjusted would not give rise to the costs which he indicated. I noted all his figures very carefully, but I probably was not quite keeping up with them. He said that he did not expect me to comment on the detail of his figures today but asked me to provide an answer. That is the least one can do, given the amount of work that the noble and learned Lord has clearly put into this. As I say, we do not readily recognise the case that he put forward. However, we must undoubtedly reflect on the issue. It would not necessarily make sense to embark on something which led to considerably greater cost when the overall object of the reforms is to reduce cost. I hope that with the assurance I gave at the beginning that we will reflect seriously on all the important issues that have been raised, the noble and learned Lord will withdraw the amendment.

[Lord Lloyd of Berwick]

My Lords, as was to be expected, the debate has gone far wider than the limited purpose of my amendment because this is the first opportunity that we have had to consider clinical negligence as a whole, and there are other amendments in this group.

So far as my amendment is concerned, everyone has accepted that expert reports are the key to the problem. The question then is: what is the best way to fund expert reports? I am especially grateful in that connection for the support of the noble Lord, Lord Faulks, given all his experience in this field. My impression was that his view is the same as mine and, indeed, that of Sir Rupert Jackson, whereby Clause 45 is not the way ahead. That is the purpose of my amendment. I am also especially grateful to the noble Baroness, Lady Mallalieu, for saying that the amendment is only the minimum required. On that I entirely agree. If clinical negligence generally is to be covered, my amendment will fall away, but it is the essential safeguard if there is not to be wider coverage by legal aid of clinical negligence cases.

Of course I will not press the amendment because I cannot do so until I know the Government’s answer to the figures that I have put forward. However, if those figures turn out to be correct, as I believe they will be, then Clause 45 is not the way ahead and it is far better from the point of view of saving money for the taxpayer to adopt the limited degree of legal aid required for expert reports. I look forward to the answer to the figures I put forward and, in the mean time, beg leave to withdraw the amendment.

Amendment 28 withdrawn.