Justice: Legal Fees

Lord McNally Excerpts

Monday 21st June 2010 Lords Chamber

[Lord Lester of Herne Hill]

To ask Her Majesty’s Government whether they intend to exercise the power conferred by section 58(4)(a) of the Courts and Legal Services Act 1990 to reduce the maximum success fee chargeable under a conditional fee agreement in defamation proceedings.

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

The Government are currently considering the recommendations from Lord Justice Jackson’s report, Review of Civil Litigation Costs, published in January 2010. The Government’s analysis of Sir Rupert’s recommendations, once completed, will determine the next steps on the success fee in defamation proceedings.

[Lord Lester of Herne Hill]

My Lords, first, I pay tribute to the noble Lord, Lord Bach, and the right honourable Jack Straw, who began to focus on the abuses created by conditional fee agreements with 100 per cent success fees. I urge the Minister and his colleagues not to wait for consideration of the vast Jackson report before taking urgent action to deal with what I think is a scandal, where some fellow members of my profession charge inordinate fees through the conditional fee agreement so that the costs far outweigh any damages that NGOs, individuals or the press may have to pay. That is a very urgent matter.

[Lord McNally]

My Lords, we recognise the sense of urgency, but also the complexity of the issue. As my noble friend will know, the proposals made by the previous Government ran into trouble at the other end of the building. We are looking at the Jackson report and we will treat the matter with the urgency that my noble friend said that it deserves.

[Lord Bach]

My Lords, the Minister knows that on 25 March last, this House agreed the statutory instrument that would have given effect to the intention of his noble friend Lord Lester. Will he please use his undoubted great influence in government to ensure that that intention is fulfilled and that that happens soon? It needs to. This is a bit of a scandal. We cannot wait for Jackson. We look forward to the Bill of the noble Lord, Lord Lester, in due course but this needs quick government action. Can the Minister please do his best to ensure that that happens?

[Lord McNally]

I can give assurances that we will treat the matter with all due seriousness. Whether we will follow the same path as the previous Administration is more questionable. As the noble Lord will know, Lord Justice Jackson has made a different recommendation about how to deal with this problem. We will weigh up what he has argued in his report and consider the debate in this House and other views on what the previous Administration was proposing to do.

[Lord Pannick]

My Lords, can the Minister confirm that a very large proportion of success fees are paid in defamation cases brought by claimants who are sufficiently wealthy themselves to pay a proper professional fee for their action? Therefore, success fees make no contribution whatsoever to proper access to justice. In asking that question, I declare an interest as I act for Mirror Group Newspapers, which is bringing proceedings in the European Court of Human Rights relating to success fees in the case of Naomi Campbell and her privacy complaint.

[Lord McNally]

Having spent some years treading the line between public relations clients and what I could say in the House, I am always very envious of how my learned friends manage to tread that line so well. This defamation area produces great scandals, and I think that the balance of Lord Justice Jackson’s report will point us in the direction of urgent action. I pay tribute to the noble Lord, Lord Lester, who has made available to my department his not inconsiderable research and preparation for a Defamation Bill, which will, I hope, enable us to move forward very quickly on this. I do not think I will say any more about the Mirror Group case.

[Lord Bates]

Can the Minister confirm whether this change in success fees would apply to cases heard in the High Court? If so, is he aware of a ruling in the High Court this morning that the decision of the previous Government to impose unitary authorities on Norwich and Exeter was unlawful? Given that this is a victory for common sense, will he ensure that there is no maximum in the success fee available to counsel?

[Lord McNally]

I thank the noble Lord for bringing me up to date on that saga. I think there should be a limit on success fees or, as the noble Lord, Lord Pannick, suggested, that the success fee should be borne by the successful claimant.

[Lord Clinton-Davis]

What are the views of the Bar Council and the Law Society about this issue? Do they think it can wait or do they demand urgent action?

[Lord McNally]

We are taking the advice of the Bar Council and the Law Society. Nobody has suggested that the issue should wait. Lord Justice Jackson has produced a 500-page report which even due courtesy would suggest should be studied before the Government proceed to action.

[Lord Phillips of Sudbury]

Would my noble friend look more widely at the conditional fee situation now prevailing? As he may know, there are large commercial purchasers of cases from the public—they are not subject to any Law Society or Bar Council rules—who then sell them in bulk to solicitors for a fee per case plus a proportion of the conditional fee gathered in the course of it. Would he not accept that that is a gross problem for justice today?

[Lord McNally]

The way the conditional fee regime has grown up has produced a number of abuses and anomalies. Right from the beginning, from those Benches across there, I raised some of the actions of the companies to which my noble friend referred. I know that Lord Justice Jackson has looked at the actions of those companies in his report and has made some recommendations. I think that right across the House, there is a general feeling that there are abuses in the conditional fee system. We have to get the balance right between the access to justice that conditional fees give and some of the anomalies and, indeed, abuses that have grown up in practice. We will do so after consideration of Jackson, but with all due urgency.