Legal Aid, Sentencing and Punishment of Offenders Bill

Lord McNally Excerpts

Wednesday 18th January 2012 Lords Chamber

[Lord Best]

I shall return to this later.

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

I do not think the noble Lord should worry. At this time of night it becomes a bit of a blur for us all.

Amendments 72 and 82ZC would bring into scope debt matters that are not covered in Schedule 1 and which we intend no longer to fund. We are faced, as we have said before, with tough choices in this current fiscal climate, but this has allowed us to focus resources on those who need them most in the most serious cases where legal advice and representation are justified. We estimate that we will continue to spend around £50 million on social welfare law overall.

Amendment 72 relates to paragraph 28 of Part 1 of Schedule 1 and appears to be aimed at making legally aided advice, assistance and representation available where a person’s financial difficulties, such as debt problems, could potentially lead to the individual losing their home.

Amendment 82ZC would bring into scope all debt matters not covered in Schedule 1. In our consultation on legal aid reform, we proposed that funding should be prioritised on cases where the individual’s home is at immediate risk. We are therefore retaining legal aid in relation to court orders for possession or sale of the home and in relation to eviction. We generally consider that other debt matters are a lower priority and therefore do not justify public funding for legal advice and representation.

We recognise that early advice can be helpful in a range of contexts. However, what people often need is general advice, for example on welfare benefits, debt or housing, rather than legal advice. There are many alternative sources of help with debt issues, including Credit Action, the National Debtline, the Consumer Credit Counselling Service and local authorities, which also direct people to local sources of advice and assistance on debt matters. In addition, the Money Advice Trust has recently launched My Money Steps, an online tool for providing advice for people with debt problems. The Consumer Credit Counselling Service also offers a free online debt remedy service.

We also recognise the argument that withdrawal of legal aid for any issue could lead, by a chain of events, to serious consequences. We considered this point carefully when formulating our final proposals. However, our view is that the limited public funds for legal advice and representation should be focused on those cases where the client faces serious direct consequences. Therefore, we do not propose to devote these limited public funds to less important cases on the basis that they could indirectly lead to more serious consequences for that person.

It is also important to recognise that the Bill does not require legal proceedings to have been issued before legal aid can be made available. Legal aid will be available where action for repossession or eviction is contemplated—for example, where a person receives a letter threatening repossession action in the absence of payment. Therefore, legal aid will be available to a person threatened with repossession action for mortgage or rent arrears, for example to negotiate with the mortgage lenders. It should also be noted that we will retain funding for the housing possession court duty scheme. It offers free legal advice and representation to anyone in danger of eviction or having property repossessed, on the day of the hearing, regardless of their means. Research shows that 77 per cent of clients who receive this last-minute advice avoid the immediate loss of their home. Under the circumstances, I hope the noble Lord will consider withdrawing his amendment.

Amendment 82D appears to be aimed at bringing into scope debt relief remedies under Part 5 of the Tribunals, Courts and Enforcement Act 2007 and, in particular, as the noble Lord said, debt relief orders. As I have already said, we consider certain debt matters to be a high priority for funding. That is why we are retaining legal aid for debt cases where the individual’s home is at immediate risk of repossession because of rent or mortgage arrears or involuntary bankruptcy. We recognise that debt problems can be difficult for the individuals concerned. Nevertheless, we strongly believe that what is often required is practical advice to resolve issues, rather than advice of a legal nature.

It is important to note that debt relief orders are relatively informal procedures. Advisers act as approved intermediaries and assist debtors in applying to the Insolvency Service for a debt relief order. I reiterate that individuals who have debt issues are able to seek advice from alternative routes. For example, the Insolvency Service website provides guidance and leaflets, and information is available through the insolvency inquiry line. Importantly, it should be noted that debt relief orders are used by people who owe limited amounts of money and have no assets. Therefore, they do not involve a person’s home being at immediate risk. They are clearly not analogous to cases in which a home owner is at immediate risk of losing their home as a result of involuntary bankruptcy. I hope that noble Lords will be reassured by what I have said and will not press these amendments.

[Lord Howarth of Newport]

Can the Minister assure the Committee with complete confidence that every single one of the organisations that he has named in his remarks are confident that they will be in a position to provide debt advice—indeed, sufficient personalised debt advice—to the people who will need it? Has he taken into account that the number of people sinking into the toils of debt is increasing hand over fist as the economy deteriorates?

[Lord McNally]

No, of course I cannot give that assurance, but neither do I assume the absolute worst case in everything that we discuss, as the noble Lord seems to do in each of his interventions.

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Lord, Lord Best, for trying to come to my aid. I am sorry that he was not able to continue with that. I am sure that he would have been able to include debt into the case that he was making, skilled orator that he is. However, this is a dialogue and I would like to respond to a few of the points that the Minister made.

We have heard the rhetoric about tough choices a number of times in these debates and no doubt we will hear it again. I wonder whether we might get a second script. Perhaps we could work together on that and enjoy a variation on the theme. We on this side of the House accept that legal aid costs have to go down, and have said so. We understand what the Minister is saying but we think that we have other ways of doing that. However, the same question emerges whichever way you approach this: namely, in saving a cost on an annual basis are the Government providing value for money in the long run? We have severe doubts that that is happening.

As my noble friend Lord Howarth mentioned, debts are increasing although perhaps not quite in the way that he indicated. CCCS, the charity which I chair, receives approximately 500,000 inquiries a year. Our average client owes more than £25,000 to more than eight different lenders. These people have a debt problem. The debts are not necessarily related to housing, to which a different contractual basis often applies, but arise because people overstretch themselves. As I tried to say in my opening address, they also arise because other things happen to these people; for example, they lose their jobs, suffer bereavement or become ill. This is not an easy area to talk about. It is not helpful to be overly simplistic and talk about owner-occupiers whose mortgages are at risk when many of these people will be in rented accommodation. However, the problems arising from losing their homes will be just as bad. I do not see any solution coming forward for those people.

The main point that I was trying to get across in my address concerned the DRO effect. I am afraid that the Minister did not answer the question that I posed: namely, what fee will be necessary to enable this service to be continued? It is presently £90. It seems to me that it will go up to nearer the fee that is charged for a full bankruptcy of £900. What will happen to debt advisers? Will funds be available to keep that generic debt advice going, particularly in the citizens advice area? As we explained, the only reason that the DRO system has continued is that the debt advisers are largely paid for by legal aid funds. If that goes, are we saying that those people who are in severe difficulty with their debts will have to rely on a website, which they probably cannot access because they do not have the necessary equipment, or guidance in leaflets? I do not think that that is a satisfactory solution to what is clearly a very serious problem.

These are very difficult issues that are part of a broader context of social welfare law. We shall probably have to come back to them but in the interim I beg leave to withdraw the amendment.

--- Later in debate ---

Bad housing and the trauma of eviction and homelessness lead to damage to individuals and families, and clearly have social and, ultimately, financial costs which have to be borne by the public purse. For legal aid in these cases to be restricted by a mantra that it is to be available only in respect of cases affecting life and liberty is to create a two-tier system of justice, which is particularly objectionable in such an important area as housing on an individual’s life and the lives of communities. Having heard the very strong arguments from all around this house, not least from at least part of the coalition Benches, I hope that the Government will rethink their position. If they proceed with the Bill in its present form, this would be one of the gravest errors that they would make. I urge them to listen to their colleagues in this place and those in the Commons who, in fairness, made similar points. It is not too late to see sense and to retain rights which can make a significant difference to people’s lives.

[Lord McNally]

My Lords, this large group includes a number of government amendments, which I presume are acceptable in their being mainly technical. I am extremely pleased to be sandwiched between my noble friend Lord Shipley and the noble Lord, Lord Beecham, as far as this debate is concerned. It is a great tribute to that great city of Newcastle that two of its most pre-eminent city leaders should now be giving such good service in this House and is a reflection of the quality of our civic leadership.

As is obvious, this group of amendments has provided a very useful opportunity to examine our proposals as they affect housing. I do not underestimate the importance of housing as an issue. Like the noble Lord, Lord Phillips, I am old enough to remember Rachmanism and when and how it entered our language. I can still remember the shock that the initial showing of “Cathy Come Home” had on British society in the late 1960s. There is no doubt that housing matters, as this debate has reflected.

As I said earlier to the noble Lord, Lord Howarth, a number of the points that were made either looked at worst-case scenarios or avoided exactly what the Government are providing for in the Bill. For example, when all these measures have gone through, we will still be spending some £35 million on housing-related legal aid.

During the passage of the Bill and in light of respondents’ views in consultation, we decided that legal aid should be available for cases of unlawful eviction. We amended the Bill in Commons Committee to ensure that legal aid continues to be available in cases of unlawful eviction for lawful occupiers without a tenancy agreement. Therefore, those who are unlawfully evicted can get legal aid, not only for the case of the eviction but for claims for damages and damage to their goods. We are also retaining legal aid for housing disrepair where it is alleged that the disrepair poses a serious risk to health or life. This, too, will give some protection to tenants. Legal aid will also remain where a tenant is threatened with eviction for early advice on the merits of their case. The merits test, which applies to all legal aid cases, will help prevent public funds being wasted on hopeless cases brought by tenants—a point made by the noble Lord, Lord Best. So we are listening. I shall not repeat the mantra, but we are concentrating limited funds on what we think are the most important cases.

At this hour, I shall go through the amendments to enable noble Lords to see where we are coming from on the issues raised by them. Amendment 81, as the noble Lord, Lord Beecham, acknowledged, appears to bring into scope housing law areas that are not covered in Schedule 1 and which we intend no longer to fund. We consider that many housing cases are primarily about money or property, and that these issues are not of importance when compared with such fundamental issues as homelessness or the immediate safety of individuals.

As I have already made clear, we intend to retain housing matters in scope only where the individual’s home is at immediate risk. Accordingly, legal aid will be available in relation to court orders for the possession or sale of an individual’s home and eviction from the home. We are also retaining legal aid for housing disrepair cases where there is a serious risk of harm to the health or safety of the individual or their family, and legal services are provided to ensure that the landlord remedies the disrepair. Legal aid will also be retained for those who are homeless or threatened with homelessness and are seeking homelessness assistance from the local authority.

Amendment 72A is aimed at making legal aid available where a tenant of a private registered provider of social housing, registered social landlord, housing action trust or local housing authority is facing a demotion of their secure or assured tenancy as a result of anti-social behaviour or use of the premises for unlawful purposes.

If an individual’s tenancy is demoted, it is replaced with a less secure form of tenancy. Demotion orders are designed to send clear warnings to tenants who are found to have behaved anti-socially or used their home for unlawful purposes. A court can grant a demotion order only where it is satisfied that the alleged behaviour has occurred and that it is reasonable to make the order.

Demotion orders are sought where there is anti-social behaviour but the landlords want to continue working with the tenants to improve their behaviour rather than evicting them outright. Accordingly, the individual is not at immediate risk of losing their home— as with, for example, an application for a possession order—and the Government therefore consider that the provision of legal aid is not justified in these circumstances.

We acknowledge that where a court demotes the tenancy of an individual, it is easier for the landlord subsequently to seek their eviction. However, the granting of the demotion order does not necessarily mean that possession proceedings will be brought, and the tenancy will revert to secure or assured status after 12 months, provided that the landlord has not issued a notice seeking possession during the demotion period—for example, because of further anti-social behaviour. However, where that is not the case and in consequence a possession order is sought by a landlord, legal aid will be available at that point.

Where a local housing authority or housing action trust decides to seek possession, the demoted tenant has the statutory right to seek an internal review of that decision. Legal help will be available for that under paragraph 28(1)(a) of Part 1 of Schedule 1. Legal aid will also be available in possession proceedings against a demoted tenant.

Where the landlord is a public authority and the tenant raises proportionality under Article 8 of the ECHR as a defence to the possession proceedings, case law makes clear that the court must consider proportionality. In addition, where a social landlord obtains a demotion order and subsequently seeks possession of the property, legal aid will be available for the tenant in relation to any judicial review of the landlord’s decision to bring possession proceedings.

Amendments 72B and 72C seek to make legally aided advice available in relation to welfare benefit entitlement where the individual is at immediate risk of losing their home and the benefits in question relate to housing costs—for example, housing benefit or the support for mortgage interest component of income support or pension credit.

Legal aid will continue to be available where the home is at immediate risk through the repossession or sale of the home, or eviction. However, legal aid will not be retained for advice on welfare benefits matters. While we recognise that many people rely on benefits, these cases are primarily about financial entitlement and we generally consider their importance to be lower than cases concerning, for example, the liberty or safety of a person.

For those who need assistance on a welfare benefits matters, factual advice is available from, for example, Jobcentre Plus, the benefits inquiry line and the tribunal itself. Accordingly, where possession action results from mortgage or rent arrears caused by a welfare benefits issue, we do not believe that legal aid should be provided in relation to the welfare benefits matter.

I have already explained the Government’s reasoning for this. We consider that the tribunal for resolving disputes is generally accessible without the need for legal assistance. Where the benefits dispute is ongoing at the point where possession action is taken, legal aid will be available in relation to the possession action, and it can be used to argue for an adjournment of possession proceedings—for example, if it appears that the client may be able to make the necessary payments once their benefits dispute has been resolved.

The Government understand that in cases where private landlords bring possession proceedings against their tenants, they will generally give the tenants reasonable notice that they are being asked to leave. Legal aid will be available to help tenants engage with landlords to try and resolve the actual or threatened possession issue wherever possible, including, if possible, coming to an agreement about delaying the possession matter until the benefit matter is resolved.

Amendment 72D relates to the loss-of-home matters at paragraph 28 of Schedule 1. It appears that the intention, by lifting certain exclusions in Part 2 of Schedule 1, is to make legal aid available for a wide range of potential claims in tort and for welfare benefit matters within the context of eviction and possession. The Government amended paragraph 28 of Part 1 of Schedule 1 at Commons Committee stage to lift certain exclusions in Part 2 of the schedule in order to give effect to the original policy intention that legal aid should continue to be available for counterclaims to possession proceedings. It was important to do so as such counterclaims have the potential to keep clients from becoming homeless. We also lifted those exclusions in relation to unlawful eviction, in order to ensure that our policy that legal aid should continue to be available for such matters was given effect.

The provisions that we introduced, now at paragraph 28(6)(a) and (b), lift the exclusions for trespass to person, to property and to land, and breach of a statutory duty in respect of counterclaims to possession proceedings and unlawful eviction proceedings. We believe that the provisions in paragraph 28 already sufficiently lift relevant exclusions in Part 2 of Schedule 1 as are necessary for the purpose of paragraph 28.

Amendment 72D would go much further and is, we believe, intended potentially to allow legal aid funding for any tort claim that may arise in the context of a loss of home. Indeed, it might even in some circumstances make legal aid funding available to a landlord to bring a damages claim against a tenant within the context of eviction.

In relation to tort claims more broadly, they are being more generally excluded from the scope of legal aid. The Government take the view that these cases are essentially claims for money or damages, which are a lower priority for funding than cases that involve more fundamental issues. Conditional fee agreements may provide a viable alternative means of funding such claims.

We are retaining legal aid for the most serious damages claims against public authorities where the issue is an abuse of position or power or a significant breach of human rights, or for any case concerning alleged abuse of a child or vulnerable adult, or alleged sexual offence. We are also retaining funding for claims under the Equality Act 2010.

On welfare benefits, with the exceptions of judicial reviews and claims related to the contravention of the Equality Act 2010, we have decided to remove welfare benefits matters from scope, for the reasons that I gave the House earlier.

Amendment 74C is aimed at ensuring that the provisions of sub-paragraph 28(10) of Schedule 1, which relate to trespassers facing eviction, exclude from legal aid only those who are in occupation as a trespasser and who began their occupation as such. Legal aid will generally be available for possession and eviction matters under paragraph 28 of Part 1 of Schedule 1. However, the Government do not believe that it is justifiable to use taxpayers’ money to provide legal aid funding in circumstances where an individual has unarguably both entered and remained on a property or site as a trespasser and is facing eviction. Such cases are intended to be excluded by paragraph 28(10) of Part 1 of Schedule 1.

The Government agree with the objectives behind this amendment and the concern motivated by it, namely that paragraph 28(10) as drafted could be read as having a different effect from that intended. These provisions could possibly be read as preventing an individual from obtaining legal aid for eviction if they unarguably entered as a trespasser but then regularised their arrangement by, for example, entering into a tenancy. The provision could also be interpreted as excluding cases from legal aid where an individual had initial consent to be present—for example, as a tenant—but no longer has such consent, for example, because of a dispute with their landlord.

As government Amendments 74A, 74B and 74D concern the same point, I will deal with them together. These amendments do not represent a change in policy; rather, they are aimed at giving better effect to our stated policy. They therefore address the same objective as Amendment 74C. The Government’s amendments are more appropriate to meet the concerns that have been expressed because they leave no room for doubt that the provision achieves the effect that I have described and that the Government have always intended. These government amendments put beyond doubt that the exclusion in paragraph 28 of Schedule 1 in relation to trespassers will apply only when the person is both unarguably occupying a property as a trespasser and began their occupation as such. I hope that noble Lords will be reassured by that clarification.

The next group of amendments relates to the provisions in paragraph 30 of Part 1 of Schedule 1, concerning housing disrepair cases. Amendments 77A, 77C and 77E relate to legal aid for damages claims by tenants relating to disrepair in rented homes—in particular, ensuring that when legal aid has been granted for a housing disrepair case, if the landlord makes arrangements for the repairs to be carried out, or carries them out, legal aid can continue for the damages aspect of the claim until the conclusion of the case. We have prioritised funding on cases which concern such fundamental issues as homelessness and the safety of the individual or their family. We are therefore retaining legal aid when serious disrepairs threaten the health of the client or their family and the client wishes to bring an action against their landlord to remove or reduce that risk. We are, however, generally excluding damages claims from the scope of legal aid because we take the view that these cases are essentially claims for money, which are a lower priority for funding than cases which involve more fundamental issues. We also consider that conditional fee agreements offer an alternative means of funding such claims.

It may be that the intention of this and related amendments is generally to extend Schedule 1 to cover disrepair damages claims. In this context, we note that Amendment 77G disapplies a range of the exclusions set out in Part 2 of Schedule 1 which concern causes of action which can be used to obtain damages. As I have already said, we do not consider that damages claims for housing disrepair are a sufficient priority for funding and that conditional fee agreements present a viable alternative means to fund such claims. We recognise that, when a housing disrepair claim is funded under paragraph 30 of Part 1 of Schedule 1 to remove or reduce the serious risk of harm arising from disrepair, and the claim also includes a damages element, legal aid could be extended to cover the excluded damages aspect of the claim. This could happen under the rules for connected matters made under paragraph 40 of Part 1 of Schedule 1.

Amendment 77F appears to be intended, in such cases, to allow funding for the damages aspect of a claim for disrepair to continue to be funded even where the disrepair itself has been addressed by the landlord. We do not consider this to be appropriate or necessary. I have already explained that we do not consider damages claims to be a high priority. In addition, where a landlord has carried out repairs, or has been ordered to do so, this should remove any doubt as to liability for the disrepair. If there continues to be a meaningful damages claim and a reasonable prospect of recovering damages, the client should be able to continue the damages aspect of the claim under a conditional fee agreement. This amendment may also, in part, be motivated by a concern that failure to fund the damages aspect of the case will prevent the legal aid fund from recovering any unrecouped costs. If so, this amendment is unnecessary. Where the damages aspect of a case continued under a conditional fee agreement, if the client were successful in obtaining damages, the statutory charge would ensure that any unrecouped funds expended at the earlier stages of the case by the legal aid fund would be recouped.

In addition, noble Lords should be aware that legal aid will not in general be withdrawn where it is in the interests of the legal aid fund for it to continue. In an unusual case where the damages aspect of a funded case could not be continued under a conditional fee agreement, legal aid for a housing disrepair case could continue to its conclusion to protect public funds by obtaining a costs order, even when repairs have been carried out.