TUESDAY 2 NOVEMBER 1999

THE RT HON THE LORD IRVINE OF LAIRG QC, MR DAVID LOCK MP AND SIR HAYDEN PHILLIPS KCB

  20. Who polices those who make the applications, that they are legitimate applications.
  (Mr Lock) Both the applicant themselves and the solicitor have a duty to provide the Legal Aid Board with a full disclosure of the applicant's financial position. There are occasions when the other party to the litigation will challenge that and make representations on behalf of the other party that the legally aided party has other capital, has other resources, has other income. Obviously at that point they will be investigated. It is fair to say that a reasonably high proportion—I am afraid I cannot give you an exact proportion but a very high proportion—of those who are investigated when an allegation is made of the legally aided party not being entitled on means grounds, end up with the legal aid certificate being discharged.

  21. What about those cases prior to litigation or in fact which never get to litigation in the early stages where legal aid may have been provided? How is the policing done? Is there any system whereby people can check on whether somebody is in fact in receipt of legal aid? Is there a public register, a public disclosure?
  (Mr Lock) No.
  (Lord Irvine) No. You are now on litigation and there is a legal aid certificate which will be lodged with the court and I do not think there is any problem in defendants' solicitors knowing that a party is legally aided.

  22. With respect, you are two jumps ahead. I am talking about prior to litigation where a case may not get to court, where one of the parties may seek legal aid, gets legal aid and then the solicitor's letter does the trick in their opinion. Is there any public register which states that Bloggs got legal advice from solicitor X?
  (Lord Irvine) I think not. It only arises at the point talked about. Let me say, very often in practice this may not be the problem you think it is. People do not normally suppress the fact that they have legal aid; they boast about it from the roof tops because they think that it increases their bargaining muscle. The first thing that a solicitor who got legal aid for his client to bring certain proceedings would do would be to write and tell the other solicitor that that was so, because he is now funded and can go forward. I think the problem may be the other way round.

  23. May I suggest then that you ought to consider having a public register from day one when a person is in receipt of legal aid? I could suggest to you that there may be occasions when people are getting legal aid in order to make the point they wish to make when they are not entitled to legal aid.
  (Lord Irvine) I shall certainly consider it. What is the objective?

  24. I am suggesting that it is possible for somebody to use the legal aid system. You are trying to cut down on unnecessary legal expenditure and we all agree with that. I am suggesting to you that it is possible for somebody to make use of the legal aid system to which they are not legally entitled in order that just a threatening letter arrives at the nextdoor neighbour's about a dispute. This happens. I would suggest to you that all MPs are aware of neighbour disputes where lawyers are involved.
  (Lord Irvine) I am certainly content to think about it. Quite honestly I can see advantages and we can all see disadvantages as well.

  25. In answer to Mr Stinchcombe's first point, I was not quite clear whether you were saying that the way in which you were going to deal with the whole question of avoiding capping was to clamp down on defence costs. May I repeat the point Mr Stinchcombe made which was that in 1996 as shadow Lord Chancellor you were of the view that cost-capping was unattractive in principle, yet three years later you said you operate as Lord Chancellor within a controlled budget. Were you aware that you would have a controlled budget when you were shadow Lord Chancellor?
  (Lord Irvine) We have come to our spending decisions collectively within government. The significance that I was attaching to cost-capping in that speech to which you are referring is that I was using that as a synonym for money running out so that there would be no funding for a meritorious civil legal aid case. I regard it as my duty to prevent that happening and I predict I will achieve it. Therefore the mischief which I feared, namely a meritorious case not gaining the support that it deserves, will not happen. We can bandy words about like cost-capping and controlled budgets and so on but the objective is to see that all meritorious cases go forward.

  26. You were not trying to suggest as shadow Lord Chancellor that were you to be favoured with the job in Government, there would be no capping and that you would make sure that the funds were there, notwithstanding of course that the Chancellor would have control over your budget.
  (Lord Irvine) In all my wildest dreams about this office, I never thought it would give me a licence to print money.

  27. So you were not attempting to mislead people.
  (Lord Irvine) Of course not.

  28. Can we move now to the question of contracting and also to conditional fee arrangements, both of which we discussed last year? If we deal with contracting first, since 1994 the Legal Aid Board has developed a voluntary contracting scheme called franchising. Under this arrangement, as I understand it, specific firms contract to provide legal aid. The question has arisen as to whether or not this system is denying litigants choice. How would you respond to that?
  (Lord Irvine) First of all, I have to make what I really believe is a very, very fundamental point and that is to ask you to focus on one of the major sins of conventional legal aid. Traditionally under legal aid, if you had suffered the severest form of medical injuries that you can imagine, you could wander in to any solicitor's firm in the country and if you qualified for legal aid then that solicitor could take your case through from beginning to end regardless of his competence or expertise to do so. That is really a very fundamental point. The whole point about franchising and contracting is to do so with lawyers who are quality assured. I do not think any person in this country would thank the state for pointing him or her in the direction of a lawyer who does not have the skill to do the job. If going over to skilled lawyers only means that there is less choice numerically, it is a far, far better choice for individuals to have only quality assured lawyers to choose from and that is my fundamental response to the question of principle.

  29. What would you say for example about rural areas where maybe both sides to an action would have access to the same firm of quality assured and contracted lawyers? Do you think that would be a problem?
  (Lord Irvine) No, we will ensure that there are arrangements in place which always—I repeat always—give a real choice.

  30. In terms of monitoring this arrangement, are you satisfied that it is working well? What measures are in hand to ensure the monitoring of the quality to which you rightly attach great importance?
  (Lord Irvine) It is the Legal Aid Board's job to set franchising criteria and to see that they are adhered to. The whole name of the new game is quality assurance. We all know that. If you have a medical negligence case then you will only be pointed in the direction of someone on a panel of lawyers who are quality assured.
  (Sir Hayden Phillips) Concerns were put to you and put to us about the fact that low numbers might be coming forward. The actual numbers coming forward to apply for contracts are very high. We expect about 5,500 in April and we expect to build that up over time to about 10,000 in the year beyond, 50 per cent of which we hope will be in the not for profit sector. This will be quite a dramatic change in the provision that is available, the different types of provision and you have made it clear. We are very conscious of the position in rural areas where we have to pay particular attention to that.
  (Lord Irvine) I have just looked up the basic facts. In the civil and family advice and assistance area, we expect there to be about 5,500 solicitors' contracts in place in January 2000 with about 350 to 400 contracts with the not for profit agencies. Then, if you take family certificated work say, which broadly speaking means representation in the family area, 5,500 contracts. Then if you take non family civil certificated work, I cannot give exact figures but the supply base is going to be around 5,000 or 5,500. I do not really see any general problem.

  31. You have answered the question as to the availability. What I was also seeking to establish was the question of monitoring of that very quality to which you attach such importance. Are you saying in answer to me that it is the job of the Legal Aid Board to monitor these contracts? If so, how is it going?
  (Lord Irvine) The Legal Services Commission is under a duty to monitor quality. I have to submit every year to Parliament under the Access to Justice Act an annual report and I can absolutely assure you that it will deal thoroughly with the monitoring of quality.

  32. In terms of those firms which failed to secure a franchise you told us last year that the Legal Aid Board proposed to set up a franchise appeal body which will comprise a member of the Board, a solicitor and a representative from a quality assurance organisation. Has that been done or perhaps there has not been the need to provide that because there has not been the level of complaints which were originally envisaged?
  (Lord Irvine) I know that there is an internal appeal mechanism within the Legal Aid Board. I believe that it is to a discreet and different body of persons within the Legal Aid Board. I do not think it is to an outside body. If anything I have just said in that answer is inaccurate, I shall write to you.[3] If I do not write to you it is because it is, as I hope it is, completely accurate.

  33. It will not be because it was lost in the post.
  (Lord Irvine) Not at all because of loss of face. If I have given you any wrong information I would want ... Oh, loss of post. I can contemplate loss of post. I cannot really contemplate anything other than that.

  34. Lord Thomas of Gresford did suggest in another place that there was concern that block contracting could provide an opportunity for large litigants to ambush cases and therefore exhaust the funds. What is your response to his concerns?
  (Lord Irvine) I have said many, many times in Parliament that I do not really recognise his concerns. I do understand people who are concerned about small high street solicitors who feel that they miss out under an arrangement which goes over to an insistence, for the benefit of the consumer, on quality assurance. I have given you the numbers of contracts which seem to me to be very, very large. Wherever any of these rival considerations arise, legal aid does not exist for the benefit of lawyers, legal aid does not exist in order to guarantee a living for lawyers in the same structures and the same organisations with the same size of firms as they had before. The consumer has to come first.

  35. Is there a danger, if block contracts were awarded on the basis of specified numbers of cases, that lawyers could thereby cherrypick the cases?
  (Lord Irvine) No, the principle of block contracting is not that the lawyers can cherrypick the cases that they do, but under the contracts, very sensibly, they will be given a capacity broadly speaking of the cases in the particular categories that they can undertake under the contract. The Legal Services Commission would not be very efficient if it gave more contractual capacity to contractors than they could efficiently do. There is a relationship between quality and the capacity to undertake work to the requisite quality.

  36. Moving to conditional fee arrangements, one of the concerns which was raised was that there would not be sufficient insurance policies and companies offering insurance policies to deal with the problem. You told us a year ago that a large number of personal injury cases had gone forward under conditional fee arrangements. You said you had seen a figure of 47,000 in relation to the work of a single insurer alone.
  (Lord Irvine) That is right.

  37. Can you tell us how things have improved? You told us that you could not specify the names of the companies for reasons of commercial confidentiality. Are you satisfied there is now a sufficiently large pool of firms offering insurance?
  (Lord Irvine) Yes, I am and the very best point to make is that when certain legal interests argue that conditional fee agreements will not work because lawyers share in the benefits of winning as well as the risk of losing, we have to remind ourselves that in practice solicitors working for trade unions have been operating what amounts to a conditional fee arrangement for years and years and years without even the benefit of any success fee. They do not charge their client trade union when they lose cases. They get their ordinary fees when they win and they run a profitable business. That is just well known. That is why these big trade union solicitors came out in favour of my consultation paper as soon as I made the proposal about conditional fee agreements and they knew that they can run profitable businesses without any success fee. I just cannot begin to accept that other competent legal firms cannot work profitably with conditional fee agreements, with a success fee. Do not forget that under the Access to Justice Act we have made two important changes, that the success and insurance premium can be recovered from the defendant who loses. The uplift and the cost does not come out of the plaintiff's damages. He or she gets the full damages to which they are entitled and the right person pays at the end of the day, the person who in a negligence case has negligently caused the damage. I would not have gone down this road unless I had a very considerable confidence which I believe will be proved that this regime will work.

  38. What evaluation have you made of the performance so far, bearing in mind that conditional fees have been in existence now since 1995?
  (Lord Irvine) Everything that we know and learn from all the sources available to us is that they work admirably.

  39. Is there a formal mechanism for evaluating the performance or is it just a question of what information comes to your attention?
  (Lord Irvine) I do not really know what the formal mechanism would be. The record of success, for example, of these trade union firms which operate on this basis in personal injury cases which fight, which is as good evidence as any, is 90 per cent I am told, but anyway an extraordinarily high proportion of them succeed. Therefore it is perfectly obvious on the basis of that information alone to my mind that this is a winning route. We have been very careful, however, not to take medical negligence cases out of legal aid pro tem. We have been very, very careful to stipulate that high cost investigative cases ... I believe the market can bear these perfectly well but we have been careful to ensure that legal aid continues for this class of case. I have to say that if we ever did reach a situation, which I confidently believe we never will, that CFAs did not work in this area, then the powers are available to bring them back into the scope of legal aid. I confidently believe that this is one area of policy which will triumphantly succeed.