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Clause 1. — (Power to Award Costs Out of Legal Aid Fund.)

Part of Orders of the Day — Legal Aid Bill – in the House of Commons at 12:00 am on 23rd January 1964.

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Photo of Mr Robin Maxwell-Hyslop Mr Robin Maxwell-Hyslop , Tiverton 12:00 am, 23rd January 1964

I beg to move, in page 2, to leave out lines 5 and 6.

There is very little to be said on this Amendment that has not already been said in debate on Second Reading. The principle is absolutely clear-cut and simple. If it is just and equitable in all circumstances that an order for provision of costs out of the Legal Aid Fund should be made, it naturally and necessarily follows that it is unjust and inequitable to deny that. There is no way round this proposition, because it is logically watertight. However, in the Bill as it stands, the court, having satisfied itself that it is just and equitable in all the circumstances that provision for those costs should be made out of public funds, also has to be satisfied that the unassisted party will suffer severe financial hardship unless an order is made.

I say, in parenthesis, that this governs the case where the plaintiff in a court of primary jurisdiction, not on appeal, is backed by the Legal Aid Fund and his case is rejected by the court, the defendant, who is not backed by the Legal Aid Fund is put to the cost of defending himself. It also covers the case where a person with a very indifferent case, but one which cannot be said not to exist at all, threatens to bring an action against another person who is not backed by legal aid and where the defendant's solicitors advise the defendant that although there is no good case against him he will be made to get costs against the legally-aided plaintiff and, therefore, the damages claimed would be less than the cost of defending himself, it would be cheaper and wiser to pay, although quite unjustly.

This is called by some people, such as myself, blackmail, and by others grey-mail, but it is precisely and exactly the same thing. The only argument of any substance advanced by the Attorney-General against the proposition embodied in this Amendment is that it would put a burden on the Exchequer. I quote from HANSARD of 6th December: This would cast a heavy burden on the taxpayer—possibly in the region of £340,000 a year—for the benefit of a small number of persons, and, ex hypothesi, for persons who would not the suffering any financial hardship and, in many instances, persons who would be covered by insurance companies and would expect to take risk, such as motorists and factory owners."—[OFFICIAL REPORT, 6th December, 1963; Vol. 685, c. 1595.] It is self-evident that the smaller the sum of money involved the easier it is for the Treasury to meet it, but the larger the sum of money involved the greater injustice there is in not making this provision.

My right hon. and learned Friend is on the horns of a proper dilemma, because if the sum is, in fact, considerably larger than £340,000, by precisely the same measure so is the injustice greater to the people unable to recover costs having successfully defended themselves against an action which the State has financed in part or in whole. If, on the other hand, the sum is £340,000 or even less, it is much easier for the Treasury to find that sum. Either way, whether the sum be larger or smaller in fact than my right hon. and learned Friend's estimate of £340,000, the case is stronger on one ground or the other for accepting this Amendment.

As I painted out on Second Reading on 9th December, the statement that ex hypothesi persons would not be suffering financial hardship is quite untrue. The question is not whether they would suffer any hardship, but whether they would suffer "severe financial hardship". This necessarily brings us to the second objection to these offensive lines, "severe financial hardship". No one knows what severe financial hardship means. No one knows how a court will interpret that. No solicitor faced with a not-very impressive claim for damages by a legally-aided plaintiff will be able with any certainty to advise his client whether, if he defends the action on the assumption that the advice is good advice, he will get costs or not.

Let us envisage a few hypothetical cases. Someone with a gross income of £2,700 a year with one child being privately educated, with a mortgage on a house, faces costs of £120. That certainly will not bankrupt the person concerned. It might or might not be said that that was "severe financial hardship", but who can say? It is not only a case of how High Court judges will interpret this. It may well be that there have been discussions with High Court judges, or it may be that my right hon. and learned Friend has watched very carefully what the attitude of the Queen's Bench has been in matters of costs.

I am no more concerned about the huge costs involved in High Court actions than the more modest, but nevertheless severe, costs which arise in county court actions which in the ratio of the wealth of the person concerned may be just as inconvenient, or impose just as much hardship even if it does not actually meet the test of "severe financial hardship".

I stress that on the ground of lack of definition and unpredictability the phrase "severe financial hardship" is not a good one to write into the Bill. It is likely not to prevent the continuance of the practice whereby people settle out of court, because the cost of defending themselves and getting a just dismissal of the action is greater than the damages claimed. That form of blackmail will inevitably continue in many cases unless this Amendment is accepted. It must be said that by definition no one can ever know how many of these cases there are each year, because by definition they are cases which do not come to court, although every solicitor I have spoken to about it has assured me that these cases are frequent rather than infrequent.

I therefore hope that my right hon. and learned Friend, even at this late hour, will be able to assure the Committee that the sum involved, difficult as it is to find any amount of money, is nothing like so important as the principle involved and the inconvenience, hardship and malpractice which our failure to accept the Amendment must inevitably involve. It is not often that we have a Legal Aid Bill before the House. The scheme was introduced 14 years ago. It has taken 14 years, during which time the Labour Party and the Conservative Party have been in office, to produce a Bill to get rid of some of the defects of the scheme. It is difficult to predict how many years will pass, if we do not take this opportunity now, before there will be another Legal Aid Bill to rectify the defects of this one. It would be much more sensible and just, apart from it being necessary, to accept the Amendment.