I beg to move,
That the Legal Advice and Assistance (Financial Conditions) Regulations 1984, dated 16th October 1984. a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.
Perhaps it will be for the convenience of the House if the following three motions on the order paper relating to legal aid were discussed at the same time.
In that case I shall direct my remarks also to the second motion relating to England and Wales:
That the Legal Aid (Financial Conditions) Regulations 1984, dated 16th October 1984, a copy of which was laid before this House on 31st October, in the last Session of Parliament, be approved.
Last year my noble and learned Friend the Lord Chancellor decided to revert to a November uprating for the financial limits. That was more administratively convenient because the legal aid dependants' allowances are automatically increased in line with those for supplementary benefit which are, of course, uprated annually in November. The first two motions increase, respectively, by 4·7 per cent. the income and upper capital limits for civil legal aid and for legal advice and assistance. The increase maintains the present relationship between legal aid and supplementary benefit. However, there is no increase in the lower capital limit for legal aid. The alignment of this limit with the supplementary benefit capital limit was introduced last year, and the supplementary benefit level is to remain the same as last year—£3,000—because last year it was increased substantially in excess of the rate of inflation.
The legal advice and assistance regulations raise the upper disposable income limit for the green form scheme from £103 a week to £108 a week. The capital limit above which assistance is not available increases from £730 to £765. The legal aid regulations raise the lower disposable income limit—the level of disposable income below which no contribution is payable—from £2,050 a year to £2,145. The upper income limit—the level above which legal aid is not available—increases by the same proportion from £4,925 a year to £5,155. The lower capital limit is to remain at £3,000. The upper capital limit above which legal aid is not normally available is to be increased from £4,500 to £4,710.
My noble and learned Friend the Lord Chancellor proposes to increase the capital limit for assistance by way of representation. It is an extension of the legal advice and assistance scheme and provides representation for certain specified proceedings before courts and tribunals to £3,000—the same level as the lower legal aid capital limit. As this increase requires primary legislation, it will have to wait for an appropriate opportunity. That opportunity will arise on the Administration of Justice Bill, which is to be introduced this Session. It is intended that the Bill should contain an appropriate amendment of the Legal Aid Act 1974. I believe that the increases are useful.
I welcome any increase in the legal aid limits and it would be churlish to over-criticise these provisions. However, several matters worry me. The first relates to capital limits. We all know the hardship that the supplementary benefits capital limit creates. In a constituency such as mine, many people own small amounts of land of no practical utility and virtually unsaleable; yet such ownership can exclude them from supplementary benefit. The same considerations can arise in relation to legal aid. I can understand the considerable reluctance of people to enter into litigation, however justified, if the price is the sale of their only remaining assets.
It is right to remind the Government that one cannot be glib or smug about the new levels set in these instruments. Private litigation is still fully available only to the very rich and to those who are at the lower end of the income bracket. Families in receipt of national average incomes, in the middle income bracket, will be virtually excluded from litigation except in the most desperate circumstances, because the financial limits still require substantial contributions to be made, even if legal aid is available.
To take a higher income bracket, I strongly doubt whether a right hon. Member who has only his parliamentary salary with which to keep his family could afford to go to law on a serious issue, because the cost of litigation would be too great a risk for him to undertake. It is regrettable that people on middle incomes are faced with the choice between possible bankruptcy and not going to law. I hope, therefore that the Government will accept that we have a long way to go before we have a fair legal aid system.
I now turn to a related issue which has caused considerable concern during the past few days. The Master of the Rolls, whose views we respect and pay great attention to, appears to have suggested that our civil litigation system should in some extraordinary way become self-financing. I hope that the Government will wholeheartedly reject that notion now. It is no part of our legal tradition—I am proud of that tradition and reject many of the criticisms made of it—that litigants should have to pay for the courts to which they take their cases, except in some arcane commercial spheres of which the Solicitor-General is aware. I hope that the Government will unequivocally say that the civil courts, the county court and the High Court, will remain open to all litigants and that judges' services and court services will not be charged for.
I have made my point and I shall not labour it further. I accept your rebuke, Mr. Deputy Speaker.
My only additional point is that these limits—we await with interest the Administration of Justice Bill—should be available to people appearing before various forms of tribunal, especially industrial and the medical appeal tribunals, and that the legal aid system should be extended—
Order. I cannot allow the debate to move in that direction. The hon. and learned Member is leading the House into a debate about the scope of legal aid. He must confine his remarks to the regulations before the House.
With respect, Mr. Deputy Speaker, I am concerned about the financial limits and I am suggesting the sphere in which they should be applicable. I think I have made the point. I hope that the Government will give those who are worried about such matters some encouragement tonight.
I hope that I shall not fall foul of you, Mr. Deputy Speaker, during my observations on the regulations. With the hon. and learned Member for Montgomery (Mr. Carlile), I support the uprating and feel it would be rather churlish to be too critical of it. However, there are several questions that the Solicitor-General might wish to answer regarding the legal aid regulations. The first point that the House should bear in mind is that, although the two sets of regulations sound similar, they are not in thee least similar. The legal aid regulations cover representation at trial, whereas the legal advice and assistance regulations relate to the green form scheme and to many other non-litigious matters.
There are several other important distinctions between the two regulations. The first and perhaps the most obvious, because it appears on the face of the regulations, is that the financial eligibility criteria are different. Another distinction is that the calculation of disposable income for the purpose of the civil legal aid regulations is done on a much more generous basis than for the green form scheme.
The Solicitor-General may wish to answer some questions that flow from the Royal Commission's report on legal services, which is the latest and by the far the most comprehensive examination of legal aid. It contained three specific recommendations, which touch on the regulations and which the Government have taken no steps towards implementing. The most pertinent recommendation for tonight's purposes is the positive suggestion that the financial eligibility limits for civil legal aid and for the legal aid and advice scheme should be merged and assimilated. The Benson commission report says in terms that the time of an uprating is the time when the financial criteria should be merged. Why have not the Government moved more positively towards assimilating the financial limits for both classes of legal aid? I see no reason why the financial criteria should be different.
The second question that flows from the Benson commission's recommendation follows what the hon. and learned Member for Montgomery said about the cost of litigation. The Benson commission said that, in its opinion, all financial eligibility criteria should be scrapped and that no financial criteria should apply to the regulations or to legal aid. The commission recommends that there should be no cut-off point, but that there should be a sliding scale of contribution, so that those with higher incomes pay much higher contributions. However, anyone who practises in the courts knows that the possession or legal aid is an enormous advantage to a litigant. Those who fall just outside the upper limit are put at a severe disadvantage compared with those who receive legal aid. Do the Government have any long-term intentions of implementing the recommendation of the Benson commission so that the eligibility criteria determined by income and capital are scrapped? I do not press the Government to do it now because I recognise that it will have spending implications, and I despise those who call for economies in general and expenditure in particular.
The final question that flows from the Benson commission relates to the calculation of disposable capital for the purpose of the eligibility criteria. One is obliged to take into account redundancy payments and personal injury damages awards. As we all know, personal injury damage awards frequently include a large loss of earnings element. A certain amount of double counting goes on if we include those sums both in the computation of capital and the computation of income. It was for that reason that the Benson commission said in positive terms that personal injury damages should be excluded from the computation of disposable capital. Do the Government have any long-term plans to implement that recommendation? Incidentally, the Benson commission also recommended that redundancy payments be excluded from the computation of capital. Do the Government have any long-term plans to implement that recommendation?
However, I differ from the hon. and learned Member for Montgomery on the question of the contingency fee fund. Once one recognises that these regulations exclude many people from access to the courts and legal advice, one must ask, "Why not a contingency fee fund?" It has the advantage of being self-financing and would help a number of people who would not have assessments under these regulations. Although I know that this has not commended itself to the Lord Chancellor—and it did not commend itself to the Benson commission—do the Government have any sympathy at all with that proposal?
I have asked four specific questions. I am not calling for immediate increases in public spending, of which I do not approve. However, we are entitled to some clear indication from the Solicitor-General about the Government's long-term views on these matters. Save for those minor considerations, I support the uprating.
I too support the regulations, but the House ought to bear in mind the fact that in the last few years the cost of legal advice and assistance has gone up dramatically, from £11·9 million in 1979–80 to an estimated £57·4 million in 1984–85. That is a considerable increase in the cost of this scheme.
They cover legal advice and assistance under the green form scheme. From £60 million spent on criminal legal aid in 1979, it is expected that next year we shall spend about £130 million. We should always be cautious of the increasing cost of legal aid.
The assessment of legal aid has hitherto been carried out by the DHSS. In my own constituency, the DHSS has been responsible for assessments over many years. It is planned that the assessment will now take place by means of a postal declaration form. A number of people at the DHSS feel that the result will not be a financial saving to the legal aid fund, because, when given a form and asked to state one's means, the temptation is perhaps to minimise one's capital and income. A person may perhaps not disclose matters which he should. Apart from fearing possible job losses if their work is replaced by a pro forma which an applicant completes, people in the DHSS are also concerned about whether the proposal will save money in the long run.
Does the Solicitor-General believe that the postal declaration form for civil legal aid applicants will save money, or does he fear that it will cost jobs, as my constituents fear that it will?
I am grateful to the hon. and learned Member for Montgomery (Mr. Carlile) and my hon. Friends the Members for Grantham (Mr. Hogg) and for Croydon, North-West (Mr. Malins) for their contributions to this short debate and for the welcome that has been given to the upratings.
I think that all hon. Members would agree that there are advances that we would like to make, but anybody who knows about litigation knows that legal aid support falls short of what most of us would like to see. One must concede that there are many people for whom litigation is a considerable personal hardship but who none the less fall outside the respective criteria. On the other hand, I know that the hon. and learned Member for Montgomery and my hon. Friends will recognise that that must take its place in the substantial and keen competition for existing resources and we must simply do the best that we can. I am glad that we have been able to make the advances that are embodied in the regulations.
The hon. and learned Member for Montgomery asked about capital limits, and in particular the inclusion within assessable capital of small land holdings. I cannot hold out any hope to him that there will be the amendment that he proposes. On the other hand, I can say that the hon. and learned Gentleman knows that the legal aid and advice committee is, at the request of the Lord Chancellor, considering the whole question of eligibility for legal aid. It is expected to report to my noble and learned Friend in December, and I do not doubt that that is one of the questions it will wish to take into account.
The hon. and learned Gentleman's last point related to a recent speech by the Master of the Rolls. Any speech by the Master of the Rolls is entitled to considerable attention and respect. It was made recently. My noble and learned Friend the Lord Chancellor will wish to give that speech full consideration, and he will note what has been said today by the hon. and learned Gentleman.
My hon. Friend the Member for Grantham said that the financial criteria for legal advice and assistance under the green form scheme are different from those for legal aid. He is right about that, but there is a relatively simple explanation. The average bill for advice given under the green form scheme is about £50. In other words, it is a low-cost scheme, and in those circumstances much lower criteria in terms of personal assets, whether of income or of capital, are appropriate. Therefore, I cannot hold out any prospect of the kind of change that my hon. Friend would like to see, although that is one of the questions that the committee appointed by the Lord Chancellor will, I do not doubt, consider.
My hon. Friend drew attention to the Benson committee's recommendation that the criteria for legal aid and advice should be merged. What I have said already comprehends the answer to that and to his second point that financial criteria should be scrapped and a sliding scale substituted. He was, as he nearly always is, fair enough to concede that that would involve substantial increases in costs, and I have to say the gloomy thing that we all have to say about resources. None the less, the committee is considering that and there is not long to wait before its report in December.
My hon. Friend asked why take into account, when looking at capital assets, the proceeds of a successful redundancy claim and a successful claim for personal injury compensation. Everyone must have some sympathy for that idea, but if it is looked at closely it does not stand up. The purpose of legal aid support is to enable somebody who lacks the financial resources to do so to bring proceedings. It matters not very much that a person's financial resources have entered his bank account by reason of a claim for personal injuries compensation or whether by reason of, let us say, inheritance. For the purpose of deciding whether the legal aid scheme will support one, what really matters is whether one has the means of financing litigation onself. That is why I do not for my part see any prospect of meeting my hon. Friend's third question.
Finally, my hon. Friend raised the question of the contingency fee. I am dead against contingency fees. The contingency fee system, which is run—
If I have understood the matter correctly—and I am not at all sure that I have—it is a development of what we already have. The legal aid fund has a statutory right to obtain its expenses from what has been recovered. However, if my hon. Friend writes to me—or perhaps more importantly to his noble and learned father—he may receive a fuller, and certainly more authoritative reply.
No doubt my hon. Friend can interpret who that is.
My hon. Friend the Member for Croydon, North-West mentioned a pilot scheme in certain parts of England and Wales which is designed to reduce the cost of applications for legal aid. I agreed with him when he drew attention to the increased cost of legal aid. He gave us certain figures with which I do not disagree. I could give others, but it is too late now to do so. There is no doubt that the claims on the legal aid fund have increased alarmingly. But, equally, the number of claims that has passed the scrutiny of the legal aid committee has also increased. The reasons for that are complex. However, I know that the Lord Chancellor agrees that claims for legal aid should be subjected to close scrutiny. I shall certainly draw his attention to what my hon. Friend the Member for Croydon, North-West has said.
I was asked by my hon. Friend to say something about the postal scheme. The purpose of the pilot postal scherne was to test whether we could save money without losing the degree of scrutiny that is necessary. It has been rather successful, so to a limited extent it is going to be adopted. I hope that what I have said has reassured my hon. Friend to some extent. We are keen to see that there is the same degree of financial discipline over the legal aid scheme and its administration as we look for elsewhere in the public sector. What he has said about it will, I think, he very helpful.