Community Legal Service (Scope) Regulations 2005.   

rose to move, That the Grand Committee do report to the House that it has considered the Community Legal Service (Scope) Regulations 2005. The noble Lord said: I shall speak also to the Community Legal Service (Cost Protection) (Amendment) Regulations 2005. The new arrangements that I will set out are important in achieving our aim of improving the legal aid system. They have been designed, first, to discourage weak applications; secondly, to encourage more mediation and an early resolution of cases; and, thirdly, to ensure that those clients who can afford to pay for their legal costs do so. These are legitimate aims and entirely necessary to protect the available budget for legal aid in the future. The changes were debated in Committee, in another place, on Tuesday 12 July, and were agreed. Many points were raised by the Committee. I know that legal aid is of great importance to us all, and I welcome the opportunity to discuss the changes that we are making. Let me say at the outset that this is quite a complex set of changes; I am afraid, therefore, that I will need to detain the Committee for a little while to go through all the principal points. The changes have been subject to, and improved by, a long consultation period, starting almost a year ago. It has been a difficult exercise to find the best way forward that protects the budget but ensures access to justice for the most needy. Before I set out the particular changes, it may be helpful if I explain the various parliamentary procedures under which the reforms are being implemented. First, the funding code criteria and procedures are being modified under Section 9 of the Access to Justice Act, which I shall from now on refer to as ““the Act””. That section requires any changes to the code criteria, as here, to be approved by both Houses of Parliament before coming into effect. There is no separate order or regulation governing the changes to the funding code; rather the revised code itself is laid before each House. Secondly, the Community Legal Service (Cost Protection) (Amendment) Regulations 2005, which, for ease of reference, I shall call the cost protection regulations, are made under Section 11 of the Act. That section sets out the rules under which costs may be ordered against an individual funded by the Community Legal Service fund. The Cost Protection Regulations 2000 define the scope of a funded client’s protection against full costs under Section 11. Those regulations amend the 2000 regulations to remove that protection from costs in specified family proceedings. The regulations also require the affirmative approval of both Houses. Thirdly, the Community Legal Service (Scope) Regulations 2005 are made under Section 6(7) of the Act. That enables the Secretary of State to make regulations in relation to Schedule 2 to that Act, which sets out those services excluded from the scope of the Community Legal Service fund. Those regulations, which I shall call the scope regulations, amend Schedule 2 to re-define the exclusion in relation to personal injury proceedings, subject to directions from the Secretary of State, which bring certain types of personal injury case back into scope. The regulations require the affirmative resolution procedure of both Houses and, subject to that approval, will come into force on Monday, 25 July 2005. The Secretary of State’s direction is made under Section 6(8) of the Act. The direction is not subject to parliamentary approval, although it is available for information. It will come into force at the same time as the regulations, and will ensure that all appropriate cases are covered. I should first explain why we are making the reforms. The changes are part of a wider package of reforms to civil legal aid that we first consulted on in July last year. The main theme of the proposals was to refocus the civil legal aid scheme away from contested litigation and to encourage early resolution of disputes. The consultation paper, A New Focus for Civil Legal Aid—encouraging early resolution; discouraging unnecessary litigation, was published jointly by the Legal Services Commission and   the Department for Constitutional Affairs. The consultation period lasted from 22 July until 15 October. We received 136 responses, and Ministers at the Department for Constitutional Affairs had further meetings with interested parties. As a result of that full consultation, we were able to improve our proposals and to take account of particular concerns. Let me take this opportunity to thank all those who responded. As I said at the outset, the Government know how important legal aid is to many people, and we need the engagement of key stakeholders, in particular, to ensure that the limited resources are spent as effectively as possible. We believe that this revised package of reforms represents a positive move forward for civil legal aid that we can build on in future years. The reforms are consistent with other ongoing initiatives; for example, the fundamental legal aid review (FLAR), launched in May 2004. The report of that review, A Fairer Deal for Legal Aid, was, as Members of the Committee will know, published on 5 July. That report sets out the Secretary of State’s long-term strategy for legal aid. The paper summarises the findings of the review and sets out proposals for the vision for legal aid in the civil advice and public law family system; the purchasing of criminal defence services; plus other measures for reforming parts of the criminal justice system to improve overall efficiency and effectiveness. The aim is to guarantee continued fair and equal access to justice and improve outcomes for those who most need publicly funded legal services, and provide them in the most efficient way for the taxpayer. The new focus package is an important component of a co-ordinated continuing legal aid reform programme. In refocusing civil legal aid, we must recognise that the legal aid budget is under pressure. We must ensure that legal aid funding is targeted at the most needy cases and in priority areas, while providing taxpayers with value for money. We expect the whole new focus package to save £56 million over this year and the next two years. We announced all but one of the final proposals on 2   March 2005. In that announcement, the Secretary of State made clear that further work needed to be carried out to ensure that affordable loans would in practice be available in ancillary relief cases—financial provision on divorce. We then consulted with leading banks and building societies, and confirmed that appropriate and affordable products would indeed be available for the range of clients to whom we are now applying the discretion. We announced the way forward on ancillary relief on 21 June. The package included a range of proposals, some of which were implemented in April 2005, such as aligning the eligibility limits for legal help and legal representation. It was a difficult but necessary exercise to balance the needs of the vulnerable with the demands on the budget. But, as I have said, we had a full and constructive engagement with stakeholders during the consultation. As a result, we were able to make considerable modifications and improvements to our original package. I believe that the final package represents a sound foundation for the future of civil legal aid. I shall now deal with the individual changes that we are debating today. The Legal Services Commission’s funding code was brought into being by Section 8 of the Act. It was approved by the noble and learned Lord, the Lord Chancellor, on 14 January 2000, and approved by a resolution of each House in March 2000. The funding code was drafted to provide the criteria by which the Legal Services Commission could operate legal aid. Since it came into force, there have been no substantive amendments to the code criteria. We are considering a total of 36 amendments to the code criteria and 10 amendments to the code procedures, many of them are technical and minor. Many reflect updates in practice, changes of wording and streamlining of existing services to ensure continued efficiency—for example, removing the term ““approved family help””, which covered general family help and help with mediation. The most significant changes to the criteria introduced by the revised funding code are: First, in relation to clinical negligence cases and police complaints cases, the Legal Services Commission will have a wider discretion to refuse funding where it is considered more appropriate for the client first to pursue the case through the appropriate complaints procedure. Detailed guidance has been issued to ensure that cases remain eligible for legal aid where it would not be appropriate for a complaints procedure to be pursued—for example, when delay would seriously prejudice potential claims. Secondly, in ancillary relief cases—that is, applications for financial provision on divorce or separation—the Legal Services Commission will have a new power to refuse funding for legal representation where a client can reasonably be expected to obtain a loan or use existing resources to fund the remaining stages of the case. I should stress that this criterion will   apply only to cases after the financial dispute resolution hearing has taken place and the case had not been resolved by then. Again, guidance will restrict the application of this criterion to cases where loans or assets are available to the client. The provision would, typically, apply to clients who are already paying significant monthly contributions under a legal aid certificate which would be comparable to typical monthly payments for a loan. Thirdly, the changes clarify the types of expenses that can be charged to the Community Legal Service Fund. This change did not arise from the New Focus consultation in July last year, but arose in response to a recent judgment, which held that therapeutic assessments in public law children proceedings might be allowable disbursements from the Community Legal Service Fund, under legal representation. This funding code amendment merely preserves the status quo prior to the case ruling—that payments from the fund are concerned with providing legal services and not for paying for rehabilitative, educative or health assessments. The amendment also leaves open the possibility for disbursements of this sort to be allowable if authorised by specific orders or directions from the Secretary of State. Subject to your Lordships’ agreement, all of these changes come into force on 25 July 2005, apart from the new provision on financial provision in divorce cases, which will come into force on 3 October 2005. That delay is to allow additional time for training Legal Services Commission staff and for consultation on the commission’s guidance which ensures that clients are not required to borrow at prohibitive interest rates and that only reputable and affordable loans are taken out. The changes to the cost protection regulations will remove a legally-aided client’s protection from being ordered to pay full costs in a case. This is being introduced to provide a deterrent in those family cases where costs are ordered primarily only where clients behave unreasonably—for example, where a funded client insists on proceeding to full contested court proceedings, despite being offered a resolution to the case that a judge considers reasonable in the circumstances. Moreover, this change will place a funded client on the same footing as a privately-funded client and will contribute to the department’s target to achieve earlier and more proportionate resolution of legal problems and disputes. Removing that protection will deter many legally-aided clients from continuing proceedings unreasonably where a privately funded client might decide not to. We do not believe that this will deter well founded applications. In the light of the consultation responses, we have excluded public law children cases and domestic violence proceedings from this change because of the importance we attach to these proceedings and the absence of alternatives to litigation in those cases. Changes also complement the proposals announced in   the Government’s Green Paper called Parental Separation: Children’s Needs and Parents’ Responsibilities, which sets out the department’s aims to create a better family justice system for parents who are separating and their children; for example, targeting legal aid to promote earlier, more consensual resolution and less litigation. The scope regulations amend the list of services that are not funded by the Community Legal Service set out in Schedule 2 to the Act; that is, those services for which legal aid is not available. The new regulations will widen the definition of personal injury services set out in paragraph 1(a) of that schedule. Currently, the definition relating to personal injury is,"““allegations of negligently caused injury, death or damage to property, apart from allegations relating to clinical negligence””." We are widening that definition so that, subject to the Secretary of State’s direction, the exclusion will apply to all personal injury claims, other than claims concerning clinical negligence. Claims concerning negligently caused damaged property will remain excluded. However, the Secretary of State has approved a new direction under Section 6(8) of the Act that will ensure that legal help and legal representation for proceedings arising out of allegations of sexual abuse, allegations of the abuse of a child or vulnerable adult, remain in scope. This scope change will have limited effect in practice, but it would, for example, mean that a burglar who was deliberately injured by a homeowner in the course of his burglary could not obtain legal aid to sue the homeowner over the injury. These changes avoid the technical distinction on whether an injury is negligently caused and instead allow the direction to specify the type of case we wish to continue to fund. It also increases the scope of funding to grant legal help in relation to appliances to the Criminal Injuries Compensation Authority. As I outlined earlier, the Secretary of State’s direction is not formally before your Lordships for consideration, as it is implemented under a different provision in the Act. It would however come into force at the same time as the regulations; that is, 25 July. The regulations also clarify those proceedings under Section 42 of the Proceeds of Crime Act 2002 relating to restraint orders are in scope. Previously, respondents and third parties were eligible for legal aid in relation only to proceedings to vary or discharge such an order. The regulation changes will mean that respondents and third parties can now be funded for all proceedings involved in restraint orders. I commend the regulations and the revised funding code to the Committee. I beg to move. Moved, That the Grand Committee do report to the House that it has considered the Community Legal Service (Scope) Regulations 2005 [5th Report from the Merits Committee].—(Lord Evans of Temple Guiting.)