Legal Aid, Sentencing and Punishment of Offenders Bill

My Lords, we believe that the package of proposals seek to end ATE insurance premiums being charged to the defendant with the specific exception of clinical negligence cases. To start unpicking it in such an important respect would not retain integrity of the proposals as a whole. I hope that I am not misinterpreting what he said, but my noble friend has suggested that it might be possible to split or share the recoverability of success fees or ATE insurance premiums. Indeed, I think that the Bar Council has suggested that some success fees or ATE insurance premiums should be payable by the losing side with the remainder payable by the claimant. Lord Justice Jackson made alternative recommendations on partial recoverability of success fees and ATE insurance premiums in the event that his principal recommendations were not accepted. But the Government had a full public consultation on both the primary recommendations and the alternatives and gave careful consideration to the responses. We decided to take forward the primary recommendations—abolishing the recoverability of success fees and ATE insurance premiums—as the best way of restoring proportion and fairness to the CFA regime. It has been suggested, as referred to in Amendment 146, that the market may not provide for or adjust itself sufficiently to take account of these. The amendment requires the Lord Chancellor to, "““have regard to the financial and commercial viability of the insurance market””," in making regulations under Clause 45(2). I accept that the changes the Government are seeking to implement are fundamental, but we expect the insurance market to respond positively to them. It is easy to say ahead of an event that all sorts of appalling things will happen, but after 1999 the market certainly adjusted to the opportunities with ATE premiums, and it is not surprising that those who wish to maintain the status quo are making substantial representations to that effect. Ministry of Justice Ministers and officials have met a substantial number of different insurers as the proposals have been developed since Lord Justice Jackson’s recommendations were published. Although some providers have said publicly that they will pull out of the ATE market if the changes go ahead, others have indicated that they will look positively at developing products which meet market needs as the details of the proposals are finalised. Amendment 145 seeks to ensure that the costs of disbursement and any additional insurance taken out against adverse costs after the introduction of QOCS can be recovered from the losing side. The amendment goes against the objectives behind Clause 45, which is to reduce costs associated with ATE insurance. Amendments 147A and 148A would have almost the same effect in that they would allow the ATE insurance premium to remain recoverable by way of a costs order, which may potentially be set at a much higher level than what is being proposed in the Bill. An inflated cost burden will remain with the losing side, which cannot be right in the circumstances. My noble friend Lord Thomas and the noble Lord, Lord Martin, referred to offers to settle, which are dealt with under Amendments 158 to 162. Again, the Government do not feel able to accept the amendments, which are either unnecessary or inappropriate. It might help if I say something about part 36 of the Civil Procedure Rules, dealing with offers to settle. The current rules permit the court to impose what are, in the main, costs sanctions against a party that refuses an offer made by the other party but then does not beat that offer at trial. The sanctions are designed to encourage early offers and early settlement of cases, as the noble Lord, Lord Martin, indicated, so that both parties are spared substantial costs in both time and money. Lord Justice Jackson argued that these costs sanctions need redressing in favour of claimants. As we set out in our consultation response, we intend to amend the rules in order to encourage claimants to make offers and defendants to accept them. Clause 53 enables rules of court to be made to permit a court to order an additional amount to be paid to claimants by defendants who do not accept a claimant’s offer to settle which is not subsequently beaten at trial. As I have said, the intention is to set the additional amount payable at 10 per cent, but there are issues to be resolved as to whether 10 per cent is appropriate in every case, in particular in higher-value claims. We will continue to work with stakeholders on what the details of the rules should be, but I hope the Committee will agree that these are matters best left to the rules. For example, the amendment would apply the increase in all cases, whatever the value of the claim, whereas we are discussing with stakeholders whether there should be some cut-off or tapering in higher-value claims. Amendment 162 seeks to include in the value of non-monetary benefit any, "““injunctive, declaratory or other non-monetary relief and any form of vindication of the claimant’s reputation””." The amendment is unnecessary. It is the Government’s intention that such matters would be included in the definition of non-monetary benefit awarded to the claimant in any event should the additional penalty be calculated in that way. Clause 53 gives some flexibility to make sure that the rules are appropriate across all categories of law, and it is our intention that they should be. Amendment 161 seeks to establish a procedure to review every three years the level of the additional amount payable by the defendant. This is not necessary, particularly if the flexibility currently afforded by Clause 53 is maintained. The Lord Chancellor will have the power to review the level of sanctions and can be called to account for that if necessary. The Government are committed, as has already been indicated to the Committee in previous debates, to a post-legislative review of their reforms between three and five years after the Act is passed, which could include the level of the additional amount. Finally, Amendments 190, 192 and 193 seek to prevent the implementation of the reforms until certain requirements have been met. The Government have given a commitment to implement the measures, which we have outlined outside of this Bill. I hope that the detail of that has given the necessary reassurance. I am grateful for the indulgence of the Committee in answering a considerable number of amendments. However, I think that it has been useful to consider this—as it were—omnibus set of amendments, which have raised all the different elements of the package. I urge noble Lords not to press their amendments.