Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Martin of Springburn Excerpts

Wednesday 14th March 2012 Lords Chamber

[Lord Judd]

My Lords—

[Lord Martin of Springburn]

My Lords—

[Lord McNally]

I am sorry, but I am not going to take questions. We are hard-pressed for time. I have offered to re-engage, but as I said before, the evidence we asked for has not been forthcoming and I do not believe the argument that without this amendment, it is going to be catastrophic for these particular cases; that is, for those which people want to take through our law courts. I ask the noble Lord to withdraw his amendment—

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Moved by

[Lord Martin of Springburn]

133: Clause 43, page 30, line 24, leave out subsection (4)

[Lord Martin of Springburn]

My Lords, I am pleased to move this amendment. I understand that the night is getting on and we have all been here for many hours. I say in the nicest possible way that, as the hour gets later, the noble Lord, Lord McNally, seems to get a bit more edgy or, as we say in Scotland—I do not know if the term is used south of the border—a wee bit crabbit. The noble Lord would not give way.

The Jackson report has been mentioned many times tonight, and it sounds as though it is a commendable report. However, I put it to the noble Lord, Lord McNally, that we are not here just to take a report and rubber-stamp it. That would be easy. It has to be debated and thought through. It would be very easy for our democratic institutions if we just got a report and passed it through, saying, “It’s a good report”. It has to be tried and tested. In that spirit, I am moving this amendment.

I declare an interest. I successfully took the Times to task on a no-win no-fee basis. Even on that basis, it was very daunting to be up against a large media organisation. I have been in politics for a long time and I feel as though we have all been hardened to what the media do and say. It must be even tougher for men and women who never expected to be in a situation in which their reputation was tarnished. It is a great loss that we are losing no-win no-fee for libel damages. My thoughts go to Mr Christopher Jefferies, the landlord in Bristol who was accused of all sorts of things because he was in the wrong place at the wrong time. It was very sad for the poor victim of that murder, but Mr Jefferies was also a victim.

The media said all sorts of things about that poor man. He must have thought to himself that he must take them on, and he did so on a no-win no-fee basis. Mr Jefferies probably took them on knowing—or his lawyers would have known—that whereas he had one solicitor, every national newspaper has a whole team of solicitors. There is not a time in the day when a media editor does not have access to a solicitor. I do not need to reiterate the things that the media said about that poor man as your Lordships know what was said. I was appalled that when the editor—I believe it was the editor of the Mirror newspaper—spoke at the Leveson inquiry, his apology was so cold and unmoving that you would not have known from it that he had destroyed that poor man’s very reputation.

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[Lord Martin of Springburn]

My Lords—

[Lord McNally]

The noble Lord has come to my aid, because I think these cases are still going on, and I had better say no more. Whenever I hear the Opposition on the wickedness of the press, I have to remind them that from those Benches more than a decade ago I proposed a minor amendment on press accountability, and was told from this Dispatch Box by the Labour Minister of the day that I was proposing the “slippery slope” to a state-controlled press. We know today what slippery slope we were actually on.

I say to the noble Lord, Lord Martin, as I have explained in dealing with other amendments, that abolishing recoverability of success fees and insurance premiums from the losing side will rebalance the CFA regime to make it fairer for defendants by reducing the substantial additional costs which they have to pay under the current regime. Amendment 133 would retain the recovery of success fees from the losing side in all cases. I am not sure whether Amendment 133ZA was spoken to, so I shall not refer to it, but the noble Lord, Lord Martin, made it sound as though we were abolishing CFAs. I emphasise that CFAs will still be available to fund the same cases as they were under the original arrangements introduced by my noble and learned friend Lord Mackay of Clashfern.

However, I understand the concerns of the noble Lord, Lord Martin, about the press. I am not sure that they are best dealt with in this Bill. As the noble Lord will know, I hope that parliamentary time can be found to introduce a defamation Bill. It is in that Bill that we will look at the question of the balance of arms between the individual and large media interests. I hope that we can do that reasonably soon. In the light of that and what I have explained, I hope that he will withdraw his amendment.

[Lord Martin of Springburn]

My Lords, I am very pleased that the noble Lord has said that he hopes to bring in a defamation Bill. That at least is something, because my worry is that there is a great imbalance. I will not detain the House any longer. I beg leave to withdraw the amendment.

Amendment 133 withdrawn.

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[Lord Hunt of Wirral]

My Lords, in speaking to Amendments 146A and 148A, I wish to say how strongly I support in principle the Government’s proposal to ban referral fees. I declare my interest as a partner in DAC Beachcroft, the international commercial law firm. My amendments are intended simply to clear up some possible loopholes. Having just heard the comments of the noble Lord, Lord Beecham, I caution how important it is to have a blanket ban because any ban that is implemented has to work. However watertight the ban is—my amendments are intended to help the Government achieve that objective—it is critical that we also remove the incentive for referral and profit share by removing the excessive legal costs from the system. There are many vested interests here and a lot of money is at stake—too much money in my view.

At present, solicitors acting for claimants can still afford to pay out more than half of their fees to a third party whose only role is to buy and sell on the details of an injured person. That cannot be right. Amendment 146A would make a minor change to Clause 54(4) by inserting,

“which consist of or include damages”.

I raised in Committee the spectre of the current wording permitting the payment of a referral fee for some non-injury element of an injury claim, completely bypassing the Government’s intentions. I look forward to hearing my noble friend the Minister’s comments on that.

Amendment 148A would insert,

“whether received by the person referring prescribed legal business or not”,

into Clause 54(8). I highlighted in Committee this gap in the drafting which could be exploited simply by the way in which payment is routed. Again, I await my noble friend the Minister’s answer.

Finally, I would also be very interested to hear whether my noble friend can give this House a commitment about just how much of the excess cost can now be taken out of the system altogether, which is, frankly, a more effective remedy than tightening up the drafting.

[Lord Martin of Springburn]

My Lords, I wish to speak to Amendment 146 in my name. In doing so, I declare an interest as I have been a member of the Unite union for a long time. I am not having a go at the media on this matter but, often when trade unions are mentioned in the media, reference is made to trade union leaders. Not much is known about the activities of the lay officials and junior officers of a trade union. Tonight we have spoken about asbestos victims. A trade union would probably be the first port of call for a person who felt that they were suffering from the effects of asbestos inhalation. Apart from the serious matter of asbestos inhalation, your Lordships may be aware that even a National Health Service kitchen can be a very dangerous place for workers. They can fall, be scalded or be cut by the knives that they are using. After any injury such as that or any other injury relating to a person’s work, the first port of call is to the local trade union office, and an investigation is made before the matter is referred to a lawyer. Any of us who has run an office knows that photocopiers, heating, lighting and cleaning all cost money. It means that there should at least be some compensation for the trade union that is prepared to try to help that member before the member goes to a solicitor.

[Baroness Deech]

My Lords, I declare an interest as chair of the Bar Standards Board, which regulates barristers and prohibits the payment of referral fees, which we regard as immoral—I think that I am not putting it too strongly—and which we disapprove of because they are anti-competitive.

While I have every respect for my noble friend Lord Martin and for the work that the unions do to help their members, the amendment has brought to mind one of the most reprehensible incidents of modern times relating to lawyers and referral fees. I will not give the House too much detail because it is late at night, and the story is probably well known to noble Lords here, especially noble and learned Lords. When very many miners were sick and 23,000 cases were referred on by the union to a solicitors’ firm, it ended up with reprimand and with the law firm taking far more money than did the sick miners. The solicitors were paying the union, and in the case that I am thinking of the amount came to about £10 million, because 23,500 cases were referred to one firm.

If a firm of lawyers knows that a number of cases of that order are to be referred to them without the firm making any effort, without it going out into the market and proving how good it is, it is not surprising that things went wrong.

[Lord Martin of Springburn]

I know it is late in the evening and I thank the noble Baroness, but I am sure she would agree that not every union or every solicitor would conduct their affairs like that. Tomorrow, there will be unions that refer their members to a solicitor, and they will do so in good faith and in the best interests of their members.

[Baroness Deech]

I am sure that the noble Lord is right, but what I am objecting to is the exchange of money. If you go to the website of the union, you may click through to the page where legal services are offered, click where the page directs you to a law firm, the law firm is named, and then you can continue to click until it says, “For every case referred to this firm, the firm will pay the union a sum of several hundred pounds”. If the unions wish to help their members, it would be very easy simply to refer them to a whole number of local firms without money changing hands. There is nothing to stop the good work done by the unions, which I praise. It is the exchange of money that I object to. In the case that I am thinking of, it was actually public funds that went to the solicitors’ firm. It illustrates what is wrong with referral fees: the issue is treated as commercial and the law firm can sit back, knowing that cases will flood its way, whether it deserves them or not.

There have been other reprehensible incidents such as this, with which I will not delay noble Lords, save to mention one other effect. Given that very large sums of money are paid to the union, whichever union it is, by the law firm, and we know that many unions are inclined to support one political party, we end up with money being paid—very indirectly, I grant you—to the political party because the money is coming from the funds that the union has accumulated, and part of those funds come from referral fees.

If the solicitors can afford to pay £200 a time, or whatever it may be, to the union in return for every case, that must logically indicate that the case could have been handled for less money than was charged. I am by no means saying that that is always bad, but there is definitely a risk in referral fees. In particular, there is a severe risk to the interests of justice where a firm knows that thousands of cases can come its way without it making the effort in the market to get them and handle them well. Therefore, with all due respect, I hope that the amendment will not be pursued, as I do not think that it helps the Bill.