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Overshadowed by a political row over reversals in its criminal justice sentencing policy, the Ministry of Justice also confirmed this week its plan to overhaul England and Wales’ GBP 2 billion-plus system of legal aid, alongside reforms to sentencing and penal policy.

The overhaul, contained in the Legal aid, Sentencing and Punishment of Offenders Bill, also provides the legislative backing to implement the long-discussed reforms suggested by Lord Justice Jackson.

The government had given explicit support for such changes in its response to Lord Jackson’s report, but the introduction of legislation to the House of commons sets the seal on its resolve to curb what many Conservative MPs see as spiralling legal costs and a “compensation culture”.

Justice Minister Jonathan Djanogly MP pointed out in a statement that “in England and Wales we spend an average of GBP 39 per person on legal aid, compared to GBP 5 in France, Spain and Germany and GBP 8 in New Zealand.”

The government aims to save the taxpayer GBP 350 million per year by 2015, as part of government austerity measures undertaken in 2010 to reduce the United Kingdom’s budget deficit.

The plans unveiled include essentially refocusing legal aid to apply solely to cases where people’s life or liberty is at stake, where they are at risk of serious physical harm, or immediate loss of their home, or where their children may be taken into care.

However, it would now be means tested for all applicants, including those on social security benefits.

Legal aid would still be available for victims of domestic violence and child abuse, and those with special educational needs, but would be abolished for squatters resisting eviction and most immigration cases.

Djanogly said: “The justice system is in need of urgent reform, burdened as it is by slow, inefficient and expensive processes and procedures, as well as sheer numbers of people bringing their problems before the courts.”

He added: “These reforms will ensure that we have a legal aid system which is targeted at those who need it most, in the most serious cases, as well as providing value for money to the taxpayer.”

JACKSON IMPLEMENTATION

Djanogly said that, taken together with reforms to no-win no-fee deals and the settlement of civil disputes, “these proposals mark a retreat from a dangerous slide towards a litigious compensation culture.”

In a sign of continued encouragement for ADR, he said: “Mediation for example can be cheaper, quicker and simpler and result in better outcomes for many people.”

Seamus Smyth, president of the London Solicitors Litigation Association (LSLA) said that the Bill contained no surprises for civil litigators.

However, he noted, the Bill had not clarified the position in regard to offers to settle.

Smyth said the Bill “seems to contradict the Ministry of Justice’s earlier announcement in March that the rules governing Part 36 offers would be amended, reversing the effect of the decision in Carver v BAA plc.”

The LSLA were disappointed that the draft s51 made the position on offers to settle, less clear “and will inevitably result in satellite litigation”.

Smyth acknowledged, however, that much of that which commercial and civil litigators were keen on would be revealed in secondary legislation and regulations, saying: “the devil is in the detail and we look forward to further details emerging, and the regulations on matters of particular interest to litigators, such as limits for Damages Based Agreements.”

The reforms will put contingency fees on a statutory footing for the first time, whilst reverting to a 1990’s position on the non-recovery of success fees from conditional fee agreements.

From a litigation funding viewpoint, Matthew Amey, Director at TheJudge, said that given success fees would no longer be recoverable: “Lawyers will need to place increased emphasis on constructing retainer packages which are cost-effective, where the client is keen to share risk in the litigation with either lawyers, insurers and/or a third party funder.”

Amey said as this would be paid from damages, “lawyers will have more incentive to shop around for the best deal.”

The Bar Council continues to explore alternatives compatible with legal aid reform and Jackson. It held a seminar on 21st June to examine prospects for a Contingent Legal Aid Fund (CLAF), under the leadership of ex-chairman Guy Mansfield QC.

A working group has commissioned a study of the benefits of a CLAF and possible disadvantages, as well as likely take-up in particular areas of practice, and is set to report in six weeks’ time.

Chairman of the Bar Council Peter Lodder QC said: “The Bar Council working group has been working hard to consider the viability of a CLAF in preserving access to justice. I look forward to a constructive level of discussion and to receiving the final results in due course.”

CLAIMANT OPPOSITION

Both the Bar and the Law Society were united in their opposition to the legal aid elements of reforms, in a rare display of agreement.

Commenting to the Law Society’s Gazette, Law Society president Linda Lee said: “The Law Society and the legal profession will continue its campaign against government cuts to legal aid.”

Lee – who has maintained an emotive and outspoken campaign, vowing to fight “every clause”, based on public interest concerns, said the cuts would “cost the taxpayer more than they save” and leave “families, the elderly, victims of clinical negligence and the unemployed without access to justice.”

Lee told the Gazette that the government should have listened to “thousands of dissenting voices” and introduced reforms that would have made the necessary savings.

Peter Lodder QC struck a more measured, but still forceful tone, saying that “continual misrepresentation on the cost of the legal aid system should fool no one.”

He pointed out the House of Commons Justice Select Committee found the UK’s legal aid expenditure was average for Europe, but would be well below average after the cuts.

Focusing his remarks on criticising the family and criminal law aspects, he did, however, suggest that access to justice issues would have a wider negative impact.

Lodder said government expectations on the impact of a larger number of unrepresented litigants in person were “wholly unrealistic”.

He said: “the courts will become clogged by unrepresented litigants, and, in the event that parties are forced to appear without representation, the systems will become slower. The court system will seize up, cases will take longer, and overall costs will increase”.

The Bill will reach the crucial second reading stage at a debate on 29 June 2011.