The Legal Aid, Sentencing and Punishment of Offenders Bill returned today to the House of Lords for its second day in committee. On the previous occasion, peers, including our very own Lord Faulks, made clear their view that the Bill is unacceptable in its current form. One hopes that today their lordships considered those sections of the Bill aimed at removing legal aid for clinical negligence cases.
The Government is seeking to save £10.5 million by this proposal. However financial analysis carried out by Kings College London estimates that the knock-on costs to the Department of Health via the NHSLA would outweigh these predicted costs savings (see http://www.kcl.ac.uk/content/1/c6/08/81/08/UnintendedConsequencesFinalReport.pdf). The analysis identifies four sources of knock-on costs, namely:
- The ATE premium for expert fees and reports;
- The 10% increase in damages to fund ‘success fees’ under the Jackson reforms;
- Costs generated by claimants who “give up” seeking justice, for example increased welfare payments, medical treatment and lost output; and
- Costs defending spurious actions no longer weeded out by the legal aid screening process, which would not be recoverable under the proposed system of Qualified One-way Cost Shifting.
Based on the report’s estimates, the Bill would generate a net loss of approximately £18 million per annum. Though an estimate, this is currently the only figure available. In evidence to the Justice Select Committee, the Ministry of Justice admitted that it had not analysed the impact of the proposals on other Departments. We wait to hear if the economic case against cutting legal aid in this area has been made in the committee session today.