Leading Article: For the sake of justice, Irvine should think again

The promise of legal aid was that access to justice should be a real possibility for everybody, regardless of wealth. The system of tax-funded assistance was founded in 1949 alongside the National Health Service as part of the concept of the welfare state. Like other parts of that settlement, it is in urgent need of reform, and the Government is to be congratulated on its speed and radicalism in approaching that task.

Momentous reforms to legal aid have been proposed by Lord Irvine, the Lord Chancellor, to come into effect later this year. So far, they have been subjected to dangerously little debate outside the self-interested ranks of lawyers. But two aspects of the reforms are seriously flawed and should be opposed by all potential users of the courts and all who benefit from the rule of law.

First, let us praise Lord Irvine for his analysis of the problem and his boldness in setting out the principles of reform. There is no doubt that legal aid has not been working well for some time and has recently run out of control. The figures quoted by the Prime Minister's former pupil-master are eloquent. Spending has doubled in the past six years, the number of people eligible for legal aid has nearly halved, the number of cases funded is now falling and the average cost of each case has nearly doubled. As Lord Irvine said last month, on behalf of the taxpayer: "We are paying more and getting less."

The parallel with other parts of the welfare state is striking. Legal aid is a playground of perverse incentives. Lawyers have an incentive to fight hopeless cases and to spin them out for as long as possible. The system is close to becoming a ghetto service for the very poor, making access to justice most difficult for the vast majority of people on middle incomes.

The Government was right to act, and to act quickly. It is right to move to the use of fixed-price contracts for legal-aid lawyers, so that they have an incentive to use court time efficiently. It is right to give the go-ahead to the Woolf reforms designed to give judges more control over the use of court time generally. It is right that the relatively fast and simple small-claims procedure should be extended to claims up to pounds 5,000.

And it is undeniably right that more regard should be paid to the winnability of legally-aided cases. But that is where the Government has strayed into error. Lord Irvine says that most legal aid cases will be replaced by a system of "no win, no fee". Instead of getting money from the taxpayer to fight cases, poor people will be subsidised by lawyers, in return for a share of damages awarded. If lawyers do not win damages, they do not get paid. That will weed out frivolous cases, and give lawyers an incentive to try their hardest to win. It will make a lot of lawyers poorer, which may be a shrewd populist move, but smacks somewhat hypocritical from a barrister-led government. The legal aid budget, meanwhile, will be restricted to cases in which damages or compensation is not being sought, such as criminal cases, injunctions or judicial review.

The problem is, this will not work. That much is already clear: the start date has been pushed back, the promised consultation process delayed. Already the Government has hinted at special arrangements for some categories of cases. As we report today, many cases of medical negligence can be hugely expensive before they get to court. It can cost thousands of pounds for expert reports simply to establish whether there is a case.

Under a "no win, no fee" system, the loser in a court case still has to pay the winner's costs. Lord Irvine argues that lawyers should insure themselves against these costs, but that will be a business decision about risk and complexity - not about justice. The Government's second mistake has been to extend the problem of winnability to civil cases not involving claims for money, saying that legal aid will only be granted in cases which have a 75 per cent chance of success - a spuriously precise measurement which will be made by a barrister, checked by the Legal Aid Board and subject to comment by the trial judge.

It should be immediately obvious that a case's chance of success is a highly subjective judgement at the mercy of the inevitable element of lottery in the law. In a rational legal system, all cases which go to court should have, roughly, a 50 per cent chance of succeeding, as all others will have been settled out of court. And yet ... who would have estimated the Guildford Four's chance of overturning their verdict at 75 per cent? In his speech in the House of Lords last month, Lord Irvine lavished praise on the brave, public-spirited lawyers who have fought against miscarriages of justice, and promised his reforms would not inhibit them. If he means it, he will have to think again.