-- Gazette: The consultation paper 'Access to Justice with Conditional Fees' is a much modified version of the original proposals outlined by the Lord Chancellor last October.

Have you watered down the plans for good or is it just a change of timetable?-- Geoff Hoon: I don't think there is any watering down, but we have listened very ca refully to the wide variety of representations that have been made since October and we have sought to incorporate those.

We have tried very hard to match our vision with some of the practical criticisms that arose.

I think the obvious example is the decision to leave medical negligence within the scope of legal aid at least for the moment.

We recognise the argument that the up-front investigative costs of medical negligence cases are at present beyond the means of many practitioners, and therefore we are suggesting that for the moment they should be able to rely on legal aid.-- Gazette: Do you intend that medical negligence cases should in time be routinely handled on a no win, no fee basis?-- GH: Ultimately, we anticipate there will be means whereby practitioners will be able to conduct these kinds of cases with conditional fees.-- Gazette: All medical negligence cases?-- GH: It's hard to speculate precisely.

Clearly, some medical negligence cases may well come within [the proposed] public interest fund.

Such cases may well affect a very considerable number of people in society where, for example, there is a failure of a medical system across the NHS.

Equally, as we move towards [legal aid block] contracting .

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I could see a situation where a contract would support the early stages of investigation of medical negligence cases.

That would be made available to specialist practitioners who, having amassed appropriate information using public money, would be in a position to say whether or not the cases could go ahead on conditional fees.-- Gazette: The Lord Chancellor's Department appears to be alone in assuming that non-medical negligence personal injury cases can be handled exclusively through no win, no fee.-- GH: I don't accept that we are alone.

There have been more than 30,000 PI cases conducted by conditional fees and I have not had a single complaint about any one of them.

Whereas I receive regular complaints about legal aid.

Moreover, at the moment the great majority of people are not supported by legal aid and are not rich enough to meet the costs of PI cases, and in those circumstances I think [conditional fees offer] a tremendous opportunity both for the lawyers and the public.

And I think it is an appropriate argument that has been missed by many commenting on these proposals.-- Gazette: Is this the first stage of a complete redesign of the delivery of legal services?-- GH: Yes.

With the legal aid bill spiralling out of control in the way that it has, every government must try to achieve some degree of control.

The way that has always been done in the past was simply to restrict the numbers who qualify.

Another consequence was that legal aid has never really been extended into new areas of practice [remaining] concentrated around those cases that were contemplated in 1949.

The great majority of social welfare work, for example, has never been covered by legal aid.

And the reason is that no government has been able to afford it.

So, recognising the need to gain financial control, we essentially had a choice.

We could continue along the path that the last government had taken, [taking] enormous numbers of people out of eligibility, while leaving the structure of legal aid in place, or we could try to tackle it in a fundamentally different way, [by] looking at those cases which can attract conditional fees, in order to allow us to re-focus legal aid on the important areas of work as we see it.

And the important areas in this context are those people who, either for financial re asons or because they have particular kinds of problems, are not at present protected by legal aid.-- Gazette: Even those lawyers who are no win, no fee enthusiasts are extremely concerned at the way the government is pinning so much of its plans on this method of running cases.-- GH: What we are proposing will actually be a remarkable opportunity for [the public] and for lawyers and what I have found disappointing about [their] reaction is that they have not recognised they have a duty not only to those who have legal aid but also to those who have legal rights.

What we are proposing will actually allow lawyers to fulfil that duty.-- Gazette: How do you suggest solicitors can best adapt to the new regime?-- GH: It will require lawyers to think in a different way.

What we are trying to do is to persuade lawyers that they can provide access to justice for a greater number of people in society by using conditional fees.

To get them to think about how to fund cases in this different way.

I am pretty confident that since last October, the better organised ones have recognised this and are moving ahead.

And new insurance products are arriving by the week and they will allow no win, no fee cases to be taken successfully.-- Gazette: The consultation paper invites views specifically on the idea of recovering success fees from losing parties.

What are your views on this?-- GH: It is an attractive idea -- one we need to have some feedback on.

It [would] clearly tilt the balance in favour of plaintiffs and defendant insurance companies might have reservations, but it [would] resolve the problem of plaintiffs losing out part of their damages, through conditional fees.-- Gazette: Under present legislation, about 60% of money or damages claims are capable of being removed from legal aid.

What is the timescale for extending conditional fees?-- GH: I don't want to be too precise [as] it rather depends on the reactions to the consultation paper.

I would anticipate that by the summer [we should] have something in place.-- Gazette: How would you characterise the government's change of tack in the consultation paper 'Access to Justice with Conditional Fees'? It has been dubbed a climbdown in the media.-- Phillip Sycamore: I don't regard it as a climbdown.

I see it as a recognition on the government's part that a lot of the proposals needed further thought.

The government obviously listened to [the legal profession] and the consumer groups.-- Gazette: The government has abandoned for the present, any plans to remove legal aid from medical negligence cases.

As a medical negligence specialist yourself, this must come as a relief.-- PS: I am pleased they have recognised that medical negligence is a specialist area.

These cases often involve the most vulnerable -- for example, children -- and [although] there are categories of medical negligence cases that could eventually lend themselves to no win, no fee, the problem is that the insurance industry is not ready.

[Existing] premiums and disbursements are out of reach for all but the very few.-- Gazette: The Lord Chancellor's junior minister, Geoff Hoon, has suggested that medical negligence cases could be financed by a public fund in the initial investigative stages and then transferred to be handled under no win, no fee.

What are your views on this?-- PS: There has to be public funding for the investigative stages.

No [practitioner] is in a position to make judgements about the prospects of a medical negligence case.

And the costs of the inves tigative stages will frequently be out of reach of the client and the practice.-- Gazette: Medical negligence aside, the government is confident that personal injury cases can be handled exclusively on a no win, no fee basis.

You, along with many PI specialists, disagree.-- PS: I don't share the government's optimism that there can be a simple replacement of legal aid by conditional fees.

The whole concept of no win, no fee is a very new one in this country.

Conditional fee agreements have effectively been up and running for just two and a half years and a relatively small number have been completed.

So far, so good, but it's far too early to decide that it is safe to substitute conditional fees for legal aid.

The extent to which they have worked well [reflects] the range of options that a solicitor can offer within a mixed case load.

If conditional fee arrangements were the only way of funding cases, the financial strain on firms could be unbearable.

It is completely unreal to expect that solicitors will be in a position to fund the up-front costs of a case, not only the [after-the-event insurance] premiums but also disbursements which can run into many thousands of pounds.

A dossier of cases compiled by the Law Society shows that many [PI] cases which ultimately proved to be successful, involved very high up-front costs and without legal aid, would never have got off the ground.-- Gazette: Given these difficulties what is your advice to the government?-- PS: There is merit in a much more detailed look at [the Law Society's] idea for a blend of conditional fees and legal aid, a concept that involves true risk sharing -- where the solicitor may well be prepared to risk his own fees provided there is a commitment from government to fund disbursements.-- Gazette: The government explains that conditional fee arrangements offer enormous potential to re-focus legal aid on sorely neglected areas such as social welfare.

It thus justifies the stripping away of legal aid from personal injury.

What are your views?-- PS: It sounds good.

But personal injury cases are the wrong target.

You must remember that the vast majority of cases is successful and so the cost to the legal aid fund is negligible.

There is also a double benefit to the tax payer [through] benefits recovery and by insuring that the person responsible for the accident bears the costs.

The proper target should be the criminal justice system where there is a lot of [wasted] expenditure.-- Gazette: When solicitors argue vociferously for the retention of legal aid, Geoff Hoon accuses them of being concerned with the rights of the legally aided to the detriment of those with legal rights.

What is your reaction?-- PS: I do not accept that.

Ever since the concept of conditional fees was introduced [the Law Society] has been pressing for them to be extended to a much wider range of cases.

Remember, it was the Law Society which made them workable by finding an insurer and constructing an agreement which incorporated the [success fee] cap.

Solicitors, in their turn, have made conditional fees work in practice and have acted responsibly by adhering voluntarily to the cap, a fact acknowledged by the government in its consultation paper.

We have long since supported the extension of conditional fees but not at the expense of legal aid.-- Gazette: There is a two month consultation process culminating in a Legal Aid conference to be held in London on 29 April.

What are the next steps?-- PS: The Law Society's especially assembled justice tas k force will meet this week to advance work already begun on a detailed response.

Meanwhile, solicitors around the country should keep up the pressure on their MPs, highlighting those cases most at risk if legal aid is withdrawn and encouraging their clients to do the same.-- Gazette: Whatever the outcome of the consultation paper, change for solicitors is inevitable.

What is your advice to them?-- PS: I think the emphasis must be on financial planning and, in relation to conditional fee arrangements, learning the new skills of risk assessment.

The message [of block contracting] is also an insistence on quality standards for those who want to offer legal aid service.

This is very clear and it reinforces what I have been saying for a long time about the importance [for the Law Society] of retaining control of standards.

Now more than ever, implementation of the practice management standards and achieving the Lexcel quality standard is important if [solicitors] want to demonstrate a commitment to quality.