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Explanatory Notes to Access to Justice Act
1999 Chapter 22 |
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These notes refer to the Access to Justice Act 1999 which received Royal Assent on 27th July 1999 (c.22) ACCESS TO JUSTICE ACT
EXPLANATORY NOTES
INTRODUCTION1. These explanatory notes relate to the Access to Justice Act 1999. They have been prepared by the Lord Chancellor's Department in order to assist the reader in understanding the Act. They do not form part of the Act and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Act. They are not, and are not meant to be, a comprehensive description of the Act. So where a section or part of a section does not seem to require any explanation or comment, none is given.
OVERVIEW3. This Act replaces the legal aid system with two new schemes; and makes provision about private methods of funding litigation; the provision of legal services; the handling of complaints about lawyers; appeals, courts, judges and court proceedings; magistrates and magistrates' courts; and immunity from legal action and costs and indemnities for certain officers exercising judicial functions.
4. The provisions in the Act form part of the wide-ranging programme of reforms to legal services and the courts described in the Government's White Paper, Modernising Justice, published on 2 December 1998.
5. Except where noted, the Act only affects England and Wales.
6. These Notes are in five main parts, reflecting the main topics in the Act.
A. Funding of legal services (Parts I & II - sections 1-34 )7. Part I of the Act provides for two new schemes, replacing the existing legal aid scheme, to secure the provision of publicly-funded legal services for people who need them.
8. It establishes a Legal Services Commission to run the two schemes; and enables the Lord Chancellor to give the Commission orders, directions and guidance about how it should exercise its functions.
9. It requires the Commission to establish, maintain and develop a Community Legal Service. The Community Legal Service fund will replace the legal aid fund in civil and family cases. The Commission will use the resources of the fund in a way that reflects priorities set by the Lord Chancellor and its duty to secure the best possible value for money, to procure or provide a range of legal services. The Commission will also have a duty to plan what can be done towards meeting need for legal services, and to liaise with other funders of legal services to facilitate the development of co-ordinated plans for making the best use of all available resources. The intention is to develop comprehensive referral networks of legal service providers of assured quality, offering the widest possible access to information and advice about the law and help with legal problems.
10. The Commission will also be responsible for a Criminal Defence Service, which will replace the current legal aid scheme in criminal cases. The new scheme is intended to ensure that people suspected or accused of a crime are properly represented, while securing better value for money than is possible under the legal aid scheme.
11. Part II makes changes to facilitate the private funding of litigation. It amends the law on conditional fee agreements between lawyers and their clients, in particular to allow the uplift payable in successful cases to be recovered in costs from the other side. It also changes the law on the recovery of costs between the parties to litigation, and allows for third parties to establish funds to support litigation on a conditional basis.
12. Part II also makes three changes to the legal aid scheme in Scotland.
B. Provision of legal services (Part III - sections 35-53) 13. Part III of the Act reforms the law on lawyers' rights of audience before the courts and rights to conduct litigation; and makes changes relating to complaints against lawyers. It:
14. Part III also provides for applicants for appointment as Queen's Counsel to be charged a fee; establishes a system of practising certificates for barristers; amends the law on the fee payable for a solicitor's practising certificate; and abolishes the monopoly of the Scriveners' Company of the provision of notarial services in and around the City of London.
C. Appeals, courts, judges and court proceedings (Part IV - sections 54-73)
15. Part IV of the Act reforms the system for appeals in civil and family cases. It:
The intention is to ensure that the appellate system reflects the principle, which underlies the Government's wider programme of civil justice reforms, that cases should be dealt with in a way that is proportionate to the issue at stake.
16. Part IV also confirms the powers of the High Court when hearing cases stated by the Crown Court for an opinion of the High Court. It enables these and certain other applications to the High Court to be heard by a single judge. It empowers the Crown Court, rather than a magistrates' court, to deal with breaches of community sentences imposed by the Crown Court, and changes the law about time limits when a defendant is sent directly to the Crown Court for trial. It provides for the secondment of UK judges to international courts and establishes the post of Vice-President of the Queen's Bench Division. It eliminates duplication between a public inquiry into a disaster and the inquest into the deaths. It prohibits the publication of material likely to identify a child involved in proceedings under the Children Act 1989 before the High Court or a county court; and allows for children under 14 to attend criminal trials.
D. Magistrates and magistrates' courts (Part V - sections 74-97)
17. Part V of the Act contains a range of provisions relating to magistrates and magistrates' courts. It:
E. Immunity and indemnity (Parts VI - sections 98-104)
18. Part VI of the Act makes provision about immunity from action and costs and indemnities for certain officials exercising judicial functions.
19. Part VII (sections 105-110) makes general supplementary provisions.
A. FUNDING OF LEGAL SERVICES (Parts I & II, sections 1-34)
SUMMARY
20. The Act reforms the legal aid system in England and Wales, and amends the law relating to conditional fee agreements between lawyers and their clients, and the award of costs between the parties to litigation. It also makes minor amendments to the legal aid scheme in Scotland.
21. The Government's intention is to increase access to justice, by:
22. The Act replaces the existing legal aid system with two separate schemes for funding services in civil and criminal matters. These will be known as the Community Legal Service and the Criminal Defence Service respectively. Both schemes will be run by a new body, the Legal Services Commission, which will replace the Legal Aid Board. Both will secure legal services for people who need them largely through contracts with quality assured providers. But the Commission will also be able to make grants and loans, and employ staff to provide services directly. Community Legal Service 23. The Legal Services Commission will have two main duties in respect of the Community Legal Service (CLS).
24. The development of the CLS depends on the formation of Community Legal Service Partnerships (CLSPs) in each local authority area. These do not require specific provisions in the Act. Each CLSP will provide a forum for the local authority, the Legal Services Commission, and others, jointly to plan and co-ordinate funding of local advice and other legal services, ensuring that delivery of these services better matches local needs.
25. Overall, the creation of the Community Legal Service is intended to:
Criminal Defence Service
26. The purpose of the Criminal Defence Service (CDS) is to secure the provision of advice, assistance and representation, according to the interests of justice, to people suspected of a criminal offence or facing criminal proceedings.
27. The Legal Services Commission will be empowered to secure these services through contracts with lawyers in private practice, or by providing them through salaried defenders (employed directly by the Commission or by non-profit-making organisations established for the purpose). This will necessarily mean that suspects' and defendants' choice of representative is limited to contracted or salaried defenders, although the intention is to offer a choice in all but exceptional cases (see paragraph 114 below). All contractors will be expected to meet quality-assurance standards; and contracts will, wherever possible, cover the full range of services from arrest until the case is completed. (The current arrangements for criminal legal aid are fragmented: a person can receive assistance in respect of the same alleged offence under several separate schemes, each resulting in a separate payment for the lawyers involved.)
28. There will be a transitional period while contracts are developed and extended to cover the full range of services. The Commission will therefore be able to pay lawyers on a case by case basis for representation provided on a non-contractual basis, according to remuneration scales set by order (that is broadly on the same basis as the current criminal legal aid scheme).
29. The Commission will gradually take over the functions currently undertaken by the higher courts in respect of criminal legal aid. At first, Court Service staff will continue to determine costs in most Crown Court cases; but the number of cases dealt with like this will diminish as the Commission increases the proportion of cases covered by contracts. Court staff will also continue to determine costs in cases before the Court of Appeal (Criminal Division) and the House of Lords; the scope for the Commission to contract for these cases as well will be considered in due course.
30. As now, the courts will grant representation under the scheme to defendants according to the interests of justice. But the courts will no longer have to conduct a means test as well before granting representation. Instead, at the end of a case before any court other than a magistrates' court, the judge will have power to order a defendant to pay some or all of the cost of his or her defence. The Commission may investigate the defendant's means in order to assist the judge. The intention is to abolish the system of means testing every defendant, which the Government considers an ineffective and wasteful aspect of the current scheme, while ensuring that in the more expensive cases defendants continue to pay towards the cost of their defence when they can afford to do so.
31. Under the current criminal legal aid scheme, most defendants (about 95%) are not required to make a contribution to their defence costs. Those who do contribute and are acquitted usually have their contributions returned. The cost of means testing and enforcing contribution orders is high in relation to the contributions recovered. In 1997/98, criminal legal aid contributions totalled £6.2 million, while the direct cost of administering the system was about £5 million. Means testing also leads to delays in cases being brought to court, because cases have to be adjourned when the evidence required to conduct the test is not produced.
Conditional fees etc.
32. The Act reforms the law relating to conditional fees and "after the event" legal expenses insurance (see paragraphs 46 & 48 below). It will enable the court to order a losing party to pay any uplift on the successful party's lawyers' normal fees and any premium paid by the successful party for insurance against being ordered to pay the other side's costs. The intention is to:
BACKGROUND Legal Aid
33. The present scheme is contained in the Legal Aid Act 1988.
34. A common feature of existing civil and criminal legal aid schemes is that expenditure on them is demand-led. Any lawyer can do legal aid work for a client who passes the relevant means test (if any), and whose case passes the statutory merits test (in the case of civil legal aid), or the interests of justice test (in the case of criminal legal aid). Lawyers are paid on a case-by-case basis, usually at rates or fees set in regulations, but in some cases on the same basis as a privately-funded lawyer.
35. This means that there are few mechanisms or incentives for promoting value for money or assuring the quality of the services provided; and that neither the Government nor the Legal Aid Board is able to exert adequate control over expenditure or determine the priorities for that expenditure.
36. Over the last 6 years, total net expenditure on legal aid has increased by £529 million, from £1,093 million in 1992/93 to £1,622 million in 1998/99, a rise of 48%. This compares with general inflation of 16% over the same 6 years. Meanwhile, the total number of people helped by legal aid increased by 7% to 3.5 million. Over the same period, spending on civil and family legal aid rose from £463 million to £659 million, an increase of 42%, while the number of people helped fell by almost 30%. The average gross cost of civil or family cases rose by 86%, from £1,739 in 1992/93 to £3,239 in 1998/99. Spending on criminal legal aid rose by 50% from £418 million to £625 million, while the numbers helped increased by 11%. The average cost of a criminal case went up by 8% in the magistrates' courts and 53% in the Crown Court. Quality assurance and contract pilots 37. Since August 1994, the Legal Aid Board has operated a voluntary quality assurance scheme, known as franchising. Currently, some 2,900 solicitors' firms have franchises in one or more of the 10 subject categories in which they are awarded (criminal, family, personal injury, housing etc.) Over 3,100 further applications for franchises are pending. The Board is continuing to develop the franchising scheme, and introduce new categories, in order to underpin the move to a generally contracted scheme under the reforms in this Act.
38. In 1994, the Board set up a pilot scheme that showed that non-profit-making advice agencies could provide legally-aided advice and assistance to the same standard as solicitors' firms. In October 1996, a second stage of the pilot was established, involving a larger number of agencies, to develop systems for contracting for advice and assistance work.
39. In November 1996, the Board began to pilot contracts with solicitors' firms to provide advice and assistance in civil matters. A pilot of contracts to provide mediation in family cases under the legal aid scheme commenced in May 1997. A pilot covering advice and assistance in criminal cases began in June 1998, and was extended in February 1999 to cover representation in youth courts.
40. Since October 1997, the Board has set up a Regional Legal Services Committee in each of its 13 Areas to advise it about priorities for contracting.
41. The Government has announced that all civil advice and assistance, and all family work, will be provided exclusively under contract from January 2000. Only organisations with a relevant franchise will be eligible to bid for these contracts. Also, a new clinical negligence franchise came into effect in February 1999; and from July 1999 only firms with that franchise will be able to take these cases under the legal aid scheme.
42. Four documents published by the Legal Aid Board explain aspects of the approach to contracting:
Advice sector 43. There are over 1,500 non-profit-making advice agencies in England and Wales. They receive their funding from many different sources, mainly local authorities, but also the National Lottery Charities Board, central Government, the Legal Aid Board, charities and business.
44. The provision of advice services is not spread consistently across the country. Some areas appear to have relatively high levels of both legal practitioners and voluntary outlets, while others have little or none. For example, the Legal Aid Board's South East Area has one Citizens Advice Bureau per 46,000 people, but in the East Midlands 138,000 people share a Citizens Advice Bureau. The Government believes that the fragmented nature of the advice sector obstructs effective planning, and prevents local needs for legal advice and help from being met as rationally and fully as possible. Conditional fees 45. Section 58 of the Courts and Legal Services Act 1990 allowed the use of conditional fee agreements in such types of case as the Lord Chancellor specified by order (and subject to any requirements made by him in regulations). Section 58(10) excludes from the potential scope of conditional fees all criminal and family proceedings.
46. Conditional fee agreements allow clients to agree with their lawyers that the lawyer will not receive all or part of his or her usual fees or expenses if the case is lost; but that, if it is won, the client will pay an uplift to the solicitor in addition to the usual fee. In July 1995, conditional fee agreements were allowed for a limited range of cases (personal injury, insolvency and cases before the European Commission of Human Rights). The maximum uplift that could be charged if the lawyer was successful was set at 100% of the normal fee. In addition the Law Society recommended that lawyers should voluntarily limit the uplift to a maximum of 25% of the damages if that was lower than the 100% uplift of the fee. At the same time, insurance policies were developed which allowed the client to take out insurance to cover the costs of the other party, and the client's own costs other than the solicitor's fees, if the case should be lost. Generally the uplift and the premium are taken from any damages recovered by the client. In July 1998, the Government extended the availability of conditional fees to all civil cases (excluding family cases).
47. Since the introduction of conditional fees, the common law has been developed by two recent decisions of the courts (Thai Trading Co. (A Firm) v Taylor, [1998] 3 All ER 65 CA; and Bevan Ashford v Geoff Yeandle (Contractors) Ltd, [1998] 3 All ER 238 ChD). In the first of these cases the Court of Appeal held that there were no longer public policy grounds to prevent lawyers agreeing to work for less than their normal fees in the event that they were unsuccessful, provided they did not seek to recover more than their normal fees if they were successful. (The latter was only permissible in those proceedings in which conditional fee agreements were allowed). In Bevan Ashford, the Vice Chancellor held that it was also lawful for a conditional fee agreement to apply in a case which was to be resolved by arbitration (under the Arbitration Act 1950), even though these were not court proceedings, provided all the requirements specified by regulations as to the form and content of conditional fee agreements were complied with.
48. In addition, it is now possible for someone contemplating litigation to take out an insurance policy to cover, in the event that the case is lost, both the costs of the other party and his or her own legal costs (including the solicitor's fees if these are not subject to a conditional fee agreement). Some of these policies were developed to support the use of conditional fee agreements but others are used to meet lawyers' fees charged in the traditional way. The Act makes premiums paid for protective insurance recoverable in costs.
49. The principles behind the Government's desire to see an expansion in the use of conditional fee arrangements were set out in a consultation paper, Access to Justice with Conditional Fees, Lord Chancellor's Department, March 1998.
COMMENTARYPart I: The Legal Services CommissionThe Commission
50. Section 1: The Legal Services Commission. This section establishes the new Legal Services Commission, and makes provision for appointments to it. The Commission will replace the Legal Aid Board. It is considered necessary to establish a new body to reflect the fundamentally different nature of the Community Legal Service (CLS) compared to civil legal aid. Within the broad framework of priorities set by the Lord Chancellor, the Commission will be responsible for taking detailed decisions about the allocation of resources. It will also be required to liaise with other funders to develop the CLS more widely.
51. The Commission will also have a wider role in respect of the Criminal Defence Service than the Legal Aid Board does in respect of criminal legal aid. The Board has very limited responsibilities for legal aid in the higher criminal courts.
52. Section 1 is similar to section 3 of the Legal Aid Act 1988 ("the 1988 Act"), which established the Legal Aid Board. However, the membership of the Commission will differ from that of the Board, to reflect a shift in focus from the needs of providers to the needs of users of legal services. Also, the Commission is to be rather smaller than the Board: with between 7 and 12 members rather than 11 to 17. This is intended to facilitate focused decision-making.
53. Section 1(6) gives effect to Schedule 1 (Legal Services Commission) which makes further provisions about the Commission. Paragraphs 1-10, 12 and 17, concerning the members, staff and proceedings of the Commission, mirror provisions about the Board in Schedule 1 to the 1988 Act, except that Treasury consent to arrangements for the pay, pensions and compensation of members and the staff of the Commission will not be required. Paragraph 11 provides for the Commission's administrative budget, mirroring section 42(1)(b) & (2) of the 1988 Act. Paragraph 13 requires the Commission to provide any information requested by the Lord Chancellor; this mirrors a provision in section 5 of the 1988 Act. Paragraph 16 requires the Commission to prepare accounts and provides for them to be audited. This mirrors section 7 of the 1988 Act, except that the Comptroller and Auditor General, rather than an appointed auditor, will audit the Commission's accounts.
54. Paragraph 14 requires the Commission to prepare an annual report on the discharge of its functions. This will be laid before Parliament. It will include a report on the impact of the Commission's activities on the supply and development of legal services within the wider CLS. (Section 5 of the 1988 Act provides for the Legal Aid Board's annual report).
55. Paragraph 15 requires the Commission to prepare an annual plan, which will be laid before Parliament. This will include the Commission's detailed plans for allocating the resources available to the CLS fund (see paragraph 68 below). This is a new requirement. The Legal Aid Board produces annual corporate and business plans, but these are not statutory documents nor laid before Parliament.
56. Part II of Schedule 14 makes transitional provisions for the replacement of the Legal Aid Board by the Commission. Briefly, it provides that, on an appointed day, the Commission shall take over all the property, rights and liabilities of the Board. Staff of the Board will automatically become staff of the Commission, and their employment and pension rights are preserved.
57. The intention is that the provisions of the 1988 Act will remain in force for any cases that have already started when the new schemes come into effect. The Commission will be responsible for the continued administration of these cases.
58. Section 2: Power to replace Commission with two bodies. This section allows the Lord Chancellor, by order subject to Parliamentary approval under the affirmative resolution procedure (by virtue of section 25(9)), to split the Legal Services Commission into two separate bodies, one responsible for the Community Legal Service and the other for the Criminal Defence Service.
59. This allows for the possibility that, because of the different nature and objectives of the two schemes, it may prove more effective in the longer term to administer them separately. It would not be practicable to set up two bodies from the outset. This is because of the need to retain, in substance, the existing infrastructure and expertise of the Legal Aid Board to manage the transition from legal aid to the two new schemes. This involves both administering existing cases under the old scheme and developing contracting as the principal means of procuring services under the new schemes.
60. There is no definite intention to split the administration of the two schemes in future. Rather, the intention is to review the situation once the new schemes are firmly established, probably after about 5 years.
61. Section 3: Powers of Commission. This section gives the Legal Services Commission similar general powers to those presently enjoyed by the Legal Aid Board (section 4 of the 1988 Act). These powers will allow the Commission to do whatever it believes is necessary in the discharge of its functions. Later sections exemplify the ways in which the powers may be used in the provision of specific services (see sections 6(3), 13(2) and 14(2)).
62. Section 3(4) provides that the Commission may delegate its functions to others. For example, it might delegate to contracted providers certain decisions about the funding of particular cases (much as the Legal Aid Board delegates some decisions to franchised firms now). Section 3(5) empowers the Lord Chancellor to make orders about whether and how the Commission should delegate certain functions. For example, he might make an order requiring the Commission to monitor the decisions made by providers under a delegation.
The Community Legal Service
63. Section 4: The Community Legal Service. This section requires the Legal Services Commission to establish, maintain and develop the Community Legal Service (CLS). It sets out the purpose of the CLS and defines the services which may be provided under the CLS. These range from the provision of general information about the law and legal services to providing help towards preventing or resolving disputes and enforcing decisions which have been reached (section 4(2)). The scheme will encompasses advice, assistance and representation by lawyers (which have long been available under the legal aid scheme), and also the services of non-lawyers. It will extend to other types of service, including for example mediation in appropriate family or other cases.
64. Section 4(3) provides that the CLS does not cover services funded as part of the Criminal Defence Service, in order to avoid any overlap between the two schemes.
65. The purpose of the CLS (section 4(1)) is in two parts, reflecting the Commission's two key roles. First, the Commission will facilitate the development of the wider CLS, by working with other funders of services, such as local authorities, to plan for the most appropriate use of available resources in order to match the provision of services to identified needs and priorities. Section 4(6) describes this function further. The intention is to build on the work already being carried out by the Legal Aid Board's Regional Legal Services Committees in order to establish systems for determining (i) the need for legal services at regional level, and (ii) the ability of providers to supply those services, to the required standard, within the available resources. Secondly, the Commission will itself fund the provision of services through the CLS Fund (which is described further in section 5).
66. The Commission will help to ensure that the services provided are of a high quality by setting and monitoring standards and establishing quality accreditation systems (section 4(7) & (8)). The intention is that only accredited providers will be eligible for funding from the CLS fund and that other funders of legal services will be able to impose a similar requirement. Section 4(9) makes clear that the Commission (and any bodies it authorises) may charge fees to cover the cost of providing accreditation.
67. Section 4(10) empowers the Lord Chancellor to give the Commission orders about how it should exercise its functions under subsections (6)-(9). There are similar powers in relation to the Commission's other main functions in sections 6(4), 13(3) and 14(3)(b).
68. Section 5: Funding of services. This section establishes the CLS fund and the mechanisms by which the Lord Chancellor will provide resources for the fund. Each year, as part of the general public expenditure planning process, the Lord Chancellor will set an annual budget for the CLS fund. This will take account of the receipts from contributions and other payments expected under the regulations made under sections 10 and 11, with the balance of the budget provided by the Lord Chancellor from money voted by Parliament. The CLS fund will therefore not be open-ended in the way that the legal aid fund is now.
69. Section 5(2)(a) provides for the Lord Chancellor to determine how much to pay into the CLS fund. (Section 5(3) requires him to take account of the assessment of need made by the Legal Services Commission under section 4(6).) Section 5(2)(b) provides for the practical arrangements for paying that money into the fund - this will be by regular instalments throughout the year to meet immediate outgoings. Section 5(4) requires the Lord Chancellor to lay a statement of the budget he determines before Parliament. This would also require him to publish any redetermination, should it ever be necessary to change the budget during the course of a financial year.
70. Section 5(6) empowers the Lord Chancellor to direct the Commission to use specified amounts within the fund to provide services of particular types. The intention is that the Lord Chancellor will divide the fund into two main budgets, for providing services in (i) family and (ii) other civil cases, while allowing the Commission limited flexibility to switch money between the two areas. The Lord Chancellor may set further requirements within these two budgets, by specifying the amount, or the maximum or minimum amount, that should be spent on, say, services from the voluntary sector, mediation, or cases involving a wider public interest. In this way, it will be possible to ensure that resources are allocated in accordance with the Government's priorities.
71. Section 5(7) places a duty on the Commission to aim to obtain the best value for money - a combination of price and quality - when using the resources of the fund to provide services. Section 4 describes how the Commission will seek to ensure that services are of high quality. Section 5, in providing for a controlled budget, and section 6 in setting out the ways, principally contracting, through which services will be procured, provide the means to control cost.
72. Section 6: Services which may be funded. This section builds on the general powers contained in section 3, by setting out the ways in which the Legal Services Commission may use the CLS fund to provide services. These include making contracts with, or grants to, service providers in the private and voluntary sectors; itself providing services directly to the public, whether by employing staff to provide them or by any other means; and making grants or loans to individuals so they can purchase services for themselves.
73. These flexible powers are intended to give effect to one of the principal objectives of the reform of publicly funded legal services: that is the ability to tailor the provision of services, and the means by which services are delivered, to the needs of local populations and particular circumstances. They will also allow the Commission to test new forms of service provision through pilot projects.
74. Section 6(6) gives effect to Schedule 2 (Community Legal Service: excluded services) which excludes from the scope of the CLS fund specified types of service which would otherwise fall within the broad definition provided by section 4(2). Section 6(7) empowers the Lord Chancellor to make regulations, subject to the affirmative resolution procedure (by virtue of section 25(9)), to amend the Schedule. Section 6(8) empowers the Lord Chancellor to direct or authorise the Commission to fund services within the excluded categories in specified exceptional circumstances; or, following a request by the Commission, to authorise it to fund an individual case. For example, the Lord Chancellor intends to authorise funding for personal injury cases (which are generally excluded by the Schedule because most such cases are suitable for conditional fees) where exceptionally high investigative or overall costs are necessary, or where issues of wider public interest are involved.
75. In effect, Schedule 2 defines the scope of the CLS fund for the time being. People (but not corporate bodies) will be able to obtain general information about any matter of English law, the English legal system or the availability of legal services. Subject to any exceptions authorised by the Lord Chancellor, more substantial services will not be available in the categories listed in paragraph 1. In the categories of case listed in paragraph 2, it will be possible (subject to priorities) to fund any of the services listed in section 4(2). For categories that are not listed in either paragraph, it will be possible to fund any service except advocacy in court or other proceedings.
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