The House of Lords is the highest Court in the English Legal System. Once all peers could participate in hearing cases and giving judgements, but those days are long past. The senior judges in the land are appointed as 'Law Lords', or 'Lords of Appeal in Ordinary' as they are properly known as. Currently there are twelve. They work full time at the judicial business of the House and receive a salary.This is not paid by the House of Lords but direct from the “Consolidated Fund” (the revenues held in the Exchequer account at the Bank of England). The reason is to ensure their independence from the legislative branch. Upon retirement judges keep their seats for the rest of their lives. Other Lords who hold or have held high judicial office can be called upon to assist the Lords of Appeal in Ordinary. A list of Law Lords can be found at http://www.parliament.uk/about_lords/the_law_lords.cfm
In 2008 a Supreme Court will be set up, so separating the judiciary from the legislature.
A very good fact sheet, produced by the House of Lords Information Office, is available at http://www.parliament.uk/documents/upload/HofLBpJudicial.pdf. Further details of the judicial committee can be found at http://www.parliament.uk/judicial_work/judicial_work.cfm