Legal aid debate

'Legal Aid after the Election' was the title of the LawWorks debate last night. An invited audience heard from the legal aid minister Lord Bach, the two Shadow Justice Secretaries, Conservative Dominic Grieve QC MP and Liberal Democrat David Howarth MP, and Des Hudson, chief executive of the Law Society. Perhaps ominously, what was striking was the remarkable degree of agreement between the politicians on legal aid policy.

Paul Newdick, the chairperson of legal charity LawWorks, which organises pro bono work for city lawyers, said in opening the proceedings that: 'Pro bono is an adjunct to, not a substitute for, legal aid and it is important that the government is constantly reminded one is no substitute for the other.' This was clearly aimed at both reassuring the legal aid lawyers in the room and as a warning shot to the politicians.

Cutting to the chase Lord Bach said: 'Politicians should tell the truth and the truth is legal aid is liable for more cuts under any government.' In response to this comment, Dominic Grieve observed that the budget had planned a 17 per cent cut in public expenditure which would include legal aid. In his view the current legal aid system is 'not salvageable' and what is needed for the future is 'thinking creatively perhaps on a cross-party basis'. David Howarth also said: 'There would be no new money for legal aid.' He also emphasised the need to look at the cost drivers in legal aid such as experts’ fees and fees for high cost criminal cases.

Both Lord Bach and Dominic Grieve agreed that the legal aid fund needed to be compensated by other arms of government for policy changes which lead to increased demand for legal aid, but both acknowledged the difficulties in doing this. There was also consensus on the need to take direct control of the Legal Services Commission (LSC). Dominic Grieve said that if the government had not moved to do so, the Conservatives would have, if elected. He could not resist a swipe at the government, observing: 'The LSC was a creation of the present government. One of the motives behind its creation was to distance the government from difficult policy decisions.'

One point of significant difference between the two main political parties seemed to be over the question of competitive tendering for criminal legal aid. Lord Bach said that as a former criminal legal aid barrister he had taken some convincing that this was the way forward. Referring to the plans announced last week (see post from 22 March), he said that he was 'firmly of the view this was the only way criminal legal aid can work'. In contrast Dominic Grieve said that: 'Best value tendering is not the best approach' and, if elected, the Conservatives would carry out a legal aid review before making any changes to policy.

Des Hudson argued that legal aid was a 'frontline service as important as health or education' and that money should be found to fund it. He acknowledged that something had to be done as the present criminal legal aid system was not sustainable, but said: 'I have severe reservations about whether the government’s plans [for criminal legal aid] can be implemented.' He also suggested cash could be found for legal aid from other parts of government, for example from the '£2.5 billion a year that goes on management consultants'. In contrast to the politicians he emphasised that: 'There can be no rule of law without access to justice.'

From LAG’s point of view the debate last night indicated that, whoever forms the next government, the current policy of trying to cut back on expenditure will continue. Some of the Conservatives' ideas about bringing new money into the system, such as a levy on client account interest, are eye-catching but they will only bring in relatively small sums and there are no guarantees that the cash will not be swallowed up by the Treasury. The problem is, as argued last night: 'Legal aid is not a vote winner', but Des Hudson was right in arguing that it is essential to maintain the rule of law. Whichever party wins the general election will need to be constantly reminded of this fact in the difficult months ahead.

Culling of criminal legal aid firms planned

The government has published a paper on radical plans for a shake-up of criminal legal aid this afternoon. It says the aim of these new proposals for the tendering of criminal legal aid services is to deliver 'significant savings to taxpayers and a more sustainable future for the legal aid budget'. It intends to publish a consultation on the proposals after the election.

LAG understands the plans are supported by a group of large legal aid firms including Tuckers, Switalskis and Kaim Todner. Speaking to LAG this afternoon, the legal aid minister Lord Bach said: 'It is not an option not to make changes. We cannot raise rates, but firms are saying they are not being paid enough to be viable.' Under the proposals he says many firms would be forced to close or merge: ' … only efficient firms will thrive'.

Only eight to ten firms for each of the 42 criminal justice areas would be needed and they would be compelled to cover police station and magistrates’ court work - currently some firms only specialise in the more lucrative Crown and high cost cases. LAG estimates that up to 1,500 firms could close down or be forced to merge. The government says the earliest the new contracts could be introduced in selected areas would be by summer 2011. This means that the current crime contract, which was due to run until 2013, would be terminated early.

LAG questions whether these proposals are necessary. Tenders have only just closed for criminal contracts. The proposals will lead to further uncertainty and mistrust of the government among firms. Criminal legal aid expenditure has fallen in real terms by 12 per cent in the last five years and the overall budget for legal aid has remained the same, £2.09 billion, for the last three years. The government has reduced the costs of criminal legal aid by introducing means-testing and cutting what it pays lawyers to provide the service. What this paper proposes is a draconian culling of small and medium-sized firms in a desperate attempt to squeeze further savings out of the system. The risk is that this will restrict client choice and lead to the creation of a monopoly of large firms which would eventually ratchet up prices.

Government moves to take direct control of the LSC

The government has announced that it intends to abolish the Legal Services Commission (LSC) and change it to an executive agency under the direct control of ministers. The LSC's chief executive Carolyn Regan has resigned from today and an interim chief executive, Carolyn Downs, has taken her place. LAG understands that the LSC commissioners will continue in post until the Access to Justice Act (AJA) 1999 can be amended.

The LSC is currently a non-departmental public body with its own governance which is separate from ministerial control. As an executive agency it will be under the direct control of ministers. This could lead to political interference in decisions on entitlement to legal aid. LAG believes that there will have to be an independent appeals mechanism for the government to comply with article 6 of the European Convention on Human Rights. In our view it is not enough for the government to give assurances about internal procedures to prevent ministers from interfering in decisions. With the direct control of the department making the decision they could give the appearance of involvement. Procedures for granting legal aid need to be above such a suspicion or the justice system risks being undermined.

LAG understands that the details of the new administrative arrangements need to be worked out and the AJA amended to change the governance of the LSC. This will have to happen after the general election, but by ousting Carolyn Regan and replacing her with Carolyn Downs, who is Deputy Permanent Secretary at the Ministry of Justice, the government appears to have asserted control of the LSC, thus making the commissioners chaired by Sir Bill Callaghan lame ducks.

Civil tenders open

The delayed tender process for the new standard civil contracts opened on 26 February. Firms and not for profit agencies wanting contracts in family and social welfare law have to submit their tenders by 12 noon on 21 April. The contracts will commence on 14 October and will be for three years, with a possibility of a two-year extension.

Legal aid providers will be expected to submit their bids using an electronic application process, which is accessed through the Legal Services Commission (LSC) website. Tenders for immigration and asylum work had to be submitted by the end of January and used a similar e-tendering mechanism. LAG is not aware of any significant problems which occurred with this process, but the LSC did tweak the bid documents in the run-up to the deadline. The same has happened with the bid round for the standard criminal contracts which closes on 12 March. Therefore, legal aid providers should regularly check the LSC website for updates and to follow the questions and answers about the tendering process which will be published there until the end of March.

It is social welfare law work, defined by the LSC as debt, housing, welfare benefits, community care and employment, which has the most potential for difficulties. The civil tenders are complex - they cover 135 procurement areas and providers can apply in consortia to undertake housing, welfare benefits and debt work. Family law providers can also apply for tenders to undertake housing and family law.

Providers are not able to tender on a standalone basis for debt and welfare benefits work. One option is to expand into the area of law not covered, but LAG understands that the scoring system is weighted against bidders with no track record in an area of law. For housing law especially, the fear is also whether there will be enough new matter starts to make services viable. Consortia applications from existing suppliers are not without potential pitfalls. Organisations applying in consortia will be well advised to co-ordinate their bids carefully as a mistake on one bid could jeopardise the others.

The LSC has had to tread carefully to ensure that it does not fall foul of procurement law and to design a system which discourages overbidding. What happens in the coming months will determine if it has been successful or not.