Wednesday, 23 June 2010

Mental health firms under threat

Many firms representing patients detained under the Mental Health Act are under threat of closure or drastic cutbacks as the Legal Services Commission (LSC) has offered them reduced contracts in the current bid round.

According to the LSC, firms were invited to bid for a slightly increased number of cases overall, provided they met criteria such as having sufficient qualified staff to undertake the work. The amount of cases allocated, or new matter starts as they are known, is largely determined by the number of firms bidding in an area. This is where the problems seem to have arisen. According to Richard Charlton of the Mental Health Lawyers Association: 'The offers are terrible. Some members have less than a third of what they have now, many have less than a half of what they bid for. Many members are facing redundancies or closure. The established firms that have bid for their existing level of matter starts have been worst hit.'

Figures released by the LSC show that there has been an increase in the number of firms bidding for the work. This has meant that much of the work has been carved-up into smaller contracts. London is the worse affected area as 67 firms have been provisionally successful in bidding for contracts and 34 of these firms are new entrants to the market. LAG is unsure why there have been so many new bidders. They could be firms that have recruited mental health specialists as they saw this as a potential 'recession proof' growth area, as well as solicitors splitting off from existing firms to form new ones.

The LSC says that all the successful firms in each geographical area got a minimum of 30 cases topped up with pro-rata allocation between firms of the remaining cases. The LSC believes that its decisions on case allocation cannot be challenged, though once the contracts are signed firms can apply for permission to start more cases. What might happen is that those firms that can afford to will sit tight and see which firms are unable to take-up the contracts in the hope they can get extra work.

Mental health tribunals undertake a difficult job. They have to balance the freedom of an individual, his/her interests as a patient and the protection of the public in making their decisions. Specialist representation for patients is vital as their liberty and health are at stake. LAG fears the present allocation of cases could lead to many good firms being lost. To a large extent the problems have been caused by the open nature of the tendering process. Without a reliable measure of experience and quality to differentiate between firms the LSC had no other option than to spread the available work in this way, penalising the established firms. The public would have been better served and tax payers’ money saved if this tender system had not been introduced.

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