Report critical of MoJ’s financial management

The Public Accounts Committee (PAC) in the House of Commons has published a report this week which is critical of the Ministry of Justice (MoJ) and its failure to deliver accounts on time. Margaret Hodge MP, chairperson of the PAC, said that while the MoJ’s financial management had improved, it 'remains unable to deliver timely and accurate financial accounts'. The PAC, which scrutinises the spending of government departments to ensure value for money, pointed to 'significant problems' with the accounts produced by the Legal Services Commission and the figures from the Courts Service. In the report, published on Tuesday (20 March), the committee raises concerns about the MoJ’s ability to meet its cuts targets, 'given the demand-led nature of its business'.

'Without full information on its costs, there is a risk that savings will be made through unnecessary cuts to frontline services essential to the poorest in the community, rather than through genuine improvements in the Ministry’s efficiency,' said Margaret Hodge.

The report is also scathing about the MoJ’s ability to maximise income to the department. It points to an improvement in fine collection, but observes that this is being 'outpaced by the growth in fines outstanding' and that there has been no progress in increasing fee recovery levels in the Courts Service. The MoJ also admits that 60 per cent of the cash in confiscation orders in criminal cases might never be recovered.

Problems with financial management at the MoJ are not a new story. For years the MoJ and its predecessor departments have struggled to control the demand-led budgets of the courts system and legal aid. Under the last government the prisons budget was added to this mix. At the heart of the financial management difficulties is a lack of political will to do anything which would require thinking beyond short-term budget cycles. The cuts to legal aid illustrate this. Cutbacks in family legal aid especially are likely to have a knock-on impact to the courts and other budgets, but no-one, least of all officials in the department, has any idea what the financial and other consequences of these will be.

A total of nearly £2bn is owed to the MoJ in unpaid fines and confiscation orders. This is nearly equivalent to the entire legal aid budget. LAG believes that the government should be pursuing a long-term strategy to maximise the collection of this income, rather than rushing for short-term cuts in legal aid, which will disproportionately impact on the poor and most vulnerable.



PAC report: Ministry of Justice financial management

Time to compromise on Legal Aid Bill?

Another week goes by and the government suffers another significant defeat in the debate on the Legal Aid, Sentencing and Punishment of Offenders Bill, known as the Legal Aid Bill. The question is will they accept the Lords' amendments or seek to circumvent them by the use of parliamentary procedure?

On Wednesday (14 March), peers backed an amendment by Baroness Grey-Thompson, a crossbench peer, against the mandatory telephone gateway. In proposing the amendment, she said: 'A telephone-only service may work for a large number of people. However, it may adversely impact the most vulnerable clients, who may struggle to explain complex problems over the phone.' She also expressed concerns that the telephone operators would not be legally trained: 'As a result, operators may not be able effectively to interpret the nuances of complex cases put to them, let alone cases put to them by clients who may be confused or have some difficulty in communicating.'

Baroness Grey-Thompson is a former Paralympic athlete who campaigns on sport, women's issues and disability. Her amendment was supported by Lord Newton, the former Conservative cabinet minister, who made the point that: ' ... it is only face to face that you can disentangle the points on which they might have a case. This is important to a lot of people who cannot really fend for themselves.' Peers supported the amendment by 234 votes to 206, a majority of 28.

LAG believes that telephone advice can play an important part in ensuring legal advice services reach the general public. What we disagree with is offering it as the only method of accessing services, which is what the government is proposing. Our opinion poll research shows that the poorest social groups, those which are most likely to qualify for legal aid, are the least likely to use telephone and internet-based services.

Earlier in the week, two important amendments were lost in votes. On Monday night, amendments to bring immigration law and debt back into scope were defeated. In LAG's view, the loss of the amendment on immigration law is especially bitter as these clients will have nowhere else to turn for advice unless they can find the money to pay, as providing advice on immigration law is tightly regulated. After losing the votes on these amendments, no other amendments against the bill were pushed to a vote that night. These included amendments on bringing housing-related benefits and unfair dismissal back into scope.

Over the last two weeks, the government has suffered seven defeats on the legal aid section of the Legal Aid Bill. The government has also made seven concessions, including allowing areas of law to be added to the legal aid scheme in future, adopting a wider definition of domestic violence and withdrawing the threat of means-testing police station advice. The Lords have now moved on to the two other sections of the bill concerning litigation funding and sentencing.

At the start of the debate on the Legal Aid Bill, it was asked whether the government would make use of the financial privilege procedure to rule out any amendments by the Lords with cost implications. Lord Strathclyde, the leader of the government in the Lords, argued that designating an amendment as being subject to financial privilege is not a decision which the government takes. While this is correct (it is a decision for the Clerks of Parliament), he failed to acknowledge that the government decides whether or not privilege is to be waived so that an amendment to a bill made in the Lords can be considered by the House of Commons.

According to the parliamentary clerks, the waiving of financial privilege by governments is a normal part of procedure: 'The Commons waives its privilege far more often than not': Financial privilege: a note by the Clerk of the House and the Clerk of Legislation. There is also a strong argument that the amendments to the Legal Aid Bill are not covered by financial privilege. According to Jeff King, senior lecturer in law at University College London, financial privilege was wrongly used in the Welfare Reform Bill and should also not apply to the Legal Aid Bill: Welfare reform and the financial privilege.

Procedural wrangling may well antagonise peers who feel that by amending the bill they have properly exercised their duties as the reviewing chamber. The Lords have the option of delaying the bill, which would effectively kill it off, as it has to be passed before the Queen's Speech due in May, unless the government is willing to reintroduce it in the next parliamentary session and use the Parliament Act to force it through. All a bit over the top, considering the government's main policy changes remain intact as the bill now stands. Peers have managed to blunt some of the sharp edges of the bill most damaging to justice without making much of a dent in the savings the Ministry of Justice needs to find. LAG would suggest this is a sensible compromise in the circumstances and the government should be pragmatic and accept it.

Legal aid cuts delayed

Lord Chancellor Kenneth Clarke today put back the implementation of the legal aid cuts from October 2012 to April 2013. LAG welcomes this news. It at least delays the end of legal advice for thousands of people with common civil law problems by six months. However, we believe the pressure needs to be kept on the government to amend the Legal Aid Bill, which is currently before the House of Lords, so that the planned cuts to employment, benefits, debt, housing, immigration and other civil legal aid cases do not go ahead.

The six month delay will also apply to the abolition of the Legal Services Commission (LSC), the introduction of the mandatory telephone gateway and the revised eligibility criteria for civil legal aid. LAG believes that the deadline to implement the government’s planned changes to legal aid was always going to be hard to meet on a practical level- notice to providers of legal aid services would have had to been given immediately after the Bill had received Royal assent. Most experts including LAG had said that the time-table was too tight to implement the changes by October next year. Rumours had been circulating in recent months that the LSC was telling the Ministry of Justice this. It would seem that the government eventually decided to listen to this advice.

In another humiliating move for the government, they have also announced that they are putting plans on ice to implement competitive tendering for criminal legal aid. In November last year ministers had announced their intention to produce a consultation paper on competitive tendering for criminal work. This has now been put back to the autumn of next year. The first contracts are scheduled to begin in the summer 2015. We have a feeling of deja vu about this decision. The previous government announced plans to introduce competitive tendering for criminal legal aid only to abandon them as the last general election approached.

In LAG’s opinion this is very much a case of pain delayed for civil legal aid clients, as well as for the firms and not for profit agencies which serve them. While it is to be welcomed that the government has paused on the brink of destroying access to justice for 650,000 people; the challenge remains to make them turn back.

Pic: Ministry of Justice

Legal Aid Bill concession?

The Daily Mirror ran a story yesterday (24 November) saying that Secretary of State for Justice Kenneth Clarke had decided to allow legal aid in clinical negligence cases. LAG checked with the Ministry of Justice (MoJ) and it confirmed that no statement on this has been made by the department and that the 'measures in the bill still stand'. LAG understands that the Mirror story is based on a source at the MoJ. Maybe a minister or an official has spoken out of turn?

It does seem likely to LAG that a concession on clinical negligence and legal aid will be made at some point. Even before the bill was finalised there had been talk of an exception being made for clinical negligence cases. When Labour introduced the Access to Justice Act (AJA) 1999, the then Lord Chancellor, Derry Irvine, looked at doing away with legal aid for clinical negligence cases, but decided that this would lead to the more difficult cases not being pursued, as lawyers would not want to act for claimants in such cases on conditional fee agreements. LAG believes that Derry Irvine was right.

Since the AJA came into force over ten years ago, it has been the more difficult cases that have stayed in the legal aid scheme. This has worked in the interests of justice and the public. Legal aid funding is the only way in which many victims of medical accidents or negligence can obtain justice. At the very least the government ought to look at legal aid funding for investigation and gathering of medical evidence in clinical negligence cases. Much of the cost of such work could be recouped by the legal aid fund in successful cases. It would also ensure that large drug corporations and medical professionals who have been negligent are held to account. It is in the public interest that this happens, so mistakes are not repeated.

It is in no doubt that the government took a pasting in the House of Lords' debate on Monday this week. Lord McNally, the MoJ minister, looked rather hapless as he took a barrage of criticism from all sides over the government’s legal aid proposals. To get the Legal Aid Bill through, the government is up against a tight deadline. The parliamentary session ends in April 2012 so the House of Lords does have the option of trying to talk the bill out if it wishes to. This makes it more likely that concessions will be made in the committee stage in the House of Lords which is due to start sometime next month.

The government will not be pleased that news of the concession on clinical negligence has leaked out. LAG suspects that it would have wanted to time the announcement for later in the process, in order to maximise its impact to shore up support for the rest of the bill among its own backbenchers. It is now stuck with a difficult dilemma - of either sticking to the line that the bill is not going to be changed, and looking foolish when it does so, or admitting there was a leak and announcing the concession. The problem then is that attention shifts to who leaked the information?

Image: LAG

The true cost of the legal aid cuts?

Each government department tends to work on its own budgets in isolation. This can be a problem, especially when cuts are being considered. The order has been handed down from the Treasury to make cash savings and officials in the Ministry of Justice (MoJ) are scrambling around to find these, with little regard to their knock-on impact.

Citizens Advice argues that the state has to pick up the cost of homelessness, poor health and the other consequences of people not receiving advice on civil justice problems. It has published research to back this up which shows the savings other government departments make when people get early advice. LAG has taken the figures which Citizens Advice produced and combined these with the government’s proposed cuts in legal aid for housing, benefits, debt and employment, to arrive at figures which give the true cost of the legal aid cuts (see below).

Our research shows that £49m of expenditure on legal advice saves the government £286.2 million in other expenditure. In other words - £1 of spending on civil legal help saves the government around £5 in other public expenditure.

Category of Law	Reduction in legal aid (08/09 figures)[i]	Savings per £1 spent on legal aid [ii]	Total savings to the state from expenditure on legal aid
Housing	£7m	£2.34	£16.4m
Welfare benefits	£22m	£8.8	£193.6m
Debt	£16m	£2.98	£47.7m
Employment	£4m	£7.13	£28.5m
	£49m		£286.2m

Earlier this year the House of Commons Justice Committee stressed in its report on the proposals for legal aid that it was surprised that the government was introducing changes to civil legal aid for cases such as these, 'without assessing their likely impact on spending from the public purse'. The Committee, which is chaired by the well regarded Liberal Democrat MP, Alan Beith, suggested the government needs to take this into account 'before taking a final decision on implementation'. [iii]

Last week, apart from a few minor changes, the bill committee in the House of Commons considering the legislation which will introduce the legal aid cuts rejected proposals to reverse them. A third reading of the bill is expected to take place late next month. This will be an opportunity for the House of Commons to get the government to think again about these cuts which are penny wise, but pound foolish to the public purse.

[i] Legal aid reform: scope changes, MoJ, 028, page 17.

[ii] Towards a business case for legal aid, Citizens Advice, July 2010.

[iii] Justice Committee Report, page 54.

Government reveals full extent of legal aid cuts

In a game of statistical catch-up, the government has now revealed a more accurate picture of the impact of the legal aid cuts. The figures, which were published with the Ministry of Justice response to the legal aid cuts consultation, show that its original figures (published in November 2010) understated the impact of the cuts by as much as 20 per cent.

A total of 595,000 people will lose out on civil legal aid, as opposed to the 502,000 which were originally estimated by the government. These figures are close to the ones which LAG calculated in March this year using the up-to-date data for cases completed in 2009/10. The government has used this data in its latest figures. There are some differences between LAG’s and the government's figures, but these can be explained by the small concessions which the government has made from its original plans, including bringing some education and family cases back into scope.

However, it seems the government has persisted in basing its estimates on closed cases as opposed to those opened in the year. LAG revealed in March that this understates the figures by around 50,000. LAG argues that to present an accurate picture of who will lose out on legal aid services the cases opened in the year should be the baseline. Removing areas of law from the scope of the legal aid scheme stops new cases being opened, while existing cases will continue for months or years until they are closed.

Initial advice on cases, known as legal help, is the big loser in terms of both new cases and cash. A total of £130m will be lost in funding for this type of advice, £16m greater than originally estimated. Advice on common types of problems (known as social welfare law) loses an additional £10.5m in funding:

• Welfare benefits - initial estimate: £22m; updated estimate: £25m


• Debt - initial estimate: £16m; updated estimate: £20m


• Housing - initial estimate: £7m; updated estimate: £10m


• Employment - initial estimate: £4m; updated estimate: £5m


• Education - initial estimate: £1m; updated estimate: £0.5m


• Total - initial estimate: £50m; updated estimate: £60.5m

Citizens Advice Bureaux, Law Centres and other not for profit (NFP) legal advice centres will lose the bulk of the above funding. At least £40m will be cut in funding to the sector as the vast majority of cases in benefits and debt are undertaken by NFP agencies which contract with the Legal Services Commission. The sector is already being hit by cuts in local government and other central government support for advice services.

If these planned legal aid cuts go ahead nearly 100,000 more people than the government originally estimated will lose out on advice and providers will lose 20 per cent more income. LAG is urging MPs to substantially amend the Legal Aid, Sentencing and Punishment of Offenders Bill currently in the committee stage in the House of Commons to prevent these cuts which will have such an impact on members of the public.

Read LAG's document: The real impact of the legal aid advice cuts

Image: LAG

Follow the money

Like in good comedy, timing is everything in politics. The minister responsible for legal aid, Jonathan Djanogly, released the figures for the highest paid legal aid solicitor firms and barristers yesterday. Call us cynical, but this is a sure sign that the delayed bill containing the legal aid cuts is to follow next week.

Publicising the top earners figures as a means of justifying the planned legal aid cuts would be hypocritical in the extreme - not that this is likely to stop some, particularly as the political pressure over the cuts mounts. What should be remembered is that nearly £300m of the total cuts of £350m likely to be announced next week have little bearing on the high-earning people on this list. These cuts instead fall disproportionately on the lower end of civil legal aid work, undertaken by solicitors and not for profit organisations earning far less than the elite few reflected in these figures.

The Bar usually comes in for criticism when these sorts of figures are released as individuals earning high amounts of public money are an easy target for sections of the press. What partners in solicitors firms earn from legal aid is less transparent. Fortunately, there are no barristers earning over one million pounds topping the list to hang a story on. LAG believes this is in large part due to the changes to Very High Cost Cases (VHCC) fees made by the last government. Barristers and solicitor advocates have also taken a 12.5 per cent reduction in Crown Court fees over the last two years.

There remains, though, a striking differential between the amounts being earned by the top criminal barristers as opposed to civil barristers. The lowest earning criminal barrister in the list would come near the top of the civil earnings list. Across all levels of fee income, civil law legal aid barristers generally earn much less than their criminal counterparts. This is a reflection of the number of criminal VHCC and, it has to be said, the more generous fee structure for criminal cases. Only two women feature in the list of top criminal barristers, as opposed to six in the civil list - a sure sign perhaps that most of the money is in criminal work?

The Law Society has called for a cap of a quarter of a million pounds to be imposed on individual earnings from the legal aid fund. LAG doubts that this is something which could be easily implemented. To be even-handed it would be difficult to apply to partners in solicitors firms with a mix of private and legal aid income. Also, as Jonathan Djanogly correctly points out in the letter in which he released the figures, the earnings for barristers are not necessarily calculated over a calendar year, and can include fees for junior counsel, as well as other overheads.

LAG accepts that excellence in advocacy carries a cost which has to be met to ensure equality before the law. However, we do not believe the differential between civil and criminal fees can be justified. If the policy choice boils down to higher fees at the top end of criminal work, against access to justice for the public coping with everyday civil legal problems, criminal barristers and solicitor advocates should be prepared to take a hit in income.

Read the letter and full list of figures here: http://www.lag.org.uk/Templates/Internal.asp?NodeID=88856

Picture: Ministry of Justice, legal aid minister Jonathan Djanogly

Will the Treasury pay?

After pressure from some sections of the media and the Conservative party, the government has backed down on its plans for sentencing reform. LAG supported the reforms, which included a 50 per cent discount for early guilty pleas, and the government’s u-turn is a big disappointment to the cause for penal reform. The government's change of heart means the bill including the legal aid reforms will not be published today as had been intended, but will be delayed until next week or later. It also leaves the Ministry of Justice's (MoJ's) budget plans in disarray as a further £100m will need to be found to meet the 25 per cent cuts target imposed on it.

Officials at the Legal Services Commission have been saying for some weeks that more money might have to be found from legal aid. LAG believes that the planned cuts of £350m will be difficult to realise. We believe there is considerable disquiet in government about the impact of the cuts on social welfare law, especially on the Citizens Advice Bureaux service and the rest of the not for profit sector. The cuts are clearly in danger of undermining the 'Big Society' policy agenda and leaves the government open to the charge that they disproportionately impact on the very poorest and most vulnerable. In family legal aid, where the bulk of the cuts will fall, LAG questions whether in principle the cuts can be justified but also if they can be delivered in practice.

Ministers have already indicated that a change in the definition of domestic violence is almost certain to be included in the bill and this is welcome, but it means many more women will be eligible for legal aid, and this will increase costs. Also, the fact remains that relationships will continue to end with continuing legal ramifications, especially over child custody, which will have to be met. Cutting off legal aid just means more litigants in person increasing costs in the family courts.

The MoJ might look for cuts in criminal legal aid to meet the shortfall. However, they have limited options. They could cut rates of pay, but these were cut under the last government. Crown Court fees have been reduced by 13.5 per cent over the past two years following one of Labour’s last big decisions on legal aid policy. Rates on police station and magistrates' court work could be looked at again, but these have already been cut to the bone. Competitive tendering for the work might produce some savings, but this will take time to implement. High cost cases could be examined again, but this would be vulnerable to protest action by the Bar.

The government is happy to publish the earnings figures for the top end of the Bar (due out this week as LAG understands) as a stick used to beat legal aid lawyers. However, the political will to reduce such fees rapidly diminishes when the Bar threatens to boycott (or rather not be available for!) such work (as happened under the last government). The red top press will happily run fat cat lawyer stories to traduce legal aid, but would give much greater prominence to stories of trials of dangerous criminals collapsing due to the lack of qualified defence counsel.

In LAG’s view, the MoJ has only two options. It could cobble together another £100m in legal aid cuts, which officials will know are not deliverable, or persuade the Treasury to increase the budget by £100m. Like it or not, the backsliding on sentencing reform policy is a decision which has been taken by the Prime Minister, backed by the cabinet. Such fundamental shifts of policy need resourcing and it is the Treasury which should find the cash. If it does not, it will be unlikely that the Civil Justice, Sentencing Reform and Legal Aid Bill will make it into the legislative timetable this year. Not something LAG and the legal aid lobby would shed any tears over, but a delay which would create a considerable headache for the government.

Image: LAG

Lies, damn lies, and statistics

LAG believes that the Ministry of Justice (MoJ) has been guilty of playing rather fast and loose in its interpretation of the figures on the impact of the proposed civil legal aid cuts.

The figure of 502,000 is quoted in the MoJ’s impact assessment on scope changes as the number of people who will lose out on access to civil legal advice services if the legal aid cuts, which were proposed in November last year, are implemented. The impact assessment was published at the same time as the green paper, Proposals for the reform of legal aid in England and Wales. The consultation closed on 14 February 2011. Over 5,000 responses were sent to the MoJ from both individuals and organisations concerned about the provision of legal aid services. We are currently waiting for the government’s response.

Clearly, at just over half a million, this is a significant number of people who will potentially be denied access to justice if the government goes ahead with its planned cuts in housing, employment, family and other areas of civil legal aid. Not surprisingly, the figure has been seized on by campaigners opposed to the cuts, including the Law Society’s Sound Off For Justice campaign, but LAG believes the true figure is much higher. Double-checking the MoJ’s calculations, LAG found that the civil servants drafting the impact assessment had been, let us say, creative in their interpretation of the data. Comparing the figures in the impact assessment with the Legal Services Commission (LSC) figures in 2008/09 for legal advice cases, a total of 615,880 is arrived at for the number of people who would lose out on legal advice services after the proposed cuts are factored in. The official figures have been underestimated by around 20 per cent. Two factors seem to account for this.

The MoJ appears to have knocked off the statistics for telephone advice, despite the fact that these services will be lost if the cuts to civil legal aid outlined in the consultation paper go ahead. It seems it has also based its projection on the statistics for completed cases as opposed to new cases. By doing this, the number of people who lose out on legal aid is understated by over 40,000. This really is a case of lies, damn lies, and statistics. It gets worse. The MoJ chose to base its impact assessment on statistics which were over a year out of date. If it had used the figures from the LSC for the year ending March 2010, LAG calculates that the true number of people who will lose out on legal aid services is 653,659 (or 617,096 if the completed cases figure is used).

LAG believes the number of cases increased in the year 2009/10 due to the combined impact of the Baby Peter case (though this had no impact on legal help cases), the recession and the last government’s five per cent increase in eligibility levels for legal aid. Using the 2009/10 figures, family cases, for example, show an increase of nearly 23,000 on the previous year. Reflecting the impact of the recession, employment law cases, which are set to be completely removed from legal aid, show a rise of 3,500, an increase of over 12 per cent on the previous year.

What LAG would like to emphasise in publishing this research is that the impact on the number of people seeking help with common legal problems is 30% greater than was previously estimated by the government. We believe this provides a further reason for ministers to think again about imposing the planned cuts. If they do not, over 650,000 people stand to lose out on legal advice.

Read LAG's full report: The real impact of legal aid advice cuts

Image: LAG

Legal aid cuts discriminate

A substantial stack of impact assessments were released with the consultation paper on legal aid in November 2010. The papers starkly set out the full horror of how the government’s proposals for the legal aid system will affect clients. As detailed in the equality impact assessments, women, people with disabilities and black, Asian and minority ethnic (BAME) groups will be especially badly hit if the planned changes to the scope of legal aid go ahead.

A total of £350m of the current legal aid budget has been earmarked for cuts, the bulk of which fall on civil legal aid. Family legal aid bears the brunt of these. Divorce, custody disputes over children and financial matters to do with relationship breakdown are all planned to be cut from the scope of legal aid. A large majority, 65 per cent, of family legal aid clients are women and the government admits in its impact assessment that this means they will be disproportionately hit by the planned cuts. BAME clients will also be disproportionately affected, though due to problems with the data the result of the impact assessment on this group is less reliable.

Women also form over 70 per cent of the client group for education law, which is set to be taken out of the scheme. The high proportion could be partly explained by the solicitor recording the sex of the parent instructing him/her to represent a child - perhaps men are less likely to attend appointments with solicitors to discuss their children’s education? The figure could also reflect a higher number of women single parents seeking advice on education matters. Thirty-one per cent of people who obtained advice on education law are BAME clients as opposed to eight per cent in the general population, indicating that the withdrawal of legal aid for education law would have a disproportionately greater impact on this group as well.

People suffering from an illness or disability will be hit hardest by the proposed cuts to advice on debt and benefits. Currently, 30 per cent of clients who have received advice on debt and a staggering 63 per cent of those needing advice on benefits have an illness or disability. Again, there is also a disproportionate impact on women and BAME clients. The proposal to withdraw legal aid from clinical negligence cases also has a disproportionate impact on sick and disabled clients with 30 per cent of cases currently being brought by people from this group.

Overall the government acknowledges that high proportions of the population seeking help from the legal aid system are women, from BAME groups or suffer from an illness or disability. Further impact assessments are promised with the final proposals, but LAG believes the government will struggle to justify the very high difference in impacts on the groups described above. The inescapable conclusion is that if these cuts go ahead they will discriminate against the most disadvantaged and the government will be to blame.

The impact assessment documents are available on the Ministry of Justice website. The consultation on the proposals ends on 14 February.

Civil law to suffer bulk of proposed legal aid cuts

The green paper on legal aid published last week outlines proposals on reductions in fees and in the scope of legal aid in order to make savings of around £350m. The bulk of the cuts, £279m, will fall on civil legal aid.

A telephone advice line is proposed to replace much of the service people currently get from civil legal aid providers. LAG supports the use of telephone services as they can be useful in dealing with many problems and in signposting people to face-to-face advice if they need it. Such services, though, cannot replace legal aid as the results of our recent opinion poll survey indicate that the poorest people are also least likely to use telephone and internet services. These people are therefore the most reliant on local face-to-face legal advice services.

If these proposed cuts are implemented, just under 550,000 less people will receive help with civil legal problems. The civil legal aid system helped just over 1 million people last year and so this cut represents a 50 per cent cut in civil legal aid services to the public. The Ministry of Justice (MoJ) is aiming to implement these cuts from October 2012. LAG understands that the proposed changes to legal aid will be included in legislation and that the first reading of an Act of Parliament to put this in place has been scheduled for spring 2011.

The cuts include taking out of the scope of the legal aid scheme welfare benefits, debt, employment, education and clinical negligence cases. It is proposed that housing law cases are cut back to include only homelessness and disrepair (non-damages). Divorce and private law children cases will be cut from scope saving £178m and the total saving from cutting non-family civil legal aid is around £100m. Around £900 million per year is currently spent on civil legal aid and so this represents just under a third of the budget.

The cuts fall disproportionately on the services which help people with the everyday problems of life such as debt and housing. Sixty-eight per cent of the civil legal help scheme which gives initial help and advice on legal problems is to be cut. Such deep cuts have not been proposed for any other public services.

The bulk of the cuts in non-family civil legal help will fall on the not for profit (NFP) sector. We estimate that out of a total cut of £64m in legal help, over £50m will be cut from local NFP providers such as Citizens Advice Bureaux and Law Centres. These organisations are already experiencing deep cuts from other branches of government. For example, £46m is due to be cut from the Financial Inclusion Fund next March and individual local councils, which fund 50-70 per cent of the costs of running these organisations in total, are also cutting back. For example, Hammersmith and Fulham London Borough Council recently cut £180,000 from its grant to the Law Centre in the borough.

In addition to the cuts in scope, the government intends to introduce a ten per cent reduction in fees in both criminal and civil cases. It has also announced its intention to introduce a competitive process for the allocation of legal aid work. A further consultation paper on introducing this for criminal work will be published next year. According to the green paper, a pilot of a competitive bid round for criminal legal aid work could commence in April 2012 and the government’s intention is to introduce a similar process for civil contracts sometime after 2013.

The MoJ has published a set of impact assessments on the proposals for legal aid. The paper on the impact of the scope changes shows that there would be a reduction in legal help cases of 502,000. The equalities impact assessment acknowledges the difficulties in breaking down the available data into gender, race and disability categories.

A green paper on Lord Justice Jackson’s recommendations on reform of the rules for funding civil litigation was published at the same time as the green paper on legal aid. Success fees and after the event insurance costs would no longer be recoverable from the losers. To compensate claimants, a ten per cent uplift in damages awards is proposed. LAG’s annual lecture next week is to be given by Lord Justice Jackson (see our website for full details).

The green papers are available to downoad at the MoJ website. Responses to the consultations have to be returned to the MoJ by noon on 14 February 2011. LAG is urging everyone with an interest in legal aid and access to justice to submit a response to the consultations.

Cuts on top of cuts for the Ministry of Justice

Well the much anticipated and dreaded comprehensive spending review (CSR) announcement was made today. As is usual with budget announcements, cuts in the big ticket, high-profile items, such as defence and welfare benefits, had been well trailed in advance. For smaller departments like the Ministry of Justice (MoJ) details were scant. What we can confirm is that the following is planned:

• Overall the MoJ has to find cuts of 23 per cent in the four-year CSR period, which commences on 1 April next year.
• Consultation on closing 157 under-utilised courts (previously announced).
• A 33 per cent cut in administrative costs.
• A reduction of the MoJ's London estate from 18 to four buildings.
• A 50 per cent reduction in capital expenditure, including 1,500 new for old prison places to go.
• A 25 per cent cut in the cost of the Crown Prosecution Service.
  
  

The MoJ will be expected to reduce its expenditure from £9.2 billion in the current year to £7.3 billion by April 2015. While other departments could have some efficiency savings left in the cupboard, LAG believes the MoJ may struggle to find any, as it has had to make cuts of 10 per cent in the last three years, including around £350 million to be made before March 2011.

The legal aid budget has been static for four years, which is a cut in real terms. Fixed fees, the reintroduction of means testing in criminal cases and fee cuts in criminal legal aid have all contributed to controlling the budget despite increased demand, caused by the recession and other factors, such as the rise in child protection cases. It is clear from what is said in the CSR paper that the government will be consulting on a radical reshaping of the legal aid system with big cuts likely in the type of cases legal aid will pay for. Increased competition is also promised and it is suggested that further cuts in remuneration are in the pipeline.

The MoJ has to deliver a business plan in the next month which is supposed to map out how it is going to deliver the budget cuts over the next four years. Even if it manages to produce this, there will be a real struggle to deliver the cuts as they are likely to be dependent on legislation on sentencing being approved by parliament within the next two years and changes in legal aid, which might also require legislation.

Image: Legal Action Group

Legal aid green paper 'imminent' says minister

Clever poker players look for 'tells' in their opponents’ body language to discern what hand they have got. Members of a packed fringe meeting at the Conservative party conference on Tuesday, addressed by legal aid minister Jonathan Djanogly, were all looking for the 'tells' about his plans for the legal aid system. The minister, though, was keeping his cards close to his chest, but he did reiterate some familiar themes, which might give some indication of government thinking. He also told the meeting, which had been organised by the think tank Policy Exchange, that a green paper on legal aid was 'imminent'.

The nub of Djanogly's speech was that spending on legal aid has doubled in real terms in the past 20 years and as his department has to find significant cuts, legal aid will be a target. The minister said that there would be a green paper on legal aid in the next few weeks and reiterated the point he has now made on a number of occasions that the government wants to look at the legal aid system in its totality rather than going down the road of a 'salami-slicing review'. The starting point, he argued, was 'what we need to do to reform the system so that vulnerable people have access to justice'. Ominously, for the legal aid lawyers in the audience, Djanogly talked about what he sees as anomalies in the system such as the higher fees paid for murder trials and that fraud trial fees are paid on the 'value of the case rather than its complexity'.

Some points Djanogly made could have been lifted directly from the previous government’s pronouncements on legal aid. He trotted out comparisons with other countries' spending on legal aid, £3 per head of population in France and £5 in Germany as against £38 in England and Wales. As politicians are prone to do, he was selective in his facts. He did not mention the Ministry of Justice's own research published last year which found that while spending in England and Wales is the highest in Europe, once the total costs of the criminal and civil justice systems are taken into account in the continental inquisitorial systems the figures on spending are similar to the UK.

Another significant point he made, which could have been lifted from a speech given by one of his Labour predecessors in government, was that 'too many cases go to trial in the Crown Court'. When pressed on this point by a member of the audience who argued about the importance of being able to elect to go to a jury trial, Djanogly replied that he was 'thinking hard about the issue as 80 per cent of thief trials in the Crown Court are for less than £200'. He argued that 'other levers such as how legal aid is handed out' can be used to persuade those accused of a crime to elect for trial in an appropriate court.


LAG hopes, perhaps optimistically, that the green paper will acknowledge that much of the cost drivers for legal aid which have led to the increase in expenditure which Djanogly referred to in his speech are outside the control of the legal aid system. Also, expenditure on legal aid has remained static over the past four years. This has been due mainly to the reintroduction of the means test for criminal legal aid and cuts in fees introduced by the last government. While Djanogly could give no indication of the amount which will have to be cut from legal aid, he said that the Ministry of Justice had to find 25 per cent in savings and as the ministry’s total budget is £9.5 billion, of which legal aid makes up £2.2 billion, 'you get some idea of the level' of cuts needed.

In a few weeks we will no longer be looking for clues or 'tells' about the government’s intentions. The comprehensive spending review announcement on 20 October will tell us how much the government intends to spend on legal aid and the green paper will indicate what sort of system it envisages for the future.

Image: Legal Action Group

'Carnage' as family solicitors lose legal aid contracts

LAG has just advised by the Legal Services Commission (LSC) that 1,300 out of 2,400 firms have been awarded contracts in family law. The new contracts are due to commence in October and firms were invited to tender for them by 21 April this year.

LAG has heard from areas in which the number of firms providing legal aid in family law from October will drop dramatically. For example, in Leeds, only ten firms will remain in the system, down from 35. In Stoke, six firms remain, with ten disappearing, leaving those six to cover a city with a population of just under a quarter of a million.

'From where I am sitting, it looks like carnage out there,' said Carol Storer, director of the Legal Aid Practitioners Group. She is advising those firms which have not secured a contract to appeal against the decision. If many firms follow this advice, it could be some weeks before it is known which firms will be providing legal aid under the new contracts.

To select between firms, the LSC scored them against criteria such as quality of work and having a permanent office in the area in which they want to provide services. One of the key criteria was employing experienced staff to supervise and undertake the work. For example, points were awarded for having a member of staff accredited by the Law Society's Children's Panel. LAG understands that many firms have applied without having the necessary staff in place and are relying on recruiting them before the new contracts commence. This has led to accusations by some losers of underhand tactics by successful firms.

The Law Society believes that the level of refusals for family contracts is far higher than either the LSC or the Ministry of Justice envisaged and has today written to the legal aid minister, Jonathan Djanogly. It is asking him to consider whether the market can cope with 'this degree of restructuring' without compromising the availability of family legal aid services for members of the public.

Social welfare law
The LSC has advised LAG that it believes around 70 per cent of existing social welfare law providers will be allocated new matter starts (NMS). It is undertaking 'due diligence checks' in five areas and will confirm the numbers of providers which have been successful in obtaining NMS once these are complete. LAG has spoken to a number of providers, including Simon Harris, chief executive of Stoke-on-Trent Citizens Advice Bureau: 'The bureau was allocated virtually everything we asked for. Overall, we feel quite relieved.' The bureau has contracts in housing, welfare benefits, debt, immigration and employment.

Image: Legal Action Group

Legal aid under threat

As anticipated the government has announced its review of legal aid. The announcement was made in a written ministerial statement to parliament yesterday by Lord Chancellor and Secretary of State for Justice, Kenneth Clarke.

LAG understands that the government is currently studying the previous reviews of legal aid before releasing a consultation paper in the autumn which will outline some options for reforming the system. Kenneth Clarke made it clear in his statement that the priority for the government is to reduce the financial deficit.

Significant cuts in legal aid spending are a very real possibility. In the budget this week the government outlined its policy for reducing the deficit which includes a 25 per cent or more cut to expenditure in departments other than health, education and defence. For the Ministry of Justice (MoJ), a 25 per cent reduction means around £2.25 billion would need to be found from a budget which has already been hit by ten per cent spending cuts over the last three years.

Some savings might be found by closing under-utilised courts and reducing prisoner numbers, but LAG believes that to reach a 25 per cent target significant cutbacks would also have to be made in legal aid. The options are limited. Revisiting the levels of fees paid to lawyers in legal aid cases is not likely to meet with much protest from the public, but there will be increasing complaints if people cannot find help as firms are forced to withdraw from legal aid. Other options include cutting what legal aid will pay for, for example, the government could decide to take help with divorce cases out of scope. The government’s room to manoeuvre is limited due to its obligations under the Human Rights Act 1998.

Finding cash from other sources to off-set the cuts could be a solution. Ideas such as a levy on all criminal clients and using interest on money held by solicitors on behalf of clients have been suggested by some as ways of funding the system. The consultation in the autumn should provide the forum to explore these and other ideas, as some original thinking will be needed if access to justice is to be maintained.

Image: Legal Action Group

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.

Criminal delay

On 11 September, the Legal Services Commission (LSC) announced that it will defer the start of tenders for the new criminal contract for at least two months. Included in this is the best value tendering process for the two pilot areas in Greater Manchester and Avon and Somerset. Good move we say. However, the Ministry of Justice (MoJ) announced its consultation on the proposed cuts for criminal work on 20 August. Why then did it take the LSC three weeks to decide to delay the bidding process?

Surely it had worked out that you cannot invite firms to bid for work if they don’t know how much they will be paid? Perhaps not. It seems more likely that LAG, the Law Society and others pointing out to the LSC the unfairness of what it was proposing, combined with mutterings about a possible judicial review, made it change its mind. Any strategy the MoJ and LSC had for criminal legal aid appears to be in tatters.

The MoJ’s paper on the proposed cuts is inadequate. It fails to state how much it is seeking to save or outline in detail the Crown Prosecution Service fees it is arguing that defence counsel should have parity with. The government also wants to shave five per cent off the budget for very high cost criminal cases (VHCC), but the options to do this have not been announced yet. They will only be outlined in a further consultation paper. A cross-subsidy operates between Crown Court work, VHCCs and the less profitable police station and magistrates' court work. Surely it should be obvious to the LSC that without all the proposed prices on the table firms cannot make any decisions about their future bids?

Civil Legal Aid Contract Deal

Legal aid lawyers and their paymasters announced a cessation in hostilities. A joint statement was published by the Law Society, the Legal Services Commission (LSC) and the Ministry of Justice (MOJ) on 2nd April announcing an agreement following ‘a series of open, constructive and pragmatic discussions’. Chancery Lane claims that its negotiations have secured the following ‘concessions’ to the reform programme:

• delaying the introduction of community legal advice centres (CLACs) and community legal advice networks (CLANs) until April 2010. There are 15 in the pipeline with four yet to be announced;
• a 2% increase on non-family fixed fees;
• an increase on childcare pre-proceeding fixed fees from £347 to £405;
• a 5% increase in fees for mental health and immigration tribunal work;
• delaying the introduction of family litigators' graduated fees;
• an amnesty on historic unrecouped payments on account over six years and where the amount outstanding is less than £20,000;
• delaying the introduction of best value tendering in criminal legal aid by six months to a date ‘not before’ July 2009;
• and no price competitive tendering for civil law family work before 2013.

‘It is good news that the impasse between the profession and government appears to have been surmounted but these ‘concessions’ are a mixed bag. We fear that the slight fee increases don’t go far enough to arrest the damage already done to mental health or child care providers,’ says Steve Hynes, director of the Legal Action Group. ‘We’re glad to see the government taking a pause for thought over the introduction of CLACs and CLANs although we question whether they are ‘concessions’ at all or a response to a lack of interest on the part of local authorities.’

The joint statement said that the agreement was ‘designed to provide a significant period of certainty and stability’ for providers to ‘enable them to adapt to the changes to the legal aid system that have already been introduced and to consider and plan for the future’.

There was a note of contrition on the part of the LSC and the MOJ over their stance on the legal challenges to the unified contract and its conflict with public procurement regulations. ‘They regret that the implications of those regulations were not recognised earlier and acknowledge that the Law Society was justified in commencing those proceedings,’ the statement said.

Chancery Lane will discontinue its judicial review proceedings launched against the LSC in February on the strength of the deal which it was claimed would ‘provide tangible benefits for legal aid practitioners’ and which would ‘establish procedures designed to ensure a closer and more constructive relationship between parties in the future’.

Bill Montague, managing partner of Dexter Montague & Partners, who jointly brought claims against the LSC with the Law Society last year, said that settlement marked ‘a watershed in the relationship between legal aid practitioners and the LSC’. Des Hudson, chief executive of the Law Society, said that the ‘more consultative approach embraced by the LSC’ would ‘hopefully allow us to work with them to address some of the most pressing issues’. ‘However, we still have serious concerns about the future of legal aid,' he added.


Read Jon Robbins' article This is Jacqui: she's here to save you from eviction in The Observer Sunday 13 April 2008.