Decision made on non-family contracts

A decision has at last been made by the Legal Services Commission (LSC) on the non-family law contracts. It has just announced that all non-family legal aid contracts and family mediation contracts will start on 15 November. The start of the contracts had been delayed by a month due to the Law Society's judicial review.

The LSC had argued that these contracts were linked with the family contracts as the intention behind the civil bid round was to provide 'joined up' services across both family and social welfare law (housing, benefits, debt, employment and community care law). Providers could bid for standalone contracts in employment and community care law, but in many areas they had been expected to bid either in a consortium, or as a single supplier, for housing, benefits and debt work, together with family work.

Family law providers could also bid for family and housing contracts but these contracts, along with the other family law contracts, have been quashed by the High Court, after it ruled that the tendering process to award the contracts was illegal. The oral judgment was given in the case on 30 September, but the transcript of the decision has yet to be released. The LSC is waiting for the transcript, as it has indicated that it may wish to consider an appeal against the High Court's decision. It has 14 days from the issue of the written judgment to lodge an appeal.

The LSC's chief executive, Carolyn Downs, said: 'Our overwhelming priority is to give providers and, above all, legal aid clients, certainty that access to justice will be maintained. We also want to continue to encourage dialogue with representative bodies to minimise any disruption.'

LAG welcomes the LSC's decision. It would have made no sense to continue the uncertainty over the non-family contracts. However, we do not believe that it was sensible only to extend the family contracts to 15 December 2010. Whether the LSC chooses to appeal or not, another extension of these contracts seems inevitable.

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

Civil contracts - what now?

Yesterday the Legal Services Commission (LSC) lost the judicial review which the Law Society had brought against it over the result of the family tender. It is important to note that the court only quashed the family contracts, ie, family, family and housing, children only and child abduction. The LSC now has to extend the existing family contracts and decide if it wishes to re-tender the contracts. It will make an announcement on 6 October about what it intends to do.

The judgment turned on the selection criteria for family contracts. Practitioners were not informed until the tender documentation was published in February this year that they would score more points if they held membership of both the child protection and domestic violence panels. Membership of these panels proved crucial in deciding whether to award firms contracts. In his oral judgment yesterday, Lord Justice Moses said that the LSC could '… provide no rational basis for denying a case-worker the opportunity to apply to both panels'. In his view the effect of the late notice of the criteria was to 'unfairly and arbitrarily reduce the number of family law suppliers'.

Linda Lee, Law Society president, deserves praise for the leadership she has offered on this issue. She and senior officials at the Law Society were under considerable pressure due to the differing opinions on whether the outcome of the tender round should be challenged. In LAG’s view they called it right, by fighting the case on access to justice grounds. While the judgment of the High Court centred on the unfairness of the tender process and not access to justice, reinstating many practitioners, especially the child protection specialists, to the legal aid system can only benefit many vulnerable families and children.

Hovering over the proceedings was the spectre of the comprehensive spending review. Indeed Lord Justice Moses referred to this in an aside, observing that 'there might be no legal aid next month', while the parties were debating what order the court should make. In LAG’s view what the LSC and the government (which now calls all the shots on legal aid policy) should do is extend the family contracts for two years. Within a year they should make a decision on what they want after these two years and tell practitioners so that they have time to adapt. What has to be learnt from this debacle is to give fair notice of processes and selection criteria when designing tenders.

At least ten other judicial reviews are pending around the civil bid round and so it will be some time before there can be absolute certainty on the way forward. However, LAG does not believe anything can be gained from delaying the rest of the non-family civil contracts. Legal aid providers need the security of having new contracts for at least two, if not the full three, years and the public need the certainty of knowing that legal services are going to be there for them in the difficult times ahead.

Manchester Law Centres face closure

Two Manchester-based Law Centres are at risk of closing their doors to clients for good from next month as they have lost out in a tender to run legal advice services in the city.

Manchester City Council and the Legal Services Commission (LSC) decided to reconfigure the cash they currently spend on legal advice services into a competitive tender for a Community Legal Advice Service (CLAS). The tender was won by the city-wide Citizens Advice Bureau service, in partnership with private law firms and an independent advice centre. The council and the LSC argue that the new service, which will operate from six venues in the city, will provide better 'joined-up' services to Manchester residents. They now intend to withdraw funding from next month from South Manchester and Wythenshawe Law Centres. This is more than likely to force them to close.

Based in Longsight, a deprived, ethnically diverse part of the city, South Manchester Law Centre has been established for 36 years. Paul Morris, an immigration case worker at the Law Centre, told LAG that he and its 14 other staff got their redundancy notices last week. Morris fears that the Law Centre's clients will be 'driven to sharks and charlatans' if the Law Centre is forced to close. The Law Centre has launched a campaign to try and persuade the council and the LSC to continue supporting it. 'We are not going down without a fight', says Morris.

Gillian Hodges, senior solicitor at Wythenshawe Law Centre, told LAG that while the Law Centre has not issued redundancy notices to its seven staff yet, it is at 'serious risk of closing'. The Law Centre has been running for 26 years in Wythenshawe, which is one of the largest council estates in the country. The Law Centre understands that it scored higher than the successful bidders on quality, but the chairperson of the Law Centre's management committee, Bernard Caine, says the 'council and the LSC have chosen lower cost over quality and it is local residents, including our own families and friends, that will suffer'.

The Manchester CLAS along with the Wakefield CLAS, which was also announced last week, are the latest additions to the half dozen such services now up and running. The previous government and the LSC were keen to establish new CLAS, but mainly due to local councils’ fears about the continued existence of existing advice providers the idea has received little support. One of the first CLAS led to the closure of Leicester Law Centre and Gateshead Law Centre closed last year citing among other issues difficulties with operating the CLAS. Hull Citizens Advice Bureau, one of the oldest bureaux in the country, was also nearly forced to close when it failed to win a tender for a CLAS two years ago. It is now operating a much reduced service.

Paul Morris can see 'no good reason' why a service 'praised and appreciated by the community it serves' should be forced to close. No money will be saved by establishing the new service as the council and the LSC are putting the same amount of cash into it. To LAG, the policy of establishing CLAS seems to be an example of change for change's sake in the public sector. Particularly in areas in which long established services are forced to fold when a CLAS is established little demonstrable benefits are brought to clients. What is in danger of being lost in Manchester, if these Law Centres are forced to close, is experience and quality - two ingredients which are essential to providing legal services that get results for clients.

Image: South Manchester Law Centre

Social welfare law success

Birmingham-based social welfare law (SWL) firm, Community Law Partnership (CLP), has today heard that it has been granted a contract by the Legal Services Commission (LSC), after originally being turned down for one last month. The LSC has also confirmed that all civil contracts will now be extended to Sunday 14 November (see yesterday's blog). Providers will receive an additional twelfth of their new matter starts allocation to cover this.

CLP had appealed against the decision not to award a contract, but the LSC still refused to grant it one. CLP then brought judicial review proceedings against the LSC arguing that one of the selection criteria for the contracts was unfair. At an initial hearing the judge, Mr Justice Collins, said, 'I am bound to say this is a dreadful decision and on the face of it the approach [taken by the LSC] is totally irrational'. He hinted that at the full hearing, which was listed for 8 September, he would be likely to find against the LSC as he believed it was unfair to use a selection criterion linked to experience in appeals to the higher tribunal in benefits cases. CLP had argued that it did not need to take many of these cases as it generally wins its clients' cases at the lower tribunal.

LAG understands that some legal aid providers in Birmingham might have overbid for work and have now agreed to accept smaller contracts. This released cash to grant a contract to CLP. It would have been a travesty if CLP, with its excellent track record, had not continued to provide legal aid. This demonstrates that seemingly fair selection criteria can throw up some perverse results.

Uncertainty over civil legal aid contracts

Last Friday (3 September), the High Court decided that the start of the new family legal aid contracts should be delayed for a month in order for the Law Society's judicial review application to be heard. The delay will give the Legal Services Commission (LSC) time to collate evidence on the geographical areas covered by the new contracts, as a key part of the Law Society's case against the LSC is that the cut in the number of firms has left areas of the country not covered by family law solicitors. The full judicial review hearing is due to go ahead on 21 September.

LAG understands that the LSC has met with representatives from legal aid providers to discuss its interpretation of the High Court's decision on Friday. An important point yet to be clarified is whether the decision also means that contracts in social welfare law (SWL), also due to start on 14 October, should be delayed as well. The LSC had decided to run the SWL bid round with the family law one as it wanted better co-ordination of services at a local level. SWL, which consists of housing, benefits and debt work, fits well with the provision of family law services as clients often face a combination of these problems. Firms might be reluctant to go ahead with SWL contracts while there is still uncertainty over the family contracts.

It seems unlikely that the issue of SWL contracts and whether they should be delayed will be resolved before the hearing on 21 September. The Law Society appears to be taking the view that the High Court ordered a delay on all of the civil contracts including SWL, while LAG understands that the LSC believes the delay only applies to family contracts. Legal aid providers are therefore facing at least two weeks of uncertainty pending the judicial review hearing before this issue can be resolved.

At the hearing, the LSC will try to convince the judge that there is sufficient cover in each area of the country and that the bidding process was legal, but all options appear open to the court regarding its final decision, including declaring the process illegal. If this happens, the whole contract round for family law will have to be scrapped and a more open system adopted in which any firm that meets the quality threshold can undertake family law work. The middle way might be for the court to order a further delay while the appeals which many firms have lodged against decisions not to award contracts are decided. Things could look very different on the access to justice ground which the Law Society has raised in its judicial review application, if by early October a few hundred more firms have been awarded contracts on appeal.

Image: Legal Action Group

No win, no fee - no solution for legal aid

In its report, Access to justice: balancing the risks, the Adam Smith Institute last week called for legal aid to be abolished for most civil compensation claims and no win, no fee agreements to be expanded to cover those cases currently funded by legal aid. The paper is deeply flawed as it seems to be mainly informed by biased opinions on the balance of risk in civil cases (the author believes that the system is loaded in favour of claimants) and little understanding of the civil legal aid system.

Most of the civil legal aid budget, well over half, pays for family cases and a large proportion of these are related to child protection and custody disputes - impossible to fund through no win, no fee arrangements. Admittedly, the financial aspects of divorce cases could be funded in this way, but legal aid currently works as a state loan to fund such cases. The costs are covered by loans secured against property and include interest charges above the Bank of England base rate. A healthy £50 million a year currently comes back into the fund through this route.

Much of the rest of the civil litigation covered by the legal aid system includes areas of law such as housing and community care. Disputes with landlords or elderly people trying to secure help with care needs really do not lend themselves to no win, no fee arrangements. These are the sorts of cases which cannot be measured in terms of hard cash, but LAG would argue they are of a greater value as they involve the necessities of life such as keeping a family in a home. Is the Adam Smith Institute seriously suggesting that these people can reply on the 'free market' for legal redress?

This is a path which has been trodden before. Ten years ago, under the last government, a substantial part of the legal aid system was privatised. Encouraged by the Adam Smith Institute, the government abolished legal aid for most personal injury cases and replaced it with no win, no fee. This led to the scandal of parasitic claims management companies exploiting claimants by charging extortionate fees for what amounted to a referral service - so much for the free market. Fortunately, after the government was forced to intervene, regulation of these companies has now largely controlled the problem.

What remained in the legal aid system for personal injury work were medical negligence cases. These were left in because of the difficulties of funding these claims through no win, no fee - due to the costs of gathering medical evidence. LAG appreciates that this is an emotive issue as the main defendant in such cases is the NHS. Unfortunately, mistakes are made in the NHS, as they are in health systems across the world. However, taking such cases out of scope of legal aid would have a negligible impact on the overall budget (such cases take up less than one per cent of legal aid's £2 billion budget), but would have a profound effect on the few hundred people a year who rely on legal aid so that they can seek redress when things go wrong.