'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

Citizens Advice seeks divine intervention?

Fear stalked the campus of York University, along with Church of England clergy, at the Citizens Advice Bureaux northern conference last week. Bureaux from northern England were meeting for their annual get together, under the cloud of impending cuts.

A potentially cataclysmic funding storm is brewing for the bureaux as they await the results of their tenders for civil legal aid contracts from the Legal Services Commission (LSC). Many of the bureaux currently undertake advice work in debt and welfare benefits under contracts with the LSC. Some of the larger ones also have contracts in other areas of work, for example, Gateshead Citizens Advice Bureau works in immigration, employment, benefits, debt and is looking to expand into family law. The results of the new tenders for the contracts, which commence in October, were due to be announced on the second day of the conference last Friday (9 July). However, the LSC seems to be in the midst of administrative meltdown and has had to delay advising bureaux whether they have a contract or not. This has left many on tenterhooks, fearing they will have to make staff redundant in the coming months and reduce their opening hours to the public.

Some managers and trustee board members gathering in York believe that up to 80 per cent of their funding could go in the next few months. One manger from a bureau in Lancashire told LAG that it could lose nearly £800,000 in contract cash by April next year, leaving it with less than £100,000 in funding. Like many, this bureau potentially faces losing its legal aid contracts as well as central government funding. Money given to Citizens Advice by the last government to help it cope with the extra work caused by the recession is due to run out by March 2011, as is cash from the Financial Inclusion Fund (FIF).

The FIF was established in 2006 by the previous government. The total fund allocated was £120m and it was intended to tackle debt and money problems through a combination of educating the public and advice. £45m of the fund has gone on frontline advice services paying for over 300 debt advisers in Citizens Advice Bureaux and other advice agencies. According to Citizens Advice, over 70,000 people facing money problems have been helped by these FIF services. The new government, though, is staying tight-lipped on whether it will renew the grants.

The delegates might have been tempted to enlist the support of their fellow temporary residents at the University of York, as the Church of England Synod was meeting at the same time on campus. This made for an interesting juxtaposition of discussions on seemingly intractable problems.

Rowan Williams, the Archbishop of Canterbury, cut a careworn figure in a corner of the refectory at breakfast time last Friday. Around the refectory his bishops and other clergy were discussing a compromise deal over women bishops. Meanwhile, the Citizens Advice delegates, often sharing the same tables as the clergy, discussed legal aid contracts and the FIF. Perhaps they could at least draw comfort from the fact that one person in the room was facing seemingly greater problems than their own?

Despite the bleak outlook last week Rowan Williams managed to put together a compromise on women bishops earlier this week. Perhaps his success at crafting an agreement can give hope to his temporary cohabitees from last week? Hopefully, the funding problems which Citizens Advice Bureaux and other advice providers face will be resolved with government rather than divine intervention, although at times like this I am sure they are willing to accept any help they can get.



Steve Hynes

Image: York University Conference hall- Legal Action Group

Aspiring lawyers disappointed

LAG was disappointed to learn this afternoon that the Legal Services Commission (LSC) has decided not to go ahead with plans to sponsor training contracts for young legal aid lawyers. We believe this is a real kick in the teeth for many newly qualified or aspiring lawyers who want to pursue a career in legal aid work. The decision on the training grants had been delayed for over a year.

Over the years, the LSC has sponsored the training of 750 lawyers in legal aid firms and some Law Centres. The scheme gave them a chance of getting a foot on the career ladder and more importantly ensured the legal aid system recruited talented lawyers at the start of their careers, rather than letting them go off to pursue more lucrative careers in commercial law.

Laura Janes, chairperson of Young Legal Aid Lawyers, told LAG, 'This was promised by the last government. The minister even showed me the paperwork and said it was going to go ahead. It will be a bitter disappointment to many law students and newly qualified lawyers, as this was their last hope of a career in legal aid work.'

LAG appreciates times are hard in the world of legal aid. Cuts are looming. But surely £2 million could have been found out of the total budget of over £2 billion for the scheme? The sponsorship of training contracts by the LSC was widely supported by practitioners and was seen as one of the most positive things it did. A good quality legal aid system is dependent on recruiting and retaining the most able lawyers. LAG fears that firms will increasingly be reluctant to pay the wages of trainee lawyers and instead opt for unqualified staff to carry out legal aid work.

More immigration advice providers could close

LAG has learnt that only 252 out of over 400 applicants were successful in their bids for immigration and asylum contracts from the Legal Services Commission (LSC). Providers were told the results of the tender exercise this week. Many are also disappointed over the number of new cases, or to use the jargon new matter starts (NMS), they have been allocated. One London firm told LAG that it had been allocated less than half of the immigration cases and only 70 per cent of the asylum cases it had applied for. According to the Legal Aid Practitioners Group (LAPG), which represents both solicitor firms and not for profit legal aid providers, some of them are facing closure due to not being allocated sufficient NMS to make their services viable.

The NMS had been allocated to geographical areas and providers had applied for blocks of them. LAG estimates that between 30-40 per cent of providers have had the number of NMS allocated to them reduced. The situation is particularly severe in London as LAG understands that the LSC, which administers the legal aid system for the government, received applications for over double the number of NMS available.

An LSC spokesman told LAG that the overall number of NMS for immigration and asylum cases had not been reduced, but that in most areas they had been 'oversubscribed' for the ones available. According to the LSC, 47,744 NMS for immigration cases and 48,761 NMS for asylum cases have been awarded in the tender round. It believes that there is no right of appeal against decisions on the number of NMS allocated and providers can only appeal against a decision not to grant them a contract. The LAPG, though, is advising its members to put in appeals if they disagree with the number of NMS allocated.

LAG believes the number of applicants for the available work must have played a part in the government’s decision not to help Refugee and Migrant Justice (RMJ). It represented over 10,000 immigration and asylum clients a year and had been forced to call in the receivers two weeks ago due to cash flow problems caused by the change over to fixed fees for cases. Despite raising over £76,000 in a few days in an effort to save the service, Caroline Slocock, RMJ's chief executive, was forced to admit defeat, saying, 'RMJ has received the most amazing support from supporters and we were overwhelmed and touched by the offers of financial help in response to our campaign. We would like to thank everyone who has tried to save RMJ and very much regret that it has not been possible.' Unfortunately it appears that RMJ will not be the last immigration provider to go under this year.

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

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.

Refugee charity faces closure

Accountants BDO have taken over as administrators of the charity Refugee and Migrant Justice (RMJ). LAG understands that BDO took over from 4 pm today. RMJ is appealing to the government to make £1.8 million in payments for legal aid work or the charity will be forced to close.

RMJ is in cash flow difficulties due to the change over to fixed fees for legal aid work. Prior to October 2007, not for profit agencies were paid fixed contractual payments for undertaking the work. From April 2009 the government ended the transitional arrangements which had been in place and this has led to the cash crisis at RMJ.

The charity represents clients in around 10,000 cases a year. It estimates that it will cost at least £2m to close the charity, as the government will have to reallocate most of its ongoing cases. RMJ has been running a high-profile campaign to persuade the government to change the rules on payment for legal aid cases. So far, though, the government has stuck to the line that it cannot make an exception for the charity. The government is in a difficult position as legal aid firms might cry foul if the charity receives special treatment.

LAG believes the system needs to be changed so that organisations like RMJ, which represents clients in complex cases, do not lose out. Over half of RMJ's cases are undertaken on behalf of asylum-seekers and these cases can take two or more years to resolve. Legal aid providers do not get paid until the end of the cases. Those providers which run complex cases are penalised under the fixed fee system, while those undertaking many short cases, which they can advise on and close quickly, benefit. LAG suggests that complex cases need staged payments or payments on account. A balance needs to be struck or clients in desperate need of help will lose out.