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

Bill committee hears from LAG

Last week, LAG’s director, Steve Hynes, gave evidence before the House of Commons committee which is considering the Legal Aid, Sentencing and Punishment of Offenders Bill. He made a number of points, which were intended to challenge the assumptions that underpin the government’s legal aid policy.

The government is fond of asserting that the budget for legal aid is out of control and that the system has expanded far beyond its original purpose. In his opening remarks, Steve Hynes told the committee that the previous government, under the then legal aid minister Lord Bach, had managed to control the budget by implementing changes. He acknowledged that LAG often opposed these changes, but that the budget had been under control for at least the last four years. He pointed out that the last large expansion of the scheme was under Margaret Thatcher’s government with the introduction of the Police and Criminal Evidence Act 1984, which led to the introduction of advisers in police stations: 'No-one is talking about repealing this.'

Government members of the committee had pursued lines of questioning around international comparisons. Steve Hynes quoted from regulations made under section 114 of the New Zealand Legal Services Act 2011, which deal with the means test for civil legal aid in New Zealand. After converting the figures to pounds he told the committee that the New Zealand civil schemes means test is, if anything, slightly more generous than that of England and Wales. He emphasised that the differences in expenditure compared to European and other jurisdictions were caused in large part by the greater number of criminal prosecutions per head of population in England and Wales.

Ben Wallace MP (Conservative) asked if further savings could be made from criminal legal aid. Steve Hynes said that the previous government had introduced fee cuts in criminal legal aid; the last of which were introduced in the current year. He explained that competitive tendering for criminal legal aid is 'hanging in the air' and that this has led to a split in the profession as, 'quite a few of the larger firms believe that if they have the volumes of work from police stations to Crown Court and higher courts work, they would save money, of the order of ten per cent. You can probably say that it will be more than that'. However, he warned that: 'You can make savings, but it means consolidation in the market, lack of choice and the potential for cartels … you can push and push and you will get to a stage where you may lose, particularly at the top end, the advocacy and other skills that you need.'

In answer to a question from Yvonne Fovargue MP (Labour) about the proposed telephone gateway, Steve Hynes said that it could work, but only in tandem with adequate coverage of face to face services across the country. Citing LAG’s opinion poll research carried out in November last year, he said this showed: 'If you want a legal aid system that people do not use, then deliver it through telephone advice.'

A full copy of the evidence before the committee is available here:

http://www.publications.parliament.uk/pa/cm201011/cmpublic/legalaid/110714/pm/110714s01.htm

A report on the evidence hearings will appear in next month’s Legal Action journal.

Image: LAG

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

Legal aid green paper expected today

According to a story in the Times this morning, and other media sources, the green paper on the future of legal aid will be announced today (15 November) by the Ministry of Justice (MoJ). Included in the paper will be plans to cut at least £350m from the budget. It is believed that the paper will detail suggested cuts in police station advice, but with the bulk of the cuts falling on civil work. It would appear family legal aid for work related to divorce is in the government's sights, along with representation in immigration cases and medical negligence claims. It is not clear if any cut will fall on social welfare law (SWL), though this had been suggested as likely by some sources close to the government over the summer.

Social welfare law: what is fair?

At LAG's conference last Friday (12 November), we released the findings from a nationwide opinion poll on the public’s views on legal advice services with an emphasis on the most common types of SWL problem (ie, problems to do with housing, benefits, money/debt and employment law).

It is heartening that at the core of the research findings is a sense of fair play. The British public overwhelmingly believe that even if they are unlikely to use the services themselves, their fellow citizens should have access to state-funded legal advice when things go wrong in their lives. We accept that cuts in legal aid should not be reduced to a popularity contest between different areas of law as we recognise that some types of legal aid work might not enjoy popular public support, but are essential to guarantee civil liberties and to maintain the rule of law. We do believe, though, that the results of the survey send a loud and clear message to the government that publicly funded SWL services matter to the public and therefore such services should not be seen as an easy option for cuts.

These are the key findings from the research:

1. Around two-fifths of the people experiencing a SWL problem went to a legal advice centre such as a Citizens Advice Bureau and around one-fifth went to a solicitor.

2. The lowest social group (DE) were the most reliant on local advice centres for help with these problems and they were the least likely to use internet and telephone services or to be able to travel far to access advice.

3. A large majority of people, while they might not use advice centres, viewed them as the appropriate place to go for advice on these types of problems.

4. People from the lowest social group were twice as likely as other groups to experience problems with money such as debts and benefits. Problems with employment and housing were the most evenly distributed across all social groups.

Respondents were asked two questions regarding their opinions on what should be a priority for government funding for legal advice. The key findings were as follows:

1. Roughly eight out of ten people (84 per cent) believed that advice on civil law should be either free to everyone or to those on below average earnings. Only one in ten believe that such services should be available only to people on benefits.

2. Support for legal services paid for by the state is very consistent across social classes.

3. Respondents believed that the top priorities for funding legal advice were child protection (70 per cent) and housing (67 per cent). Employment (53 per cent) was the third priority. Benefits and debt advice were seen as the next priorities (36 per cent each) and divorce and relationship breakdown was the lowest priority (17 per cent).

4. There was a remarkable degree of unanimity between social classes about what the priorities should be for advice.

5. While state funding for divorce-related work has least public support, LAG concluded that if there was domestic violence involved, such cases might have enjoyed higher levels of support.

A full copy of the report Social welfare law: what is fair? is available from our website. LAG intends to follow up the research and hopes to publish further reports on the public’s views on civil law legal services as well as developing a set of policy proposals based on the research.

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.

LSC under attack

The Legal Services Commission (LSC) has been hit by another damning attack on its performance. In a report released this week, the Public Accounts Committee (PAC) is scathing about the LSC's performance in managing criminal legal aid. The PAC report follows hot on the heels of the National Audit Office report published in October 2009, which slammed the LSC for making overpayments of £24.7m to solicitors and other legal aid providers.

Not surprisingly, the latest report was critical about the LSC's abandoned plans for best value tendering (BVT), as this 'leaves the Commission not able to assess if it is paying a reasonable price for legal aid'. The report also highlighted the LSC's 'poor financial management and internal controls and deficient management information'. It cites the constant and expensive changes at senior management level as the reason why the LSC has not been able to implement the Carter reforms.

Chairman of the PAC Edward Leigh, the Conservative MP for Gainsborough, believes the LSC does not possess the 'basic information' on the costs and profitability of law firms which is necessary to set a fair price for legal aid services. This echoes criticisms which have been made by the Law Society and other organisations representing lawyers.

In a nod to the Magee Review of legal aid delivery, the PAC report was highly critical of the LSC's lack of a clear strategic direction, which the committee believes is added to by the 'confusion and uncertainty' surrounding its relationship with the Ministry of Justice (MoJ). LAG takes this to mean the row which has been going on behind the scenes between the LSC and the MoJ over control of policy.

One important point which the report makes is the need for the LSC to gather feedback from the users of legal aid. With reference to police station work, the report's authors believe such feedback would be useful in investigating why only half of people take up their right to legal aid. The report also suggests a cap on the earnings which individual lawyers can draw from legal aid. Could this spell the end of the £1m legal aid QC?

Over the past two years, criminal legal aid has been in turmoil with the threat of BVT and the continuing arguments over cuts in fee levels. The PAC report reflects this, but offers few solutions.

Criminal BVT pilots abandoned

It looks like the final nail in the coffin of best value tendering (BVT) has now been hammered in - for now at least. The government has announced that it is abandoning plans for the pilots. The tendering process had been due to start in the New Year for Avon and Somerset, and Greater Manchester. This climb down will come as a considerable relief to the practitioners in these areas.

It seems to LAG that the government was swayed by the argument that it was unfair to expect firms to tender for the work when the consultations on Crown Court and Very High Cost Cases fees were still pending. Firms need to know what fees they can expect across the board in criminal work before they tender for police station work.

The government and the Legal Services Commission (LSC) say that they are going to work up alternative plans. The legal aid minister Lord Bach told LAG this afternoon that he expects 'by March next year to have some outline improved proposals'. Any implementation will be down to the next government. Both the LSC and government still seem convinced that some form of competitive tendering can provide the magic bullet to control legal aid costs. We at LAG remain sceptical.

Criminal fee cuts announced

Cuts in fees for criminal legal aid have been announced by the government. Details of the cuts were given by legal aid minister Lord Bach in a written ministerial statement to parliament at 12 noon today. The cuts follow the proposals outlined in the August 2009 paper, Legal aid: funding reforms. The main proposals are:

- Fees for police station work will be cut back in the areas the government describes as 'the most expensive and over-subscribed'. LAG understands that this could hit up to 160 areas.
- One fixed fee will be paid for committal hearings.
- The fee for file reviews in criminal cases will end.

An announcement on the reduction in experts' fees, which had also been proposed, will be made in January. The government will also launch a second consultation on reducing Crown Court fees. The government estimates that £23m will be made in savings from the cuts announced today over the next year.

LAG knows that these cuts will hit some hard-pressed firms, especially in London, where the cost of undertaking police station cover can be higher due to delays and the diverse range of clients who need advice. In some respects, though, this could be seen as the least worst option if the cash saved can be used to prop up the civil legal aid budget which is creaking under the strain of increased demand caused by the recession.

LAG is being told by legal aid lawyers that the Legal Services Commission has run out of money for civil cases. For £23m, 115,000 more clients in debt or 132,000 more clients with housing problems could be seen. LAG will be seeking assurances that this money will not disappear back into the Treasury's coffers, but will be used to help people cope with the effects of the recession.

Criminal BVT U-turn

In the face of overwhelming opposition from LAG and others, including practitioners, the government has announced today that it will not be going ahead with its plans to roll out criminal best value tendering (BVT). LAG believes it would have been a disaster if it had stuck to its original plan of introducing BVT for work in police stations and magistrates’ courts across the country by January 2011. Instead, it has decided to evaluate the two pilots in Greater Manchester and Avon & Somerset due to commence in July next year before making a final decision. At the earliest any roll out would begin in 2013.

The Legal Services Commission (LSC) has also decided that practitioners will be able to undertake own-client work outside the police station areas they are contracted for. A tolerance of ten per cent of their total work will be introduced to cover this. This represents an important concession as practitioners had argued that not to allow own-client work outside the police station areas they are contracted for would hit practices hard and lead to an inefficient service. The LSC has also announced its intention to be more flexible on the number of providers it will contract with in an area.

Apart from the two pilot areas of Greater Manchester and Avon & Somerset, practitioners will be asked to apply for new contracts in July next year. The LSC will be using an online system for providers to apply for the new contracts. Practitioners in the pilot areas will be asked to bid using an online bidding process. The fear is that practitioners will put in suicide bids to secure the work and this could lead to the collapse of some firms.

In LAG’s view, the government's mistake was in believing that BVT was a magic bullet that could be introduced relatively painlessly to cut costs. LAG believes that the government pushed hard for the quick introduction of BVT, but had to cave in when it realised that it could result in the meltdown of the supplier base. LAG recognises that there are few alternatives to controlling costs in legal aid work apart from price-setting through fixed and graduated fees or price competition. The government and LSC need to set fair, sustainable prices for legal aid work; the alternative of cutting back what legal aid will pay for is unacceptable as it chokes off access to justice for the public.

Criminal commotion

Criminal legal aid solicitors met in London last week to discuss the impending introduction of best value tendering (BVT) by the Legal Services Commission (LSC). In her opening speech, Joy Merriam, chair of the Criminal Law Solicitors Association, painted a grim picture warning that up to 80 per cent of firms might face closure.

Merriam talked about her own experience of closing her firm saying, 'It felt like a divorce'. With redundancy payments, run off insurance and other costs, she said the bill for winding up her practice came to £100,000. She feared that due to tighter LSC rules on payments many firms would be without cash to close properly. She pledged they would, 'Fight the introduction of best value tendering and we have the heart and belly to take on that fight'.

Legal aid minister Lord Bach addressed the conference after Merriam. Bach’s speech started with some pleasantries linked to the 60th anniversary of legal aid, but he moved on to say that, 'No other field of government expenditure has grown as much as legal aid. We have to face the fact total expenditure is not going up. Don’t believe any promises from the opposition'. This drew the first of many heckles from the hostile audience, 'We don’t believe them and we don’t believe you'. Bach argued that they had to identify the priorities for expenditure on legal aid and said, '… in a recession I want to protect social welfare law expenditure'.

The conference also heard speeches from LSC chair, Sir Bill Callaghan, defending BVT and Des Hudson, chief executive of the Law Society, who was critical of the proposals. Hudson believed the government and LSC had reneged on a promise made by the former chair of the LSC, Sir Michael Bichard, to evaluate the BVT pilots fully prior to any general roll out. In a question and answer session Callaghan answered this point. Citing the recession he said, 'Times have changed since Sir Michael made his comments'.

While a few months ago the public position among all practitioners was hostile to BVT, off the record some would say they were relaxed about the proposals believing their firm would win. Since the publication of the document setting out the LSC’s proposals for implementing the scheme the view of practitioners in public and private has shifted decisively against BVT. Many cannot get to grips with the complex bidding process proposed. There is also bitter resentment that the Bar got a deal on very high cost cases by using a boycott, while in contrast many solicitors now face a Hobson’s choice of risking a 'suicide bid' to keep police station and magistrates' court work or pull out at a time when the recession is making it difficult to switch into other areas of law.

LAG fears a chaotic scramble to make bids followed by recriminations and litigation, which will impact on services leading to miscarriages of justice. A pause to properly evaluate the pilot schemes before rushing to implement BVT across the country would seem to be the only sensible option.