Draft Tooks Chambers policy on the proposed legal aid reforms by HC120730083334


									Draft Tooks Chambers policy on the proposed legal aid reforms

The government is proposing radical changes to the legal aid system based on
its July 2005 White Paper, “A Fairer Deal for Legal Aid” and the July 2006 Carter
report. The aim is reduce expenditure through the introduction of market-based
reforms in the way legal aid services are funded and delivered.

The first, transitional, stage involves a move to fixed and graduated fees across
the board in areas where hourly payments have hitherto been used for solicitors
work. That will pave the way in October 2008 and April 2009 for full competitive
tendering for block contracts by solicitors. The intention is that a smaller number
of larger firms will provide the services at a reduced cost per unit.

Carter proposals on graduated fees for criminal advocacy form part of the
transitional package, this document doesn’t address issues arising from that. It is
concerned with the knock-on effect of the fixed fees and competitive tendering on
the quality and availability of legal services. The new criminal advocacy
graduated fees are not ring-fenced beyond October 2008 and the implication is
that those fees will be subject to strong downward pressure due to the
introduction of “market forces” thereafter. But there is a wider impact on the
quality of legal service provision we therefore have to take a view on, alongside
any potential impact on our own remuneration.

The small detail of the reforms has been subject to constant modification over the
past year and this is likely to continue at least until the Summer. But the overall
thrust of the policy has been clear enough for long enough for an assessment to
be made. Rather than adopting a “wait and see” approach or seeking to nit pick
our way through what we may, at a push, be able to live with in the hope of
negotiating away one or two particularly bad elements, we believe the policy as a
whole should be opposed.

The reforms are wrong because they will fundamentally undermine the quality of
legal services and universally available access to justice which, although far from
perfect, has traditionally been very highly regarded domestically and

Fixed fees
Fixed fees already operate in significant areas for determining the payment of
solicitors services. But introducing them across the board will have the effect of
driving down the quality of service provided. “Escape clauses” will allow hourly
payments where work of several times the amount of the standard case occurs.
But in the vast majority of ordinary casework solicitors will be deprived of the
necessary flexibility that hourly payments provides in adapting the resources
required to meet the real needs of clients and ensure a quality service.

Anyone involved in any legal aid work will be readily familiar with the problems
this will create. Many clients speak no or poor English, have mental health
problems or personality disorders, are addicts or have other health problems,
have childcare issues or other life-management problems (like poverty, illiteracy,
abusive relationships etc).

Each will require a greater input than the “standard” – for instance additional
time, additional resources (interpretation, medical, psychiatric reports etc). In
each case this is a matter of judgement that can only be decided on a case by
case basis the degree to which is not always apparent at the outset.

The one size fits all approach will have two major impacts. First, it will drive
solicitors away from taking on such clients, not just because they “cost” more
time and money but simply because of the uncertainty involved and difficulties in
planning around them. Second, where such clients are taken on there will be a
continual financial pressure and incentive to downgrade the quality of service,
tailoring it to the fixed fee rather than to need.

The House of Commons Constitutional Affairs Committee (CAC) report on the
Carter Review (published 1st May 2007), based on extensive evidence from a full
range of sources heard that in Scotland, where fixed fees in criminal work have
been in operation since 1999 there has been an overall reduction in client contact
and case preparation as firms dramatically increased the number of cases they

The committee commented, that “flat fixed pricing per case …. may be achieved
at the expense of quality of legal advice and representation provided”. It received
constant warning that the system would reward legal service suppliers for
handling primarily simple cases and cherry picking to the detriment of vulnerable
clients. (paras 68-71 p.24)

Cuts and financial viability
The Legal Services Commission (LSC) intends to cut expenditure of the 2005-6
level by about 5% by 2010. Taking into account inflation this will amount to a real
terms reduction in the region of 15-20%. This translates into specific targets for
particular areas of work that are higher than this 5% overall figure. For instance
an absolute reduction in expenditure on police station attendance of 8.3% and
magistrate’s court work of 16% in London – in real terms around a fifth and over
a quarter.

Three independent financial studies (one by LECG on the Carter proposals,
commissioned by the Law Society, and two by Otterburn Legal Consulting
commissioned by the LSC) have concluded that the legal aid supplier base
across the country is generally economically vulnerable. This does not simply
mean civil legal aid. Most criminal legal aid firms operate on the edge of
profitability. The overall assessment of the CAC was that the financial position of

many criminal suppliers was highly fragile, with those in a financially strong
position “very much in the minority” (CAC para 47, p.18)

The level of cuts sought will therefore threaten the financial and business viability
of a significant number of solicitors firms. Already there is anecdotal evidence
that hundreds of firms are leaving the field. That will inevitably continue.

Radical changes in work culture
Experienced lawyers, once lost, will not be regained – as they move to other
practice areas, leave the profession altogether or retire. There will be a constant
incentive to replace more with less experienced, more skilled with less or
unskilled staff.

The dynamic is towards a factory-style of operation with a small cadre of
supervisors overseeing the work of inexperienced and lower skilled staff who will
be paid less, have less incentive to stay long and develop skills and therefore will
work with less commitment and energy. Morale will decline as turnover and
instability increases. There will be a long term erosion of the public service ethos
and the culture that goes with it.

Competitive tendering
The transition to competitive tendering from October 2008 will exacerbate this
process by further driving down fees as firms seek to outbid each other by
lowering unit costs and increasing throughput. The government claims to be
committed to ensure pricing will be fair and reasonable for instance by placing a
“floor” beneath which bidding cannot go. But it’s monopoly position as buyer, the
over-riding aim of expenditure cuts, the real impact of this taking into account
inflation and the dynamics of such market-based mechanisms make these re-
assurances fairly meaningless,

The CAC heard expert evidence from Professor Frank Stephens that where legal
aid providers in a competitive market (such as criminal defence work in London)
bid for contracts there is a risk that, knowingly or inadvertently, bids might be set
at unsustainably low levels for the three year life of the contract. The
consequence is likely to be a reduced level of service for clients. (CAC paras 146

Firms that miscalculate their bids or cannot fulfil the contracts may be forced to
leave the local legal aid market with unpredictable consequences for clients and
local access to legal services. This would be a particular problem where there
are a relatively small number of large firms in a given area making them more
difficult to replace.

Lack of supporting research and data

Perhaps most disturbingly, the policy has been widely criticised for not being
based on any serious research or data analysing the drivers behind expenditure
increases in the past decade. The reforms are experimental in nature.

Independent academic research by Professor Ed Cape has found that the main
areas of increased expenditure (in serious criminal cases in the crown court and
in child care proceedings in the family court) have been due to an increase in
volume and number of claims. The increase in cost per case has risen little
above inflation. Anecdotal evidence points towards the constant stream of
legislation creating new criminal offences and constantly changing procedures
putting pressure on the work required per case.

Crisis of confidence
The highly critical and detailed CAC report stated the proposals would
disadvantage already vulnerable clients, were “reckless” and a “breathtaking
risk”. It also warned that there has been a “catastrophic deterioration” in relations
between practitioners, their representative organisations and the LSC.

This crisis of confidence was prior to the widespread opposition to the imposition
of new legal aid contracts by the LSC this Spring. Giving the LSC the right to
amend any and every term of the contract at any time without any compensation
– this has created commercial uncertainty, prejudicing firms ability to carry out
medium to long term planning and directly effecting client service.

Specific problems that can be identified
There will be a detrimental impact on Black and minority ethnic (BME) firms
and solicitors according to LSC-commissioned research. A £50,000 minimum
contract threshold would currently exclude 37.5% of BME providers but only
18.9% of white providers. Even without setting minimum contract values, the
introduction of competitive tendering will have a similar impact. Carter was aware
of this but proposed no affirmative steps to deal with it.

There has been no comprehensive race impact assessment of the reforms as a
package. The CAC has expressed its concern that the proposals may
contravene the Race Relations Act 1976 (para 229 p.74)

This is not a peripheral problem. It goes to the heart of the logic behind these
market based reforms. The market places no value on the particular contribution
of BME firms and solicitors to the quality of legal service provision and access to
justice. The reforms are premised on the assumption that small firms are
“uneconomic” and bad for business. There will be an inevitable knock-on
disadvantage to clients from BME communities - the most vulnerable and
marginalised sections of society and greatest in need of assistance.

According to Mayor Ken Livingstone, who has opposed the legal aid reforms, this
impact will be particularly marked in London. Government figures show that a

much higher proportion of legal aid clients in London are from BME communities
than in the next most affected city (73.9% compared with 34.3% in Birmingham).
The specialist expertise, community links and language skills that such firms offer
are vital if all parts of London’s population are to be able to access justice. (Press
statement from Ken Livingstone 8/5/07)

There will be a similar impact on vital work in specialist or “niche” fields. A
group of high profile firms including Bindmans and Christian Khan said the
proposed reforms will lead to the “immediate dismantlement” of specialist teams.
Cases they deal with tend to be more complex and time-consuming and are likely
to be unprofitable under the fixed fee system. Michael Schwarz of Bindmans has
said “clients will not have access to specialist lawyers and their human rights will
be at risk – it will be an encouragement for negligence or abuse by state officials
and is a recipe for injustice (Law Gazette 17th May 2007)

In relation to civil legal aid provision, the CAC has concluded that although
some suppliers would see an increase, there has been no significant research
enabling a judgement of the potential effect on the supplier base as a whole.
“The Carter reforms were intended to ease the pressure on civil and family legal
aid. We doubt that the fee levels as suggested would achieve this objective ….
We have great sympathy for the criticism voiced by the Civil Justice Council, ‘the
proposals … carry greater risks in terms of damage to civil legal aid provision
and access to justice than the minimal financial improvements in the overall legal
aid budget … the proposals … will not correct the imbalance in what is a fragile
civil legal aid supplier base’. We see risk to the supplier base in the current
proposal for the civil legal help fee proposals. Imposing national fixed fees on
large swathes of legal aid work that rapidly force unit cost cuts in a significant
proportion of providers is an exceptionally risky strategy” (paras 117-119, p.39-
40). The Master of the Rolls, Sir Anthony Clarke has expressed concerns calling
for a delay to the civil legal aid reforms. (CAC report)

There is particular impact on London family law firms. Costs are considerably
higher in London, but fixed fees are set on a national basis. More generally, the
CAC has commented that, “we are deeply concerned that the effective reduction
in case fees for a significant number of specialist family legal aid suppliers will
make it increasingly unattractive to practice in this field of law. It is unlikely that
these fee schemes will halt the trend of family lawyers leaving the legal aid
system, let alone reverse it”. (para 112, p.37)

Professor Masson has warned the CAC that very experienced and specialist
solicitors on the Law Society’s Children’s Panel “will leave, retire and not be
replaced and, increasingly, we will have all the parties represented by non-
specialist solicitors who will move away from the negotiation and identifying what
are the real issues and focussing … much more into litigation and fighting the
cases (para 80, p.27).

President of the Family Division, Sir Mark Potter has warned that the
government’s plans would “accelerate the flight” of specialist solicitors from
family work. (CAC report)

Fixed fees for police station work will have a very serious negative impact on
an area of work that underpins the very foundation of criminal legal services. The
time that solicitors spend in police stations is out of their control and can vary

Fixed fees are a threat to equality of arms – with a potential for unscrupulous
officers manipulating the system by dragging out the interview process. There will
be a financial incentive to give less advice, take less instructions, not bring in
interpreters, not make representations for medical or psychiatric assessment and
worst of all, to secure quick resolutions through early and full admissions of guilt.
What happens in this stage in the criminal justice procedure and the quality of
advice and representative will have a direct knock on effect at every subsequent
stage including verdict, sentence and appeal.

Similar threats exist in regard to the early stages of magistrates court work,
where pressure to cut hours of anticipated preparation and work may lead to
more guilty pleas at an earlier stage than is compatible with full and fair access to

The rolling up of travel costs and the “localisation” of service provision in fewer
larger firms will reduce choice overall. It will discourage or prevent clients who
move or are arrested away from home from retaining services from lawyers they
are acquainted with and who may have a profound and long term understanding
of their needs. It will drive down standards by reducing the amount of effective
competition based on quality.

Responses to some government arguments
Expenditure has risen excessively over the past decade. No country spends
more on legal aid per capita.
The high quality of legal services in this country is widely accepted. But quality
comes at a price. There has been no research or data to explain what are the
“drivers” behind the cost increases. There are reasonable grounds to argue that
costs are being driven up by factors outside the control of the lawyers – new
offences, new laws, higher volume of cases etc and that for the vast majority of
work unit costs have remained stable or risen only marginally. If this is or even
might be the case it completely undermines the government’s argument. Cost
increases are in any event heavily focussed on a very small area of legal service
provision – in particular very serious criminal cases – it is wrong and
counterproductive to introduce sweeping and across the board change on this

The argument that there is a limited “pot” has no basis in the real world.
Governments, including those applying strict monetarist principles, can and do
increase overall and departmental budgets at will – even to the extent of running
significant deficits. Even were a deficit to be undesirable there are all sorts of
ways of raising more money. These are fundamentally political and not financial

Nothing demonstrates this more vividly that prison expenditure. England and
Wales have the highest rate of prison population per head, by far, of any country
in Europe. It has gone up by a third under this government, over the past decade.
Each prisoner costs approximately £40,000 a year to keep. The construction of
new places is an extra expenditure. The government makes no claim that this
situation is a good one, indeed it is widely accepted that it is counter-productive
given the expense and high reoffending rate of ex-prisoners. Nonetheless the
response is the planned construction of an extra 8,000 places. Many informed
experts would regard slashing prison numbers to the European average as a
reasonable goal. Clearly financial restraints and ring-fenced departmental
budgets have no application to the finance of this particular area of criminal
justice policy.

Legal aid budgets, targeted as they are at assisting the most deprived and
vulnerable members of society, should (like health, education and areas of basic
social service provision) be driven by need. It would be worth looking at what
factors are driving this need and considering whether a high legal aid budget is
an inevitable consequence. We live in a society where inequality has been
increasing over several decades, millions are in poverty, drug addiction, teenage
pregnancy and prisoner population is the highest in Europe, child deprivation was
ranked by a recent UN report as the worst in the developed world and there is a
chronic housing crisis.

Civil legal aid budgets have been in decline and need to be restored.
Putting to one side the “limited pot” arguments, dealt with above – this is no
excuse for robbing Peter to pay Paul. In any event the conclusion of the CAC that
any limited civil legal aid increase has to be balanced against the negative impact
of the fixed fees and competitive tendering on an already very fragile supplier
base suggests that any supposed benefit is at best unproven and more probably
unlikely, particularly in the absence of the necessary research and data.

The need for opposition
The ethos of Tooks chambers – since its foundation 23 years ago - has been one
of uncompromising defence of civil liberties and justice for all. Our work has
focussed on consistent defence of the rights of the most vulnerable, marginalised
and oppressed sections of society – irrespective of pressures to the contrary both
inside and outside the courtroom. That is as true in respect of defending
migrants, children, minority groups and those suspected of terrorism today as it
was in the notorious miscarriages of justice in the 1980s. Legal service provision

has come a long way in recent decades and we now work closely with many
others – barristers, solicitors, legal advisors – with similar aims.

But the transformation to the legal aid system now underway poses it’s most
direct threat precisely to the most vulnerable, deprived and oppressed that we
exist to assist and to the ability of legal service providers to help them. Our
collective existence and ethos is threatened. That is why we oppose these
policies. But we are no means alone.

The breadth of opposition
The critical report of the House of Commons Constitutional Affairs Committee
has been noted already. The reforms are opposed by the Law Society
(unanimously at a Special General Meeting attended by 400) and a range of
voluntary and professional organisations including Mind, shelter, NSPCC, the
Refugee Council, the Child Poverty Action Group, the Advice Services Alliance,
and the Citizens Advice Bureau. A cross-party group of 115 MPs have supported
an Early Day Motion criticising the reforms.

Law Society chief executive Desmond Hudson has said “it is difficult to recall any
other issue generating so much strength of feeling among solicitors as the
current set of changes to legal aid. We share our members’ alarm and grave
concerns. The concept of access to justice irrespective of the means to pay is at

A large number of solicitors took strike action in February and a well attended
and unprecedented demonstration was organised by solicitors in London. The
Legal Aid Practitioners Group reported in May that over 200 firms have decided
not to continue doing any legal aid work and many are dropping areas of legal
aid practices.

Mayor Ken Livingstone, has said “as a diverse city, London will be badly hit if
specialist and community-based law practices lose the ability to take on legal aid
work. The large number of small Black and Asian legal firms in London is no
accident – they are highly valued by the communities they serve. The proposed
replacement of such firms by larger, non-local legal groups through the
competitive tendering process will cut off many communities from access to the
legal aid system … this could mean the end of legal aid provision in London, as
we know it”.

Liberty, the CRE and the Law Society are backing a legal challenge launched by
the Black Solicitors Network and the Society of Asian Lawyers. Liberty legal
officer Anna Fairclough said, “the Carter reforms have glaring implications not
only for the future diversity of the profession and the judiciary, but also for the
ability of individuals to instruct a solicitor or their choice. The failure to conduct a
proper race impact assessment or to give proper effect to their positive duties to
promote equality of opportunity demonstrates their insistence on pursuing cost-

cutting measures at the expense of access to justice”. (31st May 2007 Law

Professor Ed Cape has said the reforms would “destroy the legal aid profession
in a way that would be irreversible” (evidence to CAC).

We therefore call on the government to immediately withdraw the whole package
of proposals, we support solicitors and other legal service providers in their fight
against it and we call on other barristers to do likewise. The legal profession
needs to unite in its opposition.

PM 7/6/07


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