LEGAL AID
7. There are difficulties in following the information
on legal aid expenditure at p.45 of the Annual Report, since paragraphs
12 and 13 of the commentary appear to be reprinted from paragraphs
10 and 11 of the previous year's Report, without alteration, and
the figure at Table 12 for total 1997-98 expenditure appears to
be a misprint. What factors underlie the changes in the estimated
outturn figures for 1996-97 and 1997-98 between last year's Report
and this year's?
It is regretted that the commentary on legal aid expenditure
was not updated. The commentary should have read as follows:
Paragraph 12:
Forecast expenditure on legal aid in 1997-98 is expected
to be £1,546 million, which is around £14 million less
than planned. The main reason for this is a fall of around 7 per
cent in the volume of civil legal aid bills paid between 1996-97
and 1997-98, which has been offset by the continued growth in
criminal legal aid expenditure. Over the 1997-98 financial year
criminal legal aid expenditure is expected to grow by around 12
per cent from the 1996-97 outturn position.
8. What are the main reasons for the increase in
forecast out-turn for criminal legal aid in the higher courts
from £315 million in 1996-97 to £362 million in 1997-98?
Latest estimates suggest that expenditure on criminal higher
legal aid in 1997-98 will be around £350 million, compared
to £313m (net) in the previous year, representing an increase
of £37 million (11.8 per cent). This is largely due to the
increase in average payments; last year average payements went
up by 8 per cent, reflecting more work claimed per case.
9. What progress has been made towards the introduction
of block contracts for legal services at fixed prices in both
civil and criminal cases? Can you provide details of the pilot
contracts which have been agreed for family mediation, advice
and assistance by not-for-profit agencies and solicitors' firms,
and duty solicitor work?
In October 1997, the Lord Chancellor announced a range of
initiatives to reform the legal aid scheme. These initiatives
included moving to contracting for legal services at fixed prices
wherever possible and using contracts to implement plans to meet
local and national priorities. The Lord Chancellor's first objective
is to replace the current legal advice and assistance scheme with
a system based exclusively on contracts, so far as possible at
fixed prices/rates, let by the Board to quality assured suppliers.
The Legal Aid Board was asked to prepare an implementation plan
to deliver this objective in 1999-2000 for the Lord Chancellor
to consider.
The Board are currently running block contracting pilots
for the provision of advice and assistance which are testing a
variety of payment methods. Through these pilots, they will obtain
a better picture of case mix and the range of work done in different
categories of case so that contracts can be structured appropriately.
(a) Pilot contracts which have been agreed for family
mediation
Phase I pilot contracts for mediation commenced in June 1997,
with contract schedules and research in July 1997. The Board contracted
with 33 suppliers in 12 areas. Contracts are based on predetermined
prices negotiated with individual suppliers. The Board have provisionally
selected 60 services for Phase II of the Pilot, and expect to
let contracts by the end of June 1998; Phase I contractors will
be re-contracted for Phase II. Phase II is designed to increase
the geographical areas covered by Phase I and to test the franchising
arrangements. The overall aim of these pilots is to ensure that
there are sufficient service providers to meet the needs of Part
3 of the Family Law Act 1996.
(b) Block contracting for civil advice and assistance
by agencies in the "not-for-profit sector"
Not-for-profit contracts are priced on the basis of the cost
of the casework time that a caseworker provides annually (1,100
hours). Forty-two non-solicitor organisations were involved in
the first phase of the pilot for block contracting in the not-for-profit
sector. Before the end of summer, we expect to have over 150 contracts
signed in the expansion of the pilot, including with agencies
that employ solicitors and law centres.
(c) Block contracting for civil advice and assistance
by solicitors
In its first phase, the solicitor pilot is structured into
three groups:
— those paid a fixed sum for a fixed number of cases;
— those paid a fixed sum to do as much work as possible;
and
— those paid on a case-by-case basis as now (the
control group).
In August/September 1997, 100 offices signed two-year contracts
in this pilot. Approximately a third fall into each research group.
(d) Block contracting for advice and assistance
in criminal cases
The criminal contracting pilot commenced in June 1998 and
includes 68 firms of solicitors based in Manchester, Blackburn,
Reading, Shrewsbury, London and Portsmouth. The pilot contract
is for two years and is limited to contracted firms providing
criminal advice and assistance which includes: attendance at police
stations (including both own and duty cases), court duty solicitor
and criminal green form work. There will also be an independent
research team monitoring the pilot project led by Professor Lee
Bridges.
In parallel with the criminal contracting pilot, the Board
will be reviewing the Duty Solicitor Arrangments to see what changes
are needed to facilitate moving to a fully contracted scheme.
The review will include changes that help to increase the market
share for franchised firms which will not only provide more quality
assurance but also assist in moving towards a fully contracted
scheme.
10. What progress has been made towards the extension
of conditional fee arrangements to all civil money claims? At
what stage are the Department's consultations with the legal professions
and the insurance industry? What category of cases will be excluded
from conditional fee arrangements? Has any estimate yet been made
of the savings which will accrue to the legal aid budget?
A consultation paper called Access to Justice with Conditional
Fees was published on 4 March 1998 outlining the Government's
proposals for long term reform of legal aid and seeking views
on the proposals for the first stage of those reforms:
— extending conditional fee agreements to all civil
proceedings other than family
— removing personal injury (other than clinical
negligence) proceedings from legal aid (which the Government believes
can be funded under conditional fee agreements)
— removing a number of other types of proceedings
from legal aid which the Government considers either will be funded
under conditional fee or do not have sufficient priority for public
funding
— setting up a transitional fund to provide support
for some cases which would no longer receive legal aid but have
high investigative or overall costs or are in the wider public
interest
The formal consultation period closed on 30 April and 238
responses were received. Many of the responses were from lawyers
and lawyers' associations and there were also a number from insurers
and other financial institutions. These are being analysed and
an announcement of the Government's decisions about these proposals
will be made in due course. We would expect this to be before
the Parliamentary recess.
The Government has consulted widely with the legal professions
and has kept in close contact with those offering insurance and
funding products to underpin the use of conditional fees. It also
asked independent consultants to undertake a study of the viability
of lawyers taking personal injury cases under conditional fee
agreements rather than legal aid. All those activities have led
it to the conclusion that conditional fees are a viable alternative
to legal aid for most personal injury cases now.
The primary aim of the proposals is not to increase or reduce
in real terms expenditure on legal aid. We have estimated that
the effect on the cashflow of the fund over the three years 1998-99
to 2000-01 as £0m/-£69m/-£100m and that these figures
would diminish in later years when case costs would be recovered
to benefit the fund. We intend, within a controlled legal aid
budget, to re-focus limited resources on those most in need, particularly
in the area of social welfare law and on public interest cases.
11. What estimate has been made of the impact on
the legal aid bill of the graduated fee scheme introduced in the
Crown Court in January 1997? Are there plans to extend the scheme
to jury trials lasting more than 10 days in fraud and revenue
law cases?
The graduated fees scheme for advocates in the Crown Court
is expected to be cost neutral. However, greater control over
advocates' fees will provide savings to the legal aid fund in
the longer term. Expenditure on the scheme in 1997-98 is estimated
at £48million.
Consideration is being given to extending fees to jury trials
over 10 days in length and to categories not currently covered
by the scheme as a means of easing the transition to contracting
for advocacy services. The difficulty in extending the scheme
is that standardising fees in this way requires a large database
on which to model fees. Relatively few cases exceed 10 days in
each of the categories; accordingly, fees could not be set on
a purely statistical basis. However, there are sufficient cases
to enable reasonable rates to be set by relating them to fees
paid in shorter cases. Fraud and revenue cases cover an enormous
range of weight and complexity, even where their duration is relatively
similar. That is why they were not included in the original scheme.
However, as with cases exceeding 10 days, it should be possible
to develop graduated fees for these cases by reference to other
types of cases.
12. Can you update the Committee on developments
in franchising, in particular the franchising of non-solicitor
agencies? What plans does the Legal Aid Board have for expanding
its franchising initiative?
Franchising is first and foremost a quality assurance scheme.
Through the scheme, the Board aims to work in partnership with
the suppliers of legal services to provide an accessible and quality
assured service to clients, while at the same time delivering
improved value for money to the taxpayer.
Franchising of non-solicitor agencies
Franchising non-solicitor agencies is part of the contract
requirements in the not-for-profit block contracting pilot. Agencies
without solicitors are only franchised in this context. Before
the end of summer, we expect to have over 150 contracts signed
in the expansion of the pilot, including with agencies that employ
solicitors and law centres. This pilot is being run in tandem
with the solicitors' pilot.
Expansion of franchising
At the end of May 1998, there were 2,381 franchised offices
and 595 in the application process which between them account
for almost 60 per cent of fund expenditure. A new franchise category,
Mental Health, was introduced in January 1998 and this enabled
specialist firms to become franchised for the first time and offer
a quality assured service to a particular vulnerable client group.
The quality standard requirements of obtaining a legal aid
franchise have also been completely revised, and the profession,
the Law Society and other bodies will be consulted on them during
the second half of 1998. The main changes are in the areas of
supervision, case management, financial control and business planning.
All of the changes are made in the context of moving to exclusive
contracting, beginning with Civil Advice and Assistance, in December
1999.
13. Are you satisfied with progress in restricting
abuse of the legal aid scheme, particularly the Green Form scheme,
by solicitors? Can you update the Committee on the number of cases
against solicitors which have been investigated; how many solicitors
have been prosecuted and how many cases have resulted in convictions?
What progress has been made towards replacing the inefficient
system of determining criminal legal aid in magistrates' courts?
The Legal Aid Board seeks at all times to protect the Fund
against fraud and abuse. They reported on the measures they took
during 1996-97 to improve control over the green form scheme in
their last annual report. These are satisfactory in the context
of resource constraints and plans for the longer-term reform of
the legal aid system. They have continued to be effective both
in preventing abuses, and in detecting abuse at an early stage.
They continue to work towards limiting the possibility of abuse
of the legal aid scheme by identifying and addressing any areas
of risk identified mostly through audits.
The stricter computer payment system introduced continues
to provide better control over payment of green form claims. The
system is able to identify potential multiple claims which are
checked and either rejected or reduced on assessment. However,
it becomes increasingly difficult to estimate savings in this
area as we move further from the date the control system was introduced.
Once the Legal Aid Board's new Corporate Information System (CIS)
is rolled out to all area offices and fully operational it will
provide even greater control.
The Board has committed itself to a policy of prosecution
in all cases where there is substantial prima facie evidence of
dishonesty. Franchising has given the Board an opportunity to
increase control by requiring more stringent procedures from the
firms. Ultimately legal advice and assistance will be provided
through exclusive contracting with quality assured suppliers which
will provide an assurance that the risk of fraud in this area
is restricted even further.
During 1997-98, the total number of cases under investigation
involving solicitors and/or their employees was 144, of which
106 were brought forward from the previous year and 38 were new.
A financial profile (ie an analysis of a firms' claiming pattern)
is undertaken of every firm brought to the attention of our Investigation
Section, for whatever reason. Financial profiling was conducted
of 849 solicitor's firms this year.
In the majority of cases investigated, the Board successfully
negotiate with solicitors for the repayment of money it consider
to have been wrongly claimed. If no agreement can be reached,
the Board takes civil action and currently has one such action
pending where agreement could not be reached with the solicitor
concerned. However, during 1997-98 the amount either successfully
negotiated to be repaid, recouped from outstanding claims or otherwise
saved from being paid amounted to £1,081,371. In two cases
which we referred to the police, further claims totalling £815,795
were found in the solicitors' offices which would have been submitted
for payment if the Board had not detected the abuses and taken
early action.
Some investigations can run for many years before they eventually
reach court. This year 4 cases involving solicitors and their
employees abusing the legal aid system came before the Crown Court.
All cases resulted in convictions and terms of imprisonment; two
solicitors' employees who were charged in two of the cases were
acquitted. Further court appearances are probable in the coming
year for ongoing cases. The Board continues to publicise the successful
prosecutions in the media as much as possible to act as a deterrent.
Ministers share the concerns recently expressed by the Public
Accounts Committee regarding the granting of criminal legal aid
in the magistrates' courts. The Lord Chancellor is re-examining
the principles and procedures for granting criminal legal aid
as a matter of urgency in the light of three considerations; assured
regularity of expenditure, accountability, and the expedition
of cases through the courts. The Lord Chancellor's Department's
April 1998 Treasury Minute on Criminal Legal Aid Means Testing
in the Magistrates' Courts sets out in more detail the action
that the Department intends to take and has already taken on this
matter.
