APPENDIX 12
Memorandum submitted by The Law Society
of Northern Ireland
As arranged, I enclose a Briefing Note we have
prepared setting out the position of the Law Society of Northern
Ireland (LSNI) in relation to the Government proposals for reform
of the legal aid system in Northern Ireland.
I hope that the Briefing Note will be of assistance
to the Committee. Although we have drawn on the submission made
previously by the LSNI in response to a Government consultation
exercise, we thought it would be of most benefit to the Committee
to present a reasonably self-contained analysis and critique.
On the assumption that there will be some form
of oral evidence taken, we hope to provide the Committee within
the next few days with some supplementary materials which might
be of further assistance. We have in mind a summary of the main
points made in the Briefing Note, together perhaps with a matrix
illustrating the points we make within the Briefing Note as regards
average case costs in Northern Ireland. I shall ensure that these
are forwarded to you as soon as possible.
REFORM OF
LEGAL AID
IN NORTHERN
IRELAND: BRIEFING
NOTE FOR
THE NORTHERN
IRELAND AFFAIRS
COMMITTEE
1.1 This Briefing Note is submitted at the
invitation of the Northern Ireland Affairs Committee ("the
Committee") for purposes of that Committee's inquiry into
the future arrangements for publicly-funded legal services in
Northern Ireland. As reflected in the terms of reference adopted
by the Committee, the primary focus of the inquiry is on the decisions
as to the future announced by the Government in a Decisions Paper—"The
Way Ahead: Legal Aid Reform in Northern Ireland" (September
2000).
1.2 The Briefing Note sets out the position
of the Law Society of Northern Ireland ("LSNI") in respect
of the Government proposals. We are appreciative of the opportunity
to contribute to the work of the Committee. We offer this evaluation
of the Government proposals from the distinctive professional
perspective and experience of solicitors who have been in the
front-line of provision of legal services since the inception
of the Legal Aid Scheme.
1.3 As the Committee will be aware, the
Government proposals were preceded by several consultation exercises,
of which the most recent was entitled "Public Benefit and
the Public Purse" (June 1999). We have attached to this Briefing
Note a complete copy of the LSNI Response to that Consultation
Paper.[16]
Where appropriate we cross-refer to comments made by us at that
stage (in particular, the proposals for reform of criminal legal
aid set out at pages 12-21 and Appendix B of that Response). Otherwise,
however, in deference to the remit of the Committee and for ease
of reference, we have attempted to follow the sequence and the
broad subject headings set out in the Decisions Paper of September
2000.
1.4 Accordingly this Briefing Note is divided
into four sections:
(a) The Northern Ireland Dimension;
(b) Administrative Arrangements;
(c) Cost Issues (including alternative funding
options, and the criminal legal aid proposals);
1.5 One other preliminary observation may
by of assistance. Despite the prior period of consultation, there
is a sense in which the reform proposals remain work-in-progress.
Although the Decisions Paper provides an outline, a great deal
of detail is missing. For example in at least three of the critical
areas (setting of costs levels and the Funding Code; setting of
quality standards; and alternative funding arrangements on the
anticipated removal of civil legal aid) the Government accepts
the need for further work to be undertaken by various means.
1.6 Similarly there are various indications
of a Government intention to bring forward contingent legislation
to provide for fall-back positions in the event that the proposals
do not go according to the Government plan. This in itself is
an approach about which we have serious reservations, particularly
given the intention to legislate by way of the Order in Council
procedure. Again, in announcing the decisions the Parliamentary
Secretary at the Lord Chancellor's Department made clear that
the views of the Northern Ireland Assembly would be given weight.
Finally because draft legislation is not yet available, many critical
factors remain undisclosed or unexplored. For example, we have
no cost-benefit analysis of the proposals, no assessment of the
regulatory impact, no reasoned basis for the human rights validation
of the proposals and no indication of the overall public expenditure
implications or HM Treasury constraints.
1.7 It is necessary to make these points
first because, in an important sense, these as yet unknown matters
are of considerable importance in assessing the acceptability
or otherwise of the proposals. The devil may be in the detail,
or the salvation in the small print. Secondly, to the extent that
these factors remain unclear to the Committee, the LSNI or any
other external commentators, of necessity some of the conclusions
we set out in this Briefing Note are provisional only.
THE NORTHERN
IRELAND DIMENSION:
THE CONTEXT
AND OBJECTIVES
OF THE
REFORM PROPOSALS
2.1 Throughout the consultation process,
the Government has espoused a willingness to find Northern Ireland
solutions to Northern Ireland problems. Most recently:
". . . we recognise that the legal services
landscape in Northern Ireland has a number of distinctive features
and we indicated the Government's commitment to recognition of
the Northern Ireland legal services culture which is distinct
from that in England. . . . the Government stated intention is
to modernise the administration and provision of publicly-funded
legal services in Northern Ireland by delivering local solutions
to local problems." (Foreword, "The Way Ahead").
2.2 Again, quoting from the initial Consultation
Paper, the Government has affirmed that the reform programme (stated
to derive from the "modernisation" agenda) is directed
to the objectives set out at para. 17 of the Decisions Paper.
2.3 With due respect to the Government position,
this statement of objective is in no meaningful sense radical
or modern. These objectives have informed the structure and operation
of the legal aid scheme, probably since its inception and certainly
in the past decade. There may be scope of course for argument
as to the imperfect achievement of those objectives, or the effectiveness
of the mechanisms by which they can be achieved, but there is
unlikely to be any major disagreement as to the common sense of
the objectives.
2.4 We share, of course, the aspiration
that any reforms implemented in Northern Ireland should be related
to the context and culture of legal services provision in the
Province. Nor do we devalue the extent to which the Decisions
Paper purports to take account of the Northern Ireland context.
However, we think there is good reason to suggest that the extent
to which the distinctive nature of the Northern Ireland legal
landscape has been understood is limited and superficial; and
that the overall package of reforms has been driven by false a
priori assumptions, particularly that the starting-point for
reform is the same as in England and Wales. As a result we believe
there is good reason to think that the proposed reforms in several
key respects have within them the seeds of destruction of what
have been widely recognised as the peculiar strengths of the Northern
Ireland arrangements for access to justice.
2.5 A full understanding of these distinctive
features is vital if the stated intention of the Government is
to amount to more than a token and cosmetic adaptation of the
English agenda.
2.6 While there are many respects in which
Northern Ireland practice is different, we believe it will be
of most help to the Committee to concentrate on two areas to provide
a suitable backdrop against which to develop an informed critique
of the Government proposals. These areas are:
(a) the network of small local community-based
firms providing access to a wide-range of general legal aid and
advice services;
(b) the cost effectiveness, in absolute and
comparative terms, of the legal aid and advice services provided
under the current legal aid system.
2.7 In respect of the network, the total
number of solicitors in private practice in Northern Ireland is
1,650. They operate in some 500 practice units. Just under 50
per cent are sole principals (who may, of course, have employed
assistant solicitors). Another 25 per cent are two-principal firms.
Just under 90 percent are in partnerships of three principals
or less. All the available evidence suggests that a wide range
of advice services is being provided at reasonable cost. The value
of this network has been widely-recognised, including, in some
limited respects, by the Government. Yet in several other respects
the Government proposals, whether intentionally or otherwise,
have the potential to seriously damage or destroy this community-based
legal service.
2.8 The Government has espoused development
of specialisms in areas of work where the need for specialisation
has not been established, apparently as a function of Government
scepticism about the ability of small (one or two solicitor) practices
being able to provide a quality level of service across a wide
range of legal issues. We wish to refute this scepticism in absolutely
clear terms. In the vast majority of instances it should be possible
to provide for any necessary degree of enhanced expertise by other
means while preserving the general-practice nature of the bulk
of solicitors work (whether by continued access to the Bar, or
as is increasingly the case, by referral arrangements between
solicitors).
2.9 The Government espouses the role of
a bulk purchaser of legal services on behalf of the tax payer,
an argument which makes sense only if services are to be supplied
through bulk service-providers.
2.10 The Government espouses a system de
facto of duplicated and alternative regulation of solicitors'
small business units which is wholly disproportionate, may result
both in an increased incidence of financial failures, and is likely
to produce an exodus of firms from the network, combined with
a significant additional burden on the tax payer by way of the
administrative costs of regulation by the Legal Services Commission.
We repeat the warning in clear terms. The net effect of the proposals
is that there is a high risk that the widespread and developed
network of privately-capitalised and accessible advice units in
Northern Ireland will contract, with solicitors being obliged
of necessity to disengage from unprofitable or low-margin work,
with serious detriment to those who have ready access at present
to the justice system.
2.11 To avoid any misunderstanding on this
point, we wish to make clear also that the LSNI has no interest
in promotion of uneconomic or inefficient practices. Nor are we
other than supportive of the development and funding of a more
comprehensive range of advice services in conjunction with the
voluntary sector. However, the opportunity should be taken to
build on the strengths of the present Northern Ireland arrangements,
particularly the ready-made network of community-based legal practices.
2.12 The extent to which there has been
a failure by the Government to understand in any real depth the
distinctiveness of this jurisdiction is exemplified by reference
to the overall structure and shape of the reforms proposed. There
is an apparent, if limited, recognition of the Northern Ireland
dimension within the Decisions Paper, such as the non-suitability
of exclusive contracting. We accept this recognition as given
in good faith, but in each instance the recognition is limited
and contingent, and the fallback provision is the "full-blown"
English model. The structure, ethos and derivation of the proposals
is transparently "the English solution". What is proposed,
subject only to some conditional deferment, is unmistakably the
English model, miniaturised in some modest respects. It is a regional
adaptation of a national model, not a model designed for a distinctive,
self-contained and parallel jurisdiction.
COSTS
2.13 The second distinctive feature of Northern
Ireland practice concerns costs. Within the overall rhetoric of
reform, the Government has attempted, by the use of highly selective
and unrefined statistics, to assert a major costs "problem"
in Northern Ireland. This mantra has included overall unsustainable
costs; absence of control; absence of value for money. In all
cases the objective has been to assert a need for major reform,
ostensibly in the interests of the tax payer, by creating the
impression of a system which is expensive (in absolute and comparative
terms) and inefficient.
2.14 It is in this respect that the Government
approach is seriously wanting. Throughout the process of reform
to date the Government has been singularly unwilling to face up
to the hard evidence which suggests strongly that the legal system
and the frontline practitioners who service it within Northern
Ireland, provide a good value, good quality product at a reasonable
cost in the context of chronic under-funding. In one sense the
Government's determination in this respect is explicable because
it is clear that the identification of a "costs problem"
is the key justification and driver for the reform proposals,
as has been the case in England and Wales. Without it there may
be every reason to suspect that the reform agenda is in fact more
about cost-savings and Treasury imperatives than enhanced administration
and improved access to justice.
2.15 This is why the Government consistently
refers to the overall level of legal aid expenditure over the
past five to 10 years, without any evinced serious intention of
coming to grips with a proper understanding of the cost drivers
and dynamics involved. This is a complex matter (illustrated by
cross-reference to Appendix C to the LSNI Response to the Consultation
Paper, "Public Benefit and the Public Purse").
2.16 In absence of any refined understanding
of the developing costs picture in Northern Ireland, what does
the available hard evidence suggest? We would respectively urge
the Committee to pay special attention to this issue. All of the
available evidence suggests that legal aid in Northern Ireland
is not expensive by reference to the services and access to justice
it delivers, and that there has been an historical tendency to
under-fund legal services (whether provided by the private sector
or the not-for-profit sector). In Northern Ireland the facts are
these:
LEGAL ADVICE AND ASSISTANCE AND CIVIL LEGAL
AID—NET EXPENDITURE PER HEAD OF POPULATION
| |
| Northern Ireland
| Scotland | England and Wales
|
| |
| 1997-98 | 1998-99
| 1997-98 | 1998-99
| 1997-98 | 1998-99
|
| A | Estimated Population (millions)
| 1.67 | 1.68
| 5.12 | 5.12
| 52.21 | 52.42
|
| B | Legal Advice and Assistance—payments to Solicitors (£ million)
| 5.98 | 8.06
| 29.43 | 28.96
| 188.98 | 217.81
|
| C | Legal Aid—Solicitors charges and Counsel's fees, Disbursements (£ million)
| 18.07 | 16.88
| 32.51 | 33.61
| 1,385.26 | 1,410.34
|
| D | Total (B)+(C) (£ million)
| 24.05 | 24.94
| 61.94 | 62.57
| 1,574.24 | 1,628.15
|
| E | Gross expenditure per head of population (£) ((D)÷(A))
| 14.40 | 14.85
| 12.10 | 12.22
| 30.15 | 31.06
|
| F | Net Expenditure (£ million)
| 11.30 | 14.16
| 52.90 | 52.26
| 820.40 | 864.20
|
| G | Net expenditure per head of population (£) ((F)÷(A))
| 6.77 | 8.43
| 10.33 | 10.20
| 15.71 | 16.48
|
CRIMINAL LEGAL AID—NET EXPENDITURE PER HEAD OF POPULATION
| |
| Northern Ireland
| Scotland
| England and Wales
|
| |
| 1997-98 | 1998-99
| 1997-98 | 1998-99
| 1997-98 | 1998-99
|
| A | Estimated Population (millions)
| 1.67 | 1.68
| 5.12 | 5.12
| 52.21 | 52.42
|
| B | Net Expenditure (£ million)
| 17.55 | 15.93
| 82.08 | 75.85
| 733.20 | 787.70
|
| C | Net expenditure per head of population (£) ((B)÷(A))
| 10.51 | 9.48
| 16.03 | 14.81
| 14.04 | 15.03
|
2.17 These figures are of considerable significance for
a number of reasons. They demonstrate that the overall level of
public expenditure on these services in Northern Ireland is consistently
lower than the rest of the United Kingdom, despite the fact that
it is generally accepted that the proportion of the population
falling within the legal aid and advice eligibility limits may
be higher here. The figures reflect also that, across a wide range
of categories of legal advice and legal aid work, the per case
cost in Northern Ireland is consistently lower than the rest of
the United Kingdom.
2.18 In summary, all of the available evidence suggests
that much of the reform process has been founded on some highly
questionable premises as to the costs dynamic in a developing
and increasingly sophisticated legal system.
2.19 We would invite the Committee to consider this alternative
analysis of the core question at the heart of the Government reform
agenda, which claims to be a Northern Ireland solution to a Northern
Ireland problem: namely, what is the Northern Ireland problem?
Further we invite the Committee to bear in mind this analysis
and this core question when considering the examination below
of the several strands of the reform programme (administrative
arrangements; costs and funding reforms; and quality standards).
ADMINISTRATIVE ARRANGEMENTS
3.1 The Government proposes the establishment of a Legal
Services Commission which will take over administrative responsibility
for criminal and civil legal aid from the LSNI. It will be tasked
also to take forward issues such as quality of work, research
and pilots. The present arrangement for independent oversight
(by way of the Lord Chancellor's Advisory Committee) will be abolished.
3.2 On the key proposal (transfer of administrative responsibility
from the LSNI) we affirm again that we have no objection in principle.
We welcome the Government's tribute to LSNI administration over
some 35 years of operation of the Scheme, throughout a turbulent
period of history and in the face of many difficulties.
3.3 We do not accept all of the reasons put forward by
the Government for the transfer. For example, the conflict of
interest asserted against the LSNI is misconceived. The fact that
the LSNI has been required (on a voluntary basis) to wear two
hats is not of necessity wrong in principle, nor unprecedented
in British constitutional terms. It is less than fair to those
who devised the Scheme in 1965 to suggest, under the guise of
modernisation, that no thought was given to the implications of
the present Scheme. It is clear in fact that, correctly researched
and understood, the present arrangements were designed carefully
to strike a proper and principled balance. That is why the primary
role of the LSNI was defined and limited to the business of administration
(not the development of policy). The power to legislate (by regulations)
as to policy and the operation of the Scheme (including regulation
of the costs to be paid) was vested in the Secretary of State
(and latterly, since 1982, the Lord Chancellor), and specifically
not the LSNI. An independent body (the Advisory Committee) was
established to oversee and advise the Lord Chancellor and the
LSNI administration of the Scheme and the efficacy of those arrangements.
3.4 We think it is misleading also to suggest that the
administrative reforms made elsewhere in the United Kingdom some
10 years ago were ignored or disregarded in Northern Ireland.
The decision by the Government not to move to a Northern Ireland
Legal Aid Board at that time as based on considerations of proportionality
(that the costs of the Board administration might not be justified
by reference to the benefits to be achieved) and that improved
administration could be achieved by other means. This led directly
to a number of important administrative reforms, agreed between
Government and the LSNI, and now in train. These include, incidentally,
a proposal to bring into the structure the type of business and
financial expertise now advocated by the Government. This reform
process is beginning to produce some tangible benefits and, in
that sense, the establishment of a new administrative body can
be regarded as a logical extension of the reform process already
under way.
3.5 We do recognise and understand the widespread support
for a new administrative settlement, and we can appreciate that
it can only inure for the benefit of the LSNI to have removed
any misperceptions of conflict of interest. This is why we have
never sought to retain administrative responsibility at all costs
or as a matter of principle. Given this, we have not thought it
necessary in this Briefing Note to rehearse the administrative
development of the present scheme in detail. We can expand of
course on paragraphs 3.3 and 3.4 above as the Committee should
require. Otherwise for present circumstances we intend to proceed
on the assumption that a transfer of administrative responsibility
to a new body of some kind is agreed, and will be implemented.
3.6 We need to confirm again, as we have done already
to the Government, the LSNI commitment to work constructively
with the Government in connection with any transfer ultimately
sanctioned by Parliament. We have two objectives in mind here.
First to ensure that the administrative reform programme on which
we are embarked is continued through until the point of transfer,
so as to ensure the administration is in good shape at hand-over.
Secondly to ensure that the hand-over process itself will proceed
as smoothly and efficiently as possibly.
3.7 Having made these points clear, and pending fuller
information from the Government, particularly as to the establishment
and administration costs of the proposed Commission, we are obliged
to reserve our position on matters of detail and drafting.
3.8 In the meantime, however, we think it necessary to
signal some preliminary points of concern regarding the particular
model proposed. We have some reservations as to whether the Legal
Services Commission structure is proportionate to the scale and
nature of the legal services issues in this jurisdiction. We have
already suggested that the Northern Ireland "problem"
(to which the Commission is part of the solution) is of a different
order in some respects, or to a different degree in some others,
than suggested by the Government.
3.9 To quote directly from the Parliamentary Secretary,
speaking on publication of the Decisions Paper:
"I do not want to impose a Westminster designed system
in Northern Ireland".
3.10 With respect, the administrative model proposed
for Northern Ireland, as with so much of the reform package, is
transparently a Westminster designed model. The list of responsibilities
to be discharged by the proposed Commission (see paragraph 46
of the Decisions Paper) is virtually indistinguishable from the
English Legal Services Commission. The only modifications appear
to relate to its size of membership, and a signalled intention
by the Government that some of the powers to be conferred on the
Commission are not expected to be exercised in the short-term.
3.11 It may be worth considering again whether this particular
model is more elaborate than required for this jurisdiction. There
are other simpler NDPB models which may be instructive and more
suited for adaptation to this jurisdiction (one of the most obvious
example being the Legal Aid Board model in Scotland). This is
not a reservation we make idly, for no purpose, or limited to
considerations of value-for-money. Experience of direct rule in
Northern Ireland shows that the creation of derivative structures
will almost inevitably lead to derivative policies and practices.
The relationship between major and the minor models will lead
to the adoption of policies and practices, under the direction
of the same Minister (the Lord Chancellor) which are based on
the same and mistaken premise that what is done in England and
Wales should be done in Northern Ireland, in absence of justification
to the contrary. We do not believe that this second-hand and derivative
approach is right in principle, or suitable for Northern Ireland.
This is why we suggest that it may be worthwhile for the model
to be reviewed and critically evaluated to test whether a simpler
model might not be implemented here which would secure the same
objectives. Obviously this is a suggestion we would be willing
to explore in more detail with the Government.
3.12 Again, to avoid any misunderstanding on this point,
we need to make clear that we do not suggest that the new administrative
body should be other than independent of the LSNI, but equally
that it should be able to operate cost-effectively in a way which
secures genuine independence of judgment and operation.
COSTS ISSUES
(INCLUDING CRIMINAL
LEGAL AID
AND ALTERNATIVE
FUNDING OPTIONS)
4.1 Of the elements in the Government reform package,
perhaps none displays more the fundamental deficiencies in the
Government's approach and understanding than Chapter 5 of the
Decisions Paper. We refer again to the points already made about
the inadequate and unsatisfactory foundation on which these proposals
are constructed. We point again to all of the available evidence
which suggests that there remains a significant short fall in
expenditure on publicly-funded legal services in this jurisdiction;
that the widely-acknowledged efficiencies of the Northern Ireland
legal process combined with the supply of a suitable range of
services at reasonable cost produces an acceptable costs-model,
within the terms of the present legislation, and on the remuneration
and funding principles already in place.
4.2 These factors, combined with the absence of reliable
research into the complex costs dynamic, suggests that the Government
has no meaningful understanding of, or interest in, being put
to the test of providing a proper rationale for the extensive
and disproportionate measures set out in Chapter 5.
4.3 Throughout the consultation process, and despite
several attempts on the part of the LSNI to engage on this issue,
the Government has refused to acknowledge the significance of
the available costs evidence. Nor have we been given any real
reason to think that the Government has any interest in establishing
a more empirical basis before framing and implementing these costs
proposals. We return again to another statement of intention by
the relevant Minister:
"This is a local solution to the problems connected
with legal aid here; not a model from elsewhere which is being
imposed".
4.4 By reference to these statements, we need to place
on record that there is no material sense in which the range of
powers and "solutions" proposed by the Government in
Chapter 5 of the Decisions Paper differs from the proposals being
implemented in England and Wales under the auspices of the Legal
Services Commission there. A clue to the Government thinking and
priorities can be found at paragraph 90 of the Decisions Paper.
This paragraph needs to be read in the context of the facts we
have already provided as to the actual cost-efficiency of the
Northern Ireland system, and in a context in which there was an
almost unanimous response from within Northern Ireland as to the
unsuitability of exclusive block contracting for most categories
of legal services in Northern Ireland because of the inevitable
and serious detriment to those who need ready access to justice.
The paragraph is worth quoting in full:
"The Government is committed to reform and trust that,
with the goodwill of the profession, the proposals in this paper
for case and cost control can be carried through without having
to invoke the alternative of exclusive block contracting. This
will, however, remain on the Government's default agenda should
agreement not be forthcoming on the schemes set out in the Decisions
Paper."
4.5 The LSNI does not have, and never has had, any difficulty
with the principles of accountability for public funds and delivering
value-for-money. We also have no difficulty in making commitments
to work constructively with the Government on any costs, or indeed
other, proposals for reform. The LSNI has never taken a dogmatic
position against standard or scale fees. However, paragraph 90
suggests strongly that the Government had some pre-determined
costs objectives which, if not achieved to the satisfaction of
the Government, will lead to the imposition of a "solution"
which is acknowledged as wholly unsuitable for this jurisdiction.
4.6 Against this background, the LSNI considers that
a proper and full explanation of the Government's public expenditure
objectives needs to be made clear. Perhaps we can focus discussion
on these matters by posing some questions (there may well be others)
which the Government should be prepared to answer frankly and
openly. These are as follows:
(a) what are the projected costs of setting up the proposed
Legal Services Commission?
(b) what are the projected annual running costs of the
proposed Legal Services Commission for the first three years following
its establishment?
(c) other than the costs associated with the establishment
and running costs of the Commission, what does the Government
project as the amount available over the first three years following
implementation of each of the new budgets for civil non-family;
civil family; and criminal?
(d) what commitments have been made to, or parameters
set by, HM Treasury for projected expenditure on legal aid advice
and assistance in Northern Ireland over the next five years (commencing
April 2001)?
4.7 For the reasons indicated, the LSNI remains unpersuaded
either as to the need for, or the efficacy of, the costs reform
measures set out in Chapter 5. There is no evidence in Northern
Ireland that application of the "fair and reasonable remuneration"
principle, now to be abandoned by the Lord Chancellor, has resulted
in any unacceptable overall levels of public expenditure on legal
services in Northern Ireland.
4.8 On the contrary, all of the evidence suggests that
the operation of the present system and principles has resulted
in lower per capita cost, and lower per case cost (and across
a wide range of categories of case) than in the rest of the United
Kingdom. This fact is of particular note and importance because
the comparative costs being paid in the rest of the United Kingdom
are determined by reference to criteria similar to those now proposed
by the Lord Chancellor for introduction to Northern Ireland (see
paragraph 55 of the Decisions Paper). The LSNI considers that
this demonstrates again, and reinforces, the need to avoid wholesale
and indiscriminate adoption of "solutions" from other
jurisdictions in absence of any properly informed and convincing
analysis of the need for reform in this jurisdiction.
4.9 By reference to the specific proposals in Chapter
5 (Funding Code, Standard Fees, etc.), much will depend upon the
detailed working through of these proposals. We will be seeking
to engage with the Government on these issues.
4.10 By reference to proposals for criminal legal aid,
we refer the Committee to pages 12-21 of the previous LSNI Response.
We commend the position set out therein, both as an exemplar analysis
of legal aid delivered through the network of practices in Northern
Ireland and as a set of constructive proposals to address the
Government's concerns in this particular area of expenditure.
CONDITIONAL FEE
AGREEMENTS AND
ALTERNATIVES
4.11 Before addressing matters of detail, it is worth
recording that we address the question of what funding alternatives
might be found—and to what extent—in the aftermath
of the Government's policy decision to withdraw public funding,
as far as possible, from cases warranting access to justice where
those involve a compensation claim.
4.12 It is Government's position that others, principally
the insurance market, should be able to bear the risk in its stead.
And the only basis upon which such others might be prepared to
bear the risk is that, on a swings and roundabouts basis, they
are likely to make a profit. The Government had previously been
providing indemnity in such cases on a not for profit basis. It
has moved on to conclude that the expense is insupportable (a
proposition which we consider to be highly questionable in Northern
Ireland) and has therefore decided to let others take over, on
a profit-orientated motivation. We deeply regret that.
4.13 We remain of the view that assuring access to justice
for those of limited means with a reasonable cause of action is
the responsibility of the community, through Government, in any
civilised society. It has been the privilege of lawyers to assist
toward that end up to now. Northern Ireland solicitors, in particular,
have honoured the code and have delivered the service at an economic
rate of pay, both in absolute terms and also as compared to anywhere
else in the British Isles. Of course, as well as offering the
insurance industry more money to take it away, the Government
would also have liked to have offered more money to solicitors
for the same reason. All this extra money on offer does not come
from Treasury, which appears to be the key Government objective.
4.14 We continue to hold to the view that there is great
danger for the public in relying upon the insurance industry to
deliver access to justice. We look at the situation which the
Government has allowed to develop in England and Wales and we
consider it to be deeply flawed.
4.15 We hold the view that the unfettered freedom to
choose one's own independent legal advisor is a critical element
in countering the potential for exploitation and profiteering
which is inherent in the process of opening financial claims to
legal expenses entrepreneurs.
4.16 The Government acknowledges the distinctive culture
in Northern Ireland, where solicitors typically supply legal assistance,
funding and representation to the public in no-fault claims for
free. Solicitors rely instead upon recouping their outlay and
obtaining their fees at the end of the claim, from the opposing
party's insurers. That has profound implications with regard to
whether legal expense insurance is in fact necessary for individual
claimants.
4.17 This is already an active issue in Northern Ireland.
Many people fall outside the very restrictive financial eligibility
levels for legal aid. For many others, the contribution which
may be levied under legal aid sharply exceeds the cost of alternative
insurance arrangements. In addition, the cost of such after-the-event
insurance will vary widely, from the reasonable to the exorbitant.
4.18 The public is entitled to independent advice as
to whether they need to purchase funding arrangements at all and,
if so, in what form and where. At present, they are being manipulated
by passive sales techniques, by tied brokers and, increasingly,
by advertising into commitments to particular insurance providers
before being afforded access to independent advice.
4.19 One of the Society's core objectives is to preserve
the network of small, efficient law firms in the province. The
established practice on the part of most insurers in requiring
that the insured uses only a solicitor nominated by the insurer
is a serious threat to that network. Such panels have nothing
to do with quality control. There is no Code of Practice. There
are no known admission criteria, no tendering, no advertising.
It all turns on the standard provision whereby the insurer, not
the insured, commands the choice of solicitor. By the Government's
own admission, this is an immature and unregulated market.
4.20 That is the context in which the Government concedes
in its Decisions Paper that ". . . the large number of small
solicitors' practices providing a general service does provide
a very different background for the introduction of CFAs than
in England or Wales". It is the context in which it states
than ". . . in practice, there is a long way to go before
CFAs can be developed for Northern Ireland".
4.21 We prefer to say that the insurance providers have
some way to go—some of them a very long way to go—before
they can be regarded as offering a service which is appropriate
for Northern Ireland and in the wider public interest.
4.22 It is necessary to be quite clear about what is
at stake. It is not the preservation of work for lawyers: the
work remains—it even grows in response to proactive advertising.
Members of the Council of the Law Society presently report an
excess of job vacancies for young solicitors, across the province.
Individual firms on these insurance panels will grow larger and
need more staff. Solicitors who find the local supply of work
in a critical sector to be drying up, will follow the work. The
phenomenon taps into an underlying trend among the younger labour
force to prefer city life anyway.
4.23 On the other hand, when the insurance industry has
completed its work, created bulk suppliers of personal injury
claims services, tied to individual insurers, where then the independent
solicitors' profession?
4.24 The issue is about continuing to deliver wide-ranging
legal services to the public throughout the Province in an economic
and efficient way. That is presently delivered by small practices
providing a general service, in partnership with the Bar.
4.25 For these reasons, we consider it to be of critical
importance that, at a minimum, the reputable sector of the litigation
insurance industry reviews its policy with regard to panels. A
good comparison is with mortgage lending institutions. In the
Northern Ireland home loans market the same issue arises, where
national building societies have an inherent preference for larger
law firms. Nonetheless, they have been able to adopt a more flexible
approach here and to continue to admit sole-principal firms to
their panels—all firms, in fact, which meet basic criteria.
Significantly, many of the lenders have been able to justify this
distinctive Northern Ireland approach by reference to the LSNI
Home Charter quality-assurance scheme. The critical factor is
that they have abstained responsibly from using their power to
artificially reconstruct the legal services market. It remains
the case that people can freely choose their own local solicitor
to handle the house purchase. That is what we want to see continue
in the personal injuries sector.
4.26 The second priority is that the public should be
free to choose how to fund their litigation. We have already made
the point that the Irish system (for it applies in the Republic
as well) includes free funding to the point of settlement, in
no-fault claims.
4.27 The Decisions Paper is singularly obscure at paragraphs
69 to 71, the key observations with regard to alternative ways
of funding litigation. Taken at face value, the observations suggest
that the Government has no intention of introducing CFAs in the
short term, that CFAs and a CLAF are just two of a range of possibilities
whereby ". . . a mature legal insurance market . . ."
can be developed in Northern Ireland which will fund "appropriate"
cases.
4.28 At this stage, the LSNI is actively involved in
considering all options for future funding for money damages claims
without prejudice to our fundamental position that unless the
very major problems with all such alternatives can be resolved,
the Government should remain prepared to accept that legal aid
funding, perhaps in a modified form, should continue to be available
to support this category of litigation.
QUALITY STANDARDS
5.1 The Society has no objection to the proposition that
all legal service providers, including solicitors, who wish to
provide legal services at public expense should be required to
register with the Legal Services Commission. It was always the
position under the Legal Aid Scheme that continuance of the right
to supply such legal services was subject to the power of both
the Society and, indeed, the Independent Disciplinary Tribunal,
to exact a range of sanctions, up to and including removal from
the Legal Aid Panel for unsatisfactory or improper services or
conduct. This, therefore, is merely a concomitant part of the
transfer of administration from the Society to the new Commission,
so far as solicitors are concerned.
5.2 On the other hand, the Decisions Paper states that
legal services bought with taxpayer's money must be demonstrably
of a consistently high quality. This is the only stated rationale
for the Government's decision to depart from the previous arrangements,
whereby the regulation of solicitors (as officers of the court)
and the investigation of complaints against them was a matter
for the Law Society, under supervision of the independent Lay
Observer, with disciplinary proceedings prosecuted before the
independent Disciplinary Tribunal and ultimately subject to the
appellate jurisdiction of the High Court.
5.3 In his Foreword to the Paper, the Parliamentary Secretary
of the time, David Lock, MP, asserted that the Government is committed
to recognising the distinctive Northern Ireland legal services
culture and is intent upon delivering local solutions to local
problems.
5.4 In the context of monitoring quality standards, it
is the Society's contention that the Government has imported English
solutions with a determination to find problems to fit them.
5.5 At the launch of the Decisions Paper, the Parliamentary
Secretary expressed his approach in a slightly different way.
He conceded that he had been informed that the quality of legal
services in Northern Ireland was high, but the "problem"
was that this was not subject to any form of verification. On
that basis it has been deemed necessary to introduce a Code of
Practice and more especially a regime of external audits and inspection
by the Legal Services Commission.
5.6 No-one would wish to argue with the proposition that
legal services must be of a consistently high quality. On the
other hand, the Decisions Paper fails to explain why it is necessary
to transfer quality assurance to an external regulator in order
to achieve a credible process.
5.7 There is no reasonable basis for asserting that only
persons who are obtaining legal services from solicitors with
the assistance of taxpayer's money ought to expect that the service
be of consistently high quality.
5.8 There is no effort made by Government to assert that
it has found any cause to believe that the services presently
provided to the public by solicitors in Northern Ireland is of
unacceptable quality. The Lord Chancellor's Advisory Committee
on Legal Aid in Northern Ireland and the Northern Ireland Human
Rights Commission, for example, told it precisely the opposite.
It has failed to listen. It has paid no attention to the favourable
Users Survey contained in the Bloomfield Report on the Northern
Ireland Criminal Injury Scheme, the favourable Users Survey which
is included in the Northern Ireland Consumer Council's Report
on The House Buying Process, or the Northern Ireland Office of
Law Reform's favourable Research Report on Matrimonial Law. These
are the more recent independent appraisals and, notably, cover
a range of different services supplied by small generalist practices.
5.9 It is likewise in the interests of taxpayers that
new tiers of bureaucracy are not charged to public funds without
demonstrable evidence that the investment is cost-effective; Government
makes no effort to adopt a benchmark for itself, to state what
is currently of an unacceptable standard from legal aid solicitors,
and the extent to which it expects that the proposed initiative
will ameliorate such a situation.
5.10 The proposal threatens to introduce, without justification,
a new tier of external regulation for small businesses in a manner
which, by its nature, will make no allowance for the existing
extensive, demanding and effective levels of monitoring and discipline
to which private practice solicitors are subject.
5.11 No weight has been given to the contention that
the effective and proportionate way to secure quality standards
from a mature, self-regulating but small profession of proven
track record is to engage with its professional body in order
to enhance current regulatory provision and monitoring—for
the benefit of the public as a whole.
5.12 The declared decision, as framed, represents a serious
derogation from the independence of a self-regulation profession;
it effectively introduces a new regulator for solicitors and contrasts
with decisions by Government with regard to other areas of quality
assurance from the solicitors profession. As evidenced by the
policy underpinning the Immigration and Asylum Act, and other
sectors such as financial services and insolvency regulation,
the principle of proportionality is well-established. That is,
that there may be circumstances (particularly with reference to
scale) in which it is more appropriate to operate through the
mature, established professional body. In national terms, it is
perhaps worth reiterating that the Government is embarked here
upon the task of measuring a minnow.
5.13 The Society welcomes the decision by Government,
in the face of what is understood to have been widespread and
independent criticism (with the possible exception of the not
for profit sector), to set aside proposals to introduce contracting
generally for legal aid solicitors in Northern Ireland. The Society
believes that a widespread network of small, efficient and cost
effective practices is the proper formula for this Province. Solicitors
already cope with an extensive range of regulation and monitoring
in return for the privilege of serving the public. Where many
firms, most especially outside the Greater Belfast area, will
be involved with legal aid only for the purposes of the occasional
petty sessions case, whether criminal or matrimonial, it is difficult
to conceive that they will apply for registration with the new
Legal Services Commission. It makes little sense for them to commit
to the significant expense entailed in the Government's proposal
for duplicated regulation.
5.14 The Society therefore predicts that if Government
proceeds to introduce an external regulator as envisaged it will
significantly reduce the availability of legal services to the
public, more particularly in rural areas, without the slightest
demonstrable evidence that the quality of service previously available
was anything less than suitable. This is the consequence of the
Government choosing to play Doubting Thomas, wishing quality to
be externally verified by resort to a third party regulator, despite
all the available testimony.
5.15 At the most fundamental level, the Government's
approach to the Northern Ireland system is inherently self-contradictory.
It states that it has been persuaded that it is not feasible to
introduce a system of franchising and contracts here. It has recognised
that it cannot deliver bulk contracts to solicitors on a Province-wide
basis because there is an insufficient volume of casework in any
category of civil law, in particular, to allow it to herd such
work into a sharply reduced number of authorised providers without
an unacceptable level of inconvenience and obstruction for the
public seeking access.
5.16 On the other hand, bolted on to the alternative
scheme, and with a very superficial rationale, is a feature which
will cause many firms to conclude that the expense and trouble
involved in continuing to supply a publicly-funded adjunct to
their other business is simply not cost-effective.
5.17 This in fact is not an issue about quality assurance
at all. It is an issue about proportionality and needless duplication.
The Government has failed to acknowledge the logical consequence
of the fact that it cannot deliver bulk casework to the existing
network of small firms throughout the Province. It insists upon
trying to exact a price from each firm for the privilege of continuing
to service legal aid work while seeming to have forgotten that,
in the case of many firms, it cannot deliver such a volume of
work as would make that price affordable.
5.18 The Government's decision effectively spurns the
Society's public offer to engage in meaningful and constructive
discussions with a view to advancing and further assuring the
current plans for enhanced quality services across the full range
of solicitors' services. The Government has elected not to engage
with the Society in an exploration as to whether its prerequisites
can be accommodated within the self-regulatory environment, to
take no stock of all the Society has been engaged in these several
years to demonstrate its commitment to high quality service from
its members, to disregard all independent views as to what has
been achieved, but to proceed straight to statutory intervention;
and all this despite failing to articulate any plausible contention
that the standards which the public receive from Northern Ireland
solicitors, no matter how they are funded, are unacceptable.
5.19 A review of what has been engaging the Law Society
even just over the past year demonstrates the fact that we are
fully committed to ensuring a consistently high quality of service
for the public.
— We have re-vamped our domestic conveyancing quality-assurance
scheme, the Home Charter, and made it compulsory for all solicitors
as from January 2001. It has been in operation on a voluntary
basis for most of the last decade and involves a system of inspection
just as the Government espouses for legal aid work. We note that
the Government Homes Bill is, in effect, catching up with Northern
Ireland in respect of this initiative, save that the "sellers
pack" here does not include a survey report.
— January 2001 also saw the start of our compulsory
professional education programme whereby we will reach the position
that every practitioner will be required to undertake attendance
at further education courses as an integral part of professional
practice.
— Last year, we launched the first Advocacy Training
course for solicitors. 25 solicitors, drawn from a heavily over-subscribed
application list, completed a nine-month course of night classes
on advanced evidence, followed by a week's intensive training
run by the National Institute of Advocacy Training of America.
This year's course is once again heavily over-subscribed.
— We have produced a Client Care Code of Practice
for Family Law practitioners (notwithstanding the fulsome praise
extended in the Office of Law Reform's enquiry into present standards).
Other Client Care protocols will follow.
— We have launched the Lexcel quality assurance
scheme for solicitors' practices and already have one firm through
the process and duly accredited. Several others are in the pipeline.
5.20 The Society is a body with which Government could
usefully talk, with a view to securing a Code for the various
kinds of legal aid casework and in a way which is proportionate.
26 February 2001
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See the list of unprinted papers, p. xvi. Back
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