Evidence submitted by Mr Stephen Orchard,
former Chief Executive, Legal Services Commission
Thank you for your letter of 7 July inviting
me to submit a "valedictory" note to the Committee.
I trust this letter will suffice although I am also sending you
separately a paper (Annex A) I presented at a recent conference
in Toronto which sets out a lot of relevant information: Development
Of Legal Services Policies In England And Wales 1989/90—2001/02,
Steve Orchard, Chief Executive, Legal Services Commission and
Aoife O'Grady, Legal Services Research Centre.
It is important to understand why lawyers do
legal aid work when they are constantly complaining about remuneration
and lack of profitability. There are a number of reasons which
are not necessarily mutually exclusive. For many, the areas of
law they enjoy and which they are good at can only, or mainly,
be done under legal aid, for example asylum and crime. Others
are committed to working for the poor out of social conscience.
For those legal aid work is an obvious avenue. The numbers in
this category should not be underestimated. Also, there are firms,
mainly on the High Street in non urban areas, who see legal aid
as part of the package they offer the local community bringing
in, as it does, other privately fee paying work from family and
friends. These firms tend to concentrate on family legal aid.
Finally, there is a group who tend to be younger, often from ethnic
minorities, who wish to start a firm but are limited by cost and
likely client base so set up in cheaper areas where they are likely
to attract few private paying clients.
In the light of the above I am setting out my
thoughts under the headings of strengths, weaknesses, opportunities
and threats.
STRENGTHS
There are still a lot of very good quality lawyers
who want to do legal aid work. The changes made throughout the
nineties and as a consequence of the Access to Justice Act 1999
has meant better quality work on average, not least because of
specialisation in categories of law such as clinical negligence,
family, asylum and mental health.
Contracting means that poor performance or overclaiming
can be more easily identified and dealt with on a contracted firm
basis rather than just by individual case. Services can be better
targeted and work done previously solely as a means of generating
income for the lawyer has been eliminated from the system. The
letting of individual contracts for each high cost case will,
as it beds down, reduce the average cost of cases, particularly
in crime.
The flexibility in the Act means that different
methods of delivery of service can be encouraged and used to resolve
problems in supply or different approaches to funding can be utilised,
for example expansion packages.
There has been a significant increase in funding
for the advice sector which has considerable expertise in debt
and benefits work, in particular.
The quality of staff, particularly lawyers and
managers, in the Legal Services Commission, is extremely high.
I would put it far above the average for the public sector generally,
as a consequence of excellent recruitment practices and a willingness
to devolve responsibility and power to individuals at different
levels.
WEAKNESSES
Lawyers in private practice have tended to concentrate
on areas of law where they can be assured of volume and a solid
client base. This means family, crime and personal injuries. This
has lead to a shortage of practitioners in areas such as housing,
in particular, but also community care and mental health. However,
there is oversupply in some urban areas and categories of law.
For example, in London about 50% of the firms contracted in crime
do about 92% of the contracted work. They would have no difficulty
whatsoever in absorbing the other 8% thus reducing the supplier
base the LSC would have to manage through contracts. It would
also make the firms left more profitable. However, I suspect that
ethnic minority firms are disproportionately represented among
the 8% and their elimination would be wholly counterproductive
at a time when the Lord Chancellor is encouraging diversity in
the legal profession.
The LSC now knows clearly which are the poor
performing firms within its supplier base but it does take time
to deal with them. This is being addressed but firms will challenge
all the way. After all, loss of contract now means loss of livelihood.
I would like to see much closer involvement by the Law Society
and it using its powers of intervention much more readily where
the LSC has uncovered poor quality work, for example by peer review.
The Law Society has immunity when it takes such action.
The advice sector has not yet made the positive
contribution it is capable of. This is, in my view, due mainly
to its lack of contract management skills and its inability to
square its obligations under contracts with its ethos. There is
a tendency to go the extra mile for every client it takes on with
little thought for the clients who cannot get through the door
as a consequence. It needs to be much tougher in ending cases
by monitoring the time it is taking on individual cases and by
applying a rigorous cost benefit test as cases proceed.
The form of the contract and the method of auditing
by the LSC was designed to deal with the worst and this is resented
by the best. That is understandable. There is no difficulty in
identifying most of the best and most of the worst and giving
the former a much lighter touch. These arrangements are now in
place and will bear fruit over time. The real difficulties are
with firms in the promotion and relegation zones and their willingness
to challenge through the courts.
OPPORTUNITIES
A new contract for solicitors is due in 2004.
This should reduce the number of contracts by eliminating overclaimers
and poor performers.
The review now being conducted on the supplier
base should, if it is being conducted properly, come to the right
conclusions about remuneration and quality standards in contracts
but see what I say about threats below. What I have said above
about the Law Society is an opportunity that should be grasped.
I believe the Law Society and many of its Council members are
now all too aware of the damage done to its reputation by a relatively
small number of rogues.
THREATS
There have been a number of changes to the criminal
justice system which have driven up the cost of criminal defence
services. The biggest threat is that the continuing cost of these
and other, future, changes will lead to reductions in Community
Legal Service funding. The CLS is a fine policy designed to coordinate
funding from all sources and focus it on quality legal services
to meet real need as identified locally. There is a limit to how
long peoples enthusiasm and commitment can be maintained if funding
is cut as a result of growth in crime spend driven by Government
policy. However, the growth in average case cost in civil is also
a threat. Even a fixed and stable sum of money will buy fewer
cases if more is paid for each case. Research is in hand to identify
the cost drivers which should then be addressed, if possible.
Some average cost growth was inevitable as the LSC drove low value,
high volume cases out of the system in order to encourage good
quality work of real benefit to the client and that is a good
thing. But it should have settled down by now. However, simply
to freeze average costs by, for example, the imposition of standard
fees, without understanding the cost drivers will simply penalise
the lawyers when they are often the tail and not the dog.
A sensible approach to remuneration is essential
if the current drift away from legal aid by good firms is to be
stopped. That does not mean an across the board increase in hourly
rates. Money needs to be targeted to achieve the LSC's objectives.
Quality and experience should be encouraged by working with the
Law Society and practitioner groups to introduce accreditation
systems that recognise genuine experts in crime and asylum. This
has already been done successfully in family. Those experts should
be paid more.
Housing is a high priority area of law which
is under resourced. The LSC should be authorised to create an
expansion package to encourage more firms to do it to a high standard.
This might be a mixture of remuneration increases and targeted
grants and loans. It also needs to be recognised that the cost
base of different firms will vary widely, often driven by where
they are. London is much more expensive than elsewhere and hourly
rate increases need to be made to compensate. However, I would
limit those increases to the high volume, high performing firms
only. The LSC knows who they are but it would be challenged unless
the method of identification could stand up to scrutiny by the
courts.
Finally, on threats, I was worried by the approach
of Treasury economists during the course of the review last year.
They were of the view that the LSC should play no part in setting
or auditing quality and that competitive tendering would resolve
all issues over remuneration. Both propositions are hopelessly
wrong. I am not a lawyer and I have no loyalty to that profession.
However, I do believe I know as much about them as anyone after
some 42 years in legal and judicial administration. They are a
means to an end and no legal aid scheme is possible without them
and the best of them that we can afford. Their strengths and weaknesses
need to be recognised and worked on and the contribution they
make valued and encouraged so long as they work to achieve the
objectives set for them.
S M Orchard
Annex A
DEVELOPMENT OF
LEGAL SERVICES
POLICIES IN
ENGLAND AND
WALES 1989-90—2001-02
Steve Orchard, Chief Executive, Legal Services
Commission
Aoife O'Grady, Legal Services Research Centre
INTRODUCTION
Prior to 1989, the legal aid system in England
and Wales was administered by the legal profession through its
governing body, the Law Society. The Legal Aid Act 1988 allowed
for the creation of a non-departmental public body, the Legal
Aid Board (LAB), which took over administration of legal aid from
the Law Society on 1 April 1989. The change was not welcomed by
the legal profession. The then president of the Law Society later
commented that, "until 1989, we [the legal profession] had
been able to deceive ourselves that we were an accredited appendage
of government . . . [The serving of] formal notice of
our expulsion from the establishment . . . amounted also
to a more or less frank declaration of hostility or (worse) contempt"
(Mears, 1994).
The government's reasons for assuming control
of legal aid administration were relatively straightforward. It
was the efficiency and effectiveness of the administration of
the system that was at issue. It was thought that this could be
done first, at a lower cost, by the application of good management,
and second, by the faster processing of applications for civil
legal aid and all solicitors' and barristers' bills.[1]
At that time, the government was also interested in exploring
the possibilities of the potential for greater use of the advice
sector, including advice agencies without solicitors. The early
days of the LAB were thus taken up with improving efficiency and
effectiveness, and significant results were obtained within a
short space of time. However, weaknesses in the overall legal
aid system soon became apparent as expenditure started to grow.
It thus became clear that the system itself would have to be altered.
Since 1989 the legal aid system in England and
Wales has been thoroughly transformed. In this paper we will provide
an overview of developments in the legal aid system in England
and Wales in this period. We will also identify the main arguments
both in favour of and opposing the key changes to the system.
Finally, we will analyse the strengths and weaknesses of the current
state of legal aid in England and Wales, and ask, what next?
THE LEGAL
AID SCHEME
1989-99
Within the legal aid system adopted by the Legal
Aid Board the sole requirement for any organisation to do legal
aid work was that they should be solicitors in private practice
or should employ a solicitor. The latter allowed Law Centres and
some other advice sector organisations to do the work. As regards
civil legal aid, there were three schemes. The Green Form scheme
allowed advice and assistance, but not representation. The Advice
by Way of Representation (ABWOR) scheme was used either for civil
proceedings in the magistrates' courts, overwhelmingly family
issues related to children or domestic violence, or work before
Mental Health Review Tribunals. Legal aid certificated work covered
where court proceedings were likely or had begun.
The Green Form scheme allowed solicitors to
do up to the value of two hours work (approx £70 then) on
any matter of English law for financially eligible clients without
reference to the LAB. Solicitors carried out the means test themselves.
However, no ABWOR or civil certificated work could be done without
LAB authority.
Table 1 shows the 1989-90 volumes and expenditures
for the different forms of civil legal aid work.
TABLE 1: 1989-90
CIVIL VOLUMES
AND EXPENDITURE
| Bills Paid
| Amounts | Cases Started |
Green Form | 804,000
| £56 million | —
|
| ABWOR | 61,300 | £16.5 million
| 71,933 |
| Civil Certs | 200,000 | £258.7 million
| 262,500 |
| |
| |
This table illustrates two things: Green Form work was high
in volume but had low unit costs, and the growth rate in civil
certificated work was significant.
As regards criminal legal aid, there were four schemes. The
Green Form Scheme operated as described above for civil legal
aid. The Police Station Scheme allowed anyone arrested and taken
to a police station the right to free advice, either from their
own solicitor or from a duty solicitor. Duty solicitors were contacted
through a centralised agency, contracted with the LAB, which had
access by telephone either to individual lawyers who were on a
duty rota in the geographical area or a number of solicitors on
a panel for the area. The volume of business dictated whether
a police station was covered by a rota or a panel. Legal aid paid
for all work done whether by own or duty solicitors. The Magistrates'
Courts Duty Solicitor Scheme covered every magistrates' court
in England and Wales either by a rota or panel, again dictated
by volume of business. Finally, Representation Orders could be
made by the magistrates to cover preparation and advocacy before
those courts and for cases committed to the Crown Court, upon
application of the "Interests of Justice"[2]
test. Up until 2000, representation was means tested and contributions
could be payable in appropriate cases although legal aid could
not be refused on the basis of wealth.[3]
Table 2 shows the 1989-90 volumes and expenditures of the criminal
legal aid categories (Crown Court figures are not included as
this was not administered by the LAB).
TABLE 2: 1989-90 CRIMINAL
VOLUMES AND
EXPENDITURE
| Bills Paid |
Amounts |
Green Form | 225,500
| £10.5 million |
| Police Station Duty | 345,000
| £31 million |
| Magistrates Court Duty | 62,000
| £6.5 million |
| Representation Magistrates | 435,000
| £152 million |
| |
|
When the LAB took over the administration of legal aid the
involvement of the independent advice sector was very limited.
Seven law centres were funded by grant to the tune of £768,000
as a consequence almost of historical accident and a total of
£1.024 million was paid out of the Legal Aid Fund for casework.
1989-99: THE INTRODUCTION
OF FRANCHISING
A key development that commenced soon after the establishment
of the Legal Aid Board was "franchising", the LAB's
brand name for the first quality assurance system for legal services.
This came about as a consequence of the then Lord Chancellor's
request that the LAB should find ways of involving organisations
without solicitors in the delivery of legal aid. Solicitors had,
of course, an underpinning legal qualification and they were regulated
by The Law Society. However, a research report commissioned by
the Lord Chancellor's Department reported that, "non-solicitor
agencies provide an alternative source of legal advice to that
provided by solicitors and increase clients' choice and access"
(Steele and Bull, 1996: 139). Also, such agencies tended to provide
coverage in areas such as social welfare law, in which solicitors'
firms tended not to practise. The expansion of non-solicitor agencies,
for example, Citizens' Advice Bureaux, in the provision of legal
aid would improve the service currently provided to the public.
The development of franchising was based upon well-established
principles of quality assurance. It was felt by the LAB that if
the right processes and procedures were in place then the resultant
product was more likely to be "fit for purpose". The
first franchising specification covered the type of management
procedures that it was considered most competent organisations
would have in place. For example, a business plan should be available
together with appropriate, non-discriminatory procedures for recruitment
and training of employees. Job descriptions should be available
and staff should be appraised at least one a year.
A second area, which the LAB considered to be of great importance,
covered the availability of experienced supervisors and processes
laid down for the carrying out of supervision activity. Also included
were requirements for regular file reviews and, in both cases,
a requirement that corrective action should be noted and carried
out. Of course, while all this was important it did not guarantee
that the client got the best possible service or result. The LAB
always accepted that the most effective way of measuring quality
after the event was by peer review. However, it was clear even
in the early 1990s that comprehensive peer review was not a viable
option, not least on account of cost. An alternative approach
to determining the quality of work in individual cases was the
development of "transaction criteria" (see www.legalservices.gov.uk
for further details), which comprised a series of checklists covering
different categories of law, highlighting issues that should be
covered in a well run case.
The franchise package was eventually launched to solicitors'
organisations already doing legal aid on a voluntary basis in
1993, and more than 800 solicitors' firms obtained franchise contracts
after auditing by LAB staff. Franchising then became the basis
upon which organisations without solicitors could apply for the
right to do legally aided work. This was launched on a pilot basis
in 1997 and involved some 25 agencies seeking contracts in mainly
debt and welfare benefits categories of work.
The introduction of franchising was widely accepted as a
move to "ensure a `value for money' service through the accreditation
of legal aid practices that meet standards for quality" (Sherr
et al, 1994: 105). By its nature franchising was a complex
process, but such complexity was essential to effect a "new
managerialist agenda to control and make public expenditure [on
legal aid] accountable" (Wall, 1996:549). Wall suggested
that "the contractual conditions imposed by franchising and
its quality criteria will cause legal aid lawyers to act like
public service professionals. They will give rise to a new model
of legal aid lawyers, a `hybrid public service professional',
who is privately employed but subject to government defined employment
criteria" (Wall, 1996: 555).
In the review of the franchising pilot commissioned by the
LAB, it was cautioned that "whilst the [transaction] criteria
may cover stages which are worthwhile themselves they are still
only a proxy for a larger, more nebulous understanding of quality.
In this sense the criteria are proxies for quality because quality
extends beyond processes as evidenced on file" (Sherr et
al, 1994: 106). The possibility that some practitioners would
alter their behaviour so as to conduct their casework with the
sole objective of meeting the criteria standards was raised. However,
later research conducted for the (by then) LSC concluded that
by 2000, "client satisfaction and peer review assessments
were higher . . . than they were in the early days of
franchising", implying that the introduction of a quality
assurance mechanism had been successful in raising standards.
RLSCS, LEGAL
NEEDS, AND
CONTRACTING
A second development in the mid-late 1990s arose from a recognition
by the LAB that at some point in the not too distant future radical
changes to the Legal Aid Scheme would be necessary. The growth
of expenditure through this period was substantial (£1,085.2
for 1994-95 to £1,664.4 in 2000-01: LAB, 1995; LSC, 2001)
and the LAB started to consider what sort of changes would be
necessary to, at the appropriate time, influence government on
major change. The key point was that although the administration
of legal aid had been removed from the Law Society, the cost of
the Legal Aid Scheme was still driven almost entirely by the solicitors'
profession. Solicitors determined where they would have their
offices and what work they would do. This resulted in a concentration
on categories of law where there was sufficient work to guarantee
a constant stream of clients, ie crime, personal injuries and
family. There were some solicitors' firms that specialised in
the social welfare categories of law such as mental health, immigration
and housing, but such was rare.
It was ultimately decided that in order to refocus the scheme
it would be necessary to have as clear a picture as possible at
a local level of what the real need for legal services was and,
within that real need, how it could be prioritised. As a pilot
experiment, the LAB established a Regional Legal Services Committee
in the North West of England. The Committee was chaired by a member
of the LAB, but also involved a wide-ranging membership from the
profession, the advice sector and others with an interest in legal
services (including the judiciary).
TABLE 3: (LAB) LEGAL
AID EXPENDITURE
1989-90 AND 1999-2000
| 1989-90
| 1999-2000 |
| Civil | |
|
| Green Form | £56 million
| £144.5 million |
| ABWOR | £16.5 million |
£14.7 million |
| Civil Certs | £258.7 million
| £484.5 million |
| £331.2 million
| £743.7 million[4]
|
Crime | |
|
| Green form | £10.5 million
| £27 million |
| Police Station Duty | £31 million
| £109 million |
| Magistrates' Courts Duty | £6.5 million
| £25.5 million |
| Representation Magistrates | £152 million
| £245 million |
| £200 million
| £434.7 million |
| |
|
As can be seen from Table 3, legal aid expenditure in the
10 years from 1989 increased substantially. However, it was difficult
to demonstrate that this vastly increased level of expenditure
was delivering better value for money for the taxpayer. Although
it became clear from the RLSC pilot that such committees could
identify need and priorities, there were no mechanisms available
to LAB at the time to direct services accordingly. Redirection
was entirely dependent upon the legal profession volunteering
to provide a service under the traditional legal aid scheme. Despite
the success of franchising, its voluntary nature meant that any
solicitor could do any legal aid work, whether or not they had
appropriate expertise. In short, overall expenditure could still
only be controlled by the rather crude mechanisms of scope or
eligibility limits (see Buck and Stark 2001: 50), and quality
could only be assured where suppliers agreed to enter the franchise
process.
During the 1990s, alongside the LAB's development of quality
and need assessment methods, groups of specialist solicitors were
increasingly coming together to form associations such as the
Immigration Law Practitioners Association, the Association of
Personal Injury Lawyers, the Housing Lawyers Association etc.
Such moves were encouraged by the LAB and seen as valuable means
of improving quality. Indeed, in many categories of law it was
made a requirement that supervisors in franchised firms should
be members of the appropriate association or (if such existed)
accredited to a panel administered by the Law Society.
In light of all the above, by the end of the 1990s it was
agreed within the LAB that there were a number of objectives for
the civil scheme that any reforms should be designed to achieve.
They were:
(2)
to eliminate from the civil certificated scheme work that could
be funded in other ways and use the savings to increase funding
in social welfare law;
(3)
to have differential tests for the granting of certificated funding
in different categories of law which reflected government priorities
and importance of the issues to the client;
(4)
to reduce the amount spent on high cost certificated cases and
use savings to increase funding in social welfare law;
(5)
to increase advice sector involvement by funding expansion of
those agencies demonstrably expert in social welfare law;
(7)
to eliminate work done solely for the purposes of generating income
and encourage work likely to be of real benefit to the client;
and
In criminal legal aid it was noted among academic commentators
that "legal aid has financed a major professionalisation
of criminal proceedings, especially at magistrates' courts, and
a rapid expansion both in criminal defence solicitors' firms and
the number at the criminal bar" (Bridges, 1992: 276). There
was also an improvement in the advice at the police station, due
to the introduction (in collaboration with the Law Society) of
a mandatory accreditation scheme for non-solicitor police station
representatives. However it was still felt the main weakness was
the absence of any quality assurance over the work generally:
there was still a culture within criminal practitioners that "it
could all be done on the back of an envelope".
What was termed "new public management agenda"
at the heart of government ensured that such a culture would have
to change. Some of the above objectives were therefore relevant
to criminal work also, particularly those regarding quality standards.
There was concern about the growth in very high cost criminal
cases. These, mainly fraud and drug trafficking offices involving
multiple defendants, were accounting for about 1% of Crown Court
trials by number but nearly 40% of expenditure (now 49%).
THE ACCESS
TO JUSTICE
ACT 1999
The Access to Justice Act 1999 replaced the Legal Aid Board
with a Legal Services Commission (LSC) and gave it a statutory
duty to create and maintain a Community Legal Service and Criminal
Defence Service. The new Act was not without controversy in its
passage through Parliament. The most controversial provision was
the power to provide services through lawyers directly employed
by the LSC. The Bar was strongly opposed to employed services
in crime (Bar Council, 2000) although the Law Society remained
neutral so long, it said, "as employed lawyers competed on
a level playing field with private practice".
The Act removed some civil work from scope. Those matters
affected were deemed not to be of high priority or, as in the
case of personal injuries, open to funding through other mechanisms,
such as contingency fees (see Yarrow, 2000). The single merits
test for civil certificated work contained in the 1988 Act was
replaced by a Funding Code (LSC, 2000), which was subject to approval
by Parliament, that could set down differential tests for different
types of case. A key change, so far as the LAB were concerned,
was the far greater flexibility to fund work other than traditional
individual cases. The LAB was also given the power to introduce
"contracting" across the whole spectrum of legal services
provision. This move from the franchising of legal aid services
to contracting signified a further step down the road to a more
management led and controlled system.
THE COMMUNITY
LEGAL SERVICE
The 1998 White Paper "Modernising Justice" spoke
of a new Community Legal Service (CLS) being the "cornerstone
of the Government's pledge to protect everyone's basic rights"
(Lord Chancellor's Department, 1998). It spoke of the CLS being
focused on the issues that affect the everyday lives of the disadvantaged
and socially excluded, and, as part of the service, how legal
aid spending would be targeted towards these groups. The CLS would
be a part of the broad government programme to tackle social exclusion
and build an inclusive society (see Buck A et al, forthcoming;
Stein, J, 2001).
Following the establishment of the LSC, three elements of
CLS development were selected for initial focus. The first was
to develop franchising into the Community Legal Service Quality
Mark, and for it to become both a requirement for legal aid service
delivery within the CLS and for it to extend to other types of
CLS work. The second was to create a comprehensive network of
Community Legal Service Partnerships to bring together funders,
providers and others with an interest in the delivery of legal
services to work on the mapping of supply across all suppliers
against the need for legal services in the community (Moorhead,
2000). There was no set formula for a partnership. This flexibility
recognised historical and political differences at local levels,
for example where some cities were at odds with their surrounding
rural areas. The third was to develop a CLS website that would
provide information about the availability of legal services locally
to individuals or groups who needed that information (now online
at www.justask.org.uk).
Both franchising, and the Specialist Quality Mark (SQM),
had always been category of law specific. Individual firms would
have a franchise in, for example, family law or mental health
law or both. This, however, did not preclude them from doing other
work. With the establishment of the CLS, four categories of law
were designated as "exclusive" to suppliers holding
a Quality Mark. The reasons for exclusivity varied as between
the four.
There was excellent coverage across England and Wales in
family law; no reason was seen for allowing any firm without the
Specialist Quality Mark in family law to provide publicly funded
legal services in that area. Conversely, in clinical negligence
law it was felt that the inherent difficulty in many of the cases
meant that it should be conducted only by genuine experts, and
the "dabblers" should be removed from operation as quickly
as possible. In fact the number of firms was reduced to just under
300, whereas LAB records indicated that some 5,000 had done one
or more clinical negligence cases under legal aid funding. There
were two other areas of law where it was felt the complexity of
the issues and the vulnerability of the client base dictated that
the work should only be done by firms holding the Specialist Quality
Mark. These were immigration (particularly asylum) and mental
health law. These four categories remain the only areas of law
where holding a Specialist Quality Mark is a pre-requisite for
doing the work at all under public funding. However, other categories
of law may join them as the supplier base is developed in the
new categories.
CONTRACTING
Alongside the Quality Mark, a scheme of contracting was introduced
by the LSC following its establishment. Three types of contract
were developed, dealing with advice, representation and high cost
cases respectively. It was determined that a "one size fits
all" approach would not be appropriate. Instead, the old
Green Form and ABWOR schemes were combined under a single contract;
the Legal Help scheme. The two hour limit was removed in order
to encourage an appropriate amount of work to be done applying
a cost/benefit test, to deliver a result for the client. Each
contract at this level could cover all the categories of law in
which the firm held a Specialist Quality Mark; however, the contract
limited the number of cases that could be started. Case starts
had to be reported to the LSC. This introduced for the first time
an element of control in terms of matter starts, and consequently,
the budget.
Despite the above limits, however, some flexibility was allowed
for in every contract, enabling work outside of the categories
contracted for (save in the specialist categories of family, mental
health, immigration and clinical negligence) to be done under
"tolerances". The number of case starts under tolerances
was normally limited to 10% of the total case starts in the specialist
areas. It was felt within the LAB that tolerances were essential
to enable both an holistic service to be delivered to individual
clients and to allow new categories of law to emerge. It was also
recognised that not every legal problem could be squeezed into
the definitions and categories created for LAB administrative
use, not least because in many the volume of problems was relatively
low.
It was acknowledged that the approach adopted for Legal Help
had risks. Clearly, encouragement to do sufficient work necessary
to get an appropriate result for the client would lead to an increase
in average costs. A fixed budget in this area would mean fewer
cases and fewer clients. LSC policy advisers were therefore anxious
to increase the amount of money available at this level.
When it came to contracting for civil certificated work the
concept of exclusivity in certain categories of law was retained,
but it was clear that few firms in private practice did sufficient
work in any category of law to enable the LAB effectively to limit
the number of cases they started. It was decided to adopt a simple
licence approach which at least allowed for the imposition of
quality standards, although this did not give what was considered
an effective control over overall costs as individual cases were
still costed at the end of the proceedings. While the legal profession
did not directly oppose the introduction of contracting for civil
legal aid, these developments were not warmly endorsed. The Law
Society cautioned that the system might unfairly restrict client
choice. The new Funding Code for civil cases was also greeted
with scepticism, the then president of the law society claiming
that "legal aid will cease to be a right for disadvantaged
people with legal problems. It will become a discretionary benefit,
granted on the basis of flawed and inappropriate criteria"
(Law Society, 1999).
The third type of contract did provide for direct control
of the cost of individual cases where their cost was very high.[5]
Any case likely to be high in cost (predominantly but not exclusively
clinical negligence and Children Act proceedings) is now subject
to an individual case contract based upon a case plan submitted
to LSC by the solicitors, and if involved, the barrister. Work
is authorised by stage as the case develops and is priced before
the event. At the conclusion of each stage work for the previous
stage is paid for and the case plan is updated. This has proved
very effective in controlling costs, particularly in clinical
negligence and other types of case where the "loser pays
the winners' costs" rule applies. Here, also, the concept
of risk sharing has been introduced, on the basis that if the
case is won the winner's costs are paid at the market rate, which
is significantly in excess of the legal aid rate. Conversely,
if the case is lost the losers get less than they would have under
the old legal aid scheme and far less than the market rate. This
has acted as an encouragement to weed out cases with poor chances
of success.[6]
CRIMINAL DEFENCE
SERVICE
As noted above, as well as introducing the CLS the Access
to Justice Act 1999 also provided for the introduction of a Criminal
Defence Service (CDS). No firm can now do public funded criminal
work without a contract with the LSC.
Throughout the 1990s the average cost of criminal legal aid
cases rose even more than in civil legal aid (an increase of 46%
between 1994 and 2000-01 as opposed to 8.5% increase in civil
legal aid for the same period (LAB Annual Report, 1994-05: LSC
Annual Report, 2000-01). The problem of cost inflation is more
difficult to deal with in the criminal sphere, though, as there
is no limit on the budget for criminal legal aid and services
must be provided. Any person arrested and brought to a police
station is entitled to publicly funded legal advice. Additionally,
if an accused person is faced with the threat of prison, the government
must provide the option of publicly funded legal representation
(European Convention on Human Rights and the Human Rights Act
1998). The LSC was therefore faced with a quandry—how could
costs for criminal legal aid be controlled when case starts cannot,
as in civil legal aid, be limited?
A salaried public defenders service, the PDS, emerged as
a possible answer (see www.legalservices.gov.uk for more details
on the scheme). The first public defender office was opened in
July 2001 and there are now a total of eight offices but with
no plans to open more, at least before April 2004. The PDS experiment
is important for a number of reasons. First, the experience will
provide the LSC with a much better idea of the cost base involved
in running a criminal defence practice. Second, research and peer
review can make comparisons between the quality of service delivered.
Third, it will demonstrate any differences in approach or attitude
brought about by working in the public sector for a salary rather
than a profit-making organisation. Finally, an employed service
can step in quickly if gaps begin to appear in private practice
provision. In order to address the last point, the LSC has been
experimenting with branch offices attached to a main public defender
centre. For example, a major office was set up in Swansea in South
Wales and recently a sub-office on Pontypridd in the Welsh valleys
has been opened: both are run as a single organisation.
The introduction of contracting was another opportunity to
take forward the quality agenda in criminal legal aid. The LSC
had already combined with the Law Society to introduce accreditation
for non-solicitor representatives at the police station, but this
was in 2001 extended to encompass solicitors as well. One of the
key challenges has been the very high cost cases which now consume
49% of total spend in the Crown Court.[7]
The objective is to bring all of these cases under individual
case contracts on similar lines to the civil scheme explained
above. From April 2004, every single case that meets the criteria
will be individually contracted (implementation of this has been
delayed because of the need for Treasury approval). The budget
of each case is to be agreed in advance with solicitors and barristers,
and it is expected that this will bring the spiralling costs of
such cases under tighter control. The pilot that has been running
since April 2001 has recently been extended across the country.
The reaction to the introduction of contracts for firms providing
criminal legal aid services within the profession was negative.
The Law Society, the professional body for solicitors in England
and Wales, at one point advised its members not to sign LSC contracts,
only changing its position when improved payment rates and contract
terms were proposed.
WHERE WE
ARE NOW:
STRENGTHS AND
WEAKNESSES
After Harold MacMillan had retired as Prime Minister he was
asked by a young journalist what were the most difficult things
he had to deal with when he was in office. He replied "events,
dear boy, events". The point was, no matter how good one's
policies and implementation of them, they were always likely to
be blown off course by things that either one did not expect or
could not control. That situation faces the LSC today.
Among the strengths of the achievements so far is the significant
improvement in the overall quality of the work done under public
funding. The civil scheme is much more closely allied to real
need and to government priorities. More people are getting a service
that genuinely meets their needs and delivers an appropriate result
for them. This has been brought about by greater flexibility and
innovation in the use of statutory powers. There is much more
control over civil expenditure than there has ever been.
However, that control is not absolute and this is reflected
in some of the weaknesses that we have identified. Average cost
growth in civil work is high and unsustainable within a fixed
budget. Either average cost is brought under control or fewer
people will be eligible for help. Some quality issues remain,
particularly in asylum where there is evidence of over claiming
against legal aid and poor quality work done by lawyers. To address
this peer review is now being used in a significant way by employing
experienced immigration lawyers to look at cost claims and solicitors'
files to see if the work done was of an appropriate legal quality.
Unfortunately, in many cases over-claiming and very poor quality
work, which has put many clients at risk, are being identified.
This has subsequently uncovered weaknesses in the LSC's ability
to remove contracts, which are being resolved. However, due to
intense opposition from the profession, this is proving extremely
resource intensive.
Lawyers have rarely been portrayed publicly so negatively,
particularly in the context of asylum seekers, clinical negligence
cases, and injudicious remarks by certain Government Ministers
(see for example, "Minister Admits Crime Failures",
Guardian, 17 June 2002; "Blunkett may be a listener
but he's certainly no liberal, Guardian, 18 July 2002).
This does not help in discussions about the legal aid budget,
which is still seen by the public as money for lawyers rather
than, as it should be, money to help needy and deserving clients.
However, the "events" referred to above have brought
the greatest problems. Expenditure on asylum, although driven
by Government policy, has increased rapidly as the figures in
Table 4 below demonstrate. So has expenditure on crime, particularly
in the Crown Court. This, again, is driven largely by changes
in Government policy, for example greater encouragement to send
people to prison, the Human Rights Act and more court sitting
days. Also, there is pressure on public expenditure generally.
Falling tax revenues combined with significant investment in the
Health Service and on social exclusion initiatives is squeezing
legal aid and means that remuneration increases are few and far
between. This had led to many firms that have the option of giving
up publicly funded work doing so and in declining morale among
those who choose for one reason or another, to remain with publicly
funded work.
TABLE 4: INCREASE
IN LEGAL
AID EXPENDITURE
FROM 1989-2003
| 1989-90
| 1999-2000 | | 2002-03
|
Civil |
| | | |
| Green Form | £56 million
| £144.5 million | |
— |
| ABWOR | £16.5 million |
£14.7 million | | —
|
| Legal Help | |
| | £172 million |
| Civil Certs | £258.7 million
| £484.5 million | |
£484 million |
| Asylum | |
| | £175 million |
Crime |
| | | |
| Green Form | £10.5 million
| £27 million | |
|
| Police Station Duty | £31 million
| £109 million | |
|
| Magistrates Courts Duty | £6.5 million
| £25.5 million | |
£530 million |
| Representation Magistrates | £152 million
| £245 million | |
|
| Crown Court | — | £370 million
| | £570 million |
| | £1,420.2 million
| | £1,931 million
|
| | | |
| |
THE FUTURE
Some of the key objectives set in the late 1990s have been
achieved. For example, civil spend is under far more effective
control. There have been some increases in social welfare law
funding but almost all on asylum rather than, for example debt,
welfare benefits and housing. We now have differential tests for
the granting of certificated funding in civil law, which increasingly
reflect Government priorities and the importance of the issues
to the client. Advice sector involvement has expanded substantially
to the extent that now some £49 million is paid to that sector.
Supply is much more closely aligned to real needs and priorities
but that task is never finished. Crucially, quality standards
are now mandatory for all suppliers whether in private practice
or in the advice sector and suppliers are now more focused on
issues that will deliver real benefit to the client. However,
the pressure on the overall budget brought about by increasing
spend on crime means that spend must be brought under control
if the civil scheme is to expand further.
Private practice firms are leaving the scheme; for example,
17% of family contractors have left since contracting was introduced
in 2000. Managerial re-action to these losses, eg persuading suppliers
to advertise their services away from where their office is based
and telephone advice, has meant that no advice deserts currently
exist. However, a failure to increase remuneration and perhaps
more importantly, to commit to small but regular remuneration
increases in the future means that there will be a continuing
tendency to lose the best quality suppliers who can earn more
money in privately funded work. The key challenge for the Commission
will be to ensure that changes in policy within Government are
properly funded in terms of the total cost and that policy initiatives
by other Government departments are costed to include the legal
aid implications and the money found. Further pressure is bound
to lead to reductions in scope and financial eligibility in the
civil scheme if this is not addressed.
REFERENCES
Bar Council (2000) "Plans for a US style public defender
system comes under fire from the Bar", Press Release 13 October
2000 accessed at www.barcouncil.org.uk on 26 June 2003.
Bridges, L (1992) "The Reform of Criminal Legal Aid"
in Young and Wall, (eds) Access to Criminal Justice: legal
aid, lawyers and the defence of liberty.
Buck A, Pleasence P, Balmer NJ, O'Grady A, Genn H (2003)
The Experience of Justiciable Problems: Implications for the
Social Exclusion Agenda, forthcoming.
Buck, A, and Stark, G (2001) Means Assessment: Options
for Change, London: Legal Services Commission.
Law Society (1999) "New system to ration legal aid will
heighten social exclusion", Press Release 24 May 1999 accessed
at www.lawsociety.org on 20 June 2003.
Legal Aid Board (1995) Annual Report, London: HMSO.
Legal Services Commission (2000) The Funding Code,
London: Legal Services Commission (2001) Annual Report,
London: The Stationary Office.
Lord Chancellor's Department (1998) Modernising Justice,
London: HMSO (Cmd 4155).
Mears, M (1994) "Advantages from Adversity" in
Law Society Gazette issue 91, p16.
Moorhead, R (2000) Pioneers in Practice: the Community
Legal Service Pioneer Project, London: Legal Services Commission.
Paterson, A (1991) "Legal Aid at the Crossroads"
in Civil Justice Quarterly 10 (Apr), pp 124-137.
Sherr, A et al (1994) Lawyers—the Quality
Agenda, vol 1, London: HMSO.
Steele, J and Bull, G (1996) Fast, Friendly and Expert?
Legal Aid Franchising in Advice Agencies without Solicitors,
London: Policy Studies Institute.
Stein, J (2001) The Future of Social Justice in Britain:
A New Mission for the Community Legal Service, London: Centre
for the Analysis of Social Exclusion, London School of Economics.
1
Applications for criminal legal aid for representation before
both the magistrates' courts and the Crown Court were, and still
are, made to the courts. LAB processed magistrates courts' bills
but all Crown Court bills were processed either through the courts
themselves or by a centralised, specialist team in the Court Service.
It is only now, 1 April 2003, that accountability for Crown Court
expenditure has been passed to the Legal Services Commission (LSC)
although most Crown Court bills will continue to be handled in
the Court Service, see later for contracting for very high cost
cases (VHCC's) Back
2
See schedule 3, paragraph 5 of the Access to Justice Act (1999)
for further details Back
3
Since the introduction of the Criminal Defence Service (CDS),
means testing in the magistrates' courts has been abolished. If
a person is going before the Crown Court, he or she needs to complete
a statement of means which goes before the Judge. The Judge in
the Crown Court has the duty to consider making a Recovery of
Defence Costs Order at the end of the case. The Order is not dependent
on the defendant being convicted but an order against an acquitted
defendant is exceptional Back
4
In fact, civil expenditure had started to reduce by this time
although it had more than doubled in cost over the 10 years and
at a rate well in excess of increases in the retail price index Back
5
For these purposes "very high" was defined as £25,000 Back
6
This approach does not apply in family where there is no tradition
in the courts of recognising win or lose much less ordering costs
to be paid by one side or the other Back
7
The LSC defines high cost for these purposes as a case lasting
more than 25 days at trial or costing more than £150,000 Back
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