Examination of Witnesses (Questions 1-19)
16 SEPTEMBER 2003
PHILIP ELY
OBE, CLARE DODGSON
AND ROGER
HAMILTON
Q1 Chairman: Ms Dodgson, Mr Ely,
we are very glad to have you with us. There is a lot you can tell
us about the difficult task you have in controlling costs and
ensuring that legal services can be provided. Is there a limit
on how much funding can be diverted from the Community Legal Service
budget to the Criminal Defence Service budget? Can this raiding
go on?
Ms Dodgson: I do not think raiding
is the right word for it. I think what we need, Chairman, is a
balanced portfolio in Legal Aid. Clearly we have cross-pressures
in Criminal because Criminal is driven by factors that are not
necessarily within the control of the Legal Services Commission,
but we do need to keep a balanced portfolio. I think one of the
things that the Commission needs to do as it forward plans is
to look at what that portfolio should be and how do we maybe not
absolutely ring-fence, but how do we balance investment that Government
wishes to make in giving different client groups access to different
types of publicly funded legal advice.
Mr Ely: I think the linked point
is whether there is to be a sufficient payoff from the management,
particularly of very high cost cases. It is a new regime effectively,
but it does not need me to tell you of the scale of the spend
up at the top of the scale in terms of the high cost cases. My
own view is that the management of that is achievable. It is early
days yet and, of course, it involves negotiation, it involves
case management, it involves negotiating fees and so forth. I
think it can be done and most certainly it needs to be done. It
needs to be high on our priorities otherwise the leaching effect
from crime to civil and from legal help will continue unless—the
unless I do not need to spell out to you—there is more funding.
Q2 Chairman: It has been indicated
to us by the Lord Chancellor's Department—indeed, the Lord
Chancellor himself, I forget which—that one of the drivers
for budgetary pressure is in the increased number of cases being
brought to court by the police. Success, if you like, in terms
of getting cases to court at any rate means more budgetary problems
for you. That is an issue which does not seem to be considered,
the budgetary implications of a drive to prosecute particular
kinds of cases. Are you doing anything to make sure that it is
considered and recognised when the decision has been taken?
Mr Ely: I think awareness matters a great deal.
Across the spectrum—and I speak slightly from ignorance
in saying this, but I will do it nonetheless—I think very
often there is insufficient account taken of the Legal Aid cost
implications of new practice, new legislation and so forth and,
of course, by the time that hits the fund, it is almost too late.
I think our job even today, but wider than that, is to create
an awareness of that and we have just got to do it as part of
our job for the management and development of the Community Legal
Service.
Ms Dodgson: Being specific, Chairman,
I think one particular area is to work with the Home Office more
closely both at official level and also, I know that our ministers
are working with their counterparts in the Home Office because
there are some specific things that we need to get into, which
I describe as "upstream". As policy thinking and planning
is being worked through, how do we model and cost the consequences
for Legal Aid on the back of that? I think that is very important,
it is a specific area. As you know, I am relatively new to this
particular job, but that is one of my personal priorities, to
develop the relationships with my counterparts in the Home Office
and that has already started.
Q3 Chairman: Are there other policy
developments which could help to counterbalance this, such as
your efforts in mediation?
Ms Dodgson: I think we have got some very real
questions to ask ourselves and answer about mediation. Certainly
I have been talking to a lot of groups that are not just the Law
Society or the Legal Aid Practitioners' Group—as have many
of my colleagues including my chairman—to say what is the
role of mediation, what is the role of the not-for-profit sector,
what is the role for organisations like the Citizens' Advice Bureau?
How do we work with other government agencies? I used to work
in JobCentre Plus, we had tens of thousands of advisers who were
working with people on welfare benefit or who were looking for
jobs. What links could we make there to say that we could signpost
people who have housing or debt problems into Community Legal
Service Partnerships, for example? I think you are absolutely
right, there is a real role for us to start working with other
government departments and other agencies because many of the
clients are the same people. They are people who are vulnerable,
disadvantaged, very often their lifestyles are chaotic, and if
we can start with the individuals, their families and their communities
and then build our services around them—I use the term "wrap
the service around the individual" rather than "salami
slice" the person into the services—then I genuinely
believe we have got a job to be done. Personally I genuinely believe
Legal Aid has got an important part to play in tackling social
exclusion or bringing back social inclusion, whichever way we
want to look at it. Chairman, I want to promote and all of my
senior managers want to promote that agenda positively and constructively.
Mr Ely: Going back to your specific
on the question of mediation, I think one has to say that has
been a long haul. I happened to notice that your last witness
was Lord Mackay, the former Lord Chancellor, and I recall that
a decade ago when he was Lord Chancellor he was particularly anxious
to drive forward mediation in family work. I think enormous progress
has been made, and it is easy to say that. I think the understanding
of the role of mediation is coming up the agenda, but it is a
long time. Our own pilots in relation to family, the FAInS pilot
and the FAInS work, has taken time. Again, I am sorry to be negative,
but I do not think one can do it for less, I think one has to
develop and evolve it in that way and it is in with a chance.
Q4 Chairman: You mentioned the very
high cost of cases, but looking at the average case costs how
do you intend to bring average costs per case on the civil side
under control because they have been rising?
Mr Ely: I think the first thing is to establish
the core information, the database. Research is needed, research
is being undertaken to find out what are the drivers of the average
cost at the present time, let alone what is driving the increase.
A simplistic view might say: "We are demanding quality. Quality
has a price and that is contributory to the average cost increase".
I do not believe it is, or it may be a part but I think there
are fundamental points of information that we need. For example,
why is the cost case of Firm A as against Firm B in a particular
locality different? They are in competition, but equally there
are elements in there that ought to be the same, one has got to
find that and manage it. I know the chief executive has a pretty
strong view on that.
Ms Dodgson: I do indeed, Chairman.
Two specific things. We have an evolving and, I believe, improving
audit process which now looks much more at average costs per case
and starts benchmarking those and feeding back to suppliers. The
Committee may be aware that we categorise in Category 1, Category
2 and Category 3, and the Category 3 suppliers we have been targeting
very hard and saying: "You are an outlier. You are a high
cost provider. This is unacceptable. We need to understand why
this is the case and we need to tackle it". We are moving
back into Category 2 and we are feeding those costs back to the
individual suppliers, so we are taking out the poor value high
cost suppliers in significant numbers. The other point, Chairman,
is that the Director of Policy & Legal, who is here with us
today, is working on some proposals for next year which we are
discussing at the moment and have not finalised—including
we have not finalised them with our ministers—as to how
can we get even more explicit about putting a cap on the costs
of certain cases, and also incentivising and rewarding our high
value high quality providers. At the moment we would say Category
1 because that is the best measure we have, but we are certainly
on the case and we know that we need to do that. Early figures
for this year are encouraging about the cost rise being contained
to a lower level, but they are very early figures. I would not
want to put on record to the Committee that we are confident about
the outturn for this current year. We are seeing, as I say, some
positive early indications.
Q5 Ross Cranston: I was going to
ask about the research that you have done on increasing the high
average cost. Have you done comparable studies with the private
sector? A lot of this work will not be privately funded income
for crime, most of it is publicly funded. Where you can do comparisons,
is it the case that lawyers are driving costs up again or is it
just this view?
Ms Dodgson: We have not done the specific cost
comparators but I think you are right that we need to do that.
We need to benchmark not just internally and look at what we are
doing ourselves, but we need to make those cross-readings. We
have just appointed a Performance and Change Project Director,
which was announced yesterday as it happens, who is working to
the executive board to take forward what I would describe as action
research. Not a piece of research that takes three years to produce
an outcome and gets published in a referee journal, but research
that can genuinely help us plan and tackle cost containment and
get a better picture on need and demand, supply and provision,
map the two together, look at the different clusters and types
of cases and clients and get a better fit between the Legal Aid
spend and the wider private sector spend. I am very keen that
with David Clementi's review of the legal profession in the round
we recognise that Legal Aid has a very significant contribution
to make to that map. In my personal view—as a public servant
for 20-plus years—it has a unique contribution to make because
we are helping the most vulnerable and disadvantaged people in
society and, therefore, we need to make sure that Legal Aid is
well presented as part of that wider map. Have we got what I would
describe as the metrics, which I think you are challenging me
for at the moment? No, we have not. Do I agree that we need to
develop those and look more widely at benchmarking performance,
not just cost? Yes, certainly I do, and we are on the case.
Q6 Ross Cranston: On the criminal
side, you do now have the pilots with the involvement of publicly
employed lawyers?
Ms Dodgson: We do.
Q7 Ross Cranston: Has that thrown
up any indications yet about probable costs?
Mr Ely: I think it is too early to say. It
has been running effectively for a year to two years and I do
not know that there are even yet signals emerging because I think
thus far people would not want to draw the conclusions they want
to draw, whether it is in the public as against the private sector.
If I could go back just one step. When you say has there been
a comparison with the private practice and non-legally aided work
in relation to average cost, the answer thus far as you have heard
is no, but we are on it. I think there is a need to recognise—and
others will plead this, but I cannot forget that I was a solicitor,
I am even on the roll still—the actual benefit or profit
to be derived from that same work. Now whether the Lord Chancellor's
current investigation into supply and demand within the legal
profession and so forth is going to begin to throw up the causes
and the comparisons between privately funded work and publicly
funded work, it is too early to say. Frankly, the supplier base
will suffer if we do not get that right.
Q8 Ross Cranston: Before I say anything
more, I should declare an interest as a practising barrister,
not that I did publicly funded work.
Ms Dodgson: Two other points on the pilots.
My experience in public service tells me that pump priming is
sometimes necessary for pilots. I think we need to make sure that
we take that into account. You are starting something up from
scratch and it is new. Secondly, there is a wider question in
my view, which brings me back to the David Clementi review work
about a catalyst for change. Do we wish to put in pilots which
are catalysts for change and drivers of doing things differently?
We need to take a qualitative as well as a quantitative view of
some of these new models would be my view.
Q9 Chairman: Looking now at very
high cost criminal cases, 1% would be work and 50% would be the
cost. You have got quite ambitious targets for savings: £30
million in 2003-04, £70 million and £90 million. Can
you meet these targets?
Ms Dodgson: We recognise they are ambitious.
In preparation for this Committee, Chairman, last week my Executive
Board and myself asked that very question of ourselves. We believe
within the broad financial parameters and the modelling that we
have done, yes, they are achievable, but they are ambitious.
Q10 Chairman: Did the Chancellor
jump the gun when he announced that all new very high cost criminal
cases would be managed under individual case contracts before
we have had experience of the new regime settling down or being
assessed?
Mr Ely: May I be impudent and say I suppose
that is really a question for the Lord Chancellor rather than
for us. Having said that, there has been experience within the
Commission of the management of high cost cases. I know it is
now moving to crime where the figures are so much greater, but
we have had similar experience in relation to the civil side and
in relation to multiparty actions and that sort of thing, so there
is a track record in relation to the management of cases on that
scale. Obviously that is information that would have been shared
and fed back to the Lord Chancellor's Department—as it was—and
I think would lead to the conclusion you mentioned.
Ms Dodgson: I think, Chairman,
standing still was not an option for the reasons you mentioned
earlier. If we are getting such a small proportion of cases consuming
such a high proportion of the limited budget, then taking action
that seems sensible, advised by our board directors—our
chairman, as he has said, is a lawyer—we have expert lawyers,
who are on our board, who have looked at this and said: "We
have to do something. We have to do something that is as sensible
as we can in the circumstances that we are in and this is the
way to act." It may need to be learned from, improved and
evolved as time goes on, but from what I have seen I think it
was quite the right thing to do to get some sort of grip and handle
on some of these very high cost individual cases and what is happening
underneath the headline numbers.
Q11 Peter Bottomley: To go back to
the point that was remarked on before. I hope when you do this
you will keep an eye on cases like the one of Superintendent Ali
Dizaei, where the prosecution seemed to throw a fortune at a particular
case, and then dropped it a week or two before it came up and
then argued the merits of that case. I think that people, where
there are contracts, ought to watch what is happening on the prosecution
side and try to get some kind of equity. Now can I switch to Community
Legal Services. On the question of Legal Aid providers, if there
are shortages how has that happened and what happens to make sure
there is not that shortage of providers?
Ms Dodgson: This was the point I was making
earlier on, that we need a better fix on need and demand and supply
and provision. I describe it as "Can I have my green, amber,
red, please, for different types of cases and different types
of providers?" and looking to our regional directors—which
we already are doing—to say: "You must know your patch."
I was out in Birmingham yesterday with the regional director there.
We met with a group of local suppliers of all different types
and descriptions to talk to them about what was happening there.
We need to understand where the red spots are, not just where
we have undersupply, but in some instances, particularly in London—and
my director for London is here—we have oversupply in certain
categories. How do we shape our supplier base to best fit not
just the budget but the requirements of the communities that we
serve? Where we have hot spots and where we have genuine shortages,
I am looking to each regional director to understand that, to
work with the national operations director and to do things that
are sensible about moving services around, moving what are called
new matter starts around, which are new cases around the system,
and making sure that we respond to those pressures as best we
can in the light of the funds and services that we have available.
We take them very seriously.
Mr Ely: I think we must, as part
of our remit, have constant anxiety as to the strength of the
supplier base. It is something which is identified in this year's
Annual Report and it is something that was flagged up in earlier
years. It has been flagged up, and one has to grasp this firmly,
in terms of pay and remuneration. My own view—and it is
more than an anecdotal view because one is engaged in this—is
that is a material factor in the pressure on the supplier base.
Now at the moment supply and demand is not a cause for concern,
but it is simply something we have to have a handle on as the
chief executive has indicated. I think there are other ways. One
moves on in terms of saying if there is not a supplier base at
all, how do you deal with it? You have to look at alternative
methods of delivery. We are engaged in that process—telephones
in Wales and the West Country and that sort of thing—alternative
means of supply which can try to meet it, but it must be at the
forefront of our worries I think.
Q12 Peter Bottomley: Regional directors
should be open to clients, advocates and others who might spot
gaps and make sure that attention is paid to them?
Mr Ely: Yes. As far as solicitors are concerned,
we are entering the next bid round currently and that has to engage
that process as well. New suppliers have to have the opportunity
to bid. It is very difficult, one has to say, against a constrained
budget, but at least the opportunity must be there.
Ms Dodgson: The other thing, Chairman,
to mention is the Just Ask! website, which has been there
for a while but has been relaunched recently and genuinely revamped.
I have been into it myself. I have used it and have navigated
around it. I went into welfare benefits—that was my previous
history—and had a look. I genuinely think for people who
have relatively straightforward queries the website is now offering
an improved service, for a lot of people rather than having to
go into the high street solicitor, make an appointment, go and
sit there and wait, if you can go onto the Internet and use a
site that lets you find out the straightforward things that you
need to know. We are committed also to the website as well.
Q13 Peter Bottomley: Do you look
at the not-for- profit sector as a way of filling gaps, or do
you look also at the general signs because you would know where
there are gaps?
Mr Ely: I think they are providing complementary
services. I think the strengths of the not-for-profit sector have
been particularly identified in all the recent reviews in relation
to social welfare, housing law, et cetera. I think that is something
we have to use where they provide—and in the end one comes
back to this—better value for money—that is the service
one should be using—where they do not, one should not.
Ms Dodgson: I think complementary
is the right word, or as partners, particularly housing welfare
benefit, I am very struck by debt. The Citizens' Advice Bureau
I thought did an excellent report on debt and indebtedness. For
some people relatively small amounts of money can make the difference
between them being able to float or sink in cash. I think we ought
to be thinking through more strategically, which is a word managers
use, it is overused, but I genuinely know what I mean by that.
What should our supply base look like and what part should the
not-for-profit providers and suppliers play in that overall picture?
I think, yes, there is a real role for them, but they cannot be
a substitute. There are some things that only legally qualified
suppliers can and should do, and we need to tease out more effectively
who can and should do what across the piece.
Mr Ely: For example, in London—which
I have chaired for some time—we are a part of the East London
debt strategy, which is specifically designed to look at the way
in which debt advice is delivered. At what point do you need the
specialist input? How does that relate to and refer to others?
How does it work into the region, for example, because conventionally
in London we have done it by borough, which was not always right.
Groupings of boroughs, if they can be thus persuaded, will deliver
a mission together of the sort of advice you get. In London we
think that might apply to other types of advice in different parts
of London. We have a problem in London with the outer boroughs
with shortage of supply. How do you meet that? Do you look at
it in terms of groups of boroughs or do you look at the method
of delivery? What part does the lawyer and the not-for-profit
play in that? I believe that needs to be worked through.
Q14 Peter Bottomley: You have a review
of supply, demand and purchasing arrangements and you have the
new contracts for solicitors next year. Can you tell us what the
preliminary findings are on this and what the impact is likely
to be?
Ms Dodgson: They are still looking at the preliminary
findings. I hope it will give us a much a better understanding
of what the cost drivers are. In fact, I more than hope I believe
it will give us a much better understanding of what the cost drivers
are. I believe it will feed then into our work with the Department
of Constitutional Affairs as to how do we plan not just for the
next year, because I do think we have an operational timescale
for how do we get to the end of this year and plan for the next
operational year but more longer term, 18 months, three years,
five years, going back to the wider ranging review the Government
has commissioned of law as a profession, what position does Legal
Aid have in that? I think we need to make sure to keep a grip
on the short-term operational issues for Legal Aid. I need to
make sure—because I am the accounting officer—that
we keep a grip on the costs, that we can account for what we are
spending. Also, I want to know what the drivers are in these different
categories of provision and with different types of supplier,
and what is the best value in both quality and in the cost issues,
the value for money questions, to pull those two things and mesh
them together more effectively. I would like to see that review
of supply, demand and purchasing being a contributor to that,
but it would not cover all the elements of customer service and
quality of service, the Just Ask! website and things like
that, which need also to be built into our strategy for the future.
Mr Ely: I think the other thing
in relation to need, the total information as to need, both from
the research and from the local work that has been done within
partnerships, within partnership areas, boroughs and the rest
of it, at the end of the day I think it is relatively sophisticated.
The top line model gives you information based on all the usual
sources, if you like, and more. My experience is that in the main
the local input that is added through the partnership is, I would
say, pretty good, it is very often anecdotal. Going back to the
start of your question, that is filling it in, and I think the
picture that emerges and the information that the Commission has
is much greater than it ever was. Now, of course, I accept that
one then comes back to the question of how do you fill that need
in relation to the current contract round given the limited resources,
and I am not going to attempt to square that circle. I think it
is our job, I may say, to do the best, to identify through the
regional directors how the funding is to be spread round against
the background of that information, but I think the information
is good enough. I would share your concern as to whether it can
be met.
Q15 Peter Bottomley: Ms Dodgson,
I think we ought not to let you come here without saying to you
and to those who work for you and with you, that in each of our
constituencies every day there are people in trouble who find
that their problems are, if not totally solved, at least resolved
in a far more satisfactory way than what we would expect and we
are grateful for the services which are provided.
Ms Dodgson: Thank you very much.
Q16 Peter Bottomley: Let us move
on to the last section of our submission. Solicitors can be encouraged
into publicly funded firms by sponsoring students on Legal Practice
Courses. Is there an evaluation of the success you get from this?
Mr Ely: It is so awful to say: "It is
too early again", it is a terrible thing but last year was
the first. It is monitored and I will not go further than that.
We see it as our job to keep a grip on that and I believe it is
working. I believe they have been placed in the right places and
it is a base for further supply. Beyond that, I think it is silly
to try and answer it.
Q17 Ross Cranston: I want to ask
a few supplementaries about this area. The Law Society uses this
graphic phrase "advice deserts" and the latest phrase
is hotspots and so on. How big are these deserts and what parts
of the country are we talking about if they are deserts?
Mr Ely: Wales inevitably because of the difficulties
of access within the Principality, but that is being met because
partnerships have been created. They have funding not just from
the Government but from other sources as well to deliver supplies
through. Deserts is the wrong expression of Wales, I am sure,
but that is one you would readily identify and inevitably the
rural areas. Coming back to the question of supply, we have a
conundrum as to how to meet demand in those deserts and it goes
something like this. If the original driver is to say that we
want quality service, we want contract, we are going to drive
up standards all the time and we require supervisors and so forth,
that imposes constraints inevitably. In order to meet that the
system was developed on the basis that firms were allowed to do
work under tolerance—as it is called—where they could
do work which was not their specialisation, provided they met
certain standards again. The conundrum we have is to say does
one allow tolerance work to continue in order to assist in the
advice deserts? I believe the answer is firmly yes, provided again
one is doing the job of supervision properly in different ways
but tolerance is yes, whereas perhaps within the conurbations
one would say tolerance is no, because you should be developing
specialisations.
Q18 Ross Cranston: You are adopting
that passport road to tolerance, are you?
Mr Ely: Yes.
Ms Dodgson: Yes, we are indeed,
and just to reiterate there is the Just Ask! website and
the telephone pilot.
Q19 Ross Cranston: Yes. Can I press
you on that. You are relaunching that. I have used it as well
and it is excellent, but I just question whether there are people
out in rural Wales who use Just Ask!
Ms Dodgson: That is a fair comment
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