Written evidence submitted by the Department
for Constitutional Affairs and the Legal Services Commission
Q6-13 Figures for the rise in total spend
that was expected to follow from the introduction of CLR and how
much the actual rise in total spend has exceeded that expectation
WHAT IS
THE ESTIMATED
COST TO
THE LEGAL
AID FUND
OF THE
INTRODUCTION OF
FUNDING FOR
APPEALS UNDER
CONTROLLED LEGAL
REPRESENTATION? Controlled Legal
Representation (CLR) was introduced from January 2000 for appeals
to the Immigration Adjudicator and Immigration Appeals Tribunal.
Table 1 below shows the total costs of immigration and asylum
work funded by the LSC since April 2000. It includes an estimate
of the breakdown of work between Legal Help and Controlled Legal
Representation.
TABLE 1: COSTS
SUMMARY
| Type of Expenditure
| 2000-01
£m | 2001-02
£m
| 2002-03
£m |
| Legal Help
| 39.00 | 63.20
| 84.22 |
| CLR | 37.40
| 60.80 | 80.88
|
| Controlled Work Contracts | Total
| 76.40 | 124.00
| 165.10 |
| Certified work (primarily judicial review)
| 5.00 | 5.70 | 5.70
|
| Total | | 81.40
| 129.70 | 170.80
|
These are cash spend figures
However, not all of the costs attributed to CLR in table 1 are
additional costs arising from the introduction of CLR. Prior to
the introduction of CLR, solicitors were able to undertake the
preparation of appeals to the adjudicator and Tribunal under advice
and assistance (which was subsequently replaced by Legal Help
from January 2000). The only aspects of work that were not funded
under advice and assistance were the costs of providing representation
at the hearing itself. Additional costs attributable to the introduction
of CLR can be divided into two main areas:
a. the costs associated with attendance and representation
at appeal hearing; and,
b. the increased remuneration rates for the preparation
of appeals under CLR, which are about 8% higher than the equivalent
Legal Help rates.
We have estimated an average cost for the appeal hearing of about
£300+VAT for solicitors (or counsel), and £100+VAT for
interpreters. It is difficult to estimate with accuracy the overall
additional cost to the Community Legal Service Fund as a result
of the introduction of CLR. However the additional costs (resource)
in respect of hearings before the adjudicator or Immigration Appeal
Tribunal incurred for 2000, 2001, and 2002 is estimated to be
£40 million.
There is also some anecdotal evidence that experts' reports are
becoming more common leading to increased costs in the preparation
of appeals. It is also common practice to use counsel to represent
at the appeal hearing, and although they are paid at the same
rate as solicitors conducting advocacy, there may be additional
costs for example for a conference prior to the hearing. Adjournments
will of course also result in additional costs, as will any directions
such as to obtain a further medical report.
WERE THERE
ANY FORECASTS
AS TO
WHAT THE
COSTS WOULD
BE OF
BRINGING REPRESENTATION
AT THESE
APPEALS INTO
SCOPE? In May 1999 we set out
a limited forecast of the cost of advocacy before the Immigration
Appellate Authority as being up to £5.35 million for the
first year. We estimate that it was actually about £6 million
in the first year.
Since then there have been a number of changes, which have meant
that costs have increased above our original forecast, including:
a. The volume of appeals increased significantly beyond
the original forecast from 2001 onwards. The reason for the number
of appeals going up is because the number of applicants for asylum
has gone up and because the rate of processing of appeals has
also gone up to deal with the backlog.
b. The original forecast was limited to covering just
the costs of representation at the hearing, whereas our current
estimates include the costs of travel to and waiting at the hearing,
as well as the costs of an interpreter attending the hearing.
c. By April 2001 the hourly remuneration rates for advocacy
had increased by 20% since the original forecast was made (May
1999). Solicitors' hourly rates for the preparation of appeals
had increased by about 8%.
There is also evidence that the costs of preparation of appeals
have increased, for several reasons, including more onerous requirements
from the Immigration Appellate Authority.
Q13 Breakdown of the total spend figures, for example, what
proportion of the rise in total spend is attributable to:
(a) the introduction of funding for representation
(b) the increased complexity of asylum work following
the introduction of the Human Rights Act 1998
(d) the increase in cost of disbursements as opposed
to profit costs?
BRIEFING ON
LEGAL AID
EXPENDITURE ON
ASYLUM AND
IMMIGRATION
1. INTRODUCTION
Table 1 below provides an indication of Legal Aid Costs for Asylum
and Immigration cases.
TABLE 1: SUMMARY
COSTS
| Type of Expenditure | 2000-01
£m
| 2001-02
£m | 2002-03
£m
|
| Legal Help
| 39.00 | 63.20
| 84.22 |
| CLR | 37.40
| 60.80 | 80.88
|
| Controlled Work Contracts | Total
| 76.40 | 124.00
| 165.10 |
| Certified work (primarily judicial review)
| 5.00 | 5.70 | 5.70
|
| Total | | 81.40
| 129.70 | 170.80
|
All figures are in cash accounting terms. We have estimated
the breakdown between Legal Help and CLR. Most of the Legal Help
costs will be for advice on the initial application. In 2002-03
£3.0 million was spent on administration, and £2.4 million
on grants for special projects taking the total cost of Immigration
and Asylum spend to £176.2 million. Our current estimate
of total cash expenditure for 2003-04 is £194 million
One of the key reasons behind the planned introduction of a Unique
File Number for immigration and asylum cases is to improve the
quality of management information that the LSC can provide. We
know that clients often move around between solicitors, and at
the moment we cannot track this. The UFN will enable us to track
the work that is being conducted for individual clients, and tackle
any duplication of work.
2. THE INTRODUCTION
OF CONTROLLED
LEGAL REPRESENTATION
(CLR) In January 2000 CLR was made available for preparation and
representation of appeals before the Immigration Appellate Authority
(the Immigration Adjudicator and the Immigration Appeals Tribunal).
The LSC estimates that in 2002-03 the cost of providing CLR was
approximately £80 million. However, all of this is not additional
cost, as prior to the introduction of CLR much of the preparation
work for an appeal would have been conducted as Legal Help (advice
and assistance). Previously only the costs relating to the hearing
itself would have been excluded (such as travel, waiting, and
advocacy).
3. THE INTRODUCTION
OF THE
HUMAN RIGHTS
ACT (HRA) We do not have separate
data on the effect of the introduction of the HRA. Human rights
issues often arise as an integral part of an asylum claim and
it is not feasible to ask suppliers to break down their costs
between different issues.
4. THE POLICY
OF DISPERSAL
OF ASYLUM
SEEKERSWe can demonstrate the
increase in cases being taken on in regions rather than London.
Table 2 below shows the numbers of asylum & immigration matters
started in London, and in other regions since 2000-01. Whilst
the number of cases commenced in London has only increased by
2% since 2000-01, there has been growth of 39% in the number of
matters started outside London over the same period.
TABLE 2: THE
IMPACT OF
DISPERSAL
| Region | Period | No of Case Starts
|
| London | Year 2000-01 | 101,646
|
| Year 2001-02 | 96,650
|
| Year 2002-03 | 103,872
|
| Outside London | Year 2000-01
| 37,747 |
| Year 2001-02 | 44,548
|
| Year 2002-03 | 52,360
|
| All Regions | Year 2000-01 |
139,211 |
| Year 2001-02 | 141,198
|
| Year 2002-03 | 156,232
|
It is not possible to determine the impact on costs of the policy
of dispersal of asylum seekers. Clearly, the asylum seekers would
still have been entitled to advice and representation had they
not been dispersed, and this would have been payable at higher
London rates. However there will be some additional costs as a
result of increased travel and as a result of work being duplicated
as some asylum seekers return to the London region and change
their solicitors.
5. THE IMPACT
OF DISBURSEMENTS
AND COUNSEL
COSTS
Table 3 below shows the division of Solicitors' costs claimed
between profit costs, disbursements, and counsel costs. The cost
of disbursements as a proportion of total cost has not increased
significantly from 2000-01 to 2002-03. The use of counsel has
increased significantly, which is likely to be due to the introduction
of Controlled Legal Representation (see paragraph 2 above). As
explained above, an increase in the costs of counsel was expected,
due to the introduction in January 2000 of Controlled Legal Representation
(CLR) before the Immigration Appellate Authority. Costs have been
higher than expected largely due to the increased number of appeals.
The apparently significant increase in the amount spent on counsel
is due in most part to the use of counsel for advocacy at appeal
hearings. Before CLR was introduced there was no legal aid for
advocacy at appeal hearings. Under CLR solicitors can undertake
advocacy themselves or they can instruct counsel to conduct the
representation. Solicitors and counsel are paid at the same hourly
rate for advocacy before the adjudicator or tribunal, and generally
the solicitor cannot claim for advocacy at the hearing in addition
to counsel.
Were counsel not permitted under CLR, then most of the costs attributed
to counsel in Table 3 would have been claimed as profit costs
by solicitors instead.
TABLE 3: SOLICITORS
CLAIMS FOR
COSTS BREAKDOWN
| Year | Disbursements | Profit Costs
| Counsel | Total |
| 2000-01 | 8,100,000
15%
| 44,600,000
82% | 1,800,000
3%
| 54,500,000
|
| 2002-03 | 28,500,000
17%
| 122,200,000
73% | 16,400,000
10%
| 167,100,000 |
| Increase | 352% | 274%
| 911% | 307% |
Q39-40 Note on the merits test and appeals
APPEALS & CONTROLLED
LEGAL REPRESENTATION
Data for March—August 2003 shows that 76% of all asylum
appeals before the adjudicator were unsuccessful. The percentage
for organisations that hold LSC immigration contracts was 72%.
This breaks down across CCA categories as follows:
| Category of Organisation | % of Appeals Dismissed
|
| 1 | 73 |
| 2 | 71 |
| 3 | 77 |
As can be seen there is little variation between the average
for the 3 categories and the range of dismissal rates within each
category is also very wide. However a detailed analysis of the
organisations involved shows that category 3 organisations dismissal
rates range from 53% to 100%, which is a far poorer performance
than category 1 and 2 organisations.
Given that the success rate before the adjudicator is so low,
the LSC believes that many organisations are pursuing appeals
that have little or no merit. At present suppliers may self-grant
funding (Controlled Legal Representation) to represent clients
before the adjudicator. Last December the LSC issued revised guidance
on the merits test to be applied before granting funding. Recent
file audits show however that many organisations are failing to
apply the test at all or are not applying it fully.
The LSC is therefore proposing to remove the devolved power allowing
suppliers to self-grant CLR and bring that decision in-house.
All suppliers—except those few that we are confident have
a high success rate at appeal—will be required to apply
to the LSC for funding to appeal to the adjudicator. A specialist
team will decide applications within the deadlines for lodging
appeals so as not to cause delay to the Home Office or IAA.
The LSC believes that bringing the grant of CLR in-house will
reduce the number of unmeritorious appeals pursued with public
funding. Since April this year all suppliers wishing to pursue
judicial reviews have had to apply to the LSC for funding to do
so. Since that date funding has been granted for only 34% of applications
compared to 83% previously when suppliers were permitted to grant
their own emergency funding.
Supplementary Question—Would not the total spend fall
over the next few years without these measures, as a result of
the reduction in the number of asylum applications, the expanded
categories of non-suspensive appeals and the recent proposals
for a single tier of appeal?
WHAT WOULD
BE THE
COSTS OF
TAKING NO
ACTION TO
LIMIT WORK
ON ASYLUM
AND IMMIGRATION
CASES?
The costs (in resource) if further measures (as proposed in the
consultation papers) were not taken are estimated to be:
| 2003-04 | £194 million
|
| 2004-05 | £186 million
|
| 2005-06 | £192 million
|
These estimates of costs if no action were taken are based on
several un-tested assumptions, see below, and are subject to external
risks, so should be treated as indicative.
FORECAST ASSUMPTIONS
We have used a number of assumptions in forecasting likely costs,
both for our forecasts of the costs of implementing the consultation
proposals, and the likely costs if no action were taken.
The chief untested assumption is the number of cases, both at
the pre-decision stage, and the relevant appeals stages. We have
used a consistent set of planning assumptions shared with the
Home Office and IAA, which forecast a reduction in the number
of asylum applications. Obviously if there is a major shift away
from these assumptions in the number of applications or appeals,
then the costs will likewise vary. Indeed there is already evidence
that the number of asylum applications is reducing faster than
was anticipated in the planning assumptions, which would result
in a consequential reduction in costs below the current forecasts.
We have estimated the proportion of cases funded by the LSC, in
asylum and non-asylum immigration cases, both at the pre-decision
stage and appeals stages. For example was have assumed that the
LSC funds 90% of asylum adjudicator appeals and 20% of non-asylum
adjudicator appeals. Although these assumptions were based on
a provisional analysis of IAA data, we now have more up-to-date
information that indicates the proportion of publicly-funded asylum
appeals is more likely to be around 75%.
In the forecast of costs were no action taken, we have assumed
that average cost of claims continues to increase by 12% per annum.
This increase would include the costs of duplication of work.
In the forecast of costs under the proposals we have estimated
average costs based on current claims, and on the advice limits
set by the consultation proposals. We have also assumed in the
proposals forecast that the implementation of the unique reference
number would prevent unnecessary duplication of work.
We think that all our estimates of average costs may be on the
low side, but it is difficult to confirm this due to the current
stage billing arrangements.
We have not taken into consideration any additional or reduced
costs as a result of increased use of detention or fast-track
procedures, or any possible changes to appeal procedures. Both
models also assume that the duration of cases remains constant.
WHY, GIVEN
THE CONTINUED
REDUCTION IN
THE NUMBERS
OF ASYLUM
APPLICATIONS, ARE
THE COSTS
OF TAKING
NO ACTION
SO HIGH?
One would assume that the costs of taking no action would decrease,
in line with the reduction in the number of asylum applications.
However there are several factors that would prevent our costs
reducing in line with the reduction of asylum applications in
the period covered by the estimates:
a. We have worked to a consistent set of planning assumptions
(Home Office and IAA planning assumptions). Although the number
of asylum applications is decreasing, there remains a higher level
of decisions both at the initial decision level, and at the appeal
stages. These decisions include longer running cases that also
tend to be more complex and costly. So although the number of
asylum applications is decreasing the number of disposals remains
higher as the backlog is reduced. If the volume of decisions and
appeal outcomes reduces more quickly than expected as a result
of lower intake (and there is already evidence that this is happening),
then costs will come down accordingly (both for the "do nothing"
forecast costs, and the forecast of the proposals' costs).
b. We have assumed that average costs continue to rise
at the current rate of 12% per annum. It is difficult to predict
with accuracy what would happen to average costs if we were to
take no action. Many of the determining factors are outside our
control. For example, faster processing of cases and appeals could
lead to reductions to average costs, but increased use of detention,
or an increase in adjournments could increase average costs. The
introduction of the UFN will provide us with better management
information on average costs.
c. Although asylum applications are decreasing, and are
forecast to continue decreasing, immigration and nationality cases
are forecast to increase. We have factored this increase into
our forecasts, although we fund a smaller proportion of these
cases than asylum cases (as fewer clients are financially eligible)
and so do not expect this will have a significant impact.
WOULD NOT
THE TOTAL
SPEND FALL
OVER THE
FEW
YEARS WITHOUT
THESE MEASURES,
AS A
RESULT OF
THE REDUCTION
IN THE
NUMBER OF
ASYLUM APPLICATIONS,
THE EXPANDED
CATEGORIES OF
NON-SUSPENSIVE
APPEALS AND
THE RECENT
PROPOSAL FOR
A SINGLE
TIER OF
APPEAL?
See above—in terms of the reduction in the number of asylum
applications.
In terms of non-suspensive appeals, we have used the planning
assumptions of the Home Office & IAA in terms of volumes of
cases, which should already take account of non-suspensive appeals.
The recent proposal for a single tier of appeal has not been taken
into account in our calculations. It is unclear whether the single
tier proposal will result in legal aid savings. The introduction
of a single tier would not reduce costs if there were a commensurate
rise in the amount of work undertaken at the single appeal stage.
If there were to be savings then any reduction in cost as a result
of the single tier would be limited to the current level of costs
of the Tribunal appeals, which are estimated to be around £10-15
million (resource) per annum.
What is most likely to reduce costs is a fall in the number of
cases beyond that forecast in Home Office & IAA planning assumptions.
In particular costs will come down more quickly once the backlog
of cases is cleared—both at the initial decision stage,
and the appeals stages.
WHAT LEVEL
OF SAVINGS
DO THE
CONSULTATION PROPOSALS
OFFER?
Savings are measured by comparison between the consultation proposals
and the forecast costs if no action were taken. Both forecasts
use the same volumes taken from Home Office and IAA planning assumptions,
and the reduction in costs as result of fewer asylum applications
has already been taken into account.
If the consultation proposals were implemented then savings as
a result of the proposals of at least £30-40 million could
be achieved in 2004-05. This could increase to at least £50
million in 2005-06.
These savings assume that the proposals implemented include a
level of flexibility to provide cost extensions in certain cases,
for example where the client is in detention, or is an unaccompanied
minor.
These figures are based on several un-tested assumptions, and
are subject to external risks, so should be treated as indicative
estimates.
Department for Constitutional Affairs
Legal Services Commission
| 
