1. Controlling the cost of civil legal
help and advice
1. Expenditure on civil legal aid rose rapidly during
the 1990s, reaching a peak in 1999. Recent trends suggest that
whilst total expenditure has declined (Figure 1), expenditure
on controlled legal help work has increased. The amounts claimed
for completed work, for example, on immigration increased from
£58 million in 2000-01 to £138 million in 2001-02 and
are expected to increase further in 2002-03. The decline in expenditure
on licensed work reflects changes in the law and the reclassification
of personal injury and some commercial disputes, for example,
to a conditional fee basis.[2]
Figure 1: Summary of expenditure on civil legal aid
between 1995-96 and 2001-02
Overall, expenditure on civil legal aid has decreased
over the last six years. While expenditure on legal help has increased
over this period, expenditure on legal representation has reduced.
2. The Commission has introduced compliance audits
to validate the claims received from suppliers on controlled work.
It has some 450 people involved in auditing work, at a cost of
£6 million a year. The audits include a review of suppliers'
case files, and in 2001-02 auditors examined a sample of 20 claims
from each of 2,571 suppliers, representing 52% of participating
suppliers. The results of each audit are categorised 1 to 3 on
the basis of the percentage of costs disallowed. The categories
correspond to downward assessments of costs claimed of 1 to 10%,
11 to 20% and over 20% respectively.
3. In 2001-02, 35% of suppliers were assessed as
Category 3, and the overall average level of downward assessment
was 24%, amounting to £2.5 million across the cases examined.
These results were prior to mediation and appeal by suppliers.
The National Audit Office reported that some suppliers were dissatisfied
with the initial assessments because, for example, work had been
done by the supplier but not recorded in a transparent way on
their file. Informal discussions between the Commission and suppliers
usually resulted in reduction of the initial assessment, and in
2001-02, 10 firms made formal appeals, one of which was accepted,
four partly upheld and five rejected.[3]
4. In 2001-02, the Commission recovered £2.1
million in overpayments and reduced bills by a further £4.25
million. In one case, a supplier had to repay almost £700,000
out of a total value of £2.3 million, a reduction of around
30%. The Commission attributed overcharging in this case to bad
file keeping. The Commission acknowledged that some suppliers'
performance needed to improve but the Commission did not believe
there had been systematic fraud.[4]
5. The Commission can issue a formal notice of contract
termination to suppliers who do not respond to a warning to improve.
The Commission said around 30 such notices had been issued at
the time of the Committee's examination, with the number likely
to increase over the following months. The removal process, however,
takes at least 18 months. 69 suppliers had withdrawn as a result
of a Category 3 assessment, and 26 firms had contracts terminated.
The Commission agreed that the time taken to remove contractors
for poor service or persistent and significant over claiming should
be reduced. It was about to commence consultation on proposals
to tighten the contracting regime.[5]
6. The Commission acknowledged the Committee's concerns
about the quality of advice on asylum issues provided by some
suppliers. In London the Commission had employed expert immigration
lawyers to peer review the files of asylum legal help suppliers
rated as Category 3. This exercise had provided evidence to support
the recovery of money from firms making unreasonable claims, and
evidence of work which had placed clients at risk. It had also
developed the existing expertise in the Commission's London office
for managing the contracts of immigration practitioners. Peer
review resources would be expanded further from April 2003. Where
peer review identified that a client had been placed at risk by
the firm, the firm's contract would be terminated immediately.
If public money had been placed at risk, a contract rectification
notice would be issued immediately giving the firm six months
to improve or have their contract terminated, as the Commission
did not believe a Court would accept contract termination without
warning in such circumstances. Category 3 firms would also have
their number of case starts for 2003-04 reduced by 20% from 2002-03
levels.[6]
7. In 2001-02 the proportion of all suppliers classified
as Category 3 varied between 18% in the Cambridge region and 58%
in Nottingham. The Commission acknowledged that there was a lack
of consistency in approach to compliance audits between its regional
offices. The Commission was planning to identify the reasons behind
the variations, and address them, for example through further
staff training. Some variations were inevitable, but the Commission
accepted the need to reduce the range of variations across the
12 regional offices.[7]
8. The average cost of legal help across all categories
of law excluding immigration increased by around 20% in 2001-02.
The Commission's research suggested that billable time had increased
even though the life span of cases had not changed since the introduction
of contracting. A debt case, for example, took on average 240
minutes to complete in January 2002 compared to 155 minutes in
January 2000, and a family case took on average 147 minutes in
January 2002 compared to 127 minutes in January 2000. The Commission
suggested that the controls on the number of cases taken on by
suppliers had encouraged solicitors to focus less on routine processing
of simple cases of little added value and more on cases of higher
quality, leading to an increase in unit costs. Complexity and
better time recording had played a part. The Commission was, however,
unable to say which factors were the most significant.[8]
9. Legal advice and help for those who cannot afford
it might be provided more effectively by training people to specialise
in those areas of law where advice is needed rather than through
solicitors whose training covers all legal areas. The Department
confirmed that contracting was leading to more focus on firms
specialising in particular areas of law, and that the not-for-profit
sector had brought in people with different skills and training.
The Department was not certain, however, that the market would
sustain profit-making firms staffed only by people trained in
one particular area of law. The Department had funded training
and development schemes to encourage people to enter particular
branches of the law. Accreditation schemes were run with the Law
Society to, for example, enable people to deal with criminal work
in a police station. The Commission acknowledged that the principle
could probably be extended to areas such as asylum.[9]
2 C&AG's Report, paras 1.10-1.11, 1.13 Back
3
C&AG's Report, paras 2.4-2.10 Back
4
Qq 4, 125, 128 Back
5
Qq 90, 106, 131; C&AG's Report, para 2.12 Back
6
Ev 28 Back
7
Q 218; C&AG's Report, para 2.16 Back
8
Q 1; C&AG's Report, para 2.3 Back
9
Qq 1, 29, 32, 41, 125, 167; C&AG's Report, para 2.3 Back
|
