Evidence submitted by the Legal Aid Practitioners
Group
INTRODUCTION
1. The Legal Aid Practitioners Group is
an independent membership organisation representing over 800 organisations.
Most are solicitors operating under a Legal Services Commission
contract. We also have a number of Law Centres, CABx and other
not for profit advice agencies among our membership, and a handful
of individual barristers and chambers. Our members cover all fields
of law, including specialist areas such as education, mental health
and public law, as well as the more common fields such as crime,
family and immigration. Our membership is spread geographically
across the whole of England and Wales, covering both urban, suburban
and rural areas.
2. Technically the term Legal Aid was abolished
by the Access to Justice Act, in favour of the term "public
funding". However, the term Legal Aid is broadly known and
well understood, and clearly still has currency. We therefore
use that term throughout this document.
3. We enclose our Guide to the Legal Aid
System (not printed). Since the introduction of the Access to
Justice Act 1999, the system has changed radically. The Legal
Services Commission has confirmed that this Guide is "a true
factual account of events on the history of Legal Aid and the
current system". We hope this guide will provide an objective
basis to assist the Committee in understanding how legal aid now
operates.
DEFINING THE
ISSUES
4. The Committee's terms of reference indicate
that it is investigating the issue of variable access to legal
aid and advice deserts. The concept needs to be clearly defined,
as it can take effect on a number of levels.
5. First, there are some areas of the country
in which there is a complete absence of services. There are a
growing number of towns around the country without any legal aid
solicitors. Other areas suffer from a lack of services in particular
fields of law. A commonly identified example is that in the county
of Kent there isn't a single solicitor with a housing contract.
The organisation Shelter does run a number of Housing Advice Clinics
that are available on different days in different towns. LAPG
contacted them to find out whether they provided an equivalent
service. We were told that they are able to provide advice, write
correspondence on behalf of clients and sometimes provide written
representations in connection with Court appearances. However,
they are not generally able to act for clients in litigation,
for example when a client needs to take Court action to secure
repairs to his home. The service on offer is therefore not equivalent
to a solicitor in private practice, despite being badged, in exactly
the same way, as a "specialist" service. Kent is not
by any means the only such gap in the country. We understand the
Law Society has done work identifying other similar "advice
deserts".
6. In summer 2003, the LSC required all
firms that wanted a CLS contract from April 2004 to record their
interest by 1st October. Much to their surprise and ours, the
number of bids greatly exceeded the current number of contracts.
This was counter-intuitive, and very much against recent trends.
The number of firms holding contracts in one or more field of
law has dropped from 4,641 in March 2003 to 4,369 in October 2003,
a drop of 5.9%. The number of contracts held has dropped from
7,714 to 7,204, or 6.6%, and the number of firms with tolerances
under their contracts, which allow them to cover work other than
in their main contracted field(s), has dropped from 3,187 to 2,914,
an 8.6% fall. Tolerances are used for three purposes: to provide
a holistic service to clients within the firm's main contract
area who have a peripheral problem in a different legal field;
to enable firms to develop their expertise in areas in which they
do not hold a contract; and to ensure supply in rural areas, where
there may be no one at all that can meet the supervisor requirements
of the Quality Mark except in the most common areas of work.
7. We can only surmise as to the reasons
for the large number of bids, as we have no information on the
bidders. We would suggest that there are two factors at play here
that make the figures appear better than they really are. We suspect
that many firms are bidding for as much as they can in order to
keep their options open. We also believe that a significant proportion
of the bids come from lawyers who may wish to break away from
existing firms. This bidding round is effectively their only chance
to do so for three years. Such bids therefore represent a reorganisation
of supply rather than an increase.
8. From the information we have gleaned
as to the areas in which the Commission is holding a bidding round
for contracts, it also appears that the excess of bidders has
arisen primarily in a few large conurbations. In smaller towns
and rural areas the number of providers is not increasing, and
is frequently dropping.
9. The second aspect of the lack of provision
relates to types of case for which on the face of it there are
solicitors available, but where in practice it is difficult to
secure help. A partner in one of our member firms is in practice
in a small town in the south of Hampshire. He undertakes domestic
violence work, but is not able to take every such case that comes
to him. Although there are a number of other practices that claim
to do domestic violence work, he often finds that he has to refer
clients to firms more than twenty miles away. Often the transport
links are not good; and in any event, those clients who qualify
for legal aid are the ones least able to afford to travel significant
distances for advice. There are of course also practical difficulties
in making arrangements to seek advice from so far away—especially
so in domestic violence cases where both the violent spouse and
any children may be an obstacle to getting away to seek help.
Despite all these problems, the solicitor concerned reports that
he is still contacted regularly by clients who live on the outskirts
of London who have been unable to find help nearer to home.
10. Another of our members reports on the
problems in Dorset. Here, the key problem is the closure of Courts
in Sturminster Newton, Shaftsbury, Gillingham and Dorchester.
Although in this instance this relates primarily to criminal defence
work, the problem can and does also affect family and civil cases;
and the implications for firms that provide both CDS and CLS services
are significant. The very low rates paid for travelling and waiting
make locations any distance from the local Court uneconomic.
11. There is now no court for 42 miles between
Salisbury and Yeovil. Our member says, "It should be made
clear that no lawyer has the right to expect any form of a living
out of publicly funded work and no one owes such a lawyer a living;
but the principal concern must be for the lay client, who has
to journey to these faraway, distant courts. We would respectfully
invite the experts from Queen Anne Gate or the DCA to attempt
to make the journey. From experience, it takes the lay clients
3 hours 20 minutes to reach Weymouth from Sherborne and if they
miss the 12 o'clock return train, then they won't be home much
before 7.00 pm." This problem caused by the closure of Courts
is widespread given the programme of closures over the past few
years, and would be brought into stark relief by a proposal currently
out for consultation to consolidate all family cases in London
in just three Court centres.
12. The third angle of the advice desert
phenomenon is where a firm has a contract in a field of law but
turns away clients because it has run out of either contract capacity
or physical capacity. Legal help is the gateway to the legal aid
system. Matter starts for legal help work are allocated for the
period 1 April to 31 March. When it issued its contract schedules
for 2003-04, the Commission said it would be unlikely to be able
to allocate additional matter starts during the course of the
year, as it had done in previous years. The LSC also warned that
it would reduce during the course of the year the number of matter
starts allocated to firms whose average cost per case increased
by more than 10%. Its reason for doing this was to ensure that
payments due to firms did not exceed their Schedule Payment Limit.
However, this has had a detrimental effect on clients' access
to services, on firms' business planning and on the DCA's ability
to meet PSA Target 6, which requires it to ensure that more clients
receive appropriate help each year.
13. Over the course of 2003-04, we have
received a lot of anecdotal evidence of firms having to turn away
large numbers of clients. The problem appears to be particularly
acute in London, where some of the larger firms claim to be turning
away many more eligible clients than they accept. One of the largest
firms claims to be turning away well over a hundred clients a
week. As a result of what we had been hearing, in November we
specifically requested feedback from our members.
14. The information we have received from
our members over the past year includes the following:
— A firm in Essex reported that it
had run out of its family allocation of 42 matter starts in early
November. Demand was increasing because the only other provider
in the area had stopped offering legal help in family work. The
firm was without capacity as it approached the post-Christmas
period, which is traditionally a time of particularly high demand.
— A firm in Yorkshire reported in November
that it was the only one of three firms in its area with contract
capacity left, and that its own capacity was likely to be used
up within a month.
— Another firm in Essex reported a
cut in its matter starts because of the increase in average cost,
which was only partially restored after representations. They
anticipated that they would run out of matter starts before April.
— A large firm in the South-West, which
is sufficiently respected by the LSC to be part of one of its
major pilot projects ran out of matter starts half way through
the year.
— A firm in Grimsby reported in November
that it had had its family case starts substantially reduced because
of increased average costs, and that they understood other firms
in Grimsby had similarly been affected.
— A firm in East London reported in
October that it had had its number of matter starts cut because
it had not started as many matters as the LSC had expected. The
prime cause was a solicitor going on maternity leave, as a result
of which the department could temporarily not take on as many
matters as normal. The effect of this temporary change was a permanent
change in the contract.
— A firm in South Yorkshire had its
family matter starts cut in October. Although part of the cut
was reinstated after representations, the firm still expected
to run out before the end of January.
— A non-family firm in West London
sought additional matter starts in August, and was refused because
there was allegedly adequate capacity in neighbouring boroughs.
The firm contacted the 38 firms in question. All but four said
they could not take new matters, and two of those four were dubious.
Many of the firms indicated that they were already turning clients
away themselves. The firm estimated that it would have to turn
away 200 clients in its specialist field.
— In November a housing solicitor in
South-East London reported that he was turning clients away due
to having no contract capacity
— A firm from the North-West reported
in December that it was turning away some family clients due to
lack of physical capacity, and that it anticipated running out
of contract capacity in January after its contract was cut due
to increasing average costs.
— A firm in South-East London turned
away over 30 clients in one week in November due to a lack of
physical capacity. They were able to take on four, all of whom
had tried a list of alternative suppliers given to them by the
firm without success.
— Another South London firm ran out
of matter starts in July and was told not to expect any more.
— A firm in the Manchester region had
to turn away three housing clients in a week due to having run
out of contracted matter starts.
— A small firm in a large Welsh town
reported in November that they had 15 matter starts left to see
them to the end of the contract year.
— A large firm in South London reported
that it had turned away 162 clients in a single week in November,
and that this was typical throughout the year.
15. For the third year running, LAPG has,
together with the Law Society Gazette and the Criminal Law Solicitors
Association, undertaken a survey of the experiences and attitudes
of legal aid firms. Its findings support the anecdotal evidence.
74% of firms said they had turned clients away. Of those, 36%
said they had run out of matter starts (even though we are less
than three quarters of the way through the year), and 45% said
they had run out of physical capacity to take on clients.
16. Not all the anecdotal evidence we have
received has been negative.
— A multi-office firm in the Midlands
reported that it had sent its projections to the Commission and
was awarded enough matter starts to see it through to the end
of the contract year.
— A firm in Manchester had its matter
starts reduced because of an increase in its average matter cost,
but had them reinstated when it explained the reasons to the Commission.
— A firm from North London in the same
situation reported that its representations to the Commission
had been largely successful.
— A large firm in a Northern city reported
that swingeing cuts in its matter starts were restored after representations.
— When we sought feedback, a large
minority of the respondents said that they had not turned away
any clients for reasons connected with contract or physical capacity,
although some had turned clients away for other reasons such as
that they did not offer services in the relevant field of law,
or the client wanted advice on a small claim for which the CAB
was considered more suitable.
17. It will be seen from the above that
when a firm is allocated a set number of matter starts, it can
run into various problems. First, it will be cut if their average
cost per case increases. Secondly, the number can be cut if the
firm does not take on new matter starts at the rate expected.
Thirdly, if the demand for their services increases, whether or
not their contract capacity is increased accordingly is entirely
within the discretion of the LSC. If the LSC believes there is
other capacity available (and unfortunately the LSC cannot know
when firms are turning matters away for reasons other than having
exhausted their contract capacity) it will refuse to increase
matter starts and require the firm to refer clients to its competitors.
And if the budget does not permit an increase, it will be refused
regardless of whether there is alternative supply, except in the
highest priority cases.
18. LAPG has tried to educate firms in
the way the matter starts system operates, despite having had
severe reservations about it from the outset. For example, we
have advised firms that they should consider carefully how to
manage their annual allocation of matter starts. We suggested
that they may wish to take on a set number of clients per month.
They may wish to add their own means or merits test on top of
that required under the system. They may want to be selective
as to which cases within the contract field they take on (eg only
Children Act cases under a family contract). Or they may want
to continue taking on clients as and when they come to the firm,
and take a chance on running out of matter starts. For better
or worse, most firms seem to have opted for the latter approach.
This has contributed to the acute problem of help not being available
to clients in the later part of the contract year; but managing
the matter starts differently would lead to more clients being
turned away throughout the year.
19. Thus the term "advice desert"
can cover a range of different problems that prevent clients from
accessing the services that they need.
Is the perception that legal practitioners are
moving out of legally aided work correct?
20. As noted above, there is a significant
drop in the number of firms with contracts, and in the number
of contracts held by those remaining within the scheme. If this
represented merely a reorganisation in the supplier base, this
would not of itself necessarily be a problem, although access
to services in rural areas must of course be catered for.
21. The evidence shows, however, that the
number of cases started under the legal help scheme is dropping
significantly. In the six months to September 2003, solicitors
had started 301,531 cases under the legal aid scheme. In the same
period in the previous year, the number was 359,172. This represents
a 16% cut in the number of matters taken on. Apart from in the
immigration field, there is no evidence of any reduction in demand.
We attribute the drop partly to restrictions on matter starts
under the contract, and in part to the drop in the number of solicitors
offering legal aid services, and a reduction in the amount of
legal aid carried out by those remaining within the scheme.
What action is being taken to ensure that there
is access to legally aided advice in all legal specialisms?
22. There is a general problem at present
that the number of students and trainees coming into the legal
aid side of the profession is lower than it needs to be if an
adequate service is to be maintained in the medium to long term.
This is particularly acute in criminal defence work.
23. There are a number of reasons for this.
The first is that the salaries available for legal aid work are
now substantially less than those even for private work in small
firms. In City firms, newly qualified solicitors can start on
salaries in excess of £40,000. A legal aid lawyer may never
see that level of income. Research undertaken by the Law Society
in 1999 indicated that a quarter of the equity partners in those
firms who undertake more than 20% legal aid work had incomes of
less than £28,000. We understand that current research is
being carried out by the DCA on this issue.
24. Secondly, many students are emerging
from their undergraduate courses with substantial debts. They
tend to gravitate towards those firms that can offer them sponsorships
through their Legal Practice Course. Legal Aid firms are rarely
able to do this. The LSC has recently introduced an admirable
scheme whereby they fund students through both the LPC and their
training contracts, but the scheme is limited to only 100 students
per year. About 5,000 students start training contracts each year,
and several hundred others seek such contracts unsuccessfully.
25. Thirdly, the media and politicians have
damaged the image of legal aid. Instead of it being seen as a
public service like medicine or teaching, its practitioners are
insulted and abused. Whereas spending more money on the public
services of health and education is proclaimed as a virtue, spending
more on access to justice and help against social exclusion is
portrayed as an evil to be attacked. This both discourages students
from entering this sector of the profession and demoralises those
presently working within it.
26. Community Legal Service Partnerships
have been set up around the country since 2000. Their initial
task has been to identify local need, and to prepare a gap analysis.
LAPG has had various reservations about this work. The people
undertaking it are not given adequate resources to do so. They
are usually volunteers from local advice-providing organisations,
which means first that they may not have the relevant skills for
such analysis and secondly that they may have their own agendas
when reaching their conclusions as to what are the priority needs.
Nonetheless, this has been the first attempt to gauge the level
of need for and provision of advice around the country, and as
such it has been a valuable exercise.
27. It is certainly true that some of the
gaps identified are long-standing and have not been caused by
the contracting system. It is also true, however, as noted above,
that many additional gaps have developed over the last four years.
28. To date, very little has been done to
develop local services in line with the reports of the CLSPs.
The reports have largely identified additional needs, rather than
ways resources could be reallocated. The Commission has not, however,
been in a position to fund additional services. The increase primarily
in criminal defence work but also in asylum and immigration work,
together with the additional costs of the Quality Mark system,
none of which have been properly funded by the Treasury, have
restricted the Commission's ability to respond to the needs and
the gaps identified.
29. The Commission has taken steps to develop
telephone advice services. Such services can deal with low-level
problems that are not so complex as to need face-to-face advice.
They are also considered better than nothing in areas where there
is no current supply. For the reasons outlined above in relation
to housing advice services, telephone advice services can never
be a substitute for specialist services from solicitors, but they
can be a useful adjunct to such services. However, one concern
about the development of such services is that on the basis of
past experience, they are likely to increase, not decrease, the
demand for higher levels of service. There appears at present
to be no prospect of such demand being met.
How can the Department for Constitutional Affairs
and the Legal Services Commission provide incentives for legal
aid practitioners to continue legally aided work?
30. There are a number of factors contributing
to the exodus from legal aid. The first and most important is
the remuneration rates. The hourly rates for private work are
now double or even treble the rates for the same work done under
legal aid.
31. The actual level at which hourly rates
are set is not the only problem. There are complex rules that
mean that some elements of what would be chargeable to a private
client cannot be billed under legal aid.
32. There is a significant amount of bureaucracy
that the firm would not have to undergo if it restricted itself
to private work. It is inevitable that when firms are being paid
taxpayers' money there will be extra bureaucracy to ensure that
it is being spent properly. Most firms accept this. It is difficult
to identify unnecessary bureaucracy. When LAPG has sought ideas
as to elements of bureaucracy that could be reduced, it has proved
very difficult to name any specific reforms that would make a
major impact on the overall burden. Sometimes those reforms that
are identified are rejected by the LSC because they would allegedly
undermine quality or would prevent the Commission from obtaining
certain data that it believes it needs.
33. There will always be a need to keep
under review the amount of bureaucracy it is reasonable to impose
on firms and what the LSC reasonably needs in terms of quality
assurance or financial accountability. But it must be acknowledged
by both the profession and the Government that there is this additional
cost for firms undertaking legal aid, which contributes to making
the rates payable even more economically unattractive.
34. One of the main factors governing the
remuneration rates the Commission can pay is the Treasury. The
DCA and Commission can continue to try to influence the Treasury,
but have to live with its decisions. However, the Treasury in
turn needs to take proper account of the impact on the demand
for legal aid of the policy decisions of other Government departments.
For example, the Home Office has made numerous changes, from additional
police on the beat to anti-social behaviour orders to new rules
of evidence in the criminal courts, which increase the demands
made on legal aid. The removal of the means test also had a huge
impact on the number of Legal Aid Orders made. Failure to cost
the impact of these changes has led to the increase in the cost
of criminal legal aid not being fully funded. This is now being
addressed by cuts in both the scope of criminal legal aid and
in the civil system, including direct cuts in the payment rates
for criminal work from 1 February 2004. Because the cuts bear
no relationship to the cause of the problem, they will not solve
the issue. Indeed, they will exacerbate the problems outlined
elsewhere in this paper. But addressing the cause is, regrettably,
outside the direct power of the DCA and the Commission.
35. There are other factors relating to
remuneration that are more within the control of the LSC.
36. First, whenever the Commission finds
itself needing to reduce expenditure, the target is inevitably
the sums paid to solicitors for their own costs. Court fees, disbursements
and barristers' fees appear a long way down the agenda, and solicitors
are fed up with being in the front line for cuts every single
time.
37. Secondly, LAPG believes that the contract
for the provision of legal aid services should have a clause increasing
rates each year by the Retail Price Index. Only any further increases
beyond those necessary to maintain the real value of payments
should be considered in accordance with the statutory provisions
relating to rates increases. We cannot think of any other situation
in which it would be controversial to ask that the value of payments
be frozen for the life of a commercial contract.
38. The fact that the value of payments
is not guaranteed—indeed, in practice is virtually guaranteed
to drop ever further—is a contributory factor in the loss
of solicitors from the scheme. This is reflected in some comments
recorded in the Gazette survey. One contributor said, "We
are totally demoralised—we are working longer and longer
hours to stand still. Last month our cash flow —not income—was
so poor we had to use our own savings to pay staff salaries...this
is wholly unacceptable. The cash flow crisis is what is hitting
firms like us most."
39. Another said, "We are fighting
a losing battle—doing more for less, [which is] wholly uneconomic.
No proper business can entertain such folly. We are positively
making plans for all fee earners to reduce or stop legal aid work
in the future. In five years this practice will have only one
partner dealing exclusively with publicly funded work. We have
adapted to the needless and time-consuming bureaucracy, but we
cannot adapt to lack of funding indefinitely."
40. A third contributor echoed the same
points. "For years the rates of pay have been appalling but
we have carried on hoping things will improve—they have
not. Finally partners who undertake private work have decided
that they will no longer support a family department, which makes
a loss on every publicly funded matter. Therefore we decided not
to bid for a contract in 2004. We believe that successive governments
have abused legal aid practitioners for too long and in due course
there will be a severe shortage of those prepared to do the work,
as once solicitors drop out they are unlikely to consider doing
the work again."
41. Next, LAPG believes that the system
of contract compliance audits should be abolished in favour of
a system of peer review combined with analysis by the Commission
of the range of data at its disposal. We fully accept that there
must be proper accountability when firms are receiving taxpayers'
money, but this system is so fundamentally flawed that it has
lost the trust of the entire profession.
42. The principle of the cost compliance
audit is that an auditor, usually a recent graduate who has been
given training by the LSC, examines a sample of a firm's files
and assesses whether the firm has claimed the correct amounts.
The firm is then put in Category 1, 2 or 3 depending on the extent
of the difference between the firm's claims and the auditor's
assessments. There are two problems with this that the system
has not been able to overcome. The first is that much of the guidance
is very subjective. The auditors, never having done the work,
do not have the experience necessary to make these subjective
judgements appropriately. The second is that there is a fast turnover
of auditors, so that the first problem is not being put right
by further training, even though the LSC is trying to address
this concern. As a result, auditors end up making foolish and
untenable decisions that have resulted in a number of the most
trusted and respected firms in the country being wrongly placed
in Category 3, while other firms that do not have the trust and
respect of their peers but know how to tick the right boxes are
assessed as performing acceptably.
43. Barely a week goes past without our
hearing from a firm that has had a poor audit. We have a number
of consultants to whom we refer such firms. These consultants
have very wide evidence of the poor quality of these audits. One
with whom we have been dealing for around two years has a record
on appeal of 78% of his cases resulting in the firm being put
into a more favourable category.
44. The reasons for such a high success
rate on appeal are not hard to find. Just a few examples of sorts
of errors reported to us include the following:
— An attendance was substantially reduced
as the auditor said there was insufficient evidence of the time
it had taken. The auditor had overlooked 16 pages of hand-written
notes, timed, dated and with the fee earner's initials.
— The auditor disallowed time for waiting
before an ID parade, saying that the fee earner should have timed
the arrival better. The auditor did not know that it is accepted
practice to arrive in good time prior to the appointment so that
the client is not seen by the witness.
— An auditor disallowed a claim for
visiting a client as it was believed to be a home visit provided
without justification. The client was in fact remanded in custody,
and his address was HM Prison X.
— Files have been assessed at zero
because they have been passed on to another solicitor and are
therefore unavailable for audit.
— Files are frequently assessed at
zero due to an absence of evidence of means when in fact that
evidence is present. This is particular frequent with clients
in receipt of support through the National Asylum Support Service.
For example, in one case, on the day of the first appointment,
the client had no evidence of means. However, on the file was
a letter, brought in by the client shortly afterwards, demonstrating
that he was in receipt of NASS support, and therefore eligible.
The auditor missed the letter about NASS support and wrongly nil
assessed the file.
— In one case that was committed to
the Crown Court for sentencing, the auditor expressly stated on
the audit report form that he did not know whether the Crown Court
or the LSC should be responsible for paying the solicitor. He
disallowed the costs on the basis that the Crown Court was probably
responsible. He was wrong. The rules are clear that the LSC is
responsible.
— The auditors are sometimes apparently
unable to recognise common legal documents. In one family file
the auditor made a reduction on the basis that there was no evidence
of the preparation of the Divorce documentation. Not only was
there a copy of the document, there were two other copies held
on the file, which had been accidentally returned by the Court.
— In another case, the time for preparing
amendments to a divorce petition was disallowed on the basis that
there was no evidence on the file of the amendments. The amended
petition was on the file, as were letters to the Court and the
client referring to it. A failure by auditors properly to recognise
and understand Court documents has been a common complaint.
— Another repeat complaint has been
of time on complex matters being disallowed because the auditor
thought the case to be "not complicated".
— The LSC has repeatedly given guidance
to auditors that they should not be attempting fine judgements
as to whether an attendance should have taken 48 minutes or 60
minutes. They are not qualified to make such judgements, and it
would not be reasonable to demand attendance notes that enabled
such narrow distinctions to be made. We still come across numerous
cases in which auditors have disallowed 6 minutes here and 12
minutes there to assess off what overall amounts to a significant
proportion of the time claimed on a file.
45. The Commission has agreed to meet with
LAPG to discuss our concerns about these audits, and we intend
to take up that offer. But for the reasons outlined above, we
believe that these concerns are systemic and endemic, and cannot
be resolved within the context of the existing audit structure.
46. The view in the profession when they
hear of a firm performing badly on audit should be that that is
the mark of a bad firm. Unfortunately such is not the case. Instead,
the general view is "there but for the grace of God go I".
When a system of audit has so completely lost the trust of those
subject to it, it must be replaced.
47. Morale within the profession is very
low. The mid-market tabloids seem to have almost a weekly attack
on different elements of the legal aid scheme, particularly, but
not exclusively, those elements relating to crime and asylum.
The blatant misreporting of the Anufrijeva case and Maurice Kay
J's comments about asylum support cases are two of the worst recent
examples. The Government can do little about the media, but it
can do something about the comments of its own ministers. The
reality for many firms is that they are struggling to stay in
business while meeting ever greater demands to demonstrate quality,
without being paid a penny extra to help meet the costs of doing
so, and in fact having payments reduced in real terms year on
year. Being told that they are on a gravy train that must be stopped
is insulting and demoralising to dedicated public servants who
have sacrificed at least half of their earning potential to provide
a vital service to their communities. Those cheap headlines have
a price.
48. The other key problem for many firms
is the chronic uncertainty in the system. This manifests itself
in numerous different ways at both a micro and macro level.
49. At the macro level, the Legal Services
Commission has no plan setting out where it intends the CLS to
be in five years time. If firms knew that there was some sort
of overall vision for the system, it would help them to plan their
businesses to meet the aims of that vision. There appears to be
no plan. Instead, the profession sees the LSC as lurching from
crisis to crisis, constantly looking for ways to cut the budget,
with no care for the knock-on effects both within and outside
the legal aid system.
50. With the arrival of Clare Dodgson as
Chief Executive, there has been the first glimmer of hope that
a longer term plan might be developed, but in the meantime, the
emergency cuts and short term crisis management is continuing.
51. On the medium term basis, a number of
the contract terms build in chronic uncertainty for the next three
years. The contract contains a provision that the Commission may
unilaterally change any of its terms, provided only that it consults
with the Law Society. It has recently used this power to make
fundamental changes to the basis on which immigration firms operate,
and to make a direct cut in the rates paid to criminal defence
lawyers.
52. The contract also provides that the
Commission can terminate all contracts on six months' notice at
any time. There is a bid round happening for contracts from April
2004. In that bid round, a number of firms that have done nothing
wrong will not have their contracts renewed. The combined effect
is that no firm has a guarantee of more than six months' further
work in the legal aid scheme. In practice, many of the larger
firms feel reasonably sure that their involvement in the scheme
is not at risk, but for a significant proportion of the supplier
base, this is not the case. As well as being destabilising for
those who want to work within legal aid, this situation is bound
to have a detrimental effect on the commercial financing of legal
aid practices. Even if the bigger firms feel that they are not
at risk, their bank managers may be somewhat more risk averse.
53. At a lower level, the profession receives
a range of mixed messages. One example of this was that the 2002-03
Corporate Plan included provision for rates increases in Autumn
2002. They did not happen, and we are even now still operating
on rates set in April 2001, and there is no current indication
of any increase in the foreseeable future.
54. The profession also finds itself pulled
in two opposite directions in terms of what service they are supposed
to be providing. Part of the reason given for the diversion of
resources to the not for profit sector and now to telephone advice
contracts was that these could deal more efficiently with the
smaller, less complex cases. This would free up solicitors to
spend their time on cases that demanded the additional expertise
that solicitors have. This would appear to be a sensible use of
solicitors' time, and indeed was encouraged by at least one member
of the Public Accounts Committee when they questioned Steve Orchard
and Sir Haydn Phillips in December 2002.
55. This is one of the reasons, along with
the economic pressures caused by the limiting of matter starts,
that has led to many solicitors "cherry-picking" more
complex cases. Because they are spending more time on each case,
their average costs are increasing.
56. Unfortunately, the Commission did not
have adequate financial resources to deal with the greater number
of more complex cases taken on by solicitors. Neither was provision
made for the clients with more routine cases, who have found,
having been turned away by solicitors, that there is often nowhere
else for them to get the advice they need. This has brought the
Commission into direct conflict with its Public Service Agreement
target 6, which requires that more clients be helped year on year.
57. To tackle the problem of firms undertaking
a greater number of more complex cases, the Commission exercised
its power under the contract to reduce the number of matter starts
firms were permitted to take on. So firms found themselves penalised
for doing exactly what common sense would suggest and what the
Commission had encouraged.
58. The Commission is now focussing a lot
of effort on "average cost per case". This is grossly
misconceived. If the Government wishes, firms can of course advise
clients whose problems do not really need a qualified lawyer,
or can give half an hour's unnecessary advice to clients who do
not really need help in order to bring down the average value
of their claims. LAPG is, however, at a loss to see how this would
be in the interests of the taxpayer, the Commission, firms or
clients.
59. Finally, as noted above, this is just
one of a number of reasons for which the Commission can alter
from month to month the number of matters a firm is permitted
to start during the course of the year, which causes permanent
uncertainty as to whether the firm is going to be able to keep
open its legally aided departments, and retain the staff doing
the work, from one month to the next.
60. Another example of mixed messages, but
this time not express, concerns the optimal size of practices.
The Commission has made it clear that its preference would be
to deal with a smaller number of larger organisations. From the
LSC's point of view, this makes obvious sense. However, many firms
are unable to grow, even if they wished to do so, because of the
restrictions on the granting of new contracts or the allocation
of additional matter starts within existing contracts. Moreover,
when faced with the possibility of taking on large overheads and
undertaking work at volume, the fact that rates are virtually
guaranteed to drop year on year while costs increase makes this
too risky an approach for many practitioners. Their assessment
is that such an approach is likely to lead to insolvency. A significant
number have therefore addressed the problem by stripping overheads
to a minimum and working alone or with just one or two colleagues.
The current economic imperatives in the scheme are thus driving
many in the profession in exactly the opposite direction from
that in which the Commission would prefer them to move.
Can the requirement for legal aid be reduced by
the resolution of some legal issues on a more informal basis,
through the Citizens' Advice Bureaux, long distance services or
otherwise?
61. The experience of developing services
on a more informal basis is, as noted above, that the informal
advice uncovers a greater need for more specialist advice. People
with complex problems who would not contact a solicitor direct
may be more inclined to contact these informal services, with
the result that new need and new demand is identified. The increase
in demand on existing services is likely to exceed the reduction
caused by the informal services dealing with the more straightforward
cases.
62. The Legal Services Commission has recently
piloted a telephone advice service. As noted above, LAPG believes
that this can be a very useful adjunct to existing services, but
not a replacement. The LSC's assessment of the pilot was very
positive, but those considering the issue must not overlook the
self-selecting nature of the sample. Not all clients are readily
able to understand advice given in this way, and not all cases
are suitable to be dealt with remotely.
63. The LSC is also expanding the use of
specialist support services, whereby a frontline adviser sees
the client, but obtains specialist guidance from an expert in
the relevant field. These services are proving particularly valuable
in delivering advice in rural areas.
64. Specialisation and the requirements
for supervising solicitors has meant that many firms no longer
have lawyers with the skills to provide advice in such matters
as housing, welfare benefits, debt and employment.
65. The Specialist Support Service not only
provides support, advice, guidance and direction to a front line
adviser (and often in circumstances where the front line adviser
might otherwise have taken Counsel's opinion), it also identifies
training needs. Both the support advice and the subsequent training
that is given is intended to "up skill" the front line
advisers. This has the effect that the front line advisers are
able to undertake without support more complicated cases as they
progress. The users of the service overwhelmingly report upon
the excellent quality of the advice and support given and the
training programmes that emanate from it.
66. There is an apparent drawback in that
the Commission has to pay for two advisers, but this is offset
by savings. The savings are made immediately in that the need
to obtain a certificate and subsequent authority to instruct Counsel
to obtain advice is alleviated. The cost of providing a brief
of instructions, often attending in conference, and then acting
upon the advice given is far more costly than a simple telephone
call to an experienced legal adviser who can probably provide
the advice and assistance more quickly, perhaps more expertly
and almost certainly more cost efficiently than Counsel. The supported
case work enables clients to be dealt with in their locality,
gives confidence and support to the front line adviser and, as
indicated, improves their knowledge and skill to enable them to
deal with a similar case in the future without the requirement
for specialist support. The overall level of expertise is thus
continually being increased and improved.
67. The value of this service is potentially
undermined by some Regional Offices within the Commission because
of their removal of the right for solicitors to undertake "tolerance"
work outside their main contracted fields. As noted above, the
number of firms permitted to undertake tolerance work has reduced
by almost 300 in the last year.
68. There may be scope for developing services
via the Internet, and making greater use of e-mail. The same reservations
apply, with the additional concern that a significant proportion
of the legal aid client base may well still be uncomfortable using
computers and/or not have access to the Internet.
69. A greater possibility for achieving
savings using IT is to bring people together for conferences,
Court hearings or other forms of meeting. This could lead to reductions
in the amounts spent under legal aid on travel and waiting. This
is of growing importance in the light of the programme of Court
closures that has occurred in recent years. The difficulty firms
face is that this will involve a significant investment in computer
hardware and software, which is largely unaffordable to them because
of the low margins under which they operate. It will also require
major developments among barristers and the Courts.
70. LAPG looked at alternatives to current
face to face provision in our paper, "Legal Aid—Where
Next?" This paper was the LAPG contribution to the debate
about publicly funded legal services that arose from the Law Society
consultation paper on the subject in January 2003.
71. LAPG has doubts as to whether services
provided by non-solicitor agencies can in fact be cheaper than
those provided by solicitors. We addressed this issue too in "Legal
Aid—Where Next?" Most of the costs related to the provision
of advice have nothing to do with the qualifications of the adviser.
In practice, we understand, the services provided by not for profit
agencies under their contracts have not proved any cheaper than
those provided by solicitors. From our discussions with the Advice
Services Alliance, Citizens' Advice and others, we gather that
such agencies are making similar complaints that the amounts allowed
to them are proving inadequate to meet their costs—and unlike
solicitors, they generally have the financial benefits of charitable
status.
72. LAPG believes that these alternative
means of delivering services are a valid way of extending the
availability of help to greater numbers of people. As such, they
will assist the Commission in achieving PSA Target 6 and represent
a valuable service for the community. But we have significant
doubts that they would have the effect of reducing the demand
for specialist services or cut the overall cost of the system,
without simply abandoning people who are unfortunate enough to
need specialist help.
Would a salaried service or the provision of law
centres be a viable solution to lack of provision, either in areas
without sufficient practitioners or elsewhere? What would be the
comparative funding costs of a salaried service?
73. The LSC is currently involved in a four
year pilot of a salaried criminal defence services. The evidence
of that pilot is that there is a significant capital cost involved
in starting it up. There is no evidence to suggest that there
are any savings to be made from running the service in this way
rather than through private practice firms. Indeed, what evidence
there is to date suggests that the Public Defender Service will
prove significantly more expensive.
74. Where the market has failed, and firms
have not been willing to offer legal aid services in a particular
location, salaried services may be one way of plugging the gap.
However, it is questionable whether this would be a cheaper option
than addressing the market failings by providing incentives and
assistance for private practice firms to set up in the relevant
area.
75. So far as Law Centres are concerned,
it is noteworthy that they peaked at around 60 centres in the
late 1980s, since when their numbers have fallen. Funding of such
centres has been a hand-to-mouth affair. Just last year, a number
of London law centres were threatened with closure when the Association
of London Government decided to cut their grants. Law Centres
could only be a reliable solution if their funding was put on
a much firmer basis. As organisations, however, the service they
provide is excellent. They have an advantage over solicitors of
being permitted to provide a holistic service, rather than being
required to focus solely on legal need. The system would be improved
overall if somehow solicitors could be freed up to operate in
a way closer to that adopted in Law Centres.
WAYS TO
IMPROVE THE
SYSTEM
76. LAPG believes that a number of measures
could lead to improvement, as set out in the following paragraphs.
77. The package of sponsorship for prospective
legal aid lawyers should be greatly extended. It would also be
helpful if the Legal Services Commission could attend Careers
Fairs at colleges and universities to provide information to students
about the career options in legal aid. At present, these fairs
are dominated by commercial firms, and students are given little
if any information about possible alternative careers. The Commission
has funded a brochure, produced jointly with LAPG and the College
of Law, which has gone some way to addressing the shortage of
information for students, but it now needs to build on this good
start.
78. LAPG would also support consideration
of a change to the post-degree qualification arrangements for
solicitors. In the medical field, training is carried out at a
range of training establishments, and interspersed with academic
learning. LAPG would like to explore the possibility of establishing
a similar "collegiate" system involving legal aid firms,
the College of Law and other training providers, and the Legal
Services Commission. This approach would help alleviate the problem
of student debt for legal aid trainees. It would assist firms
who would like to invest in the next generation of legal aid lawyers
but cannot afford the full burden of taking on trainees. And it
might be a first step for the Commission to start exploring the
possibility of a salaried service, along the lines envisaged in
paragraph 84 et seq below.
79. Contract compliance audits should be
replaced with a system of peer reviews and monitoring of management
data by the LSC. Such an audit system would have the faith of
the profession and would address quality issues directly. Thus
both the quality of the system and the morale of practitioners
would be improved.
80. The LSC should liase with other relevant
parties to see how the development of IT systems in courts and
barristers' chambers could reduce the number of meetings and hearings
outside the office solicitors had to attend. From the Commission's
point of view, this would reduce claims for travel and waiting
time. From a firm's point of view, it would increase the number
of hours available to undertake work paid at a much higher rate
(whether private or legal aid), thus improving the economics of
legal aid practice.
81. The LSC should analyse its expenditure
other than on solicitors' own costs to ascertain where else there
might be scope for savings, such as for barristers' fees, experts'
fees and other disbursements. Consideration should also be given
to exempting all legally aided clients from Court fees. There
is no reason why limited legal aid funds should be siphoned straight
off into another Government budget in this way.
82. A system should be developed whereby
generic problems that lead to widespread client need can be identified
and tackled directly. For example, when a housing benefit department
develops a backlog in the processing of claims, hundreds of tenants
may find themselves needing advice on possession proceedings.
If at an early stage the HB backlog could be tackled, significant
savings could be made in the legal aid budget. This is just one
example of how tackling the cause of the client's problem rather
than merely its symptoms can lead to a situation in which everyone
wins. The Commission already has a network in place that may be
suited to this task in its CLS Partnerships.
83. A review should take place of procedures
in Courts and Tribunals to determine whether any of them can be
simplified. Much of the cost of the legal aid system is caused
by the cost of the dispute resolution system it supports. In particular,
special consideration should be given to the cost of serious fraud
trials, which consume a disproportionate share of both Court and
legal aid resources, given the relatively light penalties that
are usually handed down when defendants are convicted. Consideration
should also be given to the costs of such cases being funded not
by legal aid but by a levy on the financial sector.
84. There is another possible model of delivery
that may be worth exploring further. The key drawback of the salaried
service is the capital cost of setting it up. Would it be possible
for the LSC to set up a salaried service that made use of the
existing physical network? Under this model, the LSC would directly
employ solicitors and their support staff such as paralegals and
secretaries. The Commission would enter into contracts with private
practice firms to place the employed adviser within the firm,
sharing office space, receptionists, cashiers and IT support staff.
Depending on the nature of the work being done and the qualifications
of the staff employed, the Commission may wish to contract with
the firm for supervisory functions, or the employed staff may
be able to undertake these themselves. Furniture, equipment and
computers could be either purchased by the Commission or could
be provided under contract with the firm. The former option would
enable the Commission to develop its own software and networks
to provide common research and data sources to its employees and
data exchange systems.
85. The benefits for firms under such an
arrangement would be that they would generate income from the
provision of the legal aid service without the current risks,
burdens and bureaucracy; and clients would be brought into the
office who may then or in the future need other services.
86. The benefits for the Commission would
include that they would get the control inherent in a salaried
service without the capital set-up costs, and they would have
a ready-made network of outlets that would be more immune to some
of the changes that might result from the introduction of authorised
conveyancing and probate practitioners or "Tesco Legal Services",
two of the key threats to the high street network that are totally
separate from the issue of publicly funded services. The bureaucracy
in terms of letting and managing contracts, auditing firms and
reporting individual cases could be removed or substantially reduced;
the administration necessary to manage this alternative would
hopefully be smaller.
87. Parliament also has a role to play in
ensuring that when changes in Government policy are made, the
downstream impact on the legal aid budget is properly funded.
88. The contract offered to firms to undertake
legal aid work should include a clause increasing the rates of
payment by the equivalent of the Retail Price Index each year.
In no other sphere would it be controversial to demand that payment
rates be frozen in real terms. This would give firms a much-needed
degree of certainty in considering whether to remain within legal
aid.
89. LAPG is keen to continue exploring whether
a different structure for the contracts under which legal aid
is delivered may provide better outcomes for clients, for the
taxpayer and for the profession. The model that has frequently
been suggested is something akin to the new GP contract in the
Health Service. There is a widespread acceptance in the profession
that something has got to change, and solicitors are prepared
to listen to proposals that would involve a radically different
way of organising the system. We remain sceptical, however, that
any such solution can be found that would not involve additional
money.
CONCLUSION
90. The legal aid system, for all the current
difficulties, provides very good value for money. It is liked
and respected by the vast majority of the clients who use it (the
public image of lawyers notwithstanding). It is efficient and
very high quality. There are only a tiny minority of practitioners
who abuse the system, whom the Commission is coming ever closer
to excluding. Unfortunately, it tends to be the clients of such
firms that MPs come across: no client contacts the MP to tell
him or her that the solicitor has done a good job. Yet legal aid
funds almost three million transactions a year.
91. The system is well funded by international
standards. But it is underfunded in relation to what is being
demanded in terms of scope, access and quality. Firms are dropping
out. Within those firms remaining in the system, work is delegated
to more junior and less qualified staff as the only possible response
to the continuous and continuing drop in the real value of payment
rates. And the structure of contracts has placed previously unknown
restrictions on the ability of firms to take on many of the clients
who ask them for help.
92. None of the possible alternatives to
the current system can come close to providing the same quality,
access and value for money as the present system of delivery through
private practice firms. If it is true that the Government is not
willing to provide more money, then the only alternative is a
reduction in access to services, in the quality of the lawyers
in the system and in the value for money achieved for the taxpayer.
Parliament should not imagine that it can continue to have the
current—or perhaps we should now say historic—levels
of scope, eligibility, access and quality without significant
increases in the budget. This is not an available option.
Legal Aid Practitioners Group
January 2004
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