Evidence submitted by Ben Hoare Bell Solicitors
We are a firm of solicitors based in Sunderland,
Tyne & Wear. Although the city has prosperous pockets, as
a whole it has many social and economic problems, with relatively
high rates of unemployment and disability. Sunderland is a centre
of dispersal for NASS, and accommodates several hundred Asylum
applicants. For LSC purposes the city falls within the North East
Area, which encompasses the whole of Northumberland to the Scottish
Border, and the major conurbations of Tynesside and Teesside.
This area has a population of about 2,542,000. Sunderland has
a population of around 290,000.
Our firm is 25 years old. It was set up to work
for legally aided clients. We are a six Partner firm, employing
33 other fee earners, of whom 19 are solicitors, and the balance
trainees, legal executives and paralegals.
We emphasise the value of training and external
accreditation, and many of our legally qualified staff are members
of specialist Law Society or similar panels. Three of our solicitors
are Solicitor Advocates, and several staff are part time lecturers
at the University of Northumberland.
We have four offices, two of which are located
close to large estates which have a variety of acute social problems.
Provision of legal advice outside the centre of the city has been
encouraged by the LSC, especially in Social Welfare areas of law.
We were one of the first franchised firms in
the area, and now hold LSC Specialist Quality Marks in the following
areas of law:
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| Actions against the Police |
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| Housing |
| Clinical Negligence | Immigration
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| Community Care* | Mental Health
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| Crime | Personal Injury |
| Debt | Public Law* |
| Education* | Welfare Benefits
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| Family | |
| *are areas of law in which there is no other provision in the entire region
are areas of law in which we are the only providers in Sunderland
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We have close links with many not for profit agencies, to
which we have offered training organised by the local LSC. We
are the only firm in the city to be heavily involved in the Sunderland
CLSP, and are currently the only solicitors' firm nationally to
have been awarded a grant under the Partnership Innovation Budget—in
our case to raise awareness of, and gauge demand for, Community
Care advice and representation across the region. We provide LSC
external supervision to three local solicitors' firms. We believe
that we have a reputation with the LSC locally for high quality
work. We are one of the largest Civil Legal Aid providers in the
region.
Between 75-80% of our fee income of about £2.3 million
derives from LSC payments. We are the sort of firm—larger,
committed to Social Welfare work, specialised—which the
LSC keeps saying it wants, and yet for a variety of reasons it
is firms like ours which are finding it almost impossible to go
on providing advice and representation in Social Welfare law.
This is not a plea for more money to be spent on Legal Aid.
There is a case for it, but we recognise that there are other
more politically attractive demands on public expenditure, and
that any government will need to be satisfied that the system
is in control before it is expanded. We also believe that there
is still much money wasted in a variety of ways: to name four:
dishonest solicitors (not just in the Immigration field); extortionate
experts' fees; chaotic court listing systems, excessive bureaucracy.
This money needs to be saved and redirected into core Legal Aid
provision.
We also applaud some of the LSC's provision. The monthly
payment scheme, providing one month's advance payment is essential
for cash flow purposes; the trainee sponsorship scheme is welcome,
so is the emphasis on professional supervision.
And yet our firm, for all its commitment to Legal Aid, is
on the point of having to withdraw from several SQMs. We do think
it is important that the Committee takes the time to understand
why, and to consider what the effects are of firms like ours falling
out of the Legal Aid system. If you look at the list of areas
in which we operate, those marked with an "*" are areas
of law in which there is no other provision in the entire region.
In those marked with a "" we are the only providers
in Sunderland. If we stop doing these areas of work it is unlikely
that any effective alternative will emerge.
The people to suffer will not only be the Partners and staff
of this firm, but those whom the government has rightly identified
as suffering the worst effects of social exclusion: the unemployed,
people with physical disabilities, learning difficulties or mental
health problems, Asylum seekers.
PLANNING
Although we are always commended at our annual audits for
the quality of our 3 year business plans—a requirement of
the Specialist Quality Mark—in reality the planning is meaningless
because the LSC does not commit seriously to the process, and
does not appear to understand that it is impossible to take decisions
about investment in staff, premises or IT when the rules under
which we operate might be changed at a few months' notice. This
appears to reflect a deep structural problem. The LSC do not appear
to be able to commit to joint planning. A good example of this
is the recent and hasty changes to the rules on Asylum work. Similarly
attempts to engage with the LSC to increase provision in an area
of noted need, eg Housing, have met with all the risks being taken
by this firm with no guarantee from the LSC that they will make
extra matter starts available.
We do wonder whether there is some fundamental inability
at the LSC to come to grips with the reality of how the legal
profession is structured. This firm is in effect a provider of
public services, but the capital investment is from the partners'
own pockets. Each of the equity Partners at our firm draws £2,300
per month. The balance of profit is left in the firm: each Partner
has more than £100,000 invested in the firm, which pays no
interest. (There is not a BMW or Mercedes in sight). The firm
is still paying off £137,000 worth of loans taken out to
upgrade the sub offices. We have recently invested over £60,000
to upgrade the IT system, mainly to allow the sub offices to have
full access to the system. All of us could go elsewhere and earn
substantially more, and probably work less. Most of us have committed
a large part of our life and most of our savings to building up
a firm which offers a good service to those who need it most.
This is starkly different to the position of say GPs most
of whose capital expenditure is state funded. It is hugely stressful
to operate in an environment which seems to exist in a limbo between
the market and state provision, where the rules of engagement
are heavily weighted in favour of one party (the State) but risk
falls heavily on the other (us).
THE AUDITING
PROCESS
We are audited yearly. We accept that we should account for
public money. However the audit process is oppressive and might
have been designed to drive firms like ours, with a wide range
of civil work, out of the system.
Solicitors are asked to provide a small sample of files across
the categories of work, and these are "marked" by LSC
staff. They may find various reasons for reducing the amounts
claimed on the files: adding up mistakes, deliberate mis-claiming,
unsatisfactory evidence of eligibility for Legal Aid, or—in
the judgement of the auditors—excessive time spent, or work
done, on a particular occasion. If the auditors' valuation of
the sample files is more than 10% below the total which had been
claimed, that percentage is extrapolated to the entire civil contract
of that office and the LSC demands repayment of that percentage
of the annual value of the whole contract.
This happens even if it is plain that the fault lies only
in one category of work which in fact was responsible for only
a tiny percentage of the LSC claim. To take a concrete example:
one mistake in a single file sampled from our Community Care department
(the whole department will be responsible for less than £20,000
of our £750,000+ contract at our principal office) could
result in the LSC asking us to pay them £100,000.
This would happen even if the vast majority of our categories
of work were found on audit to have been billed perfectly. The
LSC rules contain no discretion. Even if it is clear that there
is a specific problem confined to a single area of work, or even
a specific member of staff, they will penalise an entire firm's
work because their rules say they must. The annual audit thus
puts at risk not just our livelihood, and that of many staff,
but also the very existence of what the LSC tells us is a valued
firm.
This system disproportionately affects firms like ours which
run a number of small social welfare departments, since one or
two mistakes in side one of those departments can give rise to
vast recoupments across the whole contract. It would be a simple
matter for the LSC to change their rules so that extrapolation
was restricted to the specific areas where fault had been found
or where there were clear patterns of misclaiming.
We must not confuse the auditing process, which measures
administrative processes, with quality of advice. LSC Account
Managers who are legally qualified will if honest admit that they
see many Category one firms whose advice and representation is
of an abysmal standard. It is perfectly possible to be cynical
and efficient.
ASYLUM
Just over three years ago we were approached by the LSC to
undertake Immigration work. We were unsure. To do this work would
involve a considerable amount of time in planning and training
and a considerable financial investment as we would have to rent
and upgrade premises in the city centre. We were encouraged by
the LSC to do this and there was considerable support from Not
for Profit agencies in the City who wanted a firm with a good
reputation to undertake the work. The investment from the firm
has been considerable and was undertaken on the understanding
that the work and payment for the work was secure.
Earlier this year the LSC announced a number of changes.
Had these changes been implemented as drafted, our Asylum Department
would have already closed. There have been some concessions but
we remain uncertain regarding the future.
The rules do not envisage let alone cater for the fact that
most asylum seekers in this region have already seen solicitors
in the south of the country. Unless the rules are changed we will
be required to carry out substantial amounts of work, including
payments for interpreters, without any guarantee that we will
be able to claim for this work.
The new rules contain norms for the amount of time we should
spend with asylum clients both at the Special Adjudicator and
IAT stages. The rules state that we will only be allowed to exceed
the norms in a "particularly complex case".
These norms are wholly unrealistic and are less than half
of the average times we have found to be necessary to provide
a decent service.
It remains to be seen whether these rules will be interpreted
with any flexibility. If not we see no prospect of continuing
to offer the only Sunderland based legal advice resource to Asylum
seekers.
We do accept that the LSC had good cause for dealing with
rogue operators, but the ways it has been done threatens to adversely
affect the better firms.
The approach taken by the LSC in this instance is totally
inimical to good long-term planning.
RECRUITMENT
Although the firm has a good reputation, offers flexible
working and has close links with the key educational establishments
it is becoming increasingly difficult to attract staff. We are
determined to maintain our standards. We are presently advertising
for a housing solicitor, and have not received one application.
In crime we note that the Public Defender Service are offering
newly qualified staff £32,000, plus pension plus lease car.
We can offer £20,000. While we do not expect to be able to
match the salaries offered by commercial firms (one locally offers
their trainees as much as our most experienced solicitor), it
is galling to find that the LSC is willing to pay more for what
is on present evidence a less efficient service.
ECONOMICS
Averaging out hourly rates we are paid about £40-£50
per hour for most of our Social Welfare work. We make a loss on
it. We cannot get enough staff to do the work and those we have
are overwhelmed by the numbers requiring a service and by the
LSC bureaucracy.
All our social welfare law is subsidised by our Personal
Injury department. This in itself is problematic. The PI market
is getting tighter by the year, and the murmurings around the
Clementi review indicate that it will get tighter still.
POSSIBLE WAYS
FORWARD
There is the possibility of a salaried service. Certainly
the rates of pay and conditions of service offered by the PDS
and CPS and the LSC itself look very attractive. We doubt if the
LSC would get such good value for money as at present, but there
again the present is not sustainable.
The provision of interest free loans, or capital grants,
or other ways of sharing the capital risk should be explored.
The LSC must treat us as partners not just suppliers. We
require an open and shared medium-term agenda which we can all
follow and around which we can plan. We recognise the uncertainties
of politics, but we do not have the sort of financial margins
which would allow us to cope with the present planning mechanisms
employed by the LSC.
We do like the idea of preferred providers, and if this cut
down on unnecessary bureaucracy then it would be very welcome.
SUMMARY
We are very grateful for the opportunity to make our views
known to the Committee. We do recognise that in many respects
we are not the usual legal aid provider. Legal aid is not a side
line for us, it is our mainstream work and we have committed very
heavily to it both personally and financially.
We believe we have done everything that has been asked of
us by the LSC and more.
There is increasing pressure at partnership level for the
firm to withdraw from certain areas of legal aid and indeed the
problem of attracting staff may well make withdrawal inevitable.
Housing, Community Care, Education are complex areas of law
which cannot be done well on the cheap.
Both the auditing process and the changes to the Asylum work
rules will have the effect—surely not intended, but inevitable—of
penalising the sorts of firms, in short supply, which the LSC
say they wish to encourage.
The criticisms we have set out above are not a plea for more
money to be spent on Legal Aid. There needs to be an acknowledgement
that these areas are at the heart of the social exclusion agenda.
They could be adequately funded if the areas of waste identified
were tackled. If not either supply will dry up or worse the public
will pay for a low grade service.
Ben Hoare Bell Solicitors
March 2004
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