Evidence submitted by the Advice Services
Alliance (LAR 34)
ABOUT THE ADVICE SERVICES ALLIANCE
1. The Advice Services Alliance (ASA) was
established in 1980, and is the umbrella organisation for independent
advice networks in the UK.
2. Full membership of ASA is open to national
networks of independent advice services in the UK. Current full
members are:
| Advice UK | Scottish Association of Law Centres
|
| Age Concern England | Shelter
|
| Citizens Advice | Shelter Cymru
|
| DIAL UK | Youth Access |
| Law Centres Federation | |
3. Our members represent over 2,000 organisations that
provide a range of advice, legal and other services to members
of the public. Most of these organisations offer services within
a local area, but some of them are regional or national. They
are largely funded through public sector grants and contracts,
and charitable fundraising. There are currently 452 Not for Profit
[NfP] agencies that have contracts with the Legal Services Commission
[LSC]. With some limited exceptions, services are offered to users
free of charge and are focused on areas of law which mainly affect
poorer people eg welfare benefits, debt, housing, employment,
immigration, education and community care (now commonly referred
to as "social welfare law").
4. This submission is primarily concerned with the proposals
in relation to social welfare law that are contained in the consultation
paper entitled "Legal Aid: a sustainable future". We
have published an initial response to these proposals. [1]
RECOMMENDATIONS
5. We would invite the committee to consider the following:
RECOMMENDATION 1
Any change in payment methods should be deferred until all
preferred suppliers have been selected. This will allow for further
research to be carried out into the determinants of case costs.
RECOMMENDATION 3
Alternatives to the existing proposals should be considered.
These include: tailored fixed fees; higher fee levels; more categories
of fees; graduated fees; more sophisticated escape mechanisms;
and special provision for niche organisations.
RECOMMENDATION 4
There should be further research, a full debate and proper
consultation before any changes are made to the allocation of
funding for social welfare law between the regions.
Is there a need to modernize the procurement of legal aid?
6. In relation to social welfare law, we do not believe
that changes in procurement methods are needed. Spending on social
welfare law represents a small proportion of the total legal aid
budget, and one in which costs are firmly under control, by virtue
of the tailored fixed fee system for solicitors and the capped
nature of NfP contracts. The number of acts of assistance has
already increased significantly, according to the LSC, and action
is already being taken by the LSC in relation to underperformance
by some NfP suppliers.
7. The problems in relation to social welfare law are
not to do with procurement methods, but lack of supply, the existence
of "advice deserts", and limitations on the scope of
legal aid, particularly as regards representation at tribunals.
Is the timetable for implementation suggested in Lord Carter's
report realistic?
8. We do not believe that the LSC has the capacity to
implement wide-ranging changes to legal aid, the preferred supplier
scheme and the CLS Strategy simultaneously. We do not believe
that they have the peer review resources to keep to their own
timetable in relation to preferred supplier, or the timetable
proposed by Lord Carter. We do not see how they can implement
any such changes and at the same time reduce their administration
costs by 30%, as suggested by Lord Carter. [2]
What benefits, impacts and disadvantages might result from
implementation?
9. We believe that the introduction of fixed fees in
social welfare law, as proposed by the LSC, would be seriously
detrimental to the provision of advice and assistance in this
area of law, given:
— The variation in case costs/lengths that exists
within these areas.
— The fact that the proposed implementation is out
of sync with the proposed implementation of the preferred supplier
proposals.
— The fact that the LSC does not seem to know what
types of cases it wishes to "buy".
— The likely effects on the cases that suppliers
will take on.
— The likely effect on quality.
— The likely effect on the overall provision of
services to clients in social welfare law.
10. There are alternative payment methods that should
be considered. These include: an extension of tailored fixed fees;
higher fee levels; more categories of fees; graduated fees; more
sophisticated escape mechanisms; and special provision for niche
organisations. [3]
11. Any change in payment methods should be deferred
until all preferred suppliers have been selected. This will allow
for further research to be carried out into the determinants of
case costs.
The variation in case lengths
12. There is huge variation in the type and extent of
work done by providers in social welfare law. Within each category
of law there are wide differences in the tailored fixed fees by
which solicitors are currently paid (which are reflected in the
regional fees proposed) and in the average case lengths of NfP
organisations.
13. Our analysis of NfP case lengths[4],
based on data collected by the LSC, suggests that most of the
differences are due to variations in:
— The extent of work done on cases.
— The location of suppliers.
14. Our analysis shows that:
— Certain types of cases take longer than others
(eg multiple debt cases in debt, appeals in welfare benefits,
unfair dismissal and discrimination cases in employment).
— Cases for certain types of clients take longer
(with particular reference to clients' ethnicity and, sometimes,
disability status).
— There is a correlation between the time spent
on a case and the stage at which the case is concluded (as between
"first meeting", "further work", "putting
case for client" and "representation at court/tribunal").
— The achievement of particular results for clients
is associated with longer case times.
The "what, who and how"
15. The "sustainable future" paper suggests
that the CLS Strategy and Preferred Supplier proposals set out
"what services we intend to buy" and "who we will
buy these services from", while the paper itself sets out
"how we will pay for those services." [5]
16. Who: the Preferred Supplier proposals state that
the LSC wishes to contract with suppliers whose quality has been
demonstrated by peer review scores of 1 or 2.
17. What: the CLS strategy emphasises the importance
of delivering services in social welfare law, and in particular
the "core" subjects of community care, debt, employment,
housing and welfare benefits. It does not however say what types
of cases within those categories are seen as priorities. There
is a wide range of types of cases within each category, which
helps to explain why there is such diversity in the average case
lengths of different suppliers. The only indication of priorities
provided has been the higher payment rates introduced for certain
possession and homelessness cases, which have been carried over
into the fixed fee proposals.
18. How: the present proposals seek to change "how"
services are paid for before the LSC has established "who"
the preferred suppliers will be, or "what" it wishes
to buy.
19. There are two obvious dangers involved here.
20. Firstly, fixed fees could influence the services
provided by suppliers, before the LSC has decided what it really
wants to buy and who it wants to buy services from. Although it
may be possible to retrieve this situation later, the LSC may
by then have lost some of the suppliers best able to meet the
LSC's priorities.
21. Secondly, the proposals could affect the quality
of supply before the preferred supplier process has established
a benchmark.
22. These problems arise because the proposals are likely
to have a direct impact on the types of cases taken on and the
quality of services provided.
Case mix
23. Where suppliers have average case lengths or costs
that are higher than the value of the fixed fee, the incentive
will be to reduce their average case lengths or costs. This is
likely to involve:
— looking for the easy/short cases and the easy
clients; and/or
— avoiding long, difficult and complex cases and
clients.
24. As Lord Carter says: "If the LSC targets only
case volumes, there is a risk that some suppliers may not wish
to pursue complex cases." [6]
25. Where suppliers have average case lengths or costs
that are equivalent to or lower than the value of the fixed fee,
the incentive will be to maintain their previous case mix, and
possibly to look for more shorter cases in order to increase the
profitability of the work done. There will be no incentive to
widen their case mix to take on a significant number of cases
that exceed the value of the fixed fee.
26. Our analysis of NfP case lengths shows that there
are clear differences in case lengths or costs between different
types of cases within each category. These are not accidental.
In employment, for example, discrimination cases take much longer
than other types of cases. In welfare benefits, benefit appeals
take significantly longer than other types of cases. Once fixed
fees are introduced, these differences become much more important
to suppliers.
27. The LSC has suggested that it will be able to detect
organisations that are doing more easy/short cases either by peer
review or by other monitoring procedures. We do not see how peer
review will be able to detect this since this is an issue to do
with case mix, not quality.
28. The LSC has stated that they will monitor case mix
and outcomes to ensure that suppliers continue to provide an appropriate
service. [7]We do not believe
that the LSC's present reporting systems are capable of doing
this. Even if they are, we are not clear what the LSC can do about
it, apart from imposing requirements about case mix. This however
assumes that the LSC has decided what its priorities are within
each category of law. At the moment we have seen no evidence of
this.
Quality
29. Although the CLS Strategy and the Preferred Supplier
proposals set out whom the LSC would like to contract with in
the future, the LSC is actually proposing to change the "how"
before they change the "who". This means that they risk
foregoing the quality assurance that should be provided by the
preferred supplier scheme.
30. Shorter or simpler cases can of course be done well.
They may even be done more quickly by high quality suppliers.
31. There is however a potential conflict between fixed
fees and quality. This was demonstrated by the research carried
out for the LSC and reported as Quality and Cost. [8]The
research found that solicitors funded to provide a fixed number
of matter starts for a fixed fee performed worse than others in
the three areas of quality (as measured by peer review), client
satisfaction and outcomes. We set out as an appendix to this paper
a summary of the relevant findings of this research.
32. Where suppliers have case lengths or costs which
are higher than the value represented by the fixed fee, caseworkers
are likely to be under pressure to handle the longer cases more
quickly. This is likely to involve cutting corners, which is likely
to be to the detriment of the client.
33. There is a further risk that suppliers will limit
the amount of work they do on cases that are taken on, which will
have a direct impact on the quality of services provided.
34. If these proposals are implemented, there is a real
risk that the LSC will drive out some good suppliers, while keeping
in high volume suppliers who may not be providing quality services.
The overall provision of services in social welfare law
35. The need for suppliers to meet case targets is likely
to have significant effects on the ways in which social welfare
law cases are dealt with both within and outside organisations
that have contracts with the LSC.
36. Where suppliers have higher than average case costs
they may be forced to do a significant number of short cases in
order to meet their targets. This is likely to distort any rational
division of roles as between different types of service. Specialist
agencies may have to take on work that has previously been carried
out by community groups and other generalist advice agencies.
The balance between face-to-face and telephone advice services
could also be affected. Some cases that could be dealt with over
the telephone are likely to be directed towards face-to-face advice
in order to help meet the targets of providers.
37. The need to meet targets is also likely to threaten
co-operation between face-to-face suppliers, referral patterns
and referrals themselves, as providers hold on to short cases
and try to refer longer or more complex cases.
38. The need to meet targets threatens the rational use
of specialists within agencies that provide both generalist and
specialist services. Specialists are likely to spend more time
on shorter or simple cases in order to achieve their case targets.
39. The need to meet targets is also likely to distort
the relationship between specialist agencies and other agencies
and community organisations. Many cases which would presently
be referred to specialist organisations may be rejected, and have
to be dealt with by non-specialist agencies and community groups
which may not have the necessary expertise.
40. One of the LSC's aims in proposing fixed fees for
social welfare law is to increase the number of clients who are
helped. We believe that the proposals are likely to have this
effect, as far as some providers are concerned, since they will
be looking to take on more short/easy cases. At the same time
however, there is likely to be a reduction in the number of suppliers,
as many will withdraw from providing legal aid services rather
than continue under the proposed fixed fees. Even if, overall,
there is an increase in the number of clients helped, this is
likely to be at the expense of clients who have more difficult
or longer cases and need help the most.
What impact will the proposals have on different communities
(such as Black, Minority Ethnic and rural communities)?
41. We have noted already that the need for suppliers
to meet their targets may lead them to seek to avoid long, difficult
and complex cases and clients.
42. This is likely to affect a disproportionate number
of clients who:
— are members of BME communities; and
43. The Causes of Action research found that ethnicity
was particularly influential in predicting problems relating to
discrimination, immigration, and unsafe or unsatisfactory rented
housing. [9]Discrimination
cases were found to take much longer than other types of employment
cases in our analysis of NfP case lengths. The same is likely
to be true for non-employment discrimination cases. Problems with
unsafe or unsatisfactory rented housing are also likely to be
more time consuming than other housing cases. [10]
44. The proposals in relation to immigration and asylum
work will directly affect members of BME or refugee communities.
We understand that the Immigration Law Practitioners Association
will be providing evidence to the committee and we defer to their
expertise in this area. We believe that the proposals for immigration
and asylum work are likely to have a direct effect on the quality
and quantity of supply in this area.
45. Fixed fees are most suitable for large organisations
with a large and mixed intake of cases and clients. That description
does not match many organisations, and especially NfP organisations,
which have a high proportion of clients of diverse backgrounds.
46. The problem would seem to be particularly acute in
London. Our analysis of NfP cases in 2004-05 revealed that the
proportion of clients who were classified as other than White
British was 64% in debt, 73% in housing, 74% in benefits and 75%
in employment. The overall effects of fixed fees, in terms of
case mix and quality, are likely to be the same for NfPs as for
solicitors' firms. In London at least it seems that it will be
largely non-White British clients who will suffer as a result.
47. A further problem concerns the recommendation by
Lord Carter that the allocation of social welfare law funding
should be based on a formula using data from means tested benefits
eg income support as a proxy for legal aid eligibility. [11]Our
previous analysis suggested that the most significant effect of
implementing such a proposal would be a reduction in the allocation
of funding to London of approximately 24%.[12]
We have set out elsewhere some of the reasons why we believe that
such a change cannot be justified. [13]What
is clear however is that such a change would have an indirect
discriminatory impact given the high proportion of members of
BME communities in London. [14]
48. It is our view that no action should be taken by
the LSC to implement any redistribution of the legal help budget
along the lines proposed by Lord Carter without further research,
full debate and proper consultation.
What impact will the recommendations have on legal aid providers?
49. From public statements that we have heard and the
results of the recent surveys conducted by the Law Society, we
believe that a significant number of solicitors firms will give
up legal aid work in one or more categories of law, if these proposals
are implemented.
50. In a Draft Impact Assessment published on the DCA
website it is suggested that up to 92% of NfPs would lose income,
representing up to 50% of the sector's income, if NfPs do not
increase the numbers of cases taken on. [15]While
many NfPs are likely to be able to increase the numbers of cases
taken on, we would expect many to suffer significant reductions
in income.
How will the proposals affect firms of differing size, structure
and practitioner mix?
51. We would expect the proposals to affect firms of
varying sizes in different ways. Smaller firms may find it harder
to achieve a sufficiently varied case mix to enable them to benefit
from the "swings and roundabouts" effects that are claimed
to justify fixed fees. Niche or specialist firms may find it particularly
difficult to continue. Larger firms may find it easier to achieve
a varied case mix, but, by virtue of their size, may feel more
exposed, and less willing to take the risks involved of continuing
in areas that seem particularly likely to be unprofitable.
Will the measures proposed promote the provision of high quality
advice and support the effective and efficient operation of the
Justice System
52. We believe that the overall effect of fixed fees
in social welfare law will be to reduce the provision of high
quality services and access to the justice system. We refer to
our analysis above on the likely impact of fixed fees on:
— The overall provision of services in social welfare
law.
SUPPLEMENTARY NOTE ON QUALITY AND COST[16]
1. The research used four experimental groups. The first
three groups were solicitors and the fourth group was made up
of NfP agencies. Group 1 were paid a piece rate for hours worked,
Group 2 were paid a certain amount of money and were told to do
as much advice and assistance work as possible with that amount,
Group 3 were given a fixed amount of money and were asked to do
a certain number of cases, Group 4 were paid for a certain number
of hours irrespective of the number of cases.
2. The amount of money provided bore a strong relationship
to the amounts earned in previous years by those firms. The number
of cases for the third group bore a strong relationship to the
number of cases dealt with by those firms in previous years.
3. The researchers peer reviewed the work of all four
groups and compared the results. They found that:
"Group 3 was significantly poorer at giving advice at
the right time than Group 1 (about 10% of cases were poorer).
They were also less likely to incur disbursements where disbursements
were actually appropriate than Groups 1 and 2. Group 3's failure
to carry out other work was felt to be inappropriate in a greater
proportion of cases than Group 2. This may provide an indication
of how the constraints of contracting work against Group 3; discouraging
disbursements and the carrying out of appropriate work."
[17]
4. As part of the research, clients were asked about
their levels of satisfaction:
"Group 3 clients were significantly more likely to report
that their case was taking too long (51% compared with 34% in
Group 1 and 39% in Group 2).
Group 2 received higher overall ratings of satisfaction than
Group 3. Group 2 clients rated their contractees as excellent
in 51% of cases compared with 36% of cases in Group 3. Group 3
received ratings of very good in 32% of cases compared with 26%
cases in Group 2. However, cases rated as excellent or very good
showed Group 2 as receiving positive assessments in 77% of cases
compared with 69% of cases in Group 3." [18]
5. The study also compared case endpoints. Group 3 had
the largest percentage of matters that ended with the outcome
unknown to the adviser (39% compared with 32% for Group 1 and
30% for Group 2). Group 2's clients were said to be better able
to plan and/or manage their affairs as a result of legal intervention
most frequently (26%), Group 3's client's least often (16%). The
report concludes:
"Group 3 performed more poorly on nearly all outcome
indicators than the other two solicitor groups".
6. Therefore, in the three areas of peer review, client
satisfaction and endpoints, the experimental group funded to provide
a fixed number of matter starts for a fixed fee performed worst.
7. The overall conclusion to the report states:
"Contracting as structured through Group 3 in the solicitors
sector has had a negative effect on quality when compared with
the control (Group 1) and the group most similar to NFPs (Group
2). Part of the explanation for this is the combination of volume
requirements with fixed prices for blocks of work." [19]
September 2006
1
See Legal aid: a sustainable future?-An initial response from
the Advice Services Alliance, available at: http://www.asauk.org.uk/fileLibrary/pdf/Laidsus.pdf Back
2
Carter report p 7. Back
3
See Legal aid: a sustainable future?-An initial response from
the Advice Services Alliance pp 9-11. Back
4
Available at http://www.asauk.org.uk/fileLibrary/pdf/cslgthnfpcon.pdf Back
5
Legal Aid: a sustainable future p 21. Back
6
Carter report p 85. Back
7
Provider Q&A: Legal Aid: a sustainable future Civil
and Family Legal Aid p 2. Back
8
Moorhead et al Quality and Cost: Final Report of the
Contracting of Civil, Non-Family Advice and Assistance Pilot
(2001). Back
9
Causes of Action, second edition p 37. Back
10
Cases classed as "disrepair" were the longest type of
housing cases in our analysis of NfP case lengths in 2004-05. Back
11
Carter report p 80; see also recommendation 4.29. Back
12
Adam Griffith, Regional Planning and its Limitations p
67. Back
13
"Legal aid: a sustainable future?-An initial response
from the Advice Services Alliance" pp 11-12. Back
14
According to the 2001 Census: 59.8% of the London population is
White: British; 71.2% is White; 28.8% are from minority ethnic
groups. See Focus on London 2003, table 2.12. Back
15
Draft Impact Assessment para 86. Back
16
Moorhead et al Quality and Cost: Final Report of the
Contracting of Civil, Non-Family Advice and Assistance Pilot
(2001). Back
17
Moorhead et al Quality and Cost: Final Report of the
Contracting of Civil, Non-Family Advice and Assistance Pilot
(2001) p 112. Back
18
Moorhead et al Quality and Cost: Final Report of the
Contracting of Civil, Non-Family Advice and Assistance Pilot
(2001). 133. Back
19
I Moorhead et al Quality and Cost: Final Report of the
Contracting of Civil, Non-Family Advice and Assistance Pilot
(2001) p 227. Back
| 
