Evidence submitted by Thompsons Solicitors
(LAR 39)
INTRODUCTION
We are a national firm of solicitors with 22
offices throughout the UK providing a full range of legal services
to Trades Unions and their members.
These services include a specialist national
criminal defence service which has a very different profile to
typical criminal defence firms.
Our clients are mainly public service workers,
generally of good character, for whom a criminal conviction would
be devastating.
Most of our work is specialised, primarily defending
teachers and local authority employees (particularly within social
services) in cases of alleged historic abuse and of exceeding
the lawful boundaries of restraint. Our work is spread out across
England and Wales.
We have an extremely high rate of success in
defending our clients.
Q. Is there a need to modernise the procurement
of Legal Aid?
The Legal Aid Budget
We entirely accept that is it the proper purpose
of Government to ensure that arrangements are in place that ensure
that expenditure secures appropriate quality advice for the best
price and thereby achieve "best value" for clients as
well as the tax payer. This is an ongoing process as the provision
of legal services exists in a changing environment. Indeed the
agents of change are largely external to the structure through
which services are delivered (the supplier base) and they include
Criminal Justice legislation, resource allocation to prosecuting
agencies, the extended use of technology in criminal investigation
which expands the content of prosecution evidence, changing patterns
of criminality and Government policy (eg the Narrow the Justice
Gap Initiative).
In this dynamic environment, defence services
are reactive and the budget demand led by external cost drivers.
We have noted that it has been a concern of Government that upward
budgetary pressure may be supplier led ie, caused by supplier
behaviour, but that the most comprehensive analysis to date (Cape
and Moorhead) concluded that there was no reliable or substantial
evidence that this was the cause.
We have also noted the Government's commendable
commitment to funding a system which has been described as one
of the most comprehensive and well funded in the world. It is
right that this is so. Legal services secure the rights of citizens
and without access to legal services, concepts of rights would
be merely rhetorical. We also appreciate the concern about the
growth in the budget from approximately £1.5 billion to just
over £2 billion and the desire to seek explanation and to
consider change which might "control" future cost while
continuing to ensure best value.
However, we are not certain that the Carter
Review of procurement was able to correctly analyse or identify
the "problem" or that it has reached conclusions which
stand up to a cost benefit analysis.
Our answer to the question therefore regarding
the need to modernise legal aid is that it depends on the analysis
of the problem and that there ought to be a compelling case that
reform will have a positive cost benefit outcome.
The "Problem"
There have been two headline issues beyond the
bare statistic of overall expenditure:
1. the million pounds per year barrister;
and
2. that 1% of cases absorb nearly 50% of
the budget.
We will comment on these headline matters and
then on the overall budget issue.
The 1%/50% Statistic
We were surprised by the lack of attention,
analysis and proposals in relation to this single most important
issue. There has been widespread publicity regarding spectacular
cases such as the Jubilee Line Fraud, prosecutions which have
failed at significant cost to the legal aid fund. We would have
expected the emphasis of reform/modernisation would have been
on:
(a) the institutional arrangements for determining
which major investigations and prosecutions should proceed in
the public interest;
(b) the management of those prosecutions;
(c) the prediction of "cost" for
both prosecution and defence; and
(d) whether those cases should have separate
budget arrangements.
The overriding difficulty for the criminal defence
budget holder is that it is demand led by the decisions of external
prosecuting agencies.
The proposals to create a limited, very high
cost case (VHCC) panel of solicitor firms are founded on selection
by two mechanisms; peer review and lowest price.
We do not have any difficulty with regard to
peer review save to note that the timetable for implementation
does not permit the establishment of a cadre of VHCC peer reviewers
and that this difficulty is to be "fudged" by relying
on a peer review of general crime files as a proxy for actually
reviewing VHCC files.
Of even more concern is limitation of membership
by lowest price competition. The current VHCC arrangements have
been the product of a great deal of hard work and appear to be
working by producing significantly lower cost outcome. We do not
see why there is a lack of merit in continuing a regime of administered
fixed prices. They are already low in comparison to private client
rates. Driving prices down is highly likely to undermine quality
and remove good quality firms from the market. The arrangements
are also unnecessarily bureaucratic and the bidding process will
be expensive to administer for both purchaser and supplier.
We are also concerned that the proposals are
precipitate. The additional 100% "mark up" on hourly
rates for serious fraud was only abolished in late 2005. The impact
of that and improved VHCC administration has had little time to
work its way through the system.
Recommendations
— Put in place the proper institutional
arrangements regarding VHCC cases outlined above.
— Conduct rigorous cost benefit analysis
from the investigation stage onwards as an integral part of the
management of those cases.
— Separate the budget for VHCC cases.
— Give Judges the power to order that
legal aid defence costs be paid by prosecuting agencies on the
basis that the polluter should pay when the Judge concludes that
there has been significant mismanagement of the case by the prosecuting
authority.
— Maintain the current VHCC arrangements.
— Maintain an ongoing analysis of the
external cost drivers of this expenditure.
The £1 Million Barrister
This headline has served as a distraction to
the real structural problem of trying to fix or cap a budget which
is actually driven by external agency decisions.
However, we also believe that there has been
a lack of rigor in the assessment of counsel's claims. Solicitors
have long been required to justify work as actually, reasonably
and necessarily done on a time basis with a detailed account of
time. It may well be that those determining bills should be better
trained and resourced and that simple improvement of the process
of determination would be a far easier process of preventing any
abuse of the system where the suspicion persists of systematic
over claiming.
Recommendation
— Additional resources and training
for the National Taxing Team and guidance on counsel's claims.
— A rigorous approach to counsel time
recordings.
The Budget as a Whole
We are concerned that modernisation as proposed
by Carter has identified the wrong targets. A massive restructuring
of solicitors firms is envisaged in which volume is traded for
price. This is aimed at saving £100 million over four years.
In the context of the budget this is a very small sum. We do not
accept that on a cost benefit analysis the restructuring exercise
is justifiable. The focus of that exercise is police station and
magistrates' court work, but the budgets for those areas of expenditure
are very clearly under control. Indeed it appears that the prices
are already so low that most firms are making losses or are marginally
profitable. (See the LECG research paper dated 25 September entitled
Legal Aid Reforms proposed by the Carter Report—Analysis
and Commentary.) Further it appears that the overall expenditure
has since 2002-03 been falling.
As we made clear in our introduction, Thompsons
is a specialist niche practice. We do not "fit" the
Carter model as our clients are spread all around the country
and we have low volume at many police stations and magistrates'
courts including the courts local to our offices which are located
in major cities. If implemented without exceptions, the Carter
proposals would prevent us from holding any form of contract in
any area.
The preferred supplier consultation envisages
contracting by firm rather than office. We would welcome this
development. If some version of the Carter proposals were to proceed
we believe it would be right to put in place a range of contracting
arrangements. It appears this will be inevitable given the low
volume and difficulty of supply in rural areas in any event.
Recommendation
— That work be localised by restricting
duty solicitor police station and court membership to two schemes
per qualified solicitor.
— That contracting be organised by
firm rather than by office.
— That the major restructuring envisaged
by Carter in police station work be held back pending the outcome
of the other reforms that are easily implemented and likely to
have a more beneficial outcome at lower risk and cost.
— That contracting be permitted which
recognises the diversity of firms and niche suppliers.
Q. Is the timetable for implentation suggested
in Lord Carter's Report realistic?
We do not support the timetable as we believe
the wrong question has been addressed and the timetable itself
is unrealistic. The LSC envisage implementing price cuts (which
is easy to do) before structural reform (which is hard to do)
that would allow trading volume for price.
Notwithstanding our view that this fundamental
re-engineering of the supplier base is not justifiable on a cost
benefit analysis, the implementation timetable is the wrong way
round. Firms should not be required to absorb price cuts prior
to "gaining" volume. The latter is also specious because
no one firm can gain volume without another losing volume. There
is no clear mechanism for deciding how firms will be eliminated
from the market save that the entry point for bidding should be
a relatively low "take" from the legal aid fund of £50,000.
There are also no clear mechanisms for permitting the entry of
firms to the market in order to maintain and revitalise competition.
If in fact firms are to be allowed to confederate
with a lead bidder the net effect will not really be to concentrate
volume in a single larger unit but simply to displace administrative
costs from the LSC to the lead bidder. The scheme is ill thought
out. There is a wide gap between theory and practice.
Q. What benefits might be generated for defendants
and others by adopting these proposals? What impacts/disadvantages
might result from implementation?
We can see no benefit for defendants as recipients
of legal services. We do envisage significant reductions in choice
and access. Own client choice is a particular concern. If these
proposals were implemented without allowing for niche supplier
contracting, our clients who wish to access legal aid suppliers
would be fragmented amongst all local contractors who would have
no significant experience in dealing with the teachers, carers,
and other public servants who form our client base. Our national,
specialist "joined up" experience would be lost as a
service.
Q. Will the measures proposed promote the
provision of high quality advice, and support the effective and
efficient operation of the justice system?
Our answer is no. The high quality advice and
representation we deliver is available because we have a national
dedicated team delivering a service based on specialist knowledge
and above all experience. In all specialist delivery it is the
repetition of cases, each with unique features but also common
characteristics, that allows the team to become more expert than
a general practitioner. The quality that is then delivered to
the Criminal Justice System ie, to trial counsel, to the Judge
and in the settings of the police station, magistrates' courts
and crown courts is higher and therefore promotes both effectiveness
and legitimacy in the Criminal Justice System.
OTHER MATTERS
Fixed Fees
We are extremely concerned that a system of
fixed or graduated fees will not represent proportional and proper
payment for the work actually done in cases. Our clients are usually
of good character. The work we do is more intensive than for what
could be described as ordinary criminal clients who have more
experience and a different attitude towards defence services.
As a result, our costs profiles are higher than any regional or
national average. In other words, we spend longer in the police
station where our clients usually make full comment, we fight
many more magistrates' court cases and crown court cases than
average and achieve much higher rates of acquittal.
We fear that fixed fees will reward those whose
primary purpose is to exploit the system by doing as little as
possible and penalise the conscientious solicitors. We anticipate
that because of our particular client base we are in a very disadvantageous
position and we support the continuation of a strengthened ex
post facto determination of costs.
CONCLUSIONS
The Carter Review had limited resources and
an unrealistic timetable. Unfortunately a great deal of thought
and energy was devoted to the procurement of supply for that part
of the budget which does not represent a significant problem.
The part that does, the high cost of small numbers
of cases, is susceptible to management and reform. It is that
area of the budget that should be the focus of DCA/LSC policy
and we urge the adoption of the programme of reform which we have
recommended.
A more limited but highly practical approach
to police station and magistrates' court work would yield highly
beneficial results in localising work and helping firms achieve
better economies of scale prior to any price cutting if cuts are
to be made.
Any cuts in price should be considered carefully
in the light of the low profit margins and fragility of the supplier
base.
Fixed fees bring great risks for purchaser and
supplier and may act as unfair constraints on defence teams undermining
quality and equality of arms.
September 2006
| 
