Select Committee on Constitutional Affairs Written Evidence


Evidence submitted by HCL Hanne & Company (LAR 101)

THE FIRM

  1.  H C L Hanne & Company is a large traditional High Street practice based in Battersea and established for over 100 years. We are the biggest Legal Aid provider in Wandsworth, South London. Our Legal Aid clients are amongst the poorest and most vulnerable in England, but we also have Legal Aid clients whose opponents are wealthy. Our Legal Aid lawyers are committed to Legal Aid and, without exception, dedicated to their work. Our policy has always been to take on work based on the merits of the case and not whether the client has the means to pay for the work.

  2.  Over the years we have actively participated in every new initiative the Legal Services Commission have introduced. We were one of the first firms to be granted a "franchise" in 1994.  We have since been subject to rigorous and time-consuming reviews each year together with quality audits. Two years ago we applied for and were granted Preferred Supplier status as part of the Pilot scheme and endured all the checks and inspections and Peer Reviews required to achieve this. We are therefore one of five firms in the greater London area, and one of 26 firms in the country, to have achieved this status. At a recent meeting, Anne Campbell, our liaison officer at the LSC commented that we were "head and shoulders in front of our competitors".

  3.  For many years now we have spent huge numbers of billable hours in taking measures to improve the quality of our work and our working systems. It would be impossible to estimate how many hours each of the partners and heads of department have spent over the course of the last 10 plus years on this process. The LSC also have undoubtedly spent a huge amount of money ensuring that Legal Aid firms reach the standards required of them, both in terms of systems and quality of work. The peer review system alone must have cost and be continuing to cost a huge amount of money.

  4.  To summarise, we have jumped through each hoop and over every hurdle thrown at us in the last decade by the LSC—this has involved huge amounts of time, money and effort in dealing with increased administration and improvements in efficiency. Our perception of the stage we had reached as the preferred pilot reached its conclusion was that we had entered into a new and vastly improved relationship with the LSC. We had extended powers to grant public funding, faster payments and a phone link throughout the working day with someone who was happy and eager to resolve our problems on a daily basis. To this end we developed a training plan for would be legal aid lawyers into which we have invested considerable resources in terms of both time and money. We employ eight trainees at any one time.

  5.  Despite the fact that Legal Aid rates have not improved during that decade and profit margins are extremely tight we felt that a career as a Legal Aid lawyer was still viable and sustainable.

  6.  It is with enormous sadness that we have to say that if the recommendations regarding fixed fees are implemented that will no longer be the case. The reduction in fee income would mean we were conducting Legal Aid work at a loss and we would be forced to cease this work with immediate effect.

  7.  It is our view that implementation of the proposals for fixed fees especially in the area of family law would have a positively discriminatory effect. They would also potentially constitute breaches of both Articles 6 and 8 of the Human Rights Act. It is likely that any firms still undertaking legally aided work would cherry pick work as a result of the reduction in suppliers. The likely result would be that members of ethnic minorities, those with language difficulties, the illiterate, disabled or mentally ill would not find competent representation as their demands simply could not be met within the proposed standard rates.

  8.  Our firm is a mixed practice currently employing over 50 staff, 26 of whom are fee-earners. Of those dealing with publicly funded work, there are 11 specialist family lawyers (seven dealing with divorce, disputes between parents and financial disputes; five dealing with child care law and adoption), five criminal law practitioners, two housing law specialists and two immigration lawyers. Many of our lawyers belong to the relevant specialist Law Society Panels, or specialist panels of other bodies such as Resolution or are accredited by the LSC itself. We also offer services in employment, conveyancing and private client work (thereby offering clients the full range of High Street need). We have been offering such services since the inception of legal aid. Our founder was a pioneer in legal services and offered pro bono advice before legal aid was ever conceived. The partners in the firm have maintained their commitment and we are well known in our respective fields. Of the eight partners, six are involved in publicly funded work, three of whom do virtually nothing else.

  9.  The "reforms" would have a profound effect on our business, as some 60% of our income comes from publicly funded work. We have carefully analysed and compared our profit margins from legally aided work under the current pay structure and under the proposed new regime. The likely result is that we will no longer be able to offer any publicly funded services. Our practice will reduce and there will be redundancies, including at partnership level. Our firm will survive through privately funded work, but in a much reduced form. We would no longer be instrumental in the training of legal aid lawyers.

  10.  The reports came out on 13 July, while many people and the courts were on vacation. The consultation period is far too short. Given the hybrid system proposed there is far too little time before April 2007, for suppliers to make adjustments and decisions. There has been no consideration of the impact on other stakeholders in the justice system.

  11.  We have been very disappointed by the consultation process. The report came out in the summer, when even Legal Aid lawyers might be expected to have some leave, with a very short consultation process. We have been given the impression that fixed fees are not negotiable and that we are not being listened to.

  12.  The timetable for the implementation of the scheme is April 2007.  Whereas the Carter report has made a detailed analysis in respect of criminal proceedings and this has been backed up by a number of research projects, the same is not true of family proceedings, which are dealt with only in outline. There has been no research into the likely impact of the proposals on children and families involved.

QUALITY

  13.  We entirely endorse the view that publicly funded work should be of a high standard. Ideally the quality of work undertaken in a legal aid case should be no different to the work that would be undertaken in the same case were it for a privately paying client. If the work for the legal aid client falls significantly below that standard the client is immediately disadvantaged, particularly if faced with an opponent who is privately paying for their legal services. This is of course a human rights' issue if the publicly funded client does not have "equality of arms" with the privately funded client as Article 6 requires. In effect, legally aided clients will be offered a second class service.

  14.  As a firm, we have already proved that we offer a high quality service through peer reviews and having been part of the preferred pilot scheme. We clearly accept high quality work is fundamental to the provision of these services, particularly in the locality in which we operate, where often we face complex issues and deal with the most vulnerable members of society, including those with mental health problems, disabilities, language difficulties, learning difficulties, problems caused by alcohol and substance misuse and members of ethnic minorities.

  15.  We accept that the Peer Review system is a reliable way of monitoring quality and legal competence. One of our partners is a Peer Reviewer and has first hand knowledge of the operation of the system and indeed the wide discrepancies of the quality of work offered by individual solicitors. The issue is how we can be expected to achieve work at the level of "competence plus" or "excellence"—the categories required to attain preferred supplier status, at the "price" proposed. It is obvious from the analysis we have carried out in each department of this firm that does legally aided work that this work is not sustainable.

  16.  The concern is, given the proposals are likely to result in a mass withdrawal of practices undertaking legal aid work, whether there would be a "dumbing down" of the process to ensure sufficient suppliers. Undoubtedly "quality" cannot be offered at these rates. Accordingly, our view is no firm of "quality" will be able to provide these services to be "peer reviewed". Those who do offer a service at the price suggested are unlikely to work at an acceptable standard to be offered preferred status, because no senior or experienced lawyers will be involved.

FAMILY LAW

  17.  We have chosen to focus on this, because in our view it is the area which will the most profoundly affected nationally. It is also because it is the largest department in our firm. The scope of the scheme is irrelevant if the same results in a mass withdrawal of firms prepared to undertake any publicly funded family work at the level of fee proposed, regardless of uplift or exceptional case considerations.

  18.  As a practice we are open to change and as a general principle of course accept that there has to be value for money when dealing with the public purse. However, we do not accept that such value should compromise the level of services we offer, or indeed that the LSC demand. We consider that we already operate to maximum efficiency; our profit margin is exceptionally tight. We continue to have a high volume of publicly funded cases, but even in the current climate we have to supplement such work with privately funded work so that we can continue to assist those more vulnerable regardless of wealth, and to maintain the viability of our practice.

  19.  We are inundated with work, suggesting there are insufficient suppliers currently prepared to undertake such work. The family department receives in excess of 10 new referrals a day and we turn away around 75% of these because we simply do not have capacity to deal with them. It appears that a large number of these clients currently never manage to find legal representation, which is reflected in the ever-growing number of litigants in person appearing before the courts. These do of course have a corresponding knock-on effect on the court budget, as they take more time to prepare and deliver their cases, as any judge will confirm. The impact of this will increase hugely, which the present proposals appear to ignore, coming as they do under a different budgetary heading.

  20.  Whereas we understand the concern at the growth in spending on Legal Aid and the desire for costs control, we find it hard to understand the drive towards fixed fees as the solution. It appears to us that they are particularly inappropriate in the field of family work and care proceedings. In the Carter proposals fixed fees are a precursor to price competitive tendering and only really make sense in that context. The report states: "Fixed pricing rewards efficiency and suppliers who can deliver increased volumes of work" (page 3 summary). Such a regime would, in our view be totally inappropriate in family proceedings.

  21.  It is said that administrative burdens will be reduced by a simplification of the system. Since the Legal Aid Board became the Legal Services Commission, their costs have increased from £58 million to nearly £100 million. The Carter report only expects his reforms to produce a reduction by 2010 to £70 million. (page 7 summary). In 1997 most costs were assessed ex post facto on hourly rates. Despite various fixed fee schemes these have produced an increase not a decrease in administrative costs.

  22.  From the point of view of suppliers over the same period, the constant changes and different schemes have produced a huge increase in administrative tasks. Many tasks have been devolved by the LSC to suppliers, but with no remuneration therefore. It is expected that solicitors will continue to have to undertake these tasks as well as continue to keep records on an hourly basis of work done on cases so the new regime will not reduce the administrative burdens for us. On the contrary, fixed fees may well increase the costs in some instances. We want to be paid for the work we do, not overpaid for easy matters.

  23.  Access to justice should be available to all particularly the socially excluded and disadvantaged and particularly children who are blameless. According to the LSC's annual report in July 2006, the CLS made a surplus of £443 million, while the CDS made a small loss. Why therefore do the costs have to be further reduced? The overall annual budget for the whole of Legal Aid is less than the government's annual spend on Consultants.

  24.  Lord Carter stated he had been impressed by: "the deep dedication and integrity of the professionals involved in legal aid work and their real commitment to the principles of legal aid." Those of us involved wish to be able to continue to offer a service but cannot do so under the present proposals.

PUBLIC LAW (CHILD CARE WORK)

  25.  We act for children, parents, other relatives, adopters, and foster carers. Between us we have decades of experience on the Law Society Children Panel and one of us is also a Resolution accredited specialist.

  26.  An application for a care order to remove a child from his parents is one of the most Draconian steps that can be taken, with far reaching consequences for parents, wider family and most importantly the child. This is recognised by Legal Aid being granted automatically and being free for both parents and child.

  27.  The proceedings deal with multiple issues, often over the whole of people's lives. There are also often many parties. The seriousness of the outcome necessitates careful consideration and expert advice. The court process can be lengthy and the proceedings are dynamic. Each case is peculiar to itself. No fixed or graduated fee can adequately reflect this.

  28.  While in general the model proposes larger suppliers, the Carter Report itself recognises the multi party nature of care proceedings and the need for separate representation and states that: "There are around 1,700 members of the children panel in England and Wales... A number of these are small suppliers. There will be a need to ensure such suppliers can be maintained within the system." (page 66) The present proposals do not do this.

  29.  The Carter Report deals primarily with criminal work, as that was where the greatest costs' increases had been. Care Proceedings were included as there too costs had increased and the reasons were to be investigated. In "A Fairer Deal for Legal Aid", it is stated that the volume of Public Law cases had increased by 37% but the costs by 77%.

  30.  The LSC have recently produced figures showing the average cost per case for each year from 1999-2000 to 2005-06. From this, the total average costs per case increased from £4,834 to £7,855—a percentage increase of 62% over six years. (Percentage calculated as a proportion of the cost in 1999-2000) However solicitors profit costs increased by 45%, disbursements by 107% and barristers' fees by 100.33%. Solicitors' rates only marginally increased to take account of panel membership so the increase reflects more work being done. There is nothing to show that such additional work was unnecessary. It should be remembered that over this period inter alia the Human Rights Act and the Judicial Case Management Protocol came into force, which certainly increased legal aspects needing consideration.

  31.  There is no proposal to modify the payment scheme for barristers, (barristers' rates were increased last year). We do not think it fair or appropriate that solicitors should have to have their costs reduced, when clearly there are other drivers causing the increases.

  32.  For example, there is a new practise direction that, inter alia, position statements have to be prepared by each party for every hearing, which comes into effect on 2 October. This too will cause considerable extra work and should be taken into account. In care proceedings, one driver of increased costs was the court ordering expensive residential assessments to be paid/part paid by the parties' legal aid. This has recently been stopped. Time needs to be given for the savings to come through.

  33.  However, even if care cases issued in court are able to be completed within the 40 week target laid down by the Protocol, this still is a long time. There may be work after the final order. As solicitors we cannot control the timetable and are at the mercy of delays caused by local authorities or the unavailability of Guardians or experts or court time.

  34.  It is not possible because it is time intensive to do a large volume of care work. By its very nature we are dealing with the vulnerable and socially excluded. The clients may have psychiatric or psychological problems, learning difficulties or language or cultural issues. They will be distressed by the proceedings. Most solicitors can only properly handle between 12 and 15 cases at one time. To be able to carry on at all under the proposed fixed fee regime, we calculate each fee earner would have to complete and be paid for between 30 and 35 cases each year. Given that all solicitors practising in care work both evenings and weekends now to provide a service, this is simply not humanly possible. If a continuing supply of enthusiastic good quality legal aid lawyers is wanted, who are willing to work long hours for minimal rewards (at maximum about half of what a GP will get) there must be a proper career structure and they must feel able to do a good job.

  35.  At present we are busy, but children's representatives are allocated by the court on a strict rota basis. Whether parents or other relatives come is dependent on reputation and referral. There is no arrangement like the duty solicitor arrangement in criminal matters, which guarantees a flow of work.

  36.  To give an idea of the volumes of work for comparison, the LSC say that 22,500 care cases were billed in 2004-05 out of a total of 180,033 final bills for certificated work. In 2005-06, 1.6 billion acts of legal assistance were given in criminal matters.

  37.  It is not proposed at this stage to bring in fixed fees for other public law cases as "they represent relatively small areas of both volume and value with large variables in individual case costs". It is not proposed to bring in fixed fees for other certificated work apart from family. This therefore will add to complications and is not equitable. Fixed fees will not on their own bring cost control, and overall costs will increase if more proceedings are brought, which is likely given the 38% increase in recent years. From speaking to local authority representatives at least in London they are experiencing an upturn in work. The only way then to achieve costs control would be to reduce what is paid per case still further. This would further reduce the quality of service suppliers are able to give.

  38.  A "market based" system is simply not appropriate for such as those who will never be able to pay for representation in care proceedings. Where does a market come into it when the only purchaser is the government?

  39.  The "Legal Aid Impact Test" has now been accepted for all new legislation. The impact of all the legislation brought in since 1997 should also be considered. eg over 3,000 new criminal offences. In the care field the Adoption and Children Act 2002, which came into effect on 1 January will have a major influence on care proceedings as placement applications at the same time as care proceedings are to be the norm where the plan is adoption. There is considerable additional paperwork, yet no additional payment is proposed.

  40.  The DCA report into child care proceedings (May 2006) proposes earlier advice and intervention. We agree that this could be useful. This too would mean additional costs. At present we do help parents in relation, for example, to Child Protection Conferences. But we are hardly ever remunerated for the work we actually do. So long, however, as the remuneration for court work is fair we can continue to do this. There may be a place for fixed/graduated fees for low cost general areas such as covered currently under the Legal Help Scheme. We see benefit in the level 2 pre proceedings work, for parents to have advice and a better understanding of what is involved in care proceedings and the child protection process as recommended in the DCA review. (paragraph A.24)

  41.  The proposed advocacy fees for solicitors are derisory and pay no account to the many years' experience or to the undertaking by Panel solicitors to undertake work personally. This in turn will impact on the client by reducing continuity. In care cases it is often reassuring for a parent to have the support of her own solicitor in court. As solicitors will have to take on too much work to make ends meet there is a danger that necessary work will not be done or delayed.

  42.  There are likely to be many more unrepresented clients, leading to court delays. Delay in determining children's futures can cause them harm and is inimical to the principals embodied in the Children Act.

  43.  We understand the government wishes to give priority to families suffering social exclusion. There have also been recent concerns expressed as to the outcomes for children in care. We feel there is little understanding of the role of solicitors in child care proceedings, which is far wider than dealing with narrow legal issues.

  44.  The commencement of care proceedings is often a wake up call and last chance for parents. Their solicitor has a vital role to play in helping them get over their inevitable initial anger with Social Services, start accepting responsibility for their problems and motivating them to wish to change. When done successfully, children can be rehabilitated or remain with their families. Where safe this is clearly a desirable outcome and we can think of more than a few cases where this has been achieved. Apart from more intangible benefits to society of better functioning families, there is also a considerable financial saving of the child not remaining in care.

  45.  Solicitors acting for children also use their skills and experience to challenge and firm up care plans to ensure the right carers, education and therapy are in place for a child once a care order is made. This is an important task and a chance to ameliorate the poor outcomes recently reported. The Children Panel was one of the first specialist panels and is a model which has been universally praised and followed. In recent years because of the difficulties in legal aid practice the number of applicants has reduced. The membership is getting older.

  46.  If, as a result of the proposals, solicitors either drop out or cannot give the same time and effort to their work, both these vulnerable clients and society will be the poorer with potentially far reaching consequences.

  47.  The proposals for graduated fees in care proceedings follow the Protocol but that is for guidance only and each case is looked at on its merits. It is not appropriate as a basis for a fee structure. Particularly at the outset of a case there are often several hearings and that is not reflected in the fees suggested.

  48.  Children Panel solicitors undertake to conduct all hearings personally. This allows for continuity, a detailed knowledge of the case and is efficient and cost effective. Under the suggested proposals, whereas barristers continue to be paid under the graduated fee scheme, the solicitor, no matter how experienced and no matter how many or how long the hearings are, is to be paid a derisory fee. This is quite frankly insulting. In the past we would have been paid an uplift for appearing against counsel.

  49.  The solicitor for the child is particularly essential to the smooth running of the process. Lord Justice Wall has referred to the partnership of solicitor and Guardian as an, "intellectually rigorous partnership" and a lynch pin. The impact on the courts of losing experienced solicitor advocates will be considerable.

  50.  The escape threshold of four times the graduated fee is unworkable. On the assumption that the basic fee would be approximately £4,500 this would mean the solicitor would have to do £18,000 worth of work before being paid any extra. This would mean doing £13,499 for nothing or nearly 200 hours work at current rates! No business can take that risk and to even suggest it is nonsense.

PRIVATE LAW (CHILDREN AND FINANCIAL MATTERS)

  51.  The proposed levels require urgent reconsideration.

  52.  Level 1—the proposed national rate is £113, the equivalent of just under two hours work under the current funding. This firm, however, participates in the FAiNS pilot where a payment of £100.00 is made for each new case where the fee earner is 2+ years pqe and FAiNS trained. Our average costs for a FAiNS fee earner is £200-250 per case. The proposed fees therefore represent a reduction in fees of over 50%.

  53.  Our understanding was that FAiNS was introduced as a positive means of improving the quality of the advice to the new client, with a view to referring clients to other organisations and possibly resolving issues at an early stage, by adopting an non-adversarial and holistic approach. Do we understand that this whole approach, not to mention the money that must have been spent on the FAiNS project, has now been abandoned in favour of cheap fast advice with no consideration of the wider issues for the vulnerable client?

  54.  Level 2—The proposal includes negotiation and all work up to the issue of proceedings. In a typical non-urgent family case eg money cases, it is widely accepted that it is good practice to deal with issues on a voluntary basis, for example exchange of financial affidavits, questionnaires, statements of issue and negotiation, leading it is hoped to a consent order. This work would not be possible on the proposed new rates (eg for London £346), which would inevitably lead to applications to court being issued straight away on virtually all cases. This would not only inflame situations for clients, but cause increased pressure and yet more delays in our already overworked and undermanned courts. Again, it would also by its very nature increase the court budget.

  55.  Level 3—this level presupposes that the supplier has already undertaken £333 worth of work on the proposed national rate. The true fee offered therefore from the beginning of level 3 is £750.00—to include barristers' fee! This MUST be misconceived. A "private" family law case—ancillary relief or s8 Children Act applications—is complex litigation, involving substantial amounts of correspondence, meetings with clients, drafting and generally at least two hearings. As we believe that whoever produced these figures had no idea of what these cases consist of we attach at schedule 1 a description of work required even at the most basic level in financial cases.

  56.  Our present understanding is that the proposed fixed fee under levels 2 and 3 is payable in respect of ALL applications. For example a supplier who takes on a client who presents with a divorce, problems to do with children, domestic violence and financial issues is entitled to just one fixed fee at whichever level the case concludes. This "multiple certificate" scenario is not uncommon in the area in which we practise. Under the current funding each part of the case is dealt with separately and possibly billed separately, although only one certificate is issued. It is accepted best practice that issues affecting children and financial issues should be kept separate and separate letters written. It is obvious, we hope, that such cases could not possibly be funded within the proposed fixed fees. Many multiple certificate cases would therefore fall into the "exceptional case" category. The problem, however, is that it is impossible to predict at the outset which cases these will be. Because of the very nature of the relationships involved, family cases are notoriously unpredictable. The risk that the costs might not fall within the exceptional case category is unacceptably high and not one we would be prepared to take.

  57.  The likely consequences, if anyone was prepared to take on the work, are either that the work done by suppliers would be of poor quality with corners being cut OR unnecessary work would be undertaken to ensure a case falls within the exceptional case category. This is unacceptable for the client, the supplier and those funding the work.

  58.  Consideration should be given to retaining the current arrangement where all work is paid on an hourly basis, which is subject to costs' limitations imposed by the LSC, assessment by the court/LSC and peer review. If a standard fee is implemented (and this fee MUST take into account any exceptional circumstances in the same way as barristers can currently claim extra payments by way of SIPS), then there should be a reversion to the hourly rate as soon as the costs in any case amount to twice the standard fee.

  59.  Our family department regularly uses barristers in private law family cases, unlike our colleagues who undertake care and adoption work. We have found that this often offers a good option to clients. All of us doing a high volume of Legal aid work carry heavy case loads, albeit of different kinds. We have more cases than our colleagues in public law. Spending significant periods of time out of the office reduces client contact and leads to a build up of paper work that can be overpowering. This is particularly the case in financial work where the emphasis is on paperwork and negotiation. Furthermore, those of us who have not developed the advocacy skills required to conduct their own cases will still be reliant on specialised Counsel. Indeed many cases we conduct have complex and difficult issues (regardless of net worth) that make such instruction a necessity.

  60.  Counsel specialise and there is no doubt that the counsel who are still prepared to work under graduated fees both offer tremendous value for money and enhance the quality of the work for the client. There has, unsurprisingly, been a reduction in the quality of Counsel prepared to undertake such work for the fees payable. This has had a considerable impact on our practice given that we often deal with high asset cases and the "Big Fish" firms who instruct stellar counsel from the onset. However, to continue to instruct counsel under the proposed fixed fee regime in private family work would be financial suicide.

  61.  We consider that the Family Bar continues to have a real role to play in Legal aid cases. The barristers who undertake this work are as committed as we are and this has been proved by them continuing to undertake this work after the introduction of graduated fees which substantially reduced their income. To include barristers' fees within the fixed fees is tantamount to removing their role in funded work altogether as no supplier could afford to instruct them. The only realistic alternative is to exclude their fees from the amount paid to the solicitors.

  62.  One final thought. When we arrive at the financial dispute resolution appointment with our costs' estimate for the case (since application issued) at £750, and our opponents acting for the privately funded opponent produce theirs for say £10,000.00 (not uncommon in a financial case where a West End firm is instructed), how will the quality of the work we have been able to accomplish differ from that of our opponent? How disadvantaged will our client therefore be? Our client is entitled to expect us to do everything that their opponent's solicitors have done. After all it is not their fault that we are paid a standard fee. If we take on the case we still have to comply with the standards set by the Law Society. Quite rightly clients will have complaints to make and negligence cases will follow. Another reason why, if these proposals are implemented, we will have no option but to withdraw from legal aid work with immediate effect.

PANEL MEMBERSHIP

  63.  The proposal to remove the 15% uplift for panel members is incomprehensible. Senior practitioners have worked hard to obtain accreditation or access to the specialised panels, involving exam fees, written exams, years of experience and, in some cases, an oral examination. It is currently the only public and objective way of ascertaining if a lawyer has sufficient expertise or experience to conduct complex or specialised cases. There must be some incentive to continue this work over many years. The lawyer who does not undertake legal aid work can expect to see their fees rise both with inflation and with their level of experience. This is not the case with legal aid lawyers, who to date have only been able to increase their hourly rate by applying to join a specialist panel. Should a legal aid lawyer expect to be paid the same rate of pay after 20 years as their inexperienced newly qualified solicitor on their first day at work?

  64.  Another issue arises here. Specifically in relation to peer review—is the quality expected of a trainee or newly qualified solicitor the same as the quality expected of a solicitor of say 10 years post qualification experience? The answer is clearly "no," but the issue of how this should be dealt with on peer review has apparently not been addressed.

  65.  Surely it is only right that in complex cases where greater experience is required, the client should be able to determine such experience. Our view is that this could be achieved in Legal Aid cases by a mixture of membership specialist panels, by continuing to provide enhanced rates, and individual discretion based on years of qualification and status (given that all suppliers would be preferred and would have been subject to considerable scrutiny on quality and systems).

  66.  It is inevitable that if the proposed rates are implemented, cases will be dealt with by unqualified or very junior staff. Complaints are likely to rise, as no doubt will negligence cases. We have been to many meetings of practitioners and all express that they will not be able to operate under the present proposals. Many if not all may just give up, feeling their expertise and views and many years of loyal service have been dismissed as of no value.

CONCLUSION

  67.  We do not agree there is a need to modernise the present procurement system for family and care work

  68.  We do not believe fixed or graduated fees are appropriate to this type of work

  69.  We accept that there are budgetary constraints but feel that an integrated approach over the whole family justice system would produce better savings and results.

  70.  If the present scheme is adopted it is likely to result in the loss of many experienced professionals and possibly a breakdown of the entire system.

  71.  We do not believe the system proposed will bring the desired savings in costs or in administration.

  72.  If the proposals are implemented we face a situation where our costs are to be reduced to such an extent that we will no longer be able to do Legal Aid work.

1 October 2006

SCHEDULE 1

  In order to understand why the proposals are not viable it is essential that the proposers appreciate exactly what is involved in conducting a case for which the fixed fee is proposed.

FINANCIAL CASES

  The proposed National rate for ancillary relief matters up to and including FDR is £1,083 to include counsel's fee.

  It is generally accepted that the graduated fees system will apply to Counsels fees and accordingly, where Counsel is instructed for the FDA and FDR hearings (see 7.10 above), counsel's fees would total approx £400, inc VAT and discounting Sips payments.

  In real terms the proposal effectively means that the LSC expect us to conduct a financial case from the first meeting with the client to FDR for approx £700 (if counsel is instructed).

PRE-ISSUE

  Clearly there is a significant amount of work pre-issue. The pre action protocol advocates dealing with disclosure and negotiation where appropriate without issuing proceedings. It is highly relevant to point out that the protocol would be ignored by legal aid lawyers were the standard fees proposed at level 2 to become a reality as this quality of work would be impossible pre issue. Not a happy scenario for the client who has no wish to litigate!

  We have ignored costs incurred pre issue for purpose of this exercise but clearly if payment is received at only one stage level then all of this work will likewise be included in the figure proposed and effectively will further impact on the profit margin of any particular case.

POST-ISSUE

  An ancillary relief case includes the issue of an application and the preparation of a complex and multi-page document called a Form E (the Financial statement). A large number of relevant documentation has to be attached to this. If the documentation is not available (as is often the case), reasonable steps need to be taken to acquire it. This document is comprehensive and exacting and in a complex case will take many hours to complete. The courts give solicitors at least six weeks to complete this document and accept that it is relatively onerous task. Recent costs rules state that there may be financial penalties by way of costs orders made if the document is improperly completed or lacks the relevant and required documentation. The statement is the "Bible" of financial applications and it is essential that it is completed comprehensively with full consideration of the issues involved.

  Form E's are exchanged simultaneously and there follows a process of scrutiny where the financial information provided is assessed. This again often takes several hours.

  Thereafter questionnaires, statements of issues and chronologies have to be drawn up and exchanged prior to the first hearing. (the FDA).

  Although generally half an hour is set aside for this hearing, it can take considerably longer.

  On the sample of cases we have looked at over the period of the last financial year, not one Fe has conducted a case to FDA for less than £1,000 in profit costs and counsel fees. The costs to this stage differ depending on the complexity of the case and the issues involved, but we confirm that on average, the sample we have looked at show costs at this stage at between £1,100 to £1,800.  

  It is rare for cases to settle at FDA. After the first hearing, questionnaires have to be replied to, valuations obtained, experts reports sometimes requested and there is usually a wealth of correspondence on a open and privilege basis. Again several hours worth of work.

  The next hearing is the FDR where all attempts are made to negotiate a settlement with the assistance of the Judge. However, unless the assets have all been identified and the issues, to a large extent, resolved this hearing will not be successful. Ancillary relief proceedings are front-loaded and the work done up to FDR is similar to the work that would be required for a final hearing. Counsel is frequently instructed on both sides. The law in relation to ancillary relief is complex and frequently changes. It is also not simply a matter of going through the motions. This is not the type of work that can be done by an unqualified member of staff, a trainee solicitor or even a very junior solicitor. The Client has to be advised on merit, possible outcomes and a risk assessment has to be undertaken at regular stages to ensure that the client and the Legal Aid fund is protected. The issue of proportionality has to be taken into account throughout.

  Our scrutiny of our costs for cases to FDR show profit costs at this stage to work out at between £3,100 to £4,000 (excluding Counsel). However, there are other cases where costs exceed this sum.

October 2006





 
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