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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