These comments reference to the
headings, paragraph, and page numbers in Lord Carter's report
EXECUTIVE SUMMARY
3.
Even before legal aid franchising was introduced
the quality of legal advice and representation received by the
public from the professionals, (whose dedication and integrity
Lord Carter acknowledges), has never been subject to any general
criticism of which I am aware.
Whilst like many of my colleagues I am not opposed
in principle to quality assurance measures, and indeed I have
complied with several audits, the measures so far tried have not
been beneficial and have added to the legal aid budget.
The important point which this report does not
take sufficient account of is that Legal Aid work has only been
marginally profitable for many years, and the proposals will inevitably
result in substantial loss making by all suppliers in certain
areas.
The Government must acknowledge that its suppliers
have been operating on low profit margins for many years and neither
peer review, nor, I suspect, any other quality assurance system,
would allow suppliers to maintain the quality of their services
with lower profit margins.
8.
In the light of the Criminal Justice act 2003,
anti-social behaviour orders the new sexual offences act and numerous
other new developing areas of law, and the increased number of
requests for legal representation in the police station, reducing
the criminal defence budget by 20% without reducing the quality
of the service is totally unrealistic.
15.
The proposed restriction on client choice of
legal representative is typically over prescriptive and may contravene
article 6 ECHR. By the time the masterplan of replacing the existing
market with the new engineered market by redefining boundaries
to force mergers and bring about the "cull" has failed,
the position will be irrecoverable.
16.
The levels of fixed fee proposed for police
station work are totally inadequate and suggest a fundamental
ignorance of the nature of that work, or something more cynical.
I have two cases presently on my desk in which
police have rebailed the client more than four times whilst making
a decision whether or not to charge with the CPS.
Even if the apparent initiative to replace all
duty solicitors with cheaper accredited representatives on the
duty scheme were successful firms could not make a profit on the
fixed fees proposed in these cases.
This falls into the category of inefficiencies
over which the defence has no control that Lord Carter refers
to in his report, but apparently takes little or no account of
in his recommendations.
The travelling and waiting rates for a solicitor
attending a police station as own solicitor are approximately
£25.00 per hour, the approximate private hourly rate for
that solicitor in Greater London is £250.00.
Travelling and waiting costs have always been,
at best, a loss leader for criminal defence solicitors, and have
never provided more than minimum compensation for lost billable
hours. I cannot see how police station work can be remunerated
by fixed fee without abolishing or restricting the power of police
to bail a client to return to the station.
"If you are trying to change everything
you can't leave something unreformed."
Said Lord Carter of Coles in his interview,
published in the Law Society's Gazette 7 September 2006.
I personally cannot understand why the prosecution
should not be required to decide whether to charge or not before
the end of the first period of detention, or, at most after one
bail back.
If defendants must be bailed back again and
again, as they frequently are, continuing to pay the minimal travelling
and waiting rates would be the most cost effective way of keeping
the system viable.
17.
I do not oppose the introduction of a graduated
fee scheme in the Magistrates' court provided that it realistically
takes account of the numerous adjournments which occur due to
prosecution inefficiency, and remunerates the defence appropriately.
The present graduated fee scheme in the Crown
Court pays £46.50 gross and no travelling expenses for case
progression hearings which in my experience are almost never due
to defence issues.
19.
I am in agreement with the principle that junior
advocates should receive more and I do not think the proposed
changes will cause any hardship to Queens Counsel, however I regret
that the Government has seen fit to delay the changes until next
April.
20.
Since the very high cost cases are to be controlled
by individual contract managers I see no justification to restricting
a defendant's right to free choice of representative.
Of course it is possible to imagine circumstances
in which a particular firm would be unable to provide the best
service to a client, but generally any firm should be allowed
to represent a client in a VHCC at the rates set and subject to
the contract manager's budgetary controls.
The proposed panel serves no real public interest
and may be susceptible to challenge under article 6.
27, 28.
I am not opposed to quality assurance measures
but I repeat that quality cannot be maintained at reduced cost
when the profit margins are as slim as they presently are.
30.
The figures quoted here are depressing indeed,
for anyone who knows the amount of work required to run any individual
case.
The philosophy appears to be the antithesis
of that applied to the revised graduated fee scheme in the Crown
Court, with 40 fee earners managing the work and a small number
of partners reaping the profit.
I foresee the recruitment of young professionals
into criminal defence work as almost impossible in the future
unless some guarantees of proper remuneration are found.
44.
It is difficult to understand how Lord Carter's
proposals to reduce the overall budget by 20% when the public
demand for services is increasing, and incidentally putting 800
firms out of business, is calculated to help the atmosphere of
mistrust and suspicion to which this paragraph refers.
LIST OF
RECOMMENDATIONS
3.1
Best value tendering (called block contracting
in 1995, and price competitive tendering more recently) will kill
the goose that laid the golden egg.
For decades the small solicitors firms who have
supplied criminal defence services have operated on small profit
margins to provide a personal service to their clients.
Lord Carter formally acknowledges the risk that
it will destroy the "supplier base" elsewhere in his
report, but there is nothing to counteract those concerns.
Surely it is obvious that reducing the number
of firms competing for work and at the same time reducing profit
margins is anti-competitive and bound to lead to lowering of standards
all by itself?
4.1
The construction of new boundary areas seems
principally aimed at controlling the prospective bidders for new
contracts, herding groups of firms together to force mergers and
forcing others out of business in the drive towards creating fewer
larger suppliers.
Controlling travel costs could be easily accomplished
by setting a fixed fee for each police station under the current
boundaries.
Also, although the report has not considered
this, an abolition of the restriction against clients paying privately
towards travelling expenses and other disbursements might also
be of assistance in some cases.
4.2
This recommendation is the most insidious of
the report.
For more than 20 years the duty solicitor scheme
has operated to provide high quality legal representation for
persons under arrest and although the test now taken by accredited
representatives is similar, they are not solicitors.
This recommendation, coupled with the proposed
police station fixed fee scheme and assignment of duty solicitor
slots to firms would inevitably result in detainees being attended
only by accredited representatives.
The only way for firms to manage the losses
they would sustain under the fixed fee scheme would be to send
the most poorly paid representatives and that solicitors would
withdraw either immediately or gradually from attending the police
stations.
The Government needs to look ahead and consider
the electoral impact when miscarriages of justice are attributed
to poorly paid and inexperienced representatives attend detainees
where a solicitor with court experience might be needed.
If the proposals are adopted the name of the
scheme should be changed to "The Duty Representative"
so that the public is not misled.
The proposal to strip individual duty solicitors
of their entitlement to be allocated duty solicitor slots is anti-competitive
and unnecessarily undermines an important individual qualification
and the individuals ability to compete in the work place.
That proposal inexplicable unless it is intended
to render the qualification of Duty Solicitor irrelevant and to
restrict public access to representation by them.
Duty solicitors are not the problem, they are
the best qualified and most experienced professionals to deal
with duty solicitor work, and the effective abolition of their
rank would be the most retrograde step possible to imagine for
the quality assurance standards that Lord Carter states he wishes
to maintain.
4.5
The CDS direct initiative is stated to aim at
"restricting defendant eligibility" which must be a
dangerous objective to set in itself.
If detainees want to be represented by a solicitor,
they should be entitled to choose one, not a representative, and
the decision whether provide representation should equally be
taken by a suitably qualified and experienced solicitor.
4.7
My comments are at 16 above. Police are mis-using
their bail back powers and a fixed fee scheme could work if they
were required to charge or release at the end of the first or
second period of detention, but that would have to be strict and
would require an amendment to s 37 PACE 1984.
Otherwise some payment for travelling and waiting
must be maintained, or the scheme will collapse.
4.17
Setting up a new specialist panel is anti-competitive,
unnecessary, and will restrict client choice without saving any
public funds.
If there are contract managers assigned to keep
costs down the only benefit of such a panel would be to the panel
members themselves, and once formed, it is most unlikely that
any other firms would be able to join.
Like the best value tendered programme, it will
lead to a small group of firms over which the LSC will have either
too much control, giving rise to concerns over independence, or
too little causing concern over cost.
4.18
If best value tendering proceeds there will
be no other firms available to compete for contracts after the
"cull", resulting in an anti-competitive situation,
the opposite of the reports stated intention, and concerns over
independence and control over cost.
What will the LSC do when it learns that all
the small number of firms it has created through this process
discover at the same time that they cannot operate at a profit?
The small firms that this process will put out
of business have been subsidising the Government for years by
supplying these services at low profit margins and they will no
longer be there to pick up the pieces when this initiative fails.
5.8
No explanation whatever is provided in this
recommendation as to what "support and assistance" will
be offered and what Lord Carter means by "restructure".
Surely it has not escaped Lord Carter's attention
that firms are most unlikely to seek to merge their partnerships
in order to pursue unprofitable work?
How exactly is it envisaged that firms who do
not wish to merge would form consortia?
It appears that the proposed fund is being set
up in order to enable the LSC to begin to address an issue that
should have been run to ground and fully explained by this report.
PURPOSE OF
THE REVIEW
25.
"right for client to choose critical to
commercial viability of suppliers" this is another example
of a stated principle that is wholly contradicted by the substance
of the recommendations, as if the sections were written by different
people.
The recommendations are all restrictive in effect,
especially towards client choice.
Page 42.
"Legal aid firms are amongst the most efficient
of legal firms—particularly those that are crime only firms..."
Once more, the way forward is not to cull 60%
of these highly efficient firms.
The recommendations, if implemented, will kill
the goose that lays the golden egg.
Leaving aside the Law Society's LEGG report
that undermines the reliability of the figures used in Lord Carters
report, the radical and destructive "market engineering"
it proposes has never been tried before, and, as comments elsewhere
in the report show, no-one can predict, (beyond the fear of destroying
the supplier base), what the long term effects would be.
Page 48-49 paragraphs 165-173.
The loss of costs due to ineffective hearings
described in these sections is entirely beyond the control of
defence representatives.
I have never heard of an ineffective hearing
caused by the defence losing its file, and defendants are bailed
to return to court so their solicitors cannot be blamed if they
disobey the court.
Neither is lack of communication by the defence
a cause of ineffective hearings.The prosecution is under a duty
to make primary disclosure in the Magistrates' court and usually
the defendant has made his defence clear in police interview.
The defence is not obliged to serve a defence
case statement in Magistrates' court cases and the distinction
between "undermine the prosecution case" and "assist
the defence" should not be an obstacle to the prosecution
giving fair disclosure.
It makes no sense, commercially or morally,
to penalise the defence by withdrawing the travelling and waiting
costs for delays that are not attributable to the defence.
Procurement Strategy to 2010 (page 52 et seq)
Paragraphs 5-10.
Recite some of the risks associated with implementation
of the recommendations, but no example of a comparably radical
set of reforms being successfully implemented (or even attempted)
has been given.
Either insufficient weight has been applied
to these risks or insufficient consideration to their avoidance.
To intentionally and irrevocably decimate the
supplier base whilst gambling that none of the identified risk
will occur when the few privileged firms are left to provide the
services is brinkmanship.
Paragraphs 11-13.
Creation of a Public Defender service with large
regional firms competing by price competitive tendering whilst
allowing clients to choose an "alternative non-contracted
qualified supplier by using a means tested legal aid voucher which
they could top up".
This option has the benefit of allowing the
LSC to pursue its experimental controlled market, those large
firms which believe they can make a profit in that way to compete
for contracts, and at the same time preserve true freedom of choice
of legal representative for clients.
Most importantly, if the LSC's initiative fails
(which I believe it ultimately must) there would still be a supplier
base left to rebuild the system from.
There are two caveats to this:
Firstly, the term alternative non-contracted
qualified suppliers must not be a euphemism for some regime of
intrusive controlling or monitoring by the LSC, and allow firms
to operate entirely independently; and
Secondly the legal aid vouchers must not be
for derisory amounts, or subject to controls or restrictions so
that there would be no incentive for the alternative non-contracted
qualified suppliers to act.
In giving my qualified approval to option 4
I have noted that it is described as "substantial unmanaged
change" but the difference between "best value tendering"
and "price competitive tendering" is practically impossible
to discern and of no consequence to the Governments objective.
Furthermore, since no explanation has been given
why option 4 would be more effective with even fewer firms operating
than would be the case under the so called "market-based
approach" I cannot see any inconsistency with allowing as
many large firms to bid for the contracts as may wish to do so.
THE MARKET-BASED
APPROACH
Paragraph 17.
Lord Carter acknowledges that there already
exists a long standing market economy in which suppliers compete
to provide legal services, and even expresses a desire to harness
this.
If his Lordship would fully recognise the potential
of small firms to safeguard the sector by providing a safety net
should the new contracting regime fail most or his recommendations
could be pursued.
If Lord Carter would allow independent firms
to act for clients who wish to be represented by them with vouchers,
as proposed in option 4 most of the opposition to his proposals
would fade away.
Paragraph 29.
Lord Carter recognises that "best value
tendering could produce a loss of suppliers such that demand for
legal aid services cannot be met", I propose that option
4 could safeguard change as an alternative to risking all on an
unknown business model. Incidentally, it would restore true competition
and freedom of choice.
STEADY STATE
MARKET FOR
CRIMINAL DEFENCE
SERVICES
Paragraph 46.
The market for criminal defence services has
been in turmoil since the introduction of legal aid franchising
with firms seeking to comply with added bureaucratic requirements
to compete with one another, and each time we passed a test a
new one has been created. The next test will be peer review.
There can be no business sector within the United
Kingdom that would more earnestly welcome a "steady state
market", however the wholesale destruction of so many of
the firms that have supplied these services is the opposite of
what is needed.
The purpose of stripping duty solicitors of
their personal entitlement to slots on the duty rotas is to encourage
large firms to indulge in the proposed reforms but the steady
state market can be achieved without resorting to such tactics.
Simply by allowing clients to choose their own
solicitor with legal aid vouchers under option 4 Lord Carter would
be leaving the door open to new entrants to the market, (paragraph
53), whereas requiring high volume bids without that safety net
would have exactly the same effect as the volume requirements
of legal aid franchising—"advice deserts" five
years later.
Paragraph 91.
I note with interest in this context that paragraph
91 on page 63 of the report now recommends debt, housing and benefits
should be repackaged together under the new name "social
welfare service".
Perhaps Lord Carter might also consider including
consumer work within this category since most people suffering
those problems also have issues concerned with consumer law.
Consumer law is another area of work in which
advice deserts were created by the volume requirements of franchising,
and it will be interesting to observe how successful the Government
is in attracting suppliers of those legal services now.
I believe the volume requirements of the current
proposals, in combination with some of the other proposals will
lead ultimately to a shortage of supply in the criminal defence
sector.
I have not commented further on any of the succeeding
paragraphs of the report because I have already done so earlier.
CONCLUSION
I have worked full time performing legal aid
work since 1978 and prior to the introduction of legal Aid franchising
around 1995 the system was in the "steady state" that
Lord Carter desires. Firms knew where they stood in relation to
their clients, their competitors, and income streams.
Since then there have been a bewildering series
of changes culminating in the latest proposals that may be intended
to remedy the problems created over the last 10 years or simply
to force through the original "Block Contracting" initiative.
In my opinion the initiative to create large
firms to tender for large tranches of work will ultimately prove
counter-productive, and that will certainly manifest itself within
five years, if not by 2010.
The key feature of all the failed initiatives
since 1995 is that they have all been imposed without the agreement
of the profession, and there has never been a stronger and more
unified resistance within the profession than there is to Lord
Carter's proposals in their current form.
I believe there is merit in some of the proposals
but only if the legal aid voucher system described as option 4
is adopted.
Public demand for criminal defence services
is set to increase and all the risks of restricting the contracts
to large firms are identified (though not, in my opinion, taken
seriously enough).
If that system failed, and there are no small
firms practising criminal law, the whole criminal justice system
would collapse.
Clients should be allowed true choice and solicitors
firms which are regulated by the Law Society should be allowed
again to service their clients needs.
The over regulation of publicly funded legal
services since 1995 has led to a massive increase in administrative
costs of the LSC, alienation of solicitors, has achieved no saving
to the public purse, and no increase in true quality of the service.
The "market-based experiment", as
I would call the best value tendering process, could be tried
provided there is some contingency plan, and that could be achieved
by restoring client choice through option 4 and legal aid vouchers.
October 2006
