Evidence submitted by Sansbury Campbell
Solicitors (LAR 131)
SUMMARY
We are fundamentally opposed to the proposals,
both in principle and in practice. We believe the review has reached
false conclusions based on flawed analysis. If implemented as
envisaged, the "reforms" will drive down quality and
ultimately destroy the supplier base.
1. INTRODUCTION
We are a crime only supplier operating in the
South West of England. We believe we are the largest crime only
supplier in that region. We have 10 solicitors (including one
consultant and five partners), five accredited or probationary
representatives, and four support staff, including a cashier.
As such we have therefore developed the "pyramid" structure,
which has hitherto been regarded as the best model of efficiency,
profitability, and sustainability. Many of our fee earning staff
are computer literate and we have invested heavily in appropriate
IT, with the effect that we are able to keep overheads in terms
of secretarial support to a minimum. All of our staff are housed
in one office so there is no potential for additional costs which
may sometimes result from multiple offices. We do not believe
the practice can be organised or run in a manner which is substantially
more efficient so far as overheads are concerned.
3. The work profile of the firm follows
that of many established senior Criminal Defence firms. As well
as dealing with relatively large volumes of standard Police Station,
Magistrates Court and Crown Court matters, the firm's caseload
is weighted in favour of more substantial matters, both of a fraud
and non fraud nature. The firm has Specialist Fraud Panel membership
and two of the partners are Fraud Panel Supervisors. In the last
year we have conducted two VHCCs, but also, significantly as will
be seen below, a number of serious and complex matters which fall
just short of VHCC status but which would nevertheless under current
payment rules attract enhancement and involve very substantial
input of time by senior and experienced lawyers.
4. We make it clear from the outset that
we do not believe it would be possible for this firm to continue
in practice if the proposals contained in the review of Legal
Aid Procurement ("Carter") are brought into force. We
set out below our reasons for saying this. It will be apparent,
however, that we feel that Carter completely misses the mark in
attempting to address the issue of cost within the criminal justice
system. It is necessary to analyse the assumptions behind Carter
as well as to examine the practical effect of the proposals.
2. CARTER—THE
ASSUMPTIONS
A "market based approach to reform"
is the best way forward
In our view there are many reasons why it is
inappropriate to impose a pure market economy upon suppliers,
as Carter envisages eventually. We do not pretend to set out all
of them, but the main areas of concern which occur to us are as
follows:
(a) Police stations and Magistrates' Courts
routinely close, reopen, or change location. The impact is felt
not only on travelling time beyond our control, but also on waiting.
If an office is sited close to a court or police station, the
practitioner can return to the office if it looks as though there
is a long wait ahead and do more productive work. That is not
an option if the court or police station has been moved somewhere
distant. Practitioners have no control or say over police station
or court closures. The proposal in Carter to pay no travelling
or waiting time in the police station or magistrates court is
bizarre and mystifying in these circumstances. This is not a problem
confined to rural areas. To take two examples (1) the increasing
use by the police of video identification procedures (VIPER) has
been apparent for some time, and has meant that a number of short
additional visits to a VIPER Unit are often necessary (see below):
however in Bristol the VIPER unit has been conveniently located
up to now in a building adjacent to the Crown and Magistrates'
Courts. We understand it is planned to move the unit, with no
consultation, to a location on the fringes of the City Centre
which will entail a lengthy journey. At a stroke the travelling
time such a case will demand has dramatically increased.
(2) Trinity Road police station in Bristol
is the largest custody unit in the area. It houses some 30 cells
and has 2 full time custody officers. There was some limited,
though insufficient, parking at the site which is approx 3 miles
from central Bristol by car. That has now suddenly disappeared.
We now have to find a place to park in a residential side street
as close as possible to the station. Today, as these representations
are prepared, it took 10 minutes to find a place which was sited
some 10 minutes' walk away. At a stroke, therefore, our travelling
time has been increased by 30 minutes for every case we deal with
at that station—a very considerable number. It will be appreciated
this is a meaningful addition to the expenses of the firm.
There has, of course, been no consultation and
we very much doubt there has been an "impact assessment"
of this move. It simply illustrates the futility of pretending
that our costs remain fixed and that one criminal justice agency
will subsidise another. The simple truth is that we are not seen
as a criminal justice agency by all the other members of the system:
we are seen as the opposition, partly since government rhetoric
demands this. In these circumstances, why should they take us
into account?
(b) The Police and Crown Prosecution Service
(CPS) adopt working practices and policies over which we have
no control but which may have huge effects upon the way in which
we have to do our job, and the common number of cases we have
to deal with. Some offences may be deemed not worthy of prosecution,
or budgetary constraints within the police may lead to a lack
of arrests for a period; other offences may be deemed suitable
for diversion. The use of fixed penalties is on the increase (see
para 4.3 below). Two examples of working practices which affect
solicitors are firstly the move to charging standards adopted
by the CPS approximately a year ago; cases routinely in the police
station now take a very considerable period of time and usually
necessitate a bail back whilst a CPS lawyer decides: secondly,
there have been dramatic changes in the way police officers conduct
interviews—even routine interviews now can take a considerable
time due to the policy of constant "summarising" and
repetition which it appears police officers are trained to do
as interview technique. There has been a concomitant cost to the
public purse in the form of defence lawyers' time for which it
appears the defence is now being punished. Other developments
include the redesign of many custody units to prevent the defence
having access to custody sergeants so that defence lawyers have
to wait or queue to gain access rather than having informal contact
as was formerly the case: the routine use of VIPER procedures
and the number of attendances which are necessary for that, mean
that travelling and waiting as well as attendance have all increased:
in the magistrates court, it is noted that the CPS, far from being
a responsive and well resourced public body, often appears chaotic
in its administration and incapable of responding within time
to even the most routine requests for decisions or information.
The effect of all of these developments, intended or not, is to
make the job of the defence lawyer more complex, difficult and
time consuming.
(c) Since 1994, the rates of payment for
Legal Aid lawyers have barely risen. Those of us who have been
in practice since long before that could recognise that even before
that time it was convincingly argued that legal aid rates failed
to keep pace even with inflation, never mind rates being charged
in other forms of legal work. We make no complaint that we are
not able to charge hundreds of pounds an hour in the manner in
of commercial city solicitors. However, this does mean that criminal
defence lawyers are more "vocational" in terms of their
outlook towards the job. Firms cannot compete with the salaries
being offered in commercial firms. Both young solicitors in terms
of their salaries, and partners in terms of their drawings, have
adopted a view that the work is what they want to do. The point
is that we can not compete with the open market. The rates we
have been paid both now and historically have meant that has not
been the case for many years.
(d) Legislative and procedural reform has
proceeded apace, particularly in the last 10 years. Although it
would be a familiar refrain, it is worth pointing out that arguments
in relation to hearsay evidence, bad character, defence case statements
and the like, which are all now a familiar part of the Magistrates
and Crown Court landscape, were unheard of only 10 years ago.
New offences have proliferated. The scope of confiscation and
related proceedings in particular has increased dramatically in
recent years. All of these changes have resulted in cases which
require more time and input to defend: in many instances, the
additional effort and time required is very significant indeed.
Where is the recognition of this?
(e) The complex shifts in population which
have occurred in the UK over the last 10 years or so have had
a very large effect upon the legal aid budget. Interpreters' fees
now consume a very significant chunk of money indeed. Scandalously,
the cost of interpreters is charged to the budget against which
we are measured. Anyone who practices in this field is aware that
the cost of interpreters is enormous. Defence practitioners have
no alternative but to instruct interpreters, often from a great
distance, to ensure that their clients receive the service we
have undertaken to provide them with and for which a peer reviewer
would heavily criticise us if we did not. Although BME firms may
be proportionately more affected, all firms are affected by this
and of course, as the national expense is included in the national
figure, all firms now bear the brunt of this expense.
(f) It is worth noting that the Legal Services
Commission itself has imposed fluctuating requirements on firms
to record their advice and other information on the file. Initially
this was in the form of transaction criteria. Senior managers
later informed practitioners that they did not need to pay heed
to transaction criteria. It then became apparent, during the development
of the peer review system, that the requirements to record advice,
instructions and events went far beyond those originally envisaged
in transaction criteria and amounted in themselves to a considerable
investment in time in a busy police station and magistrates court
practice. We see no guarantee that these requirements will not
shift once more: one small example is the sudden requirement to
obtain and provide information as to the ethnic origin, sex and
disability status of all clients in all cases.
(g) Possibly the greatest single factor of
importance in addressing this issue is to restate that we have
a professional obligation not only to the courts but also, overarchingly,
to our clients. We have to act in the clients' best interests.
We have to follow the clients' instructions unless they put us
in conflict with other professional duties. It goes without saying
that the client will frequently ask the lawyer to adopt a course
of action which is not the most cost effective. Indeed, it could
be argued that the lawyer who argues and investigates each point
fully on behalf of his client is displaying the highest degree
of professionalism: he may also of course be incurring greater
costs. It is accepted that in any publicly funded legal aid system
there will be tensions between professional duties and what the
State should properly pay for. However, the sort of standard and
graduated fees which are envisaged, particularly in the police
station and Crown Courts, offer perverse incentives in respect
of the most difficult cases. Firms which have hitherto been seen
as the most successful in terms of their work profile will become
the least profitable as a result not only of the higher proportion
of more serious cases (which will lose money) but also because
of their more general commitment to quality work.
We therefore believe that a market based approach
pure and simple is wholly inappropriate and fundamentally flawed
in approaching the issue. The so called "steady state"
envisaged by 2009-10 is a complete misnomer, since such a state
has never been achieved in the history of legal aid and criminal
practice and if anything, the pace of change in terms of legislation
and imposed working practices has increased in recent years and
shows no sign of abating.
It is wholly inappropriate to expect criminal
defence practitioners to become prisoners of already inadequate
and anachronistic payment structures, whilst all around them other
agencies are taking steps which have the effect of driving up
their costs without any consultation or control.
Carter pays lip service to the notion that the
costs drivers in the system are external to defence lawyers and
therefore beyond their control. The report is peppered with woolly
phrases and expressions of optimism that government departments
will communicate with each other in order to identify the most
efficient solution to the justice system as a whole. We would
have to say that, based on experience, we feel there are no grounds
for our optimism in this area. (see for example paras 5.160, 6.35).
There is no free market in which firms can make
sensible and informed decisions about their likely costs in the
future. They simply do not know what their costs will be. Some
may be tempted or persuaded to make a reckless gamble in order
to try and stay in business: it should not be thought that the
actions of those who succumb to such pressure, understandable
though they may be, represent any more than a stab in the dark.
Carter indicates that the LSC should develop policies to avoid
this happening, but we have no confidence that this is achievable.
Carter 3.24
It is asserted that the market structure would
avoid constant renegotiation. We do not accept that this would
be the case. As indicated above, there is constant change in the
system, external to solicitors' firms but crucial to the costs
of those firms. This is acknowledged in para 3.25 but the inherent
logical flaw in the argument identified in 3.24 is not developed.
The effect of the proposal is to ask us to gamble with a substantial
amount of money while a stable market comes up with a small return,
when all past evidence suggests no other player in the system
has the slightest regard for our needs (and therefore our costs)
and outgoings can change dramatically in a very short space of
time. How can the costs of the Justice system's inefficiencies
be "transferred to the government"? (3.26) It is simply
a nonsense. The market prices are not sufficiently flexible.
It is worth pointing out that in past years
the costs of inefficiency have been borne by the government through
increased waiting, travelling and preparation time etc. That has
proved to be no incentive to the government to improve the system's
efficiency elsewhere.Of course, any notion that the government
will take any responsibility whatsoever for costs in the system
elsewhere is abandoned by the notion of price competitive tendering
(PCT). In this system, practitioners are simply abandoned to their
fate whilst price, and therefore quality, are driven down to the
lowest common denominator. The system of PCT gives the government
no reason or incentive to sort out inefficiencies in the system
elsewhere.
It is thus submitted that an open market model
is simply inappropriate.
3. POLICE STATION
WORK
3.1 Carter envisages a move to fixed pricing
for each police station case. For our region, the payment will
be approximately £190 plus VAT. The price will stay the same,
no matter whether the work is done by a solicitor, an accredited
representative or a probationary representative, or no matter
whether the work is duty solicitor work or own client work. We
note in passing that it was only some two years ago that the government
increased the rates for serious offences conducted by duty solicitors
personally in the police station. That had appeared to be an acknowledgement
that some work was of particular difficulty and warranted additional
expertise which should be properly remunerated. In our view, this
was in line with the thinking that duty solicitor work is in itself
more demanding given that often clients will have never been in
a police station setting before, and not be conversant with it
or sophisticated in the manner of their responses. They may require
significantly more input from the solicitor and more sensitive
and careful treatment. Extra experience is needed.
3.2 Our analysis of the proposed police
station rate is that this firm would lose approximately £40
per case it currently conducts at the police station. Taken over
the year as a whole (assuming a rate of 3 new police station cases
per day or 1000 per annum—in fact an underestimate), the
loss would amount to a figure of at least £40,000. In a point
which will be echoed below, when a loss of this nature is taken,
it comes directly out of profit. The loss is not reduced proportionately
by savings elsewhere in the system. The effect is therefore hugely
disproportionate on the profits of the equity partners.
3.3 Fixed pricing of this nature introduces
a number of perverse incentives. So far as the police are concerned,
there will be an incentive upon them to make the solicitors or
representatives' life as awkward as possible to extend time in
the custody unit, in the knowledge that some representatives or
solicitors may be tempted to cut short their visit to the police
station and the assistance which they are giving to the client.
Whilst this may be a response which only a very few adopt, it
may not stop the police trying to do it in a large number of cases,
with the obvious effects on profitability for the many, in that
police station cases would become even less profitable. Noone
wants to spend time in the police station at £26 per hour—but
it is at least some compensation for time wasted by others. For
the solicitor's firm, there are enormous difficulties in rewarding
staff who have been prepared to attend the police station at possibly
unsocial hours of the day and night, travelling from their home
addresses which may be some distance from the police station,
when there is no provision for payment of travelling time, and
when the payment of overtime at an hourly rate may either result
in the hourly rate having to be reduced, or the entire standard
fee being swallowed up by overtime payment ( which, given the
rates involved, is by far the most likely). By the way, the current
system is accepted by all as providing a means for solicitors'
firms fairly to reward their representatives and staff when they
attend out of hours police stations, whilst the new system requires
one or other party to assume an unacceptable degree of risk.
3.4 A further perverse incentive is that
it is the relatively easy low level cases which will attract the
profit in this system. The difficult cases, the ones which require
considerable time, effort and expertise to be put into them, will
be those that are least profitable and where the levels of remuneration
may be accurately described as pathetic. It would lead to the
situation where a firm is paid the same amount for a shoplifting
case which took 90 minutes to conclude (plus travel) as it would
for a murder which took 15 hours (plus travel). The "swings
and roundabouts" argument is a wholly inadequate response
to such disparity, given the level at which the standard fee and
the "escape" provision are proposed to be set. The scope
for large "losses" is potentially great, but we cannot
envisage the currently proposed figures producing commensurate
"profits" in other cases. With regard to the so called
"escape" provision, this is set at a figure so high
that it is hard to imagine it will be invoked on more than one
or two occasions per annum. It is, moreover, not an adequate mechanism,
as it still retains the original standard fee for the first 16
hours of attendance, thus rendering those hours hugely unprofitable.
The rate thereafter does no more than restore the status quo,
it does not in any way seek to compensate for the loss earlier
in the case. It is not as if, under the new proposals (see below)
firms will be able to regard time spent at the police station
on major cases as loss leaders as the cases will generate significant
fees in court. For reasons set out below, the bigger the case,
the greater the likely loss.
3.5 As we indicate above, one of the most
mystifying aspects is the proposal that travel should not be paid,
when it is common ground the police station custody units routinely
close and change location, often to far distant areas. We make
the point above that this is not a problem which is confined to
rural areas.
3.6 In short, therefore, we are not opposed
to standard fees in principle, however:
(a) the standard fee proposed is set at too
low a level.
(b) the "escape" provision is set
far too high.
(c) the failure to pay travel and waiting
leaves us exposed to a significant cost beyond our control, which
will give perverse incentives to others to drive up our costs.
4. MAGISTRATES
COURTS
4.1 The proposed regime for Magistrates'
Courts envisages a system of standard fees which is not dissimilar
to that currently operated. However there appears to be no provision
or escape clause for those cases in the Magistrates Court which
take an excessive amount of time due to their complexity and difficulty.
For example, this firm defends several cases a year of people
prosecuted by the Department of Trade and Industry and other regulatory
bodies on serious offices under the Companies Acts and Insolvency
Acts. Those are offences which are highly technical in nature,
but which nevertheless are routinely dealt with in the Magistrates
Court system. In submitting our account at the conclusion of those
cases (they are never standard fee matters), we would routinely
apply not only for a non standard fee but also we would claim
that enhancement ought to be paid. The abolition of enhancement
on the legal aid rate is a feature of these proposals generally.
This does not adequately reflect the range of matters coming before
the magistrates court and the sort of work profile which some
firms (including our own) may have which are more highly geared
towards more difficult matters requiring additional expert assistance.
The possibility of enhanced payment must remain for those cases
requiring the expert input of experienced practitioners.
4.2 The situation which arises for the defendant
arrested "out of area" merits some exploration. These
defendants will often have long standing links to firms some way
from the area in which they are arrested. There may be efficiencies
in allowing the "home" firm to act as they will know
more about the defendant's background, personality and circumstances
and will almost certainly be on hand to deal with witnesses, whether
as to bail or the substantive charge. A firm from a different
area will have to spend time gaining the defendant's trust as
well as ascertaining basic information about him as above. Yet
no allowance for travel, even at the current very modest rates
(which no-one could say amount to an incentive) is made to allow
the "home" firm to deal.
4.3 Additionally, we feel some comment is
necessary regarding the proposed functioning of the system. Carter
envisages firms will be able to be profitable through increased
volume (bigger firms, etc) and explicitly states that the overall
number of defence lawyers should not diminish. As these representations
are being written, the Government is on the verge of introducing
means testing for legal aid, coupled with a wholesale revision
of the merits test. It is anticipated by the Government that these
changes will save approximately £30 million per annum. Also,
in the "Times" for Friday 29 September 2006, the Home
Office is reported to be proposing a huge extension of cautioning
and the fixed penalty scheme to "remove 250,000 cases a year
from the Magistrates Courts". In the light of these developments,
particularly the first which is much more imminent, how can volume
be guaranteed? This assumption underpins the whole of Carter.
It is fatally flawed. The Government clearly has signalled its
intention to move in the opposite direction.
5. CROWN COURT
We regard the proposed changes to the Crown
Court Payment Scheme, particularly the move from taxation to one
of graduated fees for case preparation, to be an extremely damaging
feature of Carter for firms. There is a vast range of cases in
the Crown Court. At the lower end, most are adequately dealt with
under the current standard fee system. At the very top end, there
are very high cost cases which are dealt with under their own
separate case contracts. In the middle, however, there is a large
number of cases of increasing complexity, comprising allegations
of murder, drugs conspiracies, frauds etc., all of which may just
fall short of VHCC status but nevertheless be extremely complex
and require very considerable input by experienced and expert
practitioners. Not only do the proposals at a stroke cut away
the enhancement which has hitherto been allowed for such cases
to reflect the degree of expertise and seniority these cases required,
but the fees which are proposed, based as they are, at least in
part, upon the number of pages of prosecution evidence, do not
in any way adequately reflect the sort of work which a competent
and diligent firm will carry out on behalf of its client.
5.2 The cases described above are often
billed and paid in the region of £40,000 to £50,000. Taxation
is a rigorous process of scrutiny in which the work which the
solicitor has done is analysed to see whether it is fair and reasonable.
It works. Taxation Officers often allow work at a reduced grade
or reduce the amount of time allowed, yet they are approachable
and apply discretion in the right case. According to our calculations
based on a sample of such cases, it is anticipated that the graduated
fee we would receive for similar cases in the future would be
in the region of £8,000 to £10,000. If we carry
out, say, two such cases per annum—and that would be a very
conservative estimate—then the loss to the practice in terms
of profit for those two cases alone would be in the region of
£70,000 per annum. Taken together with the losses identified
from police station and magistrates courts above, this can be
seen as being very dramatic indeed. We do not believe that losses
can be confined to these cases, or to those figures. In total,
we would estimate that in the Crown Court we are likely to lose
up to £100,000 per annum as a result of these proposals.
Such a loss simply puts us beyond the margins of our sustainability.
5.3 A simple example will suffice to illustrate
why the proposed model is simply inadequate. Representing a father
and son charged with conspiracy to defraud and perjury, the chief
Prosecution witness is a partner in a senior London firm of solicitors
acting for a public body. Our clients allege bad faith on the
part of the solicitors/public body in a case which is directly
linked to civil litigation spanning some 12 years. The Crown resists
any applications for disclosure but, doggedly pursued by ourselves,
eventually orders are obtained. The disclosure runs to many thousands
of pages. This is not included in the prosecution page count.
We are also able to inspect the files of our client's own solicitors.
By doing this we can build up a picture to lead to a successful
argument for abuse of process, based upon the grounds that the
defendants cannot have a fair trial as documents are withheld.
On one view, we are adopting the correct approach by seeking early
resolution in attempting to deal with the matter prior to trial.
However, the many hundreds of hours of work which has been required,
wading through and summarising this material and putting it into
a format acceptable to the court, is done without any reference
to prosecution page count which on the face of it is relatively
low. This is precisely the sort of case where the incentives to
be creative and dogged in pursuing the prosecution for disclosure
and in analysing that disclosure in a careful, measured and diligent
way will be reversed. We anticipate our fee in this case, without
the matter going to trial, to be approximately £60,000. Under
graduated fees it would be less than £10,000.
5.4 Carter makes the point that early preparation
and resolution is to be rewarded. This is clearly laudable. However,
it depends upon two things: firstly, the Crown Prosecution Service
has to be prepared to engage effectively with the Defence at an
early stage to have realistic discussions about the basis of the
plea and what pleas may be acceptable. It is our experience that
in early weeks of a case the Crown Prosecution Service is simply
unable to engage with the Defence in this way, particularly in
serious cases. Secondly, our clients, to whom after all we have
a professional duty, often find it difficult to confront their
responsibilities at an early stage. That does not mean to say
that solicitors will not seek early resolution. We are aware that
the incentives are there for us to do so, as are the incentives
for the client in the form of discount for early guilty pleas.
We do not know of any solicitors who would deliberately elongate
a case or fight a case to trial where the client had not been
advised of the credit for an early guilty plea.
5.5 "The amount of relevant unused
evidence introduced at trial" (para 4.59) is stated as being
in some way reflected in the Graduated Fee. We do not see how
this can be the case. The solicitor cannot know what material
is relevant and should be introduced at trial until it has all
been looked at. A huge amount of unused material may be looked
at which is never introduced at trial but which may nevertheless
be important. This is not reflected anywhere in the fee structure.
5.6 Therefore, whilst Graduated fees proposed
will make little difference in respect of the less serious offences,
there will be a huge effect in relation to more serious offences
falling short of VHCC cases. It is noted that the definition of
VHCC cases is to be drawn more widely, but a definition which
makes assumed trial length a necessary element would not be a
sufficiently flexible one.
6. FILE REVIEWS
When the system of contracting was introduced,
solicitors were paid to conduct the necessary supervisory file
reviews that had to be carried out on every fee earner. This is
an onerous task involving many hours work every month by a supervisor.
The fact that it is remunerated currently by the Legal Services
Commission is a helpful means of ensuring that the task of supervision
is given the status which it deserves, as well as compensating
the senior fee earners inevitable loss of fee earning time. In
our firm, the claim for file review time is approximately £10,000
per annum. We regard it as an important quality control on all
levels of fee earning and have a monthly report prepared by our
file reviewer so that we can identify any issues which may arise.
We have seen nowhere in Carter a proposal that payment for file
review should continue and clarification is urgently requested.
6. OUR CONCERNS
6.1 There is a huge concern that the effect
of the proposals of Carter will be to drive down quality in criminal
defence services. The imposition of a "one size fits all"
price structure for all defence work, to be followed by price
competitive tendering, will inevitably lead to a diminution in
standards as firms seek to retain some margin of profit from ever
dwindling income. Carter's answer is that peer review will ensure
that quality standards are met. We have serious doubts about peer
review. It is proposed that only firms with a rating of 1 or 2
will in the future be allowed preferred supplier status. Currently,
only 35% of firms meet that standard. At a recent presentation
by two peer reviewers, designed to reassure the profession that
level 2 was realistically obtainable, no objective information
was available from the peer reviewers as to how this might be
achieved and practitioners were left with the distinct impression
that the peer reviewers' subjective view of the firm and it's
files were based upon "feel" rather than on strictly
measurable and therefore achievable criteria. The fact remains
that the peer review system is not transparent enough to allow
for the certainty which the profession will need. Although undoubtedly
the vast majority of peer reviewers are practitioners of considerable
experience, many of them do not practice regularly or full time
and are felt to be out of touch by frontline criminal defence
practitioners. As such, it is felt that they impose unrealistically
high standards in terms of recording and reporting. The bottom
line is that Carter effectively proposes that a criminal defence
lawyer should receive considerably less money for doing the same
work yet do it to a higher procedural standard. Set against the
backdrop of all the other difficulties faced by criminal defence
lawyers, this would be risible were the consequences not so serious
for individual firms, partners and their staff.
6.2 The benefits to the system, outlined
in para 5.152, we believe are illusory. There already is a system
of quality control (in the form of peer review), and there are
incentives for early resolution where appropriate through standard
fees. It should not be forgotten our duty is essentially to advise
clients of the benefits to them of early resolution by guilty
plea where appropriate. The new system envisaged by Carter not
only encourages early resolution in all cases, it punishes the
defence for cases which take time even where there is a good reason
for this, and even if it may be as a result of the client's instructions
contrary to the advice of the solicitor. There is no confidence
that the rates proposed mean that sufficient remuneration is provided
for cases which are more complex and need additional work.
7. SUSTAINABILITY
7.1 It is not believed that the proposals
in Carter amount to any sort of sustainable future for criminal
legal aid firms. We identify the following problem areas
— Firms' structures proposed are very
high ratios of equity partners to fee earners. This has considerable
implications, not only for those who are or aspire to be equity
partners but also for solicitors. The static nature of salary
scales envisaged is a major factor. The prospect of advancement
to equity partner will be considerably reduced. In a world where
law students leave college often saddled with £20,000 plus
worth of debt, a career in criminal defence work will become even
less attractive, the more remote the prospect of earning a higher
income as a partner. Recruitment is already extremely difficult.
This will make it much worse. Who will want to embark upon a career
in criminal defence work when the potential returns are so small
and remote?
— It goes without saying that the implication
of the report is that there will need to be much painful restructuring
("departnering" of several who are already partners).
This ignores the fact that many criminal defence practitioners
are senior in years. Quite how firms are to achieve the restructuring
envisaged, given the capital account balances which many will
hold in their practices having accumulated over the years, and
the overdraft indebtedness which will exist, is impossible to
foresee.
— The sort of ratios envisaged by Carter
of the equity partners to fee earners assumes that the equity
partners will be prepared to take on a massive level of financial
risk. To take one example of the firm of 27 fee earners with only
two equity partners, the salary bill of that firm, according to
Carter's own figures will be £815,000 per annum, presumably
plus employers National Insurance contributions. It is highly
likely the firm will carry an overdraft, be committed to a lease
which may stretch forward for several years, and may have other
expensive lease payments to make on IT equipment and software,
and other items of office equipment. It takes only a small number
of fee earners either to leave suddenly, to go on long term sick
leave, or fail to perform for whatever reason, or for one of the
equity partners to become ill, for the entire financial structure
of what would be a large practice to come under immediate threat.
The potential losses are enormous. The risks are huge. The proposed
profits wholly inadequate to cover the level of investment proposed.
The fact that the report talks in detail about the willingness
of lending institutions to support solicitors firms means that
it is envisaged firms will need financial support to survive.
This is, frankly, insulting and is a very clear illustration of
the lack of sustainability inherent in these proposals. If further
financial support is needed from banks in the short term, then
that support will need to be extended year on year. That is not
a sustainable situation. Of course such a situation would impose
further pressures on firms to retain or win contracts (see 5.113)—a
further factor which is likely to distort the pricing of the market.
Essentially the government, by starving firms of funds, and forcing
them into debt to survive, will be making them so desperate they
will accept below-market rates in order to maintain any semblance
of income.
7.3 There is considerable doubt as to the
reliability of the statistical case put forward. Dealing with
the illustrated firms at Annex 5.1, and using the 27 fee earner
firm as an example, we have focused upon the work which is said
would be carried out at the Magistrates' Court. Using the figures
in table 5.1.4 for the proportion of hours spent in the Magistrates'
Court, and the chargeable hours figures from 5.1.3, it is apparent
that Carter envisages a firm of this size would spend 6,200 hours
per annum on their magistrates court cases.
Combining the percentages contained in table
5.1.7 and average case lengths from table 5.1.5, it can be seen
that a total of 928 cases would be commenced each year by that
firm.
This amounts to an average of only 3.5 cases
per day approximately and, more importantly, generates an income
(based on the proposed standard fees) of only £341,316. The
total turnover of the firm (table 5.8) is £1,637,489. Therefore,
Carter envisages magistrates court turnover as being only approximately
20% of the total turnover of the firm. Perhaps even more surprisingly,
a firm which has 27 fee earners which is only commencing approximately
3.5 cases each day in the magistrates court clearly has insufficient
work to survive. Based on our own and anecdotal experience of
other firms' caseloads, we do think this can possibly represent
a realistic model of a firm of this size and we therefore call
into question the authenticity and reliability of the analysis
in terms of the impact on so called model firms. If the illustrations
are unreliable, as we believe them to be, our fears and concerns
that Carter has "got it wrong" are given flesh.
8. CONCLUSION
Carter is about the way in which solicitors'
firms are remunerated. Inevitably, we have had to focus on the
detail of that to address what we believe are the flawed assumptions,
leading to conclusions which would be disastrous for the criminal
defence legal services market. Whilst this response has dealt
with some of the minutiae of the practical consequences, we believe
it should be borne in mind at all times that enormously serious
issues of principle are at stake. It should not be forgotten that
at the heart of this lies the criminal justice system and the
representation of often vulnerable defendants when facing the
full power of the State. A sustainable criminal defence service
is essential as a bulwark against the excessive use of power by
the state and the erosion of individuals' liberty. We believe
that the legal aid system can be seen as part of the Welfare State,
built up to protect those who have difficulty in assisting themselves
in dealing with difficulties in their lives. We do not believe
that the model put forward by Carter represents anything approaching
a sustainable future. We believe that the rights of the individual
as a result are seriously under threat and that the phrase "criminal
justice" is in danger of becoming an oxymoron in this context.
As such, these proposals can be seen (intended or not) as an undermining
of the Welfare State and an attack on an independent legal profession.
This is not about lawyers' pay: it is about the continued viability
and sustainability of an essential public service. We strongly
urge the Government to think again.
October 2006
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