Examination of Witnesses (Questions 104-119)
PROFESSOR ED
CAPE AND
PROFESSOR JUDITH
MASSON
23 JANUARY 2007
Chairman: Professor Masson and Professor
Cape, welcome. It is good to see you both again. We have seen
you both in different capacities in the past. We have to declare
our interests first, this being a public session.
Bob Neill: I am a non-practising barrister.
Jeremy Wright: The same goes for me;
in the field of criminal law.
Keith Vaz: I am an employed barrister,
but I do not do legal aid.
Q104 Jeremy Wright: Professor Cape,
may I start with you and ask you about the basis for the Carter
Review? As a Committee we would like to think that Lord Carter's
conclusions are based on a solid foundation of evidence and research.
Is that your perception? Has there been adequate research on which
Lord Carter could have based his report or not?
Professor Cape: Basically not;
not in my view. It depends quite what you are looking for, but
if you are looking for research to produce results on why legal
aid costs have been increasing, then as far as I am aware there
is only one piece of research that has ever been done on that,
which was research that Professor Richard Moorhead and I did for
the Legal Services Commission in 2005. The results of that were
quite controversial because rather than see it as being principally
the lawyers themselves who were driving up the cost, what we concluded
was that it was principally government policies and changes in
procedures which were the biggest drivers of cost. What we found
was that it was very important to make a distinction between the
three major areas of criminal legal aid, Crown Court, Magistrates'
Court and police station advice and assistance because the pictures
were quite different between the three. The only area of major
increase in expenditure has been Crown Court legal aid and that
has been true over the past five or more years. It is very difficult
to get to the facts about this because the statistics which are
recorded in relation to legal aid expenditure do not simply match
up with the number of defendants who appear in court and who make
the claim for legal aid, so it is actually quite difficult to
get at root causes. What we found with the Crown Court was that
quite a large part of the increase could be accounted for by an
increase in volume, an increase in the number of claims, and since
most defendants in the Crown Court get legal aid that meant that
there was an increase in the number of cases appearing before
the Crown Court and that was obviously exerting upward pressure
on expenditure. The average cost per claim did not and has not
significantly increased; it has increased, but not that significantly.
If you look at volume and take the period between 2000 and 2003,
then the volume of claims increased by 10%. Of course it is the
expenditure on Crown Court legal aid which makes up the vast majority
of the increase in legal aid costs. Just very briefly to complete
the picture and come back to the question, expenditure on Magistrates'
Courts' legal aid essentially can be discounted in terms of increases
to legal aid expenditure. If you look at expenditure over the
past 12 or 13 years, expenditure has more or less tracked inflation
throughout that period of time. Many people attribute that in
particular to standard fees, which is the method of payment for
solicitors in Magistrates' Courts. There has been some increase
in volume. I am surprised there has not been a greater increase
in volume, particularly because of the increased use of custodial
sentences by Magistrates' Courts, which is bound to have an upward
pressure on the numbers of those who get legal aid orders, and
expenditure on the average cost per case. To me it is surprising
that Magistrates' Courts' costs have not gone up more than they
have but basically they have tracked inflation. As far as police
stations are concerned, the overall expenditure more or less tracked
inflation until the turn of the century. There was an increase
then, but for the past four years expenditure has been increasing
at the rate of about 5% per annum, so a little bit above inflation.
That is almost certainly because the number of cases has gone
up. Why has that gone up? Because, apart from anything else, things
like the Government's Narrowing the Justice Gap policy
specifically wants more people arrested and processed. More people
are being arrested and processed and therefore almost inevitably
there is going to be a greater number of people wanting a lawyer
at the police station. So in many respects, yes, the increase
there is not that significant. In terms of expenditure there has
been an increase, of about 5% per annum since 2001 and an increase
in volumes of about 4.4% per annum since then; so expenditure
has gone up but volume has gone up more or less to match that.
The problem, going back to your question, is that Carter did not
really conduct any research to try to understand in any greater
detail why legal aid costs have been increasing and that is a
fundamental problem. If you do not understand why they have been
increasing and do not understand the true nature of that increase—because,
although in overall terms it is quite significant, the vast majority
of that comes from the Crown Court and quite a large proportion
of that increase is accounted for by a very small number of cases—if
you do not understand why it has been going up, I do not understand
how you can know whether the proposed solutions are going to solve
the problem. In general terms my view is that the proposed solution
will not solve the problem because the fundamental causes have
not been understood, let alone been tackled.
Q105 Jeremy Wright: Coming back to
the specific causes for the increase in the budget, from what
you are saying it is pretty clear that the increase comes about
as a result of Crown Court criminal cases predominantly.
Professor Cape: Predominantly.
Q106 Jeremy Wright: And in relation
to those, the very high cost cases are a significant element.
Across the piece, taking into account VHCC cases as well as the
standard Crown Court criminal cases, have the costs per case noticeably
increased and, if they have, what might be the explanation for
that?
Professor Cape: I am sorry but
in a sense this is a slightly different point. It has actually
been difficult with Crown Court cases to work out whether and
to what extent the average cost per case has increased, because
the notion of a case has certainly changed over the period since
the beginning of this century. Cases are paid for in terms of
the claims which do not necessarily relate to the number of cases
and there were changes in that relationship between the number
of cases and the number of claims in the early part of this century.
As a result of that, you do not have a fixed notion of a claim
by which you can then assess average costs per claim.
Q107 Chairman: What is the difference
between a case and a claim?
Professor Cape: There is first
of all difficulty in determining what is a case: is a case one
defendant in relation to one or a number of charges? What happens
if those charges change during the course of the trial process
and also what happens in terms of whether co-defendants are represented
by the same lawyers or not? You have that kind of problem. A case
may be conceived as being one client being represented in relation
to either one or a number of charges or indictments in the Crown
Court, but where there have been changes is in whether the lawyer
can only make one claim in respect of that case or whether they
can make a number of claims. It may sound odd that you could make
a number of claims in respect of the same case, but the rules
have changed both in the Crown Court and indeed in the Magistrates'
Court and indeed actually in the police station as to the stage
at which you could make a claim. To give an easier example, in
the case of the police station, in the past if a lawyer went to
a police station for a client on one occasion and that client
then was bailed back to a police station on a future occasion,
but in respect of the same case—so they were not charged
on the first occasion, they had to go back—in the past the
solicitor could make a claim for the first attendance and a claim
for the second attendance.
Q108 Chairman: Overall, the number
of claims which can arise from each case has tended to go down
rather than up.
Professor Cape: Yes, and unless
you can take account of that, it will appear as though the average
cost per claim will have gone up, but that does not mean to say
that the average cost per case has gone up. If you are going to
make your proposals as to how you should deal with this, then
you need to get to a very good understanding of that because if
you do not, really all you know is what the overall legal aid
expenditure is but you cannot rely on figures such as the average
cost per claim.
Q109 Jeremy Wright: Following that
through, it would be equally difficult presumably to make any
kind of assessment as to how efficiently each individual criminal
lawyer was dealing with each case and whether or not they were
making appropriate economies.
Professor Cape: That is right.
One of the things that I think is a great deficiency is that,
as far as I am aware, no work has ever been done to try to work
out what work a lawyer should do in relation to a case. Of course,
you would have to look at different kinds of cases; let us say
you would have to separate something like a murder or a rape from
something like a relatively straightforward theft. However, no
work has ever been done to try to gauge or even quantify what
work ought to be done in respect of a case. It has always really
been done on the basis of what has been claimed in the past and
either it has gone up or it has gone down, without any real understanding
of what the constituent parts of that claim are and whether they
are justified.
Q110 Jeremy Wright: Accepting the
scarcity of research to help you deal with this, Carter obviously
focuses predominantly on the costs of criminal lawyers, whether
or not they are spending the legal aid budget wisely, and the
underlying assumption appears to be that the increase in expenditure
on criminal legal aid is because criminal lawyers are not doing
this as efficiently as they could.
Professor Cape: Yes.
Q111 Jeremy Wright: What else, in
your view, might explain the increase in the legal aid budget?
Professor Cape: When we carried
out the research for the Legal Services Commission on cost drivers,
we only had a very small research budget and it was carried out
over a very short period of time, so we were not able to quantify
the various influences. What we were able to show was that a whole
raft of changes were affecting both the work that the lawyer had
to do and therefore the expenditure. That depended partly on whether
you were looking at police stations or Crown Court. Just to give
a couple of examples, let us take a relatively recent example
in relation to the police station. The Government, as a result
of the Criminal Justice Act 2003, have moved to a situation where
rather than the police charging suspects, this is largely done
by a Crown Prosecutor, who may be located in the police station
or may not, depending on the time of day and things like that.
In the past, the custody officer would make an almost immediate
decision about whether someone should be charged. Now that file
has to go to the Crown Prosecutor. The reason why this was done
was to try to save costs later on in the process; it would reduce
the number of discontinuances because, in the Government's words,
it would be the right charge the first time, kind of thing. So
it was to save costs later on which it may well do. The problem,
thinking about the work the lawyer has to do, is that they are
told by the custody officer he is going to refer the case to the
Crown Prosecutor, he does not know how long they are going to
take to make their decision and the CPS have issued guidance which
says that the normal period by which they must make the decision
should be within three hours of the case being referred to them
by the custody officer. The custody officer will not necessarily
know, so the defence lawyer is faced with either having to wait
whilst that decision is made, and they do not know how long that
is going to take, or going back to their office, doing other work
and then coming back again. Why do they need to be there at the
time of charge? Partly because of the right to silence legislation
going back to 1994, which says that if a suspect is silent on
being charged, then adverse inferences can be drawn. That is an
example; you cannot necessarily call it what extra work has to
be done, but what extra time might have to be spent by the lawyer,
either waiting for the Crown Prosecutor to make that decision
or going away and coming back again. If they do that, that will
of course increase travel time and if you look at police station
legal aid, it is travel and waiting time which are the elements
that have gone up over the past five years. The part of police
station legal aid in respect of advice has not gone up, or only
in line with inflation: it is travel and waiting. Well there is
one very good example of why it has gone up. It was done to save
costs further down the line, which it may well do, but the legal
aid implications were never thought through. No legal aid impact
test was done, as far as I know, in respect of the knock-on cost
for the legal aid budget. If you take the Crown Court, just to
try to wrap up the answer to that question, then what our research
showed, although the evidence was difficult to get at, was that
there was some evidence that the character of the cases being
dealt with by the Crown Court has increased in seriousness over
time. In other words, less serious cases are now more likely to
stay down in the Magistrates' Court so that the cases that the
Crown Court is dealing with are more serious and therefore you
would expect more work to have to be done and therefore that has
implications in terms of costs.
Q112 Jeremy Wright: I suppose the
final element is what part, if any, do court delays play in that?
Certainly Mr Neill and I will testify to the fact that you can
spend quite a long time waiting for your case to be called on
in the Crown Court and that obviously has a bearing on cost as
well. Were you able to make an assessment of how much that contributes?
Professor Cape: No, we were not
able to make an assessment of that and I understand that some
work has been done by the DCA on the number of adjournments rather
than waiting time. One of the problems for us in trying to find
out about the effect of waiting time is that the information is
not now routinely collected. Prior to contracting, introduced
in 2001, it would have been possible to get at waiting time to
an extent, but the reporting information or the information that
lawyers had to report to the Legal Services Commission in making
their claim after contracting was considerably less than before
and that kind of information is not now routinely available. You
would have to do a specific research project to discover the information
about waiting times and whether they have increased or decreased
and, as far as I know, that has not been done.
Q113 Bob Neill: Did your research
suggest that perhaps some of the procedural changes which have
been made to reduce the amount of time and complexity of issues
in front of the jury in criminal cases has increased the workload
that may be claimed by lawyers under legal aid, for example the
preliminary hearing on their character applications or written
submissions in advance on applications to have video-link evidence,
something of that kind?
Professor Cape: Unfortunately,
we were not able to look at that at the Crown Court stage, partly
because it was a very short research project. The Legal Services
Commission wanted the results within three months; as is so often
the case, they want the answers before you have even been commissioned
to provide the answers. There is evidence from other areas that
that kind of thing has an effect. If I can give an example from
a completely different area, from the police station stage going
into the Magistrates' Court, sometime in the late 1990s, as a
result of what was commonly known as Narey, the police were expected
to make their cases court-ready because the target at that time
was to reduce the amount of time spent between first appearance
in court and disposal. In order to be able to meet the targets
on that, what that meant was that the police delayed charging
people unless they really had to, if it was a significant case
or bail was denied. They would bail the person to come back on
a future occasion to give them time to make their file court-ready.
That kind of phenomenon is common throughout the system and that
is why, in my view, as far as legal aid is concerned, if you are
going to make changes—and one cannot state too much the
fact that what Carter is proposing is a revolution in terms of
legal aid—you should not do that unless you understand the
way in which the system works so well that you could predict that
if you make that particular change, like files having to be court-ready,
it is going to have that particular kind of consequence, charging
is delayed. That information is just not there because the work
has not been done.
Q114 Bob Neill: So if we are to get
a real grip on the drivers, particularly on Crown Court defence
work for example, then you would need to do more work to deal
with that.
Professor Cape: That is my view;
yes.
Q115 Bob Neill: And I suppose the
growth in disclosure, for example, would be yet another example
of that.
Professor Cape: We have many examples.
In terms of impact on legal aid expenditure, if you go back to
the mid-1990s, you have things like the right to silence changes,
which inevitably meant that the quality of advice and the amount
of advice had to be greater, disclosure provisions, which originally
came into force as a result of legislation in 1996, have been
developed by the criminal procedural rules which require defence
lawyers to disclose to a much greater extent than they used to,
which inevitably requires work to be done.
Q116 Bob Neill: Certainly, wearing
my own hat, it is quite common now to find cases where the unused
material is greater than the witness statements and the exhibits.
I wanted to come on to another point that was made about Crown
Court work and that is the concept which seems to underpin a lot
of the Carter thinking that the mixture of fixed fees plus front
loading is going to incentivise and encourage more economic disposal
of cases. Are there risks from your assessment of the material
that perhaps run with that? For example, is there any risk of
corner cutting?
Professor Cape: If I may put together
both fixed fees and front loading and deal with front loading
first of all, clearly trying to encourage defence lawyers, but
also actually all players in the system and particularly the prosecution
as well, to prepare early, the DCA have been going on about this,
quite rightly for years and it is a very, very difficult problem
to crack. There are all sorts of reasons why early preparation
is not done, not just on the part of the defence but also on the
part of the prosecution. The problem with front loading in relation
to Carter is that it is apparently only being tackled in relation
to the defence, but defence early preparation is always going
to be reliant on early preparation by the prosecution. It seems
to me that Carter does not really say anything about that and
is not designed to. However, if you do not have an effective system
of ensuring early preparation by the prosecution, you are always
going to have problems with early preparation by the defence.
It is not to say it is wholly dependent on prosecution preparation,
but it is to an extent. As far as fixed fees are concerned, certainly
the stability of expenditure in Magistrates' Courts' legal aid
has been attributed largely to the introduction of standard fees
in the early 1990s. Much as I personally dislike that, that is
probably true. One has to be very careful in terms of how you
devise your standard fees and how you construct the escape clauses
if cases go beyond it. I just did a very quick calculation on
Carter in terms of standard fees that he is proposing for police
station work. If it is okay, just very briefly, in London the
proposed fixed fee for a police station case is £313 and
there is what he calls an escape threshold at 24 hours, so if
the lawyer does more than 24 hours' advice, then he can claim
per hour on top of that. Therefore, it is an obvious point in
a way, if the lawyer spends one hour on a case, he gets £313
and therefore £313 an hour. If he spends 23 hours on a case,
which he might properly have to do if, for example, it is a murder
or a rape or a terrorism case, then, amazingly in a way, they
get paid £13.61 per hour. Then you could play around with
that a bit because if you go slightly over the threshold, the
threshold being 24 hours, the lawyer thinks that it is nearly
24 hours, perhaps he will come back with a charge or something
like that, then it works out that the lawyer gets paid £15.80
per hour, so massive differences. The Carter argument, and this
is a more general argument about fixed fees, is that it is swings
and roundabouts and Carter wants bigger firms of solicitors which
can absorb those kinds of swings and roundabouts. One problem
is that the more you go towards bigger units, the less you get
away from any notion of professionalism and the more that the
firm is going to be driven by financial consideration and therefore
there is inevitably going to be pressure within that standard
fee to reduce the amount of time that you are going to spend on
that case because that will up your hourly rate and if there is
no shortage of work, you just go onto the next case.
Q117 Bob Neill: That seemed to be
a suggestion that that has been brought out by some research in
Scotland that there had been a decline in client contact time
and preparation time in favour of volume. Now Carter says that
the safeguard against that is in effect peer review that will
stop the cutting of corners, the pressure to plead or not, interviewing
the third potential defence witness, something like that. Is that
really an effective safeguard?
Professor Cape: No, it is not,
not in my view or rather I should say we do not know. I have been
heavily involved in peer review from the beginning, working with
Professor Avrom Sherr who has been developing it for the Legal
Services Commission. I can deal with it in one sense very briefly.
There has been no research done on whether peer review works.
The Legal Services Commission has adopted it as its major quality
assurance mechanism. I believe that is right, but we do not know
whether it is a robust enough mechanism to deal with the kinds
of problems which I have identified. I was in e-mail contact with
a leading criminal defence lawyer only this morning—and
you would know his name if I said it, but that would not be fair
to him—and he said that his biggest concern is that he believes
peer review, and he has been heavily involved as well, is not
robust enough to deal with those kind of quality issues brought
up by that kind of proposal.
Q118 Bob Neill: The final topic I
have is very high cost cases, a separate thing, but we can take
it pretty straightforwardly perhaps. Carter is proposing caps
for very high cost cases, actually below the current level, so
it is a cut in total expenditure. Is there a danger that putting
caps on is actually going to prejudice the position of the defendant,
the fairness of the trial. If you have the misfortune to be a
defendant in a very high cost case you are suddenly told the money
has run out in terms of preparation of your defence. How do we
cope with that?
Professor Cape: Inevitably there
is a danger. I have to say that we were not able, in the time
we had available for our research, to get at the issue of very
high cost cases and, as far as I am aware again, little or no
research has been done on them. One of the things, and this is
a suggestion, is that the cost of the defence costs in very high
cost cases in part, and it is not to say that there are no solicitors
out there packing their bills or anything like that, but one of
the factors in terms of determining the defence costs, is going
to be the way in which the prosecution determine what kind of
case they are going to make of it: how many charges there are
going to be, whether it should be conspiracy, et cetera. It could
be a very sanitary exercise to have a pilot project where the
prosecution, in formulating the way in which they are going to
approach this particular area of criminality, should—I do
not even know whether they have to consider their own costs—be
asked to do is to consider the way in which they construct that
prosecution case, put together the charges, what charges there
are, et cetera, by reference to what the cost to other stakeholders
would be, not just the legal aid budget but also maybe the court
as well.
Q119 Chairman: I am going to call
Dr Whitehead, but I must just warn both members and witnesses
that we have a certain time constraint and we have a number of
civil law issues that we want to put to Professor Masson.
Professor Cape: And I have been
quite rightly warned very strongly not to take up the time of
my friend to my left here.
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