Examination of Witnesses (Questions 220-233)
DAVID EMMERSON
OBE, RICHARD CHARLTON,
DAVID JOCKELSON
AND ROY
MORGAN
30 JANUARY 2007
Q220 Dr Whitehead: Travel and waiting
costs in the fixed fee, is that a significant issue as well in
terms of the problem, as you have described it, of what you might
call "more complex cases"?
Richard Charlton: In mental health
it is always a problem if you are representing someone who is
detained because you always have to leave your office to go and
see somebody and hospitals are increasingly security conscious,
so increasingly you are being held up in entering wards, they
are being more restrictive in terms of proper appointments and
access and so on—we understand that—so our costs are
rising in that way. In addition, because of the shortage of hospital
beds, what has frequently happened in the past is you have somebody
who you started representing, say, in the Maudsley hospital is
suddenly shipped across to Yorkshire during the middle of the
case because it is decided that the bed is needed for somebody
else, so you have to decide whether you break off in the middle
of the representation, say, yourself or whatever in the Maudsley
and whether we should travel up to South Yorkshire or we should
try and give it to somebody else, but then they have got to get
to know your case. There are very significant issues with travelling
and waiting which are getting worse for our members.
Q221 Dr Whitehead: This is really
a question to everybody present, but perhaps Mr Emmerson and Mr
Charlton in particular. There is, on the one hand, one pole in
terms of the fixed fees with everything in it, and the other pole
which is, "Well, we will leave it to up to whoever is doing
the case to decide exactly how long it needs and what is involved",
and, clearly, that end of the spectrum is very much, you might
say, a demand-led, pay the money in whichever way the bills come
in system. Is there a system, do you think, of fixed or graduated
fees which could fall between those two poles and perhaps effectively
capture some of the things which you have mentioned that do arise
but, nevertheless, would provide the sort of appropriate remuneration
which would enable specialist and niche providers to continue
to provide the service?
David Emmerson: I think the Government
has accepted that the family proposals, as they were put forward,
were not right, they did not get the balance correct, and that
was recognised and the Commission has spent a lot of time listening
to us since they brought out their unannounced proposals in trying
to understand where the problems are. We wait with interest to
find out what the new proposals are there, but certainly one of
the things we have complained about is the "escape"
clause of four times, it is just too high, and if you bring it
down, and bring it down significantly, then, of course, you can
address a lot of the concerns that we have about the variation
in cases.
Q222 Chairman: Presumably, the same
concerns apply to the removal of the 15% panel uplift?
David Emmerson: Yes, as an organisation
we feel extremely strongly about that. The Commission over the
years has been at the forefront of quality in the legal profession
in terms of introducing contracting and supporting panel membership,
and many of our members are accredited specialists and Legal Aid
specialists and that gives added value to the service that is
provided to the public. It keeps experienced people doing Legal
Aid which has two advantages: first, it means they can deal with
the complicated cases but, secondly, it keeps the experienced
people involved in Legal Aid and they can offer training and support
to newly qualified people as trainees and young solicitors and,
hopefully, they will be the bedrock of the future. Sadly, the
Commission have done a big U-turn on quality and it is a very
worrying development.
Q223 Dr Whitehead: You mentioned
that the Government has taken away what it felt were wrong figures
and is looking at them again. My understanding is that they may
well be looking at those in terms of what is a suitable fixed
fee.
David Emmerson: As an organisation,
we do not have a problem with fixed fees. Fixed fees can be advantageous
but they have got to be pitched.
Q224 Dr Whitehead: A fixed fee at
the right level as opposed to, say, an initial basic fee with
add-ons or uplift moving in to hourly rates if complexities demonstrate
that was the case, where would you move from one to the other,
or do you think that a fixed fee would be adequate for all purposes
provided it was set at the level?
David Emmerson: That is a difficult
question to answer without lots of spreadsheets and what have
you setting out the different figures. We do not have the facility
to be able to move the figures around in quite the same way the
Commission do, because they have got any access to the database,
so until we see the proposals from the Commission, we cannot say
whether or not they are right. We think the starting point is
to recognise complexity factors to bring down the escape clause
and do more for rewarding solicitors for doing advocacy in the
same way they pay barristers.
Richard Charlton: In mental health
though, we have not a seen a fixed fee proposal that will suit
us. I think part of our difficulty is that we have not had the
kind of panel uplift that family lawyers rightly have had. The
last increase for mental health lawyers in the field was around
six years ago, so things are already very tight indeed. People
work in many different ways and it is very difficult at the moment
to see any fixed fee proposal that will not mean a large number
of people leaving and, as you see, we are 25% down on specialists
anyway since 2000. I think it is going to be very difficult to
see a fixed fee proposal at the moment that will retain, let alone
protect and increase, the number of specialists doing mental health.
David Jockelson: It is a bit of
a myth that demand-led payment by the hour is somehow an open
cheque. Our bills have always been carefully scrutinised, you
do not just at the end of a case say, "Oh, give us £10,000",
you draw up a bill of minute detail, every phone call is listed,
every hour is put down and justified with the documentation sent
in. It is very onerous, but it means that if you have spent longer
than necessary, you will get it taxed down either by the Legal
Services Commission, a judge or a taxing master, so there has
always been that control. There are more sophisticated ways, at
least two other sophisticated ways, rather than just crude fixed
fees. In crime there used to be bands, so if it was a certain
simple case, you got up to here; if it tipped over and you could
justify it, you went into the next band. That simplified the paperwork
for the LSC, which is the main benefit because it does not benefit
us much, we need to keep a track of every penny we spend in case
we get to the escape limit so there is no saving for us in this
system really on significant cases. The other one is grad fees,
graduated fees, and that is sometimes used as a misnomer for fixed
fees. Fixed fees are very crude. Graduated fees, which is, in
fact, what Carter has suggested, pick up on the idea the Bar have,
which is a simplified system not by the hour, it is usually by
the half day and then it is a bolt-on for additional and you tick
boxes for a more complicated case. It is relatively straightforward,
but it reflects the work actually done. If you run the two together
then you put in a very crude mechanism under the cover of a reasonably
sophisticated and sensible system. We could live with grad fees,
as they are called, very easily, and we would love to be as well
paid in grad fees as the Bar is, I have to tell you. You heard
a few days ago that the Bar made up 10 years' inflation loss and
somebody said, "Well, I wish we had", and we really
do wish we had because in the Bar they complain bitterly about
the grad fees for family law, but they are doing very much better
than we are on that score and the facts are available in the Carter
report to support that.
Roy Morgan: To piggyback again
on Mr Jockelson, I am also a solicitor advocate, and I use my
rights in the crown courts, so I have had experience of dealing
with graduated fees. What has happened over several years is what
is a very complicated calculation which you have to perform at
the end of the case has been changed at least twice, and possibly
three times I think to my knowledge, each time reducing that graduated
fee, so whilst you start off with a calculation that pays you
close to what you do, it is being eroded and eroded.
Chairman: Let us turn to best value and
quality issues.
Q225 David Howarth: In view of the
time, I should perhaps reduce my questions to two, one for all
of you and then one in particular for Mr Charlton on peer review.
The one for all of you is, you will have heard with interest whether
there is going to be any competition in the second round at all
and one of the key problems is what is going to happen to the
firms that do not succeed in getting a contract. Can I ask each
of you what will happen in your firm if you do not get the contract
that you would like to get? It is a terrible thing to ask, but
I think it is quite important for us to get a view.
Roy Morgan: In my respect, we
are very heavily committed to and very heavily reliant upon Legal
Aid. If we did not get the contract we would probably cease to
exist.
Q226 David Howarth: What would happen
to the lawyers, this is the question, where would they go?
Roy Morgan: Initially, there would
probably be a significant number of redundancies. They may well
be able to find positions in other firms, but there are not that
many firms which deal with the sort of work that they would want
to do or are capable of doing, whether they could find a relevant
position, I do not know. My guess would be, and it is obviously
only a guess, that they would disappear from the system because
those firms which would remain within it would have created themselves
into the size to take on the volume they need to make the efficiencies
and savings the volume would bring and they would not need to
take on other people. I think probably you would not see a second
round or certainly not a third round. If the LSC were being frank,
they would probably say they would have to accept they are not
anticipating there being a third round.
David Jockelson: I think Lord
Carter gave the strange idea that there would be fewer firms but
just as many solicitors doing Legal Aid.
Q227 David Howarth: That is what
I was trying to get at.
David Jockelson: It is another
absolute fantasy. Ringing round the solicitors in your constituencies,
I had it time and time again, "We are on the point of giving
up doing Legal Aid, we can do other areas of law", or, repeatedly,
"Well, I have been doing Legal Aid for 25 years, I am getting
towards 60, I will retire early". This idea that they are
all going to rush to the big firms and grow and grow is rubbish
because the big firms in your areas are also giving up doing Legal
Aid and some of the largest, most respected firms in London, the
flagships of the Legal Services Commission, have quite openly
said, "These are not workable for us either", so there
are not going to be these jobs available for us redundant solicitors
to go into. I would probably give up and follow up my second career,
which we will talk about some other time.
David Emmerson: I would like to
make two points. One is that, as an organisation, we have catalogued
the general drift away from Legal Aid by family lawyers over a
number of years and those family lawyers do not come back. Once
they have had an existence outside, they do not envy being a family
lawyer, they do not seek to get back into the system, and I do
not think that will change. The other thing is, going on from
the point that you were chasing up on, the organisations that
are viewed by the Commission as the type they want to develop
and expand are exactly the type of organisations like Roy's which
have had their fixed fees cut because they have been efficient
and are getting even greater cuts. It is the same for my firm,
Edwards Duthie, in East London that does crime, social welfare
and family law, and many other large volume quality suppliers,
we are the people having our fixed fees cut and, therefore, there
is no opportunity for us to expand. We are told by the banking
organisations that solicitors' practices generally have slipped
into the top 10 of likely business risks, not just Legal Aid firms
but lawyers generally, so the opportunity to borrow money from
the banks to fund expansion is extremely unlikely. Many organisations
are constrained by the premises that they are in, they will not
be able to easily move into a significantly larger premises with
the extra IT cost that it is going to give, so I am not quite
sure, even if people are made redundant from Roy's organisation,
what organisation is going to be able to step in and take on Roy's
team.
Q228 David Howarth: Are the bids
going to be below the fixed fee level then? You are saying it
is downward pressure and the expectation is the bids are going
to go even lower than that and then where are the resources?
Richard Charlton: My firm, Kaim
Todner, would not be around either. We have a mixed practice,
not just mental health, predominantly Legal Aid almost entirely.
On the mental health side, contact with members shows that a lot
of people would not come together in any kind of new mass, which
I think the Commission is perhaps considering coming out of the
blue. They would look towards other areas of work, employment
is one they are looking forward to and moving out to private practice.
The age profile of people who do mental health is older, we cannot
get younger people in anyway, we cannot attract them, the uncertainties
are too high, the salaries too low and, of course, once you have
lost specialists in our kinds of fields, mental health particularly,
you are not going to get them back. It is seven years to train
up somebody into our kind of position, to get onto our panel and
that is it. Then in terms of advocating for liberty or advocating
for critical aftercare support and social exclusion you have lost
people in the field for good, as I said before, with enormous
social and financial costs. At the moment, of course, there will
be nobody around to do it anyway, this country will not have representation
for the mentally unwell in our kind of field from October. It
is an absolute crisis situation and many of us are clinging to
this kind of work through commitment, but we cannot cling much
longer to something that does not pay the bills.
David Jockelson: Lord Carter does
talk about large firms to you, does he not? They are not law firms,
they are not traditional solicitors' practices, the kinds of business
structures can only make any sense post-Clementi. I really think
you must have heard the same story from all your witnesses that
we are on the edge of a disaster and, with respect, I have to
ask the Committee to say what is the Government really thinking
and ask those penetrating questions about their fantasies of these
mega organisations with completely different systems. Now that
may be a direction of travel they want to arrive at or a destination,
but it is going to be a meltdown in the meantime, a disaster for
clients, for your constituents.
Chairman: I think we have got that message.
Mr Howarth has a question.
Q229 David Howarth: It comes to the
second and final question I want to ask Mr Charlton because part
of that—it is not really a fantasy, it is more of a nightmare—is
declining quality of using people of less and less qualification
to give advice, so that is what puts great pressure on peer review
systems as the central quality control, quality assurance. I understand
Mr Charlton is involved as a peer reviewer under the present system
and I wondered what his view was.
Richard Charlton: I am only a
peer reviewer rather than the architect or administrator of it.
Like my colleagues here, I do approve of peer review as it is
much better in terms of the alternatives available. It is not
a perfect system, I think it still needs some improvement and
the Commission needs to resource it properly and there are concerns
about continuing to resource it properly, but they need to do
that. People need to be around to be reviewed and, of course,
at the moment that does not seem to be very likely. Peer reviews
in different specialisms have been producing guidelines for practitioners
and these, in a way, are something to hang quality upon. They
are not set in stone, they are guidance, and I would think they
should be reviewed only with care as kind of milestones for people
to work towards, but, of course, practitioners are being squeezed.
On the one hand, they have guidance quite properly about how to
represent your constituents but, on the other hand, of course
with the financial pressures down below it is going to be a difficult
time for practitioners certainly. The peer review service should
be, I think, continued, monitored and improved but watched very
carefully in terms of not allowing standards to slip.
Q230 Chairman: Have any of your firms
stopped taking on trainee, young solicitors for civil Legal Aid
work?
Roy Morgan: No, on the contrary,
we have had to take them on, as the only way we can find the lawyers
to do housing work, in particular, is to grow our own.
David Jockelson: It is the same
with us, we have always had trainee solicitors. We are taking
on a new one and we have got two just coming up to qualifying.
It is another myth put out by Carter that only large firms offer
contracts, there is no evidence for that at all.
David Emmerson: The trainee solicitors'
scheme that the Legal Services Commission runs is absolutely excellent
for putting trainees into good firms and that has recently been
expanded for family. I think the difficulty is it is such a small
scheme, it is really just a splash in the ocean in terms of what
is needed throughout the country as a whole. I think it is only
200 places throughout the country as a whole.
Q231 Chairman: Can you get good applicants
who want to do it?
David Emmerson: You can get excellent
applicants.
Richard Charlton: You can still
get applicants. We get sponsored placements as well, but it is
becoming increasingly difficult because people come with considerable
debts still from the college system. We do grow our own, but largely
because we cannot get them from the outside as well because if
you put out an advertisement, even for a firm as well known as
ours, we find it very difficult to attract people. I go and speak
at the College of Law, I am sure my other colleagues do too, about
why join Legal Aid and the good principled reasons to do so, but
I find that only a small proportion end up coming and I am very
nervous about the people who come to sign up with us about whether
they will stay. Certainly, I know of one practitioner in the north
of England and every one of his Legal Services Commission-sponsored
trainees in mental health have all left to go into private practice,
commercial practice; he has not managed to retain any of them.
Fortunately, we have retained most of ours, but I am very nervous
that financially we just cannot.
Q232 Chairman: What are the other
areas?
Richard Charlton: Commercial,
away from Legal Aid.
Roy Morgan: I see 2,000 trainee
solicitors a year teaching on the professional skills course and
only a few years ago in any group of 48 or 50 in a particular
session, half of those would have wanted to go into Legal Aid
practice, high street practice. Now I am seeing a figure of nought
and Professor Moorhead in the corner, I am sure, will tell you
there are so few universities now which are offering housing and
benefits and so on on their curriculum, on their syllabus, so
the future generation is a grave concern.
Q233 Chairman: Are they not offering
it because they do not see a market for the product or students
do not want to take that course because they have already decided
they are not going into Legal Aid?
Roy Morgan: Exactly, it is the
academic institutions responding to the commercial firms which
have gone in early and want business law and commercial law, et
cetera. The academic institutions are responding to that and giving
up the Legal Aid subjects.
Richard Charlton: If you go, a
large number of students are still interested. In an ideal world
they would like to come and do our work, but they say, "We
just cannot afford it". It is £20,000 or £25,000
worth of debt potentially and you will never pay that off.
Roy Morgan: The Law Society survey,
I think, showed that two years ago.
Chairman: The Committee has reported
in the past on the potential impact of student debt on young solicitors
being ready to go into this kind of work. Thank you very much
to all of you for the very frank and helpful information you have
given us this afternoon, we appreciate it very much, and we will
continue to ask the penetrating questions.
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