Family Legal Aid Reform - Justice Committee Contents


3  Process: conduct of consultation

Quality of data

19. Evidence presented by lawyers' representative bodies was highly critical of the data on which the Legal Services Commission had based its proposals. The Family Law Bar Association wrote:

"There is real cause for concern about the accuracy of the data upon which these proposals are made. Extensive corruption and mis-classification have been revealed. The time for the consultation response was extended at the request of the Bar Council and the FLBA (supported by many of the solicitor organisations) to enable efforts to be made by the LSC to clean the data."[27]

Resolution, an organisation representing family lawyers committed to non-adversarial resolution of disputes, wrote that the Legal Services Commission had sent data to individual solicitors' firms offering a comparison of payments under the new scheme; "in many cases the data … [were] simply wrong", "based on wrong assumptions" and included "some straightforward misunderstandings of the stages in [cases] to which the data relates."[28]

20. The Association of Lawyers for Children told us: "while it was utterly right that the response deadline for this consultation was extended to 'cleanse' what on its face was manifestly flawed data, that does not excuse that flawed data being used in the first place, especially when so much was built on it."[29] The Family Justice Council, the Ministry of Justice's non-departmental public body responsible for advising the department on family justice issues, was "dismayed" to learn of "considerable concerns surrounding the integrity of the data" that underpinned the LSC's consultation and was "disappointed" that such issues had not been brought to its attention directly rather than via its individual members.[30]

21. In response to our letter raising these concerns, Lord Bach told us that:

"Whilst we are naturally concerned to ensure agreement can be reached as far as possible on any remaining data issues, I understand that none of the issues identified has been of sufficient statistical significance to materially impact on the proposals. The LSC is confident that the data is sufficiently robust to underpin the new fee scheme, and will write to stakeholders to clarify the position when it has considered the consultation responses received."[31]

In response, Lucy Theis QC, chair of the Family Law Bar Association, said that "with all due respect, I would fundamentally disagree with that".[32] The Association point to the headline figure for spending under the existing Family Graduated Fee Scheme for self-employed advocacy — claimed by the LSC to be nearly £100 million and rising — which had recently been the subject of revised figures showing a consistent spend, over the last three years, of around £90 million. On 16 June, the Association told us "There are still very serious data issues in relation to the foundation of these proposals and here we are, six months later, and they have not been resolved."[33]

22. Carolyn Regan, Chief Executive of the Legal Services Commission, told us on 16 June that: "as of this morning, I was told this was the best source of data available."[34] The Commission told us that the data had been improved by the process of consultation and the "extremely helpful" process of cooperation with the Bar, but: "so far nothing has been raised that has shown a material difference to the proposals that we consulted on."[35] Sara Kovach-Clark, Head of Civil Policy Development (Family) at the Legal Services Commission, told the Committee that: "the data that we formed our consultation proposals on, was fit for purpose, is still fit for purpose and I am confident will continue to be fit for purpose."[36] The Law Society, Resolution and the Legal Aid Practitioners Group, representing solicitors whose advocacy is rewarded under a different scheme, were of the view that, on balance, progress could be made notwithstanding the flaws in the existing information.[37]

Economic analysis

23. On 23 January 2009 the Legal Services Commission invited tenders for a piece of research into the potential economic impact of its proposals on the supplier market. The research, said by the Commission to be costing about £63,000, was aimed at assessing:

The Family Justice Council wrote in its response to the consultation that: "It is very surprising (to say the least) that this research was not commissioned before the Consultation proposals were made."[38]

24. The Family Law Bar Association was informed of this work on 20 March 2009, two days after the original deadline for responses to the consultation. The Legal Services Commission said that this had been as early as procurement legislation allowed.[39] Although initial findings from the study were expected in June, the Commission originally intended the findings of this research to be utilized, alongside consultation responses, to inform the final policy on family advocacy remuneration with the final report of the study formally published as part of its consultation responses in August this year, 2009. The Family Law Bar Association, the Association of Lawyers for Children, and other witnesses, see this research as fundamental to the character of the system that the Commission was seeking to put in place and the family Bar described the timetable as "deplorable".[40] The Association of Lawyers for Children wrote that: "if ever there was a demonstration of the principle of 'verdict first, evidence later', then this was it".[41]

25. The majority of our witnesses condemned the fact that there would be only a limited opportunity to see the findings of the study before the Legal Services Commission (LSC) finalised its proposals and that the Commission had originally given no guarantee to take account of responses to the study from stakeholders. Lucy Theis QC, of the family Bar, told us "it makes a mockery of the consultation process to produce such an important piece of evidence without the courtesy of even a meeting after the report has been produced. They [the LSC] have rather grudgingly said that they are going to share it with us."[42] This approach by the Legal Services Commission does not appear to be in line with the stated aims of its consultation paper or the principles of public consultation set out by the Cabinet Office.[43]

26. In response to a letter from the Chairman of the Committee on this subject, Lord Bach wrote that:

"As a courtesy, and as part of their continuous and transparent dialogue with providers on the consultation proposals, the LSC has informed stakeholders that they are carrying out this research, and as a further courtesy, the LSC has also agreed to share the final report produced with stakeholders when it is available.

The research is not considered to be fundamental to the structure of the final fee scheme, nor is it considered that stakeholders needed the information produced in this report to respond to the consultation. The consultation asks stakeholders to consider the proposed structure of the fee schemes and not the principle of harmonisation, which is already widely accepted. The research will, however, be relevant in any final impact assessment of the effects of the proposed scheme. We await the outcome of the research with interest, and I can assure the Committee that we will act as fairness dictates in relation to its findings."[44]

27. We found the line taken by Lord Bach to be highly unconvincing. The structure of the fee scheme is likely to be the crucial factor determining whether the proposed reforms work with, or against, the grain of legal services provision, encouraging or deterring providers from offering effective, high quality services while enabling the Legal Services Commission to remain within budget. The principles behind the scheme are generally accepted but the Government's over-riding statutory duty to ensure provision from a suitable range of providers will depend on the impact of the new scheme on those providers; and this is what the research in question was designed to determine. The Family Law Bar Association described the study as "a critical piece of evidence in relation to the impact of what they are proposing, particularly when that impact falls on the most vulnerable in society".[45]

28. We pursued the question of the role of the Ernst and Young economic study with the Legal Services Commission in oral evidence.[46] The Legal Services Commission initially said that they had never regarded the Ernst and Young study as "fundamental" to the shape of the proposals. It was additional economic analysis which they would have done anyway and the timing was a "resource issue". However, the Commission did concede that an assessment of the impact on suppliers of its proposals—part of the Ernst and Young study—was very important, as a substantial drop in supply would cause a "significant problem", and that the study was "fundamental" to the decision on whether the new fee scheme went ahead. We agree.

29. This is not the first time that controversy has arisen in relation to work commissioned by the Legal Services Commission (LSC) on this issue. In November 2006 the LSC received a report it had commissioned from Andrew Otterburn Consulting on the impact of Lord Carter's initial proposals on suppliers. However, the paper was not published until after our predecessor Committee had made representations to the Secretary of State. In the relevant report our predecessors said the following:

"This [second Otterburn] study … was critical of the short transitional period between the introduction of the fee schemes and the roll-out of competitive tendering and of the lack of adequate evidence to come to a reliable assessment of the risks associated with the Lord Carter's fixed fee proposals. It warned that changes to the timetable of the reforms should be made.

While we accept the apology by the Lord Chancellor for what looked like an attempt by his Department and the LSC to suppress an important piece of research relating to the speed of the current reforms, we remain profoundly troubled by the handling of the Otterburn issue on the part of the LSC. It suggests an inability on the part of the LSC to address fairly and openly a critical aspect of the reforms: the ability of the supplier-base to survive the reform proposals."[47]

30. We emphasise and welcome the undertaking given to us in oral evidence by the Legal Services Committee that, "we have always been clear that we would show stakeholders a copy of the [Ernst and Young] report and allow them some time to comment on it." We regard a very much higher and consistent level of constructive engagement between the Commission and all its stakeholders is required if effective progress is to be made with family legal aid reform this year, 2009.

Conclusion

31. Clearly, there is a significant discrepancy of views between the Legal Services Commission and its stakeholders on the scope and quality of data that would constitute a satisfactory evidence base on which to erect a new system of fixed fees for legal services in family law. We note that these issues have some pedigree. Our predecessor's 2007 report on Lord Carter's proposals for legal aid reform said that a meaningful process for developing a new system for the future of the legal aid market could only be undertaken on the basis of adequate knowledge of case costs presupposing the right data and statistical research. The report concluded:

"It appears that the LSC has inadequate information on which to base its proposed fixed and graduated fee schemes.

Equally, there is very little reliable statistical information about the economic situation of the legal aid supplier base on which valid predictions of the impact of changes to remuneration or procurement arrangements could be based".[48]

32. The lack of transparency and the last minute nature of data-gathering and publication means that, we cannot come to a definitive view on the statistical significance of the outstanding data issues. What clearly is significant is that the existence of flaws in the evidence base has damaged the confidence of practitioners in the process that the Legal Services Commission is conducting. At the same time, the LSC has commissioned—extremely late in the process—fundamental economic research into its supplier base where hitherto it was relying on anecdote. These discrepancies and gaps in its evidence, which can come as no surprise to the Commission, should have been sorted out in advance of any proposals being published. The objectives of the economic research could have been discussed with stakeholders before it was commissioned. The Legal Services Commission has made a substantial rod for its own back by not doing so.


27   Ev 36, paragraph 10 Back

28   Ev 105 Back

29   Ev 23, paragraph 81 Back

30   Ev 57, paragraphs 22 and 23 Back

31   Ev 70 Back

32   Q 9 Back

33   Q 8 and see ev 52 Back

34   Q 27 Back

35   Ibid. Back

36   Q 28 Back

37   Ev 76, 77 and 111 Back

38   Ev 67, paragraph 126 (original emphasis). Back

39   Ev 35, paragraph 6, and Q 29 Back

40   Ev 39 Back

41   Ev 22, paragraph 76 Back

42   Q 9 Back

43   Ev 40 Back

44   Ev 69-70 Back

45   Q 9 Back

46   QQ 29-32 and 44-48 Back

47   Constitutional Affairs Committee, Third Report of Session 2006-07, Implementation of the Carter review of legal aid, HC 223, paras 235-6  Back

48   Ibid., paras 127 and 128  Back


 
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