2. Memorandum from the Law Society
The Law Society believes that the recent National
Audit Office (NAO) report on The Procurement of Criminal Legal
Aid in England and Wales has produced a number of useful findings
and recommendations, although the Law society does not necessarily
agree with them all. The issues The Society wish to focus on in
this briefing concern the profitability of criminal legal aid
work and the sustainability of future criminal legal aid provision.
Criminal legal aid is an essential element of
a democratic society as it strengthens the principles of equality
before the law and, the right to a fair trial as enshrined by
Article 6 of the European Convention on Human Rights.
Profitability of Legal Aid Providers
The NAO report finds that average profitability
has fallen from 21.6% to 18.4% over the last three years. Since
these are the accounts of partnerships, and not limited companies,
profit here is calculated as the amount before partners' drawings
or notional salaries, or any return on the capital the partners
have invested in their firms. Around one sixth of criminal legal
aid solicitors' firms do not make any profit at all—so the
partners make no income from this work— while 14% of firms
make a profit of between 1 and 5%. Approximately 50% of firms
make profits of less than 10% A sole practitioner with a turnover
typically of £150,000 making a 10% profit would thus only
earn £15,000, a sum which is not significantly higher than
the minimum wage (about £12,600 for a 40 hour week).
It is fair to ask how firms are surviving if
they are making zero profit on this work. For some firms, the
answer is that they are not surviving. They have been unable to
adjust to the significant cuts in legal aid rates in the past
couple of years at a time when there is little scope left for
making cuts in costs. The lack of earnings from this work is indefinite,
and signifies the end of legal aid as a viable work-stream for
the business.
The majority of criminal legal aid firms also
do other types of work which effectively subsidises criminal legal
aid. While this may enable firms to survive in the short term,
this cannot be sustainable for any length of time as solicitors
firms are businesses who will have no alternative but to gravitate
towards more profitable areas of work if they are to survive.
If private practice withdraws from criminal legal aid in significant
numbers, the only alternative would be to expand the LSC's directly
run Public Defender Service network. This currently consists of
four offices in England and Wales and the evidence indicates that
this method of service delivery is at least 40% more expensive
than private practice.[7]
Not surprisingly low levels of profitability
translate into low levels of earnings for salaried fee earners.
A recent survey of pay in the public sector[8]
showed that, at a median salary of £25,000, legal aid lawyers
are close to the bottom of the public service pay scale, below
nurses and primary school teachers. This offers little incentive
for debt-saddled graduates to opt for a career in legal aid work,
particularly as the rewards of private practice are considerably
higher.
Sustainability of Criminal Legal Aid
The issue of whether criminal legal aid is sustainable
is of course closely linked to the issue of profitability. The
survey accompanying the NAO report finds that only 48% of solicitors
firms surveyed consider it likely that they will be doing criminal
legal aid work in five years time. Of those firms who say they
are unlikely to continue, 40% cited lack of profitability as the
main reason for not intending to continue with legal aid. Another
significant reason for withdrawal is the LSC's intention to introduce
Best Value Tendering with 33% of firms stating this to be the
main reason why they are unlikely to continue with criminal legal
aid. The ageing profile of criminal legal aid solicitors also
affects sustainability, with 15% indicating their intention to
retire within the next five years. This in itself will produce
a net loss due to the decline in young solicitors entering criminal
legal aid practice.
Conclusion
The criminal legal aid supply base is in an
extremely fragile state. Independent evidence now shows that the
incomes of both employed solicitors and partners in legal aid
firms are frequently at or below median incomes in this country,
and far removed from the sort of level a professional should be
entitled to expect and could earn in other fields of law. It is
clear that a substantial element of the supply base is not economically
sustainable. Profitability will be further eroded if further cuts
proposed by the MoJ[9]
to Crown Court advocacy fees and representation at the police
station are implemented. This would further threaten the viability
of criminal legal aid providers. The ageing profile of criminal
legal aid practitioners and the risks posed by Best Value Tendering
are also factors which will inevitably lead to a reduction in
providers in the short to medium term.
The effect of providers withdrawing or collapsing
in the numbers that now appear inevitable will be that clients
will be unable to secure the advice and representation they need
when faced with the power of the state bringing a prosecution
against them. The UK Government could find itself in breach of
its obligation to ensure that everyone has a fair trial. The cases
of Colin Stagg and Stefan Kiszko are just two high profile examples
of why it is vital that every defendant has the opportunity fully
to test the evidence presented by the State, and why the rule
of law would be undermined if that right was effectively lost.
There is an urgent need to find a mechanism
to calculate the costs of delivering this service, and to ensure
that the rates paid for this work are sufficient to cover those
costs and provide a reasonable living to the lawyers delivering
a vital public service.
7 December 2009
7 Evaluation of the Public Defender Service in England
and Wales: Bridges, Cape, Moorhead and Sherr (2007) page 231. Back
8
The Guardian 17 November 2009. Back
9
MoJ: Legal Aid Funding Reforms, Consultation Paper CP 18/09,
August 2008. Back
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