4. Memorandum from Stuart Ranson,
Ranson Legal IT Services
Could you please receive this notification of
concerns expressed about the new BVT proposal for dealing with
legal aid in the criminal courts as proposed.
I have been privileged to be a part of the solicitors
profession since I qualified in 1972 and have always practised
(and still do in the criminal courts).
I retired from dealing with the public direct
as Senior Partner of my prior four partner firm some six years
ago and have thereafter provided my services (a la barrister)
by only taking instructions from other solicitors (ie not dealing
with the public direct) and continue to do so as both a general
agent for any firm of solicitors to attend any magistrates court
and any police station.
In my past I have been engaged as the principal
prosecutor for the police for a number of years prior to the Crown
Prosecution Service taking over all prosecutions some years ago
and have at all times represented clients in Magistrates Courts
and Crown Courts (including representation where appropriate)
and have been and still am a member of the Children Panel. I have
conducted trials and continue to represent many clients on a regular
basis in challenging the State case in contested issues and also
representations of clients on sentences etc.
I was invited by the Legal Services Commission
to be on the West Country panel of the Providers Readiness Group
and have attended each meeting to discuss how the LSC should deal
with legal aid provision in both offering positive suggestions
and also making constructive criticisms.
I feel I am particularly well placed to give
a considered opinion as to the current proposals of Best Value
Tendering as the proposal arising from the recommendations of
the original Carter commission to consider legal aid changes.
This view is because unlike the period of years
when over time I gradually became only personally responsible
for the more serious cases and was relied upon for my supervisory
and quality control skills including designing and promulgating
detailed manuals for use across three offices together with being
responsible for implementation of technology systems to support
the provision of legal aid to my current "hands on"
levels of observation the provision of the legal supply by more
than one firm due to the release of my prior responsibilities.
I have seen the gradual dimunition of the provision
of legal aid supplies to all family work until the present time
when it can be readily observed that there are "deserts"
in various parts of the country and where it is virtually impossible
to find legal aid help in family matters due to withdrawal of
firms providing such services. The reasons for such withdrawal
has been the lack of profitability in doing such work due to the
remuneration and excessive paper requirement and controls imposed
by the Legal Services Commission (LSC) which at the present time
do nothing to maximise "quality" except to drive out
of the market place those firms which were skilled in it and were
able to provide such "quality". Those firms continue
to exist but have withdrawn from the public provision because
it has been proved impossible to subsidise such a service by private
clients.
As a member of the Children Panel and being
fully aware of the high quality of the solicitors involved in
such work and the high standards they have to prove before admission
to the panel, I am aware of the very low morale of those still
perfoming such work due to the ever gradual reduction of fee levels
now paid. I am further aware as I ask the Committee to be aware
of how the CAFCAS system of ensuring protection of children in
public proceedings has deteriorated where the number of qualified
persons performing such work has reduced to the extent there are
really unreasonable and non justifiable delays. Sometimes these
delays are as much as nine months before any proper assessment
can be made. Currently I am aware of problems of the continuance
of the support of such system due to both poor fee level payments
and financial restraints imposed on the system.
I regret therefore to conclude that for various
reasons primarily the reduction of state support for the proper
representation of those poorer members of society means that they
are increasingly at a major disadvantage in the legal system and
often unable to represent themselves but unable to pay for representation
so that their case can be properly argued.
In respect of the criminal justice system there
is currently extremely poor morale within the profession and it
is my considered view that the core of the high quality persons
dealing with such work in the public sector is ageing at an alarming
rate and is not being replaced. The reason for this is that those
who are in the profession with the greatest experience are finding
it is not worth their while to continue with publicly funded cases
unless there is appropriate financial rewards. There never has
been any true compatibility or comparison with the fee rate of
the legal profession for private work and for public work. The
rates of fee payment are often one third or less than private
paid work. It is inevitable that those who have high qualities
if undervalued will gravitate to more rewarding work.
Such fee paying rates only tell half the story
however. Any firm of solicitors offering services to members of
the public are required to have physical premises and to have
a prescribed quality control to be enabled to provide legal advice
and assistance to the public at large. This also requires substantial
insurance overheads together with clear "overhead" of
supervision. These "back office" costs are made high
by the LSC and professional requirements and these "overheads"
have to be recovered.
To recover the "overhead" of any business
requires reliability of future assured clientele to meet the overhead
cost of the provision of service together with the cost of provision
and some "reward" in the form of profit for the owners
is a requirement. In the smaller firms (and there are a large
no of small firms who provide representation in the provision
of legal advice and assistance to those seeking or needing representation
whose costs of overhead have to be strictly controlled and where
there is little profit in the work with some form of cross subsidisation
from other work: such firms are at grave risk of not being able
to continue.
A comparison with the experience of the trial
run by LSC of requesting a number of "set ups" to provide
services as "Public Defenders" in the accounts showed
clearly that the expense of such firms when overheads were included
showed that these larger firms although supported by the LSC in
their overheads could not compete with the smaller firms and the
conclusion was that the expense of such was higher to the state
than the current private firms performing such work.
It is argued by many that the current specialist
firms although small are the ideal size to keep the expense of
the provision of the service low enough to enable it to be continued
and larger firms cannot by mere size alone improve either the
quality nor the fee rate than presently offered. Such argument
is obviously contentious but nonetheless may be correct.
The Carter Commission in an attempt to try and
identify the cause of increased public costs of provision of legal
aid and assistance in the criminal justice system came up with
the concept of "Best Value Tendering". The pros and
cons of that conclusion will be passed over here but the effect
has been to produce the present proposed trial in certain areas
of a "pilot" of such in a number of areas.
I understand and believe that the overwhelming
view of the profession in such a scheme is inappropriate, will
not work and will have disastrous consequences to the administration
of justice.
At the present time of writing a number of solicitor
firms in the designated "pilot" area are indicating
a refusal to join in with such a trial. One reason for so doing
is that those firms by geography have been discriminated against
because they are now asked to involve themselves in and "auction"
whereby each firm must "bid" a price "per case"
to perform work on a fixed fee basis without any compensation
should they not make a successful bid. Some of those firms have
been providing excellent quality work for many years but have
a fear that an "auction" whereby the good the bad and
the ugly are entitled to bid for work and those who are not successful
will be barred from performing such work.
The consequences for those firms are horrendous.
The theory is that all firms will bid competitively as if they
all had a market to bid for which had certainty as some in industry
may do.
It seems to me self evident that in the commercial
world when there are potentially large bids for work to be undertaken,
any commercial firm makes bids which takes account not only their
overhead costs but their projected profit but usually in the absolute
knowledge that if unsuccessful there is other work in which they
have excelled to perform for others if any bid is unsuccessful.
More importantly it is highly likely and I believe in the commercial
world it has been proved recently in IT contracts, the bids which
are successful are such as give very large profits largely because
of the restricted market in which they operate. For the legal
work in crime however there is indeed a restricted market - those
who are not successful will be prohibited from doing the work
publicly funded at all.
One of the unintended consequences is that those
firms who prove to be unsuccessful in their bids for work under
BVT will suddenly and overnight be "hit" by the TUPE
regulations which currently will require those firms to compensate
all their employees who will lose their employment as a result.
This will inevitably lead to bankruptcy of many firms whose principals
by their very nature are not able to avoid personal responsibility
for any debts their firm may suddenly incur. The LSC have currently
stated they (or the state) will not be prepared to take on the
costs of such huge claims by the reduced work force.
Quite apart from the particular problems firms
may have in provision of publicly funded work for the above reasons
different considerations are now raised as to why any firm should
undertake a risky personal investment in future work at restricted
bid prices which cannot be guaranteed and which will require them
as a firm to reassess that risk in the employment of staff etc
in the future in the knowledge that at any time in the future
all such work with all the above consequences may occur.
With any form of work there must be sufficient
profit motive to make such work worthwhile and the risk of undertaking
it most be accounted for in the measurement of what profit is
appropriate for such a firm.
Some simple calculations in arithmetic show
the following.
Currently on arrest and detention at a police
station anyone (millionaire or pauper) is entitled to legal advice
and assistance in the investigation of the allegations against
them by the state.
It is my personal experience that it is common
that some 90 minutes will be expended before an attendance at
the police station by a suitably trained lawyer actually attends
and most sessions take at least 90 minutes and some many more
before conclusion: to include the support work of telephonic contact
and writing up a report the usual minimum period of attendance
of work often in unsocial hours can be at least 4 hours per case.
The arithmetic on the small fast turn round cases means that for
a fee which is now fixed in most areas an hourly rate of payment
for a lawyer representation at the police station is no more than
£60 per hour including being mandated to be available for
a 24 hour period and to attend during these anti social hours.
These current fees are calculated on a "swings
and roundabouts" basis by the LSC on the basis some cases
will take less time while others may take more time. What I ask
you to consider is that in the more serious cases the fee of between
£200 and £250 is the MAXIMUM payable no matter how serious
the offence or how long the case takes up to nine hours of work
and no matter how many attendances. Only after nine hours is there
any possibility for representations be made to ask for a "time
spent" basis to be paid when the maximum hourly rate then
is fixed at £69 per hour.
Attending police stations therefore (the first
step of ensuring quality of arms in our justice system and in
my personal experience where the most likely position is found
to avoid unfair charging and removal from the criminal justice
system of future costs of trialling issues) results in savings
to the criminal justice system generally.
Consider if you pass by and are incorrectly
identified as being a person committing a criminal act and at
the police station no one is telling you the basis of the allegation
but an account is sought from you to support the allegation which
by astute representation informs you of the true issues and challenges
clearly at an early stage the basis of any allegation: without
representation a possible charge, investigation and full trial:
with representation a close examination of the facts, challenge
of them and an account which clearly demonstrates unreliability
of the allegations: is that not the worth of the representation
and indeed it could by you next time whoever you are).
The above is to make a demonstration of the
fact that those who provide the legal service in the criminal
justice system not only perform a useful function but on a case
by case basis may well justify the cost by ensuring cases are
removed from the system that should not be there. If one extends
the benefit of the representation at the police station there
is early involvement in the challenge of false or inaccurate allegation
or often the early admission of appropriate misconduct leading
to avoidance of cost to the justice system. The cost of such assistance
on a case by case basis on the present level of fee payment is
not great and much less than many consider.
If a case is taken to the court the current
system is the payment of a fixed fee of £160 for any guilty
plea unless for exceptional reasons more than five hours approximately
is taken on case preparation in which case a slightly higher fee
is payable.
Such fee is paid on the assumption of full details
and examination of the case by attendance on a client, reading
of papers, attendance at court and full representation, if necessary
through two or three hearings. Again the average I have found
for such cases on an hourly basis is at best £40 per hour
by time of case completion.
Solicitors are mandatorily told to take their
turn on publicly funded work to attend court on a rota basis to
provide assistance to all those facing charges where custody may
be possible. Their rate of payment is £52 per hour but they
must reserve the whole of their day for such work, and pay their
own way to the court in both time of travel and actual travel
costs. Sometimes they are asked to read papers, advise, and if
necessary assist in the completion of legal aid forms for submission
for future hearings, and if necessary fully represent on guilty
pleas and in any event to make representations for bail or adjournments
for as many attendees who arrive at court without a solicitor.
In my area the court is currently proposing a list of 20 such
persons to be seen by the solicitor per duty session: an almost
impossible task considering that there are often a minimum of
30 pages of statements to read and a client to be attended for
explanation. Nonetheless such is the system and I venture to suggest
the rate of hourly payment (less the solicitor cost of attendance)
is pretty poor (although higher than the apparent average referred
to above it is non delegable and is performed by the highest grade
of fee earner—fully qualified solicitor—and precludes
any other form of work that session if in conflict.
Simple arithmetic drives the equation that in
any firm it is likely that any solicitor may be expected to perform
direct fee earning hours of no more than six hours per day five
days per week by 48 weeks in the year: ie a maximum of 1,440 hours
where the HIGHEST hourly rate averages at £45 per hour which
is less than £70,000 per annum assuming that such hourly
work rates are performed. In fact there are many studies which
show that the actual hours reasonably required of a solicitor
or clerk at this level is only 1,040 hours (to allow for public
holidays, m(p)aternity leave, sickness and other unavoidable absences.
Such reduced hourly work produces an annual fee recovery rate
from publicly funded work of less than £50,000 It is not
difficult to work out the likely profit return from such poor
hourly rates. A newly qualified solicitor without much experience
after NI is likely to cost any firm at least £28,000 pa leaving
less than "£22,000 to cover overhead and support staff.
Generally speaking this is likely to leave by my experience little
if any profit for the proprietors of the firm!
The point about trying to publicly show what
the current rate of payment of lawyers in publicly funded work
is to show that very few other businesses would wish to operate
at such low profit margins having regard to the risks involved.
Such is the current position where I say that
the morale of the profession is the lowest in all my years of
experience.
It is the belief by the Carter commission that
if a competitive system were put into operation the "market"
would fix by competitive bids a "fair" and "competitive
rate" for work to be performed.
The BVT has fundamental flaws in this submission
of mine:
1. There has never been a system proposed
such as this anywhere in the world.
2. It follows that England and Wales are
being made a guinea pig of a new system of how publicly funded
work should be provided by lawyers to those who are in a state
of actual current and potential detention.
3. The system proposed has been drawn from
a commercial comparison where the realities of the current profession
are nothing like the commercial competitive systems for other
publicly funded work.
4. There is no provision to compensate those
whose entire future has been to provide such funded work should
they not be successful in ensuring economic survival by bidding
in a truly competitive and real form.
5. No other competitive bidding system has
been tried on an existing large market of funded firms where there
very existence is threatened without any recourse due to the particular
speciality of the work involved.
6. Those firms which have other sources of
work do their work on the basis of private profitability and any
thoughts of cross subsidisation of loss making work will be rejected
by those in such firms who consider their income streams are being
reduced by support of such public funded depts: this is proved
by the reduction in those firms which used to cross subsidise
and the increased finding of specialised firms doing no other
work (because they but not their former partners) have a feeling
of vocation for that work.
7. Where a competitive bidding system is
proposed which suggests a large reduction in provider numbers
the temptation to bid unrealistically low to avoid bankruptcy
until alternative measures can be taken is extremely high resulting
in a highly likely unrealistic competitive bidding system.
8. Those who are the best and have provided
the best quality are not likely to be rewarded by a BVT system
and in due course because they are the best their qualities will
be lost to the profession affording any such work: example that
best shows this is when recently on very high cost cases the fee
for publicly funded work was set so low that NO barrister could
be persuaded to undertake the work AT ALL leading to non representation
and trials vacated and the obvious problem of unfairness of non
representation in serious matters.
9. The system is untried and not likely for
years to provide any indication of true market price reforms.
10. The actual hourly rate for work in criminal
provision by lawyers has not changed for OVER 10 years leading
to current levels of payment to be at the very lowest and probably
at least 50% lower than historical payments.
11. The "fat" (if ever there was
any) has already been squeezed from the system of payment for
publicly funded assistance.
12. Volume of future work cannot be guaranteed
and unlike other forms of tendering the proposal is asking firms
to "bid" for a volume of work which is not guaranteed
and which if cases fall means the basis of the price fixing mechanism
fails (lower volume the price computed on higher volume will lead
to loss).
13. It cannot be right to so price the work
as to drive out those firms and individuals who have the skills
due to reducing the number of providers by the competitive bid
process.
14. It is likely that younger persons entering
the profession will not train to perform such work unless there
is value in doing so.
15. The age range of current providers is
unduly high and the likeliehood is that once the higher age groups
leave the profession they will not be replaced.
16. By definition if the market place is
to be competitive but found not to be sufficiently profitably
the most able will find alternative forms of employment.
17. There will be deserts of geographical
areas (already starting) where it will be impossible to find appropriate
representation for those who cannot afford private payment.
18. The whole justice system will start to
add costs to itself by the inadequate preparation of cases and
miscarriages of justice will increase.
19. As the state becomes more paternalistic
and grants powers to its servants to arrest and detain (witness
the ever increasing number of laws in the last few years and increased
power of arrest and detention) the ability of its citizens to
contest their detention will reduce.
20. The BVT system will reduce the quality
of firms providing the expertise which the MOJ actively claim
they seek to preserve.
It is my belief that BVT will be the most draconian
method of attack on the ability of any member of our society to
call upon assistance and representation against the state's ability
to arrest and detain due to the almost certain reduction in provision
of assistance.
I ask myself that if I was at the position I
once was some 30 years ago would I have set myself to train and
train others in the provision of legal assistance to those who
are least able to help themselves in either family or criminal
work. If I ask myself or if any younger person so starting asked
me now I would state that there was no future in publicly funded
work as it is now being presented. Why? Because there is high
risk if ability to perform such work is suddenly withdrawn having
committed investment and cost to doing so and little profit in
doing the work until that event arises.
I would ask myself whether I had skills in ability
to analyse, empathise, criticise and represent persons with good
effect relying on my personal and expert skills as a lawyer and
advocate. I would argue I (as others would also argue for themselves)
am good at what I do but I would NEVER undertake that sort of
work again with the high risks involved. The same skill set could
and did make a lot more money on other private work so why should
I compromise myself, My future is limited due to my retirement
from active practice but a younger person has only his future
and must determine in what area to ply those skills.
The above I argue shows that the current fee
rate for publicly funded work is probably at the very lowest as
matters stand. BVT will actively harm and possibly bankrupt many
good solicitor/lawyers. Any current round of BVT will be protectionist
and will arrive at an unsustainable market which will implode
for the reasons above stated.
If BVT goes ahead I am certain that a large
number of firms will exit the market place and will never be replaced.
It may be argued that BVT will achieve in part
its purpose in removing the multiplicity of firms offering the
services of a publicly funded nature and a reduced provider base
may make it easier to administer. Apart from the obvious reduced
administration of the current system of overseeing and regulating
a smaller provider base I see no advantage of BVT. Even if implemented
it means that all firms will make adjustments to ensure they do
not suffer bankruptcy if they have to prepare (as currently) for
a next bid round in a further two or three years time.
In due course even if BVT is successful and
many firms go out of business there is the real problem that a
smaller provider basis would lead to the "doctor" syndrome
of powerful control of the market by each later demanding a higher
price (the competition having been removed). At that later date
the problem the government will have is how to deal with a much
more powerful provider base. It may be well argued that the current
position is already providing a high competitive element in that
only those who wish to involve themselves at current fee rates
(which I believe are not sustainable at current low rates) seek
the type of work at the fee rates currently paid. They HAVE to
be efficient at those rates so why think that BVT will reduce
those rates even further.
Knowing that at the end of the day the current
proposed reforms are all about issues of money saving may I propose,
in the same way that MPs propose to deal with their salary rises
and other industries deal with how they pay their executives.
Why not have an organisation which "sets" the appropriate
rate of pay after extensive consultation with the profession and
Law Society and based on what are perceived to be appropriate
state set rates (as hitherto). At the end of the day if a rate
of pay is fixed then firms can decide whether to perform such
work.
The advantages are obvious.
If the rate is appropriately set the good firms
with good support systems will be able to make appropriate and
proper profit levels. Those who cannot do so will fail by their
own inability.
Professionals will "gravitate" to
the best firms who are efficient and pay appropriately for their
expertise.
No firm will be faced with a TUPE close down
and forced to discontinue but if they wish to withdraw from the
market can do so without catastrophic consequences.
Given the current non increase in fees for over
10 years why does anyone think the cost of BVT and its consequences
believe that the state will save any money.
To save the money look elsewhere at the present
time for savings because they can be made in reduction of the
huge control and overhead and simplify the controls and the other
areas of MOJ where wastage is all too clear to see.
Please submit this representation to all members
of the committee and invite them to read it all as it is meant
to be descriptive of the true position by a "front line soldier"
member who used to be a "general" and can see both ends
of the argument.
Stuart Ranson
11 December 2009
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