Overview of the Government's proposals

The Government aims by 2018/19 to save £220 million per year from the criminal legal aid budget. The legal aid budget is dwarfed by the budgets for other public services such as education and the NHS and the saving is not huge in the grand scheme of the Government’s finances. However it is a big number to lose from the criminal legal aid spend which has, in any event, been decreasing year on year for the last four years. Falling volume, previous pay cuts and changes to eligibility have ensured that legal aid spending remains on a downward trajectory but this is not good enough for this Government.

What is proposed is so radical that it will inevitably destroy the criminal justice system if it comes into force in anything like its present guise and at its present suggested rates of pay.

In the Ministerial Foreword to the document Chris Grayling MP says the following:

“Access to justice should not be determined by your ability to pay, and I am clear that legal aid is the hallmark of a fair, open justice system. Unfortunately, over the past decade, the system has lost much of its credibility with the public. Taxpayers money has been used to pay for frivolous claims, to foot the legal bills of wealthy criminals, and to cover cases which run on and on racking up large fees for a small number of lawyers, far in excess of what senior public servants are paid. Under the previous government, the cost of the system spiralled out of control, and it became one of the most costly in the world.”

The system that he then unveils concentrates largely on taking apart the funding structure that we currently have and replacing it with something that will completely undermine what he seeks to achieve. In the new system there will be no justice unless you can pay for it. Frivolous claims have nothing to do with crime, footing the bills of wealthy criminals could be addressed by allowing restrained assets to be used for legal fees and the racking up of large fees by a few highly paid QCs cannot fairly be the stick with which to beat all criminal lawyers. What relevance is there to the payments made to criminal lawyers against those made to senior civil servants, who will no doubt enjoy large pensions at taxpayers’ expense on retirement?

The basic proposals:

1. Means testing Crown Court legal aid

The proposal is for anyone with a disposable income above £37500 pa to be financially excluded from the legal aid scheme. One may perhaps be able to accept this as a concept if defendants prosecuted unsuccessfully by the State were to be recompensed at least by having their reasonable legal fees repaid to them.

The proposal is that a defendant who is acquitted would be entitled to recover costs but only at legal aid rates. So there will be innocent people prosecuted by the State for crimes they did to commit, who are denied legal aid to defend themselves and then only paid back at a rate so far below what they have actually paid as to be nothing more than a token gesture. This is in fact one of the least objectionable parts of the paper!!!

2. VHCC cases

There will be a reduction in VHCC cases of 30% of the hourly rate. This is an absolutely enormous reduction and will bring rates down so far as to be barely viable at the B and C grade and at A Grade on most cases. There is no tendering process just an across the board cut in rates.

3. Advocacy in the Crown Court

The proposal is to remove both the plea and the trial basic fee and have just one basic fee based on the cracked trial fee. There will then be a tapering reduction for each day of trial.

Overall there will be a significant reduction in advocacy fees across the board in the Crown Court. This will hit the smaller cases as well as the longer more complex cases.

This is a blatant inducement to lawyers to encourage clients to plead guilty. It puts the financial interest of the lawyers against the interest of the clients in seeking to secure an acquittal. This a conflict which should not be an issue for most professionals but when the emphasis is so heavily on price and other non-lawyer companies are allowed into the market, one can see this becoming a real issue at all levels.

4. Price Competitive tendering

The country will be divided into criminal justice areas, mainly county areas. London will be divided into three: South, Central & West and East & North. There will be a finite number of contracts available in each area. In South London there will be 18. As I read it, South London will cover Kingston, Richmond, Wimbledon, Sutton, Croydon, Bromley, Camberwell, Lambeth, Greenwich, Lewisham and Woolwich.

Firms will be invited to bid for police station work, magistrates court work and Crown Court litigation within one or more areas. The bid prices are based on the average cost of a police station, magistrates court or Crown Court case in that area and the highest bid cannot be above a 17.5% reduction on that average price. The contracts will go to the lowest bidders. To ensure quality there will be a pre-bid process and basically you will need Lexcel or similar. Not too high a hurdle.

The successful firms will be granted an equal proportion of the work in that area so for south London they will each get 1/18th of the work.

In order to ensure this even split of work between successful firms, any client arrested will have no choice of firm. They will be allocated to a firm on a rota basis and will not be able to change representation during the course of the case except under very exceptional circumstances (conflicts etc). Therefore the “own client” disappears and all cases are allocated by rota.

This means of course that it does not matter how good or bad the firm’s actual quality of work, they will be guaranteed an equal share of the cases in that area. You will no longer be able to attract cases because of your reputation (e.g. getting better cases because you know what you are doing and have a strong reputation) but will be given cases on a purely random basis. It also means that numerous firms will be representing the same person quite likely at the same time if they have different matters on-going. Knowing the client and having built a rapport with them over years is irrelevant. The clients are a commodity, their wishes and their liberty completely unimportant.

There is also no differentiation between a guilty plea and a trial. The same fee will be payable. There is no escape threshold on police station matters, just a fixed fee. As an idea of what the rates may look like:

• In South London the highest possible fee for any bid for a police station case is £282. Although (quite unbelievably) not stated in the paper, these fees include VAT. This is the starting point reduction from the average fee per case in south London. No one would be expected to be successful in any bid unless they were bidding at 25-35% below the current average fee. The average fee is £342. It is perhaps testament to the ineptitude or dishonesty of the document that it does not specify if these are VAT exclusive figures. The only rate where it is specific is in relation to VHCC rates which are quoted exclusive.

• Magistrates Court cases – the average fee for a case in south London is £640 which with a 17.5% reduction means that the highest bid possible per case, trial or guilty plea, is £528. Again this figure includes VAT and will also include general disbursements.

• For Crown Court cases of up to 500 pages the south London average cost is £1366 and the highest bid per case, trial or plea, is £1127. Again including VAT and general disbursements.

• For cases with more than 500 pages, firms will have to bid at a percentage reduction on current fees of no less than 17.5%.

• All other work including appeals and reviews, telephone advice and advocacy assistance will be contracted at an administratively fixed rate of 17.5% lower than the current rate. Therefore in London work on CCRC cases under the advice and assistance scheme will be remunerated at £41 per hour instead of the current £49.70 per hour. The current rate has not increased as far as I can recall this Century. It is already uneconomic if these cases are to be dealt with by experienced solicitors and not handled only by paralegals.

The future

The proposed structure is unsustainable. It will undermine and eradicate client choice, the personal and business incentive to do a good job for your client, adversely affect Black & Minority Ethnic firms who will be too small to bid. The Government wants firms to join together to bid. The economies of scale are not there in such mergers given the huge area to be covered in each area including south London and the rates to be achieved by the successful bidders will be so low that any business being paid at that rate is bound to fail reasonably quickly.

The bid process is open to non law firms or Alternative Business Structures so would be open to Tesco, G4S, Securicor, Eddie Stobart, Capita etc. I suspect even for them the investment is too great and the rewards too small.

This has to be fought otherwise the criminal justice system will fall part rapidly. We have said this before. This does not mean that we are not right! It is an insane proposal. It may be a cover for reducing fees and bringing in One Case One Fee but as it stands it is unsustainable on every level.

I would urge that everyone to sign and encourage others to sign the e-petition at

http://epetitions.direct.gov.uk/petitions/48628.

If we get 100,000 signatures there has to be a debate in the House of Commons.

The consultation paper is at https://consult.justice.gov.uk/digital-communications/transforming-legal-aid/supporting_documents/transforminglegalaid.pdf

Steven Bird
Birds Solicitors
Wandsworth

25/4/13