Response to the Transforming Legal Aid: Crime Duty Contracts Consultation by Birds Solicitors Limited

About the Firm

Birds Solicitors is a firm of criminal defence specialists. The firm was established on 2nd October 2000 and deals with crime at all levels from the most mundane to the most serious of cases. We act in serious fraud cases (were members of the defunct Serious Fraud Panel and VHCC Panel) and are therefore regularly involved in VHCC cases.

Our client base extends beyond the locality although we have a large core of clients from south west London and therefore are a vital resource for the disadvantaged members of society in that area and in particular the local youth. Gang culture is unfortunately rife in this part of London and many of these young men find themselves in our office, some more regularly than others.

We have a specific expertise in protest work and animal rights in particular. We are one of a small number of firms of choice for animal rights protestors arrested throughout the country and regularly deal with cases, large and small, at distant court locations. In this context it is not uncommon for us to represent multiple defendants. Three of our animal rights cases in the last 6 years have been VHCCs. We have acted in other protest work including the student protests, environmental protests and relatively recently represented 25 of the 35 people arrested during the forced eviction of the Dale Farm travellers’ site in Basildon.

We have a national reputation for appellate work and applications to the Criminal Cases Review Commission. We constantly have an appellate caseload of approximately 50 plus cases and run this via highly qualified solicitors and do not rely on less experienced paralegals. We have been responsible for overturning numerous convictions many of which have been referred to the Court of Appeal by the Criminal Cases Review Commission. We also represent claimants in applications for compensation from the Home Office for miscarriages of justice.

Currently we are acting for approximately 50 people who have been convicted mainly on their own plea of guilty for various offences but who were and remain victims of human trafficking. As such they should not have been prosecuted and their convictions are a gross miscarriage of justice. The criminal justice system has failed these people at all levels: police, UKBA, defence solicitors and counsel, prosecuting authorities including lawyers and the courts. We have already overturned several of these convictions by direct application or via the CCRC. One of our solicitors was short listed and highly commended for this work in the 2014 Law Society Excellence Awards.

We also have a small prison law department and regularly appear at adjudications in and around London prisons.

We have 20 solicitors, 12 of whom are duty solicitors and 7 are higher courts advocates, one legally qualified paralegal and four support staff. Steven Bird is the co-author of the Police Station Advisers’ Index (in its 4th edition) and has contributed chapters to Taylor on Criminal Appeals (2nd edition) and a publication on the CCRC by Michael Naughton. We have previously provided articles to Westlaw. Mr Bird is on the editorial board of LexisNexis PSL and a committee member of the London Criminal Courts Solicitors Association (LCCSA) and the Criminal Appeal Lawyers Association (CALA) of which he is Chairman. The firm deals solely with criminal law although since early 2009 has introduced a prison law department.
We are highly recommended in the top tier of both the Legal 500 and Chambers & Partners directories as one of the top firms in London for criminal work. We are also highly recommended for fraud work. Both Steven Bird and Tim Greene are highly recommended in Chambers & Partners as individuals and Steven Bird is also listed as a leading individual in the Legal 500 and Evans Amoah-Nyamekye and Richard Locke are also commended. In the Legal 500. Claire Bostock is recommended in Chambers and Steven Bird, Tim Greene, James Nicholls, Martyn Fisher and Evans Amoah-Nyamekye were all recommended in the recent first edition of SuperLawyers.

We believe that we are a firm which has a deep understanding of the criminal defence field including the financial viability of the current proposals for our business and those of others in this part of the profession. As our cases range from the minor to the most serious, from the police station to the Magistrates Court, the Crown Court and into the Appellate Courts, we are qualified to speak about the system as a whole and would be a firm which the Government might expect to be likely to bid for a duty contract under these proposals.

We state now that we do not believe that the fees, the fee structure or the separation of duty and own client contracts as proposed in this consultation paper provide any firm however constituted with a viable business model. The proposals are fundamentally flawed and no firm could survive financially under the proposed structure if that firm is to retain any professional integrity.
If the proposals are followed through, we are gravely concerned as to whether we would be able to continue to operate as 85% of our turnover comes from legally aided work. We believe that we would have to reduce in size by about two thirds to have any chance of survival on an own client only contract. We are very doubtful that the rates would allow long-term viability even if a duty contract or contracts were secured.

Preamble

This consultation was forced upon the Ministry of Justice (MOJ) by the outcome of the recent judicial review proceedings taken by the LCCSA and the CLSA in which Mr Justice Burnett found that the previous consultation process was “so unfair as to result in illegality” (para 50). With a large degree of bad faith on behalf of the MOJ, there is no mention of the reasons for the consultation in the Ministry of Justice material, Indeed the MOJ managed to show breathtaking arrogance and contempt for the court process by dismissing the judgment as merely having highlighted a few “technical issues” in the process. For the process to have been so unfair as to result in illegality goes far beyond a few technical issues. The fact that the Ministry charged with running the court system could be so contemptuous of a court judgment is really very worrying indeed and, in our view, shows a Ministry and a Minister that are out of touch and dangerously oblivious to the terrible problems that they could cause to access to justice in the UK at a time when we are about to celebrate 800 years of Magna Carta.

This feeling is reinforced by the fact that we have now been given a mere three weeks to respond to this consultation. Although the judgment suggested that a short re-consultation might be appropriate, it is our firm view that the Ministry should be acting now with the utmost fairness to allow the profession adequate time to respond to what are extremely complex reports (especially KPMG) which form the basis of the complex model chosen by the Ministry for the tender of Duty Provider Contracts.

We, as a firm, would wish the representative associations (CLSA, LCCSA) and the Law Society to commission a report to analyse the KPMG report on an equally footing. It is obvious that this was not something that should have been done during the Judicial Review proceedings, as the cost is substantial and it was clearly not necessary to have such a report in order to win the case. We are aware that the CLSA has requested more time, as indeed has the LCCSA in their response, but this request has been denied.

It is not possible for the profession to consider the effect of alternative assumptions on the model without an executable version of it being made available and once again, this has been requested and refused. Having been bitten once by Judicial Review, we would have expected a greater degree of fairness and co-operation from the MOJ.

It is particularly important to be allowed this time when the MOJ demands evidence for our comments. Largely the evidence is in the reports already prepared for the MOJ by KPMG, Otterburn and PA Consulting. However, a further analysis by an expert instructed by the profession would be appropriate and cannot be delivered within the time scale allowed.

It would be nice if the MOJ abided by the notion of relying on evidence to support their views and proposals. The basis for the original consultation was a string of inaccurate sound bites set out by the Minister in his Foreword. Not one of his assertions was actually supported by evidence and each was contradicted by evidence that was available. Where evidence has been available it has generally contradicted the Minister’s aims, and therefore it has been ignored.

The introduction to this consultation

The Ministry says that the “proposals will deliver the necessary savings to the public purse, while ensuring that all those accused of a crime will continue to have access to justice and receive quality legal representation; that defendants will be free to choose their lawyer, whether they want a big firm, their local high street solicitor or a particular specialist; and that all those who provide criminal legal aid services could continue to do so, provided they meet minimum quality standards.”

The short answer is that none of these objectives will be met if these proposals are introduced:

 

• These proposals will not deliver the necessary savings to the public purse – the savings are already being made and are ahead of where the MOJ wanted to be given that £172 million has been reduced from the criminal legal aid spend in only two years, leaving a further £43 million to go before 2018/19. This will be achieved with no further cuts and, in fact, in our view, even if the last 8.75% cut were reversed as it should be to sustain legal aid for the next few years. We do not believe that this process has anything to do with saving money but is highly political and ideological.
• Those accused of crime will not continue to have access to justice or receive quality legal representation – the vast majority of firms which do not obtain a duty contract are likely to fail within a year (Otterburn). This will reduce access to justice as the qualified solicitors employed by these firms will not be re-employed by the Duty Contract holding firms as they will have to employ cheaper non-qualified staff (as envisaged by KPMG) thus drastically reducing the quality of advice.
• Defendants will not be free to choose a big firm, a high street firm or a specialist – only those holding Duty Contracts and a handful of small own client firms will survive very long under these proposals. The client’s ability to choose a firm to suit them will be eroded quickly and this scheme is a more subtle way of destroying client choice than the original PCT proposals. The effect, however, will be the same within a relatively short period of time.
• All those who wish to will be able to continue to provide criminal legal aid services – this is clearly nonsense. Without a Duty Contract, the vast majority of firms are likely to fail in a year or so (Otterburn). They may wish to continue but the economic reality of life (something that does not trouble the MOJ if these proposals are anything to go by) will soon bite and firms will leave criminal legal aid work or close altogether.Burnett J in paragraph 37 of his judgment makes the point about the doubts around the survival of own client only firms:

  “A number of important contextual and factual matters provide the foundation for consideration of fairness in this case. First, the impact of the decisions upon any existing firm of solicitors which fails to secure a Duty Provider Work contract is likely to be very profound. It is questionable whether a criminal legal aid firm, or a department within a firm with a broader work base, could survive, or survive for long, on Own Client Work. The impact upon those who secure the contracts and upon access to justice if the assumptions underlying the KPMG calculations are wrong would also be serious.”

  Burnett J makes an extremely valuable point in highlighting the seriousness of effect on access to justice if KPMG has got it wrong. We believe that KPMG has got it wrong as we agree with few, if any, of the assumptions upon which their model is based. If the assumptions are wrong, the model has to be wrong and the proposed system will not work as envisaged by the MOJ.

  These proposals put access to justice and the criminal justice system at real risk of collapse. The Minister may have moved onto another post to wreak havoc there by the time the real problems emerge but the country will not thank him for the mess he will have left in his wake. He needs to remove his fingers from his ears and start listening to the strength of opinion against these proposals. This is educated opinion not the mere guesswork or hoping for the best which characterises the MOJ’s position.

  The reluctance with which the Ministry undertakes this consultation exercise is obvious on the face of the document and by the ridiculous timescale allowed. The scope of the exercise is limited such that it wishes to exclude consultation on the “dual contracting model” itself and rather only seeks to consult on the reports and the number of contracts to be let. We wish to make it plain that the model itself does not work. It has to be abandoned while there is time and the views of the professionals working within the system have to be taken into account at this crucial stage. To do otherwise would be perverse and illogical once the full scale of opposition becomes obvious to the MOJ.

  The consultation questions

  1 Do you have any comments on the findings of the Otterburn report, including the observations set out at pages 5 to 8 of his Report? Please provide evidence to support your views.

  Otterburn’s research is based on evidence. Otterburn considered the level of response to the survey to be good.

  • Reduced levels of work

  We agree that there has been a significant reduction in work levels. This is supported by numerous other agencies including the Legal Aid Agency in its most recent Annual Report.

  This was also the finding of Oxford Economics in their report commissioned by the LCCSA, CLSA and Law Society but immediately rejected by the Minister. Oxford Economics predicted that with spend based on the falling volume rather than a flat line, the savings from the fall alone would be £84 million by 2018/19. The Minister said that predicting on a flat line was accurate to within 1%. This was untrue as the prediction for 2012/13 was 5% out and for 2013/14 it was 3.5% out.

  The LAA report also states that the volume of work had dropped in the year by 6% in Magistrates’ Courts and an unspecified amount in Crown Courts. The Crown Prosecution Service Improvement Plan published in March 2013 shows a continued decrease in cases in both the Magistrates’ and Crown Court (at page 10).

  The reduction in volume is recognised by Otterburn, Oxford Economics, the LAA, the CPS and those working in the profession. However, the MOJ refuses to acknowledge that this is a factor which should be considered when considering the likely savings to be made going forward. Of more concern is that the Minister himself has personally stated in a letter to the Associations rejecting Oxford Economics that the flat line produces an accurate estimation of cost to a level which is simply inaccurate.

  • On average firms were achieving a 5% profit margin but larger firms had lower margins and the full effect of previous fee cuts had not been reflected in the figures

  We have no reason to dispute the figures. The evidence from Otterburn demonstrates that larger firms have smaller margins and, despite any economies of scale that may exist, the larger firms may well be less able to cope with the fee cuts than the smaller firms.

  Continued fee cuts have a tendency to fragment the market and consolidation in the face of such cuts becomes impossible.

  • The finances of many crime firms are fragile. Most do not have significant cash reserves or high excess bank facilities;

  We agree with this finding. It is why further cuts are so damaging to the supplier base and to access to justice generally.

  The SRA recognises an over-reliance on legal aid fee income as being a significant risk factor. This in itself should be a stark warning to the Ministry in seeking to implement proposals in this sector where legal aid fees are the main source of income for so many firms.

  • If the first reduction in fees of 8.75% takes place before there has been any opportunity for the market to consolidate the participants indicated that their profitability would be significantly weakened before they had managed to secure additional volume;

  We agree with this statement. The Government, however, having jointly commissioned Otterburn, ignored this finding and went ahead with the cut as originally planned.

  The Government also ignored the warnings on these cuts in the PA Consulting report which was not disclosed to the profession until it came out in the judicial review proceedings. PA Consulting recognised that low profit margins would drive firms out of legally aided criminal defence work. This was in the context of considering whether a cut of 8.75% could be made in February 2014 (which cut was made in March 2014 contrary to their recommendations and those in Otterburn):

  “In this scenario, an 8.75% reduction in fee levels, is expected to reduce to firms’ median margins to 1.6%. It is likely some firms may decide this profit level whilst positive is not sufficient to sustain them in the market due to the impact on the levels of available working capital. Similarly, even if firms do not have liquidity constraints, they may still take the view there is insufficient incentive/returns to remain in the market.”

  The full effect of that cut will not be seen for a few months but we expect to see firms struggling as this cut is actually higher than the average profit margin of firms and will therefore put very many into a negative profit situation once it works through the system.

  • Most firms are dependent on duty contracts for generating fresh work and few would be sustainable in the medium term without it.

  The supplier base will contract dramatically if the Duty Contract regime comes into place, as firms without a Duty Contract will fail quickly.

  Client choice and general access to justice will suffer as a result and pressure will be put on the Duty Contract holding firms as more clients are forced to use the duty solicitor, as their solicitor of choice is no longer in practice.

  • We have taken achieving a 5% margin as a minimum definition of a viable practice

  Such a margin is necessary to keep firms running, for re-investment and for an incentive to those firm owners to keep going. Cuts of the magnitude of 8.75% will eradicate this profit margin.

  This finding was specifically ignored by KPMG but it is not clear if it was ignored by them on their own insistence or at the request of the MOJ. The MOJ has not adequately explained why a divergence of approach was taken to the best evidence available on this issue, namely Otterburn.

  In addition, as mentioned above, PA Consulting found that a cut of 8.75% would reduce profit margins to 1.6% on average and that at this level firms may begin to leave the sector.

  Otterburn also makes a valid point that viability is dependent on many things, a large number of which are outside the control of the firm:

  “The supplier base is very diverse and a firm’s ability to make a profit depends on a range of factors that combine to mean there is no single size or format that is viable. Key issues include volumes of work that are available, which varies according to geographical location, the firm’s overall reputation and profile, its efficiency and use of technology, and the firm’s financial structure. It also depends crucially on many factors beyond the firms’ control, such as the efficiency of the police, CPS, prison transport services, prisons and courts where it operates. In the qualitative interviews, a number of respondents commented that the more efficiently these operate, the more efficiently a firm can operate. If there are problems elsewhere in the overall criminal justice system, these impact directly on firms’ profitability.”

  For KPMG to ignore this finding in favour of the bizarre notion that any level of profit means the firm is viable is troubling and undermines the validity of their work. We do not believe that KPMG insisted on this as a result of their experience but that it was requested by the MOJ. The caveats on the KPMG report are so extensive that it suggests they have no faith in their own conclusions, so heavily have they been influenced and manipulated through various drafts by the MOJ.

  • Consortia

  The Ministry suggests that Duty Contracts would not go only to large firms. Only large firms are likely to be able to demonstrate the capacity to take on most Duty Contracts. In their modelling, KPMG have assumed that the two largest suppliers in each procurement area will make bids and be awarded contracts.

  The process allows “consortia” through “delivery partners”. This is unlikely in our view to provide any assistance to firms seeking to scale up sufficiently to be able to obtain a Duty Contract.

  Otterburn uses the term “consortia” but is in effect describing the same thing when at page 45 of the report, it states:

  “Some firms may achieve critical mass through the creation of consortia however these are unlikely to create the more efficient financial structures required. They will be unable to re-structure the balance between equity and other fee earners, will not benefit from one set of systems and will have added an administrative task in liaising with the other firms in the consortium, and guaranteeing consistent performance, that someone will need to manage.”

  This is absolutely correct. The extra administrative burden and the regulatory issues involved in taking on or being a “delivery partner” are so great that it is unlikely to be an attractive proposition for many firms. In addition economies of scale, the whole point of the exercise, are completely lost if “delivery partners” are used.

  Otterburn’s research provides the Ministry with the evidence it seeks as to the actual state of play within the criminal defence sector. It should not be ignored. Most of what Otterburn says is contrary to what the MOJ wants to hear. However to ignore them and base a whole system on untried and untested theory is beyond reckless.

  2 Do you have any comments on the assumptions adopted by KPMG? Please provide evidence to support your views.

  We disagree with virtually all of the assumptions. Burnett J recognised in his judgment in the JR proceedings that criminal defence solicitors working under legal aid not only should be asked their views on the assumptions but also should be listened to when they give those views.

  Any decision by the MOJ will only be better informed for our input, if our input is taken on board. We anticipate that the MOJ will receive a very large number of responses from the profession and that those responses will be almost entirely negative to the proposals. To ignore the views of those working in the system in favour of assumptions made up by civil servants in the MOJ would be extremely ill advised and dangerous.

  The assumptions:

  • Future work levels are predicted on a flat line

  We have already set out above the fact that this is not the case at present and has not been the case for several years. The MOJ is referred to the Oxford Economics report, the LAA’s most recent Annual Report and the CPS Improvement Plan for 2013. Otterburn reports firms reporting a drop in volume.

  Notwithstanding all the evidence to the contrary, the MOJ still insists on a flat line assumption. As stated above, this has lead to a margin of error in 2012/13 of 5% and in 2013/14 of 3.5% on predicted spend not the 1% heralded by the Minister in his letter to the LCCSA rejecting the Oxford Economics report.

  A fall in volume over time will reduce the amount of money spent on criminal legal aid. It will also decrease the value of the Duty and Own Client Contracts. With firms working already on very small profit margins before the first 8.75% cut, any negative fluctuation in volume is a disaster.

  With profit margins reduced to levels where PA Consulting say firms will walk away from legally aided crime, a further drop in volume will be fatal, even if there are no further cuts.

  • Solicitors obtaining a Duty Contract will give up 50% of their Own Client work

  This assumption is quite simply insane. This firm, if it obtained a Duty Contract, would not give up any of its Own Client work. If the Duty Contract model actually manages to last to a second round and, if against all the odds, there are enough firms to bid at that time other than the incumbents, any firm which had a contract but loses it will go under immediately as they would have disappointed half of their client base by rejecting them during the last four years.

  How is a firm to decide which half to reject? Do they perhaps not take cases on if the surname begins with a certain letter or the call is on a certain day of the week? The concept is ludicrous and the assumption, quite simply, is wrong. It can only have come from someone with no idea whatsoever as to how business works, firms in this sector operate or the system as a whole operates.

  It is difficult to express the ridiculous nature of this assumption strongly enough. The system should be re-modelled on the basis that no own clients would be given up. This will, we expect, lead to greater problems in terms of firms scaling up to take on contracts. However, the assumptions used should be accurate and not just made up so that the model comes up with an answer that the MOJ likes.

  We represent some of the most vulnerable people in society. The firm gets to know these individuals if they get in trouble on a regular basis. We know their problems, their history. We can, therefore, deal with each of our own clients more efficiently and swiftly than if they had to deal with a new firm each time they got into trouble.

  We have clients who we have represented over 70 times in the last decade. We have clients who will only speak to Birds and get upset if it is even a different solicitor within the firm. We represent generations of the same family for numerous families who have known the firm or individuals employed by it for years.; repeating the same background material (usually unreliably) on each occasion and necessitating the new firms obtaining previous files from numerous other solicitors if the client has had to take up a new duty solicitor every time he has been arrested. Clients can become quite upset with a change of representation even within the same firm on occasions. Our dealing with these clients has a beneficial effect on the system generally as they listen to our advice more readily, are more willing to plead guilty where so advised and we do not require so much time to prepare their cases such that the process can be more effective. We may hold recent medical reports that can assist in new cases.

  We have specialist knowledge in certain areas such as protest work and animal rights such that any client coming to us as a result of that expertise is immediately in a more advantageous position and the case can be more efficiently prepared as we know the history of the protest movement and the background to previous cases on what can sometimes be rather complicated and unusual offences (e.g. interference with the contractual relationships of an animal research organisation under section 145 of the Serious Organised Crime and Police Act 2005).

  The criminal justice market is very competitive and no firm will sacrifice its hard won own clients for the random nature of Duty work. Client choice is the driver of quality of service. If firms are not to take on their own client work, quality will suffer.

  It is absolutely clear that this assumption is wrong. The Law Society had said as much in the meetings they had with the MOJ and, on this point, we agree with them. The assumption should be that no ‘own clients’ would be dropped to service the duty contract.

  In terms of evidence we can say that we will not give up any own client work and we know of no other firm that has indicated that it will do so.

  • If the firm showed a positive profitability under the proposed number of contracts it was considered viable

  This is utter nonsense. It makes no business or economic sense. Solicitors’ practises undertaking criminal legal aid work are generally small and medium size enterprises. The owners of the businesses rely on the income generated by the business for their income.

  It is important that there is a profit margin of sufficient size to allow the risk of running such a practice to be rewarded and for the effort and stress that goes into running a business of this nature to be rewarded. The last decade ahs been a constant round of consultation after consultation with plans re-hashed by Government after government seeking to re-invent the wheel. The current proposals seem to have settled on a shape of four equal sides as being the most appropriate way to move the vehicle forward. If it moves at all under these proposals, it will be a very bumpy ride.

  It is simply not worth running the business if the reward is a profit of 0.1%. PA Consulting recognised this as a problem if profit margins dropped as low as 1.6%. Otterburn says the average profit margin is below the level of cuts that went through in March. We already have to deal with figures that make no economic sense.

  We would be interested to know if KPMG has ever suggested to any business in any sector that any level of profit makes the business viable. Such a suggestion undermines the confidence that we can have in the work done by KPMG.

  Otterburn says that the minimum profit margin for a viable practice should be considered to be 5%. We would suggest that this is a more sensible assumption to make. Otterburn has a considerable experience of this market. KPMG does not. However, their views have been dismissed because they do not suit the MOJ plan. In the Next Steps Response the reason is given as follows:-

  “Otterburn, while not asked to make recommendations, expressed a number of observations including the view (based on his experience) that a minimum 5% profit margin was necessary to make providers sustainable. There was very little evidence to support this view. KPMG, based on their judgement and experience, did not agree that any particular minimum profit margin was strictly necessary. In the absence of robust evidence to support Otterburn’s view on the 5% profit margin we accept KPMG’s assumption was a reasonable one to make.”
  KPMG therefore are considered to have experience and judgement in this area and Otterburn is sidelined despite the relevancy of Otterburn’s experience in this particular market. We believe that this assumption was given to KPMG by the MOJ although the tone of the MOJ documentation suggests otherwise. We would like to know where this assumption actually came from. Whoever thought it up should immediately be sacked.

  • There is 15% latent capacity in any firm

  The full assumption is that “[l]atent capacity exists within providers: A 15% improvement in capacity was assumed to arise from latent capacity already existing within providers and/or the reallocation of some staff from other areas of the firm to work on criminal legal aid work”.

  We do not have “other areas” to pull people from. We do not have latent capacity approaching 15%. We cannot afford to have staff not working at (or indeed some may say beyond) full capacity. We expect our staff to work hard and this goes throughout the firm such that the senior director has as big a caseload, if not bigger, than the more junior staff.

  It is common for us to work into the evening regularly even if not called out to a police station out of normal office hours and to spend the weekend working (or responding to the endless consultations produced by the Ministry – note the date on this response!).

  We do not understand where the evidence comes from to justify the assumption. There seems to be a suggestion that as volumes are falling, staff will have the capacity to increase their workloads. This is not our direct experience.

  We would suggest that latent capacity does not exist in most criminal firms. If it does it would be at a much lower level. We are not aware of any research on this area and to commission it now is not possible given the very short time period to respond to this consultation.

  • Organic growth of 20% has been assumed to be achievable through increased recruitment activity

  There will be lots of redundant solicitors around if this proposal comes into force. However the Duty Contract winning firms, given the rates of pay under the new scheme, will not be recruiting qualified solicitors but unqualified paralegals. KPMG recognise this when they say (in a sentence that we find personally insulting to criminal defence lawyers):

  “There is potentially a pool of untapped capability that could reduce salary costs (for example, 38% of College of Law graduates in 2010 were unable to get training contracts, albeit the majority of these managed to gain law related work e.g. as a paralegal)”

  The suggestion therefore is that those not good enough to get a training contract in an area of the law that pays better can work as a paralegal for a criminal legal aid firm.

  Otterburn also pointed out the financial challenges that exist for criminal legal aid firms in terms of obtaining finance and to increase the size of the firm by 20% would involve considerable expense. It is most unlikely that firms would have the financial capabilities to do this or be considered a good risk for bank loans.

  We do not fully understand this assumption or how it has been calculated. The report is rather opaque in many places and requires consideration by a properly instructed expert.

  • There will be 2 or 4 new entrants to the market

  The assumption is 2 in all areas except London where in order to work the figure needs to be four. We do not follow the logic of this assumption. It seems to be based on nothing but what is required to make the model work properly and we would be greatly assisted by expert input on this particular assumption.

  On a basic level it is difficult to see how any new entrants would enter the market at a sufficient size to be able to bid for a Duty Contract in any area, let alone every area. We assume a new entrant includes any firms joining together. However, such consortia are, for reasons stated above, unlikely to be very popular.

  3 Do you have any comments on the analysis produced by KPMG? Please provide evidence to support your views.

  This is complicated and requires expert assistance to provide any meaningful response.

  • Disclaimer by KPMG

  The “Important Notice” that appears at the forward to the KPMG report suggests that so much of the vital information on which the report is based comes from outside sources (mainly the MOJ) and has not been checked by KPMG that the report itself cannot be properly relied upon as accurate without the checking of the accuracy of those assumptions. This is alarming as the MOJ is basing the criminal legal aid Contracting system on a report that is based entirely on assumptions that it has made up and which are not only untested but hotly disputed by the profession. The assumptions are wrong so the report will be wrong. KPMG seems to be saying that if the basic untested assumptions are wrong, do not rely on the report. Burnett J also said that if the assumptions are wrong the situation for the criminal justice system is very serious.

  We ask the MOJ: “Are you sure these assumptions are right despite the volume and strength of the comment to the contrary? If you are not sure, you cannot proceed with the proposals. If you are sure, why are you sure when everyone else says they are wrong?”

  We remind you of the words of Mr Justice Burnett:

  “The impact upon those who secure the contracts and upon access to justice if the assumptions underlying the KPMG calculations are wrong would also be serious.”

  Perhaps just as appropriate are the words of Clint Eastwood in Dirty Harry: “Do you feel lucky, punk?”

  If you are wrong, the system fails and cannot be repaired as it will be too late. If the assumptions are wrong, the model is wrong. If the model is wrong, the new system will fail and the consequences will be dire. You cannot trust this to luck. We all know the assumptions and the model are wrong and that it will fail. We are telling you loud and clear. Are you listening, Mr Grayling? It is some gamble.

  • Multiple bids (London)

  In London it is likely that if the madness continues and the scheme is introduced despite the objections, there will be multiple bids across areas. This will affect the level of scaling up required and we do not believe this has been factored into the equation by KPMG.

  Our firm is geographically eligible for 7 police station schemes. We are in or just outside the top number of firms in terms of size to which contracts might be awarded on 4 of them.

  If we were to bid at all, we would have to bid in more than one area. This would increase the amount by which we would have to scale up considerably. However, to bid in only one area would be too risky. The risk of not getting a contract at all would be too great. Also the risk of structural changes in the police stations or courts in the life of the contract would leave you open to enormous problems.

  As an example, during the life of the last duty rota, all remand cases for the South west London criminal justice area were moved from South London (Lavender Hill Magistrates” Court) to Wimbledon Magistrates’ Court. This meant that all the court duty work (with the exception of one rota one day a week) moved from Lavender Hill to Wimbledon. We were not on the Wimbledon Court scheme. Had we been in the position of having a four year duty contract for South London and half way through it, all the work were moved to Wimbledon, we would have lost all of that duty work for the rest of the contract – a financial disaster. Equally those on the Wimbledon scheme would have an influx of work with which they could probably not cope.

  Furthermore, Wimbledon Police Station is no longer used for custody cases except very occasionally and all the arrestees are taken to Sutton which is on another scheme. The police differentiate a Merton (Wimbledon) arrest from a Sutton arrest on arrival and the DSCC is supposed to call the correct scheme out. However, we know that the DSCC was calling Sutton scheme whenever they hear it is Sutton police station. We raised this issue with the head of custody at Sutton and with the LAA. We are told that the problem has now been addressed but we are not confident that it has – we are not eligible for the Sutton scheme. These changes are not co-ordinated across the system and will adversely affect firms with duty contracts in different schemes and are a reason why you would not rely on one contract in London.

  4 Do you have any views on the MoJ comments set out in this document? Please provide evidence to support your views.

  We have made some comments above.

  In short:

  • You have ignored Otterburn where it does not suit you
  • Otterburn is generally accurate
  • The KPMG assumptions are largely taken from the MOJ
  • The assumptions are wrong.
  • The model will therefore be wrong
  • The model will therefore not work
  • The system will fail as firms will go out of business and only the large Duty Contract holders will be left
  • They will struggle on the rates on offer as the larger firms already have lower profit margins and will be less able to take the cut in rates.
  • Therefore even the Duty Contract holders are at risk of financial meltdown.
  • You can hear the risks and the warnings
  • To take this forward regardless of those warnings and against eh strength of opinion would be foolhardy, reckless, dangerous, irrational and simply insane
  • Do not gamble with the criminal justice system and access to justice.

  5. If the assumptions and data on which the KPMG recommendations are based remain appropriate, do you consider that there is any reason not to accept the maximum number of contracts possible (525), as the MoJ have done? Please provide evidence to support your views.

  This is a stupid question and does not even deserve an answer. The assumptions are wrong.

  6 Do you have any other views we should consider when deciding on the number of contracts? Please provide evidence to support your views.

  These reforms are dangerous. They are untested and based on seriously erroneous assumptions which make the model itself unreliable. Any decisions taken which are based on this model will be liable to fail as a result.

  No financial case for the reforms

  • The criminal legal aid spend is falling ahead of target each year.
  • When the first consultation was launched in April 2013, the Minister said he wanted to save £220 million from the 2011/12 budget by 2018/19.
  • The spend in 2011/12 was £1.08 billion.
  • Reducing that by £220 million would have left a budget for 2018/19 of £860 million.
  • Subsequently the amount to be saved has gone down to £215 million so the ultimate budget for 2018/19 would be £865 million.
  • At no time has the Minister or anyone in the MOJ acknowledged that this is the end figure at which they are aiming
  • It is a simple question which is never answered. The goalposts cannot be moved if this question is answered.
  • The actual spend on criminal legal aid has fallen from £1.08 billion to £908 million in two years since 2011/12.
  • This is a fall of £172 million.
  • To get to the target figure the Government needs to save a further £43 million in 4 years.
  • This will be achieved with no further cuts and, we suggest, even if the last 8.75% cut were re-instated such is the fall in volume.
  • The financial case for these reforms and their drastic nature with all the risk that entails has not been made out.

  These proposals are wrong-headed, based on incorrect assumptions and are not necessary to reach the target of savings by 2018/19. They are unnecessary from a financial point of view and must, therefore, be ideological, as they will disadvantage the most vulnerable in society by removing a quality State funded legal aid system for those accused by the State of committing crime. Access to justice and client choice will be destroyed by these proposals. Ideology not austerity is behind them and it is about time that was admitted by this Minister.

  Birds Solicitors