Categorized | Criminal Justice, Legal Aid

Any chance of compensation?

Any chance of compensation?

Following Michael Gove’s announcement that he was abandoning a new contracting regime for criminal legal aid, some criminal defence firms are considering whether to seek compensation from the government.

While welcoming the decision not to go ahead with the introduction of the dual contracting system, shadow justice minister Andy Slaughter told the House of Commons: “This has been an appalling use of taxpayers’ money. It has posed an existential threat to a fundamental part of our legal system, and it has caused uncertainty, failure and distress to thousands of hard-working small businesses throughout the country.”

He asked the minister: “Will he apologise to the firms that have closed, laid off staff or cut salaries when faced with losing contracts, and also to those who have spent thousands of pounds on bidding and winning contracts and, in many instances, taking on extra staff whom they will not now need? Will he go further, and establish what assistance can be given to those firms? Will he remove the remaining uncertainty over the second fee cut?”

Justice minister Shailesh Vara replied that Slaughter appeared to have a selective memory. “I remind him that in 2009, when Jack Straw was Justice Secretary, he abandoned the criminal legal aid best value tendering scheme at a very late stage, just before the 2010 general election. I do not recall the hon. Gentleman’s grumbling to his boss at the time.”

Some solicitors said their firms were now considering whether to seek compensation from the Ministry of Justice after spending thousands of pounds preparing for the new contracts. The ‘Law Gazette’ reports that Kent-based practice Gurney Harden Solicitors spent about £30,000 in preparation costs. Director Andrew Gurney said the firm had to hire staff and lease new offices. “This has been a complete waste of time and effort when all the Legal Aid Agency had to do was listen to the profession three years ago.”
Gurney said he intended to pursue “every avenue to obtain damages against the [agency] for the financial loss incurred as a result of their conduct”

Another firm said its total outgoings in preparing for the new contracts amounted to about £65,700 and 650 hours of senior fee-earner time.

But there is a snag. The LAA’s ‘Information for Applicants’ document, published in November 2014, states that the LAA has the right “not to proceed to award contracts at any time at its absolute discretion.”

The document also states: “The applicant organisation is solely responsible for the costs and expenses incurred in connection with the preparation and submission of a tender or associated with any cancellation or suspension of this procurement process by the LAA. Under no circumstances will the LAA, or any of its employees, be liable for any costs.”

A spokesperson for the LAA said the ‘Information for Applicants document’ “was very clear that [the agency] had the right to suspend or cancel the procurement process at any time.” Whether the Unfair Contract Terms Act 2015 can be invoked remains to be seen.
Not all solicitors are outraged. An anonymous reader of the ‘Law Gazette’ writes: “Big love to the contract ‘winning’ firms who were more than happy to shaft their competitors in what they perceived to be a gold rush for the Faberge egg of Duty work, and especially to those amongst them who were quick to smugly broadcast the fact, when they thought they’d landed on the greener side of the apartheid fence…

“Tenders come and go. Some bidders win, some don’t. Sometimes the procuring party changes its mind. It was there in the small print (for all the lawyers to see). That’s commercial life.

“Welcome to big school.”

This post was written by:

- who has written 462 posts on Upper Case – The Anya Legal Journal.

Mike Gribbin is a retired Civil Servant with wide experience, including the drafting and implementation of Parliamentary legislation and regulations. He is the editor of “Criminal Offences Handbook”, a uniquely comprehensive guide to more than one thousand ways to fall foul of UK criminal law. He is Editor of the Upper Case Legal Journal and has been writing blog posts for the past eight years.

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