The Law Society claimed a partial victory when, after lobbying hard for a proper pilot and full evaluation of the proposals, the LSC promised that decisions on any roll out will not be taken until full pilots have been evaluated, which will not be before 2013. “This decision is a testament to the strength of the arguments put forward in the responses of the Law Society and all the other organisations who responded to the consultation” said Paul Marsh, Law Society President. He expressed pleasure that the LSC has adopted many of the suggestions in relation to the pilot model that were made in the economic report by LECG which was commissioned by the Law Society and welcomed the acknowledgement of the need for solicitors to be able to follow their clients out of area.

But there the welcome ends. Their main concerns are still that access to justice will be reduced and that there is a great risk of disrupting the existing supplier base. Firms are likely to feel pressured to make unsustainably low bids in order to win a contract and quality will not be taken into account as part of the bid process. The Law Society expressed disappointment that, despite an overwhelmingly negative response to BVT, the LSC has decided to proceed with pilot schemes in Manchester and Bristol. In a recent exchange of correspondence with the LSC, Des Hudson, Chief Executive of the Law Society, called for some protection for firms in the pilot areas. As bidding for contracts in the pilot areas will be open to all the firms in the whole country, this has the potential completely to destabilise and cause permanent damage to the existing supplier base, particularly as economic analysis has confirmed that the market is extremely fragile and that many firms currently operate at marginal profits. He also drew attention to the “complete lack of detail” of how the scheme will operate. “Please explain what, if any, training or advice you intend to provide.” Paul Marsh warned of the potentially destructive impact on firms in the pilot areas that will be forced to exit the market if they did not secure a contract. “For some lawyers in this position, the result will be personal bankruptcy,” said Marsh. “It is not acceptable that people should be bankrupted by the operation of a pilot scheme.”

Other views reported in the ‘Law Society Gazette’ included those of leading criminal law solicitor Andrew Keogh, who predicted the demise of BVT. “The pilots won’t happen. It’s a monumental shift by the LSC, kicking everything into the long grass.” Franklin Sinclair, senior partner at Manchester firm Tuckers, said practitioners would be looking at ways to challenge the decision to proceed, but if the pilots went ahead, it would be a “disaster for clients…I can foresee firms making unsustainable suicide bids and the price ending up so low that providing a service of any quality will not be possible.” Ian Kelcey, chairman of the Law Society’s criminal law committee, warned “each firm [in the pilot] will have to consider what decision it makes in relation to BVT. But they should be under no misapprehension that, if the price drops, the standards required by the SRA will not decrease.”

The full text of Des Hudson’s letter to the LSC is at:- http://www.lawsociety.org.uk/new/documents/2009/deshudson_lsc050809.pdf

and the LSC’s response is at:- http://www.lawsociety.org.uk/new/documents/2009/lscresponsebvt140809.pdf

Introducing proposals for legal aid reform last week, Legal Aid Minister, Willy Bach, said that the UK has one of the best funded legal aid systems in the world. He went on to say that “legal aid practitioners provide a fantastic service and should be paid accordingly; and that means rebalancing some fee structures so that there is greater fairness across the board. Today’s consultation paper sets out proposals to make better use of the legal aid budget and ensure access for as many people as possible”.

The proposals set out to rebalance the legal aid budget seek to ensure that the £2 billion currently spent every year goes as far as possible in favour of civil help for those who need it most. “Legal advice, in the fields of housing, debt, and welfare benefits, can solve people’s legal problems, with the result that their lives and lives of their families are improved. It can literally change people’s lives”, said Lord Bach. During the current economic downturn “more people who are homeowners, consumers, employees and those facing financial hardship, are vulnerable in ways that require them to use the civil law system”.

One proposal is to rationalise the rate of pay for barristers in Crown Court cases. On average, barristers acting for the prosecution receive 23% less pay than if they were acting for the defence. Ending the current duplication of fees, which remunerates litigators for preparation for committal hearing but which also remunerates the same litigators for consideration of the Committals Bundle in preparation for trial in the Crown Court, is also proposed, with one fixed fee to be paid out of the Litigator Graduate Fee Scheme. The anomaly by which practitioners in criminal cases receive a fee for file reviews which does not apply in civil cases is to be removed, with the ending of payments for criminal file reviews.

A particularly controversial proposal is the reduction in police station fees in the most expensive and oversubscribed areas. The Law Society is clear that many solicitors will not be able to provide a service if rates are reduced further. This will be particularly the case in London, where, it claims, solicitors work on the very edges of profitability. Many of the worst affected solicitors will be from the BME community, who provide important advice to members of that community, who are statistically more likely to be arrested. Des Hudson, Law Society Chief Executive, said: “Solicitors don’t create the demand for advice in police stations; they simply respond to requests from people who’ve been arrested… Arbitrarily cutting the fees that they are paid will reduce access to this vital service for the people who need it most”.

In addition, the Legal Services Commission have been asked to consider changes to payments made to experts in both criminal and civil cases. Currently, the legal aid budget pays different amounts for the same work by different experts and across categories of law. The change would see payments standardised “to ensure better value for money”.
If you wish to have your say, you have until 12 November 2009, when the consultation will close. Following consultation, MoJ intend to publish their response by December 2009. The full text of the consultation paper ‘Legal aid: funding reforms’ can be found at:-

http://www.justice.gov.uk/consultations/docs/legal-aid-funding-reforms.pdf

On the 2nd April a joint statement was issued by the Law Society, Legal Services Commission and Ministry of Justice regarding the agreement they reached on the unified contract. This follows the recent Court of Appeal judgement about the civil legal aid contract.

The MOJ and the LSC have accepted “and will not challenge the decision of the Court of Appeal in favour of The Law Society’s (TLS) arguments that clause 13.1 of the Unified Contract is incompatible with the Public Contracts Regulations 2006 (the Regulations).”

There was an element of humble-pie eating in their admission that they “regret that the implications of those Regulations were not recognised earlier and acknowledge that TLS was justified in commencing those proceedings. MOJ and LSC further acknowledge and accept that the Court of Appeal judgment means that the only power of amendment which now remains in the civil Unified Contract is the power in clause 13.2.”

The Law Society was more triumphalist, claiming that it had “secured significant benefits for the civil legal aid system”, and that the agreement would “give many legal aid firms a much needed period of stability and certainty in which to plan their futures.” Des Hudson, Law Society chief executive, said “our talks with the LSC and the Ministry of Justice have not only helped ensure legal aid will receive vital financial support, they have also shown that we can work together in an effort to establish a more balanced system that is workable and accessible. However, we still have serious concerns about the future of legal aid and welcome the LSC’s commitment to a more open approach of better engagement with legal aid practitioners and the Society.”

Unified Contract Agreement – the details

The Law Society’s press release highlighted the following points of the agreement:-

• Best value tendering (BVT) in criminal legal aid will be delayed by six months to a date not before July 2009.
• an increase of 2% on all legal help fixed fees and underlying hourly rates from 01/07/08.
• care level 2 fee increases from £347 to £405.
• a 5% increase in CLR (controlled legal representation) fees and rates for mental health.
• a 5% increase in CLR fees and rates for immigration.
• a delay in implementing private law family litigators’ graduated fees.
• a closed list of all CLACS and CLANS (Community Legal Advice Centres and Networks) planned for the period ending April 2010.
• the LSC will, with effect from today, not seek to recoup historic unrecouped payments on account over six years old and where the amount outstanding is less than £20,000 – restrictions apply (see the full deed of settlement).
• a new process on standard monthly payments, designed to prevent changes happening so often, so unpredictably and with such large variations.
• LSC’s commitment to publish a route map setting out the outline of its proposals for the next five years, including a commitment that there will be no price competitive tendering for civil or family work before 2013.
• Reviews of the contract compliance audit process and the operation of peer review and other quality assurance mechanisms.

For full details and relevant links see:-

http://www.legalservices.gov.uk/civil/unified_contract.asp
http://www.lawsociety.org.uk/newsandevents/pressreleases/view=newsarticle.law?NEWSID=394906