The aim of the research is to understand more about the providers of legal services ahead of regulatory changes, the reforms to legal aid, and other significant changes in the legal sector. This research will act as an initial baseline with the potential for follow-up research to be commissioned at a later date to measure the impact of changes once they have bedded in.

The Law Society needs information from a large and nationally representative sample of legal service suppliers. The research will probably take the form of telephone interviews with 2,000 senior representatives from law firms operating in England and Wales. A significant sub-group of this sample should be legal aid suppliers. Given that most legal services are supplied by smaller law firms the Society proposes to exclude the largest 200 firms (in terms of turnover) from the research, unless the firm is a legal aid provider.

The research will consist of three stages. Stage 1 will be an evaluation of a draft questionnaire provided by MoJ, LSB and LS, and a definition of sampling strategy. Stage 2 will be the main stage fieldwork, consisting of 20 minute interviews with senior representatives from 2,000 law firms across England and Wales. Stage 3 will be the analysis of survey results, together with the written report and presentation of the results. The findings from this research will be used to produce a state of the market report and to inform the on-going work of the three sponsoring bodies.

Stage 1 is expected to take place mid January 2012 – mid March 2012; stage 2 is expected to take place mid March 2012 – end May 2012; and stage 3 is expected to take place beginning Jun 2012 – end July 2012.
Expressions of interest from consortia of institutions (eg joining expertise in legal services with social survey capacity and expertise) are encouraged, although tenders from individual institutions are also welcome. But if you are interested in tendering you will have to be quick. Expressions of interest should arrive at the Law Society no later than 10.00 Monday 5 December 2011.

More details of the evidence being sought and the expected outputs for each stage can be found in the Law Society’s release at:

http://www.lawsociety.org.uk/newsandevents/news/view=newsarticle.law?NEWSID=444155

But clause 12 of the Legal Aid, Sentencing and Punishment of Offenders Bill appears  to say that advice in the police station will in future only be available if the Government decides in the individual case that it is in the ‘interests of justice’ to do so. There would also seem to be a financial barrier to negotiate, requiring both a ‘merit’ and a ‘means’ test to be applied at the point where someone has been arrested and is in police station custody. Writing in the ‘Observer’, Jamie Doward says that legal experts, including Lord Ken Macdonald QC, a former director of public prosecutions, have expressed alarm at the proposal and questioned how it would work in practice.

Richard Miller, head of legal aid policy at the Law Society, is quoted as saying: “When someone is arrested they are in the power of the state, subject to the mercies of the police officers involved. The purpose of having a solicitor acting for them is to ensure their rights are respected, that they are not physically abused, that their confessions are not forged and they are not detained for longer than legally allowed.” He pointed out that the presence of a lawyer also protects the police from a defendant making up allegations about what happened, for instance during the course of an interrogation, and he cautioned the government against interfering in any way with the absolute right to representation in police stations. “It’s there for a very good reason. When we didn’t have it, we saw the consequences,” he said.

But then things are never quite what they seem. An interesting exchange took place in the Commons on Wednesday during the debate on the second reading of the bill. Tory MP David Burrowes declared an interest as “one who has been a duty solicitor in the police station.” He asked Ken Clarke to consult carefully about the practical implementation of proposals to limit legal aid for advice and assistance in police stations, as “losing the benefit of the informed legal advice that one needs in the police station can lead to inefficient justice.”

Mr Clarke’s response is worth quoting in full: “We will look at that and consider it carefully as we proceed. At the moment, the Bill replicates a provision taken from an earlier Bill by the Labour party. It appears to give a power to take away the right to legal aid. It appears to give a power to take away access to legal advice in the police station. The last Government legislated to do that but never did it. We have no current intentions of doing it. We will consider the issue and no doubt my hon. Friend or others will return to it in Committee. I realise that there has been some concern.”

There would seem to be some room for manoeuvre here.

The BSB conducted a voluntary pilot last year, in which 182 people took part. A second pilot is compulsory for all those starting the course this month, which is intended to provide a more detailed examination of the suitability of the proposed test as well as enabling the necessary sampling and analysis to ensure that the test is fair for all applicants. The BSB hopes that the aptitude test will be fully implemented for those starting in 2012. According to website Legal Futures, Nigel Cooper QC, chairman of the bar professional training course sub-committee, said: “The BSB wishes to ensure that the aptitude test is fully piloted prior to its introduction and is therefore proceeding cautiously. The first pilot was a limited exercise, designed to consider the general suitability of the test. A second pilot will now be conducted in autumn 2010, as planned, to enable more detailed testing and the accurate setting of the pass threshold. This is necessary due to the need to ensure the aptitude entry test will be fit for purpose before it is finalised and becomes an absolute entry requirement.” In its report to the Ministry of Justice last year, the OFT said that the BSB’s aptitude test was overly restrictive and anti-competitive, would have a significant effect on competition and its aims could be achieved by a less restrictive route.
 
It now appears that the Law Society is playing catch up with the BSB and is considering an aptitude test for entrants into the Legal Practice Course (LPC). Legal Futures report that the Society has appointed a consultant to investigate whether to require prospective students to pass a test before being allowed to start their vocational training. The proposals have been developed by the society’s education and training committee, at the request of chief executive Des Hudson, because of the increasing disparity between the number of LPC graduates and the number of available training contracts. Details of the consultancy project are still being finalised, but it is hoped that a report will be received by late 2010 or early 2011. The aim is to stem the tide of students flooding into the field only to find once they have finished the LPC that there are simply no jobs. It is argued that such a test would stop students from incurring large expense (the LPC can cost up to £12,500) in return for little reward, and help law firms maximise the value of the time invested in training. The OFT’s suggestion was that the BSB test should be optional rather than compulsory, and that could apply to any test for the LPC. Ultimately any LPC test would be for the Solicitors Regulation Authority to introduce, but if students still chose to take the LPC despite the test suggesting that it might not be for them then that would be their responsibility.

The full text of the OFT report “Application by the Bar Standards Board to Amend its Training Regulations” is at:-http://www.oft.gov.uk/shared_oft/reports/professional_bodies/oft1086.pdf

The Jackson review was set up in late 2008 by the then Master of the Rolls, Lord Clarke, because the senior judiciary were concerned about the escalating costs of civil justice. The report – the first ever fundamental review, specifically focused upon civil costs – sets out a package of interlocking reforms, designed to reduce litigation costs and promote access to justice. The reforms would also assist in allowing for some claims to be resolved earlier with greater use of mediation. He proposes that success fees and after-the-event (ATE) insurance premiums should no longer be paid by the losing party in civil court cases. Winning parties in personal injury cases would benefit from a 10% uplift in their damages award to compensate for such a move. Solicitors’ success fees would be capped at 25% of their clients’ damages award. Lawyers would not be allowed to pay referral fees for personal injury cases. Claims management companies and other intermediaries would see their income reduced if his proposals are implemented. He also proposes fixed costs in fast track litigation and the establishment of a Costs Council.

Speaking at the launch of his report, Lord Justice Jackson said that his measures will not lead to a decrease in fee income for lawyers working on civil cases. Solicitors and barristers will continue to earn a reasonable living, he said, adding that the focus in personal injury cases had shifted away from the compensation of claimants onto the remuneration of lawyers and intermediaries. “Under the current regime, personal injury solicitors are not competing on quality of service or charges to the client, but on who can pay the largest referral fee – so the beneficiaries of the regime are the referrers, like the claims management companies.” He wants solicitors to compete on the basis of offering clients the lowest success fees, rather than relying on payouts from the losing party.

Probably the headline grabbing recommendations, welcomed by the media, relate to libel cases. Libel trials should be heard by judges sitting without juries, and the cost of libel litigation should be substantially reduced. He also proposes an increase in libel damages of 10 per cent. Referring to libel claims, he said: “The main vindication is vindication by the judgment of the court or the statement in court after settlement. I see no reason why such claimants should not be prepared to pay a substantial proportion of the damages to their lawyers as success fees”. He also said that claimants in libel cases have to be protected against the risk of paying out huge costs because usually the claimant in such cases is of modest means and the defendant a well-resourced media organisation. But, he said, the present system and the way it seeks to protect claimants “is the most bizarre and expensive system that it is possible to devise.”

Law Society President, Robert Heslett, said: “We are very pleased that Lord Jackson has accepted the Law Society’s recommendation that the small claims personal injury limit remains as it is. We regard that as a litmus test of Lord Jackson’s commitment to enhancing access to justice through his review”.  Welcoming the report, Lord Judge, the lord chief justice, said the “the costs of civil litigation are disproportionate and excessive…The measures will ensure that civil justice will be more efficient and fairer”.

The final report covers 45 subject areas and runs to 557 pages, with recommendations across the whole spectrum of civil litigation. It is available from The Stationary Office, who advise that the Final Report contains extensive cross-references to the Preliminary Report and the one cannot be read without the other.

In announcing the consultation, Keir Starmer QC, Director of Public Prosecutions, said “Following the announcement of the merger between the CPS and the Revenue and Customs Prosecutions Office (RCPO) earlier this year, I have considered further what changes to the Code for Crown Prosecutors should be made in order to ensure that all prosecutors in the new public prosecution service, along with police officers, are making fair and consistent decisions”. The main changes are:

• Prosecutors will have a discretion to determine whether, where there is sufficient evidence and it is in the public interest to prosecute, a prosecution is a proportionate response to the specific offending.
• Prosecutors will have a discretion to stop a prosecution in the public interest, in exceptional circumstances, before all of the evidence is available.
• A fuller section explaining the Threshold Test.
• A fuller section explaining the use of out-of-court disposals for both adults and youths.
• A fuller explanation of how the public interest is assessed.
• Further public interest factors are identified both tending in favour and against prosecution.

According to ‘The Times’, the consultation will fuel the debate on the numbers of cases escaping prosecution in the courts, which they estimate to be half the 1.4 million offenders dealt with by the justice system each year. A Crown Prosecution Service spokesman is reported as accepting that some offenders could be let off under the guidelines. ‘The Times’ also reports that the proposals were immediately condemned by the Magistrates’ Association, which said that it was yet another instance of the blurring of the respective duties of courts and prosecutors. John Howson, deputy chairman of the Magistrates’ Association, is reported as saying that the new discretion for prosecutors seemed to be “part of the complete muddle in the way we treat offenders and over the boundaries between where the prosecutors and the courts lie”, adding that “if someone has offended, they should be brought before the courts, where we have a range of penalties from an absolute discharge to custody. The job of prosecutors is to find the evidence, not to assess the weight of it”.

The consultation period ends on 11 January 2010 and a summary of the responses received will be published. The full text of the consultation can be found at:-

http://www.cps.gov.uk/consultations/rccp2_consultation.pdf

‘In light of current and forthcoming changes in the Legal Services market, the differing needs of different types of client, current regulatory debates and the need to promote equality and diversity, to consider the appropriate regulatory rules, monitoring and enforcement regime to ensure high standards of integrity and professionalism for solicitors and their firms in all sectors, and to make recommendations.’

This week the Law Society published his report. In his ‘Welcome’ to the report, Lord Hunt acknowledged that the legal sector is undergoing a radical transformation. Alternative Business Structures will have to be assimilated into the legal regulatory system, the ever changing demands of clients will need to be satisfied, and English and Welsh law must maintain the high international reputation which provides so many business benefits for the UK. “For these, and many other reasons, it is critically important that the regulatory system is constantly revaluated to ensure it is fit to meet both new challenges, and long standing regulatory needs”.

Lord Hunt makes 88 specific recommendations, and there are four main themes in the report. He stresses that all firms must be regulated to the same standard, by a knowledgeable and credible regulator and in accordance with the well-established BRE principles of better regulation. But this does not mean that every firm should be treated in the same way. He advocates a system which he describes as Authorised Internal Regulation (AIR). AIR will be available to all firms, not just those concentrating on corporate work, who demonstrate their willingness and ability to set up internal governance standards that are robust enough to secure compliance. Secondly he recommends the extension of the regulatory net to include will writing, claims management companies and all of probate, as these are complex matters with potentially far reaching consequences.

Lord Hunt recommends that legal professionalism should be translated into regulatory principles. He says it is essential to base any regulatory system in a strong and transparent theoretical framework, ensuring that it has the necessary resilience and flexibility to adapt to the changing world in which it operates. His view is that legal professionalism, rooted firmly in the concept of the rule of law, provides a sound base for the regulator to build on. The fourth theme concerns the regulation of Alternative Business Structures (ABS). He does not oppose the 2011 launch date, as proposed by the Legal Services Board, but stresses the importance of getting it right. It is crucial that appropriate public and consumer safeguards are put in place. Regulators must be clear about the information they require, the scrutiny they intend to undertake, and how they will deal with regulatory breaches. He recommends that ABS should be subject to the same regulatory requirements that govern other law firms.

Bob Heslett, President of the Law Society, welcomed the report and said “Lord Hunt has set out an imaginative and thought provoking blueprint which I am confident will be invaluable to the SRA [Solicitors Regulatory Authority] as it charts its way forward for the future. We look forward to working closely with the SRA as it develops its approach.”
The full text of Lord Hunt’s report can be found at:

http://www.legalregulationreview.com/files/Legal%20Regulation%20Report%20FINAL.pdf

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

The Law Society, the Bar Council and the Criminal Bar Association are all gravely concerned about BVT as currently proposed by the LSC, involving a limited scheme which would cover lower crime work in police stations and the Magistrates’ Courts. This would probably be extended should it prove successful. BVT involves competitive tendering based on price for criminal defence work, as solicitors’ firms will bid for blocks of work, with the lowest bidder getting the work. Strong concerns are expressed that criminal legal aid firms could be drastically reduced, meaning the number of firms available to clients will diminish, as the already financially vulnerable supplier base is put at risk. “The widespread use of BVT is likely to… deny clients access to many competent and dedicated solicitors who want to serve them. The bidding processes proposed are opaque and not suited to the commissioning of professional services, where the freedom of the individual is put at risk”, said Paul Marsh, Law Society President.

In their response to the proposals, the Law Society said that they will have a hugely detrimental impact on the quality of representation in police stations, and thereby damage the criminal justice system as a whole. Of equal concern is the failure to conduct a full and proper impact assessment, taking account of the potential disproportionate impact on women and BME practitioners. Desmond Browne QC, the Chairman of the Bar, said that “we cannot afford to sacrifice the present robust system for a scheme which lacks all economic justification, and which will have a disproportionate impact on BME practitioners. The LSC’s failure properly to assess the impact on BME practitioners is potentially discriminatory and may be unlawful; it has a statutory duty to avoid discrimination and promote equality of opportunity, and it has comprehensively failed to comply with this requirement”.

Speaking at a conference organised by the Legal Action Group to celebrate 60 years of legal aid, justice department minister Lord Bach said that BVT is “not a simple cost cutting exercise. It’s aimed at securing a sustainable, effective and efficient supplier base”. In an interview with the ‘Guardian’ he acknowledged that his policies are deeply unpopular among many former colleagues, adding that “I have to do what I can to ensure the legal aid is spent in the best possible way, and that’s what I’m trying to do.”

The Law Society’s response to the Legal Services Commission’s consultation on best value tendering for CDS contracts 2010 can be found at:-
http://www.lawsociety.org.uk/secure/file/180185/e:/teamsite-deployed/documents/templatedata/Internet%20Documents/Government%20proposals/Documents/bvt_response180609.pdf

Last week, Charing Cross Police Station was linked with Camberwell Green Magistrates’ Court in a virtual court hearing, with a 14 further stations taking part in the scheme over the coming months. Already one defendant has been jailed for drink driving, just hours after his arrest. Currently defendants held at Charing Cross have the right to refuse to take part in the trial, but that right would be removed by legislation before Parliament. Justice Secretary Jack Straw has backed the pilot scheme, claiming virtual courts have the potential to “transform how the justice system deals with crimes. Although at an early stage, this pilot helps the courts, police, prosecutors, defence lawyers and the judiciary work better together to deliver quicker and more effective justice without any loss of quality. The faster we get justice done, the more we improve public confidence in the criminal justice system as whole,” said Straw.

But the Law Society has expressed grave concerns. They claim that Virtual Courts could see thousands of defendants losing their right to appear in court. Richard Miller, Law Society Legal Aid Manager, said that “There are major practical considerations about virtual courts that have not yet been satisfactorily addressed”, instancing worsening delays increasing the number of ineffective hearings and solicitors not being able to gather the information necessary for a bail application in the time available. They question how defendants will get confidential advice and how their lawyers will get access to the relevant paperwork for second hearings. And they also have “grave concerns over the safety of its members – under this scheme defendants will be sat in a small room right next to their solicitor”. Jack Straw addressed this point particularly when he said “I never had any experience of a defendant threatening me. There are a lot of police officers and custody officers in the custody suite”.

The Office of Criminal Justice Reform (OCJR) is set to outline the future for the virtual courts pilot scheme next week following this trial. They will seek to “explain the scheme’s ability to lower costs and improve efficiency as part of the government’s drive to use technology more effectively in justice delivery”.

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