Line-by-line scrutiny of the Legal Aid, Sentencing and Punishment of Offenders Bill continued on Tuesday in the House of Lords. Members continued where they left off before the Christmas recess when four amendments to clause 1, which defines the Lord Chancellor’s responsibilities, were debated and then withdrawn without being put to the vote.
Lord Beecham moved another amendment to clause 1 which called upon the Lord Chancellor to review the accessibility and quality of expert advice that is available for civil legal proceedings and ensure that this is maintained or improved. Concern was voiced over creating a two-tier system in which those with money are able to access expertise and those without money have difficulty. It was stressed that an expert is not a luxury, and that there are many technical issues on which a judge would be lost in coming to a proper, conclusive determination of a case without expert evidence to assist him. This amendment was withdrawn, and clause 1 was agreed.

Lord Bach moved a new clause calling for a pre-commencement impact assessment of the effect of the legal aid changes. After a full debate he said that the Government have clearly not done the work that should have been done before bringing in such controversial and fundamental legislation. “It is not too late for them to start doing it now, and I would encourage them to do so” he said. The amendment was withdrawn. So were two amendments to clause 2 – which deals with arrangements – proposed by Lord Beecham, and the clause was agreed, as was clause 3.

Clause 4, which covers the new post of Director of Legal Aid Casework, was the subject of an amendment moved by Lord Pannick. The amendment arises out of the transfer of responsibility for the allocation of legal aid from the independent Legal Services Commission to the Lord Chancellor’s Department. Decisions on legal aid in individual cases will be taken by a civil servant, who will be designated by the Lord Chancellor. Lord Pannick concluded: “Noble Lords prefer the drafting of Clause 4 to contain clear limits on the powers, in this context, of the Lord Chancellor and clear safeguards of the independence of the director. I hope that the Minister will be able to ask his officials to look again at the wording of Clause 4 so as to achieve these objectives, otherwise we will undoubtedly be returning to this matter on Report. For the time being, I beg leave to withdraw this amendment.” Clause 4 was agreed.

Lord Bach moved an amendment to insert a new clause on appeals following a decision made by the Director of Legal Casework in respect of eligibility for legal aid. He said: “The principle of being able to appeal against a decision made in this case by a civil servant who has been appointed by the Lord Chancellor is very important. I beg leave to withdraw the amendment, but we may come back to this on Report. If we are coming back to the earlier independence issue, we shall have to come back to this one as well.” Clauses 5, 6 and 7 were agreed.

Sixteen amendments were up for consideration on Tuesday. Eight were not even moved and the remaining eight were withdrawn without being put to the vote. It all had the feel of preliminary skirmishing with the main events still to come. The committee stage resumes on Monday, 16 January, when perhaps some of the red meat will be reached. The Lords may then exercise their muscle as they did with the government’s Welfare Reform bill on Wednesday.

Last Wednesday Secretary of State for Justice, Ken Clarke, made a written statement to the Commons on Competitive Tendering. The proposed timetable has yet again slipped back.
He told the Commons: “The Government believe that tendering criminal defence work for competition, alongside regulatory changes, has the potential to significantly modernise legal aid provision, improve the service provided to legal aid clients, streamline the procurement process and deliver value for money for the taxpayer.” In a thinly veiled threat he said: “Pressure on legal aid expenditure is likely to continue, increasing the need for further reform of the current arrangements for administratively set remuneration rates in the absence of competition.”
He added: “Clearly the development of a competition strategy will be likely to have a substantial impact on the market for legally aided services, as will a number of other current developments. These changes will require significant levels of engagement between the Government and the profession. We plan to begin these discussions in early 2013 once the key components of our legal aid reform package, the regulatory changes allowing alternative business structures, and the introduction of the quality assurance scheme for advocates have had time to bed down. We will publish a full formal consultation document on the competition strategy towards the end of that year.”

The revised timetable will be:

Consultation paper published: Autumn 2013

Response to consultation paper: Spring 2014

Tender opens in first competition areas: Autumn 2014

First contracts go live: Summer 2015

In an almost throw-away last paragraph of this statement he went on to say: “I would also like to inform the House that we intend, subject to parliamentary approval of the Legal Aid, Sentencing and Punishment of Offenders Bill, to implement all of the legal aid reforms in April 2013. This will include the abolition of the Legal Services Commission under the Bill and the creation of the new agency in its place.” This amounts to a six-month delay to the programme.

The ‘Guardian’ reports that Labour’s shadow justice secretary, Sadiq Khan, said: “This six-month stay of execution due to government incompetence will do little to reassure the millions of people who rely of social welfare legal aid to gain access to justice. Rather than delaying the implementation of their disastrous reforms to social welfare legal aid, which supports some of the most vulnerable people in our society, this government should abandon them completely.”

The bill goes to the committee stage in the House of Lords on 20 December. At its second reading in the chamber last month, the proposed legal aid cuts were savaged by the overwhelming majority of speakers in the debate. Since then Lord Wilson, the newest appointment to the supreme court, and Sir Nicholas Wall, president of the family division, have added their voices to the opposition. Three other supreme justices – Lord Hope, Lady Hale and Lord Dyson – have also expressed concern about the effect of government proposals to save £350m a year by reducing the availability of legal aid.

The Government showed with the Public Bodies bill last month that they are prepared to jettison proposals to ensure the passage of a bill. It will be interesting to see how they react to the Lords’ amendments and what, if anything, is thrown off the sledge to escape the chasing pack.

The Ministry of Justice is substantially reforming a number of its public bodies. Ten of the department’s public bodies will no longer operate as non departmental public bodies or as statutory bodies. Six will be abolished and four will be merged with other existing bodies. Justice Minister Jonathan Djanogly said: “This announcement marks an unprecedented step towards enhanced transparency, increased accountability and greater efficiency of all public services.”

Bodies to be abolished are:

• The Public Guardian Board, which scrutinises and reviews the way the Public Guardian – charged with the protection from abuse of people who lack capacity – discharges his functions.

• The Legal Services Ombudsman, charged with protecting the interests of the consumers of legal services.
 
• HM Inspectorate of Court Administration, which inspects the systems that support the Crown, county and magistrates’ courts in England and Wales.

• The Victim’s Advisory Panel, which enables victims of crime to have their
say both in the reform of the Criminal Justice System and in related developments in services and support for victims of crime.

• The Administrative Justice and Tribunals Council, which keeps under review the administrative justice system as a whole with a view to making it accessible, fair and efficient.

• Courts boards (19 out of 21), which work in partnership with Her Majesty’s Courts Service to achieve effective and efficient administration of the courts.

The Legal Services Commission, which runs the legal aid scheme in England and Wales, will become an executive agency of the Ministry of Justice. The Crown Court Rule Committee’s functions will be transferred to the Lord Chief Justice in consultation with other rule committees, and the Magistrates’ Courts Rule Committee’s functions will also be transferred to other rule committees.

The Youth Justice Board (YJB) will cease to function as a public body and the leadership of youth justice and functions of the YJB will move into the Ministry of Justice. Jonathan Djanogly said: “This organisation has helped to transform the delivery of youth justice and has fulfilled an important role in reducing offending and re-offending by young people. Now is the right time to look more radically at the arrangement of youth justice, including the role of the YJB, ensuring that a dedicated focus on rehabilitation needs of young people is driven forward in the future.”

Hard on the heels of the National Audit Office’s highly critical report to Parliament on the procurement of Criminal Legal Aid in England and Wales comes the Public Accounts Committee’s savaging of the Legal Services Commission, the body charged with administering the programme.

The Legal Services Commission (LSC) spends £2.1 billion a year on buying civil and criminal legal aid, mainly from solicitors and barristers, and a further £125 million on administration. While accepting that the Commission has successfully arrested the increase in legal aid spending in the last five years, the PAC nevertheless found it to be an organisation with poor financial management and internal controls and

deficient management information. These weaknesses resulted in the Commission having its annual accounts qualified for 2008–09 and an assessment that its procurement and administration of criminal legal aid posed risks to value for money.

The Committee was very concerned that such weaknesses in the Commission’s

performance had occurred when the Ministry of Justice spends over £2 million a year itself on legal aid policy matters and on overseeing the Commission. In the words of the report: “We found confusion and uncertainty about the respective roles of the two organisations which had led to duplication of effort on some issues and a lack of clarity about who should be responsible for others. Because the Commission is the sole buyer of legal aid, it is important that it knows it is paying the right price for this and the effects its policies are having on the sustainability of providers. But it does not know enough about the costs and profitability of firms to know if it has set its fees at an appropriate level”.

The gaps the Committee found in the arrangements to assure the quality of criminal legal aid procured made it harder to assess whether the services delivered represent good value for money. The LSC considered the introduction of tendering would remove the imperative for it to know the market, because prices would be set by competition. But the recently announced abandonment of its plans to introduce its tendering proposals following representations from the legal profession leaves the Commission not able to assess if it is paying a reasonable price for legal aid.

The LSC has been responsible for implementing significant reforms to legal aid recommended by Lord Carter, but the PAC concluded that constant changes in staff at senior level, and poor planning of the changes, has meant that reforms have often been delayed, have not always kept to their timetable, and have not been properly evaluated to assess their impact.

The full text of the Committee of Public Accounts’ report “The procurement of legal aid in England and Wales by the Legal Services Commission (Ninth Report of Session 2009–10)” can be found at

http://www.publications.parliament.uk/pa/cm200910/cmselect/cmpubacc/322/322.pdf

The National Audit Office’s latest report to Parliament on the procurement of Criminal Legal Aid in England and Wales will make uncomfortable reading for the Legal Services Commission.

In 2008-09 the Commission spent more than £1.1 billion on criminal legal aid, £112 million of which was spent on 432 Very High Cost Criminal Cases.  871,000 acts of assistance at police stations and 125,000 acts of assistance at the Crown Court were funded. The LSC spent £22 per capita on criminal legal aid, more than any other comparable developed nation except Northern Ireland. At the other end of the scale France spent £0.9 per capita, though differences are partly attributable to the greater defence costs inherent in an adversarial legal system, in contrast to jurisdictions where judges play a greater investigative role.

The NAO found that the data used by the LSC to make payments for criminal legal aid services is inaccurate and incomplete. The existing controls over the quality of data and the accuracy of payments made to firms are not effective, and the impact of reforms has not been evaluated consistently. At present, gaps in the LSC’s knowledge about its supplier base mean that it has not developed a good understanding of the market, such as the cost structures of different types of firms and their profit margins. The NAO concluded  that “there are significant weaknesses in the way criminal legal aid has been administered…New schemes have not always been piloted…(and) the Commission’s ability to make payments to criminal legal aid suppliers is undermined by poor administration”.

An NAO survey of 369 firms delivering criminal legal aid found that it accounted for almost 60 per cent of turnover. Firms reported an average profit margin of 18.4 per cent in the last financial year, a fall from 21.6 per cent three years ago. They reported a wide range of profits, with 16 per cent of firms reporting no profit in the last financial year. Almost 80 per cent of firms which also conducted private legal work reported that criminal legal aid was less profitable, and firms which had withdrawn from contracts reported the main reason was that remuneration compared unfavourably with other types of legal work.  In their survey, 28 per cent of firms reported it unlikely they would be conducting criminal legal aid work in five years’ time, due mainly to lack of profitability and the prospect of tendering. The survey also revealed tensions in the relationship between the profession and the LSC. Of those who responded to the survey, 36 per cent of solicitors perceived the LSC as ‘unhelpful’, 29 per cent believed the LSC did not fully understand the legal system and 18 per cent cited the Commission’s “constant change of the system, processes and rules.”

The Law Society has welcomed the report. Legal aid manager Richard Miller said:

“This report goes a long way in dispelling the belief that legal aid lawyers are profiteering from the system. Many of them are not even earning any income from the work they do at all. This is a picture of a supplier base on the point of crumbling into insolvency. It is those requiring access to justice who will lose out in the long run if there are not enough solicitors providing legal aid criminal defence services.” He called for a major overhaul of the system to simplify criminal defence contracts so that they are easier and less expensive for the legal aid solicitors and LSC to administer.

For the full text of the NAO report ‘The Procurement of Criminal Legal Aid in England and Wales by the Legal Services Commission’ go to: http://www.nao.org.uk/publications/0910/procurement_of_legal_aid.aspx 

and follow the links.

Last week the Legal Services Commission announced the launch of a consultation on the replacement scheme for Very High Cost (Crime) Cases (VHCCs).

Chief Executive Carolyn Regan said: “The LSC is setting out a number of options for the most complex and expensive criminal cases that are designed to ensure clients continue to receive high quality legal advice. At the same time, it will also ensure litigators and advocates are fairly paid and are encouraged to work efficiently so that taxpayers receive value-for-money”. The new scheme is designed to replace the VHCC Panel scheme, established in January 2008, and the LSC makes no bones about the need to deliver savings.

For advocates, three options are proposed for consideration: to maintain the current panel system; an adaptation of the current hourly rate scheme but managed under individual case contracts; and extending the current Advocates’ Graduated Fee scheme, which is used in cases that last up to 40 days, to include cases that are expected to last up to 60 days. All cases that last 60 days or more would be paid at 2008 Panel rates. For litigators there are two options for consideration: to maintain the current panel scheme; and extending the current Litigators’ Graduated Fee scheme, on the same basis as the Advocates’ Graduated Fee scheme detailed above.

The Law Society has hit back at the plans to extend the Litigators Graduated Fee Scheme to VHCCs. Robert Heslett, Law Society President, said it was a barely-tested scheme and not a viable option. “The LGFS has not been in place long enough to have been properly evaluated. There have been numerous problems with it. It underpays for certain types of serious and sexual assault case, and for cases which are prepared for trial but then result in a guilty plea”. He pointed to the operational difficulties in validating the pages of prosecution evidence on which the payment calculation depends, adding that the scheme needs to be made to work for the cases for which it was designed before it can be extended to additional cases. “The scheme does not have any mechanism to take account of the work on unused material or the management required on very high cost cases. It depends on a ‘swings and roundabouts’ principle, but as most firms will only handle one or two VHCC cases per year, the sample is not large enough for the swings and roundabouts effect to function and firms will be subject to a greater risk of incurring substantial losses on these cases.”

The Law Society also said that an extended advocates graduated fee scheme raises many challenges. It may not be attractive to advocates without addressing some of the structural issues currently under discussion. This could mean that advocates are less likely to take on cases under the proposed system which could have serious implications for clients being able to obtain representation in long running trials.

The consultation closes on 26 January 2010 and all interested parties are encouraged to respond. The full text of the consultation document is at:

https://consult.legalservices.gov.uk/inovem/gf2.ti/f/184610/3234053.1/pdf/-/VHCC%202010%20%20A%20Consultation%20Paper%20%20Dec%202009.pdf