For the first time government, industry, voluntary groups and law enforcement agencies have joined forces to tackle fraud. Thirty-seven organisations have come together to launch ‘Fighting Fraud Together’, a new strategy that aims to reduce fraud, estimated to cost the UK £38 billion every year.

Speaking at the Fighting Fraud Together launch event, minister for crime and security James Brokenshire said: “Fraud causes serious harm to the public, to businesses and the wider economy. For too long fraud has almost been seen as a victimless crime. It isn’t and too often the victims are some of the most vulnerable members of our community. That’s why this new strategy is important to better target, prosecute and prevent it.”

The strategy includes activities aimed at preventing fraud being perpetrated in the first place, increasing awareness of the risks of fraud and the level of fraud reporting and ensuring there is a more effective enforcement response to reported fraud. The policy document ‘Fighting Fraud Together’ sets out a new approach with the ambition that by 2015 this country will be demonstrably more resilient to and less damaged by fraud. Individuals, businesses, public and voluntary bodies are tasked with detecting and preventing fraud. Law enforcement and other partners should increase the risk of disruption, with punishment to organised and opportunistic fraudsters deterring potential criminal offenders.

There is a fifty point action plan and detailed yardsticks to measure results and progress. Improved intelligence capabilities at the National Fraud Intelligence Bureau should help with the speedy closure of the channels through which fraudsters operate and launder their ill-gotten gains. A new Economic Crime Command at the National Crime Agency is being developed to provide a more effective, better co-ordinated and intelligence-led response across all the UK’s economic crime fighting agencies.

The organisations that have come together are the Attorney General’s Office, BIS, Cabinet Office, DCLG, DWP, Home Office, HMRC, MoJ, HM Treasury, ACPO, the Association of British Insurers, The British Bankers Association, the British Chambers of Commerce, the British Retail Consortium, the Building Societies Association, the Charity Commission, the Charity Finance Director’s Group, the Citizens Advice Bureau, the City of London Police, the Council of Mortgage lenders, the Crown Prosecution Service, the Federation of Small Businesses, Financial Fraud Action UK, the Financial Services Authority, the Fraud Advisory Panel, the Insurance Fraud Bureau, the Land Registry, the Law Society, the Metropolitan Police, National Council of Voluntary Organisations, the National Fraud Authority, the Royal Institution of Chartered Surveyors, the Serious Fraud Office, SOCA, the Solicitors Regulation Authority, the Telecommunications UK Fraud Forum, the UK Cards Association and Victim Support.

The full text of ‘Fighting Fraud Together’ can be found at:

http://www.homeoffice.gov.uk/publications/agencies-public-bodies/nfa/fighting-fraud-tog/fighting-fraud-together?view=Binary

Last week the government announced its intention to ban the payment of referral fees in personal injury cases. In their view the current arrangements have led to high costs, encouraged a compensation culture and led to the growth of an industry – estimated elsewhere to be worth £3bn a year – which pursues claimants for profit.

Though the MoJ stress there is no universally recognised definition of ‘referral fees’, their press release gives the following example:

• You have an accident and you are induced through a TV advert or SMS text message to make a ‘no-win, no-fee’ claim.
• Your claim is passed between claims management companies (who advertise compensation claims for accidents), insurance companies, lawyers and others who charge each other a referral fee for ‘referring’ the claim up the line.
• The lawyer sues for compensation. If he wins, he can recover his costs and his “no-win, no-fee” mark-up on his costs from the losing defendant (or often the defendant’s insurance company) which will cover the amount he paid out as a referral fee. So the lawyer may pay hundreds of pounds as a referral fee because he knows he can get the money back.
• To cover the loss, losing insurance companies are forced to raise premiums, private companies are forced to put up prices, and public authorities pass the burden on to the taxpayer.

Justice minister Jonathan Djanogly said: “Honest motorists are seeing their premiums hiked up as insurance companies cover the increasing costs of more and more compensation claims. Many of the claims are spurious and only happen because the current system allows too many people to profit from minor accidents and incidents. People are being encouraged to sue, at no risk to themselves, leaving schools, business and individuals living in fear of being dragged to the courts for simply going about daily life.”

The announcement has been received with almost universal approval by the insurance industry. Shadow justice minister Andy Slaughter said Labour supported the ban, particularly when applied to road accidents. But Neil Rose, writing in legalweek.com, reckoned that the ban was politics not policy, made for show and for headlines. He said: “If ministers really want rid of claims management companies, then ban them, not referral fees. But they know they can’t do that, because these businesses will just become alternative business structures and do the whole case themselves, a move that was likely anyway but that this announcement will surely speed up.”

The justice minister said finding a definition of referral fees was challenging, but he hoped to get the provisions included in the Legal Aid, Sentencing and Punishment of Offenders Bill, possibly by Easter next year. The government’s current proposals before Parliament in clause 41 of that bill focus on stopping losing defendants having to pay a ‘success fee’ to reimburse the claimant’s lawyer for unconnected cases he may have lost. In future the person making the claim will have to pay the success fee rather than the defendant, and that fee will be capped. Legal costs overall should fall, meaning lower costs to pass on to customers.

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

I reckon that the busiest groups of civil servants currently are those monitoring Government sponsored consultation processes. Under the present Government there are literally hundreds of consultations launched every year. The official line is that consultation is about making government more open and policies more effective by listening to and taking on board views of the public and interested groups, and has become an integral part of the policy-making process.

And here comes another, launched by the Ministry of Justice, which department alone has over 80 consultation exercises in progress at the moment. It concerns proposals to reform the way costs from central funds are awarded in the defence of privately funded defendants acquitted in criminal cases in England and Wales. This is in the context that the Government is committed to the principle that state funding in the form of legal aid should be available to individual defendants who cannot afford to pay for their own representation. “But it also believes that those who can afford to pay towards the cost of their defence should do so. For these reasons, means testing was reintroduced in the magistrates’ court in 2006 and we are currently consulting on a pilot of means testing in the crown court.” Changes are not proposed to the current arrangements for private prosecutor, witness, medical expert or interpreter costs, which are also paid from central funds.

What is being proposed is that, in future, any individual who does not apply for legal aid in defending their case would no longer be able to receive back their legal costs from central funds. This would be a reversal of the practice that those found innocent of charges brought by the state are compensated for the costs they have incurred in defending themselves. Under the Prosecution of Offences Act 1985, if an individual pays for their defence privately they can usually reclaim reasonable costs and expenses from central funds if they are acquitted. An interesting, if debatable, analogy with private education is offered in support. “Just as an individual who chooses to put their child through private education does not reclaim this cost from the education system, nor should public funding recompense those that choose to pay privately for a lawyer when a publicly funded alternative is available.”

According to ‘The Times’, the proposals have prompted outrage. Frances Gibb reports that, amongst others, motoring groups and lawyers have criticised them as a fundamental breach of principle. She quotes Edmund King, president of the AA, as saying that the proposal is “against the common law and against the common man”; and Ian Kelcey, head of the Law Society’s criminal law committee, as condemning the proposal as a “disgrace.”

The consultation will close on 29 January 2009. Full details are available at
http://www.justice.gov.uk/docs/award-costs-central-funds.pdf

If you want to see the full range and extent of current consultation exercises, navigate your way round
http://www.direct.gov.uk/en/Governmentcitizensandrights/UKgovernment/PublicConsultations/DG_4003113

The Legal Services Commission (LSC), after lengthy discussions with the Law Society, has agreed a number of changes to its legal aid proposals. The Law Society is holding free events to update civil and criminal legal aid practitioners and:-

• To explain the terms of the settlement secured by the Law Society from the LSC/MoJ.
• To inform legal aid practitioners how these changes affect them and to help them understand the business implications of the new structures.
• To hear from practitioners their view of the future of their legal aid work and to explore how the Society can support them as they prepare for that.
• The way forward on achieving a sustainable future: what the Society is continuing to do to tackle ongoing concerns about the legal aid system.
• Information on help and support available from the Society.

The timing of all the events is 17:30 – 19:30, with registration and refreshments at 17:00. A speaker at every event is Richard Miller, now Legal Aid manager for the Law Society, formerly head of the Legal Aid Practitioners Group (LAPG). He is accompanied by any combination of Andrew Holroyd, president; Paul Marsh, vice president; Bob Heslett, deputy vice president; and Des Hudson, chief executive, depending on the location.

Some events have already been held, but those still outstanding are:-

Bristol – 29 April – Armada House, Conference Centre, Telephone Avenue, Bristol.

London – 30 April – Law Society Common Room, 113 Chancery Lane, London.

Llandudno – 6 May – North Wales Theatre & Conference Centre, The Promenade, Llandudno.

Nottingham – 7 May – Castle Suite, Rutland Square Hotel, St James Street, Nottingham.

Cambridge – 8 May – Homerton College, Hills Road, Cambridge.

Wakefield – 12 May – Cedar Court Hotel, Denby Dale Road, Wakefield.

Manchester – 13 May – Park Suite, Ramada Manchester Piccadilly, Piccadilly Plaza, Manchester.

Newcastle – 15 May – Conference Room Central Square, 4th Street, Newcastle-upon-Tyne.

To book a place you are advised to e-mail: regionalsupport@lawsociety.org.uk quoting ref: ZZZ/CELS and the location. Places are limited and will be allocated on a first come, first served basis.