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

“You cannot override market forces …. We cannot secure your future for you, you must secure your own future.”
John Wotton, Law Society President, 17th October 2011

With these words, John Wotton made it very clear that the profession needs to start taking responsibility for itself in the business arena. Speaking at the Sussex Law Society Annual Conference, he said that many solicitors are very worried about the fundamental changes they are now facing and that he doesn’t have a crystal ball. “It would be wrong to say that everything will be fine”. He confirmed that times could be very difficult for small high street firms who will particularly be in the eye of the oncoming storm. ABS is a driver of change and it isn’t the only one. Reduced availability of legal aid and the changed expectations of both clients and younger lawyers will also drive that change.

It was clear from his address that the Law Society is has a better understanding than many of its members of the challenges firms are facing now. Indeed it seemed at times as if both he and his co-speaker, the Chair of the SRA, were trying very hard to wake the legal profession up. There is a real fear amongst observers of the profession that it will sleep walk its way into a very avoidable disaster.

John Wotton advised delegates that a big issue is now risk management, which is why outcome focused regulation has been introduced by the SRA. Whilst he didn’t put it in these terms, it is clear that solicitors must understand the fact that risk management starts with having a plan for the survival of their firm in face of the oncoming commercial storm.

The President reminded delegates that risk management is important to clients – 47% indicated exactly that in the latest survey figures available to the Law Society. And he invited lawyers to consider this in positive terms. He pointed out that lawyers have an enviable reputation for the level of their training. They offer great guarantees of service through their regulatory structures, their Code of Ethics, indemnity insurance, the SRA and the ombudsman. These are all huge selling points in the new marketplace that is opening up.

The clear message is that ABS is the game changer. It offers much wider business opportunities than law firms have had before and it may well dilute our current perception of what a law firm actually is. Those opportunities though are the point for a well managed and entrepreneurial firm. Investment, partners from other professions and an opportunity to create a more commercially adept business is there for the taking now. He made a particular point of highlighting how the use of a good, well informed website will provide many ways of breaking down a client’s reluctance to instruct a solicitors firm.

The other clear message is that firms need to act now, a message echoed very strongly by the individual presidents of the local law societies who had come together for this conference. There is a gap opening up between the firms who have grasped the opportunity, as well as the challenge, in front of them, and those who are building their own self-fulfilling doom prophecies by doing nothing.

photo courtesy of Mike Quinn’s Profile on geograph.or.uk

Unnecessary legislation

One of the commitments in the Coalition Agreement was the repeal of unnecessary or outdated legislation. The government is now consulting on a bill to implement this commitment.

The Ministry of Justice is collating suggestions for repeal based on the following criteria:

  petty restrictions;
  government over-interference in people’s lives;
  unnecessary criminal offences;
  unnecessary regulations;
  obsolete laws;
  excessive layers of law;
  duplication;
  laws that inform or guide rather than impose an obligation;
  EU and health and safety gold-plating, where gold-plating can be identified;      bye-laws that impose unnecessary restrictions on people’s lives.

The Law Society wants to know what legislation you believe should be repealed or retained, and why. The Society says that it is in a position to have a significant impact on the bill’s shape and content, and would like members to play a role in this process. It is anticipated that the bill will be published in 2012. Members are encouraged to suggest:

  specific proposals for legislative repeal, including both primary and secondary     
  legislation;
  further potential categories of repeal;
  views on the suggested categories/structuring of the bill.

The Law Society asks you to send your views to:

consultationresponse@lawsociety.org.uk

Linda Lee, president of the Law Society, has written to the Justice Secretary calling on him to pause legal aid reforms to allow more scrutiny.

She wrote: “The Legal Action Group (LAG) and the Law Society continue to have very serious reservations about the government’s proposals for changes to legal aid provision in England and Wales. We are therefore writing to you formally to request that the government publishes its proposals to reform legal aid as a draft bill to be scrutinised by a special joint committee of the House of Commons and the House of Lords or the justice committee and other select committees with an interest in legal aid and access to justice policy.”

She adds that an estimated 500,000 people would lose out on legal aid services annually and the haste in which the proposals were drafted has meant that many issues with far-reaching impacts on members of the public and the justice system have not been considered. The LAG calculates that the £49m in legal aid cuts to social welfare law will cost the government £286.2m in expense on other public services. For example, the proposed £7m cut in housing advice will cost the state £16m in other services such as benefit payments.

The letter goes on to say: “We also share the justice select committee’s concerns over the definition of domestic violence. It both acts as a perverse incentive to make false claims and prevents women who are victims, but do not wish to pursue a complaint in the courts, from receiving legal aid for assistance with the legal issues surrounding a relationship breakdown.” The letter refers to the government’s proposals to reform the system of litigation costs, the unintended consequences of which are profound; and the strong argument that reducing the damages of victims of negligence is unjust. This policy also needs to be paused, while the potential effects are properly analysed and researched by qualified stakeholders and experts.

The letter concludes: “As you are aware, such is the interest in the government’s plans for the legal aid scheme over 5,000 responses to the consultation were received by the Ministry of Justice. A draft bill would give an opportunity for a thorough, comprehensive consultation on the impact of this important legislation to take place and we would strongly urge you to consider this suggestion.”

Writing in the ‘Guardian’, Law Society CEO Des Walker said: “We at the Law Society find it surprising – and disappointing – that the current justice secretary appears to prefer to make cuts targeted to reduce the legal aid budget by £350m – which could put genuine redress beyond the reach of half a million people – without assessing the wider impact on access to justice for all of us…(when) we have offered a fully costed alternative, which would save £384m in the next 12 months when fully implemented and preserve the rights to legal aid for all those who need it most.” He adds that leaving fellow citizens to fight their own cause on their own, by denying them access to proper professional advice, represents a gross injustice when it is hard enough for full-time professional solicitors to keep up with both the current complexity and any changes in the law.

The number of people who will lose out on access to civil legal advice services if the legal aid cuts are implemented was quoted as 502,000 in the Ministry of Justice’s impact assessment on scope changes published in support of the green paper. A significant number in all conscience, but the Legal Action Group believe that the true number of people who will lose out on legal aid services is 653,659, 30% greater than was previously estimated by the government.

The Official Solicitor to the Senior Courts represents the interests of those involved in litigation who do not have capacity. One of his primary functions is to act as last resort litigation friend in civil and family proceedings. As a matter of law individuals who lack the mental capacity to conduct their own litigation, and the majority of children, are not permitted to conduct their own litigation. He can see no alternative dispute resolution method identified in the Consultation Paper which would provide the protection currently recognised as necessary both for persons who would lack litigation capacity in court proceedings and for the other party or parties to the dispute. In his view there is a very serious risk that the proposals would act to limit access to justice for some of the most vulnerable in society.

The Law Society say the Government runs the risk of reduced social cohesion, increased criminality, reduced business and economic efficiency. “In a time of economic difficulties, the demand for legal aid services increases. More people will need advice. Increased poverty and financial stress may lead to crime, and to abuse or neglect in the home, requiring intervention from social services.” The Society does not agree that the telephone helpline should be the single gateway. A significant proportion of clients who qualify for legal aid find accessing services by telephone difficult or even impossible. The cost of calls may be a significant barrier. In addition, the consultation paper fails to recognise the combined impact of the proposed cuts on other areas of work. The removal of many categories of social welfare law and family work from the scope of legal aid is likely to hit the viability of many crime firms very hard.

Liberty believe that in excluding large areas of the law from the scope of legal aid, the proposed reforms will create alarming gaps in protection, denying justice to many but hitting the most vulnerable the hardest. This will contribute towards a culture of impunity amongst the rich and the powerful. They are “profoundly concerned about proposed measures which risk fundamentally diluting principles of transparent justice and due process. Liberty is further deeply troubled about the potential of these measures to erode the constitutional bulwark of the right to trial by jury.”

Legal Aid Practitioners Group find “profoundly objectionable…the Government’s idea that people are rushing to litigation and that lawyers in the legal aid system are encouraging this.” The number of providers of Legal Aid has dropped from 11,000 in the early 1990s to approximately 3,000 now. The number continues to fall as less and less can survive the poor remuneration and burdensome restrictions imposed upon them. The proposed reforms will lead to huge further losses, and the Legal Aid system is already rationed by the lack of providers. Young Legal Aid Lawyers  believes that, if implemented, these proposals will destroy one of the best legal aid systems in
the world. The impact assessments also confirm that the proposals are likely to disproportionately affect women, Black, Asian and Minority Ethnic groups and disabled people. The proposals will “shake the foundations of our society as they will mean that the rule of law will only apply to those who can afford the law or the very poorest in the most desperate of situations.” In their view the legal aid scheme is fundamental to the rule of law and for ensuring justice is properly administered.

Over 5,000 responses were sent to the MoJ from both individuals and organisations concerned about the provision of legal aid services. It remains to be seen whether this barrage of detailed, informed criticism will have any effect. The best way to access many of these responses is on the admirable ilegal site at:

http://www.ilegal.org.uk/

On Monday Ken Clarke took his knife to legal aid. The scale of the reductions revealed in the Green Paper  – £350m a year to be taken out of a £914m annual civil and family legal aid budget by 2014 – had been widely anticipated. The total bill of civil and criminal legal aid currently runs to £2.1bn a year, and a substantial contribution towards the reduction of 23% over four years in the Department’s budget was inevitable.

So far so predictable. But the surprises come in the parts of the legal aid budget that he has decided to protect. In his Commons statement he said: “I do not propose any changes to the scope of criminal legal aid… I plan to retain legal aid for asylum cases, for debt and housing matters where someone’s home is at immediate risk and for mental health cases. It will still be provided where people face intervention from the state in their family affairs that may result in their children being taken into care, and for cases involving domestic violence or forced marriage. I also propose that legal aid should remain available for cases where people seek to hold the state to account by judicial review and for some cases involving discrimination that are currently in scope. Legal assistance to bereaved families in inquests, including for deaths of active service personnel, will also remain in scope.”

The axe falls elsewhere, and the criterion is those areas that are not considered of sufficient priority to justify funding at the taxpayer’s expense. Out go private family law cases, unless domestic violence, forced marriage or child abduction is involved. Out go clinical negligence cases. Other categories to face the chop are education, employment, immigration, some debt and housing issues, and welfare benefits, except where there is a risk to anyone’s safety or liberty, or a risk of homelessness. According to the ‘Guardian’, there will be a reduction of 246,000 private family law cases predicted to save £178 m a year; a reduction in welfare and debt cases of 123,000 cases predicted to save £22m a year; around 43,700 fewer immigration cases predicted to save £18m a year; and 6,100 clinical negligence cases a year, saving £17m a year. These are the deepest and the most far reaching cuts since legal aid was created.

In response to the proposals of the coalition government, Clark’s Labour shadow Sadiq Khan said that they too would have cut legal aid, so it is a done deal. Opposition can only come from pressure groups. The Law Society said the changes to funding civil litigation confirmed their worst fears and is considering strategies for defending access to justice against the proposed cuts and responding in detail the Green Paper. Peter Walsh of Action against Medical Accidents said:  “Whatever the Ministry of Justice would save by scrapping legal aid will cost the NHS many times more. At the same time, the overall effect of changes will hit the poorest hardest, denying them access to justice even if they have been seriously harmed by negligence in the NHS.” Writing in the ‘Guardian’ Steve Hynes of the Legal Action Group said: “More than half a million people, half of all people assisted by civil legal aid each year, will lose out on being able to get help with housing, benefits, employment, debt and other legal problems. These are often truly desperate people.”

Linked with these cuts the Ministry of Justice has announced a very detailed consultation paper ‘Proposals for the Reform of Legal Aid in England and Wales’, aimed at providers of publicly funded legal services and others with an interest in the justice system. The consultation runs from 15 November 2010 to 14 February 2011, and the full text can be found at:
http://www.justice.gov.uk/consultations/docs/legal-aid-reform-consultation.pdf

The tendering process for the Legal Aid scheme for new family law cases is unlawful and must be changed, the High Court ruled last week. The decision follows a three day hearing of the Law Society’s application for judicial review at the Divisional Court.
 
A blog posted on 26 August explained how the Law Society found itself on the horns of a dilemma when the recent tender procedure for civil and family legal aid work sparked a row with the Legal Services Commission (LSC). It is an issue that divides practitioners. Of those firms who had succeeded in obtaining a contract many were satisfied with the outcome, and some, but by no means all, would prefer it if nothing was done to disturb the result. The Society accepted that, whether it chose to act or not, a proportion of its members would be unhappy with the decision. The Society decided to challenge the lawfulness of the LSC’s decision.

As reported on BBC News UK, Dinah Rose QC, appearing for the Society, said the 40% reduction in the number of offices carrying out family legal aid work which the tendering procedure had produced would lead to serious gaps in geographical coverage of family legal aid. “We have referred to these as legal deserts, with no law firm available to undertake family legal aid work,” she told the judges. “At the heart of our case is the contention that the tendering process will have serious adverse effects on access to justice for very vulnerable groups, including those who are victims of domestic abuse, those who are victims of forced marriages, or vulnerable children.”

Lord Justice Moses and Mr Justice Beatson allowed the Law Society’s application for judicial review. The two judges ruled that the tendering process could not be allowed to stand because it would prevent “the vulnerable and deprived from obtaining the services of very well qualified and experienced family lawyers”. The judges said the new caseworker criterion introduced by the LSC for awarding contracts was central to the case. It gave most points to law firms with caseworkers who were members of two separate accreditation schemes which showed they were able to undertake work with children and deal with other complex family issues, including domestic violence. But the LSC had failed to make the importance of this clear in time, leading to an absence of awareness among firms that double accreditation was required, until it was too late to apply. Many highly-qualified firms were thus not given sufficient time to apply for the necessary accreditation. The tendering process was “unfair and irrational” as it “inhibited and defeated” the objective of the LSC, which was to achieve a high quality legal aid service for the public.

Welcoming the Court’s decision, Law Society president Linda Lee said that it is a victory for the thousands of families who would have been left without access to legal assistance when faced with state intervention in their family or the consequences of the breakdown of a relationship. She said: “The LSC’s actions would have seen the number of offices where the public could get subsidised help with family cases drastically cut from 2,400 to 1,300. That would have translated into thousands of people facing grave difficulty in obtaining justice – ordinary people who are already facing extraordinary difficulties. Legal aid clients are some of the most vulnerable in society and access to legal representation where required is their only hope of achieving justice.”

The new contracts should have commenced this month. In its statement the LSC said it “is obviously disappointed by the result and remains committed to ensuring that vulnerable people across England and Wales have access to justice. We are currently considering the detail of the judgment and its implications, including whether to appeal. We are conscious of the uncertainty facing providers and will publish further information in due course”.

Speaking last week at an event hosted by the Law Society, justice minister Jonathan Djanogly stressed the importance of alternative business structures (ABS). He said: “I believe that the changing legal landscape should lead to a reinvigorated and more competitive legal services sector. The introduction of ABS in particular will allow for greater flexibility of professional services provision and businesses better equipped to respond to commercial pressures.”

The Legal Services Act 2007 reformed the way in which legal services are regulated in England and Wales. It allows for ABS, which will enable law firms to explore new ways of organising their businesses to be more cost-effective, permit different kinds of lawyers and non-lawyers to work together, and allow for external investment. Non-legal firms such as insurance companies, banks and estate agents will have the ability to link with legal firms by forming ABS firms and offering integrated legal and other professional services. The claim is that allowing new providers into the marketplace should lead to innovation and price reductions. This should result in more people being able to access legal services. Firms that are interested in developing new business structures will need to apply to the relevant licensing authority for a licence. While there is no obligation on a firm to become an ABS, competitive pressure might influence a firm’s decision.

In just over a year the first ABS firms will open for business. An efficient business model involving a small number of qualified lawyers, overseeing many paralegals, has already taken hold in fields such as conveyancing and personal injury, where much of the work is routine and process-driven. This trend will grow as non-lawyer providers enter the market next year, and the paralegal will become of greater importance. Though in essence they are people doing legal work without a full legal qualification, a core problem is that there is no accepted definition of what a paralegal is. Many legal practices could not survive without them, but their work is often undervalued and unrecognised. Another claim for ABS is that it will be easier to hire and retain high-quality non-legal staff, and ABS firms will be able to reward non-legal staff in the same way as they reward lawyers.

The ‘Guardian’ reports that, in a first for the UK, the Law Society of Scotland, in association with the Scottish Paralegal Association (SPA), has formally launched its registered paralegal scheme, introducing across the board competencies and adherence to a code of conduct for paralegals working with solicitors. Collette Paterson, deputy director of education and training at the society, says more than 120 paralegals have already applied to the scheme, which will not only help to credit the work they do but also introduce set standards and provide a defined career path, possibly linking up in time with the route to qualifying as a solicitor. The Law Society of England and Wales is reported to be currently investigating whether there is scope for it to develop a paralegal qualification.

More details can be found at:
http://www.justice.gov.uk/publications/docs/abs-fact-sheet.pdf
http://www.lawscot.org.uk/paralegals/
http://www.scottish-paralegal.org.uk/

The Law Society found itself on the horns of a dilemma when the recent tender for civil and family legal aid work sparked a row with the LSC. Just over half the firms bidding for family contracts were successful, and the Society says this means businesses will close and people may find it difficult to get a lawyer, especially in rural areas. The new contracts are due to start on 14 October.

A statement by Law Society president Linda Lee states that the result of the tender would see the number of family law firms offering legal aid reduced from 2,400 to 1,300, with the loss of many highly expert lawyers from the legal aid system, and the development of significant geographical gaps and shortages of services. But she goes on to say: “This is an issue that has divided practitioners. Of those firms who have succeeded in obtaining a contract many are satisfied with the outcome, and some but by no means all, would prefer it if nothing was done to disturb the result. There are others who although they are uneasy with the impact on unsuccessful bidders take the same view because they conclude this will cause the least disruption. Many firms that have failed to obtain a contract face having to make redundancies or even close their firms. There is no one course of action that is ‘in the profession’s interests’”. The Society accepts that, whether it chooses to act or not, a proportion of its members would be unhappy with the decision, and are acutely aware of the difficulty taking action may cause those successful firms who are planning to expand their businesses either by volume, new work type or a new geographic location.

Linda Lee goes on to say: “As a profession we accept and are proud of an ethical code that is higher than pure commercial considerations. We have a duty to protect the public interest. A reduction in access to justice cannot be in the public interest particularly when it affects the most vulnerable people in society, those who are seeking to establish their basic rights.” Therefore the Society has sent a pre-action protocol letter to the  LSC, challenging the lawfulness of its decision to proceed with the allocation of family law contracts. The Society believe the contracts offered would leave many areas with a grossly inadequate supply, and consider that the family justice system will be seriously impoverished by the loss of a significant cadre of highly skilled and dedicated practitioners who are willing to provide publicly funded services to those whose need is most acute.

The President also asserts that that the LSC’s Equalities Impact Assessment was fundamentally flawed, with no account taken of the fact that the majority of applicants for domestic violence injunctions and ancillary relief are women, who are likely to suffer additional difficulties in securing the services they need because of the reduction in the number of firms available. The Society also fears that there will be significant disruption in the short term as unsuccessful firms close down their departments, either by force of economic circumstances or because their staff have migrated to successful firms. Many clients may find themselves losing their representation in the middle of their cases, and will then have to try to find a new lawyer, with no assurance that successful bidders will be willing or able to take on all of these migrating clients. The LSC has been asked to extend the existing contracts for family law for a short period in order to give it time to conduct a review addressing these issues.

Linda Lee concludes: “It is for the LSC to ensure compliance with its legal obligations, and if it does not do so, and access to justice for vulnerable clients is threatened as a result, we are ready to take all appropriate steps to secure such compliance. I hope that can be done quickly, effectively and amicably.”

In February the Legal Services Commission (LSC) announced that, as current civil legal aid contracts come to an end on 13 October 2010, any organisation who wishes to deliver legal aid work in Family (including Family Mediation) or Social Welfare Law from 14 October 2010 would need to apply for and be awarded a new contract. The tender process for this opened on 26 February 2010, and the deadline for submitting tenders was 21 April 2010.

In a press release last week, the LSC pronounced that the tenders were carried out openly and transparently, and focused on commissioning quality legal advice and representation where people most need these services, with the aim of improving current services wherever possible. The Commission claimed that the tenders were popular among both law firms and not-for-profit organisations.  All tenders were oversubscribed which meant that it was not possible to award all bidders contracts nor, in some cases, the level of work bid for. Sir Bill Callaghan, Chair of the LSC, said: “Ensuring quality advice provision, where it is needed, is at the heart of our civil contract tenders. We are confident that we now have quality-assured advice provision across England and Wales.”

This optimistic view was not shared by everyone. Indeed, the Law Society is urging the LSC to undertake an urgent public review after it emerged the number of firms providing family legal services has been halved. The fall-out from the tender process, which, it is claimed, leaves families, children and domestic violence victims without genuine access to legal services, has prompted the Society to call for its immediate suspension while a public review of the process, its outcome and the impact of access to justice is assessed. The LSC chief executive Carolyn Downs, in an interview with the Law Society Gazette, admitted that the dramatic cull in family law suppliers was not the intended outcome of the tendering round.

Clearly the law of unintended consequences was once again in operation. Law Society President Linda Lee said: “This is sadly the latest and perhaps most alarming of the LSC’s apparently haphazard attempts to reshape legal aid notwithstanding the clear intent of the previous and present Governments to return policy on legal aid to the Ministry of Justice. The LSC has, we fear, lost control of the processes.” She added: “When even the LSC itself is saying the outcome was not intended, and when clients are deprived of legal advice and services and firms are seeing important contracts vanish, the Government has to take a closer look at this and make a decision. If these systemic changes were being imposed on farmers or fishermen then compensation would be paid. All businesses, not just law firms, trading in Government controlled markets will be watching very closely how the Government handles this situation. In this era of the Big Society, the rule of law and genuine access to justice for all citizens must be an underpinning element of that concept.”