Up to 75% of criminal legal aid firms will be removed from the market under far-reaching reforms set to be implemented from summer 2011. The Ministry of Justice has announced new proposals for the tendering of criminal legal aid services with the aim of delivering significant savings to taxpayers and a more sustainable future for the legal aid budget It is claimed that the proposed new tendering process would also lead to greater efficiencies for suppliers enabling them to be profitable and sustainable, whilst ensuring that legal aid is available to those most in need.

The proposals would see the criminal legal aid market restructured so that there are a smaller number of large contracts contracted across a Criminal Justice Area, with multiple contracts let in each CJS area. In future there are likely to be no more than eight to ten contracts per CJS area. Arguments are advanced for moving quickly towards a consolidated market that will enable firms to remain viable through access to greater volumes of work. Individuals would continue to have a choice of legal representatives from among the pool of providers who hold contracts. Under the proposed model, contracts would be let for the full range of criminal defence work from the police station through to the Crown Court, with cases followed through to their conclusion. All contracts would include a share of police station and magistrates’ court duty work. The claim is that contract holders would therefore have greater access to the higher value, more profitable work, including the ability to undertake Very High Cost Cases.

In an interview with the ‘Law Gazette’, legal aid minister Lord Bach said: “These proposals are likely to affect a large number of small and medium-sized firms, but the current arrangements are unsustainable. Solicitors have been telling us for some time that the amount they get from legal aid is not enough to keep them profitable. These plans will generate greater efficiencies for suppliers, help people access good advice, and get a better deal for the taxpayer.” He estimated that no more than 500 firms will get contracts, which would mean that up to 75% of the 1,700 firms doing criminal legal aid work face an exit from the market. At the launch of the proposals Jack Straw said: “We have a duty to ensure that the legal aid budget is used effectively and efficiently on behalf of the taxpayer. Even with the necessary savings and reforms, our system of legal aid – civil and criminal – will still be far and away the best funded in the world.”

Responding to the new proposals, Law Society President Robert Heslett said: “We have long argued that the current situation is not sustainable in the medium to long term. We agree with the Ministry that reform is needed”. But he added: “The model proposed by the Ministry bears little resemblance to the market as it is currently structured, and it is not clear how, nor how quickly any move to such a model could be implemented without causing serious disruption to service provision. We do not have an economic environment in which firms will find it easy to make the necessary investment to expand as much as would be required.”

The full text of the MoJ report “Restructuring the delivery of criminal defence services” can be found at:

http://www.justice.gov.uk/publications/docs/restructuring-delivery-criminal-defence-services.pdf

Very high cost cases (VHCCs) are those estimated to last more than 40 days at trial, or 25 days if involving complicated combinations of factors. Last year there were about 400 defendants funded by legal aid in 100 VHCC criminal cases at a total cost of £100 million. Defence teams are typically paid around £400,000 for such cases but costs in some, such as the Jubilee Line Fraud case, have run into several millions.

In an attempt to ensure best quality and value for the most expensive criminal legal aid cases, the Legal Services Commission established a very high cost cases (crime) panel due to run till July 2009. “We believe this panel offers real benefits to those signed up to it. They have the first opportunity to take on work worth in excess of £100m a year.” But, according to the ‘Guardian’, of the 2300 barristers invited to join only about 100 barristers and three QCs have so far signed up.

The sticking point would seem to be the capped fees offered. Under the new scheme, for preparation work a QC’s fees will range from £91 to £145 an hour, and for time spent in court a QC will get £476 a day. For a leading junior, the range is £79 to £127 an hour, with £390 a day for time spent in court. A junior acting alone will receive between £70 and £100 an hour, with £285 a day for time spent in court.

Peter Lodder, QC, senior criminal barrister and Chairman of the Criminal Bar Association, is reported in ‘The Times’ as condemning “these derisory levels of income…hourly rates do not encourage efficiency…a system geared to an efficient dispatch of justice should have an effective payment system.” At the heart of the dispute, he said, was the “driving down of fees to a level at which properly qualified people who have invested many years of training are simply not being properly remunerated”. As reported in the ‘Guardian’, he said that the full impact of the Bar’s boycott had not yet been felt but that the first serious trials requiring QCs were due to reach court in the new year.

The first setback for the LSC has already occurred,. The 17-year-old accused of shooting dead schoolboy Rhys Jones was left without a QC a month before the trial was due to start and his solicitor was working for free. The problem occurred because the Legal Services Commission initially insisted that the defendant’s lawyers worked for a fixed fee, but they have now made an exception and reverted to the old pay structure. The LSC’s director of high cost case contracting has acknowledged difficulties with forthcoming large trials, and there may have to be other exceptions in future.