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Criminal solicitors simply cannot afford to absorb any further cuts - speech by Richard Miller

8 March 2017

Richard Miller, Law Society head of justice, gave a speech at a London Criminal Courts Solicitors' Association (LCCSA) meeting on 28 February to discuss Ministry of Jusice (MoJ), Litigators' Graduated Fee Scheme (LGFS) and Advocates' Graduated Fee Scheme (AGFS) reform proposals.

I would like to thank the LCCSA for organising this event, and for giving me the opportunity to speak tonight.

Right from when the Otterburn and KPMG reports were published during the two tier process, the Law Society has been hammering home the fact that those reports, and the subsequent reports from PA Consulting and Deloitte, show that the criminal defence solicitors' market cannot sustain further cuts. This is why, when these latest cuts were announced, the Society immediately condemned them.

The Law Society has three questions for the MoJ. Why cuts? Why now? And why us?

We have known since Michael Gove suspended the second 8.75 per cent cut from April last year that the government was going to consider reinstating the cut, even though the reasons that forced the suspension apply equally now as they did a year ago. In fact, they apply even more so as firms have another year's worth of rising costs and frozen rates to absorb. So last year, we asked Oxford Economics [OE] to provide an update to their 2014 report, looking at the trends in criminal justice and what they mean for the legal aid budget.

In the new report, published earlier this month, OE confirmed that even if the MoJ does nothing, the criminal legal aid budget will continue to fall significantly. But the MoJ is not doing nothing. It is implementing a range of reforms proposed by Lord Justice Leveson via the Better Case Management and Transforming Summary Justice programmes. We are only just starting to see the impact of those programmes on billing trends, but again the clear evidence is that they are succeeding in reducing costs to the MoJ.

All this evidence leads us to the conclusion that the budgetary imperative that is driving the MoJ to make cuts is not as strong as they seem to think it is.

So why is the MoJ doing this? They claim that because of the Napper case, they are now having to pay for pages of evidence that they had never intended should be defined as pages. We say that Napper merely corrected an unreasonably restrictive interpretation that the LAA was applying, and ensured that solicitors are paid for work they are required to do because of what the prosecution serves on them. The idea that somehow defence solicitors do not have to work on the evidence the prosecution serves does not stack up.

In any event, the argument that the increase in page count has been caused solely by Napper does not stack up. The case mix has changed. Not only are we seeing a lot more sexual offences in the Crown Court, a lot of those offences are historic cases which tend to be much more paper-heavy than a contemporary case. A few years ago, the LAA changed the rules relating to VHCCs, putting a lot of - again inevitably paper-heavy - cases into the LGFS.

Even if there were any justification to these arguments, the solution, surely, is to reform the LGFS.

That is precisely what we, LCCSA and other representative bodies have been trying to do via a working group with the LAA that has been operating for many months. From the outset the LAA has been aware of Napper. From the outset, we were assured that any adjustments to the scheme would be cost neutral. This proposed cut moves the goalposts in the middle of that work.

That brings us to the question, why us? Even if there were some urgent imperative requiring the MoJ to save money, they can't keep responding to every budgetary problem by demanding that defence solicitors keep doing more work for less money. Still less can you do so at the same time as you are consulting on a change to the AGFS that, on the MoJ's own figures, will increase payments to QCs by 10 per cent. You cannot credibly claim there is an urgent need to save money while offering the best-paid lawyers in the system, and only them, an increase.

And all this for what? For £30 million. A drop in the ocean even in terms of the MoJ's budget, let alone in terms of government expenditure more broadly. We all know that significant sums are wasted elsewhere in the justice system by inefficiencies in listing, by problems delivering people to court, by failures in the interpreters' contract, by other parties not complying with their obligations. And that is before we start asking questions how many people we prosecute, and for how long we lock them up.

But we don't even know whether they will save £30 million. The MoJ knows what the gross savings will be from capping the page count at 6,000 pages, but they have no idea how much they will pay out in special prep claims. Their own impact assessment estimates that they will pay out in special prep on 'between 20 per cent and 80 per cent' of cases. But they cannot possibly know how much they will have to pay on those claims; and as recent decisions of costs judges show, what they think they are liable to pay and what they actually have to pay are sometimes very different.

Even on their own questionable figures, they may save as little as £23 million, or take out of this fragile market as much as £37 million. This is in addition to the £6-£8 million estimated saving from reducing the rates paid for s38 cases. And there is also the impact of the AGFS proposals on solicitors who undertake higher court advocacy to be taken into account as well, which will worsen the economic hit on some firms still further.

And what if the government is wrong in blithely assuming that the profession is able to absorb the cut? How many firms would have to collapse before the MoJ has lost every penny of those savings and more? Not very many, I would guess, just from the administration, additional case payments and irrecoverable debts. And that is before we factor in other costs from plugging any gaps in supply that result.

Such a huge risk, for such tiny gains for the MoJ.

So what next?

For s38 cases, the answer is quite easy. The market will speak. If the rates now on offer for this work are not adequate, lawyers have no obligation to take them on, and will choose not to do so. I am not entirely sure what the consequences will be if the courts are unable to appoint a lawyer. They may be faced with an invidious choice between allowing the defendant to cross-examine the complainant in person or dismissing the charges. Either outcome would be devastating for those victims of domestic violence whom the system was established to protect. This would fly in the face of this government's repeated assertions that it wants to reduce the trauma to abuse victims that the legal system can cause.

For the LGFS proposals, the position is trickier. All the representative bodies will be putting in robust responses to this consultation, and we would urge all of you to do so as well, showing what the impact of this cut would be on your firms. The more firms do this, the less blasé the MoJ can be that enough firms will absorb the cut that they don't need to worry.

I would just stress that the Law Society, LCCSA and CLSA cannot advocate or organise any sort of boycott or strike action. It would be unlawful under the Competition and Enterprise Acts, and we cannot act unlawfully. However, we can say what we are seeing. As I said to Catherine Baksi for her article that appeared in Legal Voice today, the feedback we are getting from our members on s38 cases is that many firms would be unable to carry out such complex and urgent work at the rates being proposed.

The other thing we can do, and are doing, is to seek legal advice as to whether there are any grounds to bring a legal challenge to the proposals. We are instructing counsel to advise so that we can see what, if any, options might be available.

The courts tend to be very reluctant to interfere in government spending decisions, as we have seen in various challenges we have brought in the past. Moreover, it is likely, based on past experience, that any advice at this stage will highlight potential routes forward, but that a final view will have to await the MoJ's decision following the consultation. We may also be limited for strategic reasons in what we can say publicly about any legal advice we get. But rest assured that we will explore this option fully and will work with the other groups on this.

We will also continue to lobby, to try to get through to ministers and officials the serious damage they risk doing to the justice system if they proceed with this cut. We will continue to engage in the press. And we will work with CLSA and LCCSA to explore any other avenues we can think of to fight this cut.

Thank you.

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