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MOJ consultation on crime duty contracts: support pack for member responses

3 October 2014

The Law Society is supporting members to respond to the Ministry of Justice consultation on crime duty contracts, which invites comments on the Otterburn and KPMG reports. The consultation closes on 15 October.

Law Society president Andrew Caplen:

'We know that preparing a response to a consultation within such a short timescale is challenging and that is why we are publishing this guide to the reports to make the process easier for members. We have also produced lobbying advice for solicitors to write to their MP outlining how damaging the proposals for duty crime contracts are.'

Our commentary on the issues raised by the PA Consulting, KPMG and Otterburn reports

To help members draft their responses to the consultation, we have picked out some highlights below from each report.

You can also download our full commentary on the issues raised by these reports (PDF 183kb)

KPMG

In 30 of the 53 procurement areas outside London and in all the London areas, KPMG was unable to find any size of contract that would be economically viable.

KPMG says:

'Based on the data available, it is possible to illustrate the extent of market consolidation needed, but not to fully assess the extent to which this level of market consolidation can be achieved.'

Read our quick guide to the KPMG report (PDF 198kb)
Download a full copy of the KPMG report (PDF 777kb)

PA Consulting

The draft report from PA Consulting is a new piece of evidence that we were previously unaware of. It emerged during the judicial review. It was made available to the MoJ more than a year ago, in August 2013.

PA Consulting concluded that large firms will be less able than small firms to absorb the fee cuts, and those with a greater reliance on criminal legal aid (which is more common in this field) will be less able to do so than those with a broader spread of work.

If a firm earns 50 per cent of its revenues from criminal legal aid, then only those in the upper quartile and small firms at the median will still be profitable after the 17.5 per cent fee cut.

For firms who take 90+ per cent from criminal legal aid, the verdict is that only small firms in the upper quartile will still be making any profit, and that profit will be 0.3 per cent.

In short, the fee cuts are unsustainable.

Download a copy of the PA Consulting report (PDF)  

Otterburn

Otterburn says:

'Based on the findings of our survey, in our opinion, any fee reductions should take place after, not before, the market has a chance to consolidate.

'Due to the weak financial base, we conclude that few firms will be able to invest in the structural changes needed for a larger duty contract and recruit new fee earners.

... 'the Criminal Justice Areas were designed for a different purpose and may not be suitable as a basis for procurement areas without amendment. They are often extremely large geographically and would be difficult to service, and

'We consider that the MoJ should take a different approach to securing duty solicitor provision in rural areas.'

Download a copy of the Otterburn report (PDF 1.8mb) 

Key concerns

The concerns that have previously been raised can be summarised under three headings:

  1. The MoJ has failed to appreciate the fragility of the existing market players - despite the results of the Otterburn survey, its own report from PA Consulting and anecdotal evidence from practitioners, the MoJ has not accepted that the market is so financially weak as to make the combination of fee reductions and restructuring highly risky.
  2. The MoJ has accepted KPMG's market assumptions, despite evidence that they have misunderstood the market's dynamics - the ministry has accepted KPMG's assumptions, notably that firms will substitute 50 per cent of their own client work in order to scale up to cover a larger duty contract, despite repeated assertions by firms themselves that the assumption is unrealistic.
  3. The MoJ has failed to address concerns about the suitability of the planned procurement areas - despite concerns raised in both the KPMG and Otterburn reports that many procurement areas, in particular those in rural parts of England and Wales, were unsuitable for the proposed changes they have not brought forward significant amendments.

Responding to the consultation

Wherever possible your consultation response should include specific examples of the potential impact on your firm and on access to justice in your area.

Respond to the consultation on the MoJ website 

Please note: Welsh versions of the questionnaire (Word) and consultation (PDF) documents are also available.

How to lobby your MP

Our briefing sets out how you can lobby your own, or your firm's local member of parliament (MP), in order to raise your concerns about the Ministry of Justice's consultation on crime duty contracts. The briefing includes a template letter to send to MPs.

Download our campaigner briefing (PDF 197kb) 
Download our campaigner briefing for members in Wales (PDF 198kb) 

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