I hope you will welcome further explanation of the Law Society's position regarding the Lord Chancellor's second consultation on criminal legal aid. I offer this to correct any false impressions which may have arisen since the 5 September announcement.
I also attach the letter from our president (PDF, 76kb) issued on 5 September 2013, which I would urge members to read.
So that there can be no doubt, I wish to restate unequivocally that the Law Society opposes fee cuts. We set out in our original response our view that the cuts proposed would be very damaging, and we supported this viewpoint with empirical evidence which we commissioned from Otterburn/Ling and Deloitte. We will repeat our concerns in the response to this further consultation and take other opportunities to explain their damaging impact.
Our evidence this week to the Justice Select Committee draws from our draft response to the consultation to reiterate our opposition to the fee cuts and we would encourage members to alert their own MPs to the likely impact on their businesses and on their local area.
The Law Society has given a lot of consideration to the strategy that we should adopt. Many of our members would have preferred us to take a much more oppositional stance, refusing to engage, standing firm, just saying no, and supporting direct action. We understand that viewpoint, and did not dismiss it lightly.
There is no doubt that the Society could have made itself much more popular by taking such an approach. However, we cannot see any path by which that strategy could lead to a better outcome for our members. It is worth noting David Gilmore's recent comments in the Solicitor's Journal:
'I know from experience working in senior management at the Legal Aid Board in the late 1990s that it is a damn sight easier to push reforms through if the other side is not engaging… In relation to a policy of engagement and the criticism that goes with it, the frustrating thing is that, as far as I am aware, no-one has yet come up with a workable alternative to it which will help.'
The overall position
It is important to remember that the ministry is free to set the both strategic direction and the detailed arrangements for criminal legal aid and the procurement of criminal law services, subject to the law and any substantive political challenge. Assessments of the bargaining power of the profession must be set in that context - as the MoJ does not require our agreement.
Setting administrative rates of pay requires no vote in parliament, but our assessment, based on regular contact across the parties and reinforced after our meetings
during conference season, is that parliament would not find a majority to maintain current levels of criminal legal.
We have presented all the available arguments (and empirically-based evidence) as to why fee cuts are neither necessary nor reasonable as a means for the ministry to achieve its budget savings but we cannot require the ministry to accept those arguments.
The profession has been admirably united in opposing price-competitive tendering. It has not been unified around any positive alternative agenda. The Lord Chancellor is perfectly able to ignore opposition in the absence of a well-evidenced alternative. Without an alternative as proposed by the Law Society, I am sure that the MoJ would still be pursuing a PCT-based approach.
The MoJ received more than one alternative proposal in response to its initial consultation but it was the Law Society's well-researched material which eventually secured the crucial breakthrough – of persuading the MoJ to put aside its own price-competition plan.
While maintaining our objection to the fee cuts, our discussions with the ministry resulted in a new proposal as set out in the second consultation paper. The Legal Aid Agency will procure criminal legal aid services in accordance with new contracts and procurement areas, with client choice restored and price tendering shelved.
There is still some scope for refinement of these proposals, as the evidence emerges of what the implications will be in practice.
While this was not our preferred approach, we believe that it was the best settlement that was realistically achievable in the circumstances. Evidence from the current Otterburn/Ling research should strengthen our arguments for further refinements – and is likely to reassert the impact of the cuts.
It is vital that criminal law firms take part in the survey.
The Law Society's agreement to the framework does not include agreement as to the detail of the fee structures. We have two major concerns with the structures proposed, in addition to our concerns about the level of cuts:
- The national fixed fees will have a disproportionate impact on certain areas, particularly London and the south-east. In some parts of the country, and for certain elements of the work, they turn a nominal 17.5 per cent cut into a cut of as much as 40 per cent.
- The revised fee structures for magistrates and Crown court cases will result in the same fee being paid for guilty pleas and for trials on a not guilty plea. Such a structure arguably offers a financial inducement to the profession to consider commercial interest over the interest of their client and to neglect their professional duty. This could be construed as contrary to the rule of law and risks undermining public confidence in the criminal justice system. Clients who do not trust correct advice to plead guilty may be more likely to plead not guilty, causing additional cost, and additional stress to victims and witnesses.
We will be making representations about the detail of the schemes, based on the input we have had from our committees and the practitioner groups.
Two-tier contract model
Our preference, as set out in the published Law Society alternative, was for a single-tier structure of contracts under which any firm that met the requirements would be entitled to a contract, which would include duty solicitor work.
We discussed both this approach and a two-tier model with our committees and the practitioner groups. We accepted that there were pros and cons with both approaches, but on balance we preferred the single contract structure.
Unfortunately, the MoJ considered that there were procurement law problems with the proposal we suggested. Our own legal advice, while more optimistic, did indicate that the MoJ's concerns were not entirely fanciful. The two-tier model informed by what has become the Otterburn and Ling assessment is a sensible approach to resolve those difficulties; and in the circumstances, we agreed to accept this approach as part of the wider agreement.
We welcome the increase in the number of procurement areas from 42 to 62 as a step in the right direction. Our preference would have been for a larger number of smaller areas.
However, we recognise the tension between allowing practitioners to practise in a smaller geographic area, and being able to offer practitioners contracts of sufficient value to be economically viable. We believe there may need to be some further refinement of the proposed areas, and would encourage members to respond to the consultation setting out local and regional concerns.
Number of contracts
The MoJ has agreed that an unlimited number of own client contracts will be offered.
We were unable to agree with the MoJ the number of duty solicitor contracts to be offered.
Instead, we have agreed a way forward under which the MoJ and the Law Society are jointly securing hard evidence and independent analysis to underpin this decision – the Otterburn/Ling research.
The Society's position is that we wish to see the maximum number of contracts awarded consistent with economic viability. We do not wish to see firms arbitrarily driven out of the market because the MoJ has chosen an unnecessarily low figure. This would not only be bad for firms, it would be bad for their clients, and disruptive for the criminal justice system too.
However, we also accept that it would do nobody any favours if the MoJ were to offer too many contracts, with the result that no firms were able to secure sufficient volumes to be viable. Firms are already struggling with reduced volumes of work within the criminal justice system. To compound that effect with smaller contracts would be bad for clients and for firms.
The concerns being clearly expressed by the profession have been a necessary backdrop to making the progress that has been made to date, but it is engagement that has secured the changes. The combination of that backdrop and our engagement has achieved the restoration of client choice, the removal of price tendering, and the right of any firm meeting the standards to have an own client contract.
What remains still leaves practitioners facing an incredibly tough future. I wouldn't wish to offer false hopes as to what further changes might be won, but we will continue seeking improvements in the proposals on your behalf.