Dear members
We have now had a chance to consider in-depth the competitive tendering proposals the government published last Tuesday. The scale of the cuts proposed is shocking, and in our view the proposal wholly fails to achieve the government's stated aim of a restructuring of the market so that the winning bidders would be able to absorb cuts of the magnitude proposed in the timescale provided.
Our key concerns are:
- For smaller firms: the requirement to cover a whole criminal justice area means an increase in infrastructure and management costs. On top of a 17.5 per cent cut this would almost guarantee bankruptcy.
- For larger firms: the artificial cap on the share of the market that they can be awarded means there is unlikely to be sufficient volume to enable them to absorb the cuts.
- Timeframe: Firms would only be given three months from notification that they have a contract to undertake the restructuring and expansion required. Given that the successful firms will have to implement significant IT and infrastructure changes and, very likely, seek regulatory approval for changes to their structure, this is clearly not remotely achievable. Firms will be unlikely to be willing to make significant investment before the contract has been awarded.
- Client choice: The scheme proposes abolition of a client's freedom choice of solicitor, which we understood to be guaranteed by LASPO. Client choice does not just benefit the client, it provides competition and an incentive to keep standards high.
Simply on the timeframe, these proposals are unworkable, and the clear reaction of the firms that we have spoken to is that the proposals will lead not to a restructuring, but to a collapse of the criminal defence system.
The Law Society's action
It is essential to remember that:
- The Treasury is requiring the Ministry of Justice (MoJ) to make significant savings. We should be in no doubt of the reality of this and the question is not whether, but how those savings will be made.
- There is major political will at the highest level to achieve the savings and to implement some form of tendering. This is of a different to order to that which we have seen on earlier occasions where this has been proposed. We have seen with LASPO that the MoJ is willing to push through cuts in both fees and scope that the profession considered untenable.
- The MoJ has said it will listen to proposals which will achieve the savings in a different way.
The Society agrees that, as these proposals stand, they will not work for the profession. We believe that our stance must be to:
- provide evidence to government which shows that they will not work
- establish whether there are any changes to the proposals which would make them workable for the profession or whether there are alternatives – for example, would a simple across-the-board cut in fees enable the profession to restructure itself, and would it be less unpalatable than what is currently proposed?, and
- look at ways in which we can support those members of the profession who wish to continue to undertake criminal work, should we be unsuccessful in moving the government.
To this end, the Law Society:
- has issued a consultation paper to the profession seeking your views on the issues set out here
- will be setting up a series of roadshows to inform the profession and hear its views in the course of late April and May
- will be providing advice to the profession on responding to the consultation and lobbying MPs, and
- is instructing experts to look at the proposals and provide the best evidence that we can to show government that its proposals are unworkable and, where possible, to identify how they must be changed.
The Society does not rule out more serious action later on but, at this stage, we believe that it is in the interests of our members and of the criminal justice system to engage with the proposals and provide evidence and reasoned alternatives to government.
What we need from you
The Society needs the following from the profession:
I hope that you will help us with this. We will keep you informed regularly through our e-newsletters and our website as to progress.
Law Society president Lucy Scott-Moncrieff