Transforming Legal Aid - Next Steps Consultation. LDLA response

Transforming Legal Aid - Next Steps Consultation. LDLA response

 

Introduction

The Liberal Democrats Lawyers Association (LDLA) represents legal practitioners and others involved in the administration of justice who are members of the Liberal Democrats. Following the previous consultation and the concerns which were widely expressed over price tendering and client choice, we welcome the changes the Government has made to its Transforming Legal Aid proposals. However, we believe that proposals are still fundamentally flawed, and involve a dangerous and unnecessary leap in the dark.  Our view based on extensive knowledge of legal practice and discussion with practitioners is that they are based on assertion and guesswork, rather than any objective research on the costs and capabilities of criminal defence services. In particular we do not see how the criminal sector can absorb over 17 percent without fundamentally reducing the quality and accessibility of criminal defence advice and representation services – no other public service is being asked to absorb a cut of this magnitude. The proposals are also in direct conflict with Liberal Democrat Policy. 

So despite the welcome changes since the first consultation round, significant risks still remain to the sustainability of the supplier base in criminal legal aid work, for citizens’ access to justice in both criminal and civil law contexts, and for the effective operation of the Criminal Justice system, to the extent that the proposals are reckless. The LDLA brought these issues to the attention of the most recent Liberal Democrat Conference which unanimously called for the proposals to be stayed to allow further consideration of the impact of the reforms, and to explore alternative approaches to making savings in the Legal Aid Budget.  The provision of a fair and accessible justice system, with high quality representation, is an essential duty of the state.  We deprecate any suggestion that the justice system, especially where the liberty of the individual is at stake, should be anything other than excellent, as the justice system underpins everything else in a functioning state, economy and society.  The constant lowering of incomes is in the sector is already producing noticeable lowering of standards and training/recruitment challenges for the future, which these proposals will only accelerate and undermine confidence in Criminal Justice System.

Procurement of Criminal Legal Aid Services - the modified proposals (Questions 1-5)

We regard these proposals as a very considerable improvement upon the unworkable and illiberal initial proposals,  recognising the value of diversity in the market by allowing for multiple contracts and providers, providing for client choice, and maintaining the importance of quality by using capacity and quality thresholds rather than price as the criterion for awarding contracts. We also welcome that the Government have recognised that it is necessary to stagger reforms, so that providers are not required to make the required changes on the basis of unrealistic timetables, and that longer contracts provide for greater certainty.

However, even with these changes to the planned procurement model, there remain serious challenges as to whether the market can adapt and deliver under the proposals. Recognising the importance of quality is insufficient: the means must be provided to achieve it.  Specifically we have the following concerns:-

·         It is not clear why duty work should be treated so differently from own client work and therefore subjected to different contract regimes - provision could be made within the same contracting regime for duty work to be more localised

·          All the evidence, to which we refer below, makes it clear that it is highly unlikely that providers can sustain fee cuts of the proposed scale coming, as they do, after years of stagnation and cuts.

·         National fixed fee rates do not take account of regional cost differences - this is why Lord Carter\'s report concluded that fixed fee rates needed to be set regionally

·         Whether the proposed competitive block contracting system for police station work covering large CJS areas will work

 

Police station work

Even with the principle of ‘swings and roundabouts\' assumed by the proposed new system, the inflexibility of a flat £160.45 (the actual fee post-VAT) police station attendance fee may prove to be unworkable as it does not properly take account of exceptional cases, or the very different cost base of operating in different parts of the country.

Magistrates Courts

We continue to hold that a harmonised single flat fee for all types of proceeding, offence and outcome is inappropriate and may well lead to much poorer administration of justice in the Magistrates Courts. As we understand, the Government is planning to introduce legislation raising the sentencing power of magistrates or possibly re- classifying offences triable either way as summary only, and there will be new judicial guidelines ensuring work presently in the Crown Court should in future be the subject of the retention of jurisdiction by magistrates. We would not be opposed, in principle, to such developments as Magistrates courts are a highly successful model of how justice can be delivered cost-effectively in the community. However, it is important that serious cases are reserved for the Crown Court and that allocation decisions are made on the merits, and not on costs grounds.  Further, defence services do need to be appropriate. The harmonised fee applies regardless of plea or trial - something that we previously criticised for deliberately trying to incentivise guilty pleas, and there is no exceptional mechanism for complexity.  

So we regard the proposals for flat rate fees regardless of the type and level of work to be wrong in principle.  The fixed fee for magistrates court work will apply regardless of whether there is a plea, a contested trial or something in between.  The inventive for there to be guilty pleas or for corners to be cut is obvious.  A summary trial with witnesses to be traced, legal arguments to prepare and defence cases to develop will not be carried out to any good standard at all.  The same goes for the police station flat fee.  The idea that a shoplifting case with a short 30 minute interview, a tiny amount of advance disclosure and scant instructions to take attracts the same fee as a murder involving hours of interviews, multiple bail-backs and a huge amount of instructions taking place plus a lot riding on the decisions made, is utterly wrong. 

 

Fee levels

All the evidence continues to suggest that the sector will find a 17.5% fee cut (even if staggered into two stages) to be unsustainable, especially in the context of current profitability margins. Legal aid rates in crime have not seen any uplift since the 1990s, and were cut by the previous Government just before the election.  The following pieces of work (not referred to at all in the consultation paper) all suggest that the supplier base is now extremely fragile - a situation which has been exacerbated by the recession which has hit medium small law firms especially hard:-

·         NAO Report: The procurement of criminal defence in England and Wales

·         Recent firms survey by the SRA, more than 10-20% of all solicitors firms in serious financial difficulty

·         Otterburn and Ling Report – PCT for Criminal Defence Services, Report for Law Society

·         Deloitte Report – Proposed Legal Aid reforms, report for Law Society

The above research also challenges the presumption that the market can easily restructure and adapt on the basis of "economies of scale" by moving towards larger ABS delivery models.  In fact there has been a trend towards practitioners creating smaller firms serving very particular areas or communities using cheap premises and little in the way of support staff to keep overheads minimal. The NAO evidence suggests that the small practice model is actually the most profitable, which runs counter to the underlying proposals of the consultation.  What is proposed is, on all available evidence, is simply not sustainable. What is proposed is therefore, we repeat, reckless.

 

Geographical and scale issues

There may still be practical problems in the market of delivering a low-volume service across a substantial geographic area. In some of the proposed areas, it is difficult to see how suggested "economies of scale‟ can be achieved.  The NAO report actually demonstrates that there are diseconomies of scale.  The combined effect of the size of the areas to be covered, the value of the contracts on offer with low/reduced flat fixed fee levels, and the investment that would be required for new entrants and existing providers alike to scale up to cover such a wide area, contractors in many areas could stand make substantial losses throughout the life of the contract.

 

Advocacy fees (Questions 6)

It is again necessary to challenge the logic, on the basis of professional ethics and justice, of seeking harmonise payments for guilty pleas and going to trial. Whist it is a step forward that Government now accept that the gap between the preparation done and fees payable within the Advocates’ Graduated Fee Scheme (AGFS) as a result of harmonising the Basic Fee for trials with those for guilty pleas and cracked trials would be unmanageable for advocates given the current distribution of work, the two alternative proposition on graduated fee proposals for advocacy art not much better. It seems to us that both models are explicitly designed to encourage guilty pleas; option 1 incentivises guilty pleas by envisaging a 23% fee increase and cuts of 18% for cracked trials and 11% for trial, whilst option 2 would result in cuts of 11% for guilty pleas, 2% for cracked trials and 8% for trial.  

 

In respect of high cost case (VHCC) fees, we acknowledge that VHCC costs and the disproportionate share of the budget that these cases absorb  is a serious problems for the legal aid system, but we have developed alternative proposals for funding defence services for complex high cost crime cases such as fraud trials (see below).  The fees paid under the VHCC scheme have already sustained substantial cuts.  The proposed 30% further cuts are likely to drive any able practitioner away from such work which represents the most difficult and complex cases which come before the courts.  The proposal to reduce fees in existing contracts is wholly objectionable and will lead to chaos in the Courts.

 

Impact Assessments (Questions 7-9)

  

The present IAs are superficial and unsupported by any objective research or evidence.  They are an abject lesson in how government should not proceed. There needs to be a wider context to the Impact Assessment with a longer term horizon. For example crime rates are falling and the new approaches towards dealing with crime, together with the cuts to police and prosecution services, suggest that the volume of cases in the criminal legal aid system will continue to fall and the spending with it. Government should take account of the likely fall in demand for criminal legal aid in its assessment of the savings that it needs and the impact that the previous Government’s cuts are having, before assessing the potential impact of these further cuts.

There are potential equalities issue arising from basic harmonised fees. Cases that require an interpreter take longer than others; the time taken for the defendant to give evidence increases if an interpreter is required. This may have a negative impact on BME firms who may undertake more cases with non-English speaking clients, even if they have the language skills to communicate with the clients themselves.

 

Civil Legal Aid Reforms

The consultation questions do not address other aspects of the revised Transforming Legal Aid proposals , and particularly those concerning civil legal aid, ie

·      Removing prison law from scope

·      Introducing a residency test (blanket ban on legal aid eligibility on residence/citizenship basis)

·      An abolishing legal aid for \'borderline\' cases

·      Abolishing legal aid for all "pre-permission/leave" work in Judicial Review  cases   

·      Cutting civil fees and expert fees

As with other respondents to the original consultation, we expressed concern about these proposals, especially given that access to civil legal aid has already been heavily restricted by the LASPO Act. We are therefore disappointed that Government is pushing forward with these proposals largely unchanged, save considering the case for an \'exceptional\' or \'discretionary\' scheme for preparatory work in JR cases. In practice the preparatory stage and work is always the most important stage in resolving public law problems - for example in housing and care cases, and it is disappointing to see Government trying to limit its own exposure to judicial review by restricting the rules on \'standing\'.  More appropriate alternatives were suggested to these current proposals which remain disturbing for any democrat.      

The "residency test" in particular risks excluding vulnerable minorities (including asylum seekers) from being able to use the legal system - it is also misconceived; for many immigrants in this country whose precise citizenship status is unclear (many of whom have been here for years, if not decades, making a contribution to the community), this is owing to the historic backlog and systemic maladminstration by the UKBA  and can no way be equated with the very small number of anti-social immigrants or foreign criminals who deliberately set out to "game" or exploit the UK\'s legal and public services system.  The residency test as it stands is highly discriminatory, and we believe it offends the basic tenets of human rights law and the universality of human rights principles. We are also concerned that denying legal aid in cases of serious abuses by prison authorities (eg bullying and harassment) will leave vulnerable prisoners without any remedy for a breach of their basic human rights.

 

Alternatives to salami-slicing

In our earlier response we made alternative savings proposals to the Ministry of Justice, as did many other consultees, to which the MoJ has not responded. There appears to be a predetermined course of action which has precluded serious consideration of alternatives. We understand the financial pressures on the Ministry of Justice to find savings in Criminal Legal Aid, (although we note that the legal aid budget has already been cut very substantially by the Legal Aid, Sentencing and Punishment of Offenders Act and by the lower fees built into the 2010 Criminal Legal Aid Contracts). So it seems all the more strange that it is unwilling to consult on or consider proposals which would achieve exactly that. The two alternatives which we consider have the potential to deliver the greatest savings, whilst protecting access to and quality of defence services are as follows.

 1. The Insurance proposal

Most ‘High Cost’ criminal cases are fraud trials involving company directors.  If the cost of such cases could be paid though insurance, the cost savings would be substantial. The legislative changes needed would be modest -  a requirement on company directors to insure against the legal costs of a fraud trial and for that insurance to be confirmed in the company’s Annual Return filed at Companies House  Companies already are required to carry insurance in relation to risks such as health and safety at work. The Ministry of Justice should work with BIS on the necessary legislative changes to deliver this.

2. Restrained assets

The Ministry of Justice should also promote the use of restrained assets (under the POCA regime) to pay for criminal defence costs- the legislation would need to be amended so that frozen assets could be paid directly towards criminal defence costs. We understand that the present reluctance to adopt this measure is based upon opposition from the Home Office.  It would be a pity if a proposal which could relieve the legal aid budget of significant demands should founder upon a lack of political will in the MoJ.

 We estimate that these two proposals could reduce the cost of Criminal Legal Aid by approx 40%, by targeting the “High Cost” fraud cases; they could even enable many VHCC cases to be taken out of the scope of legal aid altogether without compromising defendant\'s right to defence funding. These are significant savings, but have not been given consideration by the  MoJ.  This appears to be because they are focussed on savings ‘within department’, rather than options which would involve  co-operation with other Ministries (BIS or Home Office).

 LDLA believe these goals can be achieved, and within the lifetime of this Coalition. The policy requirements are small involving small legislative and regulatory changes, all that is needed to deliver them is inter-departmental and ministerial co-operation. We would also like to see

·         the Ministry of Justice making savings from administrative, services and procurement budgets; current evidence suggests that the Ministry of Justice is getting very poor value for money for many services contracted for (eg consultancy, interpreters, security, transport, cleaning and catering in prison estate) at the expense of having to make cuts to specialist legal services which are at the heart of protecting civil liberties. The current costs of the Legal Aid Agency’s bureaucracy are a scandal.

·         use of penalties (which could re-imburse legal aid) against the CPS where prosecution conduct lead to wasted costs, long trial extensions etc 

·         a review of what issues/offences are most appropriately handled at magistrates or crown court levels

·         a strategy for decriminalising minor offences (including drug possession), reducing use of custody (currently the highest in Europe) and improving crime prevention, restorative justice and offender rehabilitation – this must involve a major reduction in prison numbers, and using the criminal court system appropriately (ie by extending community and social service approaches to deal with low level crime and nuisances)

Conclusion

In our previous consultation response, we chastised the Government "continuing the policy of previous administrations of salami slicing the legal aid budget by reducing the scope, supply remuneration of legal aid rather than addressing the more costly and fundamental failures in the justice system (such as endless prison recidivism), or by working with the professions to redesign the legal aid system for a lower cost base or exploring options for bringing alternative funding sources into legal aid." Our concerns still stand; we accept the budgetary constraints but this should be the driver to reform and humanise criminal justice rather than reduce legal aid - failure to do so will be a missed opportunity and will see ever greater cost pressures for the Government emerge in the future.

If the Government are still intent in pursuing their proposed reforms despite all the risks they have been repeatedly warned of, at the very least they should commit the following

·         fully evaluating the impact of the first fee cut, before introducing the second fee cut, and undertaking not to implement the second fee cuts if the evidence of the first fee cut shows  adverse consequences for the supply of criminal legal aid services

·         taking into account any human rights compliance issues raised by the JCHR and making appropriate modifications

·         ensuring that the proposed contracts are properly checked and road tested in the context of supplier\'s delivery plans

·         keeping other changes such as harmonised fees under review and be willing to flex the fee arrangements, should they prove (as we expect) to be unworkable