Transforming Legal Aid: Next Steps

TRANSFORMING LEGAL AID: NEXT STEPS

A RESPONSE BY TV EDWARDS LLP

Introduction and Overview

We responded to the original consultation and now concentrate on the remaining issues for a firm that is, in London, a major supplier of volume criminal law services. We undertake more than 2500 attendances a year to advise clients in the police station.

We do not consider it appropriate for us to comment on the position outside London. However, we should make clear that continued use of administratively set feesallows for considerable flexibility across the country. We have no reason to object to different rates (and particularly contract requirements) applying to meet the needs of different geographical areas.

We welcome the decision to allow all clients to choose their own lawyer and to proceed with administrative fees, as the profession is not yet ready for competitive bidding.

However major problems remain. These are substantially caused by the extent of the cuts that are being sought- notwithstanding the substantial reduction in criminal law work. The reduction in 2014 will close most firms in London leaving no one to bid for duty contracts. For firms to be solvent in London, at this level of cut, there can be no more than 15 firms holding 3 contracts each. This seems inadequate

Welcome.

We welcome the government’s acceptance of the profession’s main argument that clients should be able to select their own solicitors. (Q1)

This is not without cost to us aswe will not receive the larger cases (conducted by firms which do not undertake volume work) that would have enabled us significantly to increase our profit margin.

However we believe that it will do much to maintain the standards of the defence professions. It is particularly important for young clients and those under disability who can select specialist services such as we offer.

We welcome the government’s acceptance that selection for duty cases should be by quality and capacity and not price.(Q1)We address below the proposed tender requirements.

We have argued that increased volume is essential if cuts in rates are to be made and we welcome the proposals for duty solicitor contracts. However, the government must ensure that these contracts are large enough to guarantee the increased volumes essential to survival at further reduced rates.

In London, in the new circumstances, we welcome there being 9 procurement areas (PA) rather than 3. We await withinterest the proposals as to the number of contracts in each PA.(Q2) The figure of £1m per contract is unrealistic as only £18 million worth of duty police station work is available. Not all the proposed allocation criteria can be achieved –profit margins are too low on the volumes available to finance stand alone contracts whilst providing sufficient contracts to avoid conflicts of interest.

We are pleased that the government has removed the obligation in London to run unprofitable prison law and appeal cases.

Points of detail

In excepting cases where the defendant elects trial from the new crown court fixed litigator fees, the government refers to case that then plead guilty. We trust this is intentional; as the present scheme extends also to cracked trials which occur because the crown chooses not to proceed- often as a result of work done by the defence. This is a particularly unjust element of the old scheme and we trust the variation is intended.

Greater litigator support must not add to current cost or it will represent a further reduction in profit levels . The current professional rules provide an acceptable basis for a litigators’ attendance at court

The remainingissues

The number of contracts(Q3)

Thegovernment suggested five criteria for identifying the number of contracts.

A sufficiency of supply to deal with potential conflicts of interest.

We would suggest that four per PAis the bare minimumbut the position in London must be understood. In order to survive a cut of 17.5%on the relatively low value of police station duty work(£18m) firms will only be viable if they succeed in a number of procurement areas. If there are 9 PAs and 5 contracts in each area there will only be 15 viable firms in London.This is a very serious position. The other firms, only undertaking own solicitor work, at 17.5% reductions, will rapidly cease trading

B Sufficient case volume to allow fixed fee scheme to work.

This will not be possible if the proposed simplification goes ahead. Only with a maximum of 15 firms in London will volume be sufficient

C Market agility.

This is not a problem in London as firms could conduct at least twice their present volume with only marginal additional costs for staff premises and IT.

D Sustainable procurement.

To meet a 17.5% cut the market consolidation needs to be so extreme thatthis objective is at risk

E Contracts to deliver duty contractsthat are large enoughin volume and value to be sustainable in their own right.

This objective cannot be achievedon the funds available

The tendering process

Although not all the government’s objectives can be achieved, we recommend that there that there be no more than 5 contracts in each PA. Anything below that figure, achieved in at least 3 PAs, does not enable a sufficient profit to be made to compensate the proposed cuts in fee levels

A consequential problem with so low a figure as is available means that very many firms will be able meet the criteria once.

For that reason we recommend that the following provisions should be set as minimum conditions in London PAs:

1 One supervisor of at least 7 years experience in each PA. This is necessary to ensure there is sufficient experience to deal with any level of case as is necessary with duty work.

2 In addition in each PA one supervisor of at least 3 years call per 4 other fee earners.

3 At least 5 duty solicitors in each PA to ensure sufficient capacity to handle duty work.

4 One live training contract per PA to ensure the future of the profession.

5 A condition that in each PA the Law Society’s target for involvement of BME staff is met. This avoids any suggestion of discrimination.

6 Evidencethat solicitors employed by the firm have experience of each of the main areas of work e.g. homicide violence drugs dishonesty sexual crime etc.

7 An office in the PA where the client can be seen in confidence.

8 CJSM integrated in to the firm’s case management system.

9 Solicitors employed by the firm have experience in handling and ability to handle high volumes of advice and representation.

Simplification (Q4)

The proposed simplification of the police station fixed fee scheme and the magistrates’ court standard fee scheme will close every London firm.

We welcome simplification. We already manage our budgets by average price

However, the way in which it is designed adds at least an additional 8.5% cut(on top of 17.5%) for London firms, the very ones who can afford it least. The loss to this firm on the figuresprovided is 26% for both policestation and court work. That cannot be sustained even with increased volumes. There is no saving here to government. The simplification represents a movement of money from hard pressed London firms to firms with larger profit margins elsewhere.

There is no reason why there should not be a figure for each PA- they are generated electronically by most firms. However, the problem for police station work would be removed by having one rate for the 9 London areas and a second rate for the remainder.

We strongly recommend an escape provision aspresently exists for police station work. This is rarely used but provides an incentive to attend terrorist and other time intensive cases (many of which do not proceed beyond the police station stage)

The magistrates’ court scheme presents greater problems. London has the most ineffective court scheme with far too many court centres. The cost of this is already met heavily by defence practitioners. The proposed simplification passes money to more efficient court areas with firms enjoying larger profit margins already. The solution is again at least a London and out of London set of rates.

2014 reduction in rates (Q5)

For this firm such a reduction will entail a lossover a full financial year on a turnover of close on £3m for criminal work. This is unlikely to be sustainable given our very low profit margins.

We accept the government’s need and right to reduce rates but, if we are to remain in practice to bid for duty contracts, the cuts must be postponed to 2015 or significantly reducedbut, in each case,this change can be balanced by a larger cut after the time that duty solicitor contracts come into force.

We must emphasise that if the government is unable to follow either recommendation, it may find itself without sufficient major firms able to service the new contracts in London as we know our financial position is very similar to other major suppliers.

Advocacy fees in the crown court (Q6)

Because it spreads the losses more evenly we prefer the model recommended by the Bar Council.

Conclusion

We believe that once fully implemented BUT, with the benefit of the changes recommended in this paper, the government’s proposals may enable a viable and effective defence service to operate at a cost that the government can afford.

T V EDWARDS LLP October 2013