MoJ to press ahead with criminal legal aid reforms

Topics: Criminal justice,Legal aid and access to justice

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The Ministry of Justice will press ahead with two-tier contracts for criminal legal aid and implement a second fee reduction of up to 8.75% next summer.

In its response to the Transforming Legal Aid consultation, published today, the MoJ said it will increase the proposed number of tender contracts from 525 to 527.

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The two-month tender exercise began today. Bidders will be notified of the outcome in June 2015, with contracts beginning in October 2015.

Law Society president Andrew Caplen said solicitors were ‘extremely disappointed’ with the decision and questioned the government’s suggestion that criminal legal aid work will be sustainable in future.

Practitioner groups the London Criminal Courts Solicitors’ Association, and the Criminal Law Solicitors’ Association said this afternoon that they are investigating the possibility of fresh legal action to thwart the plans.

The consultation was started days after the high court had ruled it had acted unlawfully when introducing criminal legal aid reforms, following a challenge by the practitioner groups.

It was specifically targeted at consulting on the reports undertaken by Otterburn Legal Consultating Ltd and KPMG in February 2014 and the assumptions used to decide the number of duty provider contracts to offer.

In its summary, the government said the new model will give firms the confidence to invest in restructuring ‘in the knowledge they would be in receipt of larger and more certain volumes’.

The summary added: ‘This contracting approach also gives the government the assurance it needs that those accused of a crime will have access to a lawyer by maintaining a sustainable legal aid service.’

The MoJ explained KPMG had been asked to analyse the consultation responses and compared them to evidence previously heard.

Based on responses to the consultation, the MoJ recommended the number of contracts increase to 527, but otherwise found respondents had provided no new evidence which would require them to amend its report.

Respondents cited the Otterburn analysis that only the most profitable providers at present will survive under the new model and with a 17.5% cut in fees.

But the MoJ largely rejected that conclusion, saying Otterburn had come to its conclusions ‘in the context of the current unconsolidated market’.

The government added: ‘Consolidation of the market will give organisations the opportunity to access a larger share of work, enabling them to explore economies of scale which will in turn help to mitigate the fee reduction and give them the best possible opportunity to make a sustainable profit.’

The department will pay expenses for travel time over 90 minutes in a bid to help firms in rural areas.

The consultation received 3,942 responses, but the Ministry of Justice said they did not provide ‘any new evidence’ about the viability of the dual contract model.

Law Society president Caplen warned some areas of the country could be left with no legal representation, depriving members of the public from access to justice.

’We are very concerned that the ministry has not taken into account the views of the overwhelming majority of our members who responded to the consultation, or to the independent consultants who raised concerns about the economic impact on the supplier base.’

Shadow legal aid minister Andy Slaughter said the ‘pathetic’ response was ‘another slap in the face’ to legal aid practitioners.

‘This does very little to fix the growing crisis in legal aid and only further highlights how this out of touch government are belligerently sticking to their already failing program. Cuts to legal aid have led to justice increasingly becoming a privilege for the wealthy few.’

The LCCSA has said it expects two-third of legal aid firms to close as a result of the decision. Jon Black, president, said it was a ‘depressing day’ for practitioners which will cause ‘terrible collateral damage’.

‘A fair defence for those who aren’t wealthy will become a lottery,’ he said.

‘As firms start to close or cut corners to keep afloat we’ll see plummeting standards of defence and miscarriages of justice. It would seem that the government is unconcerned by this.’

A Ministry of Justice spokesperson said: ‘Legal aid is a vital part of our justice system. We must ensure it is available for the individuals who need it, sustainable for the lawyers who provide it, and affordable for the taxpayers who ultimately pay for it.

‘Nothing will change for anyone accused of a crime, they will still have the same access to a legally-aided lawyer as they do now.

‘When we began reform, we had one of the most expensive legal aid systems in the world at around £2bn a year. Given the financial crisis this government inherited, we had no choice but to make significant savings. However, we do understand reform will not be easy for some lawyers, so we have introduced a range of measures to support them.’

Readers' comments (11)

  • I wounder how many firms will see this as the final nail in the coffin and not even bother to apply for a duty contract which will have more hoops to jump through for much less money.

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  • We have introduced a range of measures to support them.,.....The DWP benefit office is close to my office. Thanks for that.

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  • I thought this was outrageous until I saw they would pay rural firms some expenses if they first travelled one and a half hours for nothing.Be fair they are doing their best to be reasonable.

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  • Grayling must really love losing JRs - idiot.

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  • I note that the Shadow Legal Aid Minister says ' this is another slap in the face'. Have I missed where he says that Labour, if elected, will reverse the tender process and cancel the further percentage reduction? What do UKIP, the Greens and the Lib Dems have to say? Anyone championing the underdogs in this.
    I suspect not.

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  • Get behind the LCCSA and the CLSA.
    Once more into the breach dear friends, once more.

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  • ‘Consolidation of the market will give organisations the opportunity to access a larger share of work, enabling them to explore economies of scale which will in turn help to mitigate the fee reduction and give them the best possible opportunity to make a sustainable profit.’

    I understand that a larger firm might be able to handle a greater quantity of admin tasks such as keeping accounts or running a reception than the equivalent two smaller ones. I understand that if you as a lawyer have five cases in the same court and you are piad a flat rate on each then you only have one set of travel expenses to set against them. But where else do these 'economies of scale' come from?The actual casework to be done on the files will be the same whether it is done by one or five firms.This is a personal service industry, not a manufacturing one, and it is unlikely that there is in the majority of firms a lot of spare capacity waiting to take up the slack. What am I missing?

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  • No surprise that the MOJ will plough on regardless. Perhaps the big firms will now come clean on their position to hoover up contracts countrywide and put us all out of our misery. And perhaps the MOJ can just say now how may multinationals will get contracts to give us a realistic idea of how much work will be left for 'normal' law firms. It might save a lot of grief and form filling.

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  • There is no such thing as economies of scale as far as criminal legal aid firms are concerned. The idea that a larger firm can make more money than two smaller ones is nonsense. This model is based upon a fetish for turnover. The real focus has to be on profit. Anyone interested in bidding for a duty contract is putting turnover ahead of profit.
    The intelligent thing to do is to not bid and to promote one's own firm as being better than the duty (differentiate), deliver better client care and for criminal firms to do what other firms in other areas of law have done for years-market and advertise.
    The only way to defeat this nonsense is for firms not to bid-boycott the process. Those who obtain a contract are more likely to expire quickly as costs will outstrip income.
    The fee paid for duty work will be less than the own client fee and volumes aren't growing and are in fact falling. Not a brilliant business move to bid for a duty contract.

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  • When I put AtCourtNow.com on the web in 09, it was free, you all could have used it to share an advocate at court and a solicitor for police stations creating the travel and waiting economies of scale the MoJ are after. None of you did.
    When the original proposals came out I said 25K was it for wages in London under the new regime, that the only way forward was to join together using the chambers model as large partnerships of all the solicitors, making full use of full suite case management to achieve economies of scale, admin and clerk and secretary automation, and 70K incomes for the solicitors.
    None of you listened. But I was right.
    My next prediction, the MOJ will favour those firms with the most equity partners, the largest foot prints and full suite case management.
    For those firms which don't get a contract, it's redundancy payments and PII run down. For every duty solicitor it's £22k pa if you can get or hold on to your job.
    So for the last time.
    I have an own client contract for a partnership. Join me and bid as a chambers model, income proportionate to billing, using full suite case management. The more the better. Every area.
    The details, the terms of agreements to employ, using the front offices of existing firms to get county cover, the terms of merging after the contract starts to avoid PII runoff, are open for discussion. It's not about shutting down options, it's about beig involved in more bids to have a better chance of staying in the profession, paying the mortgage, feeding the kids and saving for a pension. Whether you're employed or an equity owner, whether in a big firm hoping you're not for the chop once your duty status is gone, or a small firm hoping the owners have their act together, is it wise to put your eggs in 1 basket. No.
    Duty solicitors are professional fighters. it's time to fight our own corner. email me at andrewbenington@gmail.com.

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