Bravo, Charlie

Lord Falconer is set to bounce back after a year out of the limelight. He spoke to the Gazette about being Lord Chancellor, and what lies ahead.
Lord Falconer is late. This interview has been chased for months, and has already been rearranged once. Now, on the morning of the interview, a day perilously close to the Gazette's deadline, he calls to say he is running late. This is unwelcome news.

However, Baron Charles Leslie Falconer of Thoroton is not the kind of person you feel you can resent for being late, even if he has cancelled once before.

When he does turn up, he is as affable and talkative a visitor as one could want. But the privately educated Cambridge graduate, successful commercial barrister, peer and erstwhile Lord Chancellor can be as intimidating as he is famously 'chirpy'.

In constitutional affairs select committee hearings he was often pugnacious, and verbally he throws his weight around when he feels he is being asked questions not considered, by him at least, to be important.

In the last year of his tenure – he has not been very politically active since Jack Straw took over his office – the questions which seemed to throw him into a lather most were about the creation of the Ministry of Justice (MoJ) and location decisions for the new Supreme Court building, sited just across the square from Parliament.

The reality of both of those situations is that changes, from the creation of the MoJ to where the law lords will sit in future, sometimes came not from structured chains of events: the MoJ got started because the Home Office needed to partially deconstruct to focus on the 'war on terror', and it was decided that the Supreme Court should move into Middlesex Guildhall Crown Court because, well, because Lord Falconer and his team thought it was a good idea for it to be within a mile of Parliament.

But he seems genuinely proud of creating the MoJ, even if his reasoning has a touch of Machiavelli about it. Without the leaks indicating that the government was considering moving prisons out of the Home Office's remit and expanding the Department for Constitutional Affairs to accommodate them along with some other additions, the MoJ 'wouldn't have started', he says, which I suggest seems to smack of circularity.

'I'm saying for a variety of reasons, pressures of other people at the time, they wanted to do a ministry of justice. I'd been dying to do a ministry of justice for three or four years and never thought it would happen, because other bits of government would always be against it,' he says. 'Within the sweep of a year or two, let alone within the sweep of decades, who is going to notice that it came because of that opportunity?'

The MoJ's creation caused lots of angry faces in committee meetings, but Falconer had little time for complaints about the speed of reform.

'Having to discuss with a few committees whether or not John Reid leaked it to the press on a Thursday or a Friday, did the Lord Chief Justice discover before I did, that seems to me a pretty small price to pay [for having the MoJ]. I think they [committee members] thought it was much more important than I did. I didn't think it was important at all. And I still don't.

'The critical thing to me is that we had a ministry of justice and got it created in four months. The big criticism was that we did it much too quickly. [But] I am absolutely sure we were right to go for it pell-mell, because if we hadn't done it by May, I wonder whether it would ever have happened.'

This is not the first time Lord Falconer has used this kind of 'history will judge us' approach to difficult reform. Back in 2005, he told Mary Riddell of the New Statesman that the chaotic way the Lord Chancellorship was reformed 'was initially terrible' but 'it was the right thing to do', and then made a rather familiar statement justifying the approach: 'Two years on, I wonder if so much would have been achieved had it not been done in that completely resolute way.'

Resolutely pushing ahead with something that lacked the best of plans might be a sad headline in the Blair government's page in history, but this does not mean the MoJ will fail. Jack Straw has, he says, 'been incredibly good as Lord Chancellor and he's absolutely demonstrated, because of his quality, that it really works'.

Prisons and politics

But two of the main gripes people had about the creation of the MoJ were that the judiciary would feel monetary pressures that might translate into pressure to sentence differently, and that prisons would suck the lifeblood from every part of the MoJ, starving other projects. The latter, Falconer says, is a misconception.

Prisons pull several billions from the public purse, and more than 15,000 places need to be built by 2014 to accommodate predicted numbers. If something like the new Business Court needs £60 million, say, for a digital filing system, or someone suggests a major push for restorative justice, once the money is found surely prisons will get it instead?

'No, they would not,' he says with finality. 'You ask the Treasury for money for prisons, money for courts and money for legal aid and the idea that internally all the money is being sucked into prisons is wrong. There were prisons in the Home Office and there were courts in the Chancellery. By and large, we used to make joint bids [with] the Home Office, because the Chancellor of the Exchequer would look at the criminal justice system as being one system. I don't think the way that you deal with the Treasury has changed, nor do I think, and I know this having done it, money is being sucked into prisons, if for no other reason than, politically, you can make no difference to your prison issue whatsoever by the tiny amounts of money that you would get from [elsewhere].'

Falconer returns to why he thinks the MoJ was such a good idea – bargaining power. 'Now what you've got for the first time is the justice department which is a real, big department, much more politically powerful than it's ever been before – therefore much more able to get money, not just for prisons but also for other things.

'I am absolutely sure that, practically, of all the constitutional changes I was involved in, that was the one that will have the most practical effect, because you've taken prisons, you've lined them up with justice, you've equalised the relationship for the first time in a hundred years between the Home Office and the Lord Chancellor and, although the price paid is that he becomes a mainstream politician, he becomes a mainstream politician utterly lined up with the judges. So it's a very striking and incredibly sensible change. The stuff about money, to an insider, looks totally misplaced as a problem.'

But surely the fact that the government is having to rush-build so-called titan prisons to solve the prison housing problem points to shoddy planning by the Home Office?

'I think everybody agrees that overcrowding in prisons and a shortage in places is the worst possible result. However we got there, we need to move forward.' Titan jails will, he adds, house prisoners and be relatively local to the large metropolises in the UK where the prisoners come from – the two main 'needs' for prisons. So they will solve the problem, he says.

'It would be better if you had a local prison round the corner in every locality,' he says, but returns to pushing home the need to solve an immediate problem. Titan prisons mean 'you can accommodate much more quickly the overcrowding and you can make it more local than it is at the moment'.

'That looks to me a series of sensible, not perfect solutions, but let's be realistic,' he says. 'If we look back over the last 30 years, the prison population has very regularly got to a point where new prison places are required. That cycle, which is the cycle of the last 20-30 years, needs to be broken and I suspect the way to break it is to grasp the nettle and identify significant increases in the number of prison places. Titan prisons are a way to do that.'

Grasping the nettle is a bit of a Falconer trait, willingly or not. When Blair pulled him into government in 1997, it was not long before he was handed the Dome to look after – hardly an enviable task. When he was made the first constitutional affairs secretary in 2003, he was tasked with abolishing his own position and pushing through radical legal reform. That reform has already sent shockwaves through the profession, whether in legal aid practices or City mega-firms.

Commercial practices in England and Wales are in a good position to exploit their potential, he insists, and they need to be unleashed to realise it.

'Having been the Lord Chancellor for four years, where one of the things you're doing is trying to make sure that you can sell British legal services as much as possible, we're in a very good position. The British lawyer, especially the English lawyer, is incredibly popular throughout the world and it's a much more competitive market, both inwards – we see many more American law firms coming here – and outwards: you see English firms wanting to compete in a much broader pool than they have in the past. We are extremely good at that.

'But we need to get ahead in terms of regulatory structures. The Legal Services Act gives the English lawyer the opportunity at home and abroad to become both much more competitive and financed in a different way. So, for example, you're going to find external capital coming into law firms, you're going to find lawyers being in partnership with people who aren't lawyers, you're going to find lawyers in different parts of the world from where they are at the moment. The world changed in a commercial sense for lawyers over the last ten years, and it's galloping on at a great pace. I think most lawyers in the UK will find themselves in some sort of different structure to that which they are in at the moment.'

Does that mean that the overwhelming majority will be employed lawyers?

'I think the majority of them will end up in an organisation of a different size, not necessarily bigger, than the one that they're in at the moment,' he says. This is a kind of half-disagreement, something Falconer specialises in. It is his version of 'up to a point, Lord Copper'.

But the argument for the need to be able to access external funding is straightforward, in his opinion. 'If you provide a particular form of legal services through an exclusively legal body, you may well think: with capital, not debt, what could I do? Could I provide, on a more efficient basis, [the majority of] the matrimonial or all the personal injury services in a particular area? Could I provide a service to insurance companies in relation to the processing of claims? The ability to raise capital on the market and create new entities is inevitably going to have a very significant effect.'

Going beyond that and floating on the market, something almost no firms admit to wanting to do, is just another option. 'There is no reason why the big firms should not float themselves on some sort of stock market. It's for them to make the judgement – there will be safeguards, but there will be no bars, ultimately, to firms floating on the stock market.

'Traditionally the big City firms have indicated they're not really interested in raising external capital, because as is unquestionably the case many of them don't need any extra capital, and insofar as they do need any extra capital they can get it from debt through their bankers. If, however, they raised serious capital, I suspect it would allow one or two of them to become serious competitors on the world stage in places in which they haven't made much progress, for example New York.

'I think for the medium-sized firm, for the small firm, for the sorts of service lawyers are going to provide – and for the mega-firm as well – the Legal Services Act (LSA) is going to create huge opportunities for some of them, which they will take. And the moment some of them take these opportunities, and they work, that will inevitably have a significant effect on the legal market.'

In other words, the act will create a domino effect, alongside powerful business incentives, as firms watch the 'effect of a few people going into different sorts of organisations, for example organisations like the AA or the Co-op'.

Legal aid pains

In the area of legal reform, however, the painful subject is legal aid, not the LSA. Falconer is bullish about the Carter reforms but acknowledges the level of change will be enormous.

'There's real anxiety out there about the fact that legal aid changes are driving too many people out of legal aid work. The amount of money that's been spent on legal aid is going up quite significantly, and going up even by reference to the number of cases that are being dealt with. Cases are becoming more complicated and take a lot longer. The market is, I suspect, going to change just as much as the privately paid market is going to change.

'If you look at the way that legal aid's developed over the last 11 to 12 years in terms of expenditure, criminal legal aid has gone up pretty dramatically. The consequence of much heavier concentration on criminal legal aid has been that there's less legal aid for other things. Equally, individual cases take longer.'

But there are 'significant areas' of the country and the profession, he admits, 'where people are very concerned about the fact that legal aid appears to have become less available, rather than more'.

'But we won't ever deal with those problems unless you face up to a reduction, to some extent, of the cost per case in legal aid,' he adds.

The argument that the government cannot spend all its money on legal aid and therefore must draw the line somewhere is well-worn, but Falconer explains why it can be hard to get legal aid money at all.

'There's a finite amount of money available for legal expenditure and legal aid's a very unpopular area of public expenditure. If you asked the public [to choose between] "hospitals, schools, fighting crime, lawyers", I'm afraid in terms of political cake-cutting people would tend to favour schools and education.

'Having said that, if you look at the levels of increase in the expenditure on legal aid over the last ten years it has not fallen behind the levels of increase [in other areas] except in relation to health. I think the difficulty always is that, just as people complain that quite a lot of the extra expenditure on health has, as they see it, simply gone on wages and GPs' pay, so there is a similar battle to be gone through in relation to how you deal with legal aid. Because I think you need to pay lawyers more, but also you need to have a more efficient way of doing things. There needs to be pretty fundamental reform in the way that the service is provided.'

Consolidation of delivery must result from the pseudo-market reform of legal aid, he admits, because it is the only way to provide efficiency.

'You've got a set of providers who get a fixed rate and there is no drive for making the market of providers more efficient. Many of the people who provide the services are incredibly efficient, but if the paymaster is paying for 60 sets of overheads and it might be more sensible for four firms to be [cost centres], ultimately the people who lose are clients. I'm not saying that firms are not efficient, because many of them are incredibly efficient, but it would be more efficient if there were, in many places, much larger firms providing services.'

This leads to another prediction: 'I think inevitably there will be fewer firms, but not necessarily fewer lawyers.' So it seems his answer is yes, legal aid reforms will slash the number of firms out there, and a lot of solicitors may find they work for big firms – meaning they are far more likely to have a future that looks like working for any other business, as salaried employees.

As for firms being 'incredibly efficient' it is hard not to doubt that Falconer really believes this. But nonetheless he maintains it is the structure of firms and payments that is the problem, not efficiency at ground level. 'I don't think that restricting solicitors only to operating in a partnership is good either for solicitors or for the clients that they serve. But it doesn't mean everyone's got to become an employee or they've got to have some sort of corporate structure. But why shouldn't they have the option?'

Listening to him talk about legal services reform it is hard not to hear the echoes of Thatcherism: that deregulation will solve legal business's problems. Though he does not appear to like the 'T' word, he does want to see as light a hand on law firms as possible, he says, alongside a dose of ­Woolf-like concentration of customer care.

'The regulation that you put in place should produce lawyers of probity and quality, as it has done in the past. But subject to that very important caveat I broadly agree that, once you have a quality law profession, then the concern should be to ensure the client gets a proper service from the regulation. The way you get that good service is [by] competing on quality and on price.'

One Gazette reader offered the opportunity to submit a question asked whether Falconer thought the criminal bar would suffer from 'solicitors having to take on crown court advocacy to survive the cuts in remuneration'.

Falconer counters that the criminal bar 'is getting bigger' but in the end, efficiency must prevail. 'I don't think it's a bad thing that solicitor-advocates do Crown Court cases – some Crown Court cases are much better done by solicitors and separately instructed barrister; others can perfectly well be done by a solicitor.

'I think there are lots of opportunities for solicitors. If you go down to Kingston Crown Court and there are 20 applications for adjournments, pleas and directions and whatever, why shouldn't seven or eight of those be done by a solicitor that's there, rather than nine barristers turning up from London, all of them being paid for by the legal aid fund? It is an extraordinarily inefficient way of paying for things.'

Future moves

Beyond legal reform, Falconer recognises that the justice system cannot solve society's ills, merely contain and redirect them. But he has a good idea of what needs to be done outside the law to help bring about wider change.

'The justice system is not a good way of giving people better life chances. Two things that I think are critical are: first, much earlier intervention for families at risk. We should be encouraging, as much as possible, earlier intervention,' he explains, saying it is often possible to predict early those who will end up in trouble.

'We also need to do as much as we possibly can when people come out of prison to make sure there is support for them, keep them away from their dealers, make sure they've got links to their relatives, housing, jobs, support for drink or drug problems, all those things. Those things need to be done more.'

One wonders if there is room in Brown's new world order for Falconer. He can reveal that he is not done with law and politics.

'By the middle of July I think you'll find two further things that I'm doing will be announced [but] I'm rightly required to go through some committee on ministers getting jobs.' These will not, he says, be positions 'in government', but he refused to say if they are 'justice-related' or not.

'I think the combination of law and politics, which for many people would look toxic, has been utterly and completely fulfilling. The combination is what I'll be looking for.'

That wishlist reflects how he says he feels about Britain and its historically close relationship with the role of law in society.

'We are a country that plays by the rules. We are extraordinarily uncorrupt; we operate a much more formal basis in our commercial and our societal and political dealings. From one view you could say that leads to over-regulation with a small "r", but on the other it's one of the biggest strengths of the UK - we export a society and an approach that lives by rules,' he says.

His pride in the work he did in his ten years in government is easy to discern, even when he includes standing up for the Dome in his achievements.

'I'm sure I made lots of mistakes, but by and large the direction of travel in those ten years, especially the four years at the end, was the right direction.

'The path involved doing lots of things that were quite difficult to deal with at the time, but then what do you expect? There was nothing during those ten years that I didn't want to do,' he says, then cannot help but smile when he adds 'although there were some criticisms of the Dome'.

After the interview, while we are hurriedly snapping Falconer on the stairs to the library at Chancery Lane, a solicitor with a good few years of practice behind him loiters, looking up at Falconer, waiting to walk up. Falconer calls down to him to say he can come up past us, and he bows in jest in return.

As he passes he spars for a second with the peer. Falconer takes it all very well and, as he leaves, says that is what he likes about solicitors: 'They are respectful and, at the same time, not,' he laughs.

And then he's off, late for his next meeting. Whatever job he lands next, his energy is still brimming over.