Millions of pounds could be saved when the Criminal Defence Service Act brings back means testing. But there are fears that too many will be excluded from free public defence, writes Catherine Baksi

Five years after scrapping it, the government is set to re-introduce means testing for criminal cases in magistrates’ courts in October this year, rolling out a similar scheme in Crown Courts late next year. This time, ministers estimate the new scheme will save a cool £35 million a year.


On implementation of the Criminal Defence Service Act, which received royal assent on 30 March, qualification for criminal legal aid representation will depend on the applicant satisfying both the existing interests of justice test and the new financial eligibility test.


Formal responsibility for assessing eligibility and granting legal aid will pass to the Legal Services Commission (LSC), although the day-to-day operation of the scheme will be delegated back to court staff under a service-level agreement.


The government proposes that the means test be in two stages – an initial stage with upper and lower thresholds, based on the applicant’s gross income, which is adjusted to take into account any children of the household. Those applicants whose income falls below the lower threshold, currently proposed at £11,590, will automatically qualify for legal aid; and those who fall above the upper threshold, currently mooted at £20,740, will be ineligible and will be expected to meet the full cost of representation before the magistrates’ court. In the Crown Court, because of the higher costs, a system of contributions will be applied.


Where income falls between these amounts, financial eligibility will depend on a more detailed assessment under which the LSC will calculate the individual’s annual income, making deductions in respect of any income tax, national insurance, council tax, housing expenses, child-care costs, maintenance and living expenses. People will be eligible if the annual disposable income that remains does not exceed £3,156. A six-week consultation on the figures in the draft regulations is under way and ends on 5 June.


There will be no right of appeal to a court in relation to the application of the means test – any complaints regarding miscalculation will be dealt with administratively by the LSC. Judicial review will be still be an option, where appropriate.


Those who fail the means test, but are unable to pay for their defence costs because of particularly high outgoings or because the case is likely to be unusually expensive, will be able to apply to the LSC for special consideration under the hardship criteria.


A spokeswoman for the Department for Constitutional Affairs (DCA) says: ‘The introduction of a new means test is not about denying the right to representation. Rather, it is determining whether it is right and proper that the state should meet the cost of representation in all cases.


‘By ensuring that those who can pay, do pay, the government can better target valuable legal aid resources on those who most need them.’ She points out that privately funded defendants subsequently acquitted will be able to recover reasonable costs, unless the judge considers there are positive reasons for not doing so.


The previous means test was ditched in 2001, following the Access to Justice Act 1999, because it became too cumbersome and expensive to administer. Figures from the DCA reveal that in 1997/98 the value of contributions paid was £6.2 million, but the direct cost of assessing and collecting contributions was approximately £5 million. Set against the overall criminal legal aid budget (which in 2004/05 was £1.2 billion), it was not cost-effective.


Proof of benefits was required, and people in work had to produce 13 weeks of wage slips before legal aid could be granted, which often caused delay. Under the new rules, only one month’s wage slips will be needed, and communication with the Department for Work and Pensions removes the requirement for proof of benefits.


Derek Hill, director of the Criminal Defence Service at the LSC, asserts: ‘The new system will be simpler and straightforward to operate, but will still remain sensitive to people’s individual circumstances.’


The move is supported, in principle at least, by practitioners and their representative organisations. Robert Brown, consultant at the London law firm Corker Binning and past president of the London Criminal Courts Solicitors Association, articulates the view of many: ‘The principle of means testing is right. Practitioners’ groups and the Law Society always supported its re-introduction. They were never in favour of abolishing it – wealthy people getting free public defence is unjust.’


This happened infamously, to a public outcry, in the cases of millionaire property tycoon Nicholas van Hoogstraten, and Michael Carroll, the former bin-man who won £9.7 million on the Lottery.


Ian Kelcey, chairman of the Criminal Law Solicitors Association, agrees: ‘We favour the re-introduction of the merits test, but are concerned because, as the government seeks to apply it, it may disenfranchise a lot of people from the benefit of legal aid because the government is applying hard-and-fast rules regarding financial eligibility.’


A spokeswoman for the Law Society says its key concern is that the upper threshold should be set at a realistic level, so applicants who are ineligible can afford to pay for their own representation, without being left unrepresented or in financial difficulties.


‘The risk is that the threshold is set too low and too many people are excluded and not able to afford to pay for their defence, which would be unjust,’ echoes Mr Brown.


Jim Sturman QC, who according to DCA statistics became the first legal aid barrister to earn more than £1million in a year from publicly funded work, highlights the plight of defendants involved in long cases who may not have access to the necessary realisable assets.


‘It’s the middle classes who will feel the pinch, as they are often asset rich, but cash poor,’ he says.


The Law Society warns that means testing could result in more work for solicitors, as they will need to help clients complete the application and will probably have to carry out the test themselves to advise clients on their prospects of getting legal aid. While the Society welcomes the anticipated saving, it is uncertain whether the DCA has done its sums.


‘We are unclear how this figure was arrived at, and would welcome assurances that any savings will be ploughed back into the legal aid system,’ says the spokeswoman.


Moreover, Mr Sturman observes that without an amendment to the Proceeds of Crime Act 2002, any savings could be slight, because restrained funds cannot be used to fund private defence fees. That means wealthy defendants whose assets have been frozen, and whose legal cases will often be complex, will still be entitled to legal aid.


No research has been undertaken as to the actual cost of privately funded representation. The government should look at what a case will cost privately and use that figure to determine whether or not someone can afford to pay, suggests Mr Kelcey.


He adds that the Act raises other issues that have not been thought through. No plan has been formulated to deal with potential conflict situations, for example. The transfer of decision-making to the LSC means solicitors will no longer be able to give reasons to justices’ clerks for any potential conflict, because to do so would put them in breach of the code of conduct for privilege and confidentiality.


‘At present, justices’ clerks deal with the issue of grants in a judicial capacity [which means there is no breach of privilege]. In future they will still have the task, but it will be done as an administrative function,’ he explains.


The fact that the means test will not be re-introduced simultaneously in the Crown Court may cause further problems. ‘Those excluded from legal aid in the magistrates’ court may simply elect Crown Court trial where possible – it’s nonsensical,’ says Mr Kelcey.


And he questions what is going to be done in sexual offence cases, where a defendant is not able to cross-examine the victim if unrepresented.


The impact of the Act will, he says, be considerable. As to how it will then mesh in with the Carter review of legal aid procurement and the proposed tendering process, that remains to be seen.