Grayling has listened on legal aid reform

When the Ministry of Justice’s initial proposals for price-competitive tendering of criminal legal aid services came out last April, like many in the profession, I was horrified. We faced the prospect of up to 75% of firms currently doing this work ending up without a contract. Their future would have depended on how much they felt able to cut their own throats in a price tender. Own client work would have been a thing of the past and quality of advice and support for clients would have inevitably declined.

Today, we face a very different prospect. As a result of the Law Society’s decision to engage directly and constructively with the Ministry there will be no price tender for firms to grapple with. Own client work will continue, and any firm that meets the basic quality standard will be entitled to continue doing it.

We presented the lord chancellor with hard evidence - obtained from Otterburn Consulting and Deloitte - that his original proposal was an enormous gamble that had very limited chances of success. He has listened to the concerns of the profession, and he has acted.

There will be separate contracts for duty solicitor work, with additional capacity and capability requirements. Throughout this process, we have been keen to ensure the financial viability of firms undertaking this work. We have agreed with the Ministry to jointly commission independent research to determine the minimum level of work required to give a reasonable assurance of viability. This will help to set the number and size of duty solicitor contracts. The consultation suggests that there may be around 570 such duty solicitor contracts awarded. In areas where there are more bidders than contracts available, contracts will be awarded on the basis of capacity and capability criteria. Price will play no part in the assessment. Fees will continue to be set administratively.

There will be 62 procurement areas for duty solicitor contracts, compared with 42 in the original proposals. Throughout our discussions, there has been a tension between the need to be able to offer large enough contracts to improve firms’ prospects of being economically viable, and the problems of requiring firms to deliver services across too wide a geographic area. London will be sub-divided according to the nine Local Justice Areas, while rural areas will be subdivided based on a range of criteria, including a maximum 1.5 hour drive time. There is no inherently right or wrong answer to this question, and only time will tell whether the balance the Ministry has decided on will be workable in practice.

The new arrangements will not provide a duty solicitor contract for every firm, but smaller firms will have the option of forming consortia or other joint arrangements to seek one of the new contracts. This, taken together with the fact that at present 80% of slots are currently covered by 25% of firms means that much of the work likely will remain with the firms currently undertaking it. The consolidation of the market will take place over a time scale that will allow most firms that want to continue doing this work to be able to plan a way forward. The new contracts are now expected to start in the Spring of 2015. We will be providing guidance and template documentation to help firms develop such plans.

We have not achieved everything we would have liked. In particular, we have not persuaded the Ministry of the significant risk to the long-term sustainability of the supplier base if significant fee cuts are introduced. However, it has been persuaded of the need to phase their introduction, so that they can see the impact of the first stage of cuts before they impose the second stage. We have also persuaded them to introduce some measures to help improve cashflow, which we hope will mitigate some of the impact of the cuts.

We are under no illusion that our members undertaking criminal defence work face a very tough time. We recognise that some firms in some areas will be unable to survive a failure to secure a duty solicitor contract, and others will find the fee cuts unsustainable. Nonetheless, we believe that what is on the table today offers our members a significantly better prospect of a viable future compared with the Ministry’s original plans.

Nicholas Fluck, president of The Law Society