One of the consultants whose work the Ministry of Justice cited in support of its controversial legal aid cuts has criticised the way its original report was interpreted.
The MoJ announced in February that it would award 525 contracts for criminal legal aid work following research by Otterburn Legal Consulting and management consultancy KPMG.
But Otterburn has now rejected the way the government calculated the cuts’ impact and expressed concerns about the resulting number of contracts to be offered.
The Law Society said Otterburn’s statement - in its response to a consultation rushed through following a judicial review of the original MoJ process - now vindicates critics of the reforms.
In its reform proposals, the ministry included a reference to a finding from Otterburn that organisations bidding for legal aid contracts would ‘employ at least one full-time fee-earner for every £83,000 of the contract value’. However Otterburn said that this figure was far too low.
‘The £83,000 requirement is going to make it extremely difficult for good firms to create viable businesses.’
In its response to the latest consultation, the firm said this key element of the government’s case was ‘not a finding of the Otterburn report but a calculation made by the MoJ based on certain figures included in it’.
Its own calculations found that each firm should aim for each fee-earner to generate £125,000 in fees to create a viable long-term business.
Otterburn said it had been ‘very clear’ that the assumption that firms would give up their own client work to undertake duty work was incorrect.
It also disagreed with the idea that a positive profit was sufficient to ensure viability for providers. It estimated a net margin of at least 5% was needed to provide working capital and the cash needed to run a contract.
‘We do not believe that a break-even figure would enable firms to remain in the market when developments in IT and changes introduced by the new contracts will require increased investment.’
The response added it was ‘not logical’ to assume work levels would remain constant for the purposes of modelling future contract sizes.
It also raised concerns that a ‘significant number of good-quality medium and larger suppliers’ would fail to secure duty contracts – leading to a weaker supplier base, difficulties for re-tendering contracts in four years and insufficient contracts for urban areas.
Law Society president Andrew Caplen said the Otterburn response vindicated concerns about the basis on which the MoJ’s plans were made.
‘Many warnings in both Otterburn and KPMG do not appear to have been taken by the MoJ, with the result that they have reached some very concerning conclusions,’ he said.
‘There is a high risk that solicitors undertaking this essential work will struggle to stay afloat under the proposals, which may lead to the failure of the government to meet its legal obligations to provide duty solicitor services to all who ask for them.
‘Given the real threat to access to justice for vulnerable members of the public, and the seriousness of the consequences for the rule of law, we implore the MoJ to think again.’
Practitioner groups have joined the Law Society in urging solicitors to respond to the MoJ's consultation.
Nicola Hill, president of the London Criminal Courts Solicitors’ Association said: ‘At every turn the so-called ‘consultation’ for these devastating new legal aid contracts becomes increasingly farcical. It’s hard to keep track but this latest twist really takes the biscuit.
‘This ideologically driven attack on the provision of equal access to justice has pushed everyone to their limits, including the government-commissioned researchers themselves. It beggars belief. It would be funny if it didn’t matter so much for the future of justice.
‘Despite our criticisms of the latest over-hasty consultation - which frankly is a questionnaire in all but name - we can’t stress enough that any of us who care about the future of criminal defence and access to justice must submit responses to the MoJ by the deadline of midnight, this Wednesday 15 October.
‘We fought hard to get to this point - it’s not as we would have wanted it - but we have to show the government how damaging these plans are. And we have to show them quick.’
An MoJ spokesperson said: 'The data from the Otterburn survey was used by KPMG in their financial modelling work. We will carefully examine the Otterburn response to the latest consultation, along with all the other responses, when it closes.'
The consultation, Transforming Legal Aid: Crime Duty Contracts, closes on Wednesday.