The Legal Services Commission (LSC) is considering introducing a fixed-fee regime for civil cases, in a move that could slash the number of much-maligned contract compliance audits imposed on firms.

Speaking at the Legal Aid Practitioners Group (LAPG) annual conference in Leicester, LSC Community Legal Service strategy unit head Martin South said it would shortly consult on a scheme to agree a certain number of matter starts per category of law for each firm, with fees fixed according to individual firms' average costs for the previous year.

Mr South said this could increase predictability and cut down drastically on the number of audits firms have to undergo, although he said that there would have to be 'lots of little caveats' if it were to be workable and fair.

'There are good arguments for not applying it to mental health cases and we are not talking about applying it to crime,' he explained.

LAPG director Richard Miller said any scheme would need careful discussion and an 'escape mechanism' for more complex cases.

'There may also be questions over whether controlled legal representation matters can come within the scheme,' he added.

'But subject to these safeguards, and bearing in mind that we are only talking about controlled work, not certificated work, we think this may have merit.

If it leads to the end of the audit, this would be a very positive "carrot".'

Law Society chief executive Janet Paraskeva said: 'We welcome any change that would enable firms to plan with greater certainty and that would reduce bureaucracy.'

Meanwhile, the keynote speaker at the conference, Lord Chancellor, Lord Falconer, insisted that the government was backing legal aid all the way and hinted that it is set to make a U-turn on tough proposals to clamp down on asylum legal aid.

'We now favour a much more flexible regime,' he said.

Elsewhere, the Law Society Council last week approved its new policy paper on legal aid (see [2003] Gazette, 16 October, 1).

By Paula Rohan