By Catherine Baksi


More than half of legal aid firms will see their income fall under the legal aid reforms, the Legal Services Commission (LSC) revealed this week as it launched a consultation on the next stage - best value tendering (BVT) for criminal defence work.



An impact assessment looked at the financial effect on firms of the first phase of the criminal and civil reforms, including the various new fee schemes, the expansion of the Defence Solicitor Call Centre, Criminal Defence Service Direct and the very high-cost case panel.



The figures showed that 55% of firms nationally would see their income decrease - most by up to 20%, but a relatively small number by more. London and Manchester will be hit hardest with 68% and 65% of firms respectively suffering a fall.



The statistics, calculated by comparing providers' actual claims in 2005/06 with what the LSC would expect them to receive for the same work under the new schemes, suggested the majority of firms in Bristol, Newcastle, Leeds and Nottingham would see their income go up.



The LSC said none of the reductions would have an unacceptable impact on firms and it remained confident that there would be sufficient national coverage.



Law Society President Andrew Holroyd said: 'It must be highly questionable how many of these firms will be able to continue to provide services, but the impact assessment fails to consider the damage to client services that may result.'



The consultation on the principles of and possible outline design for BVT proposed its phased introduction from January 2009, beginning with police station and magistrates' court work, before being rolled out for Crown Court cases.



Mr Holroyd said: 'A large number of questions about how BVT could operate in the real legal aid world remain unanswered in this consultation. If the LSC cannot answer these questions but press on with BVT, the Society is concerned that the firms they need to provide the service will be driven out.'



The LSC also published a policy paper on assuring and improving quality in the reformed legal aid system, which revealed plans to scrap the planned preferred supplier scheme. It said the scheme was not compatible with EU procurement rules and that it would take elements of it and integrate them with other parts of the reforms.



Meanwhile, following advice from leading counsel after the Court of Appeal's ruling on the unlawfulness of the general civil contract, the Law Society said that, while aspects of the criminal contract were not compliant with EU law, there was nothing in the judgment that would delay the start of the new criminal contract or affect the Crown Court rates or the expansion of CDS Direct.