Paul Rogerson examines the small print of the £55m legal aid settlement brokered by Chancery Lane


The corridors of Chancery Lane rang with the sound of swords being beaten into ploughshares last week, as Carolyn Regan and Des Hudson outlined details of their landmark rapprochement (see page 1) to the Gazette.



The government agreed to a £55 million package for civil legal aid in return for the Society dropping its judicial review action against the Legal Services Commission (LSC).



'The importance we attach to this deal lies not simply in its economic terms, but also in the opportunity it presents for rebuilding relationships and re-engaging practitioners with the Legal Services Commission and the Ministry of Justice,' Law Society chief executive Hudson stressed.



'Clearly, we would prefer more money [for legal aid], but that's a political issue. The judgement we made was that this is a better outcome for practitioners than carrying on with our litigation, and in reaching that judgement we had to look beyond pounds and pence.'



'We have reached this agreement after a lot of thought and discussion which has been conducted in a collaborative manner. This signals a new way forward for all parties,' echoed LSC chief executive Regan.



Earnest declarations such as these can induce cynicism. Yet, beyond the fine words, the small print of the 53-page deal does suggest the LSC acknowledges that partnership cannot take place through diktat, which some critics had suspected to be its modus operandi. Within a month, a series of joint working parties will be established which will see practitioners working alongside the LSC in areas such as peer review and the contract compliance audit process.



If the LSC or Society choose to reject the recommendations of a working party, they will have to publish the reasons for doing so. The LSC is also committed to publishing a 'route map' for civil and family legal aid which will outline the way forward until 2013 - in which it will pledge not to introduce price-competitive tendering for civil and family cases before then.



Importantly too, the Law Society has also retained its right to submit a complaint of maladministration to the ombudsman, enabling it 'to represent any members who have justified complaints that are not addressed by the new approach'.



In a statement, the Legal Aid Practitioners Group applauded the two bodies for negotiating a settlement of the 'very necessary' litigation brought by the society to challenge the contract signed by firms a year ago.



Roy Morgan, the group's chairman, said: 'We are pleased the Law Society and LSC have sat round the table with the Ministry of Justice and brought this expensive litigation to an end. That is exactly what we had called for them to do earlier this year.'



He added: 'We welcome with caution the financial benefits agreed, in particular the approach to unrecouped payments on account which was an issue causing our member firms a high level of administrative burden and financial anxiety. We hope that this will bring a real practical benefit to us.'



The long-running spat over the new unified contract for civil legal aid reached crisis point last November, when the Society scored a significant victory in the Court of Appeal. The court ruled that the contract breached European law and that the LSC did not have the power to amend it in the way proposed.



The LSC's Regan said last week: 'The Court of Appeal's judgment will affect the contractual relationship between the LSC and providers in future. Contracts need to be clear about the conditions that will apply throughout the term of the contract, and amendment clauses cannot be too wide. This means that contracts are likely to be for shorter periods in future and each time new contracts are offered, the procurement process will be open to new bidders as well as existing contract holders.'



Relief attending the settlement of the litigation does need to be tempered with a degree of realism, notwithstanding. The £55 million settlement package is spread over three years and does not involve the injection of any new money into the annual £2 billion legal aid pot but merely a re-ordering of priorities, a Ministry of Justice spokeswoman confirmed. Of this sum, £20 million will be accounted for by the amnesty for unrecouped payments on account, £14 million for higher fee rates and a £21 million 'hit' from the deferral of tendering.



Hudson underlined the fact that the Law Society retains 'serious concerns' about the future of legal aid, particularly best value tendering, adding that the principle of providing access to justice for those who cannot afford it has suffered 'significant damage' from the current round of reforms.



The Society has also acted to arm itself with the empirical information it will need to argue its corner in the new consultative forums. Research has been commissioned into immigration and asylum, childcare and mental health to inform its work on the future of legal aid in those areas.



Hudson has urged practitioners to familiarise themselves with the full details of the settlement deed, which can be read at: www.lawsociety.org.uk/defendinglegalaid.



- What do you make of the new agreement? Write to the Gazette Editor: paul.rogerson@lawsociety.org.uk.





Settlement - main points



- 2% rise in all legal help fixed fees and underlying hourly rates from 1 July;



- Care level 2 fee rises from £347 to £405;



- 5% rise in controlled legal representation fees and rates for mental health and immigration;



- Delay in implementing private law family litigators' graduated fees;



- Closed list of all Community Legal Advice Centres and Networks planned for period ending April 2010;



- LSC will not seek to recoup historic unrecouped payments on account over six years old and where the amount outstanding is less than £20,000;



- New process for standard monthly payments;



- LSC to publish route map outlining its proposals for the next five years, including a commitment that there will be no price competitive tendering for civil or family work before 2013;



- Best value tendering (BVT) in criminal legal aid will be delayed by six months to a date not before July 2009; and



- Reviews of the contract compliance audit process and the operation of peer review and other quality assurance mechanisms.