The Ministry of Justice today unveiled its final package of criminal legal aid reforms, together with a review of criminal proceedings which will seek further to streamline the courts system.

Justice secretary Chris Grayling (pictured) is pressing ahead with plans to cut criminal solicitors’ and barristers’ fees, and introduce a two-tier contracting arrangement that will reduce the number of firms by two-thirds.

Staged cuts of 17.5% will be implemented in two phases: the first, of 8.75%, was due to be implemented this month, but has been deferred until after 20 March. 

The second 8.75% cut will be introduced next spring.

The government will introduce a two-tier contracting model, tendering for an unlimited number of contracts for own client work, available to all firms that meet the quality criteria.

 Contracts for duty work will be limited and allocated on a ‘tight contracting mechanism’ based on quality and ‘capability to operate in this more challenging market’.

Following research by accountants KPMG and consultants Otterburn Legal Consulting, the ministry will award 525 contracts for duty work. This is more than the 250 that had been mooted.

The government has, however, made a substantive change in allowing up to four firms to band together in informal consortia to make bids for contracts. This means many more firms could get contracts than the number of contracts available.

In order for those firms that are awarded contracts to be viable, taking into account the fee cuts, KPMG suggests they will have to make efficiency savings of at least 20%.

The ministry had already decided not to proceed with two elements of its initial reforms – abandoning plans to remove clients’ ability to choose their own solicitor and to introduce price competitive tendering for criminal legal aid services.

Grayling said he had listened to the concerns raised by the Law Society and other solicitors groups about the introduction of single national fixed fee for police station work, and harmonising the fees paid for magistrates’ court cases regardless of whether they are guilty pleas or trials. 

In response, it has amended its proposals, introducing a fixed higher fee for cases in London and a separate fixed fee for cases outside the capital.

In addition, it will retain the hourly rate payment for long cases where the escape fee threshold has been reached, while still implementing the 17.5% fee cut. In the magistrates’ court, rather than a fixed fee regardless of outcome, fixed fees will be determined by the level of offence charged.

The government has also pledged to implement a package of support and advice to help lawyers cope with the changes and the financial climate, including advice on restructuring.

In respect of the bar, the ministry will amend the current Advocates Graduated Fees Scheme, based on the model used by the Crown Prosecution Service, reducing fees on average by 6%. The ministry says the change will mean that the fees paid to junior barristers will be cut by an average of 2%.

The changes follow cuts to the fees paid to barristers and solicitors in the most serious cases by 30%, which were introduced in December, prompting a boycott of the cases by many barristers.

Grayling has pledged to review the impact of the new structure in Summer 2016, once it has been in place for at least a year.

He said: ‘As everybody knows this government is dealing with an unprecedented financial challenge and I have no choice but to look for the savings I have to make across the full range of the MoJ’s work. I cannot exempt legal aid from this, but that doesn’t mean I don’t understand how challenging these reductions will be.’

He added: ‘Legal aid is a vital part of our justice system but we must ensure it is sustainable for those who need it, for those who provide legal services as part of it and for the taxpayer, who ultimately pays for it.’

Grayling said he has ‘genuine respect’ for the quality services provided by the independent criminal bar and solicitors. 

He stressed he had spoken ‘at length’ with solicitors and barristers about the reforms and listened closely to their views.

 ‘Today’s publication reflects many of the changes asked for,’ he said.

 ‘It does mean fee reductions but it also includes a series of measures to ease their effect on lawyers, including a range of support and assistance requested by The Law Society.’ 

Grayling also promised that following these cuts, the government will not seek further savings from criminal legal aid.

Chief executive Desmond Hudson said the changes will have a ‘profound impact’ on practitioners, who will face ‘very difficult challenges in changing their businesses’ to meet the requirements.

‘We continue to oppose the cuts,’ Hudson stressed, adding: ‘We recognise that the government has listened to the views of the Society and our members and as a result made changes to mitigate their impact.

‘Our members’ response to [this] announcement will inform our thinking and influence preparations for the coming implementation and contract-bidding process. We will continue to press government for further measures and to support practitioners through implementation.’

The Society will also study the government’s decision and supporting evidence, including the reports from KPMG and Otterburn. As part of the consultation Chancery Lane is encouraging solicitors interested to contact their council members.

Grayling also announced today a review of criminal proceedings, to be conducted by  Lord Justice Leveson, president of the Queen’s Bench Division. This will initially consider better use of technology – for example holding short hearings by telephone or web or video-based applications.

It will consider ways of cutting the number of pre-trial hearings that require defendants in custody and advocates to attend court.

Leveson’s review is expected to make recommendations for changes to the Criminal Procedure Rules to maximise efficiency and support the implementation of any changes proposed.

Nicola Hill, president of the London Criminal Courts Solicitors’ Association, branded today a ‘shameful day’ in legal and criminal justice history.

 Cutting legal aid fees so that experienced lawyers are driven out of 
business, she said, leaves clients ‘at the mercy of low-paid, unqualified lawyers’.

‘These newly confirmed cuts are a shortcut to a two-tier system, where justice becomes a luxury not a right,’ said Hill, leaving working families and the vulnerable with the ‘crumbs of legal aid’.

 Hill warned the cuts will not only cost lawyers their jobs, but result in trials collapsing, the innocent going to jail and the guilty walking free.

Bill Waddingdon, chairman of the Criminal Law Solicitors’ Association, said the cuts ‘fly in the face’ of the evidence provided by experts, which shows firms are already on a ‘financial knife-edge’ and cannot absorb the cuts. 

Waddington said the initial 8.75% cut will ‘without doubt’ cause firms to fail financially, with ‘many good’ firms being destroyed, while others will experience a slow death.

 Waddington said the demise of so many firms will have a disastrous impact on the Treasury and the whole profession, which will have to cope with interventions in failed practices.

Bar Council chairman Nicholas Lavender QC said: ‘Today, our worst fears have been confirmed. Across England and Wales criminal barristers, who work hard in the public interest, will be dismayed and demoralised.’ 

Lavender described the cuts as ‘unnecessary’ and a ‘false economy’ that will cause ‘irreparable harm’ to the justice system and damage the international reputation of the country’s reputation for upholding the rule of law.

Shadow justice secretary Sadiq Khan accused Grayling of pursuing a ‘sham consultation’ on ‘crackpot’ plans that could render the legal system ‘unsustainable and dysfunctional’.

He said: ‘The lord chancellor has done nothing to address the concerns of those who believe his plans risk damaging the public’s confidence in our justice system.

‘He has built on a caricature of lawyers being fat-cat ambulance-chasers not realising that some of those who work in law centres, CABs, high street firms and junior barristers earn on average a third of what MPs earn and a sixth of what the lord chancellor earns.’

A planned day of protest against the cuts on 7 March will go ahead, practitioners indicated.

Read the full response and related documents here.