Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations 2015

Lord Beecham Excerpts

Monday 7th September 2015 Lords Chamber

Moved by

[Lord Beecham]

That this House regrets that the Government are introducing the Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations 2015 without having undertaken a review of the impact and coherence of the cuts to litigators’ fees; agrees with the Secondary Legislation Scrutiny Committee’s analysis that there is too little evidence to establish what effect the fee reduction would have; and regrets the Government’s lack of engagement with the profession and those affected by its reforms (SI 2015/1369).

Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee

[Lord Beecham (Lab)]

My Lords, I refer to my interests registered as an unpaid consultant with my former law firm.

Last year, the Government reduced the fees payable for criminal legal aid work by 8.75%. On 25 June this year, they published the regulations which are the subject of this regret Motion and which implemented the planned imposition of a second cut of 8.75%, effective for new cases begun after 1 July. However, the Bar was exempt from this second, further cut, at least for the time being. Therefore, it affects essentially solicitors.

The regulations also prescribe new fixed fees, effective from next January, for police station and magistrates’ court work and in Crown Court cases involving up to 500 pages of prosecution evidence—the new PPE. Alongside these changes, the Ministry of Justice is pressing ahead with radical changes to the process of bidding for contracts.

The regulations evinced from the Secondary Legislation Scrutiny Committee a critical report of the kind with which the Ministry of Justice is by now all too familiar. In its report of 25 June, the committee highlighted concerns about the lack of detail about the effect of the first instalment of the 17.5% cut and the deviation from the original timetable. It pointed out that the so-called Explanatory Memorandum gave no information about the effect of the first cut despite the statement in the memorandum accompanying the original cut that that there would be continual monitoring and a review.

The impact assessment—again, typically—is described by the committee as “very short on detail” and as offering,

“nothing about quantification of the impact on legal aid providers”,

whereas the Law Society was quoted as claiming that 120 providers—about 8% of the total—were facing bankruptcy as a result of the previous round of cuts.

An exchange of correspondence between the noble Lord, Lord Trefgarne, and the Minister is recorded in the committee’s report of 2 July and reflected the customary complacency of the Ministry of Justice. The noble Lord, Lord Trefgarne, concluded the exchange by asking two questions: first, what evidence could be provided as to the maintenance of quality, promptness and reliability of the service and how the department would ensure that these were maintained and monitored; and, secondly, given that 1,099 bids had been made for 527 contracts, what would happen to the unsuccessful applicants and was there a risk of market distortion. Perhaps when he replies the Minister could enlighten us as to these matters.

The background to these regulations is of course the Government’s determination to secure further reductions in the legal aid bill, the effects of which have so often been a matter of concern in this House and the world outside. Since 2010, the legal aid bill, civil and criminal, has fallen from £2.2 billion to £1.7 billion—that is over 20% in cash terms and more in real terms—and appears, even without the anticipated saving of £55 million from the measures which are the subject of this Motion, to be falling further to some £1.5 billion. Of course, all these figures include VAT.

Before the Minister does so, I should say that the Labour Government also implemented cuts in legal aid and froze criminal legal aid fees. Indeed, I first came to be acquainted with my noble friend—my now good friend—Lord Bach as a result of securing a debate at the Labour Party conference criticising such cuts. The Government, however, appear determined to reduce the number of law firms able to undertake legal aid work— although they have temporarily, as I indicated, spared the criminal Bar from the second 8.75% cut—heedless of the potential impact on clients and the future of the profession.

In the north-east, for example, seven firms will obtain contracts north of the Tyne and five south of the Tyne. These are very large geographical areas such that access to lawyers will become more difficult for many clients and attendance at police stations more difficult for practitioners. Moreover, the fees payable for different categories of work vary widely. The fee for attendance at a police station, which could well be in the middle of the night—as I shudder to recall—varies between £118.80 in Hartlepool to £160.88 in Durham. The rationale for this does not appear self-evident.

There is great concern about the so-called two tiers of contract under which firms can opt to act only for their own clients or in addition undertake duty solicitor work, whether it be at police stations or at court. There is a widely held view locally and indeed nationally that the former group will fall away because of the limited number of cases in what is in any case a declining number of cases overall, as testified by the court closure programme—in itself controversial but justified by the Government because of lack of demand. National and civil legal aid expenditure fell by 11% in the last quarter of 2014 compared to the same period in 2013. The number of magistrates’ court cases fell by 17%, committals for sentence by 29%, and all non-Crown Court crime by 7% in volume and 14% in value.

I discussed the situation with partners in my old firm, where the criminal department is a relatively small part of the practice, and with the senior partner in another practice where it is much more significant. During my 35 years as a partner, and since, the criminal department made a very modest contribution to the firm’s profits but was maintained because we felt we ought to offer the service. It would appear that the average profit margin on criminal legal work is around 5%. An experienced solicitor might expect to earn only around £40,000 a year, significantly less than in other areas of practice, even in firms with a larger criminal department. Firms are not recruiting trainee solicitors and, even if they wanted to, it is unlikely that many would apply when there are much more financially rewarding areas of law in which to practise. There is therefore likely to be a shortage of able solicitors in future, and of course the Bar, which has temporarily escaped the second round of 8.75% cuts, faces the same potential problem, with adverse consequences ultimately for recruitment to the judiciary, as senior judges have pointed out. The Justice Minister Mr Vara’s suggestion that work could be carried out by legal executives underlines the point while ignoring the fact that many firms cannot even now afford to employ legal executives as well as solicitors.

The difficulties that I have outlined are not, of course, restricted to the north-east. A particularly illuminating article by Steven Bird was published by the London Criminal Courts Solicitors’ Association. It demonstrated that some areas in the south-east would see some police station fees cut by more than 30% and that magistrates’ court fees, falling into what would have been the higher fee band, would be cut by an average of 52.7%. In London, a flat rate of £200.93—I love the precision of the 93p—will mean a cut varying from lucky Bexley of 8.67% to Heathrow of 33.25%. In the complex new arrangements for Crown Court cases where the new PPE applies, with different fees for each band of 100 pages up to 500 and 11 different categories of offence, fees could be cut by 50% or more.

Members will be aware that the measures now under way evoked both a strike, in effect, by solicitors and an unusually close degree of joint working between the Law Society and the Bar, as evidenced by the material published by the Criminal Bar Association. The irony of this latest assault on our cherished system of legal aid and access to justice, already compounded by the ludicrous criminal charges order which is the subject of another regret Motion that I have tabled, in the year when we have celebrated the anniversary of Magna Carta, is clearly lost on this Government. We learnt not to expect more of Mr Grayling, but had hopes of Mr Gove. It is not too late for him to think again about the changes due to take effect next January. He acted, after all, to abandon Mr Grayling’s vanity project for the secure college at Glen Parva.

In the mean time, perhaps the Minister, if not tonight then perhaps by way of a letter to be placed in the Library, could answer some questions. What, if any, contingency plans are in place if an insufficient number of firms of solicitors accept contracts for duty solicitor work in police stations or courts? How will the Government react if the contract process is disrupted by legal challenges from unsuccessful bidders? What plans exist to deal with the situation arising from contracts becoming unviable during the period for which they are to run? What assessment has been made of the ability to survive of firms with only an own-client contract and, in the event of a significant number of firms failing to do so in any locality, what contingency plans exist to deal with the problem? What assessment has been made of the impact of the changes on the number of solicitors needed to provide an efficient and accessible service and upon recruitment?

Will the Minister look into the parallel matter of the emerging problem of long delays in trials proceeding because of short staffing in the Crown Prosecution Service? What future does the Ministry of Justice foresee for the Public Defender Service? How many advocates does it plan to employ and on what terms? Will the service be required to compete with private firms or is it seen as a resource of last resort where insufficient private firms fail to survive the new regime? When will the workings of the new structure be reviewed?

Finally, what assurance can be given that it is not part of the Government’s intention for criminal legal aid work to be consigned to oligopolies, such as the likes of G4S, Serco or Sodexo, upon which they increasingly rely to provide public services?

Concern about access to justice in general, and the future of legal aid in particular, has been a regular feature of this House’s deliberations in the five years that I have been privileged to serve in it. We seem to be witnessing the slow death of legal aid. I hope that we will not, in the near future, be obliged to act as a coroner’s jury, performing an inquest on its ultimate demise. I beg to move the regret Motion.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, I refer to my registered interest as a practising barrister, though not undertaking work in the criminal field.

The fact that this Regret Motion is being debated at all is evidence of a problem that has bedevilled the relationship between the legal professions and government for many years now. Governments of all complexions have failed to seek consensual solutions to the challenge of providing a publicly funded criminal justice system that will work successfully both for the public and for the two essentially private sector professions. A mutually supportive and trusting relationship between the professions and government is essential if our criminal justice system is both to be effective and fair and, at the same time, to command public confidence. There is a crying need for the Ministry of Justice to work more closely with the professions to reach an acceptable agreement—a compact—for fees and future allocation of work. The constant war of attrition over recent decades has damaged government and the legal professions and should not continue. This was a view held and often expressed by my noble friend Lord McNally when he was a Minister, although of course he was bound by the constraints placed upon him by being part of the coalition Government with the overwhelming need to find cost savings. This Government are also so constrained, and we understand that.

I will speak of the reductions affecting criminal work, and my noble friend Lord Carlile of Berriew will speak largely about the changes affecting work for prisoners.

The background against which the implementation of the second stage of the 17.5% reduction in fees is being imposed is a great deal more favourable than it has been for some years. Sir Bill Jeffrey summarised this at the start of his extremely helpful report, Independent Criminal Advocacy in England and Wales, published in May 2014. He wrote that:

“The landscape of criminal advocacy has altered substantially in recent years. Recorded and reported crime are down. Fewer cases reach the criminal courts. More defendants plead guilty, and earlier than in the past. Court procedures are simpler. There is substantially less work for advocates to do. Its character is different, with more straightforward cases and fewer contested trials. In the publicly funded sector (86% of the total), it pays less well”.

The climate should, therefore, present us with opportunities to make improvements to the criminal justice system, to make it work better and more cost effectively by collective and collaborative effort and working on a clearly evidenced-based approach. Yet the introduction of these regulations has been far from that.

--- Later in debate ---

The debate has focused on a large number of issues. We understand that the main area of concern that the noble Lord, Lord Beecham, has directed against is that there is a risk of there being no adequate providers of legal aid around the country as a result of these cuts. For the reasons I have given, we are not satisfied that that is the position. However, we are not complacent. We acknowledge the value of the legal profession in providing proper representation and the importance of making sure that that is still available. We will continue to monitor that. I hope that what I have said has given some reassurance to the noble Lord that this is not a matter undertaken lightly and that he will understand the pressure that this Government are under to maintain a manageable legal aid service. It remains one of the most expensive in the world, as the noble Lord will be aware, and the most expensive in Europe. None the less, it is an important matter and this Government and all Governments are proud that it remains a beacon. However, cuts have had to be made. We respectfully suggest that those cuts are reasonable and, in all those circumstances, I ask the noble Lord to withdraw his Motion.

[Lord Beecham]

My Lords, I am grateful to all Members who have spoken in this debate and I congratulate my noble friend Lord Ponsonby and the noble Lord, Lord Carlile, on taking advantage of the occasion quite reasonably to raise matters which are not quite within the terms of the Motion, or indeed of the general subject of criminal legal aid fees. However, the points they made were telling and I hope that the Government will in one way or another respond to them with some proper consideration in due course. I endorse much of what they said and the very constructive suggestions made, particularly by the noble Lord, Lord Marks, in citing a number of cases in which it might be possible to find savings.

Incidentally, I do not object at all to the Minister failing to reply to the long list of questions that I threw across the Table at him. I know that he is very able to respond after proper consideration to such matters and I look forward to hearing from him with that rather long list in mind. But with all due respect to the noble Lord, I find that there is a note of complacency in his approach to these matters. One of the factors which I think the noble Lord, Lord Marks, mentioned is the matter of choice. Choice is going to be very restricted, given the relatively small number of firms of solicitors which will be engaged in the business of providing criminal legal aid. The likelihood for those who opt for just the own-client contract, from all the evidence around the profession and as perceived by the Law Society, is that after a relatively short time it will implode—and those firms engaged in that part of the legal world will simply go out of existence.

In addition, the Minister referred to consultation. While consultation took place in form, in my submission it did not really do so in substance. I cite in support of that contention two letters written by the president of the Law Society, one to the Lord Chancellor and the other to the Secretary of State for Business, Innovation and Skills. Dealing first with what I suppose is the more important of the two letters, the one to the Lord Chancellor, the Law Society’s president said that he was,

“writing on behalf of the membership … to express our disappointment and concern about this decision”—

that is, the decision following the announcement of the department’s plans. He said:

“The administration of justice is a fundamental duty of government and access to justice is an essential part of that responsibility … Today’s decision further undermines the role of criminal legal aid solicitors in our justice system … You gave us an opportunity to explain our reasons for opposing the plans. We provided evidence from over 120 firms of the dire impact of the previous cuts, and the likely impact on the criminal defence service of proceeding with this further cut. I know that many criminal legal aid solicitors … will be concerned on behalf of the public at the implications”,

of this decision,

“as well as worrying for their businesses”,

and employees.

The president wanted to raise a number of points on behalf of the profession. First, he said:

“There is extensive and compelling evidence that criminal legal aid practitioners cannot sustain a second fee reduction”.

Secondly, he said:

“The Ministry of Justice’s … own financial assessment of the tender submission”,

would in its view,

“underline the fragile nature of firms’ finances”.

Thirdly, he said:

“Making a further fee reduction … may jeopardise the savings the MoJ wishes to make in the broader criminal justice system”.

Finally, and importantly, he said:

“Any decision should be deferred until there has been a full review of the evidence as to the effect of the first round of fee reduction in light of the financial reporting made to the Legal Aid Agency”.

Given that the new system is in any event to come into place in January, I cannot understand why it is necessary to impose on the solicitors’ and barristers’ profession a fee increase half way through this period.

The society noted,

“the announcement of a review of the system after 12 months rather than assessing the evidence now”,

and deplored that. Its view is that,

“a large number of firms will have closed during this time, and many others will…withdraw from this market”.

It said that a review 12 months hence would be,

“too late to save many firms … This will be very difficult … for particularly the small, specialised firms”.

The fear is that the impact of these changes,

“could create advice deserts where the most vulnerable members of society will be unable to access the legal advice they desperately need”.

A lot of that advice, of course, is at the police station stage rather than the court stage. Drawing on memories from long ago, I cannot say I was enthusiastic about driving down at three o’clock in the morning to Jarrow police station to interview clients. Given that not only has this reduction in criminal legal aid fees taken place but fees effectively have been frozen for over a decade now, I think that the supply side is likely to be very seriously affected. Indeed, that was the subject of the letter to the Business Secretary, pointing out the danger to the firms in this sector and telling him—not reminding him—that it had been suggested to the Ministry of Justice that a decision should be deferred until there had been a full review of evidence.

Rather like his predecessor—and I hope this is not a precedent because I think Mr Gove, as others have said, has rightly attracted some approval for his more open-minded and better thought-through approach in many respects to some of the inheritance he acquired—it does not seem that he has listened to that view from the profession. I suspect that this debate will look a little pallid when compared with the one we will have about the perhaps more publicly controversial issue of legal aid charges, which we will come to when the House resumes later in the autumn.

However, I think it is important that the views expressed tonight should be considered further by the Government. I am afraid the course they are taking is very likely to fulfil the fears expressed in the Chamber tonight by those with whom they have consulted after a fashion. Nevertheless, we are not in a position to divide on this Motion—in fact, I do not think that there will be any Divisions in the next fortnight. In those circumstances, I beg leave to withdraw the Motion, but look forward to the next round.

Motion withdrawn.