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

Lord Faulks Excerpts

Monday 7th September 2015 Lords Chamber

[The Minister of State, Ministry of Justice (Lord Faulks) (Con)]

My Lords, this has been a wide-ranging and helpful debate. Although the Government have been criticised, there have been some positive suggestions. I assure all noble Lords that the Lord Chancellor and the Ministry of Justice listen to what is said in this House. I shall certainly report back what has been said during this debate.

The Motion gives me the opportunity to set out the background to the making of the Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations, which were laid before the House on 10 June, concerning the fees payable in respect of criminal litigation services funded by legal aid. The coalition Government consulted twice on the proposed fee reduction. The first consultation, Transforming Legal Aid: Delivering a More Credible and Efficient System, ran from 9 April 2013 to 4 June 2013. The second, Transforming Legal Aid: Next Steps, was published on 5 September 2013. The September consultation proposed the staging of the fee reduction plus a number of legal aid reforms, including changes to the way in which criminal legal aid services are procured and a reduction in the fees for criminal legal aid services.

The response to that consultation, Transforming Legal Aid—Next Steps: Government Response, was published on 27 February 2014 and set out the decisions taken in relation to the procurement of criminal legal aid services and fee reductions for criminal legal aid services. These regulations introduce a further fee reduction for work done under a criminal legal aid contract. This follows an earlier 8.75% reduction that was introduced in March 2014, making a total reduction of 17.5% from the April 2013 figures.

As the House will be aware, the Government consider that there is a continuing need to bear down on the costs of legal aid to ensure that we are getting the best deal for the taxpayer and that the system continues to command the confidence of the public, particularly in the light of the continuing financial challenge faced by all government departments. The House will be aware that the Ministry of Justice has no ring-fence around it, and is subject to particular pressures in this respect.

The phased introduction of the fee reduction was intended to mitigate its impact while enabling realisation of necessary savings. The second fee reduction applies to new cases starting on or after 1 July 2015, and there will therefore be a period of time before it has an impact on the legal aid income of providers.

The Government also believe that the current remuneration mechanism for criminal legal aid services is overly complex and administratively burdensome. These regulations introduce fixed fees for Crown Court cases with fewer than 501 pages of prosecution evidence, and simplify the fixed fees for police station work and for magistrates’ court work. The new fixed fee schemes are being introduced for services under the new criminal legal aid contracts governing criminal litigation services from 11 January 2016.

The Motion says that the House regrets that the Government made these regulations,

“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”.

As I set out in my Written Ministerial Statement repeating the Statement made by Mr Vara in the House of Commons, the Government listened very carefully to the concerns of the profession in considering the programme set in train by the coalition Government for the criminal legal aid market.

We must ensure—this point has been made during the debate—that the high quality of service provided by litigators remains sustainable in all parts of England and Wales. We recognise that changes in the litigation market have the potential to affect the provision of advocacy, and we will work with the profession to preserve and enhance the high quality of advocacy that generally obtains within the system.

In March 2014 the coalition Government agreed that, prior to putting before Parliament the second fee reduction, they would consider and take into account the following factors. The first was Sir Brian Leveson’s review, to which the noble Lord, Lord Marks, referred, aimed at identifying ways to streamline and reduce the length of criminal proceedings. I entirely accept his observations about the need to do that. This is part of the overall improvement that the Government hope to achieve in saving costs, but not at the expense of achieving a fair trial. The two other factors were criminal justice reforms such as digitisation, which will increase efficiency and affect how advocates work, and any impacts from earlier remuneration changes.

At the same time the coalition Government told legal aid providers that they should plan and bid for duty and own-client contracts on the basis of a second reduction of up to 8.75%, as they would be expected to demonstrate that they were capable of delivering at that level. Also in March 2014, the coalition Government announced that they had worked with the Law Society to agree additional support for litigation providers that would assist with the transition to the new regime. The ministry agreed to implement interim payments at plea and case management hearing stage in summer 2014 —earlier than had previously been planned. We introduced interim payments for trials at the same time—cash flow being, of course, very important to the legal profession in this area, which I wholly accept is not over-remunerated compared with other fields of law.

The present Government fulfilled the commitment given in March 2014 to,

“consider and take into account”,

the factors set out by the coalition Government. There was no commitment to any formal review or public consultation, but the Government considered the findings of Sir Brian Leveson’s report on the efficiency of the criminal courts, the impact of broader criminal justice reforms and the impact of changes already introduced. We examined changes to our forecast legal aid expenditure, changes to the existing market, provider withdrawal rates—that is, whether people were leaving the market—and reasons, contract extension acceptance and early information from the duty provider contract tender. We also considered the implications for quality, promptness and reliability of the first fee reduction. The Legal Aid Agency has monitored, and will continue to monitor, the quality of the delivery of services through its well-established audit and peer review programmes.

All the further consideration undertaken reassured us that the legal aid reforms so far have not had any substantial negative impact on the sustainability of the service. I should perhaps pause here and remind the House that a defendant is eligible for legal aid just as he always has been; the issue is, of course, whether the changes will result in there being legal aid deserts or professionals leaving the profession, thereby endangering defendants’ ability to secure their entitlement to legal aid. The level of interest in duty contracts—when the likely reduction in fees was already known—suggested that there remained an appetite to undertake criminal legal aid work under the new regime. Having considered all these matters, we decided to press ahead with the second 8.75% reduction in litigators’ fees that was first announced by the coalition Government.

I cannot accept there has been a lack of engagement in this process. There have been three consultation exercises over a period of almost two years, two of them relating specifically to the fee reduction. There have been numerous discussions with the legal sector, many at ministerial level. The previous Lord Chancellor worked closely with the Law Society to shape the proposals for the new contracting regime. The present Lord Chancellor and Minister for Legal Aid have continued, and will continue, to engage with a broad range of legal aid providers.

The noble Lord, Lord Beecham, referred to the exchanges between the Secondary Legislation Scrutiny Committee and Mr Vara and remarked on the continuing correspondence and the failure to give what he inferred was a satisfactory response. I remind him what the Minister said on 10 July in answer to the outstanding questions from the noble Lord, Lord Trefgarne. This is particularly relevant to the audit and peer review programmes. The Minister stated:

“The LAA uses a wide range of monitoring tools”.

Although he accepted that there were no published figures, he explained:

“Ongoing monitoring is precisely that, it is not a process with a beginning and end. As a qualitative process, it is not one that generates a significant volume of statistics”.

In terms of the number of providers, which was one of the issues raised generally in the debate, Mr Vara said:

“A reduction would cause concern if the level of that reduction was likely to reduce future competitive tension. The precise level of that reduction that would cause concern, or acute concern, would depend on the design of a future competition, for example the number of contracts being tendered, so it is not possible to provide precise figures. After a great deal of analysis we concluded that we should offer 527 duty contracts. We have received 1,099 bids for those contracts. As I said in my previous letter though, it is important to bear in mind that the 527 duty contracts does not equate to 527 firms providing work under such contracts. Some providers who obtain duty provider contracts to deliver the work under that contract will do so in conjunction with other firms (either as delivery partners or agents)”.

So they may very often still have a future but not in precisely the same capacity, and of course they will still always have the possibility of own-client work. The need was to consolidate the duty provider part of the legal aid services provided by firms of solicitors.

The noble Lord, Lord Marks, referred to a number of aspects of efficiency and he was right to do so. He also referred to various suggestions which I think were almost all contained in the Liberal Democrat party manifesto as to other improvements that could be made. Some of these have already been considered. Those matters will receive ongoing consideration. At the moment, the Government are not, for example, satisfied that it is a good idea to have compulsory insurance. The coalition Government considered this and concluded that there were strong policy reasons not to make it compulsory. The coalition changed legislation to enable the recovery of legal aid costs after conviction and after a confiscation order and any compensation to victims had been paid. I accept the noble Lord’s suggestion that we could go further. It is a matter for consideration, but at the moment there are no plans to respond in that respect.

The noble Lord, Lord Ponsonby, indicated that many magistrates were not happy with the situation as regards litigants in person. I am sure that litigants in person can present a challenge to particular courts. However, of course, as I say, the eligibility for legal aid has not been changed by any of these instruments that we are considering, which are the subject of this regret Motion. Some people simply may not have applied for legal aid but many of them will be eligible for it. I have sat as a judge with litigants in person and I sympathise with such tribunals as they present particular challenges in questions of plea and advice, but these do not, as it were, arise directly out of the matter which is currently before your Lordships’ House.

The noble Lord, Lord Carlile, focused considerably on prison law. He will be aware that the coalition Government made some changes to the availability of legal aid for prison law, focusing very much on cases where the liberty of individuals was threatened, and took the view that, as he rightly points out, prisoners are in a particularly vulnerable position and may well need representation. However, I am sure he would accept that in many cases prisoners use legal aid when an objective view would consider that they should not do so. Equally, identifying precisely the cases where liberty is truly in issue is important. I undertake to take back the detailed comments the noble Lord made about that. However, the overall principle of the Government’s approach remains a good one—namely, that we should focus legal aid on aspects of prison law where individuals’ liberty is at stake rather than on some of the more trivial aspects which, unfortunately, were sometimes pursued.

As to the availability of prison law generally, the new model would still mean that specialist law providers would get a contract. They would not have to provide all the services at the same time. Those already awarded own-client contracts have the opportunity to bid for prison law as part of the tender process and will also be given authority to undertake appeal and review work.