This is a forensic analysis (for the Westminster Legal Policy Forum on 23 April) of the effect of a range of measures on legal aid, of which the LASPO cuts are the centrepiece. It is not a lament or a protest: this is not the time or the place. My brief is to open discussion on how the legal services’ market will evolve. What are the challenges for regulators and practitioners?
I will just note that I was admitted as a solicitor in 1973, the year that a Conservative Lord Chancellor implemented a world-beating legal advice scheme on any matter of English law. Forty years later, the scope of legal aid in England and Wales is cut back by these measures to below that of Finland, other Scandinavian countries, the Netherlands and even Scotland.
Whatever the nature of our fall from grace, I want to highlight five elements of the context in which we now find ourselves and draw out five consequences.
- LASPO will do what was always said on the tin, ie the government’s original consultation document: shrink both remuneration and scope. This process has already begun. The budget for this year, 2013-4, is 7.7 per cent less than last year. The Legal Aid Agency’s Business Plan commits it to reducing payments including disbursements and VAT to £1.8bn from £2.1bn. The full projected savings from LASPO are estimated at reach £440m a year. Two thirds or so are to come from clients (and as an audience largely of lawyers, we should remember this) in terms of reduced scope and a third – around £150m from practitioners undertaking the same work for less.
- LASPO was but the first of two waves of cuts. A second wave of cuts singles out criminal practitioners for further treatment – as was foreshadowed in Ministry documents from the beginning. The government has announced that it seeks an additional cuts amounting to £220m in 2017/18. Remuneration in criminal cases will be restricted by limiting payment from central funds to legal aid rates; cuts to remuneration with a target that appears to be around 17.5 per cent and competitive tendering for all criminal advocacy save Crown Court and VHCC cases. Eligibility in criminal cases will further be restricted by the introduction of an additional household financial cut off at £37,500 disposable income (with a hardship override) for Crown Court cases. Civil scope comes in for a further bashing but the purpose seems more political than financial: coverage of some prisoner cases cope will be reduced; a residence test will be introduced: a somewhat complicated exclusion will cover judicial review permission applications; the percentage chance of success will be hardened at over 50 per cent.
- There will not only be a gradual attrition on providers. In crime, the objective will be to remove three quarters of existing solicitors. This will reduce providers from 1600 to 400. Clients will lose their right to choose their lawyer.
- Legal aid administration costs are forecast to fall by 12.3 per cent to £86.1m in 2013/14.
- The effect of cuts to legal aid will be compounded for traditional High Street practitioners by other factors, eg alternative business structures and changes to Conditional Fee Agreements.
I assume that the second wave consultation is as nominal as its shortened time span suggests and that, just as with the LASPO initial proposals, the Ministry’s has little intention of paying heed to any criticism. So, I draw the following conclusions.
First, the fundamental nature of the legal aid scheme is changing. The structure of legal aid will no longer be what Americans call a ‘judicare’ model under which clients are free to choose from a wide range of private providers available, subject to quality criteria, to take their case. Instead, the Ministry of Justice will introduce what everyone else would call a contracted public defender scheme in which clients are allocated among a smaller number of providers who have bid for restricted rights of representation. For my part, I think that the scheme should be renamed to indicate the magnitude of this change – for clients as much as providers.
There is considerable domestic prejudice against public defenders, which may be why government documents do want openly to admit what is happening. However, criminal legal services are widely delivered by public defenders, contracted and directly salaried, around the world. In the US, public defenders are the delivery system of choice. They are often salaried but states like Oregon have had contracted with legal providers for years. So, too, does a country like Chile.
Because of this global experience, we know, therefore, quite a lot about the strengths and weaknesses of delivering services by contracted public defenders. Oddly enough, the Ministry’s consultation document on the new arrangements does not reveal this. You would think that we have thought contracts of this kind all up by ourselves. We might note that domestic policy-making seems, at this moment, particularly insular and it may be that the Ministry has not been helped by the winding up of the specialist legal aid research capacity once contained within the Legal Services Commission. The consultation paper on the second wave cuts is completely silent as to foreign experience of the proposals that it advances.
What would the foreign experience tell you if you cared to look? Well, nothing that perhaps you would not expect. An obvious problem for any contracted public defender system is that the commercial imperative on the provider becomes to reduce the cost per case to the minimum possible. So, the policy-maker has to work to counteract that tendency. I like the approach of Chile: it monitors increases in guilty pleas and decreasing acquittals. It gives allowance for seniority of practitioner in the bid process so that contractors have an incentive to hire experienced staff. Chile requires specification of maximum caseload numbers because a further obvious problem is that contractors will want to overload their staff as much as possible. In the US, maximum caseloads are something for which the American Bar Association and the National Legal Aid and Defenders Association have long campaigned and we can learn from that. A further issue that needs consideration is the protection of funds for expert third party opinions – these are soon vulnerable to contractors seeking to maximise income. Of course, there may well be an unholy alliance between potential contractors and the Ministry not to pay heed to the problems. But, we need to be clearer about what is being done; more open to the lessons of foreign experience of what has been done elsewhere; and more aware of the way that any payment mechanism will affect the market.
It is not clear either either that the Ministry of Justice has appreciated the degree of management that a contracted system requires. The consultation document blithely says that the hidden hand of the market will balance out disparities in case types between different providers but both Oregon and Chile have mechanisms by which the legal aid management even out work flows in a conscious way. In that context, it is not clear that allowance has been made for the necessary services that will still be required by the Legal Aid Authority.
Second, the legal aid cuts represent a further shift in the constitution separation of the judicial system from the executive. Despite well publicised discontent from time to time, the old constitution worked with a politician who was a Lord Chancellor and head of the judiciary funding and fostering a legal profession on something close to its own terms. Legal aid has significantly assisted the expansion of lawyers since the 1970s. Now that is well and truly over. We have a politician Lord Chancellor, an independent Supreme Court, non-political appointment of the judiciary and a legal profession that will be forced more to survive (or not) on its own resources. It can no longer look to a Lord Chancellor for support. Indeed, the abolition of the LSC has removed some of the protection hitherto given to the Minister of Justice in relation to legal aid decision making. Rather skimpy provisions were inserted in LASPO to give the head of the Legal Aid Agency the role of a director of legal aid casework independent in his casework decision-making. However, there will no protection from decisions that are made about who qualifies as a contractor. Mr Grayling can expect his fill of judicial reviews.
Third, the surviving edifice of legal aid after the cuts appears highly unstable. I defy any apologists – minister or civil servant – to explain in a sentence who qualifies for legal aid and who does not. It is all just too complicated. Paradoxically, I see this as a source of hope because some government is going to have to sort it out and make the scheme comprehensive. The problem is that the legacy of these cuts will be an incoherent scheme with provision cut to the bone and little scope to fund improvement. Government is largely washing its hands of responsibility for legal advice over whole range of matters. I don’t think that its sustainable. You might change delivery but not responsibility. And you can see overseas examples of how other governments have responded differently. The Dutch, for example, want to save money as much as us but they have established a world leading website designed to meet the government’s responsibility for advice – and indeed resolution – albeit at low cost. They have not just sought to wash their hands of the problem. People with legal problems – like women with custody battles but not facing violence – will not go away. We will acknowledge ultimately a need to do something for them. The most attractive model anywhere in the world would seem to me to be that in New South Wales where a comprehensive website is backed up by a telephone hotline service and by dispersed face to face provision where required. It is not what we had until now but it does provide a model for what might be done if these cuts are to be rescinded at reasonable cost.
Fourth, the combined effect of legal aid and other cuts would seem to make much conventional High Street practice simply unsustainable. Big national brands like the Co-operative with their attractive image, transparent pricing and national coverage will hoover up high volume, lower price civil work. Crime outlets are likely reduce significantly even from the 400 originally proposed. Interestingly, the Public Defender Service will be given a new lease of life under the proposals as the Ministry says: ‘The PDS provides an important service in safeguarding continuity of service against market failure, as well as providing a test bed for methods of delivery such as electronic working. The PDS provides high quality and objective policy input on a range of criminal justice system reform proposals and acts as a “sounding-board” for Agency and Government guidance, technical changes and training.’ The high street lawyer has, however, has had it – going the way of W H Smiths. By contrast, however, there will presumably be a growth in firms delivering privately funded criminal services to white collar defendants. There is no evidence that the Not for Profit sector will be able to take up any of the slack.
Finally, the cuts would have been much worse but for the European Convention on Human Rights. No wonder ministers talk about leaving it: they could wind up the duty solicitor scheme and forget about asylum seekers and those with irritating judicial reviews. If we do ever join Belarus as (at present) the only other country out of the ECHR then a payoff for ministers will be the further cuts that will allowed to legal aid. We need to defend it with all the energy that we have and recognise that it is the only coherent structure that underlies a system which is otherwise based only what Ministers thought that they could get away with.
So, we face significant cuts; the context is difficult; the challenge enormous.
