Price competitive tendering: not an impressive proposal

Transforming Legal Aid: delivering a more credible and efficient system

Response to Consultation

1. This response addresses only one issue in the consultation document: the quality requirements to be imposed on those delivering what is now criminal legal aid. This is dealt with in paras 4.135 to 4.152.
2. The provisions governing the protection of quality are grossly inadequate and fail to show any indication of the lessons from foreign experience. In such circumstances, the removal of any right of choice on the part of the client cannot be justified. These proposals need to be reconsidered.
3. The basis of this response is largely research that was undertaken for the Legal  Action Group and funded by the Nuffield Foundation in 1998. This was published by LAG as Legal Aid Contracting: lessons from North America. For the purposes of that report, visits were made to California, Oregon and Washington, all states which had variants of contracted public defenders.
4. There is a considerable literature on the contracting of legal aid services, largely but not exclusively in the United States. This has been published by a range of organisations including the independent Spangenberg Group, the National Legal Aid and Defenders Association and the US Department of Justice. It is somewhat surprising that none of this is referenced in the Ministry’s consultation paper. Nor is there any reference to other jurisdictions that have encountered the same problems in contracting legal services. A recent statistical analysis using US Bureau of Statistics information concluded that private attorneys and public defenders achieved broadly similar results though this has given rise to some debate.
5. So, some of this research can be seen as supportive of the Ministry’s position. However, there are conditions to that.
6. It is important to recognise that the consultation paper is literally – as well as metaphorically – proposing the transformation of legal aid. Criminal assistance to the indigent will be delivered through a system which pretty well every other system would recognise as that of contracted public defenders. The essential difference between what is proposed and the current legal aid scheme (seen as ‘judicare’ in the US) is that the client has no choice: they are allocated to a defender. The consultation paper makes absolutely clear (eg para 4.57) that this is a salient feature of the structure it is proposing.
7. Public defender schemes can undoubtedly deliver high quality services. There are few criticisms of the quality, for example, of the Federal Public Defenders in the United States. However, it is important to note that these are high prestige appointments, well funded and operating within a criminal justice system that has high volumes of guilty pleas and low levels of sentencing discretion by the judiciary. A more typical depiction of US public defence lawyers is provided by a celebrated analysis of the position in New York in the early 1980s by a US and a UK professor: ‘Indigent criminal defendants in state criminal cases in New York City receive ineffective assistance from lawyers who, for largely systemic reasons, fail to provide competent adversarial representation. Those lawyers cannot fulfill their responsibility to their clients because those in control of indigent defense want low-cost, efficient processing of criminal defendants through guilty pleas and other non-trial dispositions.’
8. An indication of the type of thoughtful approach about the practicalities of contracting legal services which is missing in the consultation paper is given in an earlier post in relation to the position in Chile which uses this sort of scheme.
9. Much of the detail of the contracts to be awarded is yet to be known. In a recent interview with the Law Gazette, the Lord Chancellor indicated that bidding will not be on price alone. ‘Grayling insists quality will be “absolutely essential”, stressing: “Price is not going to be the deciding factor in all circumstances.” Firms will be given “an envelope to bid within” if they can show they can deliver a quality service. Then, if I’ve got two bidders who are going to deliver a quality service, I’ll look at who’s got the best price. I’m not prepared to accept bids on the lowest possible price regardless of the litigation support and advocacy available.’ Mr Grayling accepts that the decision on award of contracts is his. This would seem to be correct. With the demise of the Legal Services Commission, it is the Minister who has this responsibility. The provisions as to independence inserted in the Legal Aid, Sentencing and Protection of Offenders Act 2012 in relation to decisions in individual cases (s4(4)) would appear not to apply to decisions on contractors. This leaves the Lord Chancellor in somewhat of an exposed position. A member of the government is responsible for allocating contracts to public defenders and will apparently do so on criteria which are not entirely clear but will involve questions of ‘quality’. It might be desirable to insulate the minister in some way from decision-taking which could well give rise to allegations of political bias: it would also be desirable to ensure considerable transparency in the bidding process and to ensure that decisions are not taken on – to use the word broadly ‘political’ grounds which discriminate – or can be portrayed as discriminating – against lawyers who are seen as ‘trouble makers’ for government and the police. Second, Mr Grayling will need to be more specific about criteria if he is to withstand the litigation which will predictably follow any decision to make contracts other than on the most clear of grounds. Legal Aid Contracting: lessons from North America drew out nine lessons and comments from the research undertaken which might still be useful:
   1. The major determinant of high quality services is a high level of resources.
   2. Contracting for large number of cases tends to set up pressures for cost-containment at the expense of quality. In consequence, contracting is best suited for routine caseloads and tends to lead to cases being deal with as routine.
   3. The best contracting systems have overflow arrangements so that excess workloads can be shed. There should also be separate funds for the separate disbursement of expenses, such as those on experts.
   4. Contracting works best in a co-operative environment between funders and providers. Imposed in controversial circumstances, it can lead to considerable souring of relationships.
   5. Objective standards of caseload maximums and other relevant matters can be helpful in maintaining quality and represent desirable assistance from professional and representative bodies.
   6. Contracting arrangements require prohibitions against acting in conflict of interest cases and a political decision about whether to retain the client’s right to choose a lawyer.
   7. Contracting allows the imposition of politically motivated terms by governments or their agencies that impede the freedom of lawyers to act in the best interests of their clients. Thus, strong professional support for the integrity of the lawyer-client relationship is vital.
   8. Contracting legal services should encourage a vision of the justice system as a whole with an interactive relationship between the different players.
   9. Contracts can helpfully direct additional services that would not otherwise be provided.

The consultation paper asks three questions in relation to the paragraphs with which this paper is concerned.

Q23. Are there any other factors to be taken into consideration in designing the technical criteria for the Pre Qualification Questionnaire stage of the tendering process under the competition model? Please give reasons.

Q24. Are there any other factors to be taken into consideration in designing the criteria against which to test the Delivery Plan submitted by applicants in response to the Invitation to Tender under the competition model? Please give reasons.

Q25. Do you agree with the proposal under the competition model to impose a price cap for each fixed fee and graduated fee and to ask applicants to bid a price for each fixed fee and a discount on the graduated fee below the relevant price cap? Please give reasons.

The Ministry must be acutely aware of the practical difficulties of contracting services, given its experience with interpreters. Recent news stories indicate that the successful contractor is still not meeting targets.

The BBC reported: ‘figures, released by the Ministry of Justice (MoJ) also show there have been 6,417 complaints and more than 600 court trials abandoned due to a lack of interpreters over the last 12 months.’ Contracting public defence services will be a vastly more complicated affair because there will be so many more contracts – seeming around 400, every one of which will have the potential to cause problems.

In answer to Q23, it would seem desirable that the Ministry find ways of holding contractors to their agreements. It is not clear why this has not been done in dealing with Capita on interpreting. It might mean that bids are higher as contractors protect themselves from the risk but the Ministry should consider the kind of provisions required by Chile in terms of witholding of payment.

In addition, Chile’s practice of requiring the individual signed commitment of each lawyer employed in the practice would seem a desirable way of indicating individual professional responsibilities. Law is a profession and each lawyer involved in public defence should feel a personal responsibility for its provision.

There should be maximum caseload levels for all lawyers employed by the public defender. These should be agreed with the Law Society and Bar Council. The obvious danger in contracting is that contractors will employ inexperienced lawyers to undertake ever larger numbers of cases. The boundaries to that have to be set at the very beginning. This has been an enormous bone of contention in the United States with maximum caseloads advocated both by the American Bar Association and the National Legal Aid and Defenders Association.

In answer to Q23, there should be the same sort of specific allowances to encourage the hiring of experienced lawyers as are used in Chile. This should carry through into the bid process and not just, as seems to be contemplated, at an earlier stage. It should be absolutely clear that there is a financial incentive on the contractor to hire a suitably experienced workforce.

There should also be specifications – based initially on historical experience – of the number and percentage of not guilty pleas, acquittals, trials, appeals and other material evidence of the effectiveness of the public defender. These should not change – and must be seen not to change – as the result of the imposition of new system of delivery. If the number of guilty pleas rises that should be taken as prima facie an indicator that a contractor is cutting corners.

As a supplementary point to Q23, it would be surely be desirable for the Minister to be isolated from decision-making on contracts. Some form of independent commission should be established.

As a further supplementary point, it has to be recognised that contracts will not simply run themselves. In Chile and in Oregon, considerable care is taken by managers within the system to ensure that work is spread out evenly among providers. This will not happen by itself and the Ministry has to be aware that contracting of legal services will not be a ‘fire and forget’ event: it will be a continuing process of managing variables many of which will – like caseload levels and types – be out of the direct control of the contractors.

As to Q24, if the Minister wants to drive down prices by something like 20 per cent then the best way to do it might be to take responsibility directly for doing so and not use competitive tendering to obtain the apparent complicity of providers through the bidding process.

Contracted public defense schemes present two major problems for the policy maker.   First, they are competitive only at the point of contract. Thereafter, the economic incentive on the provider, particularly one whose bid price is really low, is to ensure that the minimum work is done on each case by the cheapest employees. The issue for the policy maker is to ensure that the minimum work is still acceptable in terms of quality. There needs to be much more of an indication that the Ministry is sensitive to do this. If PCT is to continue in its proposed form then the Ministry should, at the very least, produce a further document on its proposals for upholding quality in the process.

The second problem with public defender schemes of this kind is that they deprive clients of their choice of lawyer and, indeed, a choice which for paying clients is enshrined in Article 6 of the European Convention on Human Rights. This is, at a policy level, a simple and highly political decision. In a jurisdiction which proclaims its adversarial legal system (and makes the financial savings which this allows from judicial costs) it is imperative that defendants have confidence in their own lawyers. All the consultation document offers them is the promise that a successful provider will obtain a grade 3 peer review assessment some nine months into a contract. That would seem unlikely to be sufficient but others will make this argument at greater length.

The minimum that we can ask of the proposals is that they represent a competent dealing with the issues that arise. In the light of the known problems with contracting in the Ministry and elsewhere, it would seem that this is unlikely. Much more work needs to be done on these proposals to prevent an absolutely predictable breakdown of the criminal justice system.

 

 

28 May 2013