This is the (edited) text of a seminar I did for Chambers on 4th March 2014 setting out a summary of what the ‘Transforming Legal Aid‘ proposals were (ie, what the latest plans for provision of criminal legal aid are from those nice folks at the MoJ).
I felt it might be helpful to share this a bit more widely as it is of concern how many barristers (and even some solicitors) have not given the matter proper consideration and don’t understand just what is coming. I’m amazed, frankly, that not everybody has read it. This is our future, and it is important that we all know just what is brewing in Petty France.
It is, I hope, accurate. Having said that, I’m sure that there are mistakes and, if so, please feel free to point them out to me. But certainly don’t rely on this for complete accuracy.
I have left it as was last month, so it doesn’t reflect the recent events. Where I have edited it is to remove most of my commentary and predictions for the future. As well as various sarcastic comments…
The response to the consultation is out. They had over 18,000 responses and have ignored pretty much all of them, leaving nobody happy.
The fee cut to solicitors starts on 20th March 2014 (for any case starting on or after). By the beginning of September half the solicitors income will be from the new rates and the cuts will be truly biting. This is against a backdrop over the next year of 70% of firms (as a minimum) being shut out of the duty system.
The key figure for me is this – the KPMG Report for the MoJ stated that the average net profit margin for a firm is 6.3%. The Government is cutting the fees to solicitors by 17.5%. How is that circle going to be squared?
There is no-one that I have heard of that thinks a firm can survive with only an own client contract. Generally speaking, 50% of a firms work will come from the duty rota. This tends to be a rolling matter as well – some clients are very loyal and will always use the same firm, some own client is a lot less firm (Jonny arrested for a TWOC on Monday who uses Firm A as duty may use that firm when he’s arrested for cannabis on Tuesday as the business card is in his pocket. When he’s arrested a few months down the line he may well go back to using the duty, so whilst the cannabis matter goes down as an own client, there is no great loyalty there.
The most important thing to remember is that barristers are parasitic on solicitors. If they go out of business, then they can’t instruct us. There work may go to another firm that will, but it is likely that it will go to BigFirm LLP who have a suite of in-house advocates.
Even if they survive, remember the profit costs. In twelve months time, the solicitor will have a further cut totalling 17.5% (actually more because of inflation – it may be that employees will have a pay freeze, but other costs – premises, stationery etc, will still go up).
For urban firms, by number of criminal solicitors:
1-5 : Profit margin – 4.8%
6-12 : Profit margin – 8.3%
13+ : Profit margin – 8.9%
Where will they make up the shortfall?
Impact on Barristers
AGFS will be moved to a system that is similar to the CPS fees (this is Option 2 in the consultation). The Bar Council had proposed a move to this (for some bizarre reason) and the MoJ have jumped on that (with some modification).
It is justified in part on the basis that “will simplify the scheme for the benefit of both advocates and the Legal Aid Agency (LAA)”. Frankly, if you find the present AGFS scheme complicated you really shouldn’t be allowed near a Court building. And the fact that the LAA feel that they will benefit from the simplification speaks volumes about their competence.
Differences between this and the CPS fees include a tapered daily rate and payment of special preparation where there are more than 10,000 pages of evidence. Of course, when comparing one to the other you have to remember that the defence will include at least two other hearings (paid at £146.50 by the CPS) and often more.
Helpfully, the witness uplift won’t apply to guilty pleas and cracks “in order not to create a new burden on advocates who would be required to provide evidence of the number of witnesses” which is very generous of them, as you can imagine.
Guilty pleas are paid at 45% of the trial rate and cracks at 80%. Full tables are set out below.
There are various calculations floating around the internet and I’d encourage you to do your own. When doing that, do it with a ten page case and then a case close to the threshold for the enhanced fee.
It is crucial to remember that cases are not briefed out at random. A one day shoplifting with 2 witnesses, 5 pages of witness statements and 1 page of exhibit pays the same as a two day benefit fraud with an overpayment of £25,000 and 450 pages. Which of those will be briefed out and which kept in-house?
One of the effects of contracting is to ‘centralise’ the work round the area of the office of a solicitors firm. Many areas will feed into one Crown Court and so one HCA/Employed Barrister should be able to cover all the PCMHs that go there. Even without that, it is likely that very few PCMHs will be briefed out (see the CPS at the moment).
Can a firm do all the PCMHs in house and brief out only for trial the night before (with exceptions for a very small minority of cases, generally the most serious, the most ballsaching and the worse paid)? Yes. This will only escalate. Again, they will know which cases are likely to crack, how long they will last, etc.
Being a lead junior will most often be better than being a junior alone (apart from Cat J cases) on cracks and guilty pleas. With a trial it’s more nuanced and some cases may pay better as a junior alone, sometimes not. Bear this in mind (and more importantly the referral fees issue) when thinking how many junior briefs will be given out and which kind.
It’s worth noting the refreshers (daily rate). They are not high, ranging from £258 for Cats E, F and G to £419 for A, J and K. These are all 78% or 79% of the current rate.
The MoJ say that this is, overall, a 6% cut for Graduated Fees. They haven’t shown their working on this, and haven’t said what data this is based on. Frankly, I don’t believe it when looked at over the range of trials and outcomes. Cats B and C seem to be the ones that come off least worst, but it’s still not great.
|Category||Page Cut Off||Standard||Enhanced|
|Category||Page Cut Off||Standard||Enhanced|
|Cat||Page Cut Off||Standard||Enhanced||Witness up-lift||Day 3–40||Day 41–50||Day 51+|
But even if the 6% figure is correct, this doesn’t factor in any change of behaviour of the solicitors.
Not much, but admist the gloom :
- either way elected cases where the Prosecution offer no evidence post PCMH on all counts are now counted as cracked trials. Note – this doesn’t apply if there are any guilty pleas or it’s dropped at PCMH (probably), or if the indictment is stayed. It’s also a bit of con on solicitors
- return of Cat G (and less significantly, Cat A) but again note this doesn’t apply to the refreshers, only to the brief fee
Date of Implementation – tbc (depending on the outcome of the VHCC boycott and strike). Likely date is the summer, probably the end of July (look for the date when Parliament goes into recess as a likely guide).
There is an immediate reduction in Certificate for Counsel from 20th March of 8.75% (which will be followed up next year with more of the same).
Other than that, there will be the indirect impact. Given that solicitors have had more than a 20% cut in the last few years, should the £50 minimum fee for appearances be reviewed? The fact that this hasn’t changed over the years, despite all the previous cuts is either a tribute to the solicitors in ensuring the future of the junior bar, or that they were taking a much bigger ‘cut’ than they should have been historically, depending on your point of view.
Impact on Solicitors
For cases under 500 pages PPE there is a staged and banded payment structure depending on the case and disposal.
|Offence Type||Pages of Prosecution Evidence|
It’s worth noting that there are banded rates between 1 and 500, so if you have 99 pages then there is a big incentive for a firm to have an extra page of NAE, but none on the advocate (unless they are in-house). This may cause tension with advocates chasing the CPS for NAEs when it makes no difference to them or the CPS advocate. Further tension may be with dishonesty offences with the value of any fraud.
For over 500 pages, there is the current system, with a 17.5% reduction.
There are fixed fees depending on the type of hearing. There is a provision for a non-standard fee if sufficient work is done on a case to take it over the threshold (with a reduction of course).
|Case Type||Fixed Fee||Escape Fee|
The Duty Solicitor system at Court stays on an hourly rate (with 17.5% reduction) and that same hourly rate applies for the Mags Court non-standard fee,
There will be one fixed fee in London (and another outside of London), with an escape fee
|Area||Fixed Fee||Escape Fee|
The escape fee will kick in once the nominal hourly rate (with the 17.5% reduction) hits three times the fixed fee.
New Contracting Model
The government magnanimously backed down on PCT. Or so they claim (and the Law Society trumpeted).
When they did this they replaced it in the summer with the idea of ‘dual contracts’. This would mean that there are two species of solicitors – those who can only do own client work and those who can access duty work as well:
- Own Client Contracts – unlimited number
- Duty contracts – fixed number (525 in total)
There are 97 areas (65 outside of London and 32 in London – broadly the Boroughs). The duty work will be divided equally between the firms with a duty contract, irrespective of the size of the firm. This is a large change, as is recognised at para 41 – in that duty work will now “allocates to firms, not individual solicitors, and therefore breaks the link between a firm’s number of solicitors and the amount of work they receive”.
These will be allocated to a total of 525 providers – an average of 5.4 duty providers per area. This does not mean that there will be 525 providers with a duty contract, as it is anticipated that there will be many firms that get contracts in more than one area (particularly in London for obvious reasons). There is to be a cap on the number of Duty Contract bids a firm can put in for one area, but the details are to be announced (in any event, there are possible ways round this depending on how tight the rules are drafted).
The work will be allocated as now – by a duty rota. There will be far fewer providers and so someone on a contract will get a far higher access to work (see table below).
As well as a traditional law firm, bids can be entered by an ABS or other organisation leading the bid with 2 (in urban areas) or 3 (in rural) organisations to act in partnership. This could presumably be non SRA (or even LSB) regulated. There has to be a contract in place between the parties at the time of the bid.
These organisations (or consortia) will be able to have up to 25% (by amount) contracted out to agents. It’s not clear if that is the current definition of agent or whether Crown Court advocacy will be included (presumably not, or it could get very messy for the bar, or very good, depending how it pans out). The MoJ acknowledges that most chambers cannot be a lead bidder. It is not clear whether they could be part of a consortia bid without SQM or Lexcel. This is not such a major problem as a contract may be awarded subject to getting SQM/Lexcel.
The contract will last for 4 years, with the MoJ have a one year extension if required.
The process is not completely clear as yet. Firstly you have to get an Own Client contract, presumably in the same way as you do now. The requirements will include:
- hold (or commit to acquire within a specified time period) a relevant quality standard (either the LAA’s Specialist Quality Mark or the Law Society’s Lexcel standard or an equivalent quality standard agreed by the LAA)
- being regulated by one of the legal sector regulators and have approval by the contract start date
- Applicants must have or commit to have and use a CJS Secure Email Account
There will be a requirement of one full time supervisor be employed and a ratio of supervisor to caseworker of 1:4. It’s not clear exactly what this will mean (whether a supervisor must be full time etc) but this is the only potential barrier to a sweatshop.
After that, to get a duty contract you have to apply. There will be an initial sift, followed by a second round against a set of criteria. What are the criteria? We don’t know for sure as the MoJ are still working on it.
We do know that it will include the following:
To apply for a duty contract you must have an office in the area (or a neighbouring area in London where you are bidding). If that is right, it will stop multiple speculative applications (now there is a requirement to have an office in the area or commit to open one).
The current ‘neighbouring areas’ rule in London will apply (but modified). You can apply in your ‘home’ area and (broadly speaking) any of the areas that neighbour yours. Unlike currently, you won’t necessarily get access to the duty work in all those areas.
Requirements that they are ‘considering including’ :
- Experience of staff;
- Experience of the management team in managing a comparable service
- Experience of having delivered comparable volumes of work
A shortlist (the length of which depends on the number of contracts) will be drafted and ranked with the top X getting a slot.
London and surrounding areas:
|Area||Number of Contracts||Area||Number of Contracts|
|Waltham Forest||9||West London||5|
April 2014 – Own Client contract period opens.
Duty Contracts will be awarded by early 2015. They are stated to start in June 2015 (although 14th July 2015, as the end date of the current contracts, is more logical. The stated aim is for the tender for Duty contracts to start in July 2014. God knows how this is feasible. The closing date will be September 2014. It would not be the shock of the century if this got put back.
Wither the PDS?
The MoJ say that they are keeping the PDS as a benchmark of quality (cue much merriment). It is generally felt that they are being kept in case of market failure…
Is market failure likely?
All is rosy “Whilst legal aid provides a source of guaranteed work for advocates, and there will be a small proportion of cases that require very experienced advocates, a lot of the work is more straightforward and able to be handled effectively and competently by relatively junior advocates. As long as that legal aid work continues to be performed to the required standard, some suppliers leaving the market is not necessarily a concern.”
Prison Law and Appeals & Reviews
This is now (potentially) a completely separate area. Providers can apply for a contract for either or both.
Both (but prison law especially) are nationwide. This is not such a problem as they seem to still be paying travel.
These will be paid as now, but with a 17.5% reduction.
 Criminal Legal Aid (Remuneration)(Amendments) Regulations 2014 –
 Even the MoJ accept later (p48, para 120) – “We do not accept that option 2 produces any significant cashable savings for the LAA. While the LAA does spend some time validating page counts, the requirement to validate PPE for all cases is estimated to occupy the equivalent of half of one full-time caseworker’s time. Even if this casework efficiency saving were a cashable saving it would not realise savings of anywhere near savings made by option 2 as proposed.”
 The figures for the refreshers may be a typo, and it should be higher to reflect that it is a more serious charge. It may not be however. I have emailed the MoJ to ask.
 This was obviously written before the recent events, but I’ve left it in
 Curiously it seems that Cat G pays less than Cat F for LGFS where pages are 0-100 and 401-500. I have emailed the MoJ as to whether this is correct.
 The exact details are in the 2010 GCC, but this is a rough guide to the categorisation
 Page 55
 p67, para 64
 Para 67, p67
 Page 53
 Page 45, Para 114