21st April 2013
Rt Honorable Sir Alan Beith, Chair of the Justice Committee, Houses of Parliament
Re. The Consultation Paper CP14/2013: ‘Transforming legal aid: delivering a more credible and efficient system.’
Dear Sir Alan,
I am writing an open letter to draw to the Justice Committee's attention the devastating effect the proposed cuts to legal aid and Price Competitive Tendering ('PCT') will have on the independent criminal Bar and Solicitors who undertake criminal work, as proposed in the Ministry of Justice’s Consultation Paper CP14/2013. This letter and the attached annex cannot address all of the issues without going into significant and lengthy detail. Those will be dealt with in my and my Chambers consultation response.
The purpose of my letter is threefold:
First, I invite the Committee to consider the impact of these proposals before they are implemented.
Secondly, I would invite you to ask the Secretary of State for the Ministry of Justice, the Right Honourable Chris Grayling to give evidence to the Committee and seek his justification for these proposals.
Thirdly, would the Committee hear evidence on these proposals from the respective professional associations, pressure groups and other individuals concerned and affected?
I would then invite the Justice Committee to report back to Parliament.
You will see that the present proposals are extremely serious. They should not go through via secondary legislation, given the disastrous effect they will have on the legal market, without critical Parliamentary analysis. I invite the Committee to consider these issues as a matter of urgency.
Neil Hawes QC
For the Attention of the Justice Committee, Houses of Parliament
Re. The Consultation Paper CP14/2013: ‘Transforming legal aid: delivering a more credible and efficient system.’
Neil Hawes QC
Charter Chambers, London.
The Annex accompanies my letter to the Committee.
The issues that arise from the present Consultation are varied and complex. This annex cannot address all of these issues without going into significant and lengthy detail. Those will be dealt with in my and my Chambers consultation response.
The criminal Bar and Solicitors are presently having to complete submissions. We are being required to do so in a bitterly short period. I can say that even on a simple analysis of the proposed cuts and tendering process, which are two quite separate proposed attacks, both are fundamentally flawed. Each will cause devastating irreparable damage to the legal profession and therefore the criminal justice system.
We live in austere and difficult times. The public purse must be used properly and efficiently. No one could sensibly argue otherwise. The debate about the future of public legal aid funding must be considered against the following background: Both branches of our profession have already contributed significantly to the reduction of the legal aid costs to meet the economic situation the country finds itself in. From the Bar's perspective, with which I am more familiar, over the last three years we have sustained a number of cuts in legal aid fees. These cuts were made to fees that had not seen any increase at all in line with the standard of living since 1997. Solicitors too have suffered similar cuts. The precise calculation of cuts in legal aid is complex. There are a number of reasons for this: it’s dependent on a two different fee structures, the Advocate Graduated Fee Scheme (‘AGFS’) and the Very High Cost Case (‘VHCC’) regime (A VHCC case is one that has to meet certain criteria, one of which is that is expected to last 60 days or more at trial. It is reserved for the longest and more serious cases) and the levels of remuneration per case vary. By way of example however most recently, in April 2010 AGFS was cut by 13.5% staged over three years, then in October 2011 further cuts were introduced by the movement of certain cases between fee categories, murder being one of them. There is no question however that cuts have been made, and the sacrifice made by the profession.
If the proposed cuts and PCT are implemented it will mean there will have been on certain offences a near 60% cut in legal aid fees since the economic crisis started. This will result in the loss of the independent criminal Bar and a whole sector of solicitors firms who work tirelessly undertaking an undervalued but essential service to the State. The proposed cuts, coming as they do on the back of those the profession has already sustained will make many Chambers and solicitors’ firms no longer economically viable businesses. I do not understate the position when I say that both branches of the profession that practise in criminal law are now in imminent danger of collapse.
What does this mean?
There are a number of levels on which the proposals will impact.
It will mean chaos to the court system.
It will mean the loss of livelihoods for many, not just the lawyers directly effected but the staff that we employ. That maybe regarded by the general public as a consequence no different to many others in this country who have already had to go through that appalling experience. Although I do not belittle in any way the roles of many others in this country whose jobs keep the fabric of our society running at this time, it is a fact that our professions do have an important role. For example, the independent criminal Bar still prosecutes approximately 70% of Crown Court cases. The Bar, in particular, are usually called upon to prosecute and defend in the most serious of criminal cases; murder, terrorism, gang related violence and serious fraud. Our job is to ensure that the guilty are safely and properly convicted and the innocent are not. Our duty to the court ensures we assist and where necessary protect victims, witnesses, defendants and through that process the wider public. It also means we can and do act without fear or favour to protect the interests of individuals against the State. The Bar cannot do its job without committed industrious and dedicated solicitors. One hopes that most informed members of the public would – despite our present economic constraints and the difficult choices that have to be made – regard our role in the criminal justice system as being an important consistent element of a civilized democracy. The cost of legal aid, in the context of the Government’s overall spending is not that great. That is not to be complacent about the costs or to ignore the need for continued efficiencies within the system but they must be seen in context.
The Consultation has raised a number of issues which I have stated are too numerous to deal with in this annex in any detail, but I feel compelled to deal with four specific matters:
There are so many points that can be made about this proposal that its difficult to know where one should start, so I shall make only one broad point. PCT at its heart is designed to remove any freedom of choice from the individual caught up in the criminal justice system. Only the limited number of successful bidders who obtain contracts under PCT will be eligible to do the work and their work will be guaranteed to them. This will be so without any reference to the individual concerned who might, one would have thought, have an interest in who will represent them and the service they will provide. The provision of poor representation will have no consequence and outstanding representation will be of no benefit to a PCT provider.
The number of contracts being offered under PCT is a significant reduction on the present number of firms that presently operate in this market. PCT therefore will mark a major reduction in market capacity. It is anticipated PCT will attract large scale bidders, like G4S and others who will have the capacity to bid for all contracts in all areas. If that were to take place it will reduce yet further the number of actual providers in the market. In the very long term, with the loss of the established legal market of firms and chambers that presently exists it’s clear that a PCT based ‘competition’ could lead to the creation of a near monopoly of criminal defence services with one, two or three national PCT providers only. They will therefore be able to control the market. This would result in the actual reduction of any competition and pose a threat to geographical coverage.
There is a complete failure by the Ministry of Justice (‘MoJ’) to comprehend that many defendants choose their own representation because they trust them or because they are recognised experts in a particular type of criminal law, whether it is their solicitor or counsel. This is something that comes with the present market, freedom of choice and trust. Given this, the individuals concerned are far more likely to accept the advice they receive in such a relationship, and that in turn contributes significantly to the smooth running of the criminal justice system on a day to day basis in courts up and down this land. It is not ‘costed’ (in Government speak) but the consequences will become all too evident if PCT is introduced and at a time when it will be too late to reverse the damage. Choice and trust in the lawyer / client relationship means a number of things: If advice is tendered that they should in fact plead guilty it might be more likely accepted, a defendant might accept advice that he / she should not require so many witnesses to attend court unnecessarily or it might be that they should make formal admissions about certain facts to reduce the time the evidence will take in a trial. There are numerous other examples. All of these matters impact on cost in the system – which at the end of the day is the only concern the MoJ now appears to have. However in looking at cost, it has no regard to the value legal aid lawyers contribute to the system. Coupled with the proposed reduced financial ceiling for legal aid eligibility, Parliament must understand that for those not restrained there will be one law for the rich, one law for the poor and those in the middle will have no access to any form of legal defence at all.
‘Fat Cat’ Barristers
The use of the tired strapline that all barristers, and Queen’s Counsel in particular are 'fat cats' pollutes the legal aid debate. The MoJ uses it deliberately with that intention. We are an, ‘easy target’. It cannot have been a mistake in timing that on the day the Consultation was released certain parts of the press were redolent with the same old headline to soften up the public.
There are always extremes of earnings in any fee scheme. It is difficult for the MoJ to complain about one end of the fee spectrum when the scheme that remunerates those individuals is designed and run by the MoJ and the then Legal Services Commission (now the Legal Aid Authority (‘LAA’)). The legal aid fees paid to one Queens Counsel grabs the superficial headline but it deliberately ignores the underlying complexity of what those payments represent. They are at one extreme of the earnings spectrum from legal aid but are limited to a handful of individuals. They do not represent anywhere near the income of most rank and file criminal barristers – including in fact most criminal Queen’s Counsel - and it is notable that the MoJ has not provided any information as to mean, median or mode incomes for such practitioners. They most certainly do not serve as a justification for wholesale implementation of devastating cuts.
What, in fact, do these ‘headline grabbing’ payments really represent? They are payments for many hundreds of hours of work to anindividual who has worked for months and often years on a case and then represented the individual in court. It should not be forgotten that it is not the barrister who decides the category or size of a criminal case, but the State. Nor has the barrister designed the remuneration scheme that calculates the payment rate for the work being done. Indeed, in a VHCC case LAA will specifically sanction the work to be done, in advance, over a six to eight week period. They keep a tight audit control on the costs being incurred. If the work is not agreed in advance by LAA, it’s simply not paid. One should look a little deeper beyond these points: The fees paid do not show how much was recovered back to the legal aid fund from the defendant after the case was completed. They do not show the financial contribution a defendant might have made during the currency of their case. They do not show the payments made to the barrister are gross and include VAT, which is paid straight back to HMRC. They do not show how much the Barrister paid in tax to the State. Nor will they show how much the Barrister pays his Chambers, which in turn, leads to the employment of a number of other people. The list goes on and on.
The MoJ suggests that criminal Queen’s Counsel is regularly paid £150 per hour for their preparation. This is wrong. The figure quoted is a reference to an hourly payment in category 1 VHCC case, the most complex of cases. That fee rate is reserved usually for fraud or terrorism cases only. How often is that paid? In recent years LAA have very rarely made any case a category 1. Furthermore, the hourly figure quoted by the MoJ is not accurate. Since October 2010 the rate has been £145 per hour gross. The reality is that the most VHCC cases are those at category 3, which since October 2010, have paid a Queen’s Counsel £91 gross per hour for preparation and a junior advocate £61 gross per hour (when being led) or £70 gross per hour if alone.
Junior Advocates ‘Better Off’
It’s suggested that junior advocates will be better off through these proposals. No analysis of the figures to date by anyone has shown that suggestion to be correct, unless a client is pleading guilty. The impact assessment produced with the proposed reductions makes it explicitly clear that the re-arrangement of the fee structure is designed to reward more highly a guilty plea than at present. It is quite open about it, and it creates a perverse and deeply troubling financial incentive into the criminal justice system. The basic fact is a cut is a cut. The impact assessment makes that clear: For the Advocates Graduated Fee Scheme a decrease of £15m p.a is predicted, for VHCC cases a decrease of £20m p.a. and for cases where its proposed there should be the loss of two advocates (i.e. the most serious and lengthy trials), a decrease of £9m p.a. Overall that is a cut of £44m p.a. It is merely playing with figures to suggest these proposals will make any advocate ‘better off’. Instead the cuts will result in derisory sums of income for junior advocates in particular on which they will not be able to survive within the profession and which in no way adequately remunerates either the work they do or the responsibility they bear when conducting a trial.
Legal Aid: Is its Credibility in Doubt?
The Consultation has 'credible' in its title and with it the inference that there needs to be a realignment of the legal aid system to maintain public confidence. The Lord Chancellor in particular has invoked the old mantra that the system is broken because ‘the public foot the legal bills of wealthy criminals’. (Mr. Grayling’s foreword to the Consultation Paper, first paragraph)It is a further superficial headline that not surprisingly engenders – and is designed to engender - an understandable feeling of public resentment around legal aid. Yet again, it is designed to pollute the debate.
To qualify for legal aid any defendant has to satisfy strenuous means tests. These are devised and run by the LAA on behalf of the MoJ. Why if an individual is wealthy do they qualify for assistance? In most cases where they have any or any significant wealth and an acquisitive crime is alleged a court will restrain an individual’s assets. It means they cannot use their own money. They therefore qualify for legal aid under the rules designed by Government. Furthermore Parliament has by passing s.41 Proceeds of Crime Act 2002 prohibited individuals, when restrained, from paying their lawyer with their own money. This fact is omitted by the MOJ in any discussion.
Despite significant lobbying by the Bar Council, the Criminal Bar Association and others to remove this prohibition, it essentially will remain. Why? The purpose of restraint is to ensure the State can recover the money for itself, if an individual is convicted. This fact is always omitted from the public debate. If convicted, where does the individual’s money go? It is split three ways between HM Treasury, the Police and the Courts Service, and feeds into their budgets. It does not directly alleviate the legal aid cost or feature, conveniently, in the legal aid debate. Therefore legal aid appears to remain a pure cost to the State.
Now the headlines have moved on slightly. The Lord Chancellor proposes to marginally relax the prohibition on the use of restrained assets. Unfortunately, it still does not address the real problem. What is proposed will only allow an individual to make a contribution to their legal aid. They will still not be allowed to pay for their own defence entirely which, if the system does genuinely require realignment for the purposes of credibility, the public might have expected. There will continue to be, by design, a dependency on legal aid. It will not lift the burden on the legal aid system, in the way both branches of the legal profession have asked for, for years. The proposals are not surprisingly in the MoJ’s interest: LAA will obtain the contribution to the legal aid, and the restraint order will preserve the balance of the individual’s assets for the State to take at the end of a case, if there is a conviction. When this issue is looked at with these facts in mind, is there really a driving need for realignment or lack of credibility in the system that Mr Grayling suggests based on wealthy criminals getting legal aid? There is not.
The present proposals in the Consultation Paper are extremely serious. If implemented in the way proposed, they will destroy an integral part of this country’s criminal justice system. I urge the Committee to undertake a critical analysis of these proposals, and to invite the Secretary of Justice to appear before it to justify them.