Lord Carter?s government-commissioned review of criminal legal aid will ?drive small practices out of business? if they fail to merge, solicitors have warned.

The proposals, published last week, will ?sound the death knell? for sole practitioners in criminal defence work, and ?marginalise if not exclude? ethnic minority firms, some lawyers predicted.

The Black Solicitors Network (BSN) also accused the Legal Services Commission (LSC) of ?covering up? an independent assessment of the impact that price-competitive tendering would have on ethnic minority firms. It said the research was meant to be published by the LSC last October, but has ?never seen the light of day?.

Under Lord Carter?s plans, firms will be bidding against each other for criminal defence work by 2009. Firms will be encouraged to consolidate so that they can take on large volumes of work. By 2009, the report predicts there will be a ?smaller number of larger, more efficient, good-quality suppliers who profit from increased volumes of work, delivered at lower cost?.

The reforms, if accepted by the government, will begin with fixed fees for police station and magistrates? court work, with successful bidders also taking on related Crown Court work, which will be paid with a graduated fee. In a second phase, firms that can show they have increased capacity will then be awarded more work, before tendering on the basis of price competition is introduced.

Lord Carter said: ?The key is to get capacity. If we introduced price-competitive tendering at this moment, there would not be capacity to respond to it. We are going in the early stages to ask people to come forward and tell us how much work they want to do, and we want to start to award this on size of firms. We will then move to price-competitive tendering.?

Lord Carter said that support would be given to help suppliers consolidate or form consortia. He admitted that there would need to be some ?carve-outs? to the scheme, and said he had ?taken on board? the Law Society?s concerns over the effect on ethnic minority firms, which tend to be small practices. He added that in rural areas, higher fees may be needed to ensure provision.

Lord Carter said: ?This is not a cull. It is inviting people to rationalise? At the end of this the professions will look different, but we want to get there in a very measured way.?

The peer has been negotiating with the Law Society and Bar Council in the run-up to publication. Law Society President Kevin Martin said he was pleased Lord Carter had recognised that the market approach would not work in all circumstances. The Society would need to be certain of the full financial implications for the viability and sustainability of the supplier base before agreeing to the scheme, he added.

Ian Kelcey, chairman of the Criminal Law Solicitors Association, said: ?The intention seems to be to drive smaller practices out of business. No account has been taken of the fact that one size does not fit all.?

Sandra St Luce, executive committee member of the Solicitors Sole Practitioners Group, said: ?This sounds like the death knell for sole practitioners? Rather than joining bigger firms, sole practitioners will just withdraw [from this field].? Group chairman Michael Barrow added that large firms would be forced to delegate to unqualified staff to make work profitable.

BSN spokesman Michael Webster said: ?This will marginalise, if not exclude, small firms, particularly BME [black and minority ethnic] firms. You cannot have a meaningful debate on this without seeing the independent report [on how this will affect such firms], which has been completed but the LSC has still not released. I question whether the Carter review team has seen it.?

An LSC spokesman said a final version of the report had not yet been ?agreed? with the research company, but it would be shared with Lord Carter and published.

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