Legal Aid

Eye of the storm

PUBLISHED September 9, 2006

Having presided over a controversial ?1.5 million review of legal aid, Lord Carter is to some lawyers a marked man. Unbowed, he tells Rachel Rothwell why his proposals are workable

Lord Carter could probably be described as the villain of the hour among legal aid lawyers. By his own admission, his review of legal aid procurement published in July will immediately cause 400 firms to ?disappear? from criminal defence work, while family and civil practitioners have dismissed the new fixed-fee rates on offer for work as ?risible? (see (2006) Gazette, 20 July, 1).

Some larger criminal firms have welcomed the proposals ? which are based on the theory that bigger is better ? but small firms, and ethnic minority practices in particular, are strongly opposed and only too eager for the chance to take legal action.

But if some solicitors might be thinking of using Lord Carter?s picture as a dartboard, he does not seem too concerned. Sitting in his office at Sport England, of which he is chairman, he is relaxed and ebullient ? possibly buoyed by the knowledge that this difficult review, which overran by more than six months, is finally finished.

During the past year he has travelled the length and breadth of the country, spending time in police custody suites and talking to professionals from all parts of the criminal justice system in what he has dubbed an ?iterative? process. Indeed, as he says, ?you don?t get a one-kilogram review document if you?re not trying to have a dialogue in getting there.?

So how has the experience been? ?One of the pleasures of it was dealing with some very clever people,? he says. ?There are a lot of concerned and committed lawyers for whom legal aid is their livelihood, so they have strong views, mostly well informed. But that does not mean it was not frustrating ? there was a lot of whingeing, because everybody is dissatisfied; solicitors, barristers, government and taxpayers who think ?100 a head spent on legal aid is too much.?

Lord Carter?s proposals have been welcomed with open arms by the government, which put them out for an immediate consultation period ? much of which falls over the parliamentary recess ? with an October deadline.

The timetable envisaged in the review is tight. The first stage, which includes fixed fees for police station work and civil and family work, and graduated fee schemes for litigation and advocacy Crown Court work ? with solicitors paid less than barristers ? is scheduled to be introduced by next April. A new fee scheme for the magistrates? court will come into force the following April. Contracts will be awarded to those with the biggest capacity, subject to quality checks, with a move to contract tendering based on ?best value competition? by 2010.

Why so much haste? Solicitors will need time to merge and restructure themselves into the larger, more efficient firms Lord Carter deems necessary to make the new rates pay, and there is no sign of such mergers occurring yet. There is also the small matter of the constitutional affairs select committee, which recently announced that it would set up an inquiry into the impact of the review on access to justice and certain sections of the supplier base. How can firms begin to merge and take on staff on the basis of proposals that may not come to fruition?

Lord Carter says he has no problem with the committee?s decision to investigate the proposals. But he still thinks firms should press ahead. ?Why would a longer lead-in be better?? he queries. ?The outline of the proposals has been there since February. We have allowed 14 months for people to be thinking about this. We thought it was better to just get on with it. We found some very entrepreneurial people out there, and it is clearly do-able.?

Lord Carter stresses that solicitors have already had a lot of input into the review. ?We certainly didn?t end up where we started,? he says. ?We had a lot of representation, much of which we took on board. If it had only been about money, I could have gone down the public defender service route, like in the US and France, where there is no choice for clients. At the other end, we could have preserved indefinite choice, but that wasn?t going to work.

?What this is about is getting firms to adopt a 20th century work model. Solicitors have only been allowed to have more than 20 partners since the 1980s. The way they are structured is a 19th century model. Commercial law has moved quickly beyond that, and we don?t see why we can?t seek efficiencies from other suppliers. We can?t pay for a 19th century model in the 21st century.? He adds: ?The question I would pose is: why should the suppliers of legal aid not be asked to make themselves as efficient as they can be? People accept this as a direction of travel. There has not been a huge amount of dissent.?

But one section of the profession that has vociferously protested has been ethnic minority lawyers, who maintain that, as so many of the small criminal law firms ? in London at least ? are owned by ethnic minority lawyers, they and their clients will be disproportionately affected. They say that breaches the Race Relations Act 1976 ? a claim for which Lord Carter has been careful to instruct his own lawyers.

He says: ?We have taken advice, and we believe everything we are recommending is lawful. Is legal aid being run for the providers, or the people in receipt of it? If you are trying to change everything, you can?t leave something unreformed. The test is the public interest. Everyone must be treated equally. But this has exercised us a great deal and we have put in as many safeguards as we can.? Those safeguards include a requirement for suppliers to have an equal opportunities policy and to promote diversity, and monitoring ethnic data to check that ethnic minority lawyers who join larger firms do not encounter discrimination.

Ethnic minority firms have argued that not only the emphasis on size, but also the restriction on the number of cases a firm can take on from outside its police station contract area will be detrimental to them. What is the logic behind limiting the number of cases that can be done outside the area to 20%? ?We want to preserve the block of work in one area, to make things more efficient,? Lord Carter explains. ?People might want to build an office somewhere else, and so they will start by building up 20%.?

He adds: ?It?s true that, say, the Somali community in London is not all based in one place, and there?s not enough work in one area. But a firm with a police station contract might sub-contract this work to another ethnic minority firm that specialises in it.? Will the firm with a contract not want a cut of the smaller firm?s fees for passing on the work? ?We will have to see how firms work that out between them,? he says.

Practitioners have also been worried that the new fixed fees for police station work could curtail solicitors? ability to defend their clients. With travel and waiting times included in the fee, police would have an easy weapon with which to tackle what they might consider to be an overly combative lawyer. Solicitors could find themselves kept waiting for hours while their already tight profit margin slips depressingly away.

Lord Carter thinks this unlikely. ?What happens in police stations is something that will need to be watched. But it will be hard for the police to do this systematically. The bigger firms will be able to absorb the costs if it happens. If people become aware that a certain police station is doing it, they will charge a higher price for that station.?

But what if there are other, less diligent firms willing to take their place at a cheaper price? ?This notion that there is a group of solicitors out there who will do lower-quality work at a lower price ? that is what peer review will prevent. It would be apparent if that happened. The Law Society must ensure it does not.

?There is a very small percentage of solicitors actually doing police station work anyway. Indeed, a lot i
s subcontracted out to retired members of the Metropolitan Police. It?s selective arguing ? the idea of the dedicated, up-all-night solicitor is not how it seems to work to us.?

When it comes to the level of fixed fees being consulted on, solicitors across the legal aid spectrum are anxious. But in Lord Carter?s view, that is not necessarily a bad thing. Taking family fixed-fee rates as an example ? where leading practitioners have said their profits could be slashed by two-thirds ? he says: ?The rates on offer are adequate, and if firms make the right efficiency savings, they will be good. If the rates were good for firms as they operate at the moment, I would have failed.?

Another issue that has solicitors biting their nails is the prospect of areas that were previously more profitable ? and therefore enabled firms to take on the less profitable work as well ? no longer being as lucrative. That includes very high-cost cases, Crown Court work, and child care cases. But Lord Carter is vehemently opposed to this kind of cross-subsidy, which disguises where the wrong rates are being paid in other areas.

He says: ?The fees put forward are the right prices ? they were made cost neutral. At these prices, well-organised firms can get decent returns for partners. But they have got to get bigger.

?If we haven?t got the price right, there will be an advice desert and we will have to pay more. It?s up to the lawyers to make the case. But we want fair pricing in all categories, rather than cross-subsidy. If we haven?t got it right in one category, we should put it right. Why don?t we all get efficient, and then lawyers will be in a stronger place to argue for what the right money is? All we have said is: lawyers, be a little bit more in the 20th century.?

Speaking of money, Lord Carter?s review itself came in at a cool ?1.5 million, as well as missing the Lord Chancellor?s original January deadline by some months. How does he justify the cost? ?It took a year,? he says. ?But people would not have been happy if we had just said ?you need to marketise?. All the way through the review, people kept asking what it would mean for them. So we got the figures, so we could have a debate based on fact. We moved from the general to the specific. One of the challenges everybody faced was the lack of good data. And we were keen to get that, and show it to people.?

He adds: ?The review will save ?100 million a year. That means it has only cost 0.15% of what it will save, for something so important.?

Around the time of the interim report, there were rumours that Lord Carter regretted taking on such a daunting task ? in which it is impossible to please all sides ? despite having completed 11 other government reviews. Did he ever wonder what he had let himself in for? ?From the start,? he grins. ?All the way through, I would have meetings with people, and they would put forward their views. Then at the end they would come up to me and say they couldn?t believe I had taken it on ? I must be a madman.?