MINUTES OF EVIDENCE

TAKEN BEFORE

CONSTITUTIONAL AFFAIRS COMMITTEE

IMPLEMENTATION OF THE CARTER REVIEW OF LEGAL AID

Tuesday 30 January 2007

ALISON HANNAH, RICHARD JENNER and ADAM GRIFFITH

DAVID EMMERSON, RICHARD CHARLTON,

DAVID JOCKELSON and ROY MORGAN

Evidence heard in Public Questions 174 - 233

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Constitutional Affairs Committee

on Tuesday 30 January 2007

Members present

Mr Alan Beith, in the Chair

David Howarth

Mr Piara S Khabra

Bob Neill

Julie Morgan

Keith Vaz

Dr Alan Whitehead

________________

Witnesses: Alison Hannah, Director, Legal Action Group, Richard Jenner, Director, Advice Services Alliance, and Adam Griffith, Policy Officer (Legal Services), Advice Services Alliance, gave evidence.

Chairman: Good afternoon and welcome. We are very glad to have the benefit of your advice and experience. First, we should declare any interests we might have around the table.

Bob Neill: I am a non-practising barrister, formerly dealing with criminal work.

Keith Vaz: I am an employed barrister but I do not do legal aid.

Q174 Dr Whitehead: In 2003-2004, we conducted an inquiry into the adequacy of civil legal aid and we did find that there was substantial evidence still of unmet demand but, at the same time, the LSC has announced with some pride, it is fair to say, that more legal help has been provided to more people last year in particular than in any other year since 2000. In the light of that announcement and other information that you have, do you think there are still civil legal aid advice deserts and areas of unmet need? I think they were described in the House this afternoon as possible bare patches. Is it your view that there are deserts or bare patches or simple areas of under-watering?

Richard Jenner: Obviously we welcome the increase in numbers and that has helped. It is worth pointing out, though, that that increase was probably largely due to two factors: one is the inclusion of help provided under CLS Direct, the telephone service, and also, if you look at the figures closely, there has been quite a significant increase in the number of matters dealt with by the not-for-profit sector, which is partly the result of an increased number of contracts to that sector but mainly we think the result of improvement in the sector's performance. Those are probably the two main factors driving the numbers up. We are not sure that the debate about advice deserts and the use of that term is necessarily constructive. Some of the debate has been conducted in quite an anecdotal way, we think. We are clear that provision, especially in many categories of social welfare law, remains very patchy across different areas of the country and in some areas of the country remains fairly poor. Even where there are providers, they frequently lack capacity under their contract to deal with demand in their local area. There is also some research evidence that particular groups in the community, for example black and ethnic minority communities and young people, face difficulties in getting access to legal advice for reasons we do not entirely understand and are quite complicated. Our concern is that if you look at the current Reform proposals, which have not been tested and in our view are not based on any firm evidential base, they could run the risk of reducing access to justice to some of the most vulnerable clients. We have made a written submission to you. Could I briefly refer to the centre of our submission? ASA looked case lengths in not-for-profit sector contracts over a one-year period originally, and we have updated that since. That was looking at all cases conducted under contract by advice agencies. They showed that there was a number of factors that tended to make cases longer. It is worth briefly going through them. Some cases take longer because of the type of case they are; for example, multiple debt cases, welfare benefit appeals, unfair dismissal, discrimination and employment cases. In other words, matters that you might think are a little bit more complicated take longer. There was clear evidence that cases for certain types of client take longer, especially ethnic minority clients, and to a lesser extent some evidence that the cases of some clients with disabilities take longer. There was evidence that case length was at least in part related to location and particularly that cases in London take longer. Again, perhaps unsurprisingly, where more work is being done for clients, that takes longer. If you like, the greater the degree of intervention by the adviser/lawyer on the client's behalf, the work will take longer. There was some evidence using the LSC's own outcome codes that where cases took longer, actually better outcomes were achieved for clients. Our concern is that the proposed scheme for fixed fees - and I should emphasise here I am particular talking about social welfare law cases - will create a disincentive for firms and for agencies to take on longer complex cases or cases for clients where the work may take longer and in fact create an incentive for people just to do easy cases for easy clients. I should emphasise that we are particularly concerned about the effect that will have on black and ethnic minority clients. It is worth pointing out that in London, where we think there is a link between long case lengths and black and ethnic minority clients, 74% of legal aid clients are from black and ethnic minorities compared to 38% national average, but the regulatory impact assessment suggests that 68% of London providers will suffer a drop in income compared to an average of 38% of providers nationally. We are quite concerned that these proposals will have an adverse impact on vulnerable clients.

Q175 Dr Whitehead: If I could perhaps paraphrase some of what you have been saying to us this afternoon, your suggestion is that rather than, as it were, advice deserts existing, there are certain plant species within the environment that are under threat and may have slow growth or no growth?

Richard Jenner: That is what I am saying. Again, trying to remain brief here, there is a risk that the admirable desire to get the number of people helped up, which the Commission is committed to and we would fully support, will be achieved only at the expense of dumbing down the system.

Alison Hannah: I want to make a point about the numbers because that was one of the things you mentioned in asking the question. The numbers are interesting. It is quite difficult to get to the bottom of the
numbers. I was interested in the last annual report of the Legal Services Commission where they said that the number of matters started had increased. That is interesting because CLS Direct has of course taken over part of the service and has helped a number of people but the categories in which CLS Direct advise was also reflected in the number of face-to-face figures rising, particularly for not-for-profit. In debt, employment, housing, welfare and benefits there was an increase both in face-to-face and in CLS Direct, which to me suggests that there is an element of double counting, which really makes sense. You ring CLS Direct, you get some advice, then they refer you elsewhere for some further advice. I am not sure whether the numbers are quite as good as claimed. Obviously it is good that more people are being helped. The second point is: is it more people that are being helped or is it more recording of the issues? You touched with Professor Ed Cape earlier about: what is a case? Also, in one of the previous sessions you were asking about some Scottish research. What is interesting there is that that seemed to find that fixed fees led to an increase in the legal aid budget because solicitors then split the cases, and so they would record different cases for the same person. Whether more people are being helped or more cases are being resolved is a bit of a moot point. The figures are not quite as clear as you might think they are.

Q176 Dr Whitehead: Could I seek some clarification on that? That seems to me to be rather an important point, particularly in terms of people who are ringing up a service and then seeking face-to-face advice perhaps directly as a result of ringing up for the advice in the first place. Treating those as separate episodes, as it were, could be very misleading. Do you have any evidence, other than supposition, that this might be the case and that that is occurring or is it possible to make that inference by comparison of the figures, for example?

Alison Hannah: No, I have not been able to make it from an analysis of the figures. I think that would be quite difficult to do. I have heard from a solicitor that it can happen, so that a housing case can also be a homelessness case; it might also be a housing benefit case. There are ways in which it can be done. I am not saying this is at all a wrong practice. I think it is just a question of how you define a case. It may be a consequence if fixed fees are going to lead to less income that there is going to be a more determined effort to maximise payment for work done that might involve classifying things as separate cases whereas previously you might not.

Q177 Dr Whitehead: You speak about a wider basis but is there not a utilitarian argument that actually this is the greatest happiness for the greatest number and that therefore it is reasonable policy to concentrate on numbers, even if some cases are disadvantaged?

Richard Jenner: That is not what the Government is saying. It is worth saying that if it is reasonable - I do not think it is - it is not what the Government is saying that they want to achieve. They claim that the proposals will ensure that excellent services remain available to all. Our view is that it is very important that you do not lose the ability to undertake what are often quite cutting-edge cases involving issues that may, for example, clarify whether particular local authority practices are lawful or unlawful. Some of these kinds of cases that we are talking about actually have impact beyond the individual clients. It is important, in our view, that the scheme continues to have the capacity to allow that kind of work to be done. We appreciate there is a balance to be achieved. Ideally of course across the country you would have a spread of providers who are doing fairly straightforward cases and providers who have the expertise to do more difficult cases. Unfortunately, you do not have that at the moment, so there is a degree of lottery code to it, but we would not support coming down on the side of going for the cheap and cheerful and the greatest number.

Q178 Chairman: Can I clarify that for a moment? If you came across a case which, let us say, was fundamental to the issue of what constitutes medical or personal care for the elderly, the sort of case that we have had, and you decide at the advice service level that this is really pretty major and it is the one you want to take further, maybe you have to chance a bit more of your own money up-front and take it further? Presumably, once it gets to higher levels in the court system, there must be some way in which funds can be attracted to resolve it, must there not - once the local authority appeals against an adverse decision, for example?

Richard Jenner: If it goes to the higher levels, yes, you can apply for a certificate. The assumption that anyone can do this stuff is simply wrong. In an area, for example, where there is reasonable provision, and there are some areas where you would be lucky to find someone with the expertise to take this work on and that in itself is a problem, what has tended to develop within specialist services is a certain degree of niche provision. You have maybe a firm or a law centre that specialises in doing those more complicated community care cases and other providers refer to them. The difficulty with these proposals is that those agencies that only specialise in that more complex type of case or whose services are directed, say, to a particular ethnic minority community, will have a real struggle to be able to make that work within the fixed fees because basically the fixed fees will not cover the true cost of the cases. We do not think it is healthy. I think what the Government wants to achieve is basically to say that everyone should be doing a bit of everything and it will balance out by swings and roundabouts. We do not think at the moment the system has the capacity, the spread of expertise, for that to happen. What is far more likely to happen is that those higher specialist agencies will be forced and they will have to start taking on simpler cases in order to make the swings and roundabouts work. There will be clients being pushed from pillar to post and you will not be able to find anyone who is prepared to take them on. It may end up being dealt with by agencies that are not funded under the legal aid scheme but that may well not have the expertise to get the client the best service possible.

Q179 Dr Whitehead: You mention in that context the increased numbers of people who are approaching independent advice centres for help. Do you think that is directly related to the reduction in solicitors' firms holding civil legal aid contracts? In any event, do you think that advice centres have the resources to deal with those larger numbers of cases? Particularly in terms of your last comment, should that further increase as a result of further changes and is the situation going to get even worse in terms of ability to cope?

Richard Jenner: I do not think that the increase is particularly due to solicitors dropping out of legal aid, although that is clearly happening. In fairness to the Commission, it is more because they have made a commitment to funding agencies to do that work and agencies have, after a period of transition, improved their performance under contract. That is the main reason why that work is going up. There is, however, an issue about closures of legal aid practices. What does happen certainly - it is anecdotal evidence through feedback rather than any clear research that I am aware of - from the feedback we get is that increasingly clients, for example with family problems, end up coming to the door of advice agencies because they are not finding it as easy as they did before to find a solicitor, certainly locally. Agencies cannot take on that kind of work. They neither have the capacity nor often the expertise to do that. There is that issue. Similarly, looking at it the other way, for people who come to advice agencies in some areas, it i
s not as easy to refer to a solicitor as it used to be because the local supplier has stooped doing legal aid work. It has an impact that way, but at the moment I certainly do not think we are absorbing work that would previously have been done by solicitors.

Adam Griffith: There has been very clearly a change in terms of what we call the categories in social welfare law, particularly debt and benefits where there has been a considerable reduction in the number of solicitors' firms doing that type of work; they have dropped out. There has been a shift so that, over time, debt and benefits in particular have become overwhelmingly concentrated in the not-for-profit sector. Now, we are talking about 70% to 75% of cases in debt and benefits actually being done in the not-for-profit sector. When contracting started, essentially solicitors who were doing legal aid work could sign up to do as many categories as they wanted, and they gradually dropped the ones that they did not want to do or lost the expertise to do, and so on. Debt and benefits went in particular. Housing is now something like 60% in the solicitors' sector and 40% in the not-for-profit sector. The balance used to be more highly with solicitors, so there has been a change. Going back to the advice centre questions, the problem that we have is: what are you counting? You could have a firm that is still doing legal aid but they have cut down and they are just going to do matrimonial and crime. Do you count them or do you not count them? Do you count matrimonial and civil work or not? Probably you do not. I think there has been quite a clear shift and the solicitors have said that basically they are not going to do some of that social welfare stuff and that they will leave that to the not-for-profit sector. It seems to me that there is a very real risk - we are guessing now and this is crystal ball stuff - that that will be accelerated if solicitors' firms face the prospect of doing work under a fixed fee that is significant lower than the tailored fixed fee they had worked on before and many of them will stop. They will say, "We will not do this and we will not do that. We will concentrate on the ones where our fees are closer to what we are going to be paid for". You could end up with the same number of firms doing legal aid but half the number doing housing work, or half the number doing employment. We will see and it will obviously take some time.

Q180 Julie Morgan: This is a follow-up question. In parts of rural Wales it is quite hard to get specialist advice on housing, debt and welfare benefits. What tends to happen is that a client will go to a CAB which has a contract with the LSC or to a solicitor who has a contract in one bit of work, but they are backed up then by the Wales Specialist Support Service to support them. How do you think that sort of arrangement would be affected?

Richard Jenner: As you may know, the Specialist Support Service is currently still under review.

Q181 Chairman: We hoped that we had saved them!

Richard Jenner: Obviously we support them. We think precisely one of their values is to provide that back‑up and particularly in areas where provision on the ground is a bit thin. That is why we want to see it continue. We are hoping that the Commission will, in the end, take the same view.

Adam Griffith: In Wales, there is a serious problem with the lack of supply, as we understand it. The Commission and the Assembly Government have recently published a Strategy for Wales, as I am sure you know, which actually said that in their view the majority of social welfare law advice in Wales should be provided over the telephone. We think that this raises a number of issues that this committee has highlighted previously: the danger of drifting into a two‑tier system where some people get advice face-to-face and other people, like people in Wales, will largely have to rely on a telephone service. There are changes going on at the moment in relation to CLS Direct, the telephone service, in the way it has been re-contracted out and the lack of quality review so far. I think there are serious concerns about what will happen in certain areas, particularly rural areas and in Wales.

Q182 Chairman: It has been suggested to us that one way of proceeding in order to assess the impact of the reforms, especially the best value competition, might be to limit it to the criminal legal aid side with the civil legal aid side not following until the reforms in the criminal area have been assessed. Do you agree with that? Do you think there are any dangers in that staged approach? Obviously that begs the question of whether you want to oppose all the reforms. If the Government is going to proceed on roughly the lines which it intends, would it be helpful to wait on the civil side until the criminal side has been done first?

Alison Hannah: I think it would be a great deal of help if it was started with crime and the effects of that were monitored, not least because of course the major expenditure of the legal aid budget is on crime. If they are looking to make savings, then it is obvious that the first place to look would be on the high spending crime sections particularly . I think most people accept that there is quite a lot of difference between criminal practice and social welfare law. The social welfare law costs are relatively quite small compared to both crime and family. In terms of more bangs for your bucks, it would certainly make sense to start with crime. It would certainly make sense to monitor and maybe to pilot some of the criminal changes as well. To that extent, I think it is a good thing that the fixed fees that incorporate travel and waiting will be trialled in the 16 urban areas before being rolled out. I think that makes a lot of sense.

Richard Jenner: It is worth adding that the contracting regime that emerged in 2000 was very carefully piloted over a number of years and was independently assessed and researched. It is a little disappointing that what are probably more far-reaching changes are not being piloted. I am not sure whether you could learn from a pilot on crime how that would impact on social welfare laws. I think we would want to make a plea for more piloting before going ahead with the proposals in general.

Q183 David Howarth: On that piloting point, there was the rather unfortunately named London Competitive Criminal Tendering Pilot. I do not know what a competitive criminal is, but never mind! Was that the kind of thing that should have been tried, do you think, before going ahead with the best value regime on a geographically limited basis?

Alison Hannah: I was probably more involved in the crime project than Advice Services Alliance. I think there was intended to be a pilot. The price competitive tendering project was supposed to be a pilot for London. If you were going to go down the route of competitive tendering, I think the proposals put forward in the Carter Review made a great deal more sense than the Legal Services Commission proposals, which were a pretty crude price Dutch auction really because at the time it was accepted that there was going to be a very low quality threshold. At the time, I think they were saying that only 5% of providers would be eliminated on quality grounds. Then it would be a straight bid for what proportion of duty solicitors slots you would take at such and such a price, so it was a real downward spiral. Having gone to many of the meetings that took place around that, there were some very daft comments being made about "I am going to put in a bid of ?1 a case because then I know I will be guaranteed the Crown Court cases". It was a real illustration of how straight price competitive tendering would be a complete disaster because the stakes were so high for firms to make sure that they got the business that they really threw caution to the wind in some of the comments that were made. I do think the Carter proposals make a lot more sense because they were very much intended to have tendering on the bas
is of price, quality and volume. It is interesting now that the volume bit seems to be a little less certain. If you were to buy the economic package that Lord Carter was putting forward, then that has to be a worry. If you think the future lies - and I am not saying that I do - in a small number of bigger firms and you are not offering any more money, indeed you are offering to drop a lot of the income for some firms, then you really have to be able to make those economies of scale to make it practicable. At the moment, we really do not know whether it is going to be practicable or not. All the evidence about the provider base of solicitors is that it is extremely fragile and the research that has been done all indicates that even with big firms, the margins of profitability can be pretty low. There is an awful lot of risk involved in the move towards tendering certainly.

Q184 David Howarth: That does raise the question of precisely what is going to happen in the second round. You have one round of competition and then you say that the supplier base is quite fragile. What happens in the next round? Are we going to have competition in the next round?

Alison Hannah: I see no crystal ball here! It is almost impossible to imagine who would be in for a second round, particularly because of the preferred supplier scheme, which is going to be one of the key factors. In order to become a preferred supplier, you have to have a contract; you have to have your key performance indicators measured in accordance with the contract; you have to have this new file assessment value for money to make sure that you have been administrating the legal aid scheme properly in terms of devolved powers and legal aid eligibility for clients; you have to have your peer review. If you get through all those, then you may become a preferred supplier, but how can that work in a second round? Where would there be a new entrant that could possibly supply that number of preconditions? It is very difficult to see how it would work, not least because peer review is going to be organisation-wide. You could not see a situation where maybe a department would split because the peer review would be for the organisation, not for the department. I think it is really hard. I do not know that this is answered by Carolyn Regan. I find it really hard to see who would be left to put in a bid in the second round. Then you have the worry that prices will actually be driven up by competitive tendering. If there is only a small number of bidders, then they can form cartels and why would not the prices go up?

Q185 David Howarth: It is not just splitting off old firms; you cannot see how a new firm could get together, organise itself and get the various qualifications to be in a position to bid. That raises the question: can we have this sort of bidding system but differently so that there would be some possibility of competition in a second round and, if so, what would that look like? How would it be different from the system we are being offered?

Richard Jenner: Like Alison, I am very sceptical about this. It is worth saying, particularly when we are talking about social welfare law, that we are not convinced that there is a huge market out there. In practice, in most towns there may be three, four or five suppliers doing some social welfare law. Very often that work has been divided up between on the basis of custom, practice and possibly by agreement. There may be a firm doing housing cases; the local CAB will be doing the bulk of the debt and benefit cases; a law centre may be doing employment; and one or two may be providing across more than one subject. That does not really look to me like a market ripe for competition. I do not believe, under the changes in regulation, that in social welfare law you are going to have a lot of new types of supplier coming in and wanting to compete for that kind of work. There is a possibility that in relation to certain basic benefits claims you might get some new commercial suppliers showing an interest. I suspect that will be more at the level of doing telephone advice. I am not convinced there is a market out there. Certainly, in relation to a second round, I cannot envisage that if not-for-profit agencies have been unsuccessful in the first round they will be around for the second round. Some of them are so reliant on legal aid funding that they will close if they lose out. My instinct tells me that some will manage to stagger on, possibly with local authority funding, but I am not sure you will get large numbers of them wanting to go through all the effort and procedures that Alison has talked about to become involved a second time round. Certainly, as far as our sector is concerned, I think there will be one round.

Q186 David Howarth: You also mentioned peer review. What are your views about how that might or might not work? Can a peer review system of the sort envisaged guarantee quality over the period of the contract. Is this really going to work?

Richard Jenner: We do not know for certain. There are issues for example about peer reviewing organisations rather than individual advisers. We do strongly support peer review. We do not think it is the only measure of quality. There are issues like client care and client satisfaction that have to be taken strongly into account. We do think that peer review is probably the best available measure of the quality of legal work. We strongly supported the development of the scheme by the LSC. I think that is an example where the LSC worked well with practitioners and representative bodies to get agreement for what is a robust and independent scheme. We have some concerns that there are two initiatives here. One is the coming of competition and the other is the preferred suppliers' initiative. We have concerns that the timescales for those two schemes will be wrong and that you will be getting into competitive tendering long before it is clear exactly who the preferred suppliers are. That is one difficulty we have with it. It is also worth pointing out that, as things stand, peer review is at the end of the assessment process for preferred supplier. People have to jump through very many other hoops first, many of which are proxies, not direct measures, not peer review. It is also worth pointing out that organisations with small contracts may, in the end, only be peer reviewed in one of their subject areas, so there is no guarantee that everyone who will eventually become a preferred supplier will have achieved the peer review. Our concern, therefore, is that you might get some organisation that you really would not want to contract with getting through. The real doubt is whether the timetables will keep in step with each other. We think that, as things stand at the moment, competitive tendering is very likely to be introduced before it is clear who the true preferred suppliers really are.

Alison Hannah: I agree with what Richard has said. May I add two things about peer review? I think everybody does agree that peer review is a good system for assessing the quality of advice; it is certainly an improvement on the audit process. Of course, it has been designed for the present situation. The question is, as Ed Cape put it: how robust will it be over time? That must be a question. Leaving aside the question of it being organisational and therefore you do not really know that any particular department at any particular time might be up to the same level over time, will there effectively be grade inflation? If the peer reviewers, who are themselves working under the same pressures, are going to think 'It is not as good as it was two years ago but, on the other hand, what do you expect for the fees that are available?' effectively will you end up with people purportedly being at the same level but actually not providing as good quality. That is a bit of a concern as to whether, over time, it is going to be able to maintain its level.

Richard Jenner: It will not pick up cherry picking. If suppliers cut corners because oaf the
pressures of fixed fees, it may pick that up, but if suppliers simply decide they are not going to take on the complex cases that we were talking about earlier, there is no reason to think peer reviews will pick that up. All peer reviews are there for is to say: has this particular firm handled that claim? If it was, it was. As far as I understand it, it is not in the job description of peer review to make an assessment of whether suppliers have actually changed their case mix, so they will not necessarily pick up many of the issues and concerns that we raised earlier.

Q187 Chairman: It should be.

Richard Jenner: Yes. We would support that if it was made part of the job of peer review to look at those issues. In my view they would have the expertise to do it, yes.

Adam Griffith: It is a complicated statistical issue. Peer review works on the assumption that if you take 20 files and peer review 15, there is something like a 97% probability and that is all right and a good indication of something. As I understand it, that is the principle of peer review. If you come back to the same organisation and pick up another 20 or 15 files, will you find in there something that you can compare to the 20 or 15 files you looked at three years ago and detect a shift? I think it would be very difficult to do. If there had been a very major change, if you suddenly found that all the cases you were looking at were short cases and lasted two hours, maybe, but if one or two more were on the short side, I do not think you could draw any conclusions from that. I do not think as a tool it is designed to do that.

Q188 David Howarth: I have a final point on peer review. I think it was Professor Cape who put to us the point that one difficulty with applying peer review to all aspects of the system is that it is a file-based way of making an assessment, but some of what we are talking about, like oral advice in a police station, will not appear on the files. How do you assess the quality of that in a way that does not either involve excessive cost or somehow interferes with the system of giving advice itself in the first place?

Alison Hannah: I think there has been talk of trying to assess advocacy quality. You had quite a session on that. That is one issue. Quality is more than simply quality assuring. Peer review is a method of quality assurance but it does not necessarily of itself provide quality. You can learn from it, obviously, but if you are going to have a good quality professional advice giver, then it is only one factor. Obviously experience, training, morale, supervision, good quality information and educational resources all come into it. The research in America suggests that one of the main factors in deciding quality is to maintain what would be called an appropriate level of case-load. If you are overburdened with too many cases, then the quality of the work is going to drop. Peer review only, as you say, looks at what is in the file. There are many other issues around quality that peer review is not designed to address at all.

Richard Jenner: That was one of the concerns we had about Lord Carter's recommendation, that panels might not be needed any more because of peer review. I think that probably is not true, for the reason that Alison has just given.

Q189 Julie Morgan: On remuneration schemes, the not-for-profit providers have strongly criticised the proposals to merge the remuneration schemes for civil legal aid solicitors and not-for-profit providers. Is there any justification for retaining the difference in pay schemes between not-for-profit suppliers and specialist legal aid solicitors advising on the same issues?

Richard Jenner: No, not in my view. It is worth saying that some of our members have certainly criticised that. There are mixed views about the principle of having a unified contract. Our position is that it is difficult to argue as a matter of principle that people should be being paid on an entirely different basis for doing the same work. We would not want to start by saying that advice agencies should be paid fundamentally differently. The issue is what the terms are on which the payments are being made. We are concerned, and we are still in negotiation over the details of the contract, that there is proper sharing of risks and that the terms are fair on both parties. We still have some way to go in those discussions. One point I would want to flag up, and I think this is probably one of the biggest concerns raised by our members, is the move from paying in advance at the moment to a situation where you would be paid in arrears. Two things need to be said about that. Firstly, the transitional arrangements for that will need to be very carefully handled because in practice there is a real risk that that will create huge cash flow problems for agencies suddenly moving from one system to another. Certainly our members are very anxious about that. Secondly, that approach to payment certainly does not appear, in our view, to comply with the compact that has been agreed between the Government and the voluntary sector, which does say that in normal circumstances voluntary sector organisations should be paid in advance for work being done. We are not entirely clear why the Commission feels that payment under legal aid contract should be done differently from what is suggested by the compact. That is an issue about which we are also still in discussions with them.

Q190 Julie Morgan: Do you think there is a real danger that voluntary sector providers could go out of business?

Richard Jenner: Yes, without a shadow of doubt, particularly if the transitional arrangements from one system to another are not sufficiently worked out.

Q191 Chairman: There could be cash-flow problems?

Richard Jenner: Yes. They will just simply find that they have not got the money.

Adam Griffith: The way it is proposed to work is that it will at least start off essentially with payments in advance, and then there would be a reconciliation process. The danger that we see is that agencies that are unable, for whatever reason, to finish cases and record them close enough to the fixed fee levels to reflect their costs may find, over time, that the amount essentially that they owe the Commission is not going down, or indeed is even going up. At that point, they will be in a terrible position if they cannot see the light at the end of the tunnel. They will be under considerable pressure just to cut their losses and get out. That is a real danger. It is a combination of two things. It is partly just moving on to fixed fees altogether, which is a big shift. Obviously for some agencies it will be all right but for many agencies that requires them to turn over cases more quickly than they have done before. It is going to be quite a problem.

Alison Hannah: I am not sure whether this is quite on the same point but on the question of the fixed fees in general, there are two issues about the level of the fixed fee and also the flexibility of the fixed fee. Following on from what Adam has said, the problem with the system as presented is that the argument is swings and roundabouts. If you only have swings, then you cannot make it up on the roundabouts. There are going to be different organisations that specialise in different things. On the whole, for example, law centres specialise in the complex cases where there are not necessarily legal aid certificates and there may be clients who are in particular a high majority of black and ethnic minorities or disabilities and those tend to be the more expensive cases. Although the Legal Services Commission says that they need to manage their case mix, they really are not suggesting that the complex cases and the clients with complex language or other needs should not fall within the system. Of course, there is the perverse incentive in the system that is being proposed that people will want to make sure that their fees come within the level of fixed fees and the clients are again going have to squas
h into the fees rather than the fees fit around the clients. That is a pretty fundamental change. It is going to be quite hard to prevent some element of that happening because if you know that you will go out of business because you have too many complex cases, what are you supposed to do? If your mission is to help those people, it is pretty difficult to say, "I am sorry. Here is the phone number for CLS Direct or try so and so down the road". It could be pass the parcel with the most vulnerable people not getting the service and the service ironically helping those with either the less complex problems or the greater ability to present their needs in a nice simple clear way that makes it easy for the adviser. That is the last thing that anybody, including the LSC, wants, but there is going to be that incentive.

Adam Griffith: May I add one point on that? There is a particular concern. Where the advice sector and the local solicitors are well organised and there have been quite clear demarcation lines as to who does what and it is agreed that the more complicated cases of a certain kind go to certain agencies and so on, in many places you actually have a system which was what the Community Legal Service was supposed to be about, where there is agreement on the ground as to who would do what. One of the many dangerous side-effects of introducing fixed fees is that it breaks that up because the people who are doing the more complicated cases will have to come down and take some of the easy cases from the people who otherwise would have done them. Those in fact include many cases that are done by agencies in work that is not funded by the Commission. It goes back to the earlier question about the numbers. One thing that will happen is that agencies will be going out and making legal aid cases out of things that could have been dealt with outside the legal aid scheme before and, at the same time, will be disrupting the relationships that have been built up on the ground between the different agencies as to who will do what. It will purely be so that those agencies that are working under an LSC-funded fixed fee system are able to survive. We think that that would be very sad.

Q192 Julie Morgan: Do you think a system of fixed or graduated fees could be made to work for the not-for-profit sector?

Richard Jenner: We suggested some alternatives. Notably, we suggested in relation to social welfare law that there should be more categories of different types of fees to take account of different types of work. If you look at employment, we would be proposing three categories: one for unfair dismissal cases; one for discrimination cases; and one for the rest. The suggestion would be that the rest would be slightly lower than was currently proposed in order that the more complex areas of work be paid by a higher fee. That was rejected. The other suggestion we made is that there could be some kind of graduated fee in social welfare law cases to take account of the level of work undertaken on behalf of the client. We accept there are some potential difficulties in that. Certainly our view is that a scheme would be better if it had more flexibility along those kinds of lines.

Alison Hannah: The other complement is the cases, but also the clients can make the cases particularly longer and boost the costs. Although the Legal Services Commission is very unwilling to go down that route, the research does show that black and minority ethnic clients do tend to take longer and therefore are more expensive, as are clients with disabilities. If you were able to have an add-on for particular clients, in some ways I think that would also help towards the cherry picking, to prevent cherry picking. It would make more financial sense for organisations to take on these complex or lengthy cases because they would be paid a bit more and they would not have to worry about: are we going to make it into an exceptional, three times the expense case or are we just going to lose money on it by going over the fixed fee and hoping possibly that we might make it up at some other point. I think it would help with that.

Chairman: We have covered cherry picking quite a bit. I am conscious of the time restraint. I am going to ask Bob Neill to come in with a couple of other points that I do not want us to miss.

Q193 Bob Neill: I was talking to a lady yesterday who has a problem with child custody issues. She also has divorce issues, which stem from the same thing. She also has some housing problems. It is what we call a problem cluster. At the moment, the solicitor can do some of those other things under the tolerance work, but it seems as if the proposals we have from the Department and the LSC are positively designed to make it unattractive for solicitors to do tolerance work and in fact to phase it out when you get the preferred suppliers. Is that going to make my constituent's situation worse? Is it going to be an even greater deterrent or is there some way that it will all come out all right and she will get a service without having to go round half of Bromley?

Richard Jenner: I am not sure that problem can really be satisfactory resolved within the existing resources for the scheme, to be honest. That problem, to be properly resolved, would need expanded provision in many areas. The issue around tolerance has always been a difficult one because it is a balance between an access and a quality issue. It can be argued that allowing solicitors to do work under tolerance provides access which would not be available otherwise because it is very specialist. There is a problem with that argument, though, which is that nearly all the research that has ever been done into this issue suggests that there are real quality concerns when people start providing services outside their areas of expertise. I think that in the longer term it is probably not unreasonable to say that we should be moving away from tolerance towards actually filling the gaps with proper specialist supply. The difficulty at the moment is that it is not clear that that can happen under the new arrangements. I do not know if you intend to ask us about CLACs and CLANs. We have a number of issues about CLACs and CLANs but we are supportive of the aim of CLACs and CLANs, which is to try to ensure that there is a more holistic service, if you like to improve upon the kind of arrangements that Adam was talking about earlier and get practitioners with different types of expertise working together, better referrals and more joined-up services. That is something we think that the Commission is right in saying it wants to achieve as opposed to just carrying on with the current way of dealing with the number of tolerances.

Q194 Bob Neill: I understand your point about the quality control approach. We may come back to that. It has been suggested sometimes that this stops the development of silos and that if firms are doing tolerance work, that may be the first route into building up some expertise.

Richard Jenner: Yes, I think we would accept that. There is an argument that has not really been resolved. What you have to be careful about is forcing individual solicitor advisers down the road where it is impossible for them to develop skills in new areas of law. I think that is a genuine issue that has not really been resolved under the current scheme.

Q195 Bob Neill: There is a balance between that and maintaining quality control?

Richard Jenner: Yes, there is. At the moment, the research does appear to be very clear. There is not an issue about whether we are talking about a level two or a level three. There is a real issue about some providers doing tolerance work that is of quite poor quality because they simply do not have the expertise to do that.

Q196 Bob Neill: I get the impression that is a view that is generally shared.

Alison Hannah: I think that is right. The research does show that. The only problem, of course, is that some firms may not be able to get the volume to get a contract. They may not wan
t it obviously either. In some areas, particularly rural areas, they may be better than nothing. It is obviously better to have somebody giving you some help perhaps than none.

Q197 Chairman: It is not much help to be told in an area like mine by the local solicitor, "I could do this work but you probably ought to go to a solicitor 65 miles away who might be able to help you". It is not realistic.

Alison Hannah: No, that is right.

Q198 Bob Neill: You mentioned CLACs and CLANs. Perhaps we could come on to that because I am interested in how you see that developing. One thing that strikes me is that actually what we are doing is potentially creating monopolies here.

Richard Jenner: Yes. One thing that puzzles ASA is that it is not clear really how the CLAC model as opposed to the CLAN model really fits into the market-based approach advocated by Lord Carter and now the Government. It is also not clear to us exactly how it fits in to the current Government's emphasis on increasing choice in the provision of public services. It is absolutely clear that if you set up a CLAC, you are creating monopoly provision, at least in social welfare law. My understanding is that the Commission accepts that in the family services you have to have at least one or two other providers in the area; otherwise you get the obvious problem of conflict of interest, although it is worth saying that that can arise in relation to areas of social welfare law as well. Leaving aside that puzzlement, if you like, our view is that it is quite risky. It is a very risky strategy for the Commission to put all its eggs in one basket. It really comes back to the points that you were raising earlier about second rounds of competition. If anything, the problem is going to be even more acute in relation to CLACs because any not-for-profit sector providers that do not win the contract to run the CLAC or at least be a subcontractor for part of it will, almost certainly, go out of business. In the case of CLACs, you are not only losing your legal aid money, but you will be losing your local authority funding. Therefore, if a CLAC fails, there will not be any not-for-profit sector providers available in the area to build up. I suspect that by the time legal aid firms have lost their contract in the current difficult climate, given the low level of morale that you see with a lot of private practitioners, they will not be interested in coming back after it has failed and saying, "Oh, well, we will pick up the pieces". It does seem to me a very risky strategy. Our view is that we would like to see piloting and testing of model provision that we would describe as more akin to community legal service networks, possibly consortia, possibly federations of different providers, and working with the Commission on probably a less top‑down approach than has been taken so far in relation to CLACs actually to work out on the ground how practitioners can work together to provide, as we talked about, a more joined‑up service. We are interested in seeing that. It has to be tested. It will not be providing an identical model in every town. It seems to me that that is a more sensible approach than trying to set up monopoly supply.

Alison Hannah: I agree with everything that Richard has said on that. Certainly anecdotally you get the feeling that there is a lot more interest in setting up networks and that people are looking for ways to try to get those implemented in an informal way as really a way of testing out how they might work. People are much more sympathetic to that than the one-size-fits-all CLAC.

Q199 Bob Neill: The other point that struck me when looking at this aspect of it is that whatever the situation, whether a private firm or a not-for-profit provider, be it CLACs or CLANs or whatever, you have a three-year contract and you can get three-months notice of termination. What are the implications of that?

Richard Jenner: My understanding from Adam is that that is not the situation now.

Q200 Bob Neill: They have pulled that that one already?

Richard Jenner: It has been increased to six months. Your point remains that it is about sharing risks. I will just use one example. Whether it is through a CLAC or indeed generally under the new contracts, the LSC are very keen to develop e-business. That potentially, of course, means that firms and agencies will have to invest money in upgrading their IT services. It seems totally unreasonable that they can do that in a situation where, with six months notice, it will come to an end and where the performance has been fine. There is a difference now. That six-month break clause does exist under the current contracts but in the past, justifiably or not, the view was taken that it was there in case, for example, there is a total change in Government policy and there are huge public spending cuts and legal aid has to be cut dramatically, which was a possibility. For better or for worse, that risk at the moment was put on to our centre. It is quite different this time because the Government and the Commission are saying quite clearly that in at least 75 areas of the country their intention is to set up these new suppliers, CLACs, and so you will be going into contracts knowing, if the Commission succeed in setting up that many, that even before you start there is a very good chance that break clause will actually be implemented at some point. In our view, it is totally unreasonable.

Q201 Bob Neill: They get the break clause to make way for the CLAC monopoly?

Richard Jenner: Yes, to make way for the CLACs. Our view is that, obviously subject to termination for poor performance, a minimum of three years is the right period.

Chairman: Is that an idea for a Competition Commission Inquiry into CLACs at some stage! Thank you very much indeed for your help this afternoon.

 

Witnesses: David Emmerson OBE, Chair of the Legal Aid Committee, Resolution, Richard Charlton, Chair, Mental Health Lawyers Association, David Jockelson, Miles and Partners, and Roy Morgan, Morgans Solicitors, gave evidence.

 

Chairman: Mr Charlton, from the Mental Health Lawyers Association, Mr Emmerson from Resolution, Mr Jockelson from Miles and Partners and Mr Morgan from Morgans, welcome to you all. Mr Morgan we have had before us before and we are very glad to see you back again. You have heard the direction of the evidence so far and we are going to resume over very similar ground with Dr Whitehead.

Q202 Dr Whitehead: Without asking you a question in identical form to the last session, could I ask for your opinions and views on the fact that, as we have mentioned previously, the LSC has provided more legal help to more people last year than in any year since 2000, but there is still evidence of unmet demand, which we also remarked on in our Committee deliberations last year. Is it your view that there are, indeed, areas of unmet need, that there are several Legal Aid advice deserts and, if there are, where are they and what form do they take?

Richard Charlton: If I start from the mental health side, I think that from a mental health point of view there has been an increase in demand. The principal area coming in the mental health contract are people detained under the Mental Health Act who are entitled to mental health review tribunals. Psychiatry is not a certain science, expert evidence is needed sometimes to challenge psychiatrists' views, Article 5 liberty issues are involved, clients are often very demanding and it is a matter of fact that more people are being detained under the Mental Health Act. Our members struggle to meet the calls for representation for those kinds of people, but it is becoming increasingly difficult for many of our members to keep up the struggle. Geographically, I could point certainly to East Anglia as an area which has enormous difficulties, other areas includes cities such as Hull and areas such as North Yorkshire. We
have to travel out to see such clients, which is often demanding. The area of law has developed very quickly in these areas; the first remedial order on the Human Rights Act was made in these areas. This is the headline work we do, in a sense, in mental health in many respects in covering people's calls for representation to challenge their detention in hospital. Behind that headline work is an area which is suffering even more and this is, in fact, the social exclusion area which is supposed to be an area of priority for this Government and, unfortunately, many of our members really find it completely impossible to cover this kind of work. The thing is it is impossible really to stress how important preventing further increases in claims against the Legal Aid fund and preventing further, perhaps very critical, problems developing, even to the point of mental health homicide, are, so these are very unusual. Aftercare problems are often very difficult to resolve on behalf of mentally unwell clients. They are possibly the kind of clients who come to MPs' constituencies fairly frequently.

Q203 Chairman: "Demanding" seems like a bit of an understatement.

Richard Charlton: We would suggest that far more of these people are going to be, unfortunately, knocking on your door perhaps with great bags and papers and so on as well to try and describe their problems; certainly they come to our offices and you will know from their visits to your surgeries the demands they put on us. We are limited as to how many of these people we can take on. This kind of work tends to pay less than the mental health review tribunal work. The Mental Health Lawyers Association did a paper on social exclusion for the Commission and it was aimed to go to the Treasury about how a little expenditure earlier on in terms of advice, assistance and aftercare could prevent, perhaps, enormous human tragedy but certainly enormous economic cost later on in the system if things went wrong. Unfortunately, that paper was never even formally acknowledged. It is an enormous problem and a great tragedy for our members that work is not being covered. Quickly to go on to figures, these figures are also the subject, certainly in mental health, of some manipulation; I am not saying necessarily intentional at all. For example, in mental health review tribunals we used also to do work for managers' hearings and that would be one report, but then we had a direction from the Commission that there should be two reports for that, so at a stroke the same amount of work then amounts to two matters. There are various things going on in terms of apparently increased acts of legal help which I think do mar the situation.

Q204 Dr Whitehead: Mr Jockelson and Mr Morgan are what you might describe as specialist and niche providers. Do you have anything to add?

David Jockelson: I am certainly horribly specialised in the sense that I only do care work, which leaves me somewhat exposed. In terms of the number counting, I do think the point was made earlier, which was extremely interesting, about double counting. You ring up CLS Direct and you get referred somewhere else. In fact, Mr Vaz got his office to ring up CLS Direct not long ago - it is recorded in some minutes of discussions - and on the third go they finally got through to speak to a human being who said they could not help and they referred him to the Citizens Advice Bureau which with that particular query, a personal injury claim, would not be able to help either, but they tick another box. If you go down the road to a solicitor you get three apparent acts of assistance in a lovely language service, and that would look really splendid in the statistics, would it not? It would mean absolutely nothing of course. Indeed, they are probably not eligible for Legal Aid in the end for personal injury work, so they have achieved nothing in terms of delivery of service. Perhaps I should also mention there are major queries about quality issues on CLS Direct. Currently some of the people who have taken the contracts are advertising for staff, these have not been peer reviewed, they are setting up afresh, and there will be a peer review after six months, but they are advertising for law graduates and, indeed, undergraduates to advise on the telephone. This does fit in with a document which I have submitted today about the potential future direction and the fantasies the Government may have about very cheap and cheerful online, call centre, paralegal support which will make the figures look splendid and will not, in fact, deliver the quality that is needed and it might, indeed, favour, as has been said, the easy‑to‑help clients who can use the telephone and the internet. I deal at completely the other end, I deal with care cases, with clients who are ‑ without any disrespect ‑ dysfunctional, they come to me late, they needed advice months ago to understand the significance of social services concerned. I have always tried in the past to do that under the old green form scheme, to go to meetings with social services. That was increasingly uneconomic and I am glad to see that there is a proposal that there will now be better funding for that, but that is an area of unmet legal need which is not on the same map as these advice deserts. These are problems with people who have got learning difficulties, schizophrenia, personality disorders or massive drug and alcohol issues which were mentioned to you a few days ago by Mark Potter as being a driving force behind things. We cannot ignore the fact that the work we are doing is in the context of ever‑increasing social chaos, if I can use not too strong a word. My clients are from that area of the world and the skill and the care they need ‑ it sounds like I am boasting, I hope I am not ‑ are listening skills, negotiating skills, persuading skills and then advocacy skills, not one of those would show up on a peer review. I am not sure if my files would be as perfect as somebody's down the road who has a wonderful peer review and does not have the same, perhaps, dedication. As it happens, we have been peer reviewed and we are exceptionally good, thank goodness.

Q205 Chairman: They could not possibly know, could they?

David Jockelson: They could not possibly know the real issues, but our files are in splendid order and we send out all the right letters to the clients, some of them cannot quite understand the letters but never mind. The real quality of the work is missing from the catchment of peer review. I am not saying it should not happen, I am just saying it is limited. It was interesting that yesterday Ed Cabe(?), who was responsible for some of the formulating of it, expressed serious doubts and had reservations, and I think the President also said that it could not really pick up on advocacy rather than the skills; however, I am hogging the microphone.

Roy Morgan: Perhaps I can deal with the CLS Direct issue as a CLS Direct provider.

David Jockelson: Some are very good.

Roy Morgan: Thank you. With regard to the point, is more legal help being delivered, I think it depends on definition, and on the advice deserts, it depends where you look. With regard to are more people being helped, I think the figures show that over the last year the actual spend on legal help dropped from ?190 million to ?160 million, which suggests that if there are more cases - however you define "cases" - being dealt with, and then being dealt with for a lower cost and at a lower level, that might suggest cherry-picking. I know you have already had quite a bit of evidence about that, so I will not go into that. In terms of CLS Direct, my firm provides CLS Direct services in housing, profit benefits and debt and we also provide the Welsh Specialist Support Service in the same category - and thank you, I think you have saved it, I hope you have - but there is no doubt that the CLS Direct service does generate face‑to‑face advice. H
aving said that, the vast majority of calls that CLS Direct in my firm deals with are dealt with over the telephone and they are often pieces of advice that can be dealt with in a short space of time. However, if the case involves court proceedings, such as repossession action or if it involves something like a Disability Living Allowance appeal, then that must be referred for face‑to‑face advice, so there is inevitably a double counting with those two pieces of advice.

Q206 Dr Whitehead: Do you have any feeling for the percentage of the total that the two categories represent, the category that can be completed over the phone and the category that then leads to face‑to‑face advice, and, inevitably, is double counting?

Roy Morgan: Without being precise - though I probably could provide you with figures, I will do that in writing if necessary - from speaking to those people in my firm operating the system, less than 10% involve face‑to‑face referral. In terms of what you have to deal with in that referral is then a question of where you send them, and in many areas there is no difficulty and you can find providers very easily; in other areas, it is very, very difficult indeed. In Wales once you are looking for Welsh‑speaking providers you have some significant deserts, the same applies in East Anglia, Cumbria and so on. It is very difficult to refer on.

David Emmerson: On the family side, there is no doubt that the number of people being served is going down year-on-year and that is not assisted by CLS Direct because it does not offer family services, and the reason why there are fewer people served is because there was a third less contracts in family law in 2006 than there was in 2001. Also, the Commission are going to pilot the idea of CLS Direct services for family in the new year and we would support that and it is going to be a valuable information service for the public, but our view is that it is going to take away a very, very small percentage of the actual cases that need direct advice from solicitor and other organisations. You asked about advice deserts. If you plot a map round the country of all the different contracts in family law there would be reasonable coverage, but in places like East Anglia and Wales there would be a fairly clear lack of provision, but the real issue is what the capacity of those existing organisations is. Our experience is that firms are not able to use all of their allocation if a matter starts, they are not able to cope with the volume of work they are getting in to their offices because they cannot afford to expand sufficiently to meet the local need, so, in my view, it is not a question of advice deserts, it is a question of capacity throughout the country as a whole, and I think throughout the country there are problems.

Q207 Dr Whitehead: So what you might say in terms of the general model is the numbers are reducing but capacity within those reduced contractors is not increasing?

David Emmerson: No. There is no doubt that there is just the same need for family law advice throughout the country this year as there was six, seven or eight years ago.

Q208 Dr Whitehead: If that is the situation now, what is your view about the long‑term effect or the medium‑term effect of the proposed reforms on precisely that relationship of numbers and capacity?

David Emmerson: We conducted a survey in conjunction with our response to the Carter proposals and 70% of the people who responded to the survey felt that they were going to lose out significantly with the proposals as they were in the format, only something like 7% thought that they were going to be better off. So those figures alone are going to indicate, I think, that more and more family solicitors are going to be turning their backs on Legal Aid. Of course, they are able to do so because they have the advantage of being able to go into the private sector.

Q209 Dr Whitehead: Is it your view, Mr Charlton, that it is going to be a similar situation?

Richard Charlton: Yes, in the material we have given the Committee there has been around a 25% fall in the number of specialist mental health solicitors since the introduction of contracting in 2000 and they are, of course, trying to cope with an increase of people detained under the Mental Health Act and say that to the headline representation there, so the crisis is solved by our members trying to work harder and faster. Just on my own committee, around a quarter of the members of the committee have been forced out of their firms as partners because mental health pays so badly. They now survive as consultants or are working on a kind of locum basis because it is time consuming and specialist but the rates, as they stand at the moment, are so low they cannot hold their own in private practice. Then, of course, with the uncertainties ahead many are just indicating in the service, "We do not have members", they are just going to throw up their hands making the crisis even worse.

David Jockelson: I took the slightly sneaky line of ringing round the solicitors in the constituencies of some of the members here, because then you can see that I am playing straight. I spoke to people in Cambridge and I was told that a few years ago there were 20 firms in Cambridge dealing with Legal Aid work and there are now effectively four. I have spoken to some of them and I would not want to name names, but some of them are right on the edge, doing less and less. People talk about a fragile base and you have got The Law Society, who are pretty moderate chaps really, using words like "meltdown" and words like that. We are on the edge of a catastrophe and my question is, how does everybody else see this and the Government does not? What is it that the Government are relying upon to rescue them when things go really badly wrong in a year's or two years' time? It will not just be people with carrier bags with papers turning up at your surgeries, irritating though that might be, it will be people not getting domestic violence solicitors - that has life and death implications - it will be people not properly represented in care cases, children removed inappropriately or, when there are not representations for the children and with weak local authorities, children potentially returned inappropriately at risk to their lives. We are playing for the highest possible stakes here with children's lives and the supplier base being fragile is a euphemism for we are facing a serious, serious disaster. It is my suspicion that the Government, following the suspicions of the Chairman, have some fantasy that some cheap and cheerful system is going to emerge growing out of CLS Direct with a call centre mentality and Tesco law. I have prepared a paper which is phrased in relatively dramatic terms compared with representatives from official bodies. I am here as a single individual, having spoken to a large number of other solicitors, and the area of concern is absolutely widespread. The only people who do not seem to believe it are the Government, so what agenda are the Government operating on? What do they really think is going to happen in two years' time? I believe they have an idea that it is all going to be solved by post‑Clementi liberalisation. I have heard the managing director of Capita, which is a huge provider of local government services, as you probably know, Max Pell, relishing the prospect of a cull of high street solicitors. He is going to be doing all the standard work and profitability will collapse, he reckons, and many of those high street, ordinary mixed practices have a small Legal Aid practice, often subsidised by conveyancing and the wills department, and if the high street has a cull then the Legal Aid elements are going to go as well. He is helping to run CLS Direct and he has ambitions, I suspect, to push his envelope further and further into doing it. I am sure he has told the Government that
this can be done very cheaply and all the advisers, the KPMGs, PricewaterhouseCoopers, these consultants who have direct contact with the DCA, whose original papers triggered off the whole business - and I do not think you have seen them - are telling Number 11 in particular, "We can deliver many more bangs for your bucks, much more work for ?2 billion", and I believe that is being accepted. That is an underlying thing which I do not think is being discussed. These comments are the only references I have seen, almost, to this Tesco Legal Aid fantasy and I think it is phenomenally dangerous. You should be asking very penetrating questions about what the Government really thinks is going to happen, because it pretends nothing is going to happen. They are the only people who think nothing is going to happen.

Roy Morgan: Can I very briefly add to that and give a slightly different perspective to it. There is a lot of discussion about a picture of what might seem to be a number of very small practices, which are very vulnerable, juggling different categories of big leg work and trying to survive with a fine balance, we are talking about firms which may in the future decide to give up. There are a number of people on the Committee who hail from my part of the woods and they would recognise very readily the names of two very significant firms in Cardiff which are very large practices, very well respected, very well run and very businesslike, and in the last month, and in one case in the last few weeks, they have made the business decision to give up both family work and criminal work, effectively giving up all Legal Aid work together. I am not sure if I should name them, but I am happy to name them if you wish. I suspect you already know.

Chairman: Cue Ms Morgan.

Q210 Julie Morgan: I was going to ask the individual firms what you think the impact of the fixed fees are and will be on your firms. If I can ask Mr Jockelson first, what was the impact, if any, of the introduction of the Tailored Fixed Fee scheme in May 2005 on your firm?

David Jockelson: That, I think, was not at all unfavourable. The original one was reasonable, we could live with that. We have done the statistics for the next stage and, frankly, if it does not change we may as well all go home because we have done them scrupulously, taking the previous one, stripping out the VAT, stripping out the disbursement, so we are comparing like with like. The profit costs for our 210 cases under TFF were about ?80,000. Working the figures on the same cases, in future they will be ?50,000.

Q211 Julie Morgan: ?50,000?

David Jockelson: ?50,000, so we will lose ?30,000 of ?80,000. What do you think, do you think we are going to be there tomorrow? I do not think so. I am not a housing lawyer, but there is no housing lawyer here and I have a duty to my colleagues. Ann Halpern, Housing Association Legal Aid practitioners, have given me details of their most recent survey and it looks like about 50% of their members would have to give up, 50% of housing lawyers would give up. That is the point being made, you cannot move smoothly from Legal Aid housing into private housing, there is no such thing, so they will just do other sorts of work.

Q212 Chairman: It is actually for landlords, of course.

David Jockelson: It never crossed my mind! No, seriously, there is not an awful lot of that sort of work around, and I do not think most of my colleagues would want to do it particularly, apart from housing associations maybe. That is a very, very vulnerable base and they are very much the sort of people who will come to your surgeries, they are also people with multiple problems, the sort of people who are not coping in many other ways, they have got disrepair problems, are not paying their rent and may have other issues, multiple debt and so on and so forth, so they will fall through the net comprehensively. My previous firm used to be involved with the duty solicitor scheme at Lambeth County Court where you had possession days and you were really catching people just at the last minute before they hit the deck. If they had not been there, and it is a very, very shaky voluntary system, those people would have been evicted - utterly ridiculous - voluntary costs, they would have eventually been housed somewhere else, the cost downstream to other budgets would have been massive, and that is for me a scandal. That is housing. Personally, I can speak from a care position, because that is what I do. The original proposals were absolutely absurd. We were offered ?4,000 to do a care case, none of them ever cost as little as ?4,000 and certainly were not small enough for there to be any so‑called "roundabouts". It turned out later, as Judith Masson explained to you on the 27th, that they were counting certificates, so if I acted for four children then my case cost a quarter of what it really cost, so it is not surprising their figures were completely meaningless and they finally realised that during one meeting and backtracked pretty radically. They are now talking about something like ?5,000, maybe, with an escape limit of ?15,000. That means if your case has gone over ?5,000 you are into loss, up to really ?10,000 worth of loss on a case. How can you possibly tolerate that? Care cases come in large lumps like that, you cannot mass produce care cases, and nor should you. In fact, it would be a perverse incentive. If they are that cynical about us, they presumably think that since we get to about ?6,000 or ?7,000 we are going to be making damn sure it goes to ?15,000. I do not think people will in fact, but that must be the logic. What sort of lottery funding is this? Why should care work be paid on an "Oh my God, we might get paid, we might not get paid. Well, I made a loss this year, lucky somebody at the next desk made a lot of money because they had a few very simple cases". I tell you it is rank nonsense and, in fact, Carter never suggested it. The word "betrayal" has been used. Carter never suggested it and even Lord Falconer could see the difficulties.

Q213 Julie Morgan: Perhaps I could ask Roy, who hails from the same place as me, Cardiff, what is the impact that has been on your firm, which is much larger?

Roy Morgan: We are a very sizable social welfare practice, as you know. The initial benefit to us was certainly improved cash flow, there is no doubt, and we were able to reap some benefit from economies of scale, but, surprisingly, we are penalised for efficiency. Perhaps I can give an example to demonstrate what I mean by that, just a day‑to‑day case. We have an office in Swansea and we have an office in Cardiff. They both provide social welfare law in the subjects of housing, welfare benefits and debt, family law, consumer law and miscellaneous matters. If I can deal with welfare benefits as an example: our fixed fee is ?268 per case in Swansea, our average case cost in one month last year - and I have just extrapolated a month - was ?182. We are performing at ?85 less than the fixed fee for welfare benefits. In our Cardiff office, our average fixed fee is ?136 and our average case cost is ?290. We are losing ?83 for every new case we take on, but the books balance because across the practice the two match out virtually precisely. However, what we received last week - and this is the fourth time we have had this from the LSC and it shows some of the problems we have had to deal with - was a letter saying that our actual costs in welfare benefits in that particular office were more than 20% lower than the Tailored Fixed Fee. As a result of that, they are going to reduce our Tailored Fix Fee in the Swansea office. They have calculated our actual average cost, being just about 2.5% in accordance with the contract, and, as an acknowledgement that the reduction in costs is likely to be due to efficiency, they will add 10% on, so our current Tailored Fixed Fee will be dropped from ?268 to ?227. That is a 15% reduction becaus
e of our efficiency in the Swansea office and that may be due to a whole host of factors, but there is no subsequent increase in the other office. Subject to the contract, then can always reduce the Tailored Fixed Fee, they can never increase it, and that is a risk we run. When we then transpose that to the new suggested rates, we will lose, dealing with welfare benefits alone, a further 16% and in housing we will lose 39%.

Q214 Chairman: Give me that figure again, please.

Roy Morgan: Certainly, I got it the wrong way round. In housing, we will lose a further 16% and in welfare benefits we will lose a further 39%. It is not viable.

Q215 Julie Morgan: You deal with other firms and the not-for‑profit sector through being the providers of the Wales Specialist Support Service, how do you feel this will affect them?

Roy Morgan: The same way, without a doubt. We are probably, I would like to think, very efficient. As a result of that, our average fees costs are lower and our Tailored Fixed Fees are low, they were probably higher in the past, therefore the losses will be even greater.

Q216 Julie Morgan: Do you think your firm is the type of firm that could be used as a model for Lord Carter's proposals?

Roy Morgan: It has been said slightly tongue in cheek we could probably be the CLAN for Wales already.

Q217 Chairman: We are not operating a fixed fee system, or indeed any fee at all, but we do have some constraints of time. There are a number of quite important points that I still want to deal with.

Richard Charlton: On the mental health side, I am anxious to comment about fixed fees and mental health.

Q218 Chairman: It was going to arise later but by all means make it.

Richard Charlton: In terms of fixed fees and mental health, only 22% of mental health providers decide to take on the Tailored Fixed Fee and that became optional and that is the current situation. There was a range of reasons for that, partly to do with administrative efficiency, inefficiency in the mental health review tribunal office, expansion of case law, expansion of work to do with mental health review tribunals particularly, and the previous years being bad models. What really concerns us and concerns those who signed up to Tailored Fixed Fees in the past as well as those who have not is that the current proposals for mental health representation do represent a meltdown. There is just no way we can continue representation given the Commission's proposal at the moment and, as I have said in the documents here, that is not industrial action, that is just simply we will be unable to do it. What is very disappointing is after a whole series of meetings with the Commission they seem just not to understand the kind of work we do. The problem is particularly highlighted over not being paid if you represented a client before in the same period of illness, so if I represented, say, Dr Whitehead three years ago I am allowed to be paid to represent you again, Dr Whitehead, but I am not paid for any preparation of the case at all. Your condition may well have changed entirely or your diagnosis may have changed or the medication you are on, maybe a whole series of things that I should be professionally required to look at, your medical records, new reports that we made about you, say, and new medication, you may have even developed in relation to your condition.

Q219 Dr Whitehead: I have to say, it is uncanny how you know so much about me!

Richard Charlton: We will talk later about that! The fact is that I will not be paid for any of that work. That is critical work to preparing the case, and, of course, if I do not do that work for you, I will be negligent and my insurers will want to become involved and you would say, "Well, look, how can you do the work for me if you are not being paid to prepare my case? I was with you three years ago, but things really have moved on for me and I am allowed community leave" and so on. It presents our members with a completely impossible situation and there are other details of the scheme which are unworkable as well, but it means that we cannot do the job as set down in the Commission's proposals. They have talked to us about tweaking it around the edges, there is no tweaking possible there, that is just a core issue and the vast majority of us will have to walk away from that current situation. I apologise for highlighting Dr Whitehead.

Chairman: I think we get the point. Confident as I am in Dr Whitehead's mental health, I will therefore ask him to continue.

Q220 Dr Whitehead: Travel and waiting costs in the fixed fee, is that a significant issue as well in terms of the problem, as you have described it, of what you might call "more complex cases"?

Richard Charlton: In mental health it is always a problem if you are representing someone who is detained because you always have to leave your office to go and see somebody and hospitals are increasingly security conscious, so increasingly you are being held up in entering wards, they are being more restrictive in terms of proper appointments and access and so on - we understand that - so our costs are rising in that way. In addition, because of the shortage of hospital beds, what has frequently happened in the past is you have somebody who you started representing, say, in the Maudsley hospital is suddenly shipped across to Yorkshire during the middle of the case because it is decided that the bed is needed for somebody else, so you have to decide whether you break off in the middle of the representation, say, yourself or whatever in the Maudsley and whether we should travel up to South Yorkshire or we should try and give it to somebody else, but then they have got to get to know your case. There are very significant issues with travelling and waiting which are getting worse for our members.

Q221 Dr Whitehead: This is really a question to everybody present, but perhaps
Mr Emmerson and Mr Charlton in particular. There is, on the one hand, one pole in terms of the fixed fees with everything in it, and the other pole which is, "Well, we will leave it to up to whoever is doing the case to decide exactly how long it needs and what is involved", and, clearly, that end of the spectrum is very much, you might say, a demand‑led, pay the money in whichever way the bills come in system. Is there a system, do you think, of fixed or graduated fees which could fall between those two poles and perhaps effectively capture some of the things which you have mentioned that do arise but, nevertheless, would provide the sort of appropriate remuneration which would enable specialist and niche providers to continue to provide the service?

David Emmerson: I think the Government has accepted that the family proposals, as they were put forward, were not right, they did not get the balance correct, and that was recognised and the Commission has spent a lot of time listening to us since they brought out their unannounced proposals in trying to understand where the problems are. We wait with interest to find out what the new proposals are there, but certainly one of the things we have complained about is the "escape" clause of four times, it is just too high, and if you bring it down, and bring it down significantly, then, of course, you can address a lot of the concerns that we have about the variation in cases.

Q222 Chairman: Presumably, the same concerns apply to the removal of the 15% panel uplift?

David Emmerson: Yes, as an organisation we feel extremely strongly about that. The Commission over the years has been at the forefront of quality in the legal profession in terms of introducing contracting and supporting panel membership, and many of our members are accredited specialists and Legal Aid specialists and that gives added value to the service that is provided to the public. It keeps experience
d people doing Legal Aid which has two advantages: first, it means they can deal with the complicated cases but, secondly, it keeps the experienced people involved in Legal Aid and they can offer training and support to newly qualified people as trainees and young solicitors and, hopefully, they will be the bedrock of the future. Sadly, the Commission have done a big U‑turn on quality and it is a very worrying development.

Q223 Dr Whitehead: You mentioned that the Government has taken away what it felt were wrong figures and is looking at them again. My understanding is that they may well be looking at those in terms of what is a suitable fixed fee.

David Emmerson: As an organisation, we do not have a problem with fixed fees. Fixed fees can be advantageous but they have got to be pitched.

Q224 Dr Whitehead: A fixed fee at the right level as opposed to, say, an initial basic fee with add-ons or uplift moving in to hourly rates if complexities demonstrate that was the case, where would you move from one to the other, or do you think that a fixed fee would be adequate for all purposes provided it was set at the level?

David Emmerson: That is a difficult question to answer without lots of spreadsheets and what have you setting out the different figures. We do not have the facility to be able to move the figures around in quite the same way the Commission do, because they have got any access to the database, so until we see the proposals from the Commission, we cannot say whether or not they are right. We think the starting point is to recognise complexity factors to bring down the escape clause and do more for rewarding solicitors for doing advocacy in the same way they pay barristers.

Richard Charlton: In mental health though, we have not a seen a fixed fee proposal that will suit us. I think part of our difficulty is that we have not had the kind of panel uplift that family lawyers rightly have had. The last increase for mental health lawyers in the field was around six years ago, so things are already very tight indeed. People work in many different ways and it is very difficult at the moment to see any fixed fee proposal that will not mean a large number of people leaving and, as you see, we are 25% down on specialists anyway since 2000. I think it is going to be very difficult to see a fixed fee proposal at the moment that will retain, let alone protect and increase, the number of specialists doing mental health.

David Jockelson: It is a bit of a myth that demand‑led payment by the hour is somehow an open cheque. Our bills have always been carefully scrutinised, you do not just at the end of a case say, "Oh, give us ?10,000", you draw up a bill of minute detail, every phone call is listed, every hour is put down and justified with the documentation sent in. It is very onerous, but it means that if you have spent longer than necessary, you will get it taxed down either by the Legal Services Commission, a judge or a taxing master, so there has always been that control. There are more sophisticated ways, at least two other sophisticated ways, rather than just crude fixed fees. In crime there used to be bands, so if it was a certain simple case, you got up to here; if it tipped over and you could justify it, you went into the next band. That simplified the paperwork for the LSC, which is the main benefit because it does not benefit us much, we need to keep a track of every penny we spend in case we get to the escape limit so there is no saving for us in this system really on significant cases. The other one is grad fees, graduated fees, and that is sometimes used as a misnomer for fixed fees. Fixed fees are very crude. Graduated fees, which is, in fact, what Carter has suggested, pick up on the idea the Bar have, which is a simplified system not by the hour, it is usually by the half day and then it is a bolt‑on for additional and you tick boxes for a more complicated case. It is relatively straightforward, but it reflects the work actually done. If you run the two together then you put in a very crude mechanism under the cover of a reasonably sophisticated and sensible system. We could live with grad fees, as they are called, very easily, and we would love to be as well paid in grad fees as the Bar is, I have to tell you. You heard a few days ago that the Bar made up ten years' inflation loss and somebody said, "Well, I wish we had", and we really do wish we had because in the Bar they complain bitterly about the grad fees for family law, but they are doing very much better than we are on that score and the facts are available in the Carter report to support that.

Roy Morgan: To piggyback again on Mr Jockelson, I am also a solicitor advocate, and I use my rights in the crown courts, so I have had experience of dealing with graduated fees. What has happened over several years is what is a very complicated calculation which you have to perform at the end of the case has been changed at least twice, and possibly three times I think to my knowledge, each time reducing that graduated fee, so whilst you start off with a calculation that pays you close to what you do, it is being eroded and eroded.

Chairman: Let us turn to best value and quality issues.

Q225 David Howarth: In view of the time, I should perhaps reduce my questions to two, one for all of you and then one in particular for Mr Charlton on peer review. The one for all of you is, you will have heard with interest whether there is going to be any competition in the second round at all and one of the key problems is what is going to happen to the firms that do not succeed in getting a contract. Can I ask each of you what will happen in your firm if you do not get the contract that you would like to get? It is a terrible thing to ask, but I think it is quite important for us to get a view.

Roy Morgan: In my respect, we are very heavily committed to and very heavily reliant upon Legal Aid. If we did not get the contract we would probably cease to exist.

Q226 David Howarth: What would happen to the lawyers, this is the question, where would they go?

Roy Morgan: Initially, there would probably be a significant number of redundancies. They may well be able to find positions in other firms, but there are not that many firms which deal with the sort of work that they would want to do or are capable of doing, whether they could find a relevant position, I do not know. My guess would be, and it is obviously only a guess, that they would disappear from the system because those firms which would remain within it would have created themselves into the size to take on the volume they need to make the efficiencies and savings the volume would bring and they would not need to take on other people. I think probably you would not see a second round or certainly not a third round. If the LSC were being frank, they would probably say they would have to accept they are not anticipating there being a third round.

David Jockelson: I think Lord Carter gave the strange idea that there would be fewer firms but just as many solicitors doing Legal Aid.

Q227 David Howarth: That is what I was trying to get at.

David Jockelson: It is another absolute fantasy. Ringing round the solicitors in your constituencies, I had it time and time again, "We are on the point of giving up doing Legal Aid, we can do other areas of law", or, repeatedly, "Well, I have been doing Legal Aid for 25 years, I am getting towards 60, I will retire early". This idea that they are all going to rush to the big firms and grow and grow is rubbish because the big firms in your areas are also giving up doing Legal Aid and some of the largest, most respected firms in London, the flagships of the Legal Services Commission, have quite openly said, "These are not workable for us either", so there are not going to be these jobs available for us redundant solicitors to go into. I w
ould probably give up and follow up my second career, which we will talk about some other time.

David Emmerson: I would like to make two points. One is that, as an organisation, we have catalogued the general drift away from Legal Aid by family lawyers over a number of years and those family lawyers do not come back. Once they have had an existence outside, they do not envy being a family lawyer, they do not seek to get back into the system, and I do not think that will change. The other thing is, going on from the point that you were chasing up on, the organisations that are viewed by the Commission as the type they want to develop and expand are exactly the type of organisations like Roy's which have had their fixed fees cut because they have been efficient and are getting even greater cuts. It is the same for my firm, Edwards Duthie, in East London that does crime, social welfare and family law, and many other large volume quality suppliers, we are the people having our fixed fees cut and, therefore, there is no opportunity for us to expand. We are told by the banking organisations that solicitors' practices generally have slipped into the top ten of likely business risks, not just Legal Aid firms but lawyers generally, so the opportunity to borrow money from the banks to fund expansion is extremely unlikely. Many organisations are constrained by the premises that they are in, they will not be able to easily move into a significantly larger premises with the extra IT cost that it is going to give, so I am not quite sure, even if people are made redundant from Roy's organisation, what organisation is going to be able to step in and take on Roy's team.

Q228 David Howarth: Are the bids going to be below the fixed fee level then? You are saying it is downward pressure and the expectation is the bids are going to go even lower than that and then where are the resources?

Richard Charlton: My firm, Kaim Todner, would not be around either. We have a mixed practice, not just mental health, predominantly Legal Aid almost entirely. On the mental health side, contact with members shows that a lot of people would not come together in any kind of new mass, which I think the Commission is perhaps considering coming out of the blue. They would look towards other areas of work, employment is one they are looking forward to and moving out to private practice. The age profile of people who do mental health is older, we cannot get younger people in anyway, we cannot attract them, the uncertainties are too high, the salaries too low and, of course, once you have lost specialists in our kinds of fields, mental health particularly, you are not going to get them back. It is seven years to train up somebody into our kind of position, to get onto our panel and that is it. Then in terms of advocating for Liberty or advocating for critical aftercare support and social exclusion you have lost people in the field for good, as I said before, with enormous social and financial costs. At the moment, of course, there will be nobody around to do it anyway, this country will not have representation for the mentally unwell in our kind of field from October. It is an absolute crisis situation and many of us are clinging to this kind of work through commitment, but we cannot cling much longer to something that does not pay the bills.

David Jockelson: Lord Carter does talk about large firms to you, does he not? They are not law firms, they are not traditional solicitors' practices, the kinds of business structures can only make any sense post‑Clementi. I really think you must have heard the same story from all your witnesses that we are on the edge of a disaster and, with respect, I have to ask the Committee to say what is the Government really thinking and ask those penetrating questions about their fantasies of these mega organisations with completely different systems. Now that may be a direction of travel they want to arrive at or a destination, but it is going to be a meltdown in the meantime, a disaster for clients, for your constituents.

Chairman: I think we have got that message. Mr Howarth has a question.

Q229 David Howarth: It comes to the second and final question I want to ask Mr Charlton because part of that - it is not really a fantasy, it is more of a nightmare - is declining quality of using people of less and less qualification to give advice, so that is what puts great pressure on peer review systems as the central quality control, quality assurance. I understand
Mr Charlton is involved as a peer reviewer under the present system and I wondered what his view was.

Richard Charlton: I am only a peer reviewer rather than the architect or administrator of it. Like my colleagues here, I do approve of peer review as it is much better in terms of the alternatives available. It is not a perfect system, I think it still needs some improvement and the Commission needs to resource it properly and there are concerns about continuing to resource it properly, but they need to do that. People need to be around to be reviewed and, of course, at the moment that does not seem to be very likely. Peer reviews in different specialisms have been producing guidelines for practitioners and these, in a way, are something to hang quality upon. They are not set in stone, they are guidance, and I would think they should be reviewed only with care as kind of milestones for people to work towards, but, of course, practitioners are being squeezed. On the one hand, they have guidance quite properly about how to represent your constituents but, on the other hand, of course with the financial pressures down below it is going to be a difficult time for practitioners certainly. The peer review service should be, I think, continued, monitored and improved but watched very carefully in terms of not allowing standards to slip.

Q230 Chairman: Have any of your firms stopped taking on trainee, young solicitors for civil Legal Aid work?

Roy Morgan: No, on the contrary, we have had to take them on, as the only way we can find the lawyers to do housing work, in particular, is to grow our own.

David Jockelson: It is the same with us, we have always had trainee solicitors. We are taking on a new one and we have got two just coming up to qualifying. It is another myth put out by Carter that only large firms offer contracts, there is no evidence for that at all.

David Emmerson: The trainee solicitors' scheme that the Legal Services Commission runs is absolutely excellent for putting trainees into good firms and that has recently been expanded for family. I think the difficulty is it is such a small scheme, it is really just a splash in the ocean in terms of what is needed throughout the country as a whole. I think it is only 200 places throughout the country as a whole.

Q231 Chairman: Can you get good applicants who want to do it?

David Emmerson: You can get excellent applicants.

Richard Charlton: You can still get applicants. We get sponsored placements as well, but it is becoming increasingly difficult because people come with considerable debts still from the college system. We do grow our own, but largely because we cannot get them from the outside as well because if you put out an advertisement, even for a firm as well known as ours, we find it very difficult to attract people. I go and speak at the College of Law, I am sure my other colleagues do too, about why join Legal Aid and the good principled reasons to do so, but I find that only a small proportion end up coming and I am very nervous about the people who come to sign up with us about whether they will stay. Certainly, I know of one practitioner in the north of England and every one of his Legal Services Commission-sponsored trainees in mental health have all left to go into private practice, commercial practice; he has not managed to retain any of them. Fortunately, we have retained most
of ours, but I am very nervous that financially we just cannot.

Q232 Chairman: What are the other areas?

Richard Charlton: Commercial, away from Legal Aid.

Roy Morgan: I see 2,000 trainee solicitors a year teaching on the professional skills course and only a few years ago in any group of 48 or 50 in a particular session, half of those would have wanted to go into Legal Aid practice, high street practice. Now I am seeing a figure of nought and Professor Moorhead in the corner, I am sure, will tell you there are so few universities now which are offering housing and benefits and so on on their curriculum, on their syllabus, so the future generation is a grave concern.

Q233 Chairman: Are they not offering it because they do not see a market for the product or students do not want to take that course because they have already decided they are not going into Legal Aid?

Roy Morgan: Exactly, it is the academic institutions responding to the commercial firms which have gone in early and want business law and commercial law, et cetera. The academic institutions are responding to that and giving up the Legal Aid subjects.

Richard Charlton: If you go, a large number of students are still interested. In an ideal world they would like to come and do our work, but they say, "We just cannot afford it". It is ?20,000 or ?25,000 worth of debt potentially and you will never pay that off.

Roy Morgan: The Law Society survey, I think, showed that two years ago.

Chairman: The Committee has reported in the past on the potential impact of student debt on young solicitors being ready to go into this kind of work. Thank you very much to all of you for the very frank and helpful information you have given us this afternoon, we appreciate it very much, and we will continue to ask the penetrating questions.