Outrages by the Government's vision of the future of Legal Aid, Fiona Woolf explains why fixed fees would not work

Law Society Vice-President Andrew Holroyd was right to challenge the comments made by Department for Constitutional Affairs (DCA) minister Vera Baird on the future of legal aid ? and I share his sense of shock and downright outrage at the spin peddled by her (see [2007] Gazettes, 1 March, 12; 8 March, 16).

The suggestion that a move to fixed fees will benefit lawyers, firms and their clients is about as accurate as saying legal aid lawyers are a load of fat cats. The introduction of fixed fees risks a failure of supply that would hardly benefit clients.

Ms Baird tells us that competitive tendering for police station crime work, coming into force in 2008, will put solicitors ?in a much better position than they are today?. She says ?in future, we will pay whatever price lawyers calculate will cover their overheads, give a return on investment and make them a profit. That price will be competitive, since it will be bid for against local competition?.

It is hard to take the minister seriously when the first indicator of their approach to competitive tendering reveals a clear intention to fix the market. I refer to the Legal Services Commission?s (LSC) recentlypublished consultation on the application of best-value tendering to very high-cost cases. A three-level fixed-fee scheme has been proposed, the design of which seems to be calculated to ensure that firms are paid no more than the lowest fee in the scale. This model, if unchanged, would mean that firms would be stuck with fixed fees and denied the opportunity to set their own rates, while at the same time being forced to undertake a costly and time-consuming tendering process at regular intervals. This is not the competitive and profitable model the minister promised.

The LSC?s decision to omit the guideline rates from the consultation has further muddied the waters, robbing practitioners of the opportunity to make any proper business assessment of the implications of the model proposed. If this is an example of how the government and the LSC intend to approach best-value tendering and the reforms more generally, we can have no confidence in the government?s approach to adopt market-based principles. The proposals for very high-cost cases are about as far from a free market as we could possibly get.

I am staggered by the government?s refusal to acknowledge the risks of a move to fixed fees. Plainly the risks are manifest and any suggestion to the contrary is just dead wrong. Firms will be forced to turn away cases because they are unable to meet their professional obligations ? to act in the best interests of clients ? because they are constrained by the costs. The government needs to get real; clients have human problems that do not come in neat packages, and they often require a good deal of time and effort to unpack properly.

There is a clear case for changes to legal aid procurement. And the Law Society would not oppose the introduction of properly developed graduated fee schemes, which truly reward practitioners for the extra work required in cases of complexity. But the LSC appears largely resistant to modify fee proposals in this way to safeguard access to justice.

Even if firms do survive the implementation of fixed fees, which has massive risks to the already fragile supplier base, what confidence can the firms have in government statements and ministerial promises about the prospect of receiving a genuine market rate? The DCA and the LSC are rushing through consultations and pushing the changes to legal aid forward too fast for us to assess the aggregate effects ? and without disclosing all the vital information solicitors need to plan for the future.

It may suit the government and the LSC to keep us in a state of flux and uncertainty ? but the Law Society is working hard to fill in the knowledge gaps. For example, we have commissioned more work from economists LECG on how a market-based system might (or might not) work. Having yet again pressed the Lord Chancellor to publish the Otterburn report on the profitability of legal aid firms, the DCA finally did so last week with little fanfare. It was delivered to the LSC on 21
November. If you read the conclusion, you will understand why ministers did not want to publish it.

The Law Society wants to make sure practitioners have all the information they need to make an informed choice on the unified contract and to that end we have arranged a series of meetings to enable practitioners to hear from Chancery Lane?s legal advisers, the London law firm Bircham Dyson Bell, who will explain why, in their view, the contract does not represent a fair deal for practitioners. We want to ensure solicitors are equipped with all they need to make an informed choice about whether or not to sign the contracts.

Preserving access to justice is a cause that binds the profession together. Vera Baird?s spin makes no sense to any of us.

Fiona Woolf is the Law Society President

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