Changing from paying by the hour to fixed fees across the board in legal aid cases will benefit lawyers, firms and their clients, says Vera Baird

The government?s proposed legal aid reforms make no cuts to the overall budget, but will move lawyers from payment by the hour onto fixed fees for standard cases. Where fixed and graduated fees already exist, they have controlled costs while giving lawyers decent returns. Where we pay by the hour ? for police station advice and litigator work in the crown court, for instance ? costs continue to soar.

It is common sense to move to fixed fees across the board ? a process that starts in April.

Peer review will ensure lawyers? quality of service improves, and it is pleasing to see the legal profession embrace this change. Peer review will monitor case mix, meaning exclusion for any firm cherry-picking soft cases to exploit the fixed fee system ? while pushing harder cases onto others. It also answers lawyers who argue against fixed fees because they ?only do the most complicated cases?. The fixed fee system will encourage solicitors to give the comprehensive service essential to help more needy clients.

In October 2008 we will move to competitive tendering for police station crime work. Solicitors will be in a much better position than they are today. Now, we pay an estimated hourly rate, based on historical claims. 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.

There are clear differences in the way criminal advice works in urban and rural areas, so for magistrates? court work we will only introduce the new standard fees in 16 urban areas. We will fix the duty rotas in a way that best meets the needs of each area. We will then fix the fees, based on those duty rota areas.

We should be as sensitive as possible to local issues, and fees will be based on true averages for specific areas. We are consulting on whether there should be minimum contract sizes in some places to optimise profits. However, they would need to guarantee good service to all communities requiring legal aid and major suppliers would have to share that responsibility with us, which would require a flexible structure.

In the longer term, we intend to increase the proportion of spending on civil and family legal aid. This year legal aid expenditure in those areas will be more than 20% higher than two years ago. Some 700,000 people have had legal help in the past year ? 50,000 more than expected and the most since the community legal service began. Face-to-face advice increased by 13% while telephone advice from Community Legal Service Direct nearly trebled, and we are currently allocating an extra 50,000 matter starts for the year. In family law cases, profit costs in care proceedings have increased from ?109 million in 2004-05 to ?129 million in 2005-06.

The fees proposed for family work caused initial concern and we agreed they were not sufficiently sensitive. This is just one example of where we have engaged with the legal profession in negotiating changes, and a consultation on family fees starts on 1 March when the new mental health fees are also announced.

Fixed fees do not threaten the vulnerable. Very time-consuming cases taking, generally, three times the standard case hours, will escape the fixed fee and be paid for by the hour.

These reforms will ensure a legal aid system that can prosper throughout the 21st century.

Vera Baird QC MP is the legal aid minister at the Department for Constitutional Affairs