The death of the ?1 million a year barrister was signalled yesterday under reforms to slice ?100 million annually from the legal aid bill and ensure taxpayers obtain value for money.
 
Ministers have agreed a package of reforms that will see a fundamental overhaul of the ?2 billion a year scheme, giving young barristers 16 to 30 per cent more in fees but radically cutting payments to top-earning QCs.

The new market-based system, outlined in a report by Lord Carter of Coles after a year's work, will also see some 400 small law firms merge or go out of business under plans for bigger legal aid practices.

Lawyers will have new incentives to be speedy and efficient: legal aid work will be provided through contracts and the present system which pays them in 75 per cent of cases by the hour, or by work done, will be replaced with fixed or graduated fees.

The plans for fundamental reform of the way legal advice is paid for by the taxpayer in England and Wales will be phased in from next April.

Both the Law Society of England and Wales and the Bar gave a cautious welcome to the reforms although criminal solicitors were more critical.

Kevin Martin, president of the society, said more work was needed to "develop these untested proposals".

The society was unconvinced that fewer larger firms would "provide access to justice for all," he added.

It was also "vital" that fees were "set at a viable level to achieve a sustainable system which provides access to justice throughout the country."

Stephen Hockman, QC, welcomed the restoration of the 25 per cent cut in real terms for junior barristers? fees but regretted the delay in implementation until next April.

"There is much to welcome in Lord Carter?s proposals but the delay in reversing the decade of cuts in junior barristers? pay is unjustified."

He added that the shift in pay from top-earners to the bottom end of the Bar was already underway; and the days of the ?1m defence barrister - a figure that in any case represented gross earnings over several years? work - was gone.

The Criminal Courts? Solicitors? Association said the proposals were a "disaster" that would force not 400 but 1000 law firms to close.

Linda Woolley, President, said: "We are convinced that Lord Carter?s approach to reform of the legal aid system will seriously damage access to justice and the quality of legal advice for the general public."

Lord Carter, appointed as a trouble-shooter by the Lord Chancellor to tackle the defects of the scheme, outlined 62 recommendations that will strip ?100m from the scheme over five years and cap total costs, so that by 2010, costs will be lower than the present ? 2 billion.

Cash will be redirected from criminal legal aid - expected to be cut by more than 20 per cent in real terms over the next four years - and more fundings pumped into cash-starved civil and family work.

In court work, there will also be a big shift from the top to the rank-and-file.

Yesterday Lord Carter said: "There will be a substantial re-structuring... I would like to see the end end of the ?1 million a year criminal defence barrister."

Under the reforms, a barrister would probably "have to do four weeks? work in one week" to reap the previous levels of earnings.

He predicted that the overhaul could see top-earning QCs on yearly legal aid earnings in the region of ?200,000 while legal aid partners in a firm of 40 lawyers should be able to earn ?120,000 to ?150,000 a year.

Barristers? fees for crown court work - the subject of widespread protest and individual boycotts last year - will be restored to the levels of 1997, an average rise of 16 per cent but up to 30 per cent in some shorter trials.

Lord Carter said: "The existing system does permit people to make unreasonably large amounts of money.

"We believe the new system can actually find ways to constrain that."

Barristers qualified for up to five years can expect an 18 per cent rise; for between five and ten years by 20 per cent and between 10 and 15 years by 12 per cent.

Only QCs with 15 years or more experience will see a fall in pay, of some three per cent, the report suggests. It also predicts that potential gross earnings for a QC would be some ?196,000 a year.

Legal aid costs ?2.1 billion a year, or ?100 for every taxpayer in the country. About 60 per cent currently goes on criminal work and the rest on civil and family cases.

Lord Carter also estimated the reforms would see some 400 of the 2,700 firms who now provide criminal defence services to leave that sector.

The Lord Chancellor, Lord Falconer of Thoroton, said he was acting immediately to bring in the proposals.

Issuing a consultation paper jointly with the Legal Services Commission on how the reforms will be brought in "as quickly as possible", he said ministers "thoroughly endorse" the fundamental reforms proposed.

"If we don?t reform it along the lines that Lord Carter suggests, then there won?t be the access to the system, it will get out of control and we won?t have a sustainable providers market."

The reforms will also cut ?30 million from the cost of running the Legal Services Commission, which handles legal aid payments and has a current annual budget of ?100 million.

Lord Carter said he had deliberately not taken "draconian" steps to reap the greatest cost savings because of the need to maintain choice and quality, and to make the system "sustainable" because the "dedicated" lawyers could earn a living from it.

For example, he had rejected the idea of US-style "public defenders", under which people appearing in court have no choice over who brings their case. "If we had only been interested in saving money, we could have gone down that route".

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