The new contract fees considered: the real cost of the cuts – Steven Bird, Birds Solicitors

PUBLISHED June 16, 2015

Police stations
In relation to the London Police Station fees, from 11th January 2016 when the new own client and tendered duty contracts are due to start there will be two fees nationally. The fee for London will be £200.93 and outside of London it is £156.19. The thresholds will be set at £602.79 and £468.57 but given that the hourly rates have been cut by 17.5% this is unlikely to increase the number of cases passing the threshold.
The real losers in this will be those areas outside London where the previous fees were close to London rates. In some areas around the south-east, fees will actually fall in excess of 30%. Take Staines as an example: on 19th March 2014 the fee payable for a Staines Police Station case was £264 and by 11th January 2016 it will have fallen to £156.19 or an eye watering 40.83% cut.
In London, as the below table shows, the cut from the March 2014 rates to the new contract rates averages 17.88% with some areas recording considerable higher cuts (Richmond, Tower Bridge and Central London as examples).

No. Scheme Pre 20/3/14 Fixed Fee New fee Reduction (%)
1 Barking 246 200.93 18.32
2 Bexley 220 200.93 8.67
3 Bishopsgate 257 200.93 21.82
4 Brent 240 200.93 16.28
5 Brentford 244 200.93 17.65
6 Bromley 232 200.93 13.39
7 Camberwell Green 240 200.93 16.28
8 Central London 260 200.93 22.72
9 Clerkenwell/Hampstead 243 200.93 17.31
10 Croydon 237 200.93 15.22
11 Ealing 252 200.93 20.27
12 Enfield 239 200.93 15.93
13 Greenwich/Woolwich 229 200.93 12.26
14 Haringey 247 200.93 18.65
15 Harrow 240 200.93 16.28
16 Havering 224 200.93 10.30
17 Heathrow 301 200.93 33.25
18 Hendon/Barnet 242 200.93 16.97
19 Highbury Corner 252 200.93 20.27
20 Kingston 250 200.93 19.63
21 Newham 241 200.93 16.63
22 Old Street 240 200.93 16.28
23 Redbridge 247 200.93 18.65
24 Richmond 264 200.93 23.89
25 South London 252 200.93 20.27
26 Sutton 239 200.93 15.93
27 Thames 239 200.93 15.93
28 Tower Bridge 255 200.93 21.20
29 Uxbridge 231 200.93 13.02
30 Waltham Forest 224 200.93 10.30
31 West London 258 200.93 22.12
32 Wimbledon 245 200.93 17.99
Average: 244.69 200.93 17.88
All figures without VAT
Figures taken from Consultation document 5/9/13 Annex G2

Bizarrely the rates are being cut below the new contract rates for the period 1st July 2015 to 10th January 2016 in a number of London areas following which there will be a slight increase: e.g Bexley, Brent, Bromley, Camberwell, Croydon etc. What can be the justification for this bizarre situation?
Magistrates’ Court
The new contract will abolish the higher standard fee. Below is a table comparing the fees payable in designated areas before 20/3/14, after the first cut and after the second cut. The threshold figures for the second (July 2015) cut are also included.
What this demonstrates is that the cut to the lower standard fees is limited but the cut to cases that would previously have warranted a higher standard fee are enormous. This will clearly reward firms that do not undertake very much work on behalf of their clients especially in relation to trials. This is counter-intuitive to a guarantee of quality.
It is interesting to note that the higher threshold from 1st July 2015 remains as it will be for the new contracts in January 2016 so any cases falling into what would have been the higher fee band will be cut between 43% and 59% (average 52.7%). It may well be that notwithstanding the reduced hourly rates, we see more cases crossing the threshold into CRM7 claims especially if we have to list matters for multiple non-compliance by CPS. This will increase the administrative burden on the LAA on assessment of such claims.
What is clear is that although we are told that the fee cut for 1st July 2015 represents a cut of 17.5% from the pre-March 2014 figures and that the Government has only ever professed to wanting to cut by 17.5%, in fact for a considerable number of cases (i.e all those in the higher fee band), further considerable cuts will be forthcoming in January 2016 which go far beyond the advertised reductions.
Crown Court
The Crown Court litigator fee reductions from January 2016 are more complicated. For cases over 501 pages, it is a straight 17,5% cut on the pre-March 2014 fee so will be the fee as applicable from 1st July 2015.
For the majority of cases where the page count is below 500 pages, the fee structure divides into five bands of 100 pages. On the face of it, one may not consider this to produce particularly unusual differences. However , the table below shows what happens when you compare cases from March 2014 to the January 2016 fees where there are 100, 200, 300, 400 and 500 pages of evidence. The average fee cut on these figures is actually 27.26% so we can expect further actual cuts to our income in January 2016 despite having been told that we have had the “necessary” 17.5% cut from 1st July 2015. The change in payment structure produces deeper cuts.
As an example of how the table works, let’s take a basic burglary. This is a class E offence. It is not unusual to have a low page count. If our page count is 100, pre-first March 2014 cut, we would have been paid £394.66 on a guilty plea, £557.96 on a cracked trial and £1171.84 on a 3 day trial. In January 2016 those fees will be £189.13, 272.47 and 690.59 respectively. These decreases are 52.08%, 51.17% and 41.07%.
Take any example at random and in very few cases will you find a cut as low as 17.5% (only 16 of the 165 individual fees are at or below 17.5%).
Of course, we are looking at cases on the edge of each boundary and may therefore be considering the worst case scenario. However, these are actual scenarios and will actually reflect the reality of what this re-structuring of the fees means in terms of income on the vast majority of Crown Court litigators’ fees.
Confiscation/Court of Appeal
These cases remain funded under the ex post facto basis and as such rates are reduced under the new contract by 17.5% from the pre-20th March 2014 figures. There will be no further reduction after the 1st July 2015 cut. These are the rates for London.
However, it is instructive to compare the figures with the last time they were increased (April 1996).
The rate has not increased for 19 years. In the last year it has been reduced first by 8.75% and then by a further 8.75% to give a total reduction of 17.5%. When inflation is taken into account, the cut in real terms over that time reaches 50%.
CA and confiscation rate table
Consultation Crown Court fee cuts under 500 PPE Final 270214