SAILESH MEHTA, LYNTON ORRETT, OBA NSUGBE,

MARCIA WILLIAMS and RICHARD MILLER

RODNEY WARREN, BRIAN CRAIG, HELEN COUSINS

and JOANNA STEVENS

Evidence heard in Public Questions 234 - 297

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Oral Evidence

Taken before the Constitutional Affairs Committee

on Tuesday 6 February 2007

Members present

Mr Alan Beith, in the Chair

David Howarth

Mrs Si?n C James

Bob Neill

Keith Vaz

Dr Alan Whitehead

Jeremy Wright

________________

Witnesses: Richard Miller, Director, Legal Aid Practitioners' Group, Oba Nsugbe QC, Chairman, Lynton Orrett, Marcia Williams and Sailesh Mehta, Carter Diversity Group, gave evidence.

 

Chairman: Good afternoon and welcome, Mr Mehta, Mr Orrett, Mr Nsugbe, Ms Williams and Mr Miller. We are very glad to have you with us. We have to declare our interests before we can do anything else.

David Howarth: I have no interest in this at all!

Bob Neill: I am now a non-practising barrister. I used to specialise in criminal work.

Jeremy Wright: Exactly the same applies to me.

Keith Vaz: I am an employed barrister but I do not do any Legal Aid.

Q234 Chairman: Thank you very much. We are very glad to have you with us this afternoon. This is a very important issue which is causing a great deal of concern. One of the things which has been suggested to us in the course of our proceedings from quite a high level is that in order to assess the impact, and the potential impact, of the Carter reforms implementation should be limited to criminal Legal Aid with the civil Legal Aid waiting until there has been proof that reforms on the criminal side have been successful. Do you think that is a viable proposition and has it got any adverse consequences?

Richard Miller: I think there are some fundamental issues to do with best value tendering and to do with the whole Carter approach that need to be addressed before either side can progress at all. There are a couple of points in particular that really concern me. The first is that one of the underlying principles of the Carter reforms is that risk will be transferred from the public sector to the private sector. Inevitably, when that happens there is an economic cost for that risk and you will see that in any PFI contract or in any sort of business arrangement. Where there is an increased risk the business needs to get an increased reward to compensate for that. We are being presented with these proposals in the context of the DCA saying there is not a penny more available for Legal Aid beyond what is currently being paid. That means they are expecting firms to take on an additional risk which has an economic cost and they are not prepared to pay the cost for us taking on that risk. The second aspect which throughout all these discussions, going back to the proposals for London competitive tendering that were produced last year that I have never seen addressed, is assessing what it is that you are putting a price on. It is all very well saying you will put a price on a case and then you will have bids for ----

Q235 Chairman: I think we will come back to some of those points later. I wanted to check whether this idea that there might be some merit in letting a criminal side go first is one that had any wider support or would cause worries. If you do not have a view about it, fine. This is quite without prejudice, the question of whether you are against doing it in either the criminal or civil sphere, whether there is any merit in this staged approach.

Oba Nsugbe: We cannot see any merit in the staged approach is the short answer.

Q236 Chairman: Similarly, what about initially limiting it to certain areas such as major conurbations rather than elsewhere? I take it that would not commend itself to you either?

Oba Nsugbe: No.

Q237 David Howarth: Can I ask about the peer review process and quality assurance in general that were largely under Lord Carter's proposals but also under the slightly modified view that has come out since then. Especially for Mr Miller, although other comments are welcome as well, how is this system going to guarantee high quality in the long-term and do you have any comments to make about the criticism that it starts off with a high level of quality but then it is not clear how it will maintain that quality through different rounds of bidding?

Richard Miller: I think that is very fair comment. We are very much supporters of peer review, we think it is the best measure of quality that has yet been produced by the Legal Services Commission, but all it will ever do is measure whether quality has been maintained in the past, it will not do anything to ensure that quality is kept at a level after a bidding round. So you may have a bidding round and only allow firms that are of a suitable quality to bid but what happens in the next two to three years is not affected by peer review at all, all that happens is three years later you measure the quality again and if it is dropped what do you do because in the bidding round you have excluded all the other firms, they will not be there to come back into the system, so if quality has dropped there is no-one there to replace them to bring the quality back up to the necessary standard. It is a good measure of quality but it is not a method of maintaining quality.

Q238 David Howarth: What do you think could be done between bidding rounds to make sure that quality stays high because it is a problem for the bidding, it is a separate problem, but the quality itself to clients in the meantime, what can be done to maintain that level of quality?

Richard Miller: I think this is one area where the Legal Services Commission does have some reasonable ideas in that they intend to measure firms' outputs, the results of cases that they are conducting and also certain measures that they will themselves undertake to assess whether quality is being maintained if there are other indicators that give them cause for concern. They have proposed a number of measures that they hope will address those issues. Those methods are untested at the moment, these are new proposals that they have come up with, but on paper they do look as though they are at least approaching it from the right angle, so I think they have got some reasonable ideas there but it remains to be seen whether they will be effective in practice.

Q239 David Howarth: Is it going to work to have basically a paper-based system? Do you need more than just file-based assessment?

Richard Miller: I think you do, particularly in criminal law. On the civil side I think the file does tell you a lot more because it is very much more paper-based. Criminal work very much more depends on the actual performance of the lawyer in the police station and in the court and I think the current systems do not adequately measure that. That is one concern that I do have, that if firms are being excluded from criminal law on the basis of the system as it currently stands measuring only the paper file I do not think that is necessarily excluding the right firms. Firms could be keeping paper files absolutely fine and doing a poor job in the advocacy and the police station work or, vice versa, they could be doing excellent advocacy but just not maintaining the files as well as they should. In either event you could find that the peer review is targeting the wrong firms on the criminal side.

Sailesh Mehta: Certainly for crime that sort of review only tests a tiny proportion of real quality because there are lots of other things that are such imponderables that it would be very difficult to put a measure on that.

Lynton Orrett: Also, we are finding with peer review, from a BME perspective, that BME firms are coming in low on a level three or four and in discussion with the LSC what they have not quite worked out is why there is this negative impact on peer reviews. What needs to be looked at from the LSC's perspective as well is what is it about the implementation of peer reviews that is having a negative effect because if peer reviews are going to be a basis for getting forward to the next round, and there is something wrong at this stage, then you may find that BME firms are not going to get through on BME without the research being done as to why they are not reaching a level two.

Oba Nsugbe: Can I answer your question in a more fundamental way by saying that we think the way of maintaining quality between peer reviews really is best answered by ensuring quality lawyers remain in the profession and ensuring that you have good quality entrants into the profession and the best people for this job. I think if you can ensure that by making sure that people want to do publicly funded work, then I think the issue of peer review, although it is an important one, will go a little way to answering a proper concern about what you do in-between the reviews.

Q240 Bob Neill: That is exactly the next point I wanted to come on to. Are the Carter proposals going to have any impact, good or ill, upon attracting quality people and perhaps also retaining them? We have heard differing views, a suggestion on the one hand that the business risk for that type of work will mean that firms do not want to take the risk of entering into training contracts. On the other hand, if you are having to pare down your margins, do you go for the cheapest available people to do the work if you are effectively trying to do it in bulk? What is your assessment as to where we stand? Are either of those likely or none?

Lynton Orrett: Within BME firms we are already seeing that there is a hiatus on employment, especially when it comes to taking trainees. The bigger risk is if these proposals come in as they are, they are going to negatively impact on BME firms, I think everyone, including the DCA, has conceded that. Within those firms there are quality people who are running their businesses, doing well, the kind of people who down the road would be suitable for judicial office. A lot of those firms are considering closing at the moment, and I do say "just considering" because the proposals are not detailed enough for them to make full plans, but a lot are saying we are not going to have a future in a few years so you will lose quality in practitioners.

Q241 Bob Neill: Is that in both crime and civil work?

Lynton Orrett: In both aspects.

Oba Nsugbe: The question of new entrants is absolutely central to our submissions as you will have seen. We are extremely worried, even now, attracting good quality lawyers to publicly funded work is an extremely difficult task. There was a time, as I am sure the Committee will appreciate, when people choosing publicly funded chambers, or chambers doing publicly funded work, was an attractive proposition and you did not have a problem attracting people to do that kind of work. Now, it simply is not the case. You are finding the most able candidates, if they can stay the distance, are simply saying to themselves, "There are too many risks, too many imponderables, we are not particularly well valued as a resource or as a work provider and why should we?" I think if you were a business person looking at the proposals that Carter has in mind, they are not being piloted or tested anywhere, all the risk is being transferred to the suppliers, in effect you are saying, "We will come up with an imaginative business model for providing a public service". We all know that clients are all very different and you cannot treat them all as standard cases, which is exactly what we are being asked to do with these new proposals, and if they are as untested as they are I think it is an extremely risky model to pass to the profession and say, "Well, you can work it out". If I were coming into law now, I certainly would be thinking long and hard about going into crime, family or publicly funded civil work.

Marcia Williams: Can I pick up on this issue of transferring the risk but maybe from a different angle, which is that I think one of our major concerns is the extent to which these proposals are being discussed and debated but in the absence of a full race equality impact assessment. It is very difficult for people with all the variables that there are in the mix to fully understand what the ultimate impacts are going to be both for BME firms, but particularly for BME clients. Given that the DCA and the LSC are public authorities, they are subject to the Race Relations (Amendment) Act, we are concerned that does not seem to be forthcoming in the way that we would like. We understand that various strands of Carter will be rolled out over a period of time but I think our very basic concern would be that the impact of that kind of staged implementation could very well mean the removal from the marketplace of precisely the kinds of firms and practices that we are discussing here. Their absence means that it is very difficult after that point in time to do a genuine and full race equality impact assessment with any integrity because they are simply not in the marketplace to be able to assess them. From our perspective we are very concerned to ensure that the full spirit and letter of this piece of legislation around race equality impacts is adopted. Our feeling is that the Carter Report adopted a very negative and a very limited approach to the question of race equality. It simply looked at this issue about elimination of discrimination: are the measures themselves discriminatory? We would say please bear in mind that those public sector duties are three-part and they are purposive and positive. They also include an obligation not just to eliminate discrimination, but to promote good race equality and to ensure the positive promotion of race equality measures. They are things that we would very much hope that the DCA and the LSC would bear in mind.

Lynton Orrett: In relation to the race impact assessment, Vera Baird gave a speech to the Black Solicitors' Network on 8 June 2006 and in that speech, if I may read from what she said, she said, "Let me add that there will have to be and will be a full race impact assessment of these proposals if they become government proposals". We have got the first stage of those proposals that will be implemented within the next eight weeks but we do not have a full race impact assessment.

Q242 Chairman: Have you got any sort of race impact assessment?

Lynton Orrett: We have got nothing that we would class as a race impact assessment at all.

Q243 Bob Neill: This is something that I recall, things like the Bar's Diversity Group and others, raised at the very beginning of the Carter process. That is not something that comes as new, is it.

Marcia Williams: It is not a surprise.

Oba Nsugbe: I think if you do not know exactly how the legal landscape claims to look, you do not have any kind of map as to where you are going, you do not have a particularly good map of where you are coming from. It is crucial to have a race equality impact assessment and, having promised one, I do not see the point at where we will have a look at it piecemeal because we are told that these are all connected reforms, so if you put into place one reform you have already altered the landscape. If you do not do this kind of thing which, in fact, engenders confidence in the profession, you find that by the time you come around to it, as is happening now, lawyers are already saying "This is not for me, why should I stay? What is happening?" and there is anger and disillusionment. It is a crucial aspect as the Committee have no doubt picked up. The crucial aspect of what we are saying is something that the Government indeed said that they would do and we were expecting an independent race impact assessment, such as they did with the MDA Report, which I am sure you have looked at and read, which was a high quality document that did good research and asks people how this service is delivered.

Q244 Bob Neill: Has any reason ever been given to you as to why that has not been done?

Sailesh Mehta: When we met Lord Carter's team right at the outset the first few questions were, "How many people will fall by the wayside at the first stage? How many at the second stage? How many will be BME firms and what BME communities will be affected?" The answers we got were "We do not know" to all of those questions. We could not believe that you could propose a wholesale change to such a fundamental part of our way of living and not know the answers to those questions. Even now my members ask me "How many of us are going to be out of a job in October 2008?" The answer I give them is what Lord Carter's team told me, "I do not know". If the pessimists are right, that there is going to be a massive negative effect upon BME communities, access to justice and a knock-on effect for lawyers, then they should be tested in advance rather than letting it happen and then for people like us to say in five years' time "I told you so" because then those changes will have become irreversible.

Chairman: Thank you for drawing that to our attention.

Q245 Mrs James: It has been suggested that fixed fees with their swings and roundabouts might put certain vulnerable clients at a disadvantage as solicitors could be disinclined to deal with clients who are disabled or have insufficient command of the English language. Do you agree?

Richard Miller: Yes, I do. I think it is inevitable when you are dealing with a fixed fee system, and we already know that the rates are low as far as firms are concerned, they feel that they are inadequate, if they are faced with a client who they know immediately is going to cost them more because they do not speak English as a first language or they have health needs or other particular reasons to do with the client which mean that the case will take longer to deal with, that is an immediate disincentive to the firm to take on that particular client. It is more than that as well. There are certain firms that specialise in acting for particular clients. There are some that specialise in acting for clients with mental health difficulties and providing all the social welfare needs that they have. There are other firms that act for particular ethnic minority communities with all the relevant language needs that those entail. The result of moving to a national fixed fee system for social welfare work, which is due to come in in October, is that those firms will be losing money on every single case. They will not be able to operate under this national fixed fee. From the outset we have argued that account must be taken of these additional needs in the fee structure and at every step of the way that has been expressly refused. We think that is unacceptable and we still think that is unacceptable.

Q246 Mrs James: Is there a way of minimising this cherry-picking because one could presume that companies or solicitors might choose to pick the ones that best fit into their criteria and the more difficult cases might not succeed in getting representation? How would we minimise on that cherry-picking?

Richard Miller: The LSC talks a lot about monitoring on an on-going basis but the whole point of moving to a fixed fee scheme is they are insisting that firms should change their pattern of work, so these firms that are specialising in dealing with these clients with additional issues, the LSC are saying they should take on a load of simpler cases as well to balance that, so they will be required to stop taking on some of these clients with the additional difficulties. Meanwhile, the firms that have no experience of dealing with these clients and no experience of addressing their needs will be expected to take them on. It is not in the clients' interests and it is not in the solicitors' interests. I do not think the monitoring can deal with this issue and I do not think it would be desirable for that to be the way forward anyway.

Q247 Mrs James: I am also concerned about the inclusion of interpreters' costs in the fixed fees for asylum legal advice. Is this the right way for you to improve efficiency in that area?

Richard Miller: Absolutely not. We have got no idea why in this one area alone the LSC decided that the interpreters' fees should be included within the fixed fee, we can see no justification for it, we think it is a deeply retrograde step and we very much want to see that removed.

Q248 Keith Vaz: What role do black and Asian suppliers play in ensuring access to justice for the community?

Marcia Williams: We would say that they provide an absolutely critical link and function. The fact of the link between the ethnicity of the firm and the ethnicity of the client has been acknowledged by Carter. I think we would disagree to the extent that he suggests that link is purely perhaps on a geographical basis, that those individuals tend to gravitate towards those firms because they happen to live or work in that particular area, we think it is much more fundamental than that, that there are cultural, linguistic, faith and other reasons for clients from black and minority ethnic groups positively seeking out firms and lawyers from those backgrounds. For that reason we are concerned at the suggestion in Carter's Report that somehow a regional analysis of the pattern or spread of BME firms is inappropriate and actually the proper concern is to understand the proportion of black and minority solicitors and barristers at a national level because it is certainly our feedback that there is that fundamental link and that clients do seek out lawyers on that basis. In terms of the overall picture, what we would say is the presence of those kinds of firms in the legal marketplace adds a particular value in terms of community cohesion as well. The fact that there are lawyers, respectable members of the communities, entrepreneurs, people who are running businesses and owning firms, is very important in an environment where there are not such role models commonly and it does provide a real focus point and a hub in a community to know that there are those trusted advisers that people can go to.

Q249 Keith Vaz: Mr Mehta, you have your own firm at the Bar, do you?

Sailesh Mehta: No, I am a barrister.

Q250 Keith Vaz: Which of you has your own firm? None of you?

Oba Nsugbe: Not own a firm but Lynton Orrett certainly has experience of working in an ethnic minority firm.

Q251 Keith Vaz: For example, in an ethnic minority firm, what percentage of the clients would be from the ethnic minority communities? Are you talking about 50% plus?

Lynton Orrett: With the firm that I worked with it was easily above 80% and what you would get from clients was that they did not think a solicitors' firm could be like that. They would walk in and they would feel comfortable immediately from reception onwards. One of the things they always commented upon was how relaxed they felt. It is something you cannot quantify, it is like why do you pick your friends. When they walked through the door the faces they met, maybe from the pictures on the wall, little things could make a difference, what they were offered as a drink when they came through the door, small things that you understand about your community instinctively so that when they walk in they feel comfortable.

Sailesh Mehta: I think the LSC pre-Carter did some research and for small firms in conurbations such as London where there are larger groups of ethnic minorities, something approaching 50% of firms of solicitors are BME controlled or run. That is a pretty high proportion. Part of an explanation for that is that these firms do not sprout up for no reason, there is an economic reason as well. There are a number of communities who can support these firms, who need these firms, and these firms would not exist and thrive but for their local community using them and needing them and it allows access to justice for these communities. One of the difficulties that we have with Lord Carter's proposals is that the starting point is that these small firms are uneconomic and therefore bad for business. We do not accept that, we say that these firms are, in fact, very good value for money and add a level of assistance to the community which cannot be put into monetary terms. As soon as these firms go, and we say that a good proportion of these firms will go under Lord Carter's proposals ---

Q252 Keith Vaz: What proportion will go? What is the estimate? You say that Lord Carter has no estimate, what is your estimate?

Sailesh Mehta: Our pessimistic estimate is more than 70%.

Q253 Keith Vaz: 70% of?

Sailesh Mehta: Small black and Asian firms.

Q254 Keith Vaz: They will close as a result of these proposals?

Sailesh Mehta: Yes. At the second stage when price competitive tendering takes effect and hard economies bite, then, of course, it is very likely that the larger firms will win at the second stage. It does not matter how good a firm you have, it does not matter that your local community wants you and needs you, you will still go.

Q255 Keith Vaz: Pretend I am Lord Carter for a moment - I know it is difficult to imagine that - he says what they should do is they should merge. There is nothing wrong with Malick & Malick of Wembley merging with Bindman's, for example, I know you find that also hard to believe but imagine that could happen. Why is it not possible for these little firms dotted around the inner city areas to merge as Lord Carter wants?

Sailesh Mehta: Can I answer that question in two ways. Firstly, what is happening and, secondly, what we believe the reasons are. If Lord Carter is right and if there is a good economic argument for these proposals then right now, as we speak, there would be merger mania amongst the small firms because all of the small firms that fear they are going to lose out will start merging with Bindman's and so on. In fact that is not happening at all. I can tell you from the members that I represent in the Society of Asian lawyers, there is no merger mania at all, it is pessimism. The reason for that is the economic reason that these firms start off in the first place. You start off a firm near an Ethiopian community, for example, in West London because that community is going to support you. You do not then merge with the firm next door that is supported by another community, there is no rationale for that sort of thing to happen. What I say is what is happening because if I was wrong about that, there would be mass mergers right now, there would be large BME firms sprouting up all the time.

Q256 Keith Vaz: Did Lord Carter have a member of the black and Asian community on his review team?

Oba Nsugbe: Not that we are aware of, unless we missed something.

Q257 Keith Vaz: How was he able to know of your concerns? How did he know that what you were saying was representative of the community? How did you put yourself across?

Oba Nsugbe: We had written submissions, obviously, but, more importantly than that, we had a public meeting in the GLA, the Greater London Authority.

Q258 Keith Vaz: And he attended?

Oba Nsugbe: No, he did not attend, but where we specifically targeted the community, the community leaders, religious leaders, and we had on that platform the immigration practitioners, we had the Law Centres Federation and the Refugee Council, and we wanted, obviously, to talk to the community about these concerns and we did not have any representative from Lord Carter's team.

Q259 Keith Vaz: Did you meet Lord Carter? Since you take your name from his name, the Carter Diversity Group, did you meet with him and discuss these issues with him? Did he ask you to meet with him?

Lynton Orrett: As everyone will know, we are an umbrella group. I represent the Black Solicitors Network under that umbrella and we had numerous meetings with the Carter team.

Q260 Keith Vaz: With Lord Carter himself?

Lynton Orrett: Lord Carter was there as well. We were invited to open meetings and we also had meetings with his team to express our concerns. Partly the concerns were about the consortia and the mergers. The mergers have been dealt with. The reason that the consortia also are not happening is because we said from day one there has to be a development fund. The smaller firms do not have the resources of Tuckers, where they can employ someone who can plan a consortium for them. So we needed a transitional fund, and we said: "Look, this may be what we need, and the BME firms need, to survive. If you can give us this transitional fund", which Lord Carter did recommend in his report, "then we may be able to form consortia and we may be able to take it forward that way so that people do not have to leave the areas they are in, they retain the link with their communities, but we can save on cost to the LSC." The LSC has decided that that money is not available. It has to be spent elsewhere. Whether that is on their administration, or whatever, I do not know, but they have said definitely there will be no fund for BME and small firms.

Q261 Keith Vaz: But there seems to be an acceptance by Lord Carter that his reforms will have a disproportionate effect on black and Asian firms and, therefore, the community. As you say, the community accesses these firms in order to get access to justice, and it justifies it on the grounds that it will control Legal Aid spending. Do you think that that is a justification? That is an easy question, by the way.

Lynton Orrett: It is no justification. We also have to look at savings that are taking place as we speak. For example, since means-testing has been introduced we have seen a reduction in the number of representations being granted, which means there is less income coming into firms. We are having conditional cautioning for crime, which means that a person can be cautioned at the police station, have conditions attached but never sees a solicitor. On the estimates that were out last week, it seems that there has to be a saving, roughly, of around 100 million already over the next year on three proposals that are being brought in by the LSC. Those savings are being found somewhere else. Why do you need them from the reforms? Also, Carter says that they can retain a client-base under these reforms. Last week, when this 100 million figure was mooted, the Legal Services Commission said that small firms will have to make up the deficit through private work. That is different from the basis upon which Carter said they can ensure there will be a client-base. If the client-base is already disappearing because you are not getting Legal Aid, then we are talking about a smaller pool than all the figures relate to in the reports, so it is going to be even worse than was originally anticipated.

Marcia Williams: May I add to the question on justification. Again, here Lord Carter's justification argument runs along the lines that the move to working with larger firms is justifiable on the basis that, although it may have a particular disproportional impact in terms of the number and scope of BME firms, provided he can maintain a proportion of BME practitioners in the professions, then there is some justification for that approach. I repeat what we said earlier: we would feel it is the regional pool that is the proper pool for assessment, not the national pool, but also I think what we would say is that the justification is based on broad proposals around the best value, the fixed fees and peer review. What we would suggest is that that justification needs to be more detailed, more specific, and it needs to be from the perspective of do these reforms hold up in the light of the Race Relations (Amendment) Act? Are they justifiable in that context? The only way really to answer any of those questions is to undertake a full wide-ranging race equality impact assessment.

Q262 Keith Vaz: Did you put it to them that they should do that?

Marcia Williams: Absolutely.

Q263 Keith Vaz: What did they say?

Marcia Williams: At the moment I think the position is that they are prepared to look at race equality impacts in the context of the individual strands - for example, police station boundaries and so forth - but we are insisting that there should be an undertaking for this full race equality impact. As colleagues have said, the Government is suggesting that they will undertake an impact assessment. What we do not have is any assurance about the timing of that and, with these reforms coming in April 2007, the clock is ticking.

Q264 Keith Vaz: You want them before?

Marcia Williams: Of course.

Keith Vaz: Thank you very much.

Q265 Dr Whitehead: You have already mentioned this afternoon and, indeed, in your written evidence the impact that particularly best value tendering might have on BME practices. You also mentioned, I think, that BME solicitors working in non BME practices would actually not resolve the particular issues, should there be best value tendering and fixed fees coming in. Assuming that they do, what measures would you think the LSC might take to ameliorate that impact and, particularly, are there views you might have about how the very notion of best value might, therefore, be judged? What is the quality as well as the quantity of best value that one might look at in this context?

Marcia Williams: Can we pick up, first of all, on that distinction between BME lawyers operating in their own firm and environment and BME practitioners dispersed in a national picture among firms more generally? We would not say necessarily that is a bad thing. Of course we want to see more diverse law firms and practices, but, picking up on something we mentioned earlier, we do think it particularly adds to the ethos and the identity of a firm as such where we do have those entities present in the market place. We have suggested that perhaps the criteria for those needs to reflect the needs of the client. So the ability of firms to be able to provide the kind of service that Sailesh was describing for these - sensitive and appropriate, linguistically, culturally, and so forth - is a necessity, but we do struggle to see how the mainstream approach that is being suggested can answer that. To be very particular, the recommendations that Lord Carter made were around ensuring that each law firm has in place an equal opportunities policy, for example. We know already that that is a requirement under professional conduct rules. Every firm must have an equal opportunities policy in place. He also suggests that one way to ensure the presence of these laws in the market place is to do regular and frequent monitoring. Sadly, we all know what the results of that kind of monitoring are; we know that there are pockets of under representation in the mainstream. I suppose what we would say is that those recommendations are fairly safe, they are not particularly ambitious, and that actually what we need is a commitment to these kinds of firms being present in the market place and maybe some more radical suggestions might be considering the scope for either not insisting on a minimum threshold of contracts in particular areas, or for particular types of firms, or, as I say, looking at the criteria for best value, what that might mean and what that might represent in practice, to enable these firms to survive.

Q266 Dr Whitehead: Would you, in the context of best value, perhaps be looking at a wider definition of what best value might be, particularly in the context of what you have already said about the presence of BME firms, and that best value simply based on the lowest envelope tender might not be the most appropriate way to look at it?

Marcia Williams: I agree. I have to say that the diversity approach that has been taken in the report is very much a human resources-led equal opportunities approach in that the concern is to ensure that there is an appropriate headcount of lawyers from different backgrounds and that there are internal policies, and so forth. That is laudable, but what we would like to see is this cascaded through into service delivery. It is at that end that our real concerns are: what the client might expect and how the client might benefit in the new regime. It is imperative that best value reflects that.

Richard Miller: I think one concern here is that in any best value tendering scheme that could only be one element of what is being looked at. The scheme has to be objective, it has to be fair to all bidders and there is always the risk that the firms that are providing these services will lose out because in the overall assessment they do not score as highly as some of the other firms; so we would need to see a lot more detail presented by the Commission or by the DCA as to how this would operate in order to ensure that these services for clients were protected. At the moment we do not see how that would operate. We do not see any way that they have come up with yet that these services would be protected.

Chairman: We have found your evidence very helpful this afternoon. You have drawn our attention to a serious omission in the Government's approach to this. Thank you very much indeed.
Witnesses: Rodney Warren, Director, Criminal Law Association; Brian Craig, Chairman, Association of Major Criminal Law Firms; Helen Cousins, Partner, Cousins & Tyrer; and Joanna Stevens, Specialist National Criminal Law Team, Thompsons Solicitors, gave evidence.

 

Chairman: Ms Cousins, Mr Warren, Mr Craig, Ms Stevens, welcome. It is very good to have you with us. I think we have got one more interest briefly to declare.

Keith Vaz: Thompsons have acted for my constituency party on an issue.

Q267 Jeremy Wright: Can we start with the position as it is now. We understand that the number of solicitors firms who hold a criminal Legal Aid contract has been gradually declining, and that obviously gives rise to some concerns as to whether the supply base is large enough to cope with the sort of proposals that Carter has in mind. First of all, is it your impression that the number of criminal law solicitors is declining and, if that is right, are there enough of them to enable them to do the work that Carter has in mind, particularly in smaller towns and rural areas?

Rodney Warren: I wonder if I may start by giving some figures in relation to that. It is a very interesting question. I think there are now something approaching 120,000 solicitors on the roll and certainly 100,000 in practice. There are, I think, on the Legal Services Commission's figures, somewhere over 5,000, so, therefore, roughly 5% of solicitors are qualified or accredited to do criminal law, and that figure of 5,000 solicitors, it may be two or three hundred more than that, but it is a number which has remained broadly constant over a period of time but has dropped a little. The number of firms in which those solicitors work has been about 2,500, and falling, over the same period of time. Certainly my understanding of it is that nobody has actually suggested that there are too many solicitors in work, but actually it may be true that they are spread across a large number of firms and, therefore, the administration of the process may be more costly because of the number of firms involved. I do not know whether my colleagues would agree on that.

Brian Craig: I think there is a regional element. Certainly in some of the rural areas, as I understand it, cover can be very difficult. However, in some of the urban conurbations there has not been, I would say, a shortage of solicitors available. The question, I suppose, is whether or not you have got the right skill-sets for the work that needs to be done, and certainly I would not personally see a shortage at this point in time.

Q268 Jeremy Wright: You are obviously here to talk about things from a criminal perspective, but one of the arguments that is made in the context of the Carter Reforms is that it will do less damage to the supplier base to implement these proposals in the criminal field before doing it in the civil field. Is that a point of view with which you would agree?

Rodney Warren: No, it is not - a very simple answer. It seems to be taking an extraordinary risk with the effective operation of the criminal justice system to try an experiment across the board, and just hope that it is going to operate effectively. I think we are united in expressing degrees of concern about varying aspects of it, and, therefore, to leap ahead with criminal law without being certain of the consequences, I think, is taking a very great risk indeed. I do not think it is a question of putting one before the other as a means of testing it; it seems that such an experiment should be proved to be a successful pattern and process before it is put into operation.

Brian Craig: There is a real problem in terms of whether or not criminal law firms will remain viable under what is being proposed under Carter. As you will be aware, October Research showed profitability levels ranging between -6 and 2%. The actual reduction that Carter sees generally is set at about 4% in the first year, but on a regional level that is considerably more. What we have got is a situation that under Carter, where we expected to see lower unit costs, we have already seen a reduction in volumes as a result of means-testing and there is a transfer of risk. It is very difficult, in that context, to see how criminal law is going to be able to continue under that triple-pronged attack, and one would have thought that the first steps ought to be looking to see whether or not the system is going to be viable in the first instance on the criminal side or on the civil side. I am sure the civil practitioners face as equally daunting prospects as the criminal.

Helen Cousins: The criminal justice system as a whole feels, to those who practise within it, to be right on the very edge. The police are struggling, we understand, with various aspects; the Probation Service fails to produce reports more often than they produce them; the court staff are striking. We are right on the edge. It seems to me that if you push the criminal profession any further than they are at the moment, which will take them over the edge, then the whole thing will collapse, because it cannot work without us. To try and experiment on a system that is so fragile and on a group that within that system is beyond fragile seems to me to be lunacy.

Q269 Chairman: There is another issue which has complicated it, certainly in my own area, which is that duty solicitor and police station work out of hours is disappearing because the police are taking all prisoners, other than in daylight hours, to a distant police station, which takes out the solicitors practices in three or four towns from involving them in this work. Is it your view that there is a whole series of pressures which are actually making it less and less viable for the small town firm to remain in criminal work rather than pursue all the civil business which might be open to them?

Helen Cousins: Yes. One of your colleagues asked the previous witnesses about the quality of the people coming into the profession and the impact that Carter will have on that. I am very clear that it will have an extremely desperate impact on the quality. First of all, the pay. The rates are unsustainable, so the money that will be there to pay people coming into the profession will be so low that you will get what you deserve. There is too great a risk, for those who are capable of doing something better, for them to take. Why bother going into criminal law, why bother setting up a business when the remuneration and the benefits, such as they are, will be so small, and anyone who can do anything else will go into a different field. In addition, there is too little respect. I am sick, as most of my colleagues are, of being treated as if I am worse than useless and of no value whatsoever, and it is just not worth it, frankly. More importantly, you can see already the quality of the people who are going out of the profession. We all know of firms who have stopped doing criminal work. There are major firms that have stopped doing it. There are good firms in conurbations and there are good firms in rural area who are stopping because they can no longer take either the risk or the remuneration levels as they are. So the quality is bound to reduce significantly, in my view, and, yes, the way that we are being expected to work and the way that Carter anticipates that we work makes it even more likely that people will leave. The proposals will mean that within a firm you have to do 80% of your police station work in-house. For a small firm, we have to take into account the Working Time Directive, which has now been found to apply to us as well. So, I cannot use the staff that I use during the day to do out of hours work at night, I cannot use agents, because I have got to do 80% of it in-house, so who do you think that means is going to a police station? Me, four of us, four partners, all of whom, quite frankly, are too old and too tired to go out all night to police stations to deal with rubbish. The whole thing just will not hang together as a system in a way that will mean that police station work is viable.

Q270 Jeremy Wright: Ms Stevens, is there anything you wanted to add?

Joanna Stevens: I was going to go back to the point that you made at the beginning on the impact on the supply base. These reforms are so radical that, in any other context, you would have some piloting. When we have had changes before, both on civil and criminal Legal Aid, things have been piloted, and there is no suggestion of any piloting here, which would seem to me to be a sensible thing to do.

Q271 Jeremy Wright: Where would you suggest the piloting happens? There is a pretty consistent impression being given from all the witnesses we have heard from today that these developments are not popular. If nobody is going to volunteer, where would you suggest that the pilots should be held, because there has to be a site for the pilot which gives you a representative enough view of how the proposals are working to assess whether or not they are going to work nationwide, assuming you pursue a pilot? Is there a particular consideration we should be giving to where these pilots should happen, if they happen?

Joanna Stevens: I think you could do it on a limited geographical basis, and you have got to put in some reward elements so that firms that participated in a pilot would not be financially penalised for doing so. This is what has happened in the past and so, knowing that that has worked before, why not replicate it in this situation?

Q272 Mrs James: I wanted to turn to bulk contracts and the need for economies of scale. Will there have to be a minimum contract size for criminal Legal Aid work to make the Carter proposals work?

Brian Craig: The association that I represent was initially set up because the current rewards within criminal Legal Aid were simply insufficient to make us feel as if we were actually getting a good return on the investments we had made. The problem that we currently have is that most criminal law firms are not making a profit on their general crime; they are subsidising that through very high cost cases, they are subsidising it through other areas of work, general crime is no longer seen as particularly profitable. To take money out of that, and I think this is what Lord Carter identified, if you are being forced to remove money out of the criminal justice system, then there has to be another mechanism to provide that income to firms. We are not particularly interested in whether or not we get X amount from police station work, Y from Magistrates' Court work and Z from Crown Court work, we are looking at an overall income against our outgoings. The problem that we have in seeing these reductions is that to cater for that the only mechanism that is available, if no more money is going to be put into the pot, is to deliver volume. Therefore, if the large firms are to survive, there has got to be the supply of volume. Then you get to the issue of how do you achieve that, and one of the mechanisms that has been put forward is minimum contract size. However, that is being driven, not by large firms saying, "We have got to have volume", it is being driven by simple economics that, if you are going to reduce the unit costs of a case (and, let us face it, none of our overheads are going down generally), then somehow or other that has got to be replaced if the large firms are to survive. It is going to be equally difficult for small firms. I make no bones about that. The reality is that everyone is working on incredibly small margins and they are just not sustainable at this level.

Q273 Mrs James: That raises the point about the best value tendering and how that would affect the smaller firms. Would that effectively stand a chance in this tendering process?

Brian Craig: I think there is a misunderstanding of the position of the large firms at this moment in time. I can tell you now that most large firms are currently looking at downsizing. Just the effect of the reintroduction in means-testing and the loss of volume that it entails means that most large firms have got too many qualified staff for the number of court hearings that they are now attending. That downsizing is impossible to put off for large firms, because if you have got 100 employees that you have got to pay each month, if you are not making a profit on one case, then that is something you can probably live with in a total budget, but if you are losing money on every single case, then that cumulative effect is massive. At this moment in time large firms are not sitting there saying, "Gosh, this is actually good for us", they are looking at it and saying, "These sums do not make sense and if they go wrong, we are the first against the wall because our overheads are much greater." So, whether or not the large firm could ever get to the situation where they will be bidding for best value tendering is very much in question, I would suggest, because unless something is done to move the market in the direction of greater volume, then the large firms will not be there to bid in any event. I would say that, as things stand, it is going to be very much a bidding process for small firms.

Rodney Warren: I wonder whether I could add something to that. The issue about the best value tendering loses sight of one important difference in Lord Carter's proposals than most other types of tendering process, and that is that there is no guarantee of the volume that my colleague, Mr Craig, talks about anywhere envisaged in this process, simply an opportunity to earn up to a level of a number of cases, but there is no guarantee that, if arrests drop or other processes of dealing with defendants are found, there will be the work for the firm to do. The problem in relation to the economies is, I do not think, well understood. What we have seen is a supply base which has been operating on flat fees, flat cash rates, for very many years, and the way to deal with that when margins fall is in one of two ways: either to increase the volume of work, which the larger firms have done (they get bigger and bigger, because that has the effect of maintaining the bottom line terms of profitability), or you take the opposite route, which is to reduce overheads, reduce costs, and work in smaller and smaller units; in other words to become a true cottage industry. Either way, and firms have gone in one way or the other, broadly, you have a sporting chance of maintaining some level of profitability, and the issue about the minimum contract size is around understanding what the consequences will be if you have such a minimum contract size: because a minimum contract in some areas would have a much bigger impact and a disastrous effect compared with the impact it would have in other areas.

Q274 Mrs James: I take it you are talking about major conurbations as opposed to smaller rural areas. The evidence that we have heard is that there are over 490 contracted firms doing police station and Magistrates' Court work in London. Do you think that that can be justified or sustained?

Rodney Warren: I think this goes back in part to a point that I was making earlier. I have not heard anybody suggest that there are too many solicitors actually attending police stations, but it may well be that the number of units in which they work is large, that is to say there are as many small firms, and the reason for that, I suspect, partly at least, is just as I have mentioned, that and the ease with which firms can set up. So I am not certain that there are too many solicitors in London; I am quite reasonably certain that in one area in particular, or two or three, there is a shortage. The areas I have got in mind are the rural areas. There are clearly shortages in the south-west of England, in south-west Wales and certainly in the north-east of England, and am I am sure the Chairman knows about that well. Berwick-upon-Tweed is an area in which it is notoriously difficult to have an adequate service from criminal law solicitors.

Joanna Stevens: Could I make a point about minimum contract size. We are a national firm, so we do not have any great volume in any one geographical area, and so we simply will not fit within the model that Carter proposes. We work all over England and Wales, but we do not have enough volume in any one area to be able to say that we could have a minimum contract, or any bulk in one area. Our problem is that we need a national contract, one single contract, that would cover all our areas with a minimum price on it.

Q275 Mrs James: Could there ever be a uniform procurement system for all criminal Legal Aid applying to all areas of England and Wales, or will there have to be special arrangements or exceptions for certain geographical areas or certain groups?

Joanna Stevens: I think there has to be some exception to the proposed reforms. We welcome the fact. I think the LSC and Carter have made mention of niche practices. A colleague in the previous evidence session was mentioning specialist mental health practitioners. We are in a similar situation. We act for trade union members across England and Wales, public sector workers, teachers and hospital staff. They are very different from your typical criminal client, they do not fit the profile; we do not fit average costs for police station attendances or for court. Under the proposals as they currently stand we would not be viable, we would not be able to operate a criminal law unit providing the specialist service that we do at the moment?

Helen Cousins: The difficulty is that it is dealing with people and every group will want an exception for their group. London will say that they have got a different way of getting work, it is very high on duty solicitor work and therefore they have a different profile; people in very small rural areas will say, "We cannot do it because we do not have enough volume of work." Everybody has got their own special case that they would like to plead, and the reason is because what we deal with are not widgets, they are human beings, with all of the failings and the differences that they have.

Q276 David Howarth: Could I ask how you envisage the bidding system working without a minimum contract size? The Minister has announced that they are going to go into the first stage without a minimum contract size. Exactly how are you going to bid? What are you going to be bidding about? Is it going to be a schedule of rates that you are going to bid: "We will do a job at this price and you send us as many as you have got", or are you going bid on: "You set the volume and also the price", and then the authorities will have to match the bids to the volume they have got so they get the right volume? How exactly is this going to work?

Helen Cousins: I do not know.

Q277 Chairman: An honest answer!

Helen Cousins: I am sorry.

Q278 David Howarth: I am afraid that is what I thought too. Has anyone got any idea?

Brian Craig: For clarity, the first stage is the minimum contract size is something that is still envisaged for coming in for October of this year. Obviously that is something which is supposed to be getting the market ready. Frankly, the levels of minimum contract size which are envisaged are probably insignificant to make a huge effect, certainly on the larger firms. Beyond that, I have no idea how contract bidding could work because, frankly, I have absolutely no confidence that the Government would be able to stump up the money necessary to pay at market rates. There is nothing that I have seen so far which would suggest that firms can continue to work at the rates at which they are currently working. Even if we had huge amounts of volume, there are only so many economies of scale that can be delivered, and I am not convinced that the Treasury is going to be particularly happy when it is faced with a 20% increase in costs where people actually bid for the market rates. So, whether or not we get to that stage, I am somewhat pessimistic in any event.

Rodney Warren: One of the concerns that have been expressed about the process (although we do not know and cannot see how the bidding process might operate and what are the risks of it) is that we have a supply base at the moment which ranges in its sophistication and understanding of its business cost so that the bigger firms are more likely to have a much better understanding of their economic base and their profitability, whereas solicitors working in their own practices may be less able to understand fully what the figures are about, mostly because they are out working all the time. The risk is that when they are bidding for the contracts that have been described to us, they will have to bid in such a way to try to secure a contract. They will have, as we have said, all of their eggs in one basket. The temptation, inevitably, is going to be to bid a price which secures the contract, irrespective of whether it is truly economic, and that actually means that they could unwittingly (because they would not do it intentionally, I am sure) be bidding at a price which is uneconomic, and that that in itself will damage the supply base.

Q279 David Howarth: There is also the problem that this could be a requirement of the contract, is there not? The Government says, "You tell me a price and I will send you some work if I feel like it." That has the fundamental legal problem that it is not a valid contract.

Brian Craig: One of the real problems is that there is no guarantee of volume, is there, and, therefore, how do you actually bid against an unknown volume, particularly in a market where you have got very few controls over delays, which obviously affect the costs that you can deliver at? Although I am aware that Lord Carter is saying the market will sort that out, because they will bid at a higher rate for those courts where there is undue waiting, and things of that nature, the reality is that there will be a lot of concern as to whether or not firms will be successful in their bids and there will inevitably be pressure to bid low, and it may well be that these levels become unsustainable. They may even be sustainable at that point in time but something happens in the criminal justice system to which changing the volumes, changes the amount of travel, waiting, whatever it might be, that pushes a firm over the brink and makes them unprofitable. Once the supply base has been diminished, who then comes in?

Q280 Jeremy Wright: Can we come on to the fees that Carter has in mind for police station work? His assumption appears to be here that the Magistrates' Court standard fee structure is working very well and, therefore, we can import that into fees for police station work. I suppose there are two questions that arise out of that. The first question: do you agree that the standard fee structure of Magistrates' Court work is working well, and, if you do agree with that, what are the problems with importing that into police station work?

Helen Cousins: It works relatively well at the moment in the Magistrates' Court because travelling and waiting are paid on top. The minute that travelling and waiting are taken out of it, I think, shows total exploitation of those of us who work in the system, because what we are being told is an element of travelling and waiting will be transferred into the standard fee, i.e. you can stump up the rest. Well, actually, why should we? Once that goes in the Magistrates' Court, I think it will cease to work there as well. In police stations it is an absolute no, no. You cannot expect people to turn up Christmas night for the same money as three o'clock on a wet Wednesday afternoon and run out of their fixed fee and still stay there for the love of it. In Leeds it has been said on a number of occasions that the police have had a meeting, because they think that fixed fees are coming in in April, to discuss how they are going to handle it, and we are being told that we will be told to attend at the police station for six o'clock and they will have no intention whatsoever of dealing with us until eight o'clock because they know that we will be doing it for free; and that will upset us, we will leave and we will leave clients unrepresented; and I am afraid, for the money that is being paid, I will leave clients unrepresented. It is not a happy position. I have spent 22 years looking after the rights and wishes of other people, and I do not feel comfortable that I have been pushed to the point where I walk away and leave them.

Q281 Jeremy Wright: The problem for the Government in all of this, presumably, is that if you leave your client unrepresented, that will not save costs; in the long run that will increase costs because, later in the court process, the fact that they did not get the right advice at the police station will become a problem?

Helen Cousins: Yes, section 78 arguments, and so forth, and miscarriages of justice, so it is not going to help anybody.

Rodney Warren: The Magistrates' Court system at the moment, we say, works reasonably well because of the way that it is structured. It is not anticipated that the same structure will apply in a police station. The reason it works well in the Magistrates' Court is that, broadly speaking, there are two levels of fixed fee and a reasonable rate at which we move into a non-standard fee rate where cases become exceptional. That is not exactly the same structure that is envisaged at the police station. It is envisaged that there will be one fee only and that the number of cases that would get into the escaped category would be so small as to be negligible, the sorts of cases which most of us would never ever deal with in a whole career, never mind once in a year. On top of that, as Ms Cousins has already said, the removal of the travelling and waiting time, which transfers the entire risk in terms of time (which is what we have to sell to the employer) means that the process quickly becomes uneconomic, and especially then, as Ms Cousins has also said, if people within the system take advantage of that, then the position is exacerbated, not helped.

Brian Craig: There are two points I would make on this. The first is that, unfortunately, the way in which the system is being set up currently causes perverse consequences. If you consider that the more serious cases take a longer period of time whilst you are down at the police station, then you will very quickly see that, if you are getting the same amount of money, the hourly rate that you are effectively working to is much higher for the very simple cases and much lower for the very long cases. You can go down to a police station, e.g. a murder case, you might be down there for ten hours, and if the standard fee is ?300 you are going to be getting ?30 an hour for your troubles there. If you are down there on a shoplifting case which lasts for two hours, you are being paid ?150 an hour for your trouble, plus the problems with the travel and waiting. Therefore, if you took an impure economic sense, there is a clear incentive to actually start to utilise the less qualified staff on the most serious cases, and this seems to be a very perverse situation to move towards. The other issue that I would raise, very briefly, is that with the standard fee within the Magistrates' Court that has been very effective at controlling costs, but a lot of firms have moved to a point where the Magistrates' Court work is a sort of loss leader almost for the Crown Court work, and with the changes that are taking place, both in terms of the reduced rates for the police stations, reduced rates for the Magistrates' Court and with the savings intended on the graduated litigator fee, it means that we can no longer take those sorts of hits at the Magistrates' Court. Almost certainly, as the waiting is no longer paid, solicitors are going to be forced down the economic route of saying, "Why have I got a solicitor there?" If you have a case that is being put back for an expedited report to the afternoon, I am afraid the solicitors are going to say, "I am sorry, I cannot wait for this. I want a judgment. I want this case put over to another date when I am next in court." There will not be the ability financially to remain in court in those circumstances. So, although it may be perceived that standard fees have worked, and I think that is true, I think the loss of the waiting time is going to have a lot of consequences that are not actually identified. Just by way of another example, I am sure that every time the CPS fail to be ready to proceed there will be a request for costs against them, because why should we be bearing those costs any more? They are the sorts of things which I do not think have been fully taken into account.

Joanna Stevens: From our perspective Magistrates' Court fees have worked, we have learnt to live with those, but, for the same reasons that Mr Warren outlines, it is not proposed that that is replicated for police stations, so you just have a flat, fixed fee for the types of clients that we deal with. You are not in and out of there in a couple of hours. It is not unusual to have 12, 14 hours worth of interview time and time with your client prior to interview for the types of people that we deal with, and so we will lose massively in terms of income in police station cases. Our margins will go completely.

Q282 Jeremy Wright: Moving on to Crown Court work, the Bar obviously operates on a graduated fee system in the Crown Court. Assuming that the fee levels are set at the right level, what are the objections to a graduated fee style system for solicitors doing Crown Court work?

Rodney Warren: There is no objection in principle to a graduated fee scheme working for litigators, or solicitors, as opposed to advocates. There is no reason why they should not work. The key to that is ensuring that the proxies - that is the elements that constitute the graduated fee - should be appropriate to represent the work which is actually being undertaken. The work that solicitors do, of course, by definition, is different from the work that the advocates may do, and we have concerns that the proxies so far identified for litigators do not reflect the extent of the work that solicitors should properly be doing to represent their clients to help towards the proper preparation of trial. By that I mean that one of the principal areas is that probably in more cases than in the Magistrates' Court the defendant will be remanded in custody. It is totally outside of the solicitor's control as to where that defendant will be held in custody, which prison it will be. Of course the cost and time taken to go and see the defendant in custody is a very important issue, therefore, in terms of determining the cost of preparing for the case. That is one example; there are others. It is, therefore, essential that the proxies are created effectively.

Q283 Jeremy Wright: To take another example, what about unused material: because the difference between the role of the barrister and the role of the solicitor in a Crown Court trial is quite often substantially accounted for by the amount of unused material that the solicitor would normally go through and the barrister would not? The assumption, again, must presumably be that in a case where there is a great deal of unused material there will also be a great deal of used material, so using used material as proxy is an adequate representation of the amount of work that will need to be done. Is that fair or is that unfair?

Rodney Warren: I think that is actually very unfair. I do not think that the two necessarily correlate one with another. It is a simple thing, of course, to suggest that if we do not take into account the unused material, it will be up to the solicitor to decide whether or not to go and look at it. Of course, we know what constitutes doing the job properly and effectively for the defendant in the interests of justice, and it cannot be to ignore what is available in the unused material. It is for that reason that we consider that the unused material is absolutely crucial in this, and I know that Mr Craig has some strong views on that as well from experience that has come about within his own work.

Brian Craig: One of the examples that you might have heard about, it was certainly in the pack that was distributed to the Legal Aid debate, relates to one of the clients of our firm. We were asked by the judge to go and look through the unused material (and there was a huge amount of unused material) because it was identified, very belatedly, that the main prosecution witnesses in a murder case had, in fact, had the flat that she lived in bugged by the police and there was some real concern over her position. The case turned. The gentleman concerned was acquitted when it was discovered that there had, in fact, been a tape that had never been disclosed to us which had the person actually saying, "I did it. I killed him. I had to", and that was the main prosecution witness, so it rather let our client off the hook! That was buried in the unused material and, therefore, there are occasions --- You can just imagine it if we were not being paid to look through the unused material. We had four people at a police station for two weeks looking through the unused material. That was the difference between that person walking and being acquitted; so the difference was the whole of his life, in fact.

Q284 Jeremy Wright: In the example you have given the judge decided it would be appropriate to order the defence to do that work. Would it, therefore, be feasible, in your view, for the judiciary to play a part in deciding what extra work ought to be done in particular cases on a case by case basis?

Brian Craig: Interestingly, that came about because Treasury counsel in that case actually alerted the judge. We had made a lot of representations in relation to the unused material, there was clearly something not right, and eventually Treasury counsel made it clear that they had identified things in the material that perhaps should have been disclosed, and that was the reason that the judge gave the order to look at the unused material. That may happen on occasions and it may be that the judiciary may have a role, but the concern must be that in many cases that will not be followed through in that way. Certainly, without the Treasury counsel's intervention, it was unlikely that we would have had access to that unused material, and so I think there is a real issue. It does beg the question that if that had not been a legally aided client but someone who was privately paying, almost certainly, in those circumstances, they would want you to actually look at the unused material if they had real concerns and would be prepared to pay for it. So you are moving towards, effectively, a two-tier justice system if you do not take into account the exceptional cases where looking at things like unused material can make a significant difference to the outcome of the case.

Rodney Warren: It is right that the judiciary have got a role to play in the course of events such as this, but that actually probably is much more limited to dealing with issues around disclosure and those aspects of public interest immunity which have been well rehearsed. To suggest that the judiciary have got a role which goes beyond that, I think, is probably taking things into a new realm. I am not sure that the judiciary would feel particularly comfortable with that. It is a rare event, after all, for special counsel to be appointed to deal with issues around disclosure, let alone the unused material, and I think probably most of us would say that it is very much the responsibility of the litigator, the solicitor, to look at the unused material to establish what is there for the benefit of the client and, of course, to assist, in the interests of justice, in ensuring that a trial is fair and that the appropriate, proper evidence is heard.

Q285 Mrs James: The question I wanted to ask was about the independence of the Bar. In the light of the likely passing of the Legal Services Bill, will a single court fee pose a risk to the existence of the Bar as a specialist referral profession?

Rodney Warren: Yes.

Helen Cousins: Once the money is being split into proxies, when solicitors have higher rights within their firm and the monies can all go into the firm with the overheads that we have, why would you instruct a barrister? If you can do it in-house, you will, which I think will decimate the lower Bar, the younger Bar, which will leave less people there to be the specialist counsel that you need, as the independent referral agency, for more important and more serious matters. So, yes, I think it offers a great risk to the Bar.

Q286 Mrs James: Are there any advantages or disadvantages to the single graduated fee that you can see?

Rodney Warren: The concept, of course, only replicates that which happens in private practice, where the private client will expect the solicitor to get the best deal possible in terms of the fee that is negotiated with counsel's chambers. That is where the idea comes from.

Q287 David Howarth: My question is addressed to Ms Cousins. I understand that you are a peer reviewer?

Helen Cousins: Yes, for my sins.

Q288 David Howarth: Can you explain to us how peer review works now and how you expect it to work under the best value contracting system and whether you have any comments on the issues that I raised earlier, for example, about the maintenance of quality between contracts and any other matters that you think might be relevant at this stage?

Helen Cousins: Mr Miller mentioned in his evidence that part of the concern is that peer review looks at what has happened in the past, it does not have any benefit in ensuring it happens in the future. Of course you can see a pattern. You can decide that a firm who is well set up and well supervised is likely to continue to be so, but in the bigger firms particularly the turnover of staff is so great, as it is bound to be, that you can have one rogue member of staff which will affect a whole load of files at a peer review and, two years later when there are peer reviews, that member of staff has gone anyway and the firm is still being assessed on that person's work all that time ago. It is an inadequate tool, but I think it is probably the best that there is. I have two very serious concerns about peer review as a concept. One is that there is a distinction between quality and service, and I think those are being conflated in a way that means that the standards that are being required are being upgraded out of quality but into service in a way that is not remunerated. I find it hard to see how any normal criminal practice would get much beyond threshold competence, which is the middle layer, on the normal run of the work that we do, without providing a service for which the Legal Services Commission will not pay. If you look at the criteria for categories one and two, it does require things that I just know they will not pay for, because we have fought this in the Criminal Bills Assessment Manual for years. They are expecting you to do something and they are not expecting to pay you for doing it, so how you get higher I do not quite understand. The other thing that impacts on the same issue is that it depends what you are being paid. If you are getting ?175 to do the whole of a case, then you can only expect to get the work that is justified for ?175; you cannot expect to get a Rolls-Royce service on a mini-income, which is what I think it is beginning to do. As the money goes down, as under the Carter proposals it will, either the quality will go down or the standards will be reduced to ensure that the quality appears to remain the same, but it cannot, because if you are being paid less money, then you are going to get less work. So it works, I think, to an extent, but it has problems with it and I think it has future problems under Carter that have not yet been assessed.

Q289 David Howarth: One specific thing you have not raised so far is the notion of peer review in very high costs cases. Do you think you can be a peer reviewer for a very high cost case if you do not yourself do very high costs cases?

Helen Cousins: No. We are on the very high costs case panel and have one on at the moment that takes me one day a week to manage. It is a very big case and it takes an awful lot of time. Had I not had the experience of doing that over some years, then to walk into a file which can be as big as this room - the files that you are given to assess could fill that wall - and know whether all of that work was necessary or something more should have been done would, I think, be impossible.

Q290 David Howarth: Another point which has come up is can you assess a firm just on the part of its work that relates to a contract or do you have to assess the whole firm?

Helen Cousins: For a lot of purely criminal firms, such as mine, we do no private work at all. Provided your selection of files is adequate, then it does represent the totality of what we do, because we do nothing else. So for firms such as mine, yes, I think you can. It is surprising how much you do get a feel for the operation of a firm from 20 files. There are constant problems that appear through them all, or there are good things that appear in all of them, and it does give you a picture that I think would be replicated across the firm as a whole.

Q291 David Howarth: The final point. The target for completing all the peer reviewing is October 2009. Is that right?

Helen Cousins: I think so.

Q292 David Howarth: Can it be done in time?

Helen Cousins: No.

Q293 Chairman: Very high cost cases have been a major issue in terms of the budget, the LSC and of the department; therefore it is a high priority to sort them out. Is peer review an adequate means of getting value for money in those cases or is it necessary to go to specialised teams and firms, which is envisaged in the review?

Helen Cousins: I do not think peer review would be an adequate check on those at all, firstly, because it is past and done. The Legal Services Commission can already have spent ?5 million on a case and somebody comes along and says, "You did not need to spend all of that." So it does not mend an issue, if there is an issue. How you do properly review those files, I do not know. Probably by having somebody in-house at the Legal Services Commission who has great experience of these sorts of cases and is able to assess what is right and what is wrong.

Q294 Chairman: Is there any reason not to follow the recommendation for teams with a proven experience in very high cost cases as being the only people operating in this field with LSC money?

Helen Cousins: No, provided that people can move into that field. You cannot possibly shut the door, because those cases are the ones that allow firms to exist.

Rodney Warren: I think the answer to that is around the definition of what constitutes a very high cost case. There are some cases in which we know, right from the start of the investigation when that is embarked upon perhaps by the SFO, that the highest likelihood is that it is going to be a very big case. There are other cases, though, in which investigations start by the police which will end up as quite lengthy or quite costly cases, but they do not actually require anything like the same level of skill in managing big cases that those cases started by the Serious Fraud Office might. To give examples of the two extremes, there could be a very major fraud at one end - we can all think of cases of that sort that there have been - and at the other end there can be disorder cases, which the police deal with in the normal course of policing, involving a large number of defendants, all tried at the same time, which could go on for longer that the current 40-day deadline which is set. For each of the defendants the work involved for the defence team would not be that great, but it would still become a high cost case. The issue is much more around getting the definition of what is a high cost case right, and we think that one way of dealing with that might be to look much more at who is prosecuting it and how it has developed than simply by saying, if it is more than eight weeks of trial it must be a high cost case, because that may not be capturing the right type of case.

Q295 Chairman: Do you think the measures that have been proposed will actually enable cost control of very high cost cases?

Rodney Warren: Yes, there is no reason why there should not be a hybrid position. At the moment the Legal Services Commission is involved, through contract managers, in managing the higher cost cases, but it does not necessarily mean that those cases should only be dealt with by a limited number of firms. As Ms Cousins has just said, there must be a way in which firms can become more specialised, and there are many firms who are very capable of dealing with big cases but they may not be dealing with the most complex of cases. So there can be a middle stage where the Legal Services Commission may, through its contract managers, be dealing with the longer cases which the ordinary run of complex or bigger firms could be dealing with, but there may be a panel which is restricted to the biggest cases of all and dealt with entirely separately.

Q296 Chairman: Is there not a known definition in the proposals? I cannot remember.

Rodney Warren: The definition of a high cost case currently is that that case should be more than 40 days of trial. That is it. There was a previous definition, which changed some two years ago, which said that there should be ?150,000 worth of profit cost for the defendant or 25 days of trial. So it has been a moveable feast over a period of time.

Brian Craig: Under the proposals, what they are actually saying is that cases will become notifiable potentially after 25 days and they will only have to contract with those that they wish to which are between 25 and 40 days, but anything over 40 days will go down the route of the VHCC. Picking up on a couple of the points that have been made, peer reviewing VHCC is clearly unproven. It is not being trialled at the moment. They are peer viewing firms on their general crime files and saying that will have to act as a proxy for the VHCC, but, of course, they have got to authorise all work on VHCC cases as they go along, and I find it surprising, if what the Legal Services Commission are saying now is that having established their VHCC department, having trained their people to go along and look at the cases as they progress and to discuss whether or not it is appropriate to do that work as they progress, that they are now effectively saying that they have not got proper quality control. I find that very surprising.

Q297 Chairman: Thank you very much indeed. We are most grateful for your help.

Rodney Warren: Thank you.

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