Mackay sides with fundholding

The current legal aid system will face its most serious challenge yet when, this week, the Lord Chancellor hints at his support for the "fundholders for justice" proposals.

Lord Mackay will hail the demise of the demand-led legal aid fund at a seminar on access to justice staged by the Social Market Foundation (SMF).

Andrew Cooper, head of research for the centre-right think-tank, says: "We have been led to believe that he is going to make a significant speech in which he intends to outline what is going to be in his Green Paper.

"It was made clear to us that he felt that the SMF report was a helpful and serious contribution to the debate in which he is engaged and that he was interested in the fundholders concept."

But some commentators claim that the ideas are unworkable and can never be serious proposals. Instead they are being used to soften up the profession for scaled down plans which will include finite cap on the legal aid fund.

Roger Smith, director of the Legal Action Group, says: "The ideas are so inadequate, there can only be two explanations. Either it is a political decision taken on a non-pragmatic basis, or it's a calculated softening-up exercise."

Lord Chancellor's Department officials insist that Lord Mackay has not yet decided what will be included in his spring Green Paper and that this week's speech will raise questions rather than come up with solutions.

The panel of speakers due to attend the SMF seminar includes US lawyer John McFadden, partner with Pepper Hamilton Scheetz, as well as co-author of the report and ex-Law Society President Tony Holland.

Holland, joint senior partner of south west firm Foot & Bowden, says changes are desperately needed.

"The system we have at the moment is a hotch-potch of bolt-ons which have accumulated over the years. It doesn't work any more," he says.

But the SMF proposals have been dubbed "a lottery for justice" by the Law Society which says they are fundamentally flawed. The Legal Aid Practitioners' Group has also added its voice to the opposition.