Block contracts block justice

Lord Andrew Phillips tucks into his breakfast at the Waldorf Hotel. “It's not access to justice, it's exit from justice,” he says.

It is 8am on a Tuesday morning and Lord Phillips has a busy day ahead of him. He is a practising solicitor who has to be at the Inland Revenue by 9am. In the afternoon, he is off to the House of Lords, where he is taking the fight to the Government over the Access to Justice Bill, dubbed the greatest legal reform of the century.

The Liberal Democrat peer and senior partner at Bates Wells & Braithwaite is convinced the reforms will be nothing short of disastrous. “Whatever the Lord Chancellor says, this Bill is treasury driven. The smoke-screen is the claim it is quality driven as well,” he says, digging into some bacon and eggs.

He is equally eager to get his teeth into the Government reforms.

At the heart of Lord Phillips' objections is the proposal to introduce block contracts for legal aid work.

Exclusive contracts will be handed out to a limited number of firms that pass a quality threshold.

Further down the line comes block contracting, in which chosen firms will be given a lump sum of government money in return for taking on an agreed number of legal aid cases.

It is not clear what form the contracts will take. Pilot studies are looking at various complex options for working out payment systems, but opponents say block contracts are an inevitable part of the Government's drive to bring down costs.

Even law firms that are likely to win the contracts balk at the idea. According to a recent survey by the Legal Aid Practitioners Group (LAPG), 95 per cent of legal aid lawyers believe block contracts will lead to a “reduction in real and effective access to legal services”.

The LAPG is made up of 500 of what Lord Phillips calls frontline legal aid firms – the firms most likely to win the proposed competitively tendered, three-year block contracts.

One third of LAPG members responded to the survey, which is not an enormous figure, but Lord Phillips points out that fewer than 30 firms responded to the Legal Aid Board's last consultative document on exclusive contracting.

Standards will also suffer, according to LAPG members. Up to 84 per cent of respondents thought contracts would reduce the quality of legal services “a lot”.

Mark Haslam, secretary of the London Criminal Courts Solicitors' Association and a partner at Burton Copeland, is resigned to the fact that block contracts are inevitable. “We have a number of concerns relating to Access to Justice. Clients' freedom to choose to instruct the lawyer of his or her choice will inevitably be a casualty of any form of block contract.

“We don't accept that the concentration of legal aid work in a small number of firms is necessarily going to improve quality.”

Haslam also has grave concerns about the way contracts will be awarded. There will be a temptation for the Government to drop firms that take on politically unpopular cases, he says, explaining there are no safeguards to prevent this happening.

Rodney Warren, vice-chairman of the Criminal Law Solicitors Association, comments: “We are seeing economy with justice and not justice with economy.”

He condemns contracts awarded on a three-year cycle. “There is no prospect of planning for the long-term future,” he says. “It is undoubtedly going to put a great deal of pressure on a number of firms.”

It is not as though the big legal aid firms want any more work. According to the survey, 60 per cent would not welcome “a big increase in workload”.

It is not clear when block contracting will become law, but many firms say they will not bother to tender.

According to government figures, about 11,000 legal aid providers – the bulk of which are solicitors' firms, but also including legal advice centres and other agencies – undertook legal aid work last year. Of these, about 6,000 accounted for 8 per cent of the legal aid budget. Such firms are unlikely to tender for contracts.

The loss of these firms will have dire consequences, says Lord Phillips. He believes many of them take on legal aid work out of a sense of public duty. After all, private work pays about double the amount.

The founding chairman of the Legal Action Group and chairman of the Solicitors Pro Bono Group, Lord Phillips says: “My fear is that we are driving hard towards a two-tier solicitors' profession – with legal aid on the one hand and private practice on the other – and that is something the profession has always been against right from the beginning.

“My own firm in London is a case in point. Eight per cent of our work is legal-aid funded. It loses the firm money, but we feel that we ought to do it, and we have a real expertise in cross-frontier abduction and immigration work. But there is no way we are going to bid for a block contract.”

The Government expects 3,000 firms to operate exclusive legal aid contracts when the Bill becomes law, although it admits the figure is “speculative”.

Lord Irvine faces a lot of resentment from the profession. His much-publicised attacks on fat cat lawyers have angered legal aid lawyers, who picture him as one of the fatter cats, albeit that he made his money at the commercial bar.

Lord Phillips says: “The Lord Chancellor's team is short on practical experience of how the world works in a typical high-street solicitors firm.”

Basic green form advice pays a solicitor between £44 and £48 an hour – a fraction of the money being made in the commercial world.

But the Government is adamant contracting will work.

Lord Irvine says: “I would sooner have legal aid with an assurance of quality than a slightly wider choice without.”

A spokesman at his department comments: “Contracting can deliver two advantages. One is the fact that the consumer gets a quality assured service, the second that it helps to bring in some of the costs.

“The Government is satisfied there will still be choice for people. We are still talking about thousands of firms likely to get contracts.”

LAB policy adviser Allison McGarrity says: “There is a challenging road ahead, but it is very definitely a way forward and will make the provision of legal services more effective in the future by targeting under a contractual arrangement.”

Last year, legal aid cost the British tax payer £1.560bn. Next year, the figure is expected to rise to £1.602bn, and to £1.630bn by 2000.

By the financial year 2001/02, when the Access to Justice Bill should be in force, the Government predicts the legal aid bill will be down to £1.552bn – a saving of £78m on the previous year.

Critics of the new system will wonder whether the wholesale shake-up of the British justice system was really worth it for the kind of saving that amounts to five and-a-bit Alan Shearers.

ACCESS TO JUSTICE IN A NUTSHELL

The Legal Services Commission (LSC) replaces the Legal Aid Board (LAB) to run legal aid for criminal cases via a Criminal Defence Service (CDS) and family/civil cases though a Community Legal Service fund (CLS).

Lawyers and other providers need a contract from the LSC to offer services under the fund. The LSC has the power to make any type of contract.

CIVIL CASES

The LSC must liaise with other funders, such as local authorities, to establish a broad-based CLS and provide the widest possible access to information and advice.

Lord Chancellor sets an annual budget for civil and family cases with the aim of targeting the most needy ones.

An LAB consultation paper – the Funding Code – sets out how civil public funding might be allocated, and includes suggested funding priorities and a new tougher merits test. Lord Chancellor has the final say on the code, although parliamentary scrutiny is now on the cards.

The use of conditional fee arrangements is allowed in matrimonial property disputes and is mandatory in personal injury cases (clinical negligence cases excepted).

No publicly funded lawyers are allowed in family cases – care, adoption and domestic violence applicants excepted – unless it is shown that the case is unsuitable for mediation.

A central budget is established for high-cost cases, funded on a case-by-case basis through individually negotiated contracts.

CRIMINAL CASES

Most CDS services are provided under contract, usually at a fixed price. Contracts cover everything from police station advice to Crown Court representation.

High-cost CDS cases are subject to individual contracts.

The possible introduction of US-style public defenders, employed by the CDS, with a favoured long-term plan of mixing private and staff lawyers.

Courts to decide if it is in the interests of justice to grant representation under the scheme. Power could be transferred to the CDS.

Eventually legally-aided defendants can only choose lawyers with a contract. In high-cost cases, the choice will be limited to lawyers on a specialist panel. In certain circumstances, defendants are to be assigned a lawyer.

Abolition of means testing. The court can make convicted defendants repay some or all of their defence costs.