Justice Secretary Chris Grayling has backed down on several key criminal legal aid contracting reforms, following a sustained campaign by the profession.
The government has dropped plans to cap the number of contracts in each area, and will instead impose a 17.5% fee cut, introduced in two stages.
According to the Law Society, which campaigned vigorously against the initial proposals, today's announcement means:
▪ clients will be able to choose their own lawyer;
▪ tendering criteria will be based on quality and capacity as well as price;
▪ all firms meeting minimum quality criteria will qualify for their own client contracts;
▪ contracts will cover smaller geographical areas where populations are thinly spread; and
▪ firms will be given more time to prepare for the new contract arrangements.
Grayling said he had “listened to lawyers’ concerns and had constructive discussions with The Law Society. “They acknowledge that, whilst it may be difficult, change is also inevitable. But it must be the right change that brings about the right outcomes.”
Law Society president Nicholas Fluck welcomed the proposals as “a shared way forward for a more stable and sustainable criminal legal aid system”. He said: “The new proposals will demand considerable change, but offer genuine opportunities for those firms who wish to continue to provide these crucial legal services. Crucially, all firms that meet the required quality standards will be entitled to continue conducting own client work.”
He said the Law Society and Ministry of Justice (MoJ) will jointly commission independent research into the contract size “required to assure viability”, which will then be used to set the ceiling on the number and size of duty solicitor contracts to be awarded.
Grayling has agreed to stage fee reductions to give firms more time to adjust, and to extend the system of interim payments to ease the cash flow pressure on solicitors. An initial reduction of 8.75% will take place in early 2014 and again in spring 2015.
NLJ consultant editor, David Greene, senior partner at Edwin Coe, said: “The Law Society decided to enter into a dialogue with the Government on price competitive tendering rather than simply oppose the changes which was the stance of the Bar.
“That decision was the right one and appears to have paid dividends.”
The reforms confirmed today include introducing a threshold on Crown court legal aid to stop the automatic grant of legal aid to defendants with an annual household disposable income of £37,500 or more.
A one-year residency test will be introduced for civil legal aid although, in a minor concession by the MoJ, children under 12 months old will now be excluded from this.
The government also intends to make it harder for prisoners to obtain criminal legal aid funding for matters that can be resolved through the prisoner complaints system, and to ensure civil cases have at least a 50% chance of success before legal aid money is granted.
The new consultation, Transforming Legal Aid: Next Steps, will be open until 18 October. The MoJ expects the changes to achieve savings of about £220m a year from 2018/19.
Maura McGowan, chair of the Bar Council, said: “We were relieved to see that the MoJ has listened to the public and to the profession about the importance of retaining client choice. It is deeply regrettable that the Ministry does not appear to have moved on many other areas of justified and evidenced concern.
"It remains the case that cuts to legal aid are the harshest in the public sector. The amount of money which the Ministry of Justice is seeking to save does not justify the consequences of these cuts. It is inevitable that this will impact heavily on the quality of both criminal and civil legal aid.
“We shall study the paper carefully. Our response will aim to preserve the heart of the legal aid scheme that has played such a vital role in providing access to justice for all.”
