Solicitor News

Report from the Chair of the Criminal Law Committee

Crime news

Dual contracting.

 

On the 28th January 2016, the Lord Chancellor and Secretary of State for Justice, Michael Gove handed down a Written statement to Parliament announcing that HMG would not be pursuing dual contracting, and would be suspending the fee cut.

 

He stated that in the last Parliament spending on legal aid was reduced from £2.4 billion to £1.6 billion. These figures were relied upon by his predecessor – the ill-fated and much reversed Chris Grayling - and many apologists for the proposals. The figures have been shown to be demonstrably wrong.

 

As has his next statement, that ‘expenditure on legal aid per capita was more generous than any other EU nation or comparable common law jurisdiction’

 

There has been a sustained attack on access to Justice through reductions in fees paid to Solicitors. The first reduction to litigation fees of 8.75% occurred in March 2014. The second 8.75% reduction occurred in July 2015. No business can survive a 17.5% fee cut yet HMG pursued (after an aborted attempt to force through price competition for legal aid contracts) further savings. The chase to the bottom was beginning.

 

However, after strong opposition, price competition was abandoned but replaced by another folly, a system known as ‘dual contracting’. This, after “careful negotiation” with The Law Society.

 

Under the dual contracting system, two types of contract were to be awarded to criminal legal aid firms, the second of which was for ‘duty contracts’ by which a total of 527 ‘duty’ contracts was to be awarded by competition, giving firms the right to be on the duty legal aid rota in 85 geographical procurement areas around the country.

 

There were to be four contracts in Warwickshire and thirteen in West Midlands. Nationwide, 1600 firms reducing to 527 contract holders – given multiple bids, perhaps 350 firms.

 

1250 firms having their contracts taken from them. Small and medium (and some large firms) having to close the doors.

 

None of this was needed as a process of natural consolidation was taking place in the criminal legal aid market, as crime reduced and natural competition took place.

 

It quickly became clear, mainly through the ‘whistleblower’ Freddie Hurlstone that the procurement exercise was a mess. With remarkable solidarity legal challenges were mounted by way of Judicial Review and EU procurement law. In the face of 99 separate legal challenges over the procurement process, HMG were forced to stay the award of new contracts and, by this announcement, a decision was taken to not proceed with dual contracting.

 

Just as welcome was the suspension, for a period of 12 months from 1 April 2016, of the second fee cut which was introduced in July last year.

 

This was a victory in a fight that we did not need to have. It has created much uncertainty and mistrust, both within the profession and with the Bar. Firms can now plan for the future, many will decide that any contract with such level of cuts is unsustainable, others will consolidate. Many believe that access to justice has been affected as the drive to ‘efficiency’ will prompt many to cut corners. Many will leave this type of work and, as very few new entrants are attracted to public funded work, the vulnerable are likely to suffer through lack of representation. Chris Grayling once stated that HMG would accept ‘adequate’ representation. The future may not even bring that.

 

David Murray