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Two-tier contracts
21.9For legal aid, it was the abandonment of two-tier contracts in criminal legal aid which was perhaps the most dramatic of Gove’s policy reversals. This decision was not taken on any principled or moral grounds, rather it was forced on Gove by a combination of effective campaigning by criminal legal aid lawyers and bad advice from his civil servants.
21.10Successive legal aid administrators have been attracted to the idea of putting duty work for police and magistrate’s court work out to tender. In March 2009, the then Labour government announced it was going to introduce a system of best value tendering (BVT) for the work. At the time many practitioners feared that it would lead to cost reductions at the expense of quality. Plans for BVT were watered down from a full blown scheme across the country to establishing a couple of pilot schemes. These pilots were eventually abandoned just before the general election in 2010.
21.11Chris Grayling announced his plans for competitive tendering for criminal legal aid in April 2013. The Law Society agreed a compromise with the Government over the summer that year which led to the two-tier contracts system – all firms could apply for own client contracts, but would have to compete for contracts for duty work in police stations and the magistrates’ courts.
1Steve Hynes, Legal Aid Handbook 2015/16, p413. This agreement was highly controversial and led to a successful vote of no confidence in the leadership of The Law Society,
2Steve Hynes, Legal Aid Handbook 2015/16, p413. (though the leadership, in the event, carried on regardless).
21.12Amidst continuing protests the tender round eventually went ahead in the summer of 2015 and the Ministry of Justice announced 520 successful bidders in October 2015. Some of the results of the tender round caused widespread surprise for example Williamsons, the largest criminal law firm in Hull, was not awarded a contract and GT Stewart a large firm in London that bid for 22 contracts and was awarded just one.
3Catherine Baksi, ‘Whether firms fared well or badly in the duty contracts bid round, the uncertainty is far from over’, November 2015 Legal Action 6.Whistle-blower and legal challenges
21.13For LAG, and other legal aid commentators, the failure of the tenders was very much a case of ‘I told you so’ as concerns were expressed about the tender process from its inception and in particularly the selection criteria to distinguish between firms. David Gilmore of DG Legal, a firm of management consultants which specialises in legal aid work, believes the Legal Aid Agency relied too heavily ‘upon subjective essay-style questions’
4February 2016 Legal Action 7. to decide which firms should be awarded contracts. Gilmore argues ‘It’s far easier for procurers to administer a tender if they stick to objective criteria as far as possible.’ He suggests that if the LAA could have used more objective criteria such as the frequency of attendance at police stations and magistrates’ courts or ‘even peer review scores (assuming an appeal process is open to all)’ to differentiate between bidders.
21.14Accusations of inconsistencies in the marking of the tender bids were made as soon as the successful tenders were announced. Gilmore and others began to ask difficult questions about the consistency in the LAA’s approach.
21.15Two days before the bid results were announced, Freddie Hurlston, who had worked as part of the assessment team from June to October 2015, claimed that many of the staff working on the bids were temporary and had insufficient knowledge of public sector procurement. This had led, he believed, to the assessment process being inconsistent. A large firm which had bid in a number of areas could be top scoring in one, but be a low scoring one in another.
5November 2015 Legal Action 6.21.16A number of legal challenges to the tender results were launched by firms. Bindmans LLP represented 25 firms that challenged the Government’s decisions under procurement law. Jamie Potter, a specialist in public law and a partner at Bindmans, told LAG that, ‘By the time the Ministry of Justice caved in there were around 75 firms making multiple claims in around 200 procurement areas.’ Potter was ‘confident that we could demonstrate to the Court that something had gone very wrong with the tender process.’
21.17According to Potter there was ‘strong evidence of inconsistencies in how the tender applications were marked for the same firms in different areas.’
6March 2016 Legal Action 4. He also alleges that the Legal Aid Agency had made transcription errors ‘in failing to carry across the correct mark from one element of the process to the next. In addition, some firms seemed to be marked down for issues that were not relevant to their bids, for example, firms were criticised for not supplying details of a delivery partner when there was no delivery partner on their bid.’
21.18London-based firm Edward Fail, Bradshaw and Waterson was one of the firms which had brought claims against the LAA. It emerged that the firm had lost out in its bid for a contract in Hackney due to a transcription error. While the LAA admitted its mistake, it was not willing to compensate the firm.
21.19Gove announced that the Government was abandoning the two-tier criminal legal aid contracts in a ministerial statement on 28 January 2016. In his statement, the Justice Secretary said that thanks to the economies made in Ministry of Justice, and following the legal challenges to the tenders, he had decided not to go ahead with the two-tier contracts.
21.20Perhaps the most surprising part of the announcement was that as well as the abandonment of the tenders, Gove announced his decision to suspend the fee cut of 8.75 per cent which had been introduced from July 2015 (this was the second of two cuts, the first of which had been introduced in April 2014). He was able to do this because spending on the legal aid budget was under control. He observed in his announcement that the legal aid budget had reduced from £2.4b in the last Parliament to £1.6b. Gove could have chosen to continue with the cut and the reason he did not do so can be interpreted as a gesture of goodwill to keep lawyers onside over the far-reaching court reforms to which he had committed the Government.
21.21Zoe Gascoyne, chair of the Criminal Law Solicitors Association (CLSA), speaking to
Legal Action after the announcement, said that Gove’s decisions on two-tier contracts and the fees were ‘welcome news’ and that she was pleased that the Government ‘is willing to continue with the engagement’ with practitioners to discuss a way forward.
7March 2016 Legal Action 4. Not surprisingly the other representative bodies including The Law Society and the campaign group, the Justice Alliance, also expressed their support for Gove’s decisions.
21.22The defeat of two-tier contracts was that rarest of triumphs in legal aid campaigning – a complete victory for the providers. They fought tenaciously and some of the campaigning, especially the events and protests organised by the Justice Alliance, was creative and innovative. However, the Government were ultimately undone by a badly designed and executed procurement system, which the lawyers for the losing firms were able to expose with the help of the whistle-blower, Freddie Hurlston.
21.23As the proposed tenders for the housing possession court duty schemes illustrate (see below) competitive tendering has not lost its attraction as a policy for the Ministry of Justice. However, LAG would argue, such were the problems with the duty tenders, at least for this Parliament competitive tendering for criminal legal aid is unlikely to be resurrected.
Crown Court fees
21.24As this book went to press in March 2017, a consultation was on-going regarding proposals from the Ministry of Justice which could cut between £26–£36m from the Litigator Graduated Fee Scheme. The Ministry of Justice is also proposing that fees paid to advocates appointed by the court to cross-examine victims of abuse will be cut from private to legal aid rates. This would lead to around £7m in reduced income.
21.25In an interview for Legal Action, Zoe Gascoyne, condemned the consultation as ‘ill-timed’ and in effect ‘holding a gun to practitioner’s heads as they are about to sign a new contract,’ (see below). She also argued that a report commissioned by The Law Society from the consultants Oxford Economics ‘shows the fragility of the profession’ and the decreasing spend on criminal legal aid which means she believes that there is no ‘need for any cut.’
21.26The Oxford Economics report
8Forecasting Criminal Legal Aid Expenditure: 2017 update – a report for The Law Society, Oxford Economics, January 2017. forecasts expenditure in criminal legal aid based on trends in rates of crime and prosecution. It concludes that expenditure could fall by between £20–£111m and also argues that further savings could also accrue from efficiencies in the criminal justice system.
21.27In response to the Ministry of Justice’s proposals, the CLSA has been holding meetings across the country to discuss their next move. If the Ministry of Justice goes ahead with the cuts criminal legal aid providers are likely to mount protests, but they are unlikely to be joined by the Bar. A consultation which ended in March 2017 on changes to advocacy fees, if implemented, will increase payments for trials involving more serious offences and this has been welcomed by the Bar.
9www.barcouncil.org.uk/media-centre/news-and-press-releases/2017/january/new-agfs-plan-will-mean-fairer-pay-for-advocates/. The proposals on advocacy fees are cost-neutral, but were condemned by The Law Society as favouring more senior members of the Bar at the expense of the junior Bar and solicitors.
New criminal contracts
21.28In the aftermath of the dual contract debacle the LAA started a consultation on new criminal legal aid contracts. These will begin in April 2017.
21.29The LAA inserted an ‘embarrassment clause’ in the contract to prevent firms from criticising the agency or government. A judicial review was threatened which led to to climb-down. The LAA did not agree to remove the clause but issued a clarification that it would be relied upon in exceptional circumstances only’ (see para 18.20 above).
10http://www.publiclawproject.org.uk/data/files/News/161013_ex_LAA.pdf. According to David Oldfield from the Public Law Project (PLP), the clause never should have made it past the consultation stage, as a legal aid lawyer’s ‘duty to their clients and the courts will always trump any obligation to save a third party, like the LAA, from embarrassment.’
21.30The new contract seeks to deal with the controversial issues of touting and ghosts. There seems widespread agreement among practitioners that some firms are touting for business. For example, one solicitor complained to LAG that they were fed-up losing clients who ‘were tapped-up while on remand’ and persuaded to change solicitors. Scott Bowen, a solicitor in Cardiff, told Legal Action he has come across cases in which clients had been offered cash to change solicitors, but he believes this is the ‘practice of a very small minority.’
21.31As well as preventing touting a clause in the contract seeks to stop solicitors holding duty slots, but not delivering them personally. Instead they are reputed to ‘sell’ them to firms who send their own staff in substitution for the named solicitor. Whilst substitution is allowed, it is alleged that some do not perform sufficient duty work to maintain their accreditation status, and so should be removed from the rota. The ‘purchasing’ firm would have the benefit of additional income generated from the slots. There is little consensus on how widely spread this practice, known as ‘ghosts’ is, but the contract specification sets out clear requirements for duty solicitors. We will see if the LAA has the resources to police its operation.