Lord Falconer – 2006 Speech on Legal Aid

Below is the text of a speech made by Lord Falconer on 7th November 2006 at the Legal Aid Forum held at the Law Society, Chancery Lane, London.

Introduction

Thank you for asking me here today.

It is the second time in almost as many weeks that I have addressed solicitors on the issue of legal aid.

Rightly so. Dialogue’s very important. And we will listen

Importance of Legal Aid

Legal Aid is a vital issue; it is something we must get right.

Society demands a legal aid system. It demands a system which aids the delivery for justice, which provides quality and which provides value for money. Since Attlee introduced legal aid nearly 60 years ago, it has provided millions of people with advice, support and representation. Many of whom would have been otherwise denied access to justice because they could not have afforded to pay.

Free access to justice for those who need legal aid is as integral to the Welfare State as the NHS or state education.

Without legal aid for anyone charged with a significant criminal offence, the criminal justice system could not function, and could not function fairly.

Without legal aid for family law – critical decisions around whether or not, for example a child should be taken into care could not be properly made.

Without legal aid the most socially excluded would not get advice and support for welfare, debt, relationship or housing 7problems.

Legal aid provides equality in the justice system.

Commitment to principles

This is why, in the UK, we should be proud of our legal aid system – proud but determined to ensure it continues to reach the people who need it

This is why the Government would never countenance the withdrawal of legal aid.

We remain committed to the principles of social justice. They are as essential now as they were for Attlee. And we remain as committed to safeguarding access to justice.

This is why I asked Lord Carter to look at how legal services were procured by Legal Aid authorities, particularly with regard to criminal defence, so that we have a sustainable future that can ensure continued, equitable, access to justice.

That is why we must go forward. Forward to a sustainable future that not only hangs on price, but also – and more importantly – the quality of legal aid services that are delivered.

I want to take the opportunity to reiterate some of the comments I made at the annual conference, and explain why there has been no backtracking, why I think it is important we implement the reforms and why I think it is vital that we work together

Some of what I say may be familiar to you – I make no apology for that. I say it because I believe it to be right, because I believe that the direction set by Carter is the right one and because I believe the public need a legal aid system that delivers for those who need to advice and representation and that represents value for money for the tax-payer.

This is a timely event. It is critical for the provision of legal aid services that we resolve the issues that we currently face and that we work effectively together. But also that we think about how it currently works in practice

We expect to publish our formal response to the consultation in the coming weeks.

And the government has already indicated we will accept Lord Carter’s plan as a blueprint for reform. The destination for legal aid will be best-value tendering, which has quality at its centre.

Market-based reform is the way forward for legal aid.

Because it seeks to ensure the money is targeted as much as possible on those who need it.

However, I accept that some aspects of Lord Carter’s proposals may need refinement – for example, for the period before the price element of best value competition is introduced.

There is no retreat in our position for reform – we stand by the principles of fixed and graduated fees, as a prelude to competition, in all areas of legal aid – civil, family, immigration, and criminal. What we do accept is that these need to be appropriate to the nature of the work. We want providers to be able to do the most effective job and to have incentives related to this.

So we are looking afresh at the detail of our proposals on family legal aid. Many of the responses we received were specifically on this area. And I know it is something that Vera Baird was keen to address, after encountering significant concern over the family proposals during her summer tour to meet you and many others across the country.

So we are acting responsibly and looking again at the family proposals. It is a sign that the consultation is working, that it is doing what it is meant to.

We have listened and we are re-evaluating some of the key elements.

But we are not retreating from implementing the principles of Carter.

I am also acutely aware, following the Law Society Annual Conference of some other key issues which were raised by the delegates in the Q+A. This is how I understand them, and forgive me if this is not the case;

Firstly, there is not enough money.

Secondly, that the reforms will lead to over 800 firms going out of business;

and thirdly, that as a result of the reform it will be increasingly hard to attract lawyers to do legal aid work.

Serious and real concerns to many of you. But let me, if you’ll permit, address those concerns and suggest that all is not as bleak as it perhaps seems.

Not enough money

Firstly, not enough money. There is no extra money for legal aid. There is no bottomless pot. If I had the money I would give it to Legal Aid.

This Government has increased spending on public services dramatically over the last 10 years. And yet increased expenditure has also gone hand in hand, rightly, with increased efficiencies. The amount of money spent on legal aid has risen to more than £2billion during this period – which represents around a 37% increase in spending, an increase which compares favourably with all other public services, possibly bar health.

But there are finite resources for legal aid – just as for all public services -and those resources must be judged against other priority areas like health and education.

And despite the substantial investment over the past 10 years, the procurement of publicly funded legal advice and representation has not kept up with the pace of change. The system has grown organically rather than in a systematic way. Reform is long overdue – legal aid has not always provided a fair deal.

Above all it has not always been fair for vulnerable people. There has been a disproportionate growth in the criminal legal aid spend. And this is to the detriment of civil advice – advice which helps us tackle poverty and social exclusion. The balance must be redressed.

The taxpayer needs a fairer deal. The overall cost of legal aid has grown considerably in recent years. If we are going to justify this pressure on the public purse, we have to ensure that all of the money is being spent on the right things and that it is spent well.

But in all of this we want to ensure that legal aid rates continue to provide respectable remuneration for hard working practitioners. There needs to be a network of provision.

Legal aid spending in context

£2 billion is a considerable amount spent on legal aid – considerably more in fact than in any other comparable jurisdiction – it is simply not the case that under-funding is the problem. The problem is that this money could be more effectively utilised. What is required is for us to find efficiencies in the procurement system that can enable us to continue to deliver a world-class service. We also need to recognise that other parts of the system need to become more efficient as well.

There is simply no extra money for legal aid. We must operate within these parameters.

Like the provision of other mainstream public services, legal advice needs to deliver for the public. And this is more than delivering a high quality service to a client – this is delivering value-for-money for the taxpayer.

And this must come, in part, from a move to a market based approach.

A move I believe the Carter reforms will initiate.

A move I am committed to making work.

2. Profitability levels and firms being driven out of business

A great deal of concern has also been raised regarding the financial viability of the proposals. Concern that the timing of the introduction of fixed prices- before the efficiencies of a new system are able to reap benefit will put considerable pressure on businesses. And concern that profitability will be low even when the efficiencies are in place.

Dealing firstly with the timing of introducing fixed prices.

We are well aware of the pressure this may bring. And I assure you we are taking a long hard look at the sequencing of the reforms.

We remain eager to enter into a constructive discussion to find a workable arrangement – But finding more money is not a feasible nor constructive argument.

The second and more serious concern is the long term impact the reform will have.

I very much realise that to move from present arrangements to price competition, with interim fixed and graduated fees, will mean a great deal of change for suppliers in all areas of legal aid. But I accept Lord Carter’s view that such change is desirable, indeed it is essential, if we are to have a sustainable and increasingly effective supply base. Things simply cannot go on as they are.

There must be a move to the market. A move to a market based approach which will lead to increased efficiencies.

Fixed and graduated pricing rewards efficiency. Marketisation allows efficient suppliers to deliver and receive increased volumes of work.

Lord Carter’s model for best value tendering will free suppliers who meet the quality threshold to develop their own means of delivering products or services in response to external incentives and pressures. This means that where good quality services are costly to provide, prices will be higher, and where services are relatively inexpensive to provide, prices will be lower. The price element of competition means that it is the practitioners, in effect, who will therefore set the prices. This will ultimately result in good quality efficient suppliers earning a reasonable level of profit.

The issue is how many solicitors there are undertaking legal aid work. The market will dictate the number of solicitors who can undertake legal aid and the market will reward those solicitors who deliver efficiently. It is through supply and demand that efficiencies will be found, as solicitors find new and efficient ways of working. It is these efficiencies that are found that will, I believe, safeguard the future of solicitors providing legal aid services.

And this leads to the third area of concern; that these reforms will lead to a diminishing number of solicitors prepared to undertake legal aid work.

Dearth of Solicitors

I fully accept that we cannot provide those who need help with that help unless the profession can continue to attract people to do legally aided work.

The move to the market will provide fresh incentives for solicitors. The market will reward the efficient solicitor of quality, not drive them away. And the reforms we are proposing will mean that solicitors can all compete on an equal footing, regardless of the size of their firm.

I firmly believe that there will be opportunity for firms, even in large rural or black and ethnic minority areas to increase their profitability.

I truly believe that the reforms are workable and achievable. Incentives are there. There are practitioners out there – indeed very likely some here today- who will be able to take advantage of the opportunities they give, in a way that is good for the client, good for the legal aid system, good for the taxpayer, and good for practitioners.

But to achieve this we must work together to ensure that we continue to have a supplier base that can meet the needs of those who require advice and represent particularly those who are socially excluded.

It is this desire to make sure that everyone, and in particular the most vulnerable of our society, has recourse to high quality legal aid that underpins the importance of a sustainable and effective legal aid system.

Peer review

You, the providers, will ensure that quality is at the heart of the legal aid framework. Lord Carter proposed that the responsibility of quality assurance – through a process of peer review – should be passed to the Law Society.

Peer review by the Law Society will ensure that only quality-assured providers will be able to undertake legal aid work. This is one of the most important aspects of the proposals. Peer review has been almost universally welcomed and, I am confident that it will guard the public against any diminution in the quality of legal advice.

However, we also recognise that such radical reform will ostensibly require a change in the way practitioners operate.

That is why the LSC are currently working with the Law Society to sort out the details of the grant programmes with the Law Society. Grant programmes which will be used to help provide specialist assistance in restructuring your firms or to invest in modernising your IT. The Law Society has an important role to play in assisting firms throughout this transitional period.

Consultation

A large number of individual legal aid practitioners – as well as the Law Society itself – contributed formally by submitting written responses to the proposals. The consultation closed on 12 October and I would like to extend my thanks to the Law Society and its members for engaging fully in the process.

We are considering the comments of everyone who has responded. We will not shy away from difficult decisions, nor will we be afraid to look again at proposals if we believe them to be wrong.

Conclusion

And it is now right that we go forward. That we go forward with the principles of Carter leading the way.

A market based approach will ensure sustainability.

It will ensure value for money for the taxpayer. It will ensure a fair deal for all.

But it will not enforce a one size fits all solution. There will be differences between an urban and a rural practice, for example.

We want to get these reforms right, for all our society, but particularly for those who most need it.

We need to get these reforms right.

And we need to get these reforms underway. We must take steps over the coming months to ensure the long term viability of the system – a system I know we all believe passionately should exist.

But we need your involvement. If we are to achieve this we want to work with you, to ensure that we get this right.

My vision is for a legal services market that is reflective and responsive to modern society. A legal system that is suitable for the modern democratic world we live in. A legal services market which has at its core a profession driven by the need of its clients and in so doing holding public confidence.

The current legal aid system needs reform. It needs an overhaul. We are committed to moving forward. We are committed to moving to the market. My hope is for a legal aid system which is fair to the vulnerable, fair to taxpayers, fair to defendants, and fair to practitioners.

A system we need your help to implement.