Proposed Amendment to the Criminal Defence Service (Funding) Order 2007

court room scene

05 February 2008

The Lord Chancellor and Secretary of State for Justice has begun consultation with the General Council of the Bar and the Law Society on a proposed amendment to the Criminal Defence Service (Funding) Order 2007.

In his letters to the Bar Council Chairman and the President of the Law Society, Jack Straw said:

Over 2,000 barristers bid for VHCC [Very High Cost Case] work, knowing the payment rates on offer. However, a significant number of barristers have now refused to sign the VHCC panel contract, so we anticipate that the Legal Services Commission (LSC) will need to agree to the use of non-panel advocates more often than might originally have been envisaged. 

The LSC have been told by members of the Bar that have not signed the contract, that they had bid in the full knowledge of the rates offered, and that they want to do this work. I am therefore confident that solicitors will be able to find non-panel counsel of the requisite experience. However, I do not feel that it would be appropriate for the LSC to continue to deal directly with barristers who are not under contract. So, in order that we can move forward, I intend to amend the Funding Order. This amendment will enable solicitors to be paid for advocacy work direct if they instruct non-panel advocates. The order will also set out maximum rates that can be paid in respect of advocacy services. Those rates will be no higher than those that were bid in the tender process and offered in the contract.

I am mindful of the position of those lawyers (both barristers and solicitors) who have signed the contract. I intend to enable them to work as expected. The proposed amendment will enable solicitors to be paid for advocacy work direct, so that they can instruct non-panel advocates. Those barristers who have signed the contract will be paid direct under the terms of that contract.

In reaching my provisional view that I should make this funding order, I have, of course, had regard to the factors set out in s 25(3) of the Access to Justice Act 1999 namely:

  1. the need to secure the provision of the relevant services by a sufficient number of competent bodies;
  2. the cost to public funds; and
  3. the need to secure value for money.

As to the first consideration, as I have said the LSC have been told by some members of the Bar that they bid for this work in the full knowledge of the price on offer and were prepared to work at that rate which they offered. However, they have felt under some peer pressure not to sign the contract. I feel confident that when offered work on a case by case basis sufficient members of the Bar will choose to take this work. This view is supported by some larger firms of litigators, who have indicated to the LSC that they believe they will be able to secure advocacy services from members of the Bar when needed. Finally on this issue, I have also noted the fact that not all members of the Bar have refused to sign contracts, and that the LSC have now offered a new contract on substantially the same terms for signature. I am hopeful that there will be an increased take up of contracts when members of the Bar realise that there is no possibility of an increase in the rates. Although I cannot be certain how many advocates will sign the new contract, given the numbers that signed the original contract, I believe it will provide a significant resource in addition solicitor advocates with higher rights of audience and  non-panel advocates taking work on an ad hoc basis.

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In considering the cost to public funds, I have been mindful of the overall budget available for legal aid expenditure and to the conclusions of Lord Carter's review of legal aid. As you are aware, there was considerable concern expressed about the fees available for the most straightforward Crown Court cases. The Bar Council, among others, pressed strongly a case for redistribution of the money available for Crown Court Advocacy away from the longest most complex cases and towards the shorter cases. As a result my predecessor agreed to fee increases in graduated fee cases that amounted to some £29m additional funds being made available for Crown Court Advocacy. The rates which have been set by the LSC for VHCCs following a bid round of litigators and advocates will save in the region of £4m per year. So, overall there has been a net increase of £24m per year for this advocacy work. Given the other pressures on the legal aid fund and the Ministry's overall budget I'm afraid there is simply no more money available for this work. The proposed amendment will not increase costs as it limits amounts payable for advocacy services by non-panel advocates to the same rates as those bid in the tender process and offered in the contract.

Finally, in considering value for money I have considered it an important principle that the LSC should retain control of money paid on VHCCs through contract terms. In my view the proposition to enter into contracts with both advocates and solicitors was a significant step forward in improving value for money. The LSC will have access to the diaries of counsel and will be in a position to judge if they are able to devote sufficient time to these most complex cases. They were also able to specify other important non-legal skills such as IT literacy. At the time of the proposals the Bar Council also expressed its support for this level of control - in the Bar Council's response to the consultation paper 'Legal Aid: a Sustainable Future' which was published on 12 October 2006. The Bar Council's views on this were:

'We agree that to go on the panel barristers and solicitors should have high levels of computer skill and we agree that electronic diaries should be kept, and that work should be logged electronically'.

It therefore seemed to me that it was appropriate that direct payment from the LSC should only be available to advocates who had a contract with the LSC. In all other cases the payment will be made to the litigator as the party responsible under the contract for ensuring that appropriate advocacy services are available. Given that as a result of these proposed amendments, costs will remain as previously envisaged; and only practitioners with a contract with the LSC with the controls that that entails will receive direct payments, I consider that value for money will be preserved.

Any Funding Order can, of course, only be made after appropriate consultation. In the circumstances, I think it is appropriate that the period for consultation be short. I should be grateful to receive your response to this consultation no later that 18 February 2008.