My noble Friend the Parliamentary Under Secretary of State, Lord Bach, has made the following Written ministerial statement.

“Between 18 June and 10 September 2008, the Ministry of Justice (MoJ) and the Legal Services commission (LSC) consulted on options for how payments made under the Family Graduated Fees Scheme, which governs payments to barristers for family legal aid work, could be reduced in order to live within budget, and to protect services to vulnerable clients. Our consultation was announced in a statement made by my noble Friend, Lord Hunt of Kings Heath, on 18 June, Official Report, column WS81.

Expenditure on legal aid barrister family advocacy has risen unsustainably from £74 million to nearly £100 million in the last five years—a rise of over 30 per cent. Over the same period, the number of cases has increased by only 11 per cent., so there has been a significant rise in average case costs in a short period. Payments to family barristers now form over 10 per cent. of the entire civil legal aid budget. Legal aid operates within a fixed budget and the department is obliged to take action to remain within that budget, or risk being forced to reduce vital services.

Following the close of our formal consultation in the autumn, we have continued to engage with interested parties to hear their views. We are grateful to respondents for their time. We have listened and changed many of our proposals, and accepted some of the suggestions made by consultees.

Today I am announcing a package of measures to restructure family barrister payments, reduce overall expenditure, and to refocus resources on high-priority clients. Given the significant priority afforded to public law children cases, these reductions will apply primarily to private family law work, such as child contact and residence disputes, and disputes over property. The Government is considering how we can increase the number of private law disputes which are resolved through mediation, because adversarial proceedings are not always in the interest of the parties. We will make the following changes to the Family Graduated Fee Scheme for barristers:

Abolish the “more than two parties”. Special Issue Payment which provides a 40 per cent. increase to fees when claimed in public law cases. We received strong representations from interested parties that this element of the scheme did not represent a sufficiently ‘special’ issue to merit a fee increase, as there are more than two parties in the large majority of such cases.

Re-direct most of the funding spent on the 2 more than two parties” Special Issue Payment into increasing by £4.4 million p.a. the fees paid to barristers for hearings and conferences in child care or supervision proceedings. This will mean an increase in fees paid to lawyers in at least 3,500 of these cases each year.

In private law disputes concerning child contact or residence, reduce the Special Issue Payments claimable by barristers for conduct issues and additional experts from 50 per cent. to 30 per cent. and 20 per cent. respectively. Both of these payments are currently running at 150 per cent. of the level intended.

In private law disputes concerning financial settlement on divorce, abolish the most expensive Special Issue Payments claimable by barristers for issues concerning conduct, analysis of accounts, assets which are outside the control of the parties, and more than one expert. In addition, we intend to reduce the Special Issue Payments claimable for litigants in person or a relevant foreign element from 25 per cent. to 20 per cent. All of these payments are running at a level higher than that intended.

Introduce tighter procedures for barristers’ claims for Special Preparation Fees, which was a suggestion made to us by interested parties. This is an area where fees are running at 800 per cent. of the level that anyone expected. Barristers will be required to submit to judges a detailed schedule of the hours spent in preparation so that these payments are only made where appropriate. We will also revise the claim forms so that the basis of any claim is clear.

We are not reducing expenditure in the Domestic Violence category.

Annual expenditure on family barristers’ fees is now nearly £26 million per year higher than it was five years ago—an increase which far outstrips any increase in cases. These changes will help us to reduce net expenditure by £6.5 million per year, and to refocus resources on some of the most vulnerable families and children in society”