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Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations 2015

Volume 764: debated on Monday 7 September 2015

Motion to Regret

Moved by

That this House regrets that the Government are introducing the Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations 2015 without having undertaken a review of the impact and coherence of the cuts to litigators’ fees; agrees with the Secondary Legislation Scrutiny Committee’s analysis that there is too little evidence to establish what effect the fee reduction would have; and regrets the Government’s lack of engagement with the profession and those affected by its reforms (SI 2015/1369).

Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee

My Lords, I refer to my interests registered as an unpaid consultant with my former law firm.

Last year, the Government reduced the fees payable for criminal legal aid work by 8.75%. On 25 June this year, they published the regulations which are the subject of this regret Motion and which implemented the planned imposition of a second cut of 8.75%, effective for new cases begun after 1 July. However, the Bar was exempt from this second, further cut, at least for the time being. Therefore, it affects essentially solicitors.

The regulations also prescribe new fixed fees, effective from next January, for police station and magistrates’ court work and in Crown Court cases involving up to 500 pages of prosecution evidence—the new PPE. Alongside these changes, the Ministry of Justice is pressing ahead with radical changes to the process of bidding for contracts.

The regulations evinced from the Secondary Legislation Scrutiny Committee a critical report of the kind with which the Ministry of Justice is by now all too familiar. In its report of 25 June, the committee highlighted concerns about the lack of detail about the effect of the first instalment of the 17.5% cut and the deviation from the original timetable. It pointed out that the so-called Explanatory Memorandum gave no information about the effect of the first cut despite the statement in the memorandum accompanying the original cut that that there would be continual monitoring and a review.

The impact assessment—again, typically—is described by the committee as “very short on detail” and as offering,

“nothing about quantification of the impact on legal aid providers”,

whereas the Law Society was quoted as claiming that 120 providers—about 8% of the total—were facing bankruptcy as a result of the previous round of cuts.

An exchange of correspondence between the noble Lord, Lord Trefgarne, and the Minister is recorded in the committee’s report of 2 July and reflected the customary complacency of the Ministry of Justice. The noble Lord, Lord Trefgarne, concluded the exchange by asking two questions: first, what evidence could be provided as to the maintenance of quality, promptness and reliability of the service and how the department would ensure that these were maintained and monitored; and, secondly, given that 1,099 bids had been made for 527 contracts, what would happen to the unsuccessful applicants and was there a risk of market distortion. Perhaps when he replies the Minister could enlighten us as to these matters.

The background to these regulations is of course the Government’s determination to secure further reductions in the legal aid bill, the effects of which have so often been a matter of concern in this House and the world outside. Since 2010, the legal aid bill, civil and criminal, has fallen from £2.2 billion to £1.7 billion—that is over 20% in cash terms and more in real terms—and appears, even without the anticipated saving of £55 million from the measures which are the subject of this Motion, to be falling further to some £1.5 billion. Of course, all these figures include VAT.

Before the Minister does so, I should say that the Labour Government also implemented cuts in legal aid and froze criminal legal aid fees. Indeed, I first came to be acquainted with my noble friend—my now good friend—Lord Bach as a result of securing a debate at the Labour Party conference criticising such cuts. The Government, however, appear determined to reduce the number of law firms able to undertake legal aid work— although they have temporarily, as I indicated, spared the criminal Bar from the second 8.75% cut—heedless of the potential impact on clients and the future of the profession.

In the north-east, for example, seven firms will obtain contracts north of the Tyne and five south of the Tyne. These are very large geographical areas such that access to lawyers will become more difficult for many clients and attendance at police stations more difficult for practitioners. Moreover, the fees payable for different categories of work vary widely. The fee for attendance at a police station, which could well be in the middle of the night—as I shudder to recall—varies between £118.80 in Hartlepool to £160.88 in Durham. The rationale for this does not appear self-evident.

There is great concern about the so-called two tiers of contract under which firms can opt to act only for their own clients or in addition undertake duty solicitor work, whether it be at police stations or at court. There is a widely held view locally and indeed nationally that the former group will fall away because of the limited number of cases in what is in any case a declining number of cases overall, as testified by the court closure programme—in itself controversial but justified by the Government because of lack of demand. National and civil legal aid expenditure fell by 11% in the last quarter of 2014 compared to the same period in 2013. The number of magistrates’ court cases fell by 17%, committals for sentence by 29%, and all non-Crown Court crime by 7% in volume and 14% in value.

I discussed the situation with partners in my old firm, where the criminal department is a relatively small part of the practice, and with the senior partner in another practice where it is much more significant. During my 35 years as a partner, and since, the criminal department made a very modest contribution to the firm’s profits but was maintained because we felt we ought to offer the service. It would appear that the average profit margin on criminal legal work is around 5%. An experienced solicitor might expect to earn only around £40,000 a year, significantly less than in other areas of practice, even in firms with a larger criminal department. Firms are not recruiting trainee solicitors and, even if they wanted to, it is unlikely that many would apply when there are much more financially rewarding areas of law in which to practise. There is therefore likely to be a shortage of able solicitors in future, and of course the Bar, which has temporarily escaped the second round of 8.75% cuts, faces the same potential problem, with adverse consequences ultimately for recruitment to the judiciary, as senior judges have pointed out. The Justice Minister Mr Vara’s suggestion that work could be carried out by legal executives underlines the point while ignoring the fact that many firms cannot even now afford to employ legal executives as well as solicitors.

The difficulties that I have outlined are not, of course, restricted to the north-east. A particularly illuminating article by Steven Bird was published by the London Criminal Courts Solicitors’ Association. It demonstrated that some areas in the south-east would see some police station fees cut by more than 30% and that magistrates’ court fees, falling into what would have been the higher fee band, would be cut by an average of 52.7%. In London, a flat rate of £200.93—I love the precision of the 93p—will mean a cut varying from lucky Bexley of 8.67% to Heathrow of 33.25%. In the complex new arrangements for Crown Court cases where the new PPE applies, with different fees for each band of 100 pages up to 500 and 11 different categories of offence, fees could be cut by 50% or more.

Members will be aware that the measures now under way evoked both a strike, in effect, by solicitors and an unusually close degree of joint working between the Law Society and the Bar, as evidenced by the material published by the Criminal Bar Association. The irony of this latest assault on our cherished system of legal aid and access to justice, already compounded by the ludicrous criminal charges order which is the subject of another regret Motion that I have tabled, in the year when we have celebrated the anniversary of Magna Carta, is clearly lost on this Government. We learnt not to expect more of Mr Grayling, but had hopes of Mr Gove. It is not too late for him to think again about the changes due to take effect next January. He acted, after all, to abandon Mr Grayling’s vanity project for the secure college at Glen Parva.

In the mean time, perhaps the Minister, if not tonight then perhaps by way of a letter to be placed in the Library, could answer some questions. What, if any, contingency plans are in place if an insufficient number of firms of solicitors accept contracts for duty solicitor work in police stations or courts? How will the Government react if the contract process is disrupted by legal challenges from unsuccessful bidders? What plans exist to deal with the situation arising from contracts becoming unviable during the period for which they are to run? What assessment has been made of the ability to survive of firms with only an own-client contract and, in the event of a significant number of firms failing to do so in any locality, what contingency plans exist to deal with the problem? What assessment has been made of the impact of the changes on the number of solicitors needed to provide an efficient and accessible service and upon recruitment?

Will the Minister look into the parallel matter of the emerging problem of long delays in trials proceeding because of short staffing in the Crown Prosecution Service? What future does the Ministry of Justice foresee for the Public Defender Service? How many advocates does it plan to employ and on what terms? Will the service be required to compete with private firms or is it seen as a resource of last resort where insufficient private firms fail to survive the new regime? When will the workings of the new structure be reviewed?

Finally, what assurance can be given that it is not part of the Government’s intention for criminal legal aid work to be consigned to oligopolies, such as the likes of G4S, Serco or Sodexo, upon which they increasingly rely to provide public services?

Concern about access to justice in general, and the future of legal aid in particular, has been a regular feature of this House’s deliberations in the five years that I have been privileged to serve in it. We seem to be witnessing the slow death of legal aid. I hope that we will not, in the near future, be obliged to act as a coroner’s jury, performing an inquest on its ultimate demise. I beg to move the regret Motion.

My Lords, I refer to my registered interest as a practising barrister, though not undertaking work in the criminal field.

The fact that this Regret Motion is being debated at all is evidence of a problem that has bedevilled the relationship between the legal professions and government for many years now. Governments of all complexions have failed to seek consensual solutions to the challenge of providing a publicly funded criminal justice system that will work successfully both for the public and for the two essentially private sector professions. A mutually supportive and trusting relationship between the professions and government is essential if our criminal justice system is both to be effective and fair and, at the same time, to command public confidence. There is a crying need for the Ministry of Justice to work more closely with the professions to reach an acceptable agreement—a compact—for fees and future allocation of work. The constant war of attrition over recent decades has damaged government and the legal professions and should not continue. This was a view held and often expressed by my noble friend Lord McNally when he was a Minister, although of course he was bound by the constraints placed upon him by being part of the coalition Government with the overwhelming need to find cost savings. This Government are also so constrained, and we understand that.

I will speak of the reductions affecting criminal work, and my noble friend Lord Carlile of Berriew will speak largely about the changes affecting work for prisoners.

The background against which the implementation of the second stage of the 17.5% reduction in fees is being imposed is a great deal more favourable than it has been for some years. Sir Bill Jeffrey summarised this at the start of his extremely helpful report, Independent Criminal Advocacy in England and Wales, published in May 2014. He wrote that:

“The landscape of criminal advocacy has altered substantially in recent years. Recorded and reported crime are down. Fewer cases reach the criminal courts. More defendants plead guilty, and earlier than in the past. Court procedures are simpler. There is substantially less work for advocates to do. Its character is different, with more straightforward cases and fewer contested trials. In the publicly funded sector (86% of the total), it pays less well”.

The climate should, therefore, present us with opportunities to make improvements to the criminal justice system, to make it work better and more cost effectively by collective and collaborative effort and working on a clearly evidenced-based approach. Yet the introduction of these regulations has been far from that.

The justification for the second 8.75% fee reduction was to have been the economies of scale and reductions in cost that were to be expected as a result of market consolidation—the theory being that fewer providers would have larger and more certain volumes of work, which would enable them to weather lower costs by making such economies of scale. Of course, that argument ignores some of the difficulties inherent in reducing provider numbers. A reduction from 1,600 contracts to 527 for solicitors offering cover at police stations involves a substantial limitation of choice for the public. It also makes it far more difficult for new entrants into the market to prosper, which has the effect of ossifying criminal practice in the hands of a few providers. It risks defendants being left without adequate advice at police stations. I do not believe that any clear assessment of that risk—the risk of solicitor cover being unavailable or simply too far away—has been carried out.

Even if one overlooks these points, there is an inherent deep unfairness in what has happened. Although the cuts were introduced in July of this year, the market consolidation that was intended to enable the profession to weather them is delayed until at least January 2016, so that there is a minimum of six months between the two with no protection in place.

The Law Society expects numbers of firms to fold or stop taking criminal work as a result of this second tranche of cuts. Yet the Government’s impact assessment accompanying the regulations entirely missed the point. It recognised the,

“additional pressures created by declining case volumes”,

and that there are,

“additional challenges in coping with reductions in fees”.

Yet the impact assessment made the assumption, described as key, that there would not be any major impact on future clients, explaining that:

“Any impact on clients would be felt through a lack of legal aid coverage should providers be unable to sustain a second fee reduction. We believe that any potential problems with sustainability are mitigated by the changes to legal aid procurement and the harmonisation of fee structures”—

in other words, by the very market consolidation that has now been delayed. But the fact is that there is already, and will be, a loss of providers. The assumption to the contrary flies in the face of human economic behaviour.

It is very similar to the assumption that was made in relation to raising court fees—that the enhanced fees of up to £10,000 to bring a money claim were assumed not likely to lead to a reduction in case starts.

The real challenge for government in this Parliament should be to get the criminal system working better. The report by Sir Bill Jeffrey, which I mentioned earlier, recognised the value of independent and successful legal professionals providing high-quality advocacy. He made a number of important suggestions for the future work of solicitor and barrister advocates in the fields of training, early choice of advocates for cases, and the structure of the two professions and the work they undertake. The Government should heed his report very carefully, and it would be very helpful if the Minister could say in his response how and when they intend to respond to the Jeffrey report, which they commissioned.

The Government should also respond positively, and not just with warm words but with the allocation of the necessary resources, to the need to implement in full the recommendations of the Review of Efficiency in Criminal Proceedings conducted by Sir Brian Leveson and published in January this year. With better communications, fewer unnecessary hearings attended in person by all parties, getting charging decisions right first time and ensuring continuity of representation and of case management throughout the life of cases, there could be a manifestly more efficient system. But as Sir Brian made clear, resources are needed to establish and kick-start that more efficient system—resources for better technology and resources for training. It is incumbent on the Government to provide those resources—and to ensure that the morale of those involved in establishing and running the system is high, so as to make the changes successful.

No doubt the Government would say that savings needed to be made now, and would point to the obvious fact that that the savings that would result from the Leveson proposals would take time to be made. But that is, quite simply, no reason for not making them or trying to make savings now by enabling remuneration in ways that are unfair, that reduce the number of practitioners willing to undertake criminal work, and that diminish morale throughout the system.

On legal aid, we have proposed ways of saving money without cutting fees to unacceptable levels. We have suggested making defendants’ restrained funds available for paying reasonable defence fees in very high-cost cases. In civil cases, you cannot freeze funds without an exception for the payment of reasonable costs, yet at present the defendant in a criminal case who has restrained funds is entitled to legal aid because he cannot use the funds to pay for his defence. It defies logic, but apparently some in the Government support retaining the present arrangements.

We have also suggested that larger companies should be required to carry compulsory insurance for directors and employees to cover the costs of fraud prosecutions; we have employer compulsory liability insurance, so why not that? Such defence costs are usually now incurred by the legal aid budget in disproportionately expensive very high-cost cases. These are practical ways to reduce the cost of legal aid without driving firms out of business or making criminal work a Cinderella service, and without destroying the morale of those who work in it. We wish to co-operate with the Government to find ways to save money that are effective and fair, and to be involved in a far more consensual approach.

My Lords, I congratulate my noble friend on moving this Regret Motion. I sit as a magistrate in London in the family courts, the youth courts and adult criminal courts and I frequently hear cases where the defendant or applicant is a litigant in person. From the court’s perspective, some litigants in person represent themselves very well. They understand the advice that they receive from the clerks and manage both the legal process and the practical aspects of navigating the court system through to a conclusion that they believe is satisfactory. However, some—I would say many—litigants in person have difficulty understanding the guidance that they are given when in court. They struggle with the whole procedure and, at the end, do not feel that they have been treated justly by the system that they have grappled with.

I want to tell noble Lords an anecdote from about a year ago. It concerns a woman who turned up in court charged with fraud against her employer. She was a litigant in person. She came into court and was correctly identified. The clerk then asked her whether she was guilty or not guilty. Her reply was, “I am guilty but I want to plead not guilty”. When asked to explain herself, she did indeed have a rationale for saying that. She was imminently due to have a medical operation. If she had pleaded guilty she would lose her employment and not be able to have the operation, so she was going to delay the finding of guilt until a trial.

It could be argued that the defendant had told us that she was guilty and that she was planning to commit a further fraud on her employer. But as a court we were limited in the advice that we could give to her other than to advise her of the benefits of a guilty plea. We had 30 other cases to deal with that day. We filled in the necessary forms and the matter was indeed put off for trial. If that lady had had some robust defence advice, she may have decided to plead guilty as she had indeed told us she was guilty. But her right to plead not guilty trumped everything else, resulting in the additional cost of the trial.

The overwhelming point that I want to make is that we see many vulnerable people in courts—people who are not able to represent themselves. There is a concern. The Magistrates’ Association, together with other interested bodies, has tried to judge whether the justice system is functioning properly with this increase in litigants in person. I draw the House’s attention to a survey of magistrates published on 13 January this year. Views were taken before costs came in in February 2014 and again in November 2014 after the increase in litigants in person. The survey shows a noticeable increase in the dissatisfaction expressed by magistrates because they felt that the system was not being as just as it should be.

I understand that there are a lot of surveys, but the current chair of the Magistrates’ Association, Richard Monkhouse, was a statistician in a former life and this is a robust piece of work. I have looked at it myself and I have a scientific background. I hope that the Government will look at these figures carefully because they raise a worrying growth in uncertainty and dissatisfaction with the increase in the number of litigants in person.

A wider point should be made. Other aspects of the legal and court system also feed into the general sense of dissatisfaction and the feeling that the court system as a whole is not properly offering justice to people. We have heard from my noble friend about the imposition of the criminal courts charge. In the family courts, we have had cuts to legal aid and an increase in the costs of drug and alcohol testing, which reduces access to fairness for people. We have had the increase in tribunal fees and cuts to CABs. These are off-topic for the purposes of this debate, but they add to the sense of many vulnerable people feeling that the court system as a whole is not open to them as it should be.

My Lords, it is always a pleasure to follow the noble Lord, Lord Ponsonby, who brings a rich vein of evidence from his experience as a lay magistrate to your Lordships’ deliberations. I declare the interests of having been a barrister practising criminal law for 45 years and having spent 28 years, until I retired from these roles at the end of last year, as a part-time judge at various levels and, particularly for this debate, as a former president of the Howard League for Penal Reform.

In a few moments, I shall talk about prison law specifically, but I wanted to address some issues about the generality of this debate, if I may. I agree with the broad thrust of what has been said about the effect of the regulations. However, I want to commend the Lord Chancellor for his willingness to engage with the legal profession, both the Bar and the solicitors, during recent weeks and months. This has been appreciated. Other things could be done than cutting criminal legal aid in the way which has been described.

There are still cost savings to be made which could be addressed and I can give some examples. Lord Justice Leveson’s report and the target of one case, one hearing or, at worst, one case, two hearings, which just does not take place at the moment, could save a great deal of money. Announcements have been made about the closure of court buildings but that could go much further and would not result in removing court proceedings from localities. There is absolutely no reason why most magistrates’ court hearings and, indeed, county court hearings in the civil jurisdiction, should not take place in town halls, village halls or school halls—buildings where the public would be less intimidated. Layers of administration could be removed. For example, every Crown Court centre has a resident judge. More or less by definition, they are all fairly intelligent men and women who could be trained to manage their court buildings and to be in charge of the whole staff in the courts. There should not be two separate administrations: the court judiciary and the court administration. I know from talking to resident judges that some might resign if presented with the obligation to manage the courts, but there are plenty of others who would seize the opportunity to be trained to do so.

There is an unacceptable level of regulatory duplication in the legal profession: the Solicitors Regulation Authority, which struggles with all the cases placed before it because it does not have adequate resources; the Bar Standards Board; the Legal Services Board; and the Legal Ombudsman. There is a level of duplication here which is—or should be—counterintuitive to any Conservative Government. The statutory bodies regulating the Bar could certainly be reduced by at least one, and possibly two, leaving the Bar Standards Board in place and saving public money. I respectfully suggest that another thing that is counterintuitive to a Conservative Government is the Criminal Defence Service. The nationalisation of part of criminal defences, when there is a perfectly good set of private sector organisations to deal with these things, is an admission of failure to negotiate, not an empirical and objective decision. I urge that the future of the Criminal Defence Service should be reviewed seriously. It is not, unfortunately, making the impact that was intended. Indeed, it is barely making any positive impact at all.

I turn to prison law and to cuts to legal aid for prisoners. One of the roles of lawyers—including the Minister, who is a very experienced and much admired Queen’s Counsel—is to speak out sometimes for the unspeakable; to do really difficult things in an articulate way and to represent those many believe should not have rights but who are human beings who do have rights. Prisoners fall into that category. Since December 2013, legal aid for prisoners has been severely curtailed both in scope and through fee cuts. However, this has coincided with an unprecedented deterioration of safety standards in English and Welsh prisons; a rise in suicides; an increase in mental illness among prisoners; and a reduction in the effectiveness of treatment for this. All that is compounded by staff shortages. Access to justice is vital for prisoners who are, as members of a closed community, as the noble and learned Lord, Lord Brown, said,

“uniquely subject to the exercise of highly coercive powers”.—[Official Report, 29/1/14; col. 1279.]

Previous regulations removed almost all issues that prisoners face from the scope of legal aid and outside it now are advice—never mind litigation—about access to mother and baby units, prolonged segregation and access to safe accommodation and support for vulnerable prisoners, including children, on release from prison. That means that if a perfectly reasonable judicial review has to be mounted—for example, on the basis that prolonged segregation was severely damaging a prisoner’s health—it has to be done pro bono, if at all. If the provision of support for vulnerable prisoners, including children leaving custody, is to be challenged, that too has to be done pro bono. One contrasts that with the support that is available, at least in exceptional cases, for children with educational challenges and their parents.

The only forms of prison law work that remain in scope of legal aid at the moment are some parole and disciplinary hearings and a limited number of sentence calculation cases. As the Minister will know, the Court of Appeal granted the Howard League and the Prisoners’ Advice Service permission to challenge those cuts at a hearing in July 2015, so that challenge remains pending. The Government have the opportunity to respond without going through the public expense of a court challenge by looking once again at the way in which prison law has been cut.

The Howard League, which I use as an example because I know it well, provides a free telephone legal advice line, through its very expert legal team, for children and young people in prison. It is the only dedicated legal service in the country for such people. The team has expertise and has a contract to carry out legal aid work but it is now carrying out almost a majority of that work for nothing. So here we have the private sector picking up serious cases, many of which succeed when challenges are mounted, but having to do it for nothing for one of the most vulnerable groups in the community. This is not an acceptable position because of the financial challenge it presents. The Howard League and other charities do not resile from their ambition to do as much pro bono work as possible and to be the leaders of opinion and the formation of new law in relation to prisoners, but they must be allowed to do reasonable work for reasonable fees and that is just not happening. The work that remains in scope is all subject to a standard fixed-fee regime. This means that each case is paid for according to the case category. Lawyers get paid for the actual work they do only if they can prove that they have reasonably done more than three times the work allowed for by the fixed fee. That is self-evidently unfair to those carrying out the work and their clients.

For example, written representations for a person who has served his or her sentence, but is recalled to prison, attract a standard fee. However, the work can involve the consideration of hundreds of pages of documentation which may be extremely difficult to extract from the public service, particularly the prisons and the Home Office. Throughout that time, while the challenge is being mounted, the prisoner is deprived of their liberty, even though they have served the punishment part of their sentence and the state, of course, is paying the cost of imprisoning them—an imprisonment that may be the subject of successful challenge.

I suggest that the fee regime does not recognise the nuances or complexities of a case. A young person with learning difficulties recalled on an indeterminate sentence for public protection—an IPP—attracts exactly the same for his or her case as an adult on a much simpler fixed-term sentence. The new rates mean that practitioners who specialise in complex cases and who have the expertise are invariably operating at a loss.

I am informed that the result is that firms that have been skilled and experienced in prison law are pulling out of it and that lawyers are being laid off or moving to do other work. I suggest that that is unacceptable. Many may think that prison law is unattractive work, but it is important work. It concerns a prisoner’s ability to change and to be released into the community, which is in everyone’s interests.

I hope that the Lord Chancellor, who is plainly very interested in prison reform and has already made a significant contribution to change in prisons, will regard the sort of aspects of prison law that I have been talking about as part of the same picture and worthy of the modest investment that is involved in restoring legal aid to the sort of cases that I have been describing.

My Lords, I thank the noble Lord for introducing this Motion to Regret, which I and many others hope will lead to a sustained examination of legal aid now and in the future, as a result in particular of the cuts proposed by the Government. My intervention will be very brief because I have no legal background whatever. I saw that this Motion was proposed for today, and I came to listen and to say a few words as, one may say, an ordinary member of the public.

I have listened to those who have a detailed knowledge of this field. I do not have that knowledge but I have had it put to me that there are grave concerns for the ordinary member of the public, who could be said to be at the bottom of the pile and might be induced—because of pressure and of feeling vulnerable—to shorten court proceedings and say, “Yes, I was guilty”. I may be wrong on that; others more expert than me may say, “No, that is not the case”. Is it the case that vulnerable people will suffer as a result of these proposals, as has been mentioned tonight?

My other concern is whether it is likely that fewer people will train for the legal field, which I trust the Government will look at. That is of great concern because there could be a shortage of legal practitioners, with the result of the service not being fit for purpose. With my lack of knowledge, I will sit down. Others have great knowledge to which I have listened, but I have great concerns on behalf of the ordinary public.

My Lords, this has been a wide-ranging and helpful debate. Although the Government have been criticised, there have been some positive suggestions. I assure all noble Lords that the Lord Chancellor and the Ministry of Justice listen to what is said in this House. I shall certainly report back what has been said during this debate.

The Motion gives me the opportunity to set out the background to the making of the Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations, which were laid before the House on 10 June, concerning the fees payable in respect of criminal litigation services funded by legal aid. The coalition Government consulted twice on the proposed fee reduction. The first consultation, Transforming Legal Aid: Delivering a More Credible and Efficient System, ran from 9 April 2013 to 4 June 2013. The second, Transforming Legal Aid: Next Steps, was published on 5 September 2013. The September consultation proposed the staging of the fee reduction plus a number of legal aid reforms, including changes to the way in which criminal legal aid services are procured and a reduction in the fees for criminal legal aid services.

The response to that consultation, Transforming Legal Aid—Next Steps: Government Response, was published on 27 February 2014 and set out the decisions taken in relation to the procurement of criminal legal aid services and fee reductions for criminal legal aid services. These regulations introduce a further fee reduction for work done under a criminal legal aid contract. This follows an earlier 8.75% reduction that was introduced in March 2014, making a total reduction of 17.5% from the April 2013 figures.

As the House will be aware, the Government consider that there is a continuing need to bear down on the costs of legal aid to ensure that we are getting the best deal for the taxpayer and that the system continues to command the confidence of the public, particularly in the light of the continuing financial challenge faced by all government departments. The House will be aware that the Ministry of Justice has no ring-fence around it, and is subject to particular pressures in this respect.

The phased introduction of the fee reduction was intended to mitigate its impact while enabling realisation of necessary savings. The second fee reduction applies to new cases starting on or after 1 July 2015, and there will therefore be a period of time before it has an impact on the legal aid income of providers.

The Government also believe that the current remuneration mechanism for criminal legal aid services is overly complex and administratively burdensome. These regulations introduce fixed fees for Crown Court cases with fewer than 501 pages of prosecution evidence, and simplify the fixed fees for police station work and for magistrates’ court work. The new fixed fee schemes are being introduced for services under the new criminal legal aid contracts governing criminal litigation services from 11 January 2016.

The Motion says that the House regrets that the Government made these regulations,

“without having undertaken a review of the impact and coherence of the cuts to litigators’ fees; agrees with the Secondary Legislation Scrutiny Committee’s analysis that there is too little evidence to establish what effect the fee reduction would have; and regrets the Government’s lack of engagement with the profession and those affected by its reforms”.

As I set out in my Written Ministerial Statement repeating the Statement made by Mr Vara in the House of Commons, the Government listened very carefully to the concerns of the profession in considering the programme set in train by the coalition Government for the criminal legal aid market.

We must ensure—this point has been made during the debate—that the high quality of service provided by litigators remains sustainable in all parts of England and Wales. We recognise that changes in the litigation market have the potential to affect the provision of advocacy, and we will work with the profession to preserve and enhance the high quality of advocacy that generally obtains within the system.

In March 2014 the coalition Government agreed that, prior to putting before Parliament the second fee reduction, they would consider and take into account the following factors. The first was Sir Brian Leveson’s review, to which the noble Lord, Lord Marks, referred, aimed at identifying ways to streamline and reduce the length of criminal proceedings. I entirely accept his observations about the need to do that. This is part of the overall improvement that the Government hope to achieve in saving costs, but not at the expense of achieving a fair trial. The two other factors were criminal justice reforms such as digitisation, which will increase efficiency and affect how advocates work, and any impacts from earlier remuneration changes.

At the same time the coalition Government told legal aid providers that they should plan and bid for duty and own-client contracts on the basis of a second reduction of up to 8.75%, as they would be expected to demonstrate that they were capable of delivering at that level. Also in March 2014, the coalition Government announced that they had worked with the Law Society to agree additional support for litigation providers that would assist with the transition to the new regime. The ministry agreed to implement interim payments at plea and case management hearing stage in summer 2014 —earlier than had previously been planned. We introduced interim payments for trials at the same time—cash flow being, of course, very important to the legal profession in this area, which I wholly accept is not over-remunerated compared with other fields of law.

The present Government fulfilled the commitment given in March 2014 to,

“consider and take into account”,

the factors set out by the coalition Government. There was no commitment to any formal review or public consultation, but the Government considered the findings of Sir Brian Leveson’s report on the efficiency of the criminal courts, the impact of broader criminal justice reforms and the impact of changes already introduced. We examined changes to our forecast legal aid expenditure, changes to the existing market, provider withdrawal rates—that is, whether people were leaving the market—and reasons, contract extension acceptance and early information from the duty provider contract tender. We also considered the implications for quality, promptness and reliability of the first fee reduction. The Legal Aid Agency has monitored, and will continue to monitor, the quality of the delivery of services through its well-established audit and peer review programmes.

All the further consideration undertaken reassured us that the legal aid reforms so far have not had any substantial negative impact on the sustainability of the service. I should perhaps pause here and remind the House that a defendant is eligible for legal aid just as he always has been; the issue is, of course, whether the changes will result in there being legal aid deserts or professionals leaving the profession, thereby endangering defendants’ ability to secure their entitlement to legal aid. The level of interest in duty contracts—when the likely reduction in fees was already known—suggested that there remained an appetite to undertake criminal legal aid work under the new regime. Having considered all these matters, we decided to press ahead with the second 8.75% reduction in litigators’ fees that was first announced by the coalition Government.

I cannot accept there has been a lack of engagement in this process. There have been three consultation exercises over a period of almost two years, two of them relating specifically to the fee reduction. There have been numerous discussions with the legal sector, many at ministerial level. The previous Lord Chancellor worked closely with the Law Society to shape the proposals for the new contracting regime. The present Lord Chancellor and Minister for Legal Aid have continued, and will continue, to engage with a broad range of legal aid providers.

The noble Lord, Lord Beecham, referred to the exchanges between the Secondary Legislation Scrutiny Committee and Mr Vara and remarked on the continuing correspondence and the failure to give what he inferred was a satisfactory response. I remind him what the Minister said on 10 July in answer to the outstanding questions from the noble Lord, Lord Trefgarne. This is particularly relevant to the audit and peer review programmes. The Minister stated:

“The LAA uses a wide range of monitoring tools”.

Although he accepted that there were no published figures, he explained:

“Ongoing monitoring is precisely that, it is not a process with a beginning and end. As a qualitative process, it is not one that generates a significant volume of statistics”.

In terms of the number of providers, which was one of the issues raised generally in the debate, Mr Vara said:

“A reduction would cause concern if the level of that reduction was likely to reduce future competitive tension. The precise level of that reduction that would cause concern, or acute concern, would depend on the design of a future competition, for example the number of contracts being tendered, so it is not possible to provide precise figures. After a great deal of analysis we concluded that we should offer 527 duty contracts. We have received 1,099 bids for those contracts. As I said in my previous letter though, it is important to bear in mind that the 527 duty contracts does not equate to 527 firms providing work under such contracts. Some providers who obtain duty provider contracts to deliver the work under that contract will do so in conjunction with other firms (either as delivery partners or agents)”.

So they may very often still have a future but not in precisely the same capacity, and of course they will still always have the possibility of own-client work. The need was to consolidate the duty provider part of the legal aid services provided by firms of solicitors.

The noble Lord, Lord Marks, referred to a number of aspects of efficiency and he was right to do so. He also referred to various suggestions which I think were almost all contained in the Liberal Democrat party manifesto as to other improvements that could be made. Some of these have already been considered. Those matters will receive ongoing consideration. At the moment, the Government are not, for example, satisfied that it is a good idea to have compulsory insurance. The coalition Government considered this and concluded that there were strong policy reasons not to make it compulsory. The coalition changed legislation to enable the recovery of legal aid costs after conviction and after a confiscation order and any compensation to victims had been paid. I accept the noble Lord’s suggestion that we could go further. It is a matter for consideration, but at the moment there are no plans to respond in that respect.

The noble Lord, Lord Ponsonby, indicated that many magistrates were not happy with the situation as regards litigants in person. I am sure that litigants in person can present a challenge to particular courts. However, of course, as I say, the eligibility for legal aid has not been changed by any of these instruments that we are considering, which are the subject of this regret Motion. Some people simply may not have applied for legal aid but many of them will be eligible for it. I have sat as a judge with litigants in person and I sympathise with such tribunals as they present particular challenges in questions of plea and advice, but these do not, as it were, arise directly out of the matter which is currently before your Lordships’ House.

The noble Lord, Lord Carlile, focused considerably on prison law. He will be aware that the coalition Government made some changes to the availability of legal aid for prison law, focusing very much on cases where the liberty of individuals was threatened, and took the view that, as he rightly points out, prisoners are in a particularly vulnerable position and may well need representation. However, I am sure he would accept that in many cases prisoners use legal aid when an objective view would consider that they should not do so. Equally, identifying precisely the cases where liberty is truly in issue is important. I undertake to take back the detailed comments the noble Lord made about that. However, the overall principle of the Government’s approach remains a good one—namely, that we should focus legal aid on aspects of prison law where individuals’ liberty is at stake rather than on some of the more trivial aspects which, unfortunately, were sometimes pursued.

As to the availability of prison law generally, the new model would still mean that specialist law providers would get a contract. They would not have to provide all the services at the same time. Those already awarded own-client contracts have the opportunity to bid for prison law as part of the tender process and will also be given authority to undertake appeal and review work.

However, I understand that it is not necessarily desirable for there to be judicial review to challenge these cuts. At the same time, the noble Lord will understand why I would not wish to comment further on the matter currently before the court, in which the Howard League is maintaining various representations about the alleged unlawfulness of the Government’s acts.

The noble Lord pointed out two other areas where the Government might save money, and I have some sympathy with his comments regarding regulation and the repetition of regulation in terms of the Bar and the solicitors’ profession. Indeed, I have made some observations on the Floor of the House to that effect. It is certainly a matter that should be considered carefully. While, of course, regulation is desirable to protect the public from lawyers who do not perform their task adequately, at the same time regulation and overregulation very often result in overbureaucratic processes, which can ultimately cost the public more and therefore do not actually serve what should be the aim of a properly regulated profession.

The noble Lord also pointed quite rightly to the fact that there are difficulties in prisons, and particularly difficulties caused by violence in prison at the moment. Much of that is attributable to the prevalence of psychoactive substances, which have caused there to be assaults on prison staff at a very unacceptable level. Much is being done about that, including greater security by means of cameras on individuals—which are planned to be used a great deal more—which can result in more security both for the individual prisoner and, of course, the staff working in prison. There are challenges and the Government are fully aware of that.

The noble Lord rightly pointed to the fact that the Government and the Secretary of State have a particular interest in hoping that prisons can provide a proper source of rehabilitation. An increasing emphasis will be placed on education provision in prisons and it will be very much part of the Ministry of Justice’s programme that conditions in prisons will improve significantly and, it is hoped, have a greater effect on the long-term rehabilitation of prisoners.

The debate has focused on a large number of issues. We understand that the main area of concern that the noble Lord, Lord Beecham, has directed against is that there is a risk of there being no adequate providers of legal aid around the country as a result of these cuts. For the reasons I have given, we are not satisfied that that is the position. However, we are not complacent. We acknowledge the value of the legal profession in providing proper representation and the importance of making sure that that is still available. We will continue to monitor that. I hope that what I have said has given some reassurance to the noble Lord that this is not a matter undertaken lightly and that he will understand the pressure that this Government are under to maintain a manageable legal aid service. It remains one of the most expensive in the world, as the noble Lord will be aware, and the most expensive in Europe. None the less, it is an important matter and this Government and all Governments are proud that it remains a beacon. However, cuts have had to be made. We respectfully suggest that those cuts are reasonable and, in all those circumstances, I ask the noble Lord to withdraw his Motion.

My Lords, I am grateful to all Members who have spoken in this debate and I congratulate my noble friend Lord Ponsonby and the noble Lord, Lord Carlile, on taking advantage of the occasion quite reasonably to raise matters which are not quite within the terms of the Motion, or indeed of the general subject of criminal legal aid fees. However, the points they made were telling and I hope that the Government will in one way or another respond to them with some proper consideration in due course. I endorse much of what they said and the very constructive suggestions made, particularly by the noble Lord, Lord Marks, in citing a number of cases in which it might be possible to find savings.

Incidentally, I do not object at all to the Minister failing to reply to the long list of questions that I threw across the Table at him. I know that he is very able to respond after proper consideration to such matters and I look forward to hearing from him with that rather long list in mind. But with all due respect to the noble Lord, I find that there is a note of complacency in his approach to these matters. One of the factors which I think the noble Lord, Lord Marks, mentioned is the matter of choice. Choice is going to be very restricted, given the relatively small number of firms of solicitors which will be engaged in the business of providing criminal legal aid. The likelihood for those who opt for just the own-client contract, from all the evidence around the profession and as perceived by the Law Society, is that after a relatively short time it will implode—and those firms engaged in that part of the legal world will simply go out of existence.

In addition, the Minister referred to consultation. While consultation took place in form, in my submission it did not really do so in substance. I cite in support of that contention two letters written by the president of the Law Society, one to the Lord Chancellor and the other to the Secretary of State for Business, Innovation and Skills. Dealing first with what I suppose is the more important of the two letters, the one to the Lord Chancellor, the Law Society’s president said that he was,

“writing on behalf of the membership … to express our disappointment and concern about this decision”—

that is, the decision following the announcement of the department’s plans. He said:

“The administration of justice is a fundamental duty of government and access to justice is an essential part of that responsibility … Today’s decision further undermines the role of criminal legal aid solicitors in our justice system … You gave us an opportunity to explain our reasons for opposing the plans. We provided evidence from over 120 firms of the dire impact of the previous cuts, and the likely impact on the criminal defence service of proceeding with this further cut. I know that many criminal legal aid solicitors … will be concerned on behalf of the public at the implications”,

of this decision,

“as well as worrying for their businesses”,

and employees.

The president wanted to raise a number of points on behalf of the profession. First, he said:

“There is extensive and compelling evidence that criminal legal aid practitioners cannot sustain a second fee reduction”.

Secondly, he said:

“The Ministry of Justice’s … own financial assessment of the tender submission”,

would in its view,

“underline the fragile nature of firms’ finances”.

Thirdly, he said:

“Making a further fee reduction … may jeopardise the savings the MoJ wishes to make in the broader criminal justice system”.

Finally, and importantly, he said:

“Any decision should be deferred until there has been a full review of the evidence as to the effect of the first round of fee reduction in light of the financial reporting made to the Legal Aid Agency”.

Given that the new system is in any event to come into place in January, I cannot understand why it is necessary to impose on the solicitors’ and barristers’ profession a fee increase half way through this period.

The society noted,

“the announcement of a review of the system after 12 months rather than assessing the evidence now”,

and deplored that. Its view is that,

“a large number of firms will have closed during this time, and many others will…withdraw from this market”.

It said that a review 12 months hence would be,

“too late to save many firms … This will be very difficult … for particularly the small, specialised firms”.

The fear is that the impact of these changes,

“could create advice deserts where the most vulnerable members of society will be unable to access the legal advice they desperately need”.

A lot of that advice, of course, is at the police station stage rather than the court stage. Drawing on memories from long ago, I cannot say I was enthusiastic about driving down at three o’clock in the morning to Jarrow police station to interview clients. Given that not only has this reduction in criminal legal aid fees taken place but fees effectively have been frozen for over a decade now, I think that the supply side is likely to be very seriously affected. Indeed, that was the subject of the letter to the Business Secretary, pointing out the danger to the firms in this sector and telling him—not reminding him—that it had been suggested to the Ministry of Justice that a decision should be deferred until there had been a full review of evidence.

Rather like his predecessor—and I hope this is not a precedent because I think Mr Gove, as others have said, has rightly attracted some approval for his more open-minded and better thought-through approach in many respects to some of the inheritance he acquired—it does not seem that he has listened to that view from the profession. I suspect that this debate will look a little pallid when compared with the one we will have about the perhaps more publicly controversial issue of legal aid charges, which we will come to when the House resumes later in the autumn.

However, I think it is important that the views expressed tonight should be considered further by the Government. I am afraid the course they are taking is very likely to fulfil the fears expressed in the Chamber tonight by those with whom they have consulted after a fashion. Nevertheless, we are not in a position to divide on this Motion—in fact, I do not think that there will be any Divisions in the next fortnight. In those circumstances, I beg leave to withdraw the Motion, but look forward to the next round.

Motion withdrawn.

House adjourned at 8.42 pm.