Joseph Markus from Garden Court North in Manchester, attended the CLSA and LCCSA Rally about Dual Contracts. He kindly agreed to produce this briefing note. Clearly he wrote it for publication before the General Election. However, as the time for decisions about action draws nearer, it is important that as many people as possible understand what is afoot. Joe’s note is a pretty succinct explanation of what is planned and when it is coming into effect. Maybe the new Lord Chancellor may need to read it so he is totally up to speed.
Many thanks to Joseph for producing this.
LCCSA rally – dual contracts
Criminal legal aid services are provided under contract to the Legal Aid Agency. The current position is that an individual firm can apply for a Standard Crime Contract, which gives that firm the opportunity to take instructions from new clients as well as join a “duty rota” under which solicitors are posted to police stations (and in some cases magistrates’ courts) in order to provide legal advice and representation to those who require it.
The Lord Chancellor intends to split criminal legal aid work into two contracts, the first for Own Client Work (“OCW”) and the second for Duty Provider Work (“DPW”). As now, the individual firm will need to apply to the Legal Aid Agency for a contract. Under the new system firms will only be able to take on a “duty” role if they hold a DPW contract and these will only be issued to a limited number of firms throughout a particular region. The geographical regions represent considerably larger areas than firms were previously required to service. These reforms are to be made in conjunction with a net fee reduction of 17.5 per cent. The first fee cut of 8.75 per cent was implemented on 20 March 2014; the second 8.75 per cent fee cut is due in July 2015.
The Lord Chancellor believes that limiting the number of contracts in this manner, and requiring providers to commit to the provision of legal advice and representation across the whole geographical area, will produce a more efficient system where criminal legal aid providers will be able to benefit from economies of scale and the ability to offset loss-making cases with those charged at higher rates.
The effect of this reform is acknowledged to be widespread and irreversible market consolidation. That is the only way that firms will be able to successfully demonstrate an ability to service an entire region (as required). The estimates suggest that up to 1,000 firms will be forced to close as a consequence of two-tier contracting.
We know from the argument before and the judgment of the Court of Appeal in R (The Law Society & Ors) v the Lord Chancellor  EWCA Civ 230 that the number of DPW contracts will be capped at 527 and the Legal Aid Agency will award contracts based on a tendering process. The tender will consist of firms applying to the Legal Aid Agency demonstrating a capability to provide duty rotations of solicitors across the designated region.
The tender process for the 527 new DPW contracts re-commenced on 27 March 2015 and will close at midday on 5 May 2015. The tendering process would be implemented such that the contracts would start on 11 January 2016.
The Bar can expect that two-tier contracting, together with the proposed fee cuts, will have an effect on the number of cases briefed out, especially to the junior criminal Bar. The need to slash costs and run economies of scale is likely to lead to an increase in the number of Higher Court Advocates operating from within firms.
The Labour Party has committed to scrap two-tier contracting in the event that it is returned as the UK Government in May 2015. It has pledged to review the fee cut scheduled for July 2015.
And now, the bio and marketing blurb. View From the North would like to make it clear that other barristers are available….
“Joe is a civil practitioner with a growing judicial review practice covering his core areas of practice (immigration and housing) as well as other fields of law. He has developed particular experience of challenges focusing on Articles 6 and 8 ECHR relating to the Legal Aid Agency’s exceptional case funding regime, having been instructed in one of the lead challenges to that regime – successful both in the High Court and Court of Appeal – as well as a number of follow-up cases”