Ian Burns

1.2 The Government’s White Paper "Modernising Justice" (December 1998) described how it is intended to deliver on these commitments. The White Paper accompanied the Access to Justice Bill. That Bill gives effect to those changes and innovations which require legislative authority, and is expected to complete its passage through Parliament this Summer.

1.3 Papers taken at previous international legal aid conferences have shown that both civil and criminal legal aid in England and Wales give rise to higher levels of expenditure per capita of population than in most other countries. A survey carried out in 1996 showed that the per capita level of expenditure in EU countries was:

* Not available

1.4 More pertinently, the cost of the existing demand-led arrangements for legal aid in England and Wales has been rising sharply for several years:

1.5 The present Lord Chancellor, Lord Irvine, set out the Government’s approach to the reform of legal aid in a speech in Cardiff in October 1997. That speech re-ignited debate about the reform of legal aid, and the proposals contained in the White Paper and the Access to Justice Bill reflect the issues raised during that debate. The strategic approach outlined in that speech was:

• altering the basis of payment in both civil and criminal legal aid to contract at agreed, fixed, prices;
• tightening the merits test in civil cases;
• extending conditional fee arrangements as widely as possible, to assist those ineligible for legal aid and as an alternative to legal aid.

1.6 The imperative is to take control of legal aid expenditure. The need to do this is reinforced by the tendency for costs to rise even when the number of acts of assistance is falling:

1.7 Surprisingly, average payments per case, have also risen, and risen a good deal faster than inflation.

1.8 Under the existing arrangements there are few effective levers of control, and one of the most effective levers, reducing the levels of eligibility for legal aid, is one of the least easy to justify using. The Government’s plans build on the approach enunciated at Cardiff, and provide for both civil and criminal legal aid to be provided in future on a new legislative basis.

1.9 Under the Access to Justice Bill, the Criminal Defence Service will replace the existing provisions for payment of criminal legal aid. The Criminal Defence Service will be administered by the Legal Services Commission (which will be a successor body to the existing Legal Aid Board) and will provide assistance to all people appearing in criminal courts, where the interests of justice require this. Part 4 of this paper sets out the Criminal Defence proposals in more detail.

1.10 Legal aid in civil and family cases will be provided in future under the umbrella of the Community Legal Service, also administered by the Legal Services Commission. The Commission will contract with providers (mainly solicitors) for the provision of legal services, on the basis of a stipulated quantity of service and a stipulated price. People needing legal aid will seek it from the contracted provider. Fuller details of the new civil legal aid arrangements are in Part 3 of this paper.

1.11 At the same time as the Lord Chancellor’s Cardiff proposals for legal aid reform were under debate, there was an emerging debate about ways in which the Government might deliver on its commitment to create a Community Legal Service. Over time, the phrase "Community Legal Service" has grown to include both the provision of legal services to the community through civil legal aid; and the provision of advice services and other forms of information designed to enable people to evaluate their legal problems, and consider whether they needed the services of a lawyer, or some other form of action or assistance. The phrase "Community Legal Service" still carries these two over-lapping meanings. The Community Legal Service provided for in the Access to Justice Bill is based on the new arrangements for delivering civil legal aid, and will be a task for the new Legal Services Commission. The broader ideas for Community Legal Services are being developed in parallel by a project team in the Lord Chancellor’s Department, and these are described more fully in Part II of this paper. The Access to Justice Bill provides for the LSC to establish, maintain, and develop the Community Legal Service. The plan is that this is what the LSC will do, but the initial developmental phases of the Community Legal Service work described here is currently being managed by the Lord Chancellor’s Department.

1.12 A Consultation Paper on these broader aspects of Community Legal Services is expected to be published in May 1999.

1.13 Each of these reforms - Criminal Defence Service, Community Legal Service, and the wider Community Legal Services project, fits within a larger agenda of reforms to the legal system - to the organisation of the civil courts, the handling of appeals, speeding the criminal justice process, developing ADR, extending rights of audience in court and extending conditional fees.

1.14 Civil courts On 26 April 1999 there came into force new arrangements for managing all civil cases in England and Wales. The intention to make these changes was also announced in the 1997 Cardiff speech. The limit for the informal small claims courts has been lifted to £5,000; other cases involving less than £15,000 will be expected to go to a new fast track, under which there will be automatic directions as to the timing of the steps in each case, with the aim of ensuring that that small percentage of cases that actually comes to trial does so swiftly. Higher value cases and those of greater complexity, will also be subject to case management by the court, but the case management in this case will be tailor-made to the circumstances of each case. The new arrangements are backed by a complete re-write of the Civil Procedure Rules, by the unification of practice directions across the country, and by a major re-training exercise for the judiciary.

1.15 Appeals Following in the wake of these changes, the Access to Justice Bill will make changes in the handling of appeals, shortening the routes for appeal, reducing the number of levels to which an individual case may be appealed, and giving the Court of Appeal the ability to manage appeals by picking out key cases, and avoiding log jams.

1.16 Criminal Courts Similar changes are being made in the criminal courts. Following successful pilot projects in 1998/99, all areas of England and Wales will from October 1999 be introducing new procedures for the swift processing of cases in Magistrates’ Courts. The new arrangements provide for round-the-clock liaison between the police (who bring the criminal charges) and the Crown Prosecution Service (who prosecute); there are new arrangements for Magistrates’ Courts to hold early administrative hearings in cases likely to be contested, and to hold early substantive hearings in cases where a guilty plea is expected. Arrangements have been made in the pilot projects for defence lawyers to be available to their clients round-the-clock, and subsequently at any early court hearing, each arrested/accused person being entitled to the service of any lawyer on the duty solicitor list.. The evidence so far is that these procedures have not only seen the relevant services working more closely together, but also dramatically increase the speed with which cases are disposed of. Matching changes are now being piloted in the Crown Court.

1.17 Alternative Dispute Resolution On a longer timescale, the Government is examining the future possibilities of Alternative Dispute Resolution. There are already some significant examples of mediation and early neutral evaluation, and early settlement is positively encouraged by the new civil procedure rules. One precedent has, however, already been established in the Family Law Act 1996: although the key provisions of that Act have yet to come into force, the provisions which permit the payment of legal aid for the giving of mediation services in family cases were brought into force in 1998.

1.18 Conditional fees are now available for all classes of civil (but not family) case. They will provide additional access to the courts for those above legal aid limits; and they will provide a means of enabling those who currently are eligible for legal aid to take cases forward without support from legal aid funds. This development is discussed more fully in paragraphs 3.34-3.37.

1.19 Rights of audience The Access to Justice Bill extends to suitably qualified solicitors the ability to appear for their clients in the superior courts, where most representations has until now been the preserve of the Bar. This will enlarge the client’s choice of advocate, and will also allow a more economical service to the client.

1.20 To all these changes, the changes in legal aid are a significant partner. The services provided by the Community Legal Service are intended to complement not only the legal aid changes, but also the changes in the civil courts and the development of ADR.

2.1 The aim is that the Community Legal Service will improve access to legal advice services so that a person is better able to find out about their rights and how to enforce them properly. This will be achieved through the development of local networks of legal services of consistently good quality, supported by co-ordinated funding, and based on the real needs and priorities of local people.

2.2 The Community Legal Service is a radical plan for the future of legal advice services and, through empowering the ordinary citizen, it is also an integral part of the Government’s agenda for tackling social exclusion and poverty. The Government recognises that a lack of information and advice on legal rights - eg for someone suffering from a negligent landlord, or threatened with illegal eviction - can be an important factor causing or maintaining social exclusion. Access to good advice will be promoted by the Community Legal Service project and by its three separate, but interrelated, initiatives:

• firstly, it is encouraging the formation of Community Legal Service Partnerships, which are local partnerships of funders and providers, to plan and co-ordinate the funding and provision of legal services, based on the needs of the local area;
• secondly, it is creating a Community Legal Service Quality Mark, and a system for awarding the mark and monitoring compliance with its terms. The Quality Mark will be awarded to service providers and will be their quality assurance for customers, funders, and other service providers;
• thirdly, it is developing a Community Legal Service Website to further improve access to advice and provide links to other relevant on-line services.

2.3 The Community Legal Service project will have statutory under-pinning. The Access to Justice Bill will require the Legal Services Commission (which will replace the Legal Aid Board) to establish, maintain and develop the Community Legal Service as well as funding some of the relevant services, using the Community Legal Service Fund (which will replace civil legal aid). The Bill places a duty on the Legal Services Commission (LSC) to inform itself about the need for legal services and the supply and quality of those services. It will also place a duty on the LSC to co-operate with other authorities and bodies in planning how the Commission and others can meet the need.

2.4 There are also significant funds already being used to support existing legal services. An estimated £250 million a year of public expenditure is spent in support of services providing advice and information:

Legal Aid Green Form - £80 million (£60 million excluding accidents, personal injury, consumer protection and similar matters);

Local Authorities – pay at least an estimated £130 million to Citizens Advice Bureaux, FIAC members, Law Centres and other agencies;

Central Government grants – around £20 million in 1997/98, mainly to NACAB and Shelter;

National Lottery Charities Board – in six rounds of funding the NLCB has provided £33 million across the UK for services with comprising or including advice work;

London Boroughs Grants – distribute around £28 million, to voluntary groups/outlets, around half of which have some involvement in providing information and advice.

2.5 The present provision of legal advice services is unorganised, and fragmented. People in some parts of the country have access to solicitors who specialise in social welfare law, high quality law centres, and active advice centres. However, in too many areas there is little or no help for those in greatest need. For example, the South East of England has one Citizens Advice Bureau per 46,000 people, but in the East Midlands there are 138,000 people to each Citizens Advice Bureau.

2.6 Even where advice is available it is too difficult for many people in need to find out about the services in their area, and to identify which source of help would be best for their problem. As a result, many who could be helped simply carry on alone, or end up unprepared and unassisted before a court or find themselves seeking formal legal aid before considering whether their problem might be more simply resolved than through litigation. The National Consumer Council’s 1995 survey ("Seeking Civil Justice") sought to quantify the need for legal services. This research showed that 22% of people who had experienced serious disputes had not sought legal advice. The principle reason for not seeking help was that the person "felt I could handle the legal side myself", but the second most frequently quoted reason was that seeking legal help would be "too much hassle".

2.7 The lack of effective referral networks of providers also means that many who have taken the difficult first step and sought help are sent away, and so fall through the advice net. According to research undertaken for the Lord Chancellor’s Department by Jane Steele (Joined up Solutions (1998) - unpublished), "referrals are frequently made on an informal basis. There is a lack of monitoring and clients are simply advised to consult the other service. There is often no contact between services".

2.8 A second problem is the lack of proper targeting of types of help; this means that best use is not made of the resources available in the advice sector. A fully trained lawyer who spends his or her time providing straightforward money advice is not using their own expertise effectively, and may be denying that expertise to those clients whose problem really needs it.

2.9 Third, the weight of sometimes conflicting requirements for quality measurement and for reporting to funders can divert scarce resources. Advice centres have told us they are reporting to as many as ten or, on one case, seventeen different funders. Umbrella organisations and the funders of advice services necessarily require providers to comply with quality criteria. But if as is common, an adviser derives funding from a number of sources, and is therefore attempting to comply with multiple different sets of quality criteria and reporting requirements, this all takes time and energy that could be better spent helping people.

The three initiatives being taken forward within the Community Legal Service project specifically address these problems.

The Access to Justice Bill lists the services to be provided by the local networks in the Community Legal Service. They are:

• general information about the law, legal system, and the availability of legal services;
• help by way of giving advice as to how the law applies in particular circumstances;
• help in preventing, or settling or otherwise resolving disputes about rights and duties;
• help in enforcing decisions taken to resolve disputes; and
• help in relation to legal proceedings not relating to disputes.

2.11 The Government does not believe that lawyers in private practice are the only people who can provide information and help when there are legal problems. This view is supported by the NCC’s research which showed that over half of people with "serious disputes" did not seek help from a solicitor. Some people go directly to lawyers, but many others seek advice from the local law centre, local CAB, or other community advice centres, if they have access to such a service. The Government’s definition of providers of Community Legal Service is therefore based on an inclusive vision including:

• lawyers working in private practice or working pro bono;
• lawyers working in the voluntary sector;
• advice workers or para-legals with specialist skills who are not formally qualified lawyers; and
• trained volunteers in advice agencies, such as, the Citizens Advice Bureaux.

2.12 At the heart of the Community Legal Service is the move towards improving the accessibility of legal services by refocusing them on the needs of local communities. The Government intends to achieve this by encouraging the establishment of Community Legal Service Partnerships (CLSPs), in every local authority area in England and Wales, to support the creation of co-ordinated local networks of legal services. The networks will be inclusive and so enable those in need to access a full range of services, whether generalist or specialist. The Government identified local authority areas as the most appropriate administrative unit on which to base the CLSP, as local authorities are major funders of legal services and follow recognised geographical boundaries with which local communities identify.

2.13 Community Legal Service Partnerships will be free where the local authority, the LSC, and other local funders and providers, to come together to assess local needs, and, on the basis of this assessment, to co-ordinate funding and planning of local legal and advice services. The main tasks of the CLSP are:

• to undertake a needs assessment for their area,
• to map the provision of legal advice services,
• to encourage the development of local referral networks and draw up formal working agreements (Concordats), and
• to co-ordinate funding of services in the area.

2.14 The Access to Justice Bill provides the necessary statutory underpinning. The LSC is required by the Bill to inform itself about need for legal services and the supply and quality of those services. It also places a duty on the LSC to co-operate with other authorities and bodies in planning how priority needs should be met. These provisions form the statutory basis of CLSPs.

2.15 The partnerships will benefit from work already started by the LAB; and for the wider relationship with the LSC. The move to contracting as the means of providing civil legal advice and assistance will provide the LSC with control over its funding, and therefore enable it to co-ordinate its decisions on funding with those of its other partners in the CLSPs. The LSC will also be able to act on the information produced by the CLSPs, and to target contracts in a way that encourages the formation of an integrated local service.

2.16 The LSC will also take responsibility for the recently established network of Regional Legal Service Committees (RLSC), which will advise on the nature and extent of need for legal aided services in their geographical areas and how the need should be prioritised. (The RLSCs submitted their first Regional Strategies, which have been the subject of wide consultation, to the LAB in February 1999. These strategies will form the basis of the contracts between the LAB and franchised firms of solicitors and advice agencies and are covered more fully in a separate paper for this Conference (Needs Assessment and Prioritisation of Legal Services in England and Wales: S M Orchard). Whilst the need assessment models being developed for use by CLSPs build on the work done by RLSCs, they have a wider focus and CLSPs will not be limited to identifying the needs of those eligible for legal aid funding, or to assessing the need for services within the scope of legal aid. We expect that the RLSCs will draw together the local needs assessments undertaken by CLSPs for the individual local authority areas, singling out the people and categories within scope, in order to create a regional assessment from which it can advise the LSC on levels of need for legal aided services.

2.17 Local authorities as the largest funders of community legal services (around £130 million a year) and as the type of funder found in every area of the country have a key role in the CLSPs. A significant number of local authorities are keen to be involved with the CLSP project, reflecting perhaps, continuing budget pressures as well as their positive experience of partnership working in other fields, but in particular it reflects the move to Best Value by local authorities. The Local Government Bill, currently before Parliament, will place a duty on local authorities to obtain Best Value through delivering services to clear standards - covering both cost and quality - by the most effective, economic and efficient means available. This will cover all services provided or funded by local authorities, and will involve a commitment to regularly review services, to consult on the provision of services, and partnership working. CLSPs offer a clear opportunity to secure Best Value.

2.18 The Lord Chancellor has invited six local authorities to become "Pioneer" Community Legal Service Partnerships. They are Cornwall County Council, Nottinghamshire County Council, Liverpool City Council, Kirklees Metropolitan Council, the London Borough of Southwark and Norwich City Council. The Pioneer exercise is the subject of an Evaluation and Monitoring exercise by the Lord Chancellor’s Department, which will culminate in a report at the end of 1999.

2.19 For logistical reasons, only six Pioneers have been chosen. A far larger number of local authority areas have expressed enthusiasm for the project. To take advantage of this a further 40 English and Welsh local authorities have been nominated as Associate Pioneer areas and will also help develop the idea of CLSPs by identifying and testing best practice. They are not part of the formal monitoring exercise, but are part of the communication networks and exchange information with other Associate Pioneers, the Pioneers and the Lord Chancellor’s Department.

2.20 The 46 Pioneer and Associate Pioneer areas together cover 23% of the population of England and Wales - which amounts to nearly 12 million people.

2.21 It is important to stress that the CLSP is not simply a partnership between the local authority and LSC; it is intended to be inclusive and involve all local funders and service providers, and the joint LCD/LAB Pioneer Progress Report shows that one or more of the Pioneer CLSPs already include representatives from the National Lottery Charities Board, their Government Office for the Region, the National Association of Citizens Advice Bureaux, the Law Society, the local Health Authority, and charities.

2.22 Funders of legal services and umbrella organisations have each tended to develop their own distinctive set of quality criteria and monitoring systems. This has led to advice agencies having to spend a great deal of time demonstrating compliance with different sets of quality criteria reducing the time they can give to customers. The lack of a recognisable and generally accepted quality mark also means that providers have no easy and reliable way of assessing the standards of other providers, which in turn discourages referrals.

2.23 In an effort to address these issues, the Lord Chancellor has set up a Quality Task Force (QTF) consisting of all those organisations which take responsibility for assessing the quality of advice services. The QTF includes organisations representing the voluntary sector, consumer groups, the legal profession, the LAB, National Lottery Charities Board, London Boroughs Grants, and representatives from local government and from relevant Government Departments.

2.25 A Reference Group made up of the Pioneering areas, the Legal Aid Board’s RCSCs, and organisations with a more specialist focus is also being set up, to broaden the consultation at appropriate stages of the development work. The QTF is expected to have identified "core" criteria by the end of this year.

2.26 The QTF has much to do during this year to achieve its aim of developing a common accreditation system. The Quality Mark will benefit from the franchising specifications devised by the LAB, which was introduced as a means of determining the award of civil advice and assistance contracts as well as from accreditation systems developed by the various umbrella organisations. The Access to Justice Bill provides the Lord Chancellor with an order-making power to introduce the Quality Mark, and provides the LSC with the power to accredit providers, monitor standards, and withdraw accreditation from those who provide services of an unsatisfactory quality. The LSC will also be able to authorise others to supervise the accreditation under the Community Legal Service Quality Mark. Pending full implementation of the Quality Mark, compliance with the Legal Aid Board’s franchise specification will continue to be a prerequisite for funding from civil legal aid (or the Community Legal Service Fund.

2.27 As a means of improving access to legal services, the Government is looking to greater innovation in the delivery of services through encouraging the use of information technology, and in particular the Internet. The Lord Chancellor’s Department therefore plans to set up a Community Legal Service Website to complement the local networks in the CLSPs.

2.28 The team responsible for taking forward the website was formed in February this year. They have been researching what legal information and services are available on the Internet and meeting with providers to determine how these sites have been developed, what plans there are for future developments and how they might assist in the Community Legal Service.

2.29 A LCD/LAB working group has now been set up to take the initiative forward. Given the limited time and resources available to the Website project, it will probably be launched in phases, with the initial facilities being built upon as the various aspects of the Website are developed. It is intended that the Website will provide access to advice, information, and second tier services, and eventually allow access to on-line assistance in the form of e-mail stacking and video conferencing. The Website will also seek to co-ordinate and have links with the services which are already available on the net, whilst introducing interactive aspects for speedier response and resolution of queries.

2.30 It is also recognised that the services offered by the CLS Website should be supported by a quality assurance, so to this end, work will progress with the assistance of the Quality Task Force to establish links with those service providers with a Community Legal Service Quality Mark.

2.31 Whilst it is not for the Government itself to provide access to the Internet, this is obviously an area of real importance, as there is little point in providing a service to which access is limited. One of the reasons it was decided to set up a Website was because it is recognised that the Internet is a rapidly growing area, and it is anticipated that the majority of homes will have access to the Internet in the near future. Research by Elmwood Design in 1998 revealed a global growth of internet users from 1 million in 1990 to a projected 100 million in the year 2000. There are currently 12 million internet subscribers in the United Kingdom, with a new subscription rate of one every four seconds. In the meantime, many people already have access to the Internet at work, and there is increasing access in public places, such as libraries, local authority "one stop shops", supermarkets, etc. The use of the Internet is also spreading across age ranges and social groups.

2.32 The Government aims to empower the ordinary citizen, through the Community Legal Service, by improving access to legal and advice services, so that it is easier for people to find out about their rights and how to enforce them properly. At present, the funding and provision of legal services is too fragmented and confused, so that people find it difficult to find the right information and help, the resources available are not targeted effectively, and complying with multiple quality criteria takes up too much time that could instead be better spent helping the public.

2.33 The action being taken to improve access to legal services includes:

encouraging the establishment of Community Legal Service Partnerships to create co-ordinated, local networks of legal services based on the needs of the local area. They will build on the experience and good work of the existing advice sector. The local partnerships are currently being pioneered in selected local authority areas across England and Wales, so that a best practice "blue print" can be identified and tested, to enable it to be used by other local authority areas after the national launch of the Community Legal Service in 2000;

developing a new Quality Mark to be used as an assurance of high standards and to accredit legal service providers in the local networks of the Community Legal Service; and

using new technology by the launch of a CLS Website to provide accurate information and advice for all sections of the population; and to support advisers.

2.34 The Government believes these changes will have a radical impact on the future provision of legal services, and the CLS project is an important part of the Government’s agenda for tackling poverty and social exclusion. The Consultation Paper planned for issue in May 1999 will mark the next step in developing these ideas.

3.1 There has long been wide acceptance that the state should provide financial help to enable people to defend or secure their rights if they are too poor to be able to do this for themselves.

3.2 But until relatively recently there has been little consideration of where this financial priority should stand in comparison with other calls on the taxpayer, and limited thought about controlling the budget for legal aid. Our society accepts that class sizes are in part determined by the numbers of teachers who can be salaried within set budgets: that hospital treatment is prioritised, or that certain procedures or drugs should not be funded by the taxpayers, but by the individual, if he or she chooses to do so. Yet, in recent years, legal aid expenditure has remained uncurbed. Limits have been set on the eligibility of individuals, and on the categories of litigation for which legal aid can be made available. But the hard truth is that, once an individual’s case has passed these tests, there is in effect no limit on the money which will be available to fund legal representation for that case. This includes no effective limit on both the calibre of representation, and on the potential duration of a case through repeated appeals in the court system.

3.3 The current legal aid system in England and Wales is now half a century old. In that time, social conditions, the legislature, and individual choices, rights and responsibilities have all undergone significant changes. It would of course be quite surprising if a fifty-year-old regime, evolved in less changeable times, was still capable of meeting current and anticipated needs for legal funding.

3.4 Legal aid can now be seen to be biased towards expensive, court-based solutions to people’s problems. The scheme is demand-led and, rather than allowing constructive flexibility, this has made it impossible for those who dispense funds to target resources on priority areas, or on more efficient and effective way of dealing with particular problems.

3.5 There is no limit on a lawyer taking a case. What this means in practice is that there is no independent or disinterested control over quality, and no means of generating market competition to keep prices down. Lawyers’ fees in higher-cost cases are calculated after the event, based on the amount of work done, so there is little incentive to work more efficiently. Legal aid costs have soared beyond the rate of inflation, yet this has not borne fruit in terms of improved productivity. The number of full civil legal aid cases started each year has fallen by 31% in the last five years, from 419,861 in 1992-93 to 319,432 in 1997-98 (See Table 3). At the same time, spending on all forms of civil and family legal aid has risen rapidly, from net expenditure of £586 million in 1992-93, to £793 million in 1997-98 (the figures in Table 3 are gross). This 35% level of growth in expenditure contrasts with general inflation of 13% over the period.

3.6 Lawyers’ services account for almost all current legal aid expenditure. Furthermore, in practice, it is the lawyers themselves who determine where and how the legal aid money allocated to their services is spent. And allocation of legal aid is also criticised on the grounds of poor exercise of judgement. It is argued that cases of insufficient merit are funded, and that some people are able to pursue cases unreasonably, so forcing their (unfunded) opponents to agree to unfair settlements.

3.7 The current system does not provide the taxpayer with any truly effective mechanisms for the control of expenditure. Some measures do exist. Cutting financial eligibility, for example, has been a regular feature of previous attempts to curb the soaring legal aid bill. But this is a crude and inflexible constraint, which works by increasingly depriving individual citizens of the help they need, whilst imposing no limit on the continued ability of lawyers to draw from the unlimited fund itself.

• The reforms launched in 1997, and now provided for in the Access to Justice Bill, derive from the following clear requirements:
• to control legal aid expenditure, enabling it to be held within limits:
• to set priorities which reflect the genuine needs of the community; and
• to ensure that the available resources stretch as far as possible.

3.9 The reforms are based on a set of general guiding principles for the public funding of legal aid. These are:

• public funding must not give one party an unfair advantage over another;
• it must direct the available resources to where they are most needed, to reflect clearly defined priorities;
• it must ensure, as far as possible, that disputes are resolved in a manner which is fair to both sides;
• it must provide a guarantee of high quality services which achieve the best possible value for money;
• it must have a budget which is affordable to the taxpayer, and can be kept under control.

3.10 Possibly the most significant change is to provide for the new Community Legal Service fund to operate under a controlled budget. By making the legal aid resource finite, the customary expectation that there will be an unqualified entitlement to public funding for legal assistance is removed.

3.11 The reformed legal aid fund - the CLS fund – has three key elements:

• a planning system, to allocate resources according to national and regional priorities. This will ensure that the available funds are deployed in a manner which recognises differing needs and factors;
• contracting, which will enable effective overall control of the legal services provided. By defining the services to be purchased, contracting can ensure that specific priorities are met, and at an acceptable standard. Contracts will also increase value for money, by introducing fixed prices and an element of competition;
• a new funding assessment, used to decide which cases should receive help. This can take account of priorities identified by the fundholders, and with sufficient flexibility to change in response to changing priorities. The funding assessment will ensure that the resources available for each category of case can be allocated to the neediest or most appropriate individual cases.

3.12 The funding assessment is complemented by changes to the existing rules governing financial eligibility, contributions, and costs in court cases where one side is funded under the scheme. These changes will improve the fairness of the scheme, reducing the risk that the balance between parties in dispute will be distorted by the availability of public help for one side.

3.13 The LSC will have duties to assess legal needs in each area, to plan how it should procure services (using the Community Legal Services Fund), and to facilitate planning by other bodies (eg local authorities, independent advice agencies etc) to meet need. Need assessment tools, approach to priorities, will apply to both planning wider response, case by case, to meeting needs, and managing applying the CLSF. RLSC have key roles in both. LSC will manage CLSF overall public spending planning

3.14 When the new arrangements are fully in force the overall budget for the CLS fund will be set as part of the general public expenditure planning process. The Lord Chancellor will then allocate two sub-budgets to the Legal Services Commission, for civil and for family cases. The LSC will be given limited powers to switch money between the two sub-funds. The Government will need the means of making clear its policy objectives for legal aid, and this will be addressed through a policy document to be produced by the Lord Chancellor. This might include, for example, an emphasis on the levels of expenditure or outcomes expected for high priority categories such as child care proceedings. Other policy objectives might relate to geographic access to services, developing new quality standards, or targets for reducing or containing the average cost of cases.

3.15 Within this budgetary and policy framework, the LSC will allocate budgets to its regional offices. The regional offices will have substantial freedom to transfer resources between their various individual budgets. This will protect the flexibility of the scheme, enabling it to respond to the particular circumstances of different local conditions. Each region will take advice from its Regional Legal Services Committee about the extent and nature of the needs in the area for legal advice, assistance and representation. On the basis of that advice, and in the context of its overall budget and the Lord Chancellor’s formally stated public priorities, the regional office will determine the pattern of contracts needed to produce the required service.

3.16 The LSC will retain a separate central budget, for the most expensive cases. In practice, many of these cases are likely to involve public interest issues; they will certainly be atypical of the main body of civil legal aid work. Such cases will be funded through individually-negotiated contracts.

3.17 The decision to enable the LSC to decide what services to buy, and who to buy them from, is a fundamental change to the existing scheme, where any properly qualified lawyer can take a case and bill the Legal Aid Board for payment. Contracting proposals have been piloted by the current Legal Aid Board to test their effectiveness, and the new system reflects the experiences gained during that pilot scheme.

3.18 Under the new arrangements lawyers and other providers will receive legal aid funding only if they have a contract with, or a grant from, the LSC. The current intention is that this key change will come into effect for all advice and assistance, and representation in family litigation, from the end of 1999.

3.19 Contracts will where necessary be tailored to fit the different circumstances of geographical or economic variation. Contracts for particular types of case will include flexibility at the margins, to overlap with other case categories, thus allowing providers to deal with novel or unusual cases, and complex cases which may be less easy to categorise straightforwardly.

3.20 Contracts will not be tied directly to annual budgets. They will run for up to three years, and new contracts will be let in several tranches throughout the year. This means that, at any given time, a number of contracts will be in place, all at different stages in their life cycle.

3.21 Quality is fundamental to the Government’s approach. Work is in hand to create a Quality mark, which will in principle be applicable to all CLS outlets - both those holding contracts and those (see Part II) providing other services.

3.22 Quality standards will be based on the Community Legal Service kitemark, which will set minimum core standards, and the Legal Aid Board’s existing franchising scheme, which also sets more specific requirements relating to particular types of case. The Board has recently published a revised franchise specification for consultation. It will also be important that, whatever monitoring system is used, it is capable of applying quality requirements flexibly, especially while the process is at an early stage of development and implementation. Outcome indicators will be used to help monitor the work done under contracts. Outcomes (this is the result and duration of cases) and other key indicators will be compared against standard profiles.

3.23 Agencies and firms which do not initially meet franchise standards fully will be able to apply for short term contracts. This will give them time to work up to the required standard. The LSC will also be able to make loans, to help providers develop new operating systems.

3.24 Wherever possible, contracts will fix the price to be paid for the relevant work under contract. This may also include a quota stipulating the number of cases to be covered by the contractor during a given period. It is envisaged that the prices set will generally cover all necessary work and expenses on each case, including any advocates’ fees, experts’ reports, or other disbursements. Fixed prices create an incentive to deal with cases more quickly and efficiently. Fixed caseloads will remove the incentive to take every possible case, regardless of merits.

3.25 The new funding assessment will ensure that the limited resources to be allocated to legal aid are spent on the ‘right’ cases – such as those where help is essential, those which address issues of wide public interest, and those where the matter being pursued is not frivolous or weak.

3.26 The funding assessment will consider three key questions:

• would another type of service be a better way of dealing with the case? For example, in some types of family case, is the case suitable for mediation (which might itself be funded from LSC funds)? If so, should it qualify for representation by a lawyer?
• could the applicant fund the case in some other way? Unlike now, the assessment will consider whether the case is of a kind suitable for a conditional fee;
• do the merits of the case itself justify public funding? The general test here is a hypothetical one - whether a reasonable person, able to fund the case in question with his or her own money, would be prepared to pursue it. The strictness of this general test may be relaxed if, for example, wider public interest considerations were involved.

3.27 Merit assessment will be determined against four criteria, which may also be used when deciding if the case is suitable for a conditional fee. They are:

• the legal strength of the case and the prospects of a successful outcome;
• the importance and potential benefit to the assisted person, and the likely cost;
• the wider public interest;
• the availability of resources and the likely demands on those resources.

3.28 The obligation to use these criteria will be on the LSC, who will be required to follow a published Funding Code, setting out how these criteria will apply to the different categories of case . In many cases, the prospects of success, and the ratio of potential benefit to likely cost, will be quantified and explicitly linked. This will make the funding assessment tougher and more transparent than the current merits test. The Code will be approved by the Lord Chancellor (and laid before Parliament).

3.29 However, in some types of cases, the funding assessment will not consider all the criteria listed above. For example, cases about whether a child should be taken into care are so important, to the child and his or her parents, that as a category they will be guaranteed automatic representation. The prospects of success and the availability of resources will not be relevant criteria in this category.

3.30 The Funding Code will explain how people can seek a review of their case, if their application for funding is turned down by the LSC. A review body will consider representations. It will be a part of the Commission, but with independent members, and it will be able to refer decisions back to the LSC for reconsideration. The Review Body acts as a necessary ‘second opinion’ giver: and the LSC will be expected to give great weight to its views in deciding whether or not public funding can be given.

3.31 The financial eligibility rules are designed to target resources on the people most in need of help. They will need to provide that people contribute towards the cost of their case whenever possible, but that they are not dissuaded from pursuing soundly-based claims by a fear of being left facing large legal bills.

3.32 One of the commonest criticisms of the current system is that it is unfair to the opponents of parties who are legally aided, because a legally-aided litigant who loses his case is not himself at risk of having to pay his opponents costs. The court already has the power to award costs against a legally-aided litigant, after considering the means and conduct of both parties. Most people on legal aid would be unable to pay costs, even if they were ordered to do so. However, the current provisions exclude the value of most homes when assessing ability to pay. Under the new proposals, therefore, the court will be able to take account of the value of the assisted litigant’s home when considering the award of costs.

3.33 In addition, the court will be empowered to order the LSC to pay the costs of a successful, unassisted defendant, who would otherwise suffer financial hardship. This tones down the current test of ‘severe financial hardship’ used to determine costs payments. These changes will make the scheme fairer on the opponents of those litigants whose case is being funded by the taxpayer.

3.34 The recognition that the resources available for legal aid are finite and incapable of meeting all current or future need has led the government to consider what it can do to improve the working of the private market in legal services. Their purpose has been first to give access to people on middle incomes without increasing demand for public subsidy. Secondly, it wished to release existing legal aid resources by encouraging mechanisms that would allow the less well off access to justice without resort to legal aid. One of its chosen tools has been the extension and reform of conditional fees. Those reforms have extended the types of case in which a lawyer and a client may agree that if the case loses the lawyer is paid nothing, but if the case succeeds he is able to enhance his normal fee by an agreed percentage. They are also making the enhancement recoverable from the losing party as part of the normal costs. The result of that latter reform is:

• to protect the client’s damages from being eroded by having to pay the enhancement himself; and
• to make conditional fees suitable for non money claims(where there would be no damages out of which to pay the enhancement) and perhaps for use by defendants.

Whereas requiring a party to meet his own costs is usually seen as an incentive to keep costs down, on this occasion, shifting the cost to the defendant is expected to produce a more effective downward pressure on the size of enhancements as repeat defendants such as insurance companies are more likely to attack excessive uplifts than solicitors own clients seem to have been.

3.35 The insurance industry, encouraged by the government has been quick to design and market a range of products to insure a person using a conditional fee against the risk of having to meet some or all of their own disbursements and the other side’s costs. Together with linked funding arrangements (usually bank loans secured by the insurance policy) conditional fees can be used by people on low as well as middle incomes. The government therefore plans to exclude most money and other claim that will attract conditional fees and underpinning insurance from legal aid. The exceptions will be where there is a social policy or public interest case for helping fund them even though they are so high risk that lawyers and insurers would not take them on.

3.36 Conditional fees and making the enhancement recoverable have been criticised as putting up overall costs and being unfair on the losing party, especially when compared with contingent fee arrangement in which the lawyer shares in the damages if successful. The government is not convinced. The experience in the USA is that lawyers and parties inflate their damages claims and that the courts go along with it not least to ensure that what is left after the lawyer takes his share represents a proper level of compensation. That also increases costs which also fall on the shoulders of the defendant. Contingent fees are also only available for money claims and therefore lack the potential coverage of conditional fees. In addition, by making the ‘risk money’ (i.e. the enhancement) transparent, rather than factoring it unacknowledged into damages, conditional fees offer a much better opportunity for defendants and the courts to regulate it and prevent abuse.

3.37 At the end of the day, requiring the enhancement to be paid by the losing party will increase general costs, most obviously through increased insurance premiums. Those increases will reflect themselves throughout the economy in the costs of goods and services. The result will be that everybody will pay a little more for their goods and services to enable individuals who come in harms way to sue and recover full compensation.

4.1 The Criminal Defence Service planned in the Access to Justice Bill is, like the current legal aid system, based on a recognition that any person accused of a criminal offence must have access to legal representation where the interests of justice require this - that is, broadly speaking, in all cases where the defendant is at risk of losing his liberty.

4.2 The volume of assistance given to accused people (whether at police stations, or before the courts) is therefore unlikely to be affected by the reforms. The reforms instead seek to target the cost of the services that are provided - and (see paragraph 1.) the complexity and length of proceedings, and the number of adjournments.

4.3 The cost of criminal legal aid is rising at an alarming rate. In 1992-93, the cost to the public sector of all forms of criminal legal aid including advice and assistance was £507million. By 1997-98, the figure was £733 million. This is an increase of 44%, compared to a rise in general inflation over the same period of 13%. The number of criminal legal aid orders (for representation at court) during this time rose by only 10%, from 563,788 in 1992-93, to 618,621 in 1997-98.

4.4 The single most expensive element of the criminal legal aid system is funding for the costs of higher criminal courts cases (Crown Court and above). The growth of expenditure in this category presents by far the worst evidence of a process out of budgetary control. Higher criminal courts’ legal aid spending has risen from £221 million in 1992-93 to £349 million in 1997-98. This is an increase of 58%. The number of cases dealt with each year in these five years has in fact remained more or less static, at around 124,000.

4.5 The mechanism which determines lawyers’ rates of criminal legal aid pay is inflexible and outdated. Standard fees are now paid in many cases, and this change has allowed for better recent control over expenditure growth. However, larger and more complex cases fall outside the scope of standard fees. Instead, they are calculated under the traditional system, where a bill is submitted for payment after the event. This is an intrinsically flawed mechanism. It provides a direct financial disincentive for lawyers to seek unnecessary adjournments; to prolong the length of the trial process by encouraging defendants who are considering entering a guilty plea to delay doing so until the last possible moment; or even to use the appeal system in weak cases with a negligible chance of success.

4.6 At the very top of the scale, a small number of exceptionally expensive cases have in recent years taken an increasingly disproportionate share of the criminal legal aid budget. In 1996-97, 42% of legal aid spending in the Crown Court - almost £131 million - was paid out in respect of just 1% of the cases heard (around 1,000 cases): an average of £131,000 per case.

4.7 The system for assessing defendants’ means - to determine whether an individual can contribute anything towards the cost of his or her case - is also flawed. About 94% of defendants in the Crown Court obtain legal aid without making any contribution. Therefore, for the greater proportion of Crown Court cases, the means assessment is clearly a waste of time and money. On the other hand, free legal aid is sometimes granted to a defendant with an apparently wealthy lifestyle. This is usually because the defendant’s assets have been frozen for the duration of the case, which is the only period when contributions are payable. The understandable media interest and adverse comment on these unusual (but usually high-profile) cases has undermined public confidence in legal aid.

4.8 The current criminal legal scheme is highly fragmented. Help can be given under five different parts of the scheme in a single case. These can lead to duplication and delay. They make it harder for legal practitioners to manage the work required for each case in an efficient manner, and the cost of such inefficiency is again passed on to the public purse.

4.9 The overhaul of the criminal legal aid system is to be marked by the creation of a new process under a new title - the Criminal Defence Service (CDS).

4.10 This will be a separate scheme from the Community Legal Service (CLS) referred to earlier in Part II of this paper, although – like the CLS – it will also be managed by the Legal Services Commission. Its budget will be completely separate from that of the Community Legal Service fund for civil legal aid. Separating the two schemes in this way reflects the fact that they are responsible for providing different types of service in very different types of case; and that each scheme has its own distinct objectives and priorities.

4.11 For this reason, there may be advantages in the longer term in establishing two completely separate and clearly-focused bodies to administer the two schemes. For the foreseeable future, however, both the CDS and the CLS will be run by the Legal Services Commission. It is intended that this will facilitate a smooth working transition from the old legal aid scheme to the substantively reformed regimes. It should also enable the existing body of expertise and experience built up by the Legal Aid Board to be used in putting the new processes into operation.

4.12 The new CDS scheme will cover all the main services currently provided by criminal legal aid, including representation in court when this is in the interests of justice, and advice and assistance for suspects being questioned by the police. But it will have as a specific objective the requirement to secure better quality legal services, and improved value for public sector money. These new requirements will be met by developing more efficient ways of procuring services - contracting and directly employed lawyers - and by streamlining the arrangements for granting representation. Detailed plans for these elements are explained below.

4.13 Contracts for all legal services provide a flexible and manageable means of procuring the services needed – for criminal cases as much as civil. Use of contracts allows for the specific inclusion of quality standards and financial incentives, which can be tailored by category to suit particular types of cases.

4.14 Wherever possible, contract prices will be fixed in advance. This will create an unequivocal incentive for the lawyers under contract to minimise delays in cases, as the cost of unwarranted delays will be borne from within the fixed amount of funding provided by the contract itself, rather than presenting an opportunity to simply increase the tally of hours expended on a case and so work to be billed to the legal aid fund. Fixed costs provide quick and certain payment to the lawyers themselves, allowing them to also take advantage of more effective business and financial planning for their own firms.

4.15 As far as possible, the reforms propose that contracts with solicitors’ firms will cover the full range of criminal defence services noted above, from advice at the police station, through representation in the magistrates’ court and, if necessary, the Crown Court. This will eliminate the fragmentation that bedevils the current scheme. Contracts of this type can require that individual firms must cover a number of duty solicitor slots at local police stations and the magistrates’ court. The contracts would include a series of fixed prices for other services which the firm could be called on to provide. These might include, for example, advice outside the firm’s duty solicitor slots for suspects remanded in custody at the same station, or representation at a guilty plea or trial). There would also be flexibility in the details which can be stipulated in each contract. For example, although there is no need to set an upper limit on the number of cases to be covered by any given firm, in some areas – where there is a high volume of work – qualifying lower thresholds of volumes of case work could be desirable. Other contracts, in less densely populated areas, might not include a minimum volume of cases to be handled, as the levels of work available might make such a requirement impossible to fulfil. However, in such areas a requirement for the firm to cover a wider than customary geographical area would ensure that the specific local needs for representation were adequately addressed.

4.16 It is intended that, if a case also requires the services of a specialist advocate in the Crown Court, this will be provided for under a separate contract, allowing a tighter control over the potentially high-cost element of such cases.

4.17 Very expensive cases - those where the trial is expected to last 25 days or more - will fall outside the scope of contracts designed to cover ordinary cases. Instead, a separate contract will be negotiated for each individual case. A defendant’s choice of solicitor will be restricted, and this is set out in detail below. The firm selected by the defendant will be expected to negotiate prices for discrete stages of the case with the CDS, on the basis of the plan they will be required to submit in each instance, detailing their arrangements for managing the work anticipated. Negotiations will usually include the cost of specialist advocates and other experts, although the system will be flexible enough to allow prices for these services to be negotiated separately, in most instances.

4.18 If the CDS and the chosen firm cannot agree on acceptable terms for any given case, defendants may be required to choose a different firm from the panel. This approach will enable the CDS to negotiate contracts that keep a tight rein on the cost of potentially long, complex and expensive criminal cases; rather than handing over a blank cheque, as is the effect of the existing process.

4.19 All contracts for criminal defence services will include quality requirements. To begin with, these will be based on the Legal Aid Board’s existing franchising scheme. But it is anticipated that the new arrangements will need to go further than this current one. The aim is to provide the assurance that individual solicitors who are giving services under the scheme - and their unqualified representatives - have the necessary levels of knowledge, skill and experience to advise suspects and handle criminal cases.

4.20 Salaried defenders will form part of a mixed system, including lawyers in private practice working under contracts with the Legal Services Commission. Combined with this, the ability to employ and use ‘staff’ lawyers will give the CDS an essential flexibility to cover areas of need not met by the private sector, for example in regions where legal practitioners are scarce.

4.21 Development of a salaried defence service will add to the controls on the cost of criminal legal aid. The costs of the salaried lawyers will provide an indication of what it is reasonable for private practitioners to be charging for providing the same services.

4.22 Contracting will inevitably restrict choice of legal representative to a greater extent than under the current legal aid system

4.23 In most cases, defendants will have a choice, from among those lawyers with a current contract with the CDS. This is important to ensure, as far as possible – in part, because it helps to maintain both the necessary independence of defence lawyers, and the defendant’s confidence in his or her representative. It will also encourage the maintenance of good performance standards: lawyers have a direct interest in providing their clients with the best possible service, in order to improve their reputation and the likelihood of being chosen in future.

4.24 In exceptional cases, it will be necessary for unrepresented defendants to have a lawyer assigned to them by the court. The most obvious example of this will be instances where it would not be right for the defendant personnally to cross-examine a witness, such as a child, or the alleged victim of a rape. The defendant in these circumstances will nonetheless retain the right to refuse to use the assigned representative

4.25 The restrictions in choice which will arise under the new criminal defence system will still enable defendants to engage QCs, or more than one counsel on particularly complex cases. However, regulations currently under consideration will examine the current parameters which determine when this is justified, with a view to tightening the existing scope.

4.26 Under the current criminal legal aid scheme, the courts are responsible for evaluating circumstances and so deciding whether a defendant should be represented at public expense. The result of this is that most defendants (about 95%) are not required to make a contribution to their defence costs. Those who do contribute and are acquitted have their contributions returned.

4.27 The cost of means testing and enforcing contribution orders is high in relation to the contributions recovered. In 1997-98, criminal legal aid contributions totalled £6.2 million, while the direct cost of administering the system was about £5 million. Means testing also leads to delays in cases being brought to court, because cases have to be adjourned when the evidence required to conduct the test is not produced.

4.28 Tighter procedures were introduced in recent years, in response to concerns that the courts’ testing was not always carried out properly. These have helped somewhat to improve the efficiency of the process. But fewer than 1% of applicants are actually refused criminal legal aid because they have sufficient means to pay for their own defence. In addition, there are also hidden costs. For example, if the documentary evidence provided to the court to enable it to make the means assessment is incomplete, the case is adjourned, causing delay and inconvenience to the criminal justice process as a whole.

4.29 Under the new scheme, the courts will remain responsible for deciding whether a defendant should be represented at public expense. But they will no longer be required to conduct a means test at the outset of each case. Means testing will be abolished. Nonetheless, it would still be inappropriate for taxpayers’ resources to be used to meet the cost of defending criminals who can and should contribute to their own defence. The new process will therefore permit Crown Court judges to order a defendant to pay some or all of the costs of his or her defence.

4.30 The information necessary to determine whether the defendant in question has sufficient assets to make a contribution may come to light in the course of the trial itself. If so, the judge will be able to make an order when passing sentence. In other cases, the judge will be able to ask the CDS to investigate the defendant’s means, and make an order later. Leaving this decision to the end of the case will stop time being wasted on means-testing defendants whose contributions are later returned when they are acquitted. In addition, some well-off criminals will pay much more than now, because costs orders will be able to take account of assets that were frozen, or only came to light during the case.