These points may well apply equally to those areas of Civil Legal Aid work not covered by CFAs and in which a system of graduated fees could be introduced)
The proposal which follows was considered and approved by all Chambers on the North Eastern Circuit at a Meeting on Saturday 11th July 1998 and will he approved
by the Circuit in Grand Court on 16th July 1998.
Ring-fencing
The proposals which follow will only be viable if there is a separate ring-fenced advocacy contract for which any group of advocates (whether chambers, groups of chambers, firms of solicitors or groups of firms of solicitors) may tender. Advocacy as a disbursement of Solicitors will spell the end of the Bar and will create the same problems as currently face counsel appearing in legal aid cases in the Magistrates Courts.
We believe that it is unlikely that the Bar will be forced to go cap in hand to Solicitors for advocacy fees as part of a contract for all Crown Court or other legal services. At the Circuit Leaders’ dinner for the Lord Chancellor (also attended by the Chairman and Deputy Chairman of the Bar) on Monday 8th June 1998, Lord Irvine stated that the Bar would not be reliant upon Solicitors for payment for advocacy under any block contracting situation (see the penultimate sentence of the letter dated 12th June 1998 from the Leader of the North Eastern Circuit to the Lord Chancellor Annex A herewith) He also expressed his support for a strong and independent Bar. He was willing to consider any alternative proposals for the administration of legal aid (in the Government’s usual manner of asking those adversely affected by its proposals to suggest and devise a better scheme) and he surely has a clear priority of ensuring predictable expenditure in future.
The Future - Block Contracts
It seems to be thought by the Bar Council (as expressed at the Meeting in London on Saturday 27th June 1998) that Block Contracts will not arrive for some time. We are not so sure. The Government is committed to contracting for all services. We may well see very soon attempts by the Crown Prosecution Service to negotiate Bulk Contracts for Crown Court work with individual preferred sets. We are reasonably confident that the Government will wish to move quickly to Block Contracting in those areas where legal aid remains in order to rid itself of the responsibility of administering legal aid and particularly if current studies suggest that graduated fees have not in fact resulted in any real cost savings to Government.
We have obtained some interesting figures from the North Eastern Circuit Administrator which clearly show a dramatic decrease in legal aid expenditure on advocacy by counsel in the Crown Court in the year 1997/8 but with a significant increase in legal aid expenditure on Solicitors in the Crown Court (including Solicitor Advocates). (See the letter from the Circuit Administrator dated 7th July 1998 at Annex B). The fall in counsel’s fees reflects to some extent a drop in the volume of work but that should surely also affect Solicitors. The fact that they are not only unaffected but are in fact receiving more payments for less work suggests that the new graduated fees scheme is in fact controlling costs in respect of counsel and that Solicitors are responsible for increases in legal aid expenditure because of the lack of control over their claims. We are also sure that the scandalous and unilateral scything of graduated guilty plea fees by the introduction of pleas before venue and the resultant transformation of a guilty plea into a committal for sentence has also begun to play is part in the massive fall in fees paid to counsel. This is a matter of great concern to the young Bar and does not appear to have been the subject of the outcry from the Bar Council which it deserves.
How would Block Contracts operate?
What would be the scope of the contract? It is assumed that the Government will make available contracts for advocacy which will cover specific numbers or tranches of cases in Court Centres (either singly or by areas). The size of those contracts is unknown They may be limited to types of cases, numbers of cases, cases at a given court centre, cases over a period of time etc. They may apply to Magistrates Court work as well as Crown Court work.
To enable the Bar to tender, the contracts would have to be for advocacy exclusively and not for the work Solicitors currently do when the case reaches the Crown Court (however, the Bar could alter its historical position and employ administrative legally qualified and unqualified staff to carry out the "Solicitor’s" work). Would the Bar be equipped to employ staff to do the Solicitors work in the Crown Court? Would our Rules allow it? Should we alter the Rules? Would there be separate contracts for advocacy and for Crown Court preparation work? Perhaps we should not dismiss out of hand any suggestion that the advocate could conduct the case from the outset provided there was arms-length administrative assistance at hand. Could we preserve our status as a referral profession and yet employ staff to do the post-committal normally done by a Solicitor? Would the Bar then lose its cost competitive edge over Solicitors if we were doing their work as well?
Who would tender for any advocacy contracts? What if the contracts for advocacy were offered for tender between different Chambers and Firms of Solicitors (in circumstances in which Solicitors had equal rights of audience) in the same Town/City? It is anticipated that only the Bar and the Solicitors would tender although anything is possible with this Government which contemplates in the recent Rights of Audience Consultation Paper extension of the rights of audience currently enjoyed by Fellows of the Institute of Legal Executives.
Who would submit the lowest tender? Solicitors have much higher overheads than the Bar. The Bar should be able to compete with solicitors on financial terms in any contract for advocacy (but see para 3.2 and 3.5). However there may be freelance solicitor advocates in groups wishing to tender. There are already such groups in London. Are they big enough? Should this encourage the Bar to aim for a contracting arrangement which is so large that firms or groups of firms of Solicitors could not compete? Also these contracting proposals will lead to increases in the overheads of the Bar even if the contracts were for advocacy alone. We cannot assume that the Government would increase the contract price in order to allow us to make the same profit as before.
The cost advantage will only work in favour of the Bar as long as we compete for advocacy contracts excluding other preparatory work. If the Bar was to be forced to compete with Solicitors (and with each other) for all Crown Court work, the cost advantage would probably disappear as the Bar’s overheads would increase inevitably.
What would be the result of competition between Counsel? It is our view that competition for advocacy contracts between Chambers would inevitably result in (a) mergers or general growth in size as Chambers are joined by counsel from Chambers which have failed to obtain a contract and/or by counsel taken on in order to have sufficient personnel to enable the successful tenderer to carry out the contract work and (b) downward pressure on the contract price during the tendering process until such reorganisation has occurred. This is because the contracts offered are unlikely to cater for the varying sizes of Chambers. However, it does seem that tendering competition is unlikely to come from rival Chambers in the long term. Unsuccessful bidders are unlikely to survive to bid again and Chambers will be forced into growth or amalgamation or mutual work arrangements by any contracting scheme. Polarisation of work seems inevitable. Division between prosecuting Chambers and defending Chambers looms large. Further, if Solicitors tendered successfully, where would that leave the Chambers whose bid had failed? Might Chambers merge with Solicitors? Also we must surely avoid at all cost the spectre of counsel whose bid fails, desperately underbidding for other contracts simply to avoid a future without any prospect of any work at all.
Surely competition for contracts for advocacy between sets of Chambers and against Solicitors must lead to fusion by any other name and to amalgamations of practitioners.
We believe that this bleak future can be avoided.
The Administration
At present the Court Service administers the payment of criminal legal aid. Graduated fees make this a mathematical calculation for the most part. Ex post facto taxations account for the balance of cases. Graduated fees can and will be extended to longer cases. Graduated fees will soon be seen in Family cases. Civil cases (where legal aid remains) will follow.
The Way Forward for the Bar
There is no reason in principle why the Bar Council or a Circuit (with full time staff) could not administer the payments to counsel (and to other advocates) for advocacy services.
If the Bar Council or a Circuit is capable (with proper staffing and correctly constituted) of administering the payments for advocacy, why could the Bar Council or a Circuit not also tender on behalf of its members and on behalf of the Chambers on Circuit for the advocacy contracts en bloc? This would enable tendering to take place on a larger scale for contracts covering a quantity of work for which an individual Chambers or Solicitors Firm could never hope to compete.
The Law Society might of course seek to tender on behalf of its members just as we are postulating that the Bar Council and the Circuits might. In advocacy the Bar should have the cost competitive edge.
How would the Bar tender? It should be relatively simple to estimate the tender amount based on previous years’ expenditure, predictions of work for the coming year, graduated fees levels and so on. The Court Service produces figures at present linked to statistics from the Magistrates Courts which enable them to predict the work load for the coming year. Exceptional circumstances (e.g. unexpected frauds) would have to be catered for.
The effects of tendering by the Bar Council or by the Circuits
If the Bar Council or a Circuit tendered for all the Advocacy Contracts on behalf of all the barristers practising in the country or on that Circuit and then administered the payments on the conclusion of the cases, what problems might occur?
The following are just some of the possible advantages and disadvantages:
Some advantages:
The solicitors could continue to brief their favourite counsel. The system would work very much as at present. The system proposed would widen and enhance choice for the consumer.
Competition between chambers et al for contracts (driving fees down) would be avoided.
Graduated fees could be retained and expanded.
The administration of the payment system could be refined and improved if under our control.
Possibility of formal reciprocal arrangements between Circuits if manning proved to be a problem.
Members of the Circuit who did not pull their weight would not disadvantage those who work hard.
Any advocate who was not party to the successful tender (e.g. a Solicitor Advocate or an off-Circuit counsel) could still carry out work under the contract and would be paid out of the contract amount but the fees would be calculated in accordance with the successful tenderer’s payment scheme and the "outsider advocate" would have to contribute to the cost of administration of the scheme. These arrangements could either be part of a reciprocal agreement between contract holders if the "outsider advocate" was a member of another contract holding group or an individual agreement.
Greater control by the Bar and by the Circuits of members of the Bar and their standards would be necessary. Membership of the contracting party would surely be essential if contract standards were to be maintained.
Some disadvantages:
Some form of dispute resolution system would be required to deal with disagreements over fee calculation and assessment. Also some form of Central Taxation Team within the payment system would be necessary to deal with the assessment of fees in very high cost cases (VHCCs) outside the Graduated Fees Scheme.
Would the proposal be considered a monopoly situation? Would this be deemed an unfair and restrictive practise or anti-competitive? It is inevitable that every advocate wishing to work under a contract would have to join the contracting party or reach an arrangement (see 6.3.7 above). There is however nothing unusual in a successful contracting party insisting that its contract work is done by its employees - indeed it would be odd if that were not the case. Equally, there would be nothing to prevent groups of advocates tendering independently. The Law Society could tender. It may be sensible to obtain expert advice on the legality of what is proposed.
The Bar will have to regulate its intake in order to avoid overmanning. The successful contractor would have to aim for 100% membership of those practising or wishing to practise in its area in order to maintain standards.
Some form of contingency fund would be required to deal with the exceptional cases which could not be budgeted for when tendering.
Unless some reciprocity between Circuits could be written into the contracts. The system might lead to rigidity of Circuit boundaries which is possibly not a good thing.
Some kind of contingency funding would be required for exceptional circumstances (e.g. the money running out for unanticipated reasons).
Other Considerations
The Bar Council or the Circuits (as contracting parties) would probably have to be incorporated in order to carry out the administrative function.
The Bar Council or the Circuits would have to be able to exercise disciplinary powers over the members to ensure compliance with contractual obligations.
The Bar Council or the Circuits and their members would have to enter into some formal and legally enforceable arrangement between themselves which would enable the system to work and would bind the advocates to the contracts negotiated on their behalf. Returns and division of fees between counsel for individual cases would have to be dealt with. A system for dealing with VHCCs would be needed. A panel of some sort to deal with disputes or questions of interpretation would be required. It is reasonable to hope that graduated fees schemes could provide a structure within which much of the status quo might be retained.
The Circuit may be liable for failure of its members to supply services in accordance with the contract. How could this be catered for? What remedy would there be against a member who did not meet the standards which the contract required? What disciplinary measures would be needed?
Recommendation
The North Eastern Circuit recommends that the Bar Council or the Circuits on behalf of their members should be able to tender for advocacy (or wider) contracts. We also recommend that the Bar Council should seek expert advice on how we should structure a nationwide or circuit-wide organisation to enable us to prepare to tender and to administer the contract work in the event of the tender being successful. We consider it essential to avoid at all costs any possibility of counsel tendering against one another which will drive fees to an unacceptably low level and will reduce choice in the long term for the consumer. We believe that our recommendation has the virtues of simplicity, benefit to the public, preservation of the Bar and cost-effectiveness. It is also likely to inject into the Bar much needed discipline and control over the standards and behaviour of its members.
