CIVIL AND FAMILY WORK
The Way Forward
Introduction
In the immediate future, the Civil and Family Bar on Circuit will need to meet the challenges:
In civil work, of the loss of Legal Aid in personal injuries work, the introduction of CFAs and the longer term prospect of some form of Block Contracting in respect of those areas of civil work where Legal Aid continues to be provided;
In family work, the introduction of graduated fees and the prospect of some form in the longer term of Block Contracting.
With these challenges in mind, a small Committee (Black QC, Wilby QC, Burrell QC, Cameron, Kramer and Atherton) have been asked to consider the implications of these changes for those practising in civil and family work on Circuit.
The following represents our initial reactions and proposals for discussion.
The Present Position
Although those on Circuit familiar with Circuit provision for civil and family work may not regard our position as materially different from that on other Circuits or in London, the reality is that the North Eastern Circuit, particularly in respect of civil work, is almost unique in the way in which it provides legal services to solicitors.
In respect of civil work, on most other Circuits there are large established Chambers practising exclusively or predominantly in civil work, eg 5 Fountain Court, Birmingham; Deans Court Chambers, Manchester; Rope Walk, Nottingham. In contrast, on the North Eastern Circuit the only set undertaking predominantly Common Law civil work is Park Lane Chambers, Leeds and the only wholly Circuit based chancery/commercial set is Chancery House Chambers, Leeds. Enterprise Chambers from Lincoln’s Inn have Chambers annexes in Leeds and Newcastle. Otherwise civil provision, including commercial and chancery provision, in all other centres on Circuit is provided by small groups of practitioners within individual sets of Chambers, some with Silks, who represent the minority rather than the majority within Chambers. There are a large number of those who practise predominantly in crime or family who also undertake some civil work, usually personal injuries with some minor contract litigation.
In respect of family law work, the pattern is similar to that on other Circuits. There are some Chambers on Circuit such as 30 Park Square who are recognised specialists in family work and there are other Chambers who regard themselves as having a similar level of specialisation in Newcastle and Sheffield. Nonetheless, the reality in most instances is similar to that in civil work where the family practitioners represent a small group of those who work within a larger general Common Law set where the work undertaken is predominantly crime.
The geographical distribution of Chambers on the North Easter Circuit presents a significant problem since there are three principal centres - Leeds, Newcastle and Sheffield - but with sizeable sets of chambers in other centres such as Bradford, Hull, Middlesbrough, York and now Durham. Any Circuit-wide scheme to integrate and oversee civil or family work either in relation to CFAs or Block Contracting will inevitably encounter significant logistical problems however sophisticated the administration and communication.
Family Work
For the present family work will probably be the least affected by the present Government proposals. There is no immediate proposal for Block Contracting in respect of Legal Aid family work. The immediate challenge will be the introduction of a graduated fee scheme probably in 1999 in a form similar to that introduced in respect of criminal Legal Aid.
The Bar has operated an information gathering scheme on the Western Circuit with a view to establishing an economic basis for graduated fees. Whether that will be accepted by the Government is anybody’s guess. The prospect is in the present ethos that the fees will be significantly lower across the board for all work presently undertaken on Legal Aid.
It is recognised by the Family Bar nationally and locally that the probable effect of the introduction of graduated fees will be a significant reduction in fee income from Legally Aided family work with possibly a "knock-on" effect on other fees paid for family work where, for instance, the opposing brief is funded by a local authority in childcare work. The impact of this may be a significant reduction in the income into sets of Chambers from family work which may, depending upon the basis of funding of individual sets of Chambers, significantly affect Chambers economics.
Reduction in Legal Aid and Introduction of CFAs
At present a large proportion of plaintiff personal injuries and medical negligence work and a significant proportion of both plaintiffs and defendants Common Law civil work is Legal Aid funded. With the introduction of the intended new Legal Aid scheme, Legal Aid will be lost to personal injuries work in the very near future and there remains the threat that in time it will be removed from other areas where Legal Aid will presently continue, for instance medical negligence. Additionally, there is the concern that CFAs will have attraction to even those who are entitled to Legal Aid if there is satisfactory insurance in respect of defendants’ fees since the costs particularly of those with a high Legal Aid contribution will be less than Legal Aid. Across the board, CFAs will obviously be attractive to private paying clients who will avoid the necessity to make immediate substantial payments to their lawyers.
It must be recognised that these substantial changes will dramatically affect the Bar, the funding of and organisation of sets of Chambers and probably cause difficulties in relation to divided loyalties of Members of Chambers where they have to make arrangements to cope with CFAs.
The General Council of the Bar instructed Biddle Solicitors to prepare a report on the "Future Structure of the Bar following the Government’s Proposals for Change in the Delivery of Legal Services". Their report of 11th May 1998 makes unhappy reading and its principal features are summarised in the opening address of Daniel Brennan QC, Vice-Chairman of the Bar, to the Queen Elizabeth Conference Centre Meeting on 27th June 1998.
It is assumed for the purposes of this paper that the reader will be familiar with the problems presented by CFAs which may be summarised as follows:
Adverse Selection - The solicitor keeping the best cases; the barrister getting the worst cases.
Insurance against Defendants’ Fees.
Fair Uplift - Establishing and agreeing the uplift.
Purse Sharing – Barristers / Chambers framework to spread risk.
Conflicting out - Disqualification of members of the purse sharing group from trying or appearing for other parties in a CFA action.
The economic effect of these changes on individual barristers and sets of Chambers is obvious. A steady stream of payment will be removed and replaced by uncertainty and high risks as to receipt of fees. It is perceived by the authors of Biddle and is obvious commonsense that few individual barristers will be able to accept this situation and therefore individual barristers and probably Chambers will have to change dramatically to deal with the problems presented.
Purse Sharing
This is an umbrella term to reflect an arrangement by which a group of barristers reach an agreement between themselves in respect of CFA work so that the benefits of success and the detriments of failure are shared across the group.
Biddle when considering CFAs (and also block contracting) concluded that the potential solutions in respect of CFAs particularly are:
Sharing arrangements within Chambers.
Partnership.
Limited liability company.
The problems envisaged with any such arrangement, apart from the principles identified at Paragraph 4.4 above, are:
The necessity for change in the code of conduct to facilitate purse sharing and to deal with the conflict of interest/conflicting out.
Major re-organisation of financial and material structures within Chambers.
The effect on Chambers structure of individual groups within Chambers or cross-chambers CFA purse sharing arrangements.
The prospect of polarisation of practitioners undertaking CFA work to larger specialist Chambers removing them from traditional Chambers groups.
(See generally Biddle, Chapter 4, "Alternative Options" to 5, "Consequences of Adopting each Structure" and 13, "Cross-chambers Groups."
At the Queen Elizabeth Centre Conference, a CFA group model constitution was provided (copy with reader’s papers) which provided a model group "comprising barristers from only one Chambers". There was also a paper from Jonathan Hurst QC and Martin Seaward in respect of the code of conduct and CFAs. This addressed the practical problems of operating a CFA, but only in limited form the conflicting out problems. Biddle raised this problem and it is not adequately addressed at Paragraph 17 of their paper. They appear to accept as inevitable that conflicting out will prevent any participation in the action whether as Judge or Counsel for another party of any member of the purse sharing agreement. The ramifications for that are dire. In reality, however, the true conflict of interest is clearly far less than the conflict of interest between the individual banister and his client where settlement of the case arises. It is the view of the North Eastern Circuit Civil Work Committee that very careful consideration of ‘‘conflicting out" is required and a much more specific code of conduct is necessary.
Problems for Circuit
The major problem for individual barristers and Chambers is the effect of purse sharing agreements. Traditionally on Circuit, particularly in the smaller centres and on the Circuit generally, Members of the same Chambers act for and against each other regularly, often appearing for a plaintiff one day and a defendant the next day. This traditional way of working will be precluded if a Chambers model such as that put before the 27th June meeting is adopted.
The practical effect of a Chambers CFA purse sharing agreement will mean that once one member of that group is retained for the plaintiff in the CFA agreement, no other member of that group (the Chambers) can appear for the defendant or for any other party to the litigation such as a third party where there is a conflict of interest. This will mean, for instance, in a small centre such as Hull, that if the Chambers have a CFA agreement they will be in most instances effectively precluded from undertaking any defendant work in their Court centre.
This will have much wider implications. Once it is known to local solicitors that Chambers ‘A’ has a Chambers CFA agreement including all Members of Chambers (which will not take long) a number of unhappy situations may prevail. First, once a Member of Chambers is instructed, it therefore precludes anybody else in Chambers appearing for the defendant or trying the case. Second, Chambers will get known to the defendants’ solicitors as a Plaintiff / CFA set and will receive no or no significant defendants’ work. Third, unscrupulous solicitors for either plaintiffs or defendants may instruct a particular barrister in the Chambers to prevent other banisters appearing in the case (already a problem with beauty parades).
These problems will compound the already existing problem of the drift of civil work from Circuit to London and other large civil centres such as in Manchester and Nottingham.
The financial and personal ramifications for individuals and Chambers as a whole are mammoth. The loss of mainstream Legal Aid income and the uncertainties of if and when payment will be made in respect of CFA cases are the tip of the iceberg. The Committee considers that a solution to purse sharing and conflicting out is small purse sharing groups of individuals within Chambers or across Chambers. But such a solution may well conflict with the interests of other individuals within Chambers. Equally, if a Chambers-wide CFA group is formed, that may cause those who do predominantly defendants’ work to choose to leave Chambers and join another set of Chambers which does not have a Chambers-wide CFA or specialises predominantly in defendants’ work. There is a real threat to the existing fabric of Chambers and a danger that they will either fragment into smaller groups or alternatively that there will be a gravitation to one or more larger sets of Chambers which are capable of supporting individual purse sharing arrangements whilst also retaining and providing for defendants’ work. Either solution strikes at the existing structure and fabric of Chambers.
It is perceived by the Committee that there are no simple solutions. Individual barristers within a set of Chambers and Chambers will have to make important decisions. They may be characterised as follows:
Do we wish to undertake CFA work? If so:
Do we wish to continue to undertake defendant’s work? If so:
What form of purse sharing agreement suits us? Should it be:
a Chambers-wide agreement? Or
individual CFA groups within Chambers or in conjunction with barristers in other Chambers.
Whichever solution:
What is the financial impact on Chambers? In particular:
What additional staff and/or technology will be necessary to implement purse sharing within Chambers or across inter-Chambers groups?
How is the financing of Chambers to take into account the uncertainties of payment of those undertaking CFA work?
Are they:
to be expected to continue to pay Chambers contributions as before despite a reduction in cash flow; or
will special arrangements have to be made by overdraft facilities or other means to provide for the change in cash flow/liquidity and ability to make regular contributions of those undertaking CFA work.
Block Contracting
Block Contracting for civil Legal Aid work and for family work (see Paragraph 2 above) is not presently intended. However, it is a real prospect. It also creates conflicts.
The advantage of Block Contracting to the Bar will be that it retains the purse strings and does not become a disbursement which may be the "death knell" of the independent Bar.
But Block Contracting brings for the Civil Bar many similar problems to CFAs. Whilst it is accepted that Block Contracting will provide in some instances Legal Aid for both plaintiff and defendant, there will still be two major problems. First, conflicting out where once a member of the Block Contracting agreement has agreed to represent a party, he cannot represent another party in the same litigation or try the case. Second, the perception by local solicitors (principally Defence solicitors) that the Chambers are a Legal Aid Block Contracting group who undertake primarily Legal Aid/plaintiffs’ work. This will have the effect of work being sent to other Chambers or off Circuit.
The advantages of Block Contracting are a substantial volume of guaranteed work, possibly at relatively low fees, and a good and regular cash flow.
Matters for Discussion
Clearly the matters at Paragraphs 6 and 7 above will require detailed consideration, as will the general impact, terms and effect of CFAs, Block Contracting, Family Graduated Fees, Chambers composition, conflict of interest and importantly the Chambers view of its future in respect of the provision of civil and family legal services.
Finally, we wish your views as to how we can assist in familiarising other Members of Circuit with the impact of these changes in civil and family work so that we can serve the Circuit in finding solutions to these problems
David Wilby QC, Jill Black QC, Gary Burrell QC
Ian Atherton, Neil Cameron, Philip Kramer
7th July 1998
This paper is limited to issues to be discussed on 11th July and does not consider the wider issues including the possibility of widened rights of audience for solicitors, the use of block contracts by insurance companies to reduce rates of payment for defendants’ work, the promotion of the Civil and Family Bar on Circuit.
