Speaker notes for Council Presentation Brief outline of current situation: - Tender round - any firm that met the quality standards was given a contract to do criminal defence work - Clients are free to choose any solicitor who has a contract with the LSC Duty scheme – someone in police station can ask for the duty solicitor. Each - firm is allocated slots on the duty scheme at their local police station proportionate to the number of duty solicitors they have Rates – fixed fees in police station, standard fees in the Mags Court, - graduated fees in the Crown Court. Structures have changed, but the underlying hourly rates were until 2010 the same in cash terms as in 1993 – and then they were cut. What are we up against We are in no doubt that cuts of this scale are coming, one way or another. The Ministry’s proposals Key features CJS areas: the exceptions are that London will be divided into three along the same lines as the CPS; and there will be two amalgamations, Warwickshire with West Mercia and Gloucestershire with Avon and Somerset. Number of firms per area – indicative figures include suggesting five firms for Kent, 18 for London South, 10 for Devon and Cornwall, four each for Cambridgeshire, Norfolk and Suffolk, 37 for Greater Manchester. Own client abolished. Clients in the police station will be allocated a solicitor, either on the basis of duty slots, or by next on list, date of birth or first letter of surname. Clients who do not request a solicitor in the police station, but want a lawyer further down the line, will also be allocated by this central system – but how? Timetable The Law Society’s line to date The economic impossibility arises primarily from having a bid based on the CJS area, and the problem is exacerbated by the proposal for exactly equal contract sizes that in some cases are smaller than firms currently are. With perhaps an occasional exception, firms are not geared up to provide services on this geographical basis. To do so would require capital investment. The smallest firms would have to take on infrastructure that they do not currently have, even if that is limited to a layer of management to become part of a county- wide network, and some IT infrastructure. Most other firms would have to downsize within their own immediate market as well as providing services across the county that they have never done before.
It is therefore difficult to see how these proposals will enable economies of scale. This does not enable firms to grow their businesses. It requires them radically to change their whole approach. What the proposals in effect require is the wholesale abolition of the existing supplier base and its replacement with a completely different structure; and the Government apparently expects this to be done within the space of three months over next summer. This can’t be done. New firms and consortia will have to be created. Funding will have to be secured. SRA licenses will have to be applied for and obtained. Software will have to be developed, purchased and installed. Premises will have to be obtained. Staff will have to be recruited, moved or made redundant. Nothing that requires a significant investment of time or money can happen until firms have the assurance that they have a contract. It would be a challenge to get up and running in nine months to a year. The proposal that firms would have just three months to do so beggars belief. Moreover, the proposal for a three year contract, following which a firm may not secure a subsequent contract, means that all the investment required to deliver this new model and a return on it must be recovered within three years. It is difficult to see how this could be achieved at current rates of remuneration, let alone with the cuts being imposed. So now what? Arguing that there should be no cuts is not credible with the Government, the opposition, the media or the general public. We cannot see any way forward that will enable all firms to survive, and many will only be able to survive with radical change. As we see it, there are only two possible outcomes: the Government proceeds with tendering, or there is a substantial administrative cut. However, if we succeed in persuading the Ministry that the profession cannot tender on this basis, how big is the risk that the Ministry will turn to G4S and Serco instead? This is the unknown quantity that gives us major cause for concern. What the Society is doing We issued a consultation paper to the profession, exploring possible ideas that we could put forward as an alternative to competitive tendering. We have instructed Vicky Ling and Andrew Otterburn to undertake some analysis for us, to demonstrate both what it would take to deliver the Government’s model, and what it would mean financially and practically for firms to try to adapt from their current structure to the new one. We are seeking legal advice on the following points: Whether the removal of choice of lawyer is lawful under LASPO Whether the proposal is irrational, given that the model does not permit the expansion to achieve economies of scale that the policy rationale proposes, and the timescale is unachievable. Whether there are legal implications arising from the equality and diversity impact
We are undertaking research to draw appropriate analogies with other markets that have been restructured, primarily GP services. Plus Deloittes for market analysis. We have held a number of roadshows with the profession, as well as a private focus group. We have had meetings individually and collectively with the practitioner groups and the Bar representative bodies, ensuring that we are hearing the views of big firms and small firms alike. We had a meeting with Grayling and a group of practitioners last night, another next Monday. We have instructed Deloittes to provide us with some high level market analysis, both of this market and in comparison with other markets. What the Society is not doing Strike action – legally we can’t; we would be doing something unlawful, which we cannot be seen to do. Moreover, it would put our members in breach of their contracts and SRA obligations. Boycotting the Ministry – some of our members think the Ministry does not work with us in good faith, and we should stop trying to engage with them. While we are under no illusions as to how much we can influence, we do believe that the best chance of securing the best available outcome for our members lies in working as constructively as we can. It is also essential in order to lay the groundwork for any subsequent legal challenge we might seek to bring. If we don’t engage, the most likely outcome is that Chris Grayling will plough ahead with the model in the paper. Opposing competitive tendering on principle – we have always refrained from opposing competitive tendering on principle. We believe it is more effective to concentrate on whether the actual model proposed can in fact work. That is the approach we took in 2009, which resulted in the proposal for competitive tendering first being scaled down to a pilot and then being shelved altogether. We do however see major problems with applying tendering given the cottage industry nature of the current market and the monopoly purchaser status of the MoJ. Cuts denial – not realistic. Many of our members are still in denial. Denial of reality will not help our members. We have to face up to the consequences in the event that we do succeed in fighting off competitive tendering again. It would sour our credibility with select committees, the media and the public, who will be vital allies in trying to stop these proposals. And we have to be realistic that this Government is determined to proceed with tendering, and may go ahead despite our best efforts with a scheme that we believe to be hopelessly flawed. Key questions – the Government’s proposals There are a number of key questions we are discussing with members about the proposals from the Government. Key questions – the alternative 1
In addition, we have been seeking a mandate for the alternative options that we might put forward Key questions – the alternative 2 Likely Law Society response 1 We want to open this up to discussion with Council now for a steer on how we should approach the issue. Our current thinking is that our response should cover the following ground: The argument that the proposal is unworkable will rely on the evidence from Otterburn and Ling, and possibly legal advice on the own client issue. We propose to include in our response a section looking at things that would have to change in order for the tender to proceed. Likely Law Society response 2 This alternative depends on both responses to our consultation, feedback from the profession, and the steer we get from you today, but these are the kinds of measures we are contemplating.
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