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Department for Constitutional Affairs Consultation Paper

Criminal Defence Service Bill

May 2004

[Consultation Number CP 17/04, Command Paper CM 6194]

 

Contents

This consultation closed on 6 August 2004.

Annexes

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Introduction

The Department for Constitutional Affairs has announced its intention to introduce a draft Criminal Defence Service Bill containing proposals for changes to the Criminal Defence Service (CDS) grant of the right to representation. This paper sets out for consultation the Government's proposals for these changes and invites comments on the shape the new scheme might take. The provisions fall broadly into two parts:

These two measures together will bring greater consistency, better control over grant and a quicker reaction to changes within the Criminal Justice System (CJS).

This consultation is being conducted in line with the Code of Practice on Consultation issued by the Cabinet Office and falls within the scope of the Code. The Consultation Criteria, which are set out later in this document, and have been followed.

An initial regulatory impact assessment indicates that public sector staff and the legal profession are likely to be particularly affected. The proposals are likely to lead to additional costs or savings for businesses, charities or the voluntary sector, or on the public sector. A Partial Regulatory Impact Assessment is attached at Annex C. Comments on this Regulatory Impact Assessment are particularly welcome.

Copies of the consultation paper are being sent to:

This list is an indication of the recipients of the consultation paper; a full list is available on request from Miss Hannah McMinn (see section on contact details).

However, this list is not meant to be exhaustive or exclusive and responses are welcomed from anyone with an interest in or views on the subject covered by this paper.

How to respond

Please send your response by 6 August 2004 to:

Miss Hannah McMinn
Department for Constitutional Affairs
Criminal Defence Service
3rd Floor
Selborne House
54 Victoria Street
London SW1E 6QW

Tel: 020 7210 8552
Fax: 020 7210 8729
Email: Miss Hannah McMinn

We would appreciate receiving responses to this consultation (if possible by e-mail) in MS Word.

Further paper copies of this consultation paper can be obtained from the above address.

A paper summarising the responses to this consultation will be published within three months of the closing date of the consultation. The response paper will also be available on-line.

Representative groups are asked to give a summary of the people and organisations they represent when they respond.

A further consultation paper will be published by the Legal Services Commission on the detail of the regulations that will support the Criminal Defence Service Bill.

The Department may wish to publish responses to this consultation document in due course. Please ensure your response is marked clearly if you wish your response or name to be kept confidential.

If you are replying by e-mail, your consent overrides any confidentiality disclaimer that is generated by your organisation's IT system, unless you specifically include a request to the contrary in the main text of your submission to us.

Confidential responses will be included in any statistical summary of numbers of comments received and view expressed.

Consultation Co-ordinator contact details

If you have any complaints or comments about the consultation process rather than about the topic covered by this paper, you should contact the Department for Constitutional Affairs consultation co-ordinator, Laurence Fiddler, on 020 7210 2622 or email him

Alternatively, you may wish to write to the address below:

Laurence Fiddler
Consultation Co-ordinator
Department for Constitutional Affairs
5th Floor Selborne House
54 Victoria Street
London SW1E 6QW

If your complaints or comments refer to the topic covered by this paper rather than the consultation process, please direct them to the contact given under the How to respond section.

The Consultation Criteria

The six consultation criteria are as follows:

Foreword

  1. Any changes to the scope and eligibility of the criminal legal aid scheme need to be placed firmly in the context of the guiding principles of the legal aid system and their impact on the CJS as a whole. The discussion within this paper seeks to reflect and take into account the valid concerns of both those who run the CJS and those who are dealt with by it.
  2. Criminal public funding helps defendants to get access to justice. The availability of suitable representation for defendants in criminal trials is of paramount importance in the criminal justice system, as in most circumstances a defendant's rights are easier to safeguard when the defendant has legal representation. But, it has always been the will of Parliament and a cornerstone of the Department's legal aid policy that those who can afford to pay for their defence should do so.
  3. The contribution of legal aid to confidence in the justice system is indirect yet invaluable. Criminal Defence Service (CDS) funding enables people to defend themselves against criminal prosecutions, where the interests of justice require that they get help in doing so, at public expense. A key aim of the criminal justice system must be to dispense justice fairly and efficiently and to promote confidence in the rule of law. It is important, if the system is to be fair and seen to be fair, that the fundamental rights of those people accused of crime should be respected and that they should be treated with fairness and equality.
  4. Presumption of innocence and the right to a fair trial are important principles which go right to the heart of not only the Criminal Justice System, but also the Legal Aid system. People need to be confident not only that those who have committed offences are brought to justice, but also that those who are innocent or against whom the case cannot be proved beyond reasonable doubt, are acquitted.
  5. In addition to the objective of fairness, there are international obligations in the area of criminal defence. Once an accused person is charged, Article 6 of the European Convention on Human Rights provides a defendant with a right "to defend himself in person, or through legal assistance of his own choosing or, if he has insufficient means to pay for legal assistance, to be given it free when the interests of justice so require". The Human Rights Act allows criminal public funding to be means tested.
  6. It is equally important that any new system of grant does not simply add a layer of bureaucracy and, in doing so, release the hidden potential for delay that can easily flow from even the most straightforward and seemingly sensible and well crafted changes to the system. It is not lost on policy officials today that early means tested schemes proved cumbersome and unworkable precisely for these reasons.
  7. Means testing for criminal cases was abolished in 2001 as part of the reforms introduced by the Access to Justice Act 1999. Governed by the Legal Aid Act 1988 and the Legal Aid in Criminal and Care Proceedings (General) Regulations 1989, means testing was a costly and bureaucratic system. The value of contributions collected scarcely paid for the direct costs of the system. Less than 1% of applications were refused legal aid on grounds of means and only 5% of defendants were ordered to make any contribution towards the cost of their legal aid. Statistics from the last three years of legal aid where contributions were collected show that only 0.14% of contributions were made against capital only or income and capital combined (Statistics for 1999 - 2001: total number of applications for this period - 1,003,439 and contributions by capital only or income and capital totalled 1470). The majority of contribution orders were made against income alone.
  8. There were also other indirect costs, such as delays through adjournments, caused by the need to obtain substantial supporting documentary evidence of means before legal aid could be granted. The abolition of the means test does not mean that criminal public funding is available without limit, individuals still have to satisfy the court that it is in the interests of justice that public funding should be granted. See Annex A for details of the interests of justice test.
  9. It is undeniable that one way in which fairness can be promoted is by providing the accused person with access to independent and, if appropriate, free legal advice. But, criminal public funding is by its nature demand led. We cannot control the volume of cases entering the system - responsibility for policing, and the carriage of the criminal law, and the decision to prosecute rest elsewhere. It is only right, therefore, that the government should seek to carefully prioritise legal aid spending.
  10. In this context, it is important to note that the most expensive 1% of cases in the Crown Court consume a disproportionate amount of expenditure - currently 51% of Crown Court expenditure or 24% of the entire CDS budget.
  11. Any new proposals therefore, should seek to manage the very clear tension between protecting the fundamental rights of the individual and the government's responsibility to the taxpayer to achieve improved management control over the legal aid system and the way in which the fund is spent.
  12. Finally, it is worth emphasising that the impetus behind the Bill is not only the need to halt the rising costs associated with criminal legal aid, but also to prevent further erosion into the civil legal aid budget. Any cuts that may have to be made into the civil budget will have serious implications for the wider fight against social exclusion.

Executive summary

Introduction

  1. This consultation paper accompanies the Department for Constitutional Affairs' Criminal Defence Service Bill. Proposals contained within the Bill fall into two parts:
    • the transfer the responsibility for grant of criminal legal aid from the courts to the Legal Services Commission;
    • and introduction of the means test for criminal cases.
  2. The purpose of the Bill is to ensure that the taxpayer receives best value for money from the Criminal Defence Service (CDS). The proposals seek to manage the tension between protecting the fundamental rights of the individual and the government's responsibility to the taxpayer to achieve improved management control over the legal aid system and the way in which the fund is spent.
  3. The purpose of the Criminal Defence Service is to ensure people suspected or accused of a crime have access to advice, assistance and representation, as the interests of justice require. At present, there is no means test for criminal representation or advocacy assistance before a court. Free advice and assistance or advocacy assistance is provided to anyone arrested and held in custody at a police station, or who appears before a magistrates' court or the Crown Court. Where representation is granted for cases that proceed to the Crown Court, the court can order a convicted person to repay all or part of the cost of the case - known as a Recovery of Defence Cost Order.
  4. Although the LSC is responsible for funding under the CDS, it is the courts which are responsible for granting the right to have funding. Most often magistrates' courts do this, even if the case is to be tried in the Crown Court. Grant of public funding is not the core business of courts who are rightly focused on the administration of justice. Courts are not and cannot be expected to be responsible for the monitoring and controlling of publicly funded expenditure.
  5. The policy intention behind the Bill is to enable the power to grant a right to representation to be transferred from the courts to the LSC. This change is aimed at gaining better control over grant because expenditure on criminal representation has been increasing in a seemingly uncontrollable manner. The LSC will be able to issue binding instructions to solicitors in the General Criminal Contract thereby providing greater control of grant, and modern management tools to monitor and control expenditure, so ensuring a consistency that does not currently happen.
  6. To take full advantage of the greater stability, predictability and control that the transfer will afford, the Department seeks a similar level of control over the operation of the means test. The re-introduction of the means test will focus the resources on those that need help the most. Means testing would ensure that those defendants who can afford to pay their legal costs do so, and that those most in need of help continue to have access to justice.
  7. This paper sets out a number of proposals on how the means test may operate. The Bill introduces enabling powers, and detail on how the schemes will operate will be set out in regulation. This paper provides for discussion on the detail of how such a scheme could operate and the impact in terms of efficiency and cost savings each will have on the Criminal Defence Service.
  8. The models try to balance the needs and rights of the individuals against the potential bureaucracy and complexity of the system. It is intended that any test administered by the Commission will be a delegated power to solicitors with a General Criminal Contract. In all the proposed models, public funding would be granted to an individual who has shown that he satisfies the means test, and the interests of justice test. If an individual meets the means criteria, and in addition satisfies the interest of justice test, the solicitor will automatically be able to grant representation and proceed to case preparation immediately and at a far earlier stage than under the current arrangements.

The proposals

History

  1. The proposals for a system of legal aid were first put forward by the Rushcliffe Report in 1945 and enacted in the Legal Aid and Advice Act of 1949. In their conception, the founding principles of the legal aid system were prosaically simple. It was decided that a "judicare system" should be set up whereby lawyers would cater for the needs of the poor as well as the rich. The poor would be able to receive legal advice so as to prosecute and defend a legal right and both counsel and solicitors would benefit from fair remuneration for their services.
  2. Throughout the 1960s and 1970s, legal aid expanded considerably. By the ‘80s and the ‘90s, rising costs had begun to be an issue for the Government. Expenditure in the period between 1985-1986 was £317 million. By 1995-1996, the figure had risen to £1,391 million.
  3. Expenditure this year (2003-04) is £2,084 million. This is £558 million more than in 1997/98 when the Government came to power. During this period expenditure has risen by 37% whilst inflation was only 16% in the same period.
  4. Successive governments have made and implemented proposals to tackle this rate of increase and in 1999, the Labour Government passed the Access to Justice Act.

Access to Justice Reforms

  1. Against the background of rising expenditure, the Government implemented a raft of reforms during 2000 and 2001. The main reforms resulted from the Access to Justice Act 1999 and included:
    • The creation of the Legal Services Commission (LSC) to replace the Legal Aid Board;
    • The removal from scope of personal injury (excluding clinical negligence) and other money claims where alternatives sources of funding exist (i.e. conditional fees, trade union support and legal expenses insurance);
    • The establishment of the Community Legal Service (CLS), including the CLS Fund, which subsumed the old civil legal aid scheme, better focused resources on priority family and social welfare matters;
    • The introduction of a fairer and more consistent framework for financial eligibility for civil and family legal advice and representation;
    • A tightening up of the merits test. The implementation of the Funding Code has meant that weak and non-meritorious cases, as well as the less cost-effective cases, being weeded out of the system.
    • The creation of the Criminal Defence Service (CDS) replacing the old criminal legal aid scheme;
    • Giving LSC greater flexibility to purchase and provide services - e.g. through contracting at pre-determined rates, and from employing lawyers direct (e.g. Public Defender Service).
  2. In addition, the LSC now has a controlled (capped) budget for civil and family Legal Help. This covers initial legal advice and assistance given to clients in all categories of law, and representation at mental health and immigration tribunals. The contract enables the LSC to allocate a fixed number of "matter starts" to each supplier. This allows the LSC to pay a set monthly payment which represents the supplier's average claim rate as those cases are finished and billed. Suppliers are required to report each month how many cases they have commenced. This means that the LSC know the average costs per case, which in turn gives the LSC an accurate budget-planning tool. The Commission are committed to paying for all work reasonably done on "matter starts" which have been approved, but are not obliged to pay for any cases commenced over that limit. Suppliers can ask them for additional "matter starts" if they run low, and the LSC are able to determine how many they can allocate while staying within the allocated budget overall. At the end of each year contract payments are reconciled to suppliers' actual claim rates plus a small contribution to work in progress.
  3. Other reform measures include the introduction of graduated fees for family barristers, the extension of the existing graduated fees scheme for advocates involved in criminal trials from 11 to 25 days, and restriction on the use of QCs in criminal cases.
  4. The main thrust of the reforms has been better targeting and control of civil legal aid, to improve the effectiveness of its contribution to the Government's agenda for tackling social exclusion and protecting the most vulnerable (particularly children and the mentally ill). The extent to which new business is being focused on areas of family and social welfare is illustrated by the following figures: in 1999/00 22% of new business related to personal injury and other money claims, 40% family and 38% social welfare; whereas last year, only 7% of new business related to clinical negligence and other civil claims, 48% family and 45% social welfare.
  5. The Legal Services Commission is responsible for providing funding for legal representation in relation to criminal proceedings by way of the Criminal Defence Service. Similar controls and reforms were introduced for the criminal scheme. Through contracts, solicitors' firms provide defence services ranging from advice at the police station to representation at the magistrates' court.
  6. Individual Case Contracts were introduced for solicitors for Crown Court cases that last 25 days or more or cost over £150,000 to make sure they are managed effectively and that their cost is controlled. For serious fraud cases, the choice of solicitor is generally limited to firms which have met special quality standards to obtain membership of the LSC's Specialist Fraud Panel.
  7. The Legal Services Commission is piloting a Public Defender Service (PDS) over a four-year period. The PDS employs advocates who work only on publicly funded criminal defence cases. The PDS pilot will give the LSC a valuable insight into the costs of running a defence solicitor's office, which in turn will help them to make better decisions about funding criminal defence cases.
  8. In addition to these measures, the Department recently announced changes to the Criminal Defence Service, which were consulted on by both the DCA and the LSC. The proposals include restricting the amount of advice and assistance or advocacy assistance a solicitor can offer to clients in certain circumstances. These measures are intended to achieve better value for money for the taxpayer in relation to public services expenditure.

The Criminal Defence Service - current scheme

  1. The purpose of the CDS is to ensure people suspected or accused of a crime have access to advice, assistance and representation, as the interests of justice require. The levels of service are:
    • Advice and assistance - provides general help on criminal matters. It also provides free advice to anyone being interviewed at a police station in connection with an alleged offence;
    • Advocacy assistance - covers the cost of a solicitor preparing a case and initial representation in certain proceedings. It also provides representation for prisoners facing disciplinary charges before the prison authorities, and for discretionary and automatic lifers and those detained at Her Majesty's Pleasure whose cases are referred to the Parole Board. It also covers representation for those who have failed to pay a fine or obey a court order and are at risk of imprisonment. It also included the court duty solicitor scheme.
    • Representation - provides for the cost of a solicitor preparing a defence and for representation at court, and for applying for bail. If deemed appropriate it also provides for an advocate, particularly if the case is to be heard in the Crown Court. Representation can also cover advice on appeal against a verdict or sentence of the court and for preparing a notice of appeal.
  2. At present, there is no means test for criminal representation or advocacy assistance before a court. Free advice and assistance or advocacy assistance is provided to anyone arrested and held in custody at a police station, or who appears before a magistrates' court or the Crown Court.
  3. An individual may receive advocacy assistance before a Parole Board, or advice and assistance from a solicitor regarding his treatment in prison or other parole review subject to his meeting the financial criteria. An individual will be entitled to advocacy assistance regarding his treatment or discipline in prison or where he is the subject of proceedings before the Parole Board where his weekly disposable income does not exceed £192 and disposable capital does not exceed £3000. An individual will be entitled to receive stand-alone advice and assistance from a solicitor where his weekly disposable income is less than £91 and his disposable capital is less than £1000.
  4. Where representation is granted for cases that proceed to the Crown Court, the court can order a convicted person to repay all or part of the cost of the case - known as a Recovery of Defence Cost Order.

The New Proposals under the Bill

  1. Proposals contained within the Bill fall into two parts, as follows: -

Transfer of Grant of Representation

The Issue

  1. Although the LSC is responsible for funding legal representation under the CDS, it is (subject to a few exceptions) the courts - and not the LSC or the Department - which are responsible for granting the right to have funding. Most often this is done by magistrates' courts, even if the case is to be tried in the Crown Court. Grant of legal aid is not the core business of the courts, who are rightly focused on the administration of justice and the imminent changes to be brought about through the Unified Administration. Courts are not and cannot be responsible for the monitoring and controlling legal aid expenditure. They may also often be unfamiliar with a defendant's circumstances when considering an application for public funding, whereas solicitors are instructed to represent their clients' interests from the outset of a case. This gives the solicitor greater insight in considering the question of grant of criminal public funding.

The Proposed Solution

  1. The policy intention behind the Bill is to enable the power to grant a right to representation to be transferred from the courts to the LSC. The effect of this in operational terms will be that applications for public funding will be made to the Commission. In real terms the LSC will delegate the authority to grant to solicitors with a General Criminal Contract (GCC) in the most simple cases. Details of how the grant will be delegated will be set out in regulations and in the GCC.
  2. This change is proposed as part of a raft of measures aimed at gaining better control over grant because expenditure on criminal representation has been increasing in a seemingly uncontrolled manner. One of the reasons for the increase has been the apparent willingness of courts, especially magistrates' courts, to grant representation orders. There is some evidence that courts have been too favourable to defendants, and certainly inconsistent, in applying the interests of justice test referred to in paragraph 5 of Schedule 3 to the Access to Justice Act 1999. Transferring to the LSC the power to grant representation will enable the LSC to use modern management tools to monitor and control expenditure, ensuring a consistency which does not currently happen.
  3. There will be greater control of grant through the Commission issuing binding instructions to solicitors in the Contract, but solicitors themselves will gain greater flexibility and autonomy through these arrangements. They will have a certainty of knowledge that a decision on grant can be made at a much earlier stage, allowing them to proceed to early preparation of their client's case. Their knowledge of the circumstances of the case and the individual will mean that informed decisions can be made on the issue of grant, not as courts currently do solely based on the application and the often incomplete case papers available at the time. Where the interests of justice are not satisfied or the individual's means are such that he or she is ineligible for public funding, the solicitor will be able to advise the individual whether to proceed by privately instructing a solicitor or by representing him or herself. Decisions about grant will be made in most instances before the first court appearance, therefore not disrupting the courts' business.
  4. The transfer of grant from the courts to the Legal Services Commission will mean that the application of the interest of justice test will be moved away from the courts. If we are to take full advantage of the greater stability, predictability and control that the transfer will afford, then a similar level of control over the operation of the means test is essential and that too could not remain a function of the court.
  5. The grant of public funding in magistrates' courts constitutes on average 4.4% of the cost of administering criminal cases through the courts. Removing grant of criminal public funding from the courts could save an estimated £9m a year. This does not include fixed assets which would not be affected by the transfer of grant. This figure also does not reflect that many individuals involved in the grant are not dedicated exclusively to this task. Crown Court staff have effectively not had to grant criminal public funding since the introduction of the Criminal Defence Service; most grant is made in the magistrates' courts. Savings to be made in the Crown Court by the transfer of grant will be nominal.
  6. We would welcome respondents' views on the following questions:

    7. Question 1. Do you agree that it would be advantageous to transfer the power of grant from the courts to the Legal Services Commission?

    Question 2. Do you agree that solicitors are better placed to conduct the ‘interests of justice' test and grant of the right to representation?

    Question 3. Do you perceive any fundamental disadvantages to a system of ‘self-grant', that is a solicitor granting help to qualifying clients?

    Question 4. Do you perceive any potential for delay or bottlenecks in the proposed system?

Reintroduction of the means test

The Issue

  1. Since April 2001, the numbers of individuals applying for and getting public funding has risen by about 40%. Research undertaken by officials to look into the reasons for the increase, revealed a number of drivers. Narrowing the justice gap has led to more cases being brought before the courts; changes to the sentencing guidelines meant that there is a greater risk of imprisonment for a range of cases, meaning that more cases are likely to pass the ‘interests of justice' test; there is also some evidence that the test has not been applied rigorously in all courts.
  2. Research also showed that there was an increase in the number of applications which could be attributable to the abolition of the means test. While the Department knew the number of defendants who were refused legal aid under the old system due to their means, what was unknown was the number of defendants who did not apply at all.
  3. Since the abolition of the means test many who previously would have been privately represented or who chose to represent themselves have applied for public funding. Individuals would not have applied for legal aid where the case against them was relatively minor, and they were advised by solicitors that they would have been ineligible for legal aid, due to their means. Similarly there is some suggestion that a number of individuals, mostly self employed, who either could not gather sufficient documentary evidence together to support their application or who were reluctant to have officials examine their means, did not apply under the old system.
  4. The number of applications for public funding from these individuals could not have been estimated, and the proportion of the increase attributable to them can also not be measured, but it is reasonable to assume that they attribute in part to the rise in the number of applications since April 2001.

The Solution

  1. The re-introduction of the means test will focus the resources on those that need help the most. However, the Department is aware of the need to ensure that initiatives throughout the Criminal Justice System to remove delay are not hampered by any test we introduce. The Effective Trial Management Programme requires early intervention by solicitors; any delay in grant of funding may affect this programme.
  2. Any test that the Government introduces must balance the priorities of:
    • the need to ensure that help is focused on those that need help the most;
    • the need to protect the fundamental rights of the accused;
    • the need to ensure that the means test does not cause delay in the grant of representation which will increase costs to the criminal justice system as a whole;
    • the need to ensure that the process does not cost more to administer than it saves and demonstrates value for money;
    • the affordability of contributions by the assisted person.
  3. With these priorities in mind this paper proposes a number of models and invites comments on how the new test might operate and the impact in terms of efficiency and cost savings each will have on the Criminal Defence Services and the Criminal Justice System as a whole.
  4. In developing the models for the means test we considered the relationship between criminal and civil funding, and the possibility of simply importing the means test for civil representation. This was discounted on the grounds that the requirements of the two schemes are very different. The state brings a prosecution against an individual. He has no choice other than to enter the criminal justice system, and must have access to independent legal advice. A lawyer can ensure that the defendant's interests are protected by testing the evidence against him or expediting the proceedings to secure the best outcome for his client. Criminal cases are brought quickly to the courts, the means test for criminal grant must therefore be simple, yet robust, and to be able to be administered swiftly so as to avoid delay.
  5. In applying the civil test, the Government's main priority is to use public money to provide help to people who are excluded from society because they are unable to exercise their legal rights. Public funds are targeted on areas of greatest need, such as helping people to secure their basic rights like a decent home and appropriate social security benefits. Cases that raise issues of significant wider public interest are also a priority. All cases must still justify public funding; taking into account their costs, likely benefits and prospects of success, although the tests are less demanding for high-priority cases. The test for civil cases is relatively complex, and would be slower to administer than that for the criminal test. When taking into consideration the need to ensure those that need public funding receive help and that the criminal justice system is not delayed by those waiting to receive public funding, the civil means test was discounted.
  6. It is intended that any test administered by the Commission will be a delegated power to solicitors with a General Criminal Contract. Under proposals set out in the consultation paper ‘Criminal Defence Service: Value for Money', advocacy assistance for early hearings in the magistrates' courts will be abolished. This will enable help to be focused on more serious cases where representation is necessary according to the interests of justice test. The scope of the court duty solicitor scheme will also be restricted to those in custody or to those charged with an imprisonable offence. Solicitors are, therefore, encouraged to apply for representation at the earliest possible stage in the proceedings. If an individual meets the means criteria, and in addition satisfies the interest of justice test, the solicitor will automatically be able to grant representation and proceed to case preparation immediately and at a far earlier stage than under the current arrangements.

Proposed models for the re-introduction of the means test

  1. In order to give the future scheme some meaning and shape, DCA officials have produced a set of indicative models proposing a number of ways in which a means test might be implemented. These are not intended to represent a concluded view but are rather a means of exploring the issues. Nor is it suggested that these models represent the only ways in which the scheme might be implemented.
  2. None of the models should be considered in isolation and it may very well be that the final framework represents a hybrid that borrows thinking from a number of different sources. It should also not necessarily be assumed that we would wish to adopt the same model in both the magistrates' and the Crown Courts.
  3. In all the proposed models, public funding would be granted to an individual who has shown that he satisfies the means test, and the interests of justice test. Where grant was subject to contributions, defendants would have to agree to grant in these terms.
  4. Each of the models explores the tension that exists between fairness and simplicity: that is balancing the needs and rights of the individuals against the potential bureaucracy and complexity of the system.
  5. With all these models, it is proposed that solicitors would be responsible for ensuring that the individual qualified for help and the recovery of contributions. When the case concludes, and the solicitors submit a bill for payment, any fees paid would be less the contribution paid or due from the funded defendant. Where the case is in the Crown Court or exceptionally where counsel is instructed in the magistrates' court, the risk of non collection of the contribution or the payment of only the balance by the LSC will rest jointly between both solicitors and barristers.
  6. Where a defendant has paid a contribution towards his costs, and is subsequently acquitted his contributions will be repaid or where payment has been deferred until the end of the case, any liability to pay those costs will be removed. An acquitted defendant will not be required to pay towards his defence. In these instances the solicitor will submit a bill for full payment.
  7. Solicitors would be expected to take all reasonable steps to ensure that the defendant's means are such that he is entitled to help. Where grant was conditional and evidence was produced to show that the defendant was ineligible the solicitor would be expected to withdraw funding immediately. Similarly, if no evidence was produced following conditional grant, solicitors would be expected to withdraw help before any real expense was incurred.
  8. While the risk will lie between the solicitors and barristers, the control of grant and the means test will be audit controlled. Solicitors will be expected to show that sufficient effort was made to collect reasonable evidence of means. Performance standards would apply to both the grant and the means test, and a sample of files would be monitored for audit compliance. Systematic misapplication of either grant or the means test may lead the LSC to record non-compliance.
  9. Grant would continue for the life of the case other than in circumstances where the defendant has asked for publicly funded representation to be withdrawn, or circumstances mean that the solicitor is no longer able to represent the defendant.
  10. In all the models, we propose that publicly funded representation would be granted to an individual where he has demonstrated that he needs help in meeting the cost of his case, and that it is in the interests of justice.
  11. An individual would be required to provide reasonable documentary evidence of gross household income and capital to show that he qualifies for help. Equity would not be taken into account when considering means.
  12. Solicitors would be able to grant a conditional order subject to evidence of means. Full grant can only be made where evidence of gross income or capital is provided. Solicitors can backdate an order from the date of the original application where the evidence supports the application. Where evidence is not provided within a particular period, representation will be withdrawn.
  13. Solicitors conducting financial assessments for clients for advice and assistance currently require reasonable documentary evidence of earnings. This evidence may be in the form of the most recent tax certificate (P60) or in the form of a single payslip where annual earnings are shown. Where the individual is self-employed, the last tax return would suffice. Where the individual is an intermittent worker or employed on a casual basis, evidence would be required either in the form of a bank statement or benefits received. The Inland Revenue provide details of the Tax Credits that an individual or family are entitled to. Where the applicant has a partner, the solicitor must be satisfied that the gross household income is looked at to determine the level of contribution required from the applicant.
  14. Copies of reasonable evidence would need to be attached to the application form for the LSC to be able to audit the means test, and that the level of grant and contribution due from the LSC and the individual have been correctly calculated.
  15. Individuals, or their partners who are in receipt of a passported benefit, would need to show a benefit book for either Income Support or income-based Jobseekers' Allowance or the tax certificate provided by the Inland Revenue for receipt of the Guarantee Pension Credit.
  16. Similar evidence of capital would be required, either in the form of an annual tax statement, or details of savings accounts.
  17. Where an individual satisfied the means test and the solicitor computed the level of contribution required from the applicant, the Legal Services Commission would pay a ‘grant'. That is the LSC would pay the costs incurred under the representation order less the amount paid or owed by the defendant.
  18. The two clauses in the Bill will bring in their own savings that can be seen separately, but both measures within the Bill need to be considered side by side to make good the Department's estimated savings.
  19. We have predicted savings for all the models, based on a series of estimates, which include the volume of grants in the 12 months prior to the abolition of the means test in April 2001, (and the partial abolition in October 2000) was 426,165 (Oct 1999 - Sept 2000). In the 12 months following the abolition of the means test, the volume of grants rose to 598,422, an increase of 40%. Since this time, the volumes have continued to rise and for the 12 months to December 2003, grant was at 638,538, an overall increase of 50%.
  20. Many factors have been cited as having increased the volume of grant, the most notable being Government initiatives aimed at narrowing the justice gap. However, the overall number of cases being heard in the magistrates' courts has only seen a modest increase, although there was a sizeable shift of 60,000 cases from summary motoring to summary non-motoring. If this increase was attributable to government initiatives and all the new cases would have been eligible for public funding before April 2001, which is unlikely, the vast majority of the increase in grant is still unaccounted for.
  21. Other factors that may attribute to the increase cannot be quantified, such as changes to the sentencing guidelines, new procedures in the Probation Service for dealing with breach of community sentences, and the impact of the Human Rights Act. Overall, it is likely that the impact of any of these other factors is not that large and do not account for the overall increase in the number of grants. Prior to April 2001, there has never been a comparable increase in the number of grants despite other initiatives being introduced which would have had an impact on public funding. However, in order to allow the Department to estimate the impact of re-introduction the means test, we can assume that a sizeable proportion of the increase is attributable to the abolition of the means test. It is likely that between 75,000 and 150,000 grants arose as a result of the abolition of the means test.
  22. We would welcome respondents' views on the following questions:

    23. Question 5. Which of the models below do you believe represents the best balance between operational simplicity and fairness to the client?

    Question 6. Do you believe that the reinstatement of a test of financial eligibility would cause delay?

    Question 7. Do you believe that the reinstatement of a test of financial eligibility would in any way affect access to justice?

    Question 8. Do you have any additional comments on the models?

Model 1

Framework

  1. The first model is a return to the test under the under the legal aid arrangements. It develops the original means test but aims to reduce the level of bureaucracy associated with its operation.
  2. As currently designed there is not an upper income limit within these arrangements, where an individual may not qualify for help, as under the old legal aid arrangements, solicitors will be required to assess whether an individual could afford to pay for the case without recourse to public funds.
  3. There is an upper capital limit where an individual may not qualify for help. The value of the equity in the property would not taken into account.
  4. To demonstrate that an individual lacks the means to pay for his own assistance, he would be required to complete a means form detailing his income and expenses and provide supporting documentary evidence. Depending on the outcome of these enquiries, an individual would receive help that was either free (i.e. with a nil-contribution) or required a contribution or he would not qualify for help at all.

Eligibility Criteria

  1. This model is loosely based on the old contribution system that existed under criminal legal aid. The means test includes reference to the outgoings or allowances that an individual may have, and so has a level of complexity that means that it will be costly to conduct and has the potential to cause delay. Any contribution payable by the individual is subject to case type, which means that solicitors will have to assess the complexity of the case prior to grant, again building in a degree of risk to themselves and delay into the system.
  2. The average cost of a case in the magistrates' court in 2002/03 was £515. Based on the assumptions above re-introducing the means test could lead to a saving of between £39m and £77m. After April 2001 costs from central funds for magistrates' cases decreased by approximately £15.2m. It is anticipated that this amount would be offset by the reintroduction of the means test, leaving net savings of between £23.8m and £61.8m.
  3. Prior to the abolition of the means test, about 5% of recipients of legal aid in the magistrates' court were required to pay a contribution. It is anticipated that the proposals set out in this model would lead to a similar proportion of legal aid recipients being required to pay a contribution. This suggested that about 26,000 defendants would be required to pay an average contribution of a little over £50. However, those acquitted will be able to claim their contribution back. The gross contributions are likely to be £1.4m with maybe £0.4m being refunded, leaving a net contribution of £1m.
  4. The number of payments from central funds for Crown Court cases has fallen by about 1500 per year since the abolition of means testing. Acquittal for all charges occur in about 21% of cases in the Crown Court, which suggests that about 7000 cases which previously would have been privately funded are now attracting legal aid. In the Crown Court defendants would have 90% of their costs covered, with a cap of £2000 maximum on contributions. It seems unlikely that the reduction in the number of privately paying clients would be reversed under this model. Any savings from reduced grant are likely to be negligible. However, we would expect to see a greater number of defendants contributing.
  5. It is difficult to estimate with any certainty the number of defendants that would be required to pay a contribution in the Crown Court, or what they would pay on average. Approximately 1% of defendants (750) contributed towards their cost prior to the abolition of means testing. If we assume that the 7000 increase in privately funded defendants would remain publicly funded, as there is no incentive to not seek publicly funded representation, then this suggests that about 7,750 defendants would pay on average £500. This gives a total net contribution, after refunds for acquitted defendants, of about £3m.
  6. Overall the reintroduction of the means test could amount to a savings between £23.4m and £61.2m with receipts of contributions of about £1m in the magistrates' court, with contributions of about £0.3m in the Crown Court, giving the Department overall savings of between £27m and £66m. The middle figure for estimated savings is £47m.

Flowchart for model 1

Model 2

Framework

  1. Individuals in receipt of a means tested benefit would automatically satisfy the means test, although documentary evidence would still be required. Individuals would need to show evidence of gross household income prior to grant in all other instances. Evidence of capital would also be required.
  2. Indictable only cases that are sent to the Crown Court under Section 51 of the Crime and Disorder Act 1998 will not be means tested before grant. Grant will be subject only to the interests of justice test. These cases will be subject to an RDCO at the conclusion of the case.
  3. Where the defendant is ineligible for public funding due to his means in the lower court and his case is committed to the Crown Court for trial, the defendant could reapply for public funding, either after the plea before venue hearing in the magistrates' court or at any time after venue has been decided.
  4. This model has the benefit of simplicity. Individuals are only required to show evidence of gross household income and no outgoings or allowances. Solicitors would not be required to conduct a means test to determine the level of grant that the LSC may pay towards the case minus the contribution from the defendant. Individuals in receipt of gross household income of more than £25,000 may not be able to afford the full costs of a case where funding has been refused, but could afford to pay a contribution towards the costs.
  5. Under this model we would also expect to see between 75,000 and 150,000 fewer defendants in receipt of legal aid in the magistrates' court and a commensurate rise in payments from central funds of £15.2m (leading to a net saving of between £23.4 and £62m). However, unlike under model 1, under this model we would not see any contributions but defendants with an annual income of over £25,000 would not be entitled to legal aid. We estimate that this would lead to about 4,000 fewer grants for legal aid with a net saving of around £1.4m per annum.
  6. This model does not result in any changes to the grant of legal aid or the contributions required to the current to those currently in place and we would not expect to see any change in costs in the Crown Court.
  7. It is estimated that the overall impact of model 2 would be a saving of between £25m and £62m with a mid point of £39m.

Flowchart for model 2

Model 3

Eligibility criteria

  1. In the magistrates' court:
    • an individual would qualify for free help where he or his partner were in receipt of a means tested benefit, as described above. Similarly, an individual would also qualify for free help where he could show that his gross household income was below £10,000 (£10,000 roughly equates to the annual minimum disposable income under civil eligibility rates);
    • an individual would qualify for help with a contribution of £75 where his gross household income is between £10,000 and £15,500 (£15,500 roughly equates to the annual maximum disposable income under civil eligibility rates);
    • an individual would qualify for help with a contribution of £150 where his gross household income is between £15,501 and £20,000;
    • an individual would qualify for help with a contribution of £225 where his gross household income is between £20,001 and £25,000 (£25,000 - ONS national average income including full and part time work);
    • an individual would qualify for help with a contribution of £300 where his gross household income is between £25,001 and £30,000 (£30,000 - earnings for higher tax bracket);
    • an individual would be ineligible for publicly funded representation where his gross household income was over £30,001, or his gross capital was over £5,000.
    • Where capital is less than £5,000 only an individual's gross income is considered for the contribution.
  2. Payment could be deffered for a determined period where a contribution was tied up, but payment would be required before the case in the magistrates' court. Representation would be withdrawn if payment was not forthcoming.
  3. For cases that progress to the Crown Court, the same means test would apply but there would not be an upper income limit. The following limits would apply:
  4. An individual would qualify for help where his gross household income was between £30,001 and £44,999 subject to a contribution of a third of the gross income above £30,001. For example, an individual with a gross household income of £36,000 would be required to pay a contribution of £2,000. [£36,000 - £30,000 = £6,000 x 33.33% = £2,000]. The maximum an individual would be required to pay as a contribution would be £4,999. Where the total costs of the case were less than this amount, the individual would only pay the costs of the case.
  5. An individual would qualify for help where his gross household income was £45,000 or above, but he would be required to pay the total costs of his case or £5,000 whichever was the lower.
  6. Where publicly funded representation is granted but at the time of grant it is not clear whether the costs of the case would exceed £5,000, payment can be deferred until after the case.
  7. Cases that are or are likely to become Very High Cost Criminal Cases will not be means tested and will be subject to an RDCO at the end of the case. The means of the defendants in these cases will be subject to investigation by the Special Investigations Unit at the Legal Services Commission and the report will be handed to the judge in the usual way.
  8. Where an either-way case progresses to the Crown Court, an individual's gross household income may mean that he was ineligible for publicly funded representation in the magistrates' court. However, following the plea before venue hearing or after the case was committed to the Crown Court, he could reapply for representation, and would not be subject to the upper income eligibility limit. The contribution would be calculated in the usual way. Cases that are indictable only would only be subject to the Crown Court eligibility rules from the outset.
  9. Under this model we would also expect to see between 75,000 and 150,000 fewer defendants in receipt of legal aid in the magistrates' court and a commensurate rise in payments from central funds of £15.2m (leading to a net saving of between £23.4 and £62m). The contributions are likely to be higher on average than under model 1. It is estimated that the average contribution would be a little over £150 leading to a net contribution of £2.9m.
  10. Expenditure in the Crown Court has also risen sharply since the abolition of the means test. The number of payments from central funds has fallen by about 1500 cases per year since this time. Acquittal for all charges occur in about 21% of cases in the Crown Court, which suggests that the number of cases which previously would have been privately funded was about 7000 higher. The average cost of these privately funded cases was £5 - £6,000. Private rates are probably 50% higher than legal aid rates. In addition some £89m of legal aid goes towards defendants committed to the Crown Court for sentencing and £32m goes towards defendants appealing against the magistrates' court decision (of which about 40% are successful). Some of these cases would also return to private funding if a means test were to be re-introduced. Overall, it is estimated that savings from reduced legal aid spend in the Crown Court would be in the region of £34m a year. There will be an increase in costs to central funds where individuals in the Crown Court are privately represented, suggesting a net saving of about £26m.
  11. If we also assume that the proportion contributing return to their pre-abolition levels of 1% and that the average level of contribution will be £2000, this translates into a total net contribution of £1.5m.
  12. It is estimated that over all model 3 would result in savings of between £45m and £93m for the legal aid budget, with a mid point estimate of £69m.

Flowchart for model 3


Annex A - Interests of justice test

Interests of justice test

Criteria for grant of right

The test is set out in Paragraph 5 of Schedule 3 to the Access to Justice Act 1999.

  1. Any question as to whether a right to representation should be granted shall be determined according to the interests of justice.
  2. In deciding what the interests of justice consist of in relation to any individual, the following factors must be taken into account -
    1. whether the individual would, if any matter arising in the proceedings is decided against him, be likely to lose his liberty or livelihood or suffer serious damage to his reputation,
    2. whether the determination of any matter arising in the proceedings may involve consideration of a substantial question of law,
    3. whether the individual may be unable to understand the proceedings or to state his own case,
    4. whether the proceedings may involve the tracing, interviewing or expert cross-examination of witnesses on behalf of the individual, and
    5. whether it is in the interests of another person that the individual be represented.
  3. The Lord Chancellor may by order amend sub-paragraph (2) by adding new factors or varying any factor.
  4. A right to representation shall always be granted in such circumstances as may be prescribed.

Annex B - Categories and types of proceedings

Categories and types of proceedings

Category 1

Category 2

Category 3

1.1 guilty pleas

2.1 contested trials

3.1 committal proceedings including those which are discontinued or withdrawn

1.2 uncontested proceedings arising out of a breach of an order of a magistrates' court (including proceedings in a magistrates' court relating to a breach of Crown Court community punishment order or suspended sentence)

2.2 proceedings which are listed and fully prepared for trial in a magistrates' court but disposed of by a guilty plea on the day of trial before the opening of the prosecution case.

3.2 proceedings transferred under Section 4 of the Criminal Justice Act 1987 or Section 53 of the Criminal Justice Act 1991.

1.3 proceedings (other than committal proceedings) which are discontinued or withdrawn.

2.3 proceedings which were listed and fully prepared for trial in a magistrates' court but are discontinued or withdrawn or where the prosecution offers no evidence or which result in a bind over on the day of trial before the opening of the prosecution case.

1.4 proceedings (other than committal proceedings) relating to summary or either way offences which result in a bind over.

2.4 contested proceedings relating to a breach of an order of a magistrates' court (including proceedings relating to a breach of a Crown Court community rehabilitation order, community punishment order or suspended sentence).

1.5 proceedings arising out of a deferment of sentence (including any subsequent sentencing hearing) under Section 1 of the Powers of the Criminal Courts (Sentencing) Act 2000.

2.5 proceedings where mixed pleas are entered.

Proceedings not listed in the table above fall outside the standard fee scheme and a non-standard fee must be claimed by the solicitor.

Questionnaire

We would welcome responses to the following questions set out in this consultation paper:

Question 1. Do you agree that it would be advantageous to transfer the power of grant from the courts to the Legal Services Commission?

Question 2. Do you agree that solicitors are better placed to conduct the ‘interests of justice' test and grant of the right to representation?

Question 3. Do you perceive any fundamental disadvantages to a system of ‘self-grant', that is a solicitor granting help to qualifying clients?

Question 4. Do you perceive any potential for delay or bottlenecks in the proposed system?

Question 5. Which of the models below do you believe represents the best balance between operational simplicity and fairness to the client?

Question 6. Do you believe that the reinstatement of a test of financial eligibility would cause delay?

Question 7. Do you believe that the reinstatement of a test of financial eligibility would in any way affect access to justice?

Question 8. Do you have any additional comments on the models?

Name:

Date:

Organisation:

Address:

If you are a representative of a group, please give a summary of the people and organisations you represent:





Please send your completed response by 6 August 2004to:

Miss Hannah McMinn
Department for Constitutional Affairs
Criminal Defence Service
3rd Floor
Selborne House
54 Victoria Street
London SW1E 6QW
Tel: 020 7210 8552
Fax: 020 7210 8729
Email: Miss Hannah McMinn

Annex C - Partial regulatory impact assessment

Proposed Changes to the Criminal Defence Service

Purpose and intended effect of measure

  1. The reasons behind bringing change to the Criminal Defence System is to ensure that the taxpayer receives best value for money from the Criminal Defence Service (CDS) - formerly criminal legal aid. It is proposed to transfer the grant of criminal public funding from the courts to the Legal Services Commission (LSC) and introduce a test of financial eligibility prior to grant of criminal public funding.
  2. The availability of suitable representation for defendants in criminal trials is of paramount importance in the criminal justice system, as in most circumstances a defendant's rights are easier to safeguard when the defendant has legal representation. But, it has always been the will of Parliament and a cornerstone of the Department's legal aid policy that those who can afford to pay for their defence should do so.
  3. Subsequent to any change introduced in legislation, we propose to draft regulations and amend the General Criminal Contract to support the enabling powers introduced by the CDS Bill to:
    1. Transfer the power to grant the right to representation in criminal proceedings to the LSC;
    2. Allow the LSC to delegate the authority to grant to solicitors that have a General Criminal Contract;
    3. Provide detail of the assessment of an individual's financial resources prior to grant of the right to representation;
    4. Provide the power to assess a contribution from an assisted person to be recovered where a right to representation has been granted;
    5. Provide for the Recovery of Defence Costs Orders (RDCOs) to continue alongside the means test and the subsequent power to order contributions in a certain category of case.
  4. Transferring the grant of criminal public funding to the Legal Services Commission will give greater consistency to decisions to grant and so aid savings. Similarly, a financial eligibility test prior to grant will also provide savings. It will mean that those defendants who can afford to pay for representation shall do so, while focusing resources on those that need help the most. The two changes must be taken together for the savings to be realised.

Devolution

  1. This change applies to England and Wales only.

Background

  1. Although the LSC is responsible for funding legal representation under the CDS, it is (subject to a few exceptions) the courts - and not the LSC or the Department - which are responsible for granting the right to have funding. Most often this is done by magistrates' courts, even if the case is to be tried in the Crown Court. Grant of legal aid is the not the core business of the courts, who are rightly focused on the administration of justice. Courts are not and cannot be expected to be responsible for the monitoring and controlling legal aid expenditure.
  2. The policy intention is to enable the power to grant a right to representation to be transferred from the courts to the LSC. The effect of this in operational terms will be that applications for public funding will be made to the Commission. In real terms, the LSC will delegate the authority to grant to solicitors with a General Criminal Contract (GCC) in serious cases.
  3. Transferring to the LSC the power to grant representation will enable the LSC to use modern management tools to monitor and control expenditure, ensuring a consistency which does not currently happen.
  4. There will be greater control of grant through the Commission who will be able to issue binding instructions to solicitors in the Contract, but solicitors themselves will gain greater flexibility and autonomy through these arrangements. They will have a certainty of knowledge that a decision on grant can be made at a much earlier stage, allowing them to proceed to early preparation of their client's case.
  5. The transfer of grant from the courts to the Legal Services Commission will mean that the application of the interest of justice test will be moved away from the courts. If we are to take full advantage of the greater stability, predictability and control that the transfer will afford, then a similar level of control over the operation of the means test is essential and that too could not remain a function of the court.
  6. Expenditure on criminal legal aid in 2002/03 exceeded original provision by more than £140 million. The numbers of individuals applying for and getting public funding had risen by about 40%. Research has revealed a number of drivers: Narrowing the Justice Gap has led to more cases being brought before the courts; changes to the sentencing guidelines have meant that there is a greater risk of imprisonment in a range of cases, meaning that more cases are likely to pass the ‘interests of justice' test; there was also some evidence that the test was not being applied rigorously or consistently in all courts.
  7. The re-introduction of the means test will focus the resources on those that need help the most. However, the Department is aware of the need to ensure that initiatives throughout the Criminal Justice System to remove delay are not hampered by any test we introduce.

Risk assessment

  1. The principle risk that the proposed changes to the CDS are intended to address is to halt the rising costs associated with criminal legal aid, the direct corollary of which is likely to be erosion into the civil legal aid budget. Any cuts that may have to be made into the civil budget will have serious implications for the wider fight against social exclusion.
  2. A further risk is the erosion of public confidence in the legal aid scheme if relatively trivial cases are seen to receive publicly funded legal aid, or defendants who can afford to pay for their own representation receive the Right to Representation paid for by the taxpayer. The underlying principle the Bill is designed to support is that only cases of appropriate seriousness should receive publicly funded legal aid, and those who can afford to pay for their defence should do so.

Options

  1. DCA has considered achieving these objectives by means of the following options:

    2. Option 1 - Do Nothing;
    Option 2 - Introducing a voluntary code of practice; self-regulation and an information and education campaign for both courts and solicitors;
    Option 3 - Introducing legislation to transfer the grant of criminal public funding from the courts to the Legal Services Commission and introducing a financial eligibility test prior to the grant of criminal public funding.

    The benefits and costs associated with each of these options are discussed in turn below.

Option 1 - Do Nothing

  1. DCA has proposed changes to the CDS in order to address a large overspend on the legal aid budget and to assure the public that publicly funded representation is made available only to those who most need it. Making no change to the CDS would mean that the overspend on legal aid would still exist, and would probably continue to rise, and therefore would need to be addressed by making savings from other areas of legal aid, such as the Community Legal Service (which has a key role in helping some of the most disadvantaged members of society and reducing social exclusion).
  2. This option would also have the effect of maintaining a situation in which publicly funded representation continues to be provided in cases where we do not consider the interests of justice merit it (typically in circumstances where there is no possibility of a custodial sentence being passed). This would also not deliver the objective of ensuring public confidence that public funds are being targeted where they are most needed.
  3. There would be no additional costs associated with following this option, but it would not deliver any savings to the legal aid budget and consideration would have to be given to reducing the overspend by delivering cuts to other services.
  4. This option does benefit from the fact that there would be no costs (associated with becoming familiar with regulatory changes) to business, charities, the public sector or the voluntary sector.

Option 2 - Introducing a voluntary code of practice; self-regulation and an information and education campaign

  1. Implementing this option would avoid the need to place an additional regulatory burden on businesses. The transfer of grant of criminal funding from the courts to the Legal Services Commission and the introduction of a means test will impact individual solicitors' firms. Rather than introduce changes to the grant of criminal public funding through legislation, guidance could be issued to courts to help them administer the Interests of Justice test so that decision making could be applied consistently. Specific guidance could be offered as to where grant should or should not be made so that cases which are not serious, nor where there is any real risk of imprisonment, do not receive public funding.
  2. The DCA regularly provides guidance to courts on the grant of criminal public funding, to improve the level and consistency of compliance with regulations by highlighting good practice and setting out the main considerations in areas where discretion may be exercised. The guidance is not binding in any way, as the granting authorities are able to exercise their discretion in accordance with the statutory provisions. The grant of criminal public funding is not the core business of the courts, who are rightly focused on the administration of justice. Courts are not and cannot be expected to consider legal aid expenditure when dealing with individuals who have been brought before them for committing a criminal offence.
  3. There would be no guarantee that new guidance would achieve the savings required to bring the legal aid budget back on to a sustainable basis. While it might mean that legal aid funding would no longer be available to cases that do not meet the interests of justice, it would not control the budget by requiring that those who can afford to pay for their own representation do not receive public funds.

Option 3 - Introducing legislation to transfer the grant of criminal public funding from the courts to the Legal Services Commission and introducing a financial eligibility test prior to the grant of criminal public funding.

  1. Primary legislation is required to enable the transfer of grant to the Legal Services Commission and to introduce a financial eligibility test. New regulations and changes to the General Criminal Contract would need to be made to allow the changes to be implemented. These proposals seek to manage the tension between protecting the fundamental rights of the individual and the government's responsibility to the taxpayer to achieve improved management control over the legal aid system and the way in which the fund is spent.

Business sectors affected

  1. By transferring the grant and reintroducing the means test to support this measure, every firm with a General Criminal Contract will be affected. There are currently around 2730 solicitor offices with a General Criminal Contract in England and Wales.

Equity and fairness

  1. It is difficult to identify whether some firms will be affected more than others, as this will be dependent on the type work that they undertake. For example, firms who do a greater proportion of straightforward matters at the magistrates' courts may be more affected than firms that do more serious matters in the Crown Court. Similarly reintroducing the means test may affect firms with offices in more affluent areas; individuals may become ineligible for public funding but will be prepared to pay private rates.

Question: Stakeholders are invited to comment on the perceived impact that the reintroduction of the means test will have on these areas.

  1. Details of how the means test will be applied will be set out in regulations and a further impact assessment will be prepared when the regulations are drafted and more detail is available. Any savings will be made up of collected contributions and the assumption that there would be a reduction in the number of applications made for public funding as a consequence of the reintroduction of the means test.
  2. The transfer of grant would introduce greater control over the grant of public funding. The savings for courts would largely be in the magistrates' courts where the majority of applications for public funding are made.

Question: Stakeholders are invited to comment on our analysis here. Do you agree with our view?

Costs/Impact upon viability

  1. Solicitor firms will need to become familiar with the changes and there will need to be changes to internal procedures to accommodate them. There will be an impact on solicitors advising clients to apply for representation, as they will be familiar with the circumstances of the case prior to grant. There will also be an impact on the way solicitors submit claims for payment, as the contribution due from an individual will be recoverable by the solicitors firm, with the Commission paying the balance of the costs. Changes will need to be made to how solicitors manage means information and recover the contributions, which may impact on the software used in solicitors' offices and the way in which the Commission conducts the audit process. It is estimated that the costs involved in this will be up to £1,000 per supplier.

Question: Stakeholders are invited to comment on this estimate. Is this figure reasonable? What would this sum include for practitioners?

  1. The Legal Services Commission has estimated that the transfer of grant to their control would cost about £800,000 to set up with running costs of £400,000 a year. Start up costs include staffing costs, IT development, recruitment, training and equipment.
  2. It is not possible to state definitively that there will be no impact upon the viability of solicitor's firms - this would depend on the proportion of their income that is derived from publicly funded work and how reliant the firm is on publicly funded Criminal Defence Service work in particular. It is possible that the changes could result in some firms abandoning publicly funded work (and switching instead to work with private clients). It is more likely that solicitor firms doing a range of other work and a relatively small amount of criminal work will make this decision rather than larger specialist firms. This may result in a reduction in supply in some areas.

Question: Stakeholders are invited to comment on this supposition. Do you agree or disagree? Please provide reasons for your view.

Costs on voluntary sector

  1. It is difficult to quantify what costs will fall on voluntary sector (e.g. Citizens Advice) as a result of these proposals. It is possible that Advice Agencies would experience an increase in individuals seeking advice on a criminal matter. This is most likely to be limited to the small number of cases where a Representation Order is refused and the individual decides to represent himself. By the time the Bill is enacted post charge advice and assistance given by solicitors will no longer be available. However, it is possible that a defendant refused funding on means or merits or required to pay a contribution, may seek advice from a voluntary sector organisation. Following on from consultation, further analysis of the impact on the numbers of individuals affected by the introduction of the means test will be possible.

Question: Stakeholders are invited to comment on this assessment.

Consultation with Small Business: the Small Firms Impact Test

  1. The Department is currently working with the Small Business Service (SBS). Based on the information presented in this RIA, the SBS are content that there appears to be no significant or complex impact on small firms in general. However there may be effects on small partnerships of solicitors who specialise in criminal defence service work.

Competition

  1. The Department applied the Competition Filter test, which showed that the proposals are likely to have little or no effect on competition for solicitors' firms. No one firm has more than 10% of the anticipated market, and existing firms will not be at an advantage over new or potential firms. Following consultation, when the detail of the proposals are developed, it will be possible to assess whether the proposals will lead to a change in the number or size of existing firms.

Question: Do stakeholders agree with the view set out here?

Enforcement and Sanctions

  1. The Legal Services Commission will be responsible for the introduction of the changes and will control the implementation through the General Criminal Contract. Enforcement of the powers that the Bill will introduce will be through audit of solicitors firms with a Contract. Failure of an audit or the terms of the Contract may result in termination of the Contract.

Monitoring and Review

  1. The Legal Services Commission will be responsible for monitoring the impact of the proposals and reviewing whether the proposals are successful in reducing the rise in expenditure associated with criminal public funding and reducing the loss of public confidence in the Criminal Justice System.
  2. The LSC are currently considering monitoring processes to be put in place within 6 months of the proposals being implemented and are planning to review the overall effectiveness over the next spending review period. These plans, which are ongoing, will be developed as appropriate along with the proposals outlined in this RIA .

Impact upon the Public Sector

  1. The impact upon the public sector is most likely to be experienced by court staff, as there is likely to be a small increase in the number of defendants appearing without legal representation.
  2. In the 12 months up to December 2003 there were over 630,000 representation orders granted in the magistrates' court. During this period there were over 1,838,000 defendants proceeded against at magistrates' courts. That is two thirds of defendants appearing in the magistrates' courts are currently unrepresented or pay privately. This suggests that the magistrates' courts are already adept at dealing with the delay caused by un-represented defendants, and a rise in the number of defendants not publicly funded will have a minimal impact.
  3. Early calculations of the numbers affected by an increase in the numbers of unrepresented defendants, based on numbers of defendants who previously paid a contribution under the old legal aid scheme, and average income, suggests that only 0.14 defendant per day per court would be unrepresented. The cost to the public sector would be minimal. When the scheme is developed following consultation, further analysis of the impact will be determined.

Question: Stakeholders are asked to comment whether they agree with this assumption.

  1. Any delay to the criminal justice system will be minimal as decisions on grant and eligibility will be made prior to the first hearing, so individuals will not require adjournments to seek advice or representation. There will be no delay in determining an individual's eligibility before the case can proceed.
  2. There will be an impact on court staff who currently determine whether publicly funded representation will be granted, in so far as the task will be removed. Further analysis of what this impact will be will be determined alongside policy officials considering the impact of the Unified Courts Administration.

Question: Do stakeholders have any views as to the impact of the proposals on the courts?

Consultation

  1. DCA are consulting on the details of these proposals. A full list of the consultees is available on request, but copies of the consultation paper are being sent to the judiciary, Law Society and Bar Council and other professional and representative bodies; Citizens Advice, HM Treasury, Cabinet Office, Home Office, Crown Prosecution Service, Justices' Clerks Society, Legal Services Commission, and the Whitehall Prosecutors' Group.
  2. The RIA will developed further in light of the consultation responses and the development of the scheme. Further analysis of the impact on a number of areas will be possible when the detail of the scheme has been decided.

Recommendation

  1. Option 1 - Doing nothing is not an option - the legal aid overspend needs to be addressed, and a failure to achieve savings in CDS would require equivalent (and socially more damaging) cuts in other areas of legal aid.
  2. Similarly, Option 2 self-regulation would fail to guarantee the objectives could be achieved, and the voluntary nature of such a scheme would be likely to result in a staff-time burden upon solicitors firms (as discussed above).
  3. Option 3 is the preferred route. Introducing primary and secondary legislation allows the objectives to be achieved. The overspend will be addressed by transferring grant to the Commission who will be able to monitor the grant of public funding, and issue binding instructions through the Contract. Similarly the means test introduced through regulations will mean that those defendants who can afford to pay for their own representation no longer receive help paid for by the taxpayer.

 

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