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Jonathan Djanogly backs reform of legal aid but believes it could be more efficient with a single-fee structure

27th June 2013

Jonathan Djanogly broadly supports the Government’s reform of legal aid but calls for a single-fee structure which will provide a more flexible, efficient and sustainable platform for criminal legal aid provision.

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Mr Jonathan Djanogly (Huntingdon) (Con): I declare any interest I might have as a practising solicitor, although not one who has ever done any legal aid paid work.

The Government have given a very clear explanation of how, under any reckoning, this country spends by far the most of any in the world on legal aid and will still do so after these proposed savings, which have to be made in these times of tough spending decisions.

Let us first acknowledge that the difficulties in providing criminal legal aid are not new. Indeed looking through my old notes for the debate, I found my question asking a Justice Minister in the previous Labour Administration what he was going to do about the then crisis, with barristers going on strike, some 25% of criminal law firms having closed shop in the previous four years and rates having been frozen for a decade. The then Labour Government acknowledged that the system was unsustainable and prepared, but subsequently failed, to introduce contracts for criminal legal aid tendering. Admitting their inability to reform the system, they then went for the relatively easy route of making savings through further rate cuts.

Even then, the Labour Government were so frightened of initiating the cuts that they organised them to take effect after the general election. That was the position that this Administration inherited and one of the main reasons why we decided to reform civil legal aid first to allow the criminal legal aid market to settle after Labour’s cuts.

Steve McCabe (Birmingham, Selly Oak) (Lab): I have no argument about whether the savings should be made, but why does the hon. Gentleman think it is right to have a widespread attack on legal aid when the chair of the Criminal Bar Association has said that banking fraud cases are taking up 45% of the legal aid budget?

Mr Djanogly: They do. The consultation considers very high cost cases and identifies them as a specific area that needs to be looked at. I agree with that.

During debates on what is now the Legal Aid, Sentencing and Punishment of Offenders Act 2012, Labour spokesmen were saying that we should be looking at making savings by contracting criminal legal aid rather than touching civil legal aid. Now it seems that they have made another U-turn and are saying that they do not want criminal contracting at all. The position of Labour Members is not only inconsistent but deeply irresponsible, because they still acknowledge the need for legal aid savings but do not have a clue how to deliver them in practice. That is not the position of a party that can be serious about government.

Jake Berry: The criminal legal aid solicitors to whom I have spoken in my constituency have said that they would prefer a further cut in their rate to the structural changes the Government are talking about, because those structural changes mean that a solicitor in Rawtenstall has to travel to Blackpool to go to the police station. that is completely unsustainable.

Mr Djanogly: Further cuts in the rate are the easy option. The market is out of sync with the legal profession and it needs reform.

My theory is that Labour’s contracting proposals failed because they not only succumbed to the reactionary wing of the legal profession but shied from the bottom line facts of criminal legal aid contracting, which are that in order to get efficiencies and savings, contracting will always involve fewer but larger practices operating over a larger area. If the market is to be sustainable, there must be fewer firms each receiving a larger slice of the remaining pie.

Although I support the Government’s consultation and the contracting proposals in general, my personal view is that we are missing an opportunity radically to restructure the market and bring it into line with modern practice norms. At the core of that lies the need to consider the type of organisation that can bid and how they are paid. The historic position in England and Wales is that the client instructs a solicitor and then, particularly for more complicated advocacy, the solicitor employs a barrister. That involves two fees and I would strongly advocate moving to a single fee.

Karl Turner: I wonder whether the hon. Gentleman has read the consultation document. The proposals are very different from what the previous Government proposed under best value tender. There are major constitutional differences in these proposals that will ruin the entire criminal justice system.

Mr Djanogly: The previous Government were considering contracting, as were Labour Front Benchers during this Parliament. We need to appreciate that the Legal Services Act 2007, brought in by the previous Government with Conservative support, has transformed the potential for legal service provision. To cut a long story short, there is now no reason why solicitors and barristers should not go into partnership together, or indeed, with non-legal organisations, via alternative business structures. There is no reason why barristers should not take instructions direct from the client nor any reason why barristers should not themselves bid for contracts and employ solicitors. In practice, there have been blockers to this kind of progress, not least a barrister regulator that seems unable to see the writing on the wall for its own profession.

If I seem radical, I am explaining a scenario that would seem more or less natural to most Commonwealth common law countries.

Mr Bellingham: On a point of order, Madam Deputy Speaker. I am sorry, but the right hon. Member for Tottenham (Mr Lammy) is on the move again. Surely right hon. and hon. Members should always stay in their seat and listen to the speech immediately after their contribution.

Madam Deputy Speaker (Dawn Primarolo): The courtesies of the House are that a speaker should remain for the next two speakers, having contributed to the debate. It is regrettable. I did not see him move again, but I am sure that someone from the Opposition Benches will ensure that he returns quickly to hear the debate. Sorry for the interruption, Mr Djanogly.

Mr Djanogly: To retain the two-fee structure sends the wrong message either that the outdated current system can adapt to contracting or that it will soon be reversed and be back to inefficient business as usual. In the longer term both are unsustainable.

The legal profession, from mediaeval times, has always been against change. Most significant legal reforms emanate from Parliament. Our job is to create a marketplace for the future, not for the past. I support the Government’s proposals, but I recommend that we look again at bringing in a single-fee structure. Yes, that will force significant changes to criminal legal practice, but in the longer term it will provide a more flexible, efficient and sustainable platform for criminal legal aid provision.

I end by noting that it was not just the Labour Government’s inability to reform that constituted their failure but their shocking inability effectively to process legal aid payments and to monitor fraud and auditing systems. In all seriousness, when I started at the Ministry of Justice, the previous Minister had hardly been on speaking terms with the Legal Services Commission, and the delays and inefficiencies of the processing of claims, including criminal claims, were very serious indeed. Much of the processing has now been dramatically improved. The accounts published only this week are the first not to have been qualified in five years, and I congratulate the MOJ on that achievement. Significant savings have since been made by abolishing the LSC and reintegrating legal aid into the MOJ.

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