Court Closures and the Two Tier Contract

This week, the Ministry of Justice announced a consultation on plans to close 91 courts and tribunals identified as ‘surplus’. The courts affected are in all areas of the country and include Magistrates’ Courts, County Courts, Youth Courts, Family Courts and even four Crown Courts (two standalone and two within combined court centres).

The overall costs and benefits of this suggestion are lengthy and too detailed to consider here. This blog will focus on one particular point, which is the interaction between the possible court closures and the two tier crime contracts, which are due to be introduced in January 2016.

In brief, at present firms doing criminal legal aid will have a ‘Standard Crime Contract’. This includes both duty work (at police stations and magistrates’ courts, acting for those who don’t have their own preferred solicitor) and own client work, where a client has specified that that firm is their preferred law firm. There are approximately 1600 existing Standard Crime Contracts. The proposed change is to create ‘two tier’ contracts. For these contracts, pretty much any firm already holding a Standard Crime Contract may apply for, and be granted, an Own Client Contract. There is no limit on the number of Own Client Contracts available. However, there will only be 527 Duty Contracts. This is, obviously, almost a 2/3 reduction on the current number of contracts for duty work in existence.

Firms submitted their tenders for Duty Contracts in early May of this year and will hear the outcome of the tender in September or October. Some firms chose not to tender for a variety of reasons; and many firms, including some of those who tendered, continue to hope that two tier contracts will not go ahead.

The particular question at issue here is the way in which the court closures may affect the Duty Contracts. When firms tendered for Duty Contracts, they did so for particular designated areas. In each of these areas the courts and police stations were specified, and no doubt many or most firms tendered with a strong focus on their ability to cover the courts and police stations named in each designated area. If a firm found, for example, that in a particular contract area, the courts were located too far from their offices to make it economic to attend that court on a regular basis, then the firm would not have tendered for that area. Conversely a firm may have been more keen to tender for an area in which the courts or police stations are located conveniently for access from their office.

We can see from this that the court closures may be a game changer, particularly for law firms based in rural areas.  A hypothetical, but quite possible, example: a small law firm, Firm X, based in a rural area, tendered for one Duty Contract area. There are two criminal courts based in the duty contract area. One of them, Court A, is across the street from Firm X and the other, Court B, is further afield, perhaps an hour’s drive from Firm X. Then Court A is proposed for closure. This means that even if the volume of work does not decrease, because the work from Court A is transferred to Court B, the financial calculations for Firm X are now entirely different. Instead of half of their work being done across the street at Court A, and the other half being done an hour away at Court B, now all of their work is being done at Court B. But Firm X has tendered for the Duty contract with the expectation that Court A will remain open, and they have done their financial calculations on that basis. The entire functioning of Firm X may no longer be feasible – but they have already put in their tender. Now if they withdraw, they will not have the opportunity to re-tender for a more appropriate duty contract area, as the tender is closed; and without a Duty contract Firm X may not longer be financially viable at all.

The above example may be an extreme one. However, it is surely the case that tenders were made on the basis of the existing courts and police stations prior to the proposed closures, and it seems at the least unfair, if not arguably in bad faith, that this consultation was launched after the tender process, thus preventing firms from taking possible closures into account in calculating the financial viability of their tenders. It should be acknowledged that for some firms, the opposite to the above example may happen: for them, all of their work will get closer to their office and become more convenient, and those firms may revise their expected profits upwards. But for many others this may have an overall negative effect and increase their operating costs, and those firms should have had the opportunity to consider the possibility of closures before submitting their tenders.

As we have had occasion to remark on this blog before, criminal legal aid firms do not in the main operate with large profit margins or have significant financial reserves to draw on. For some firms, then, if two tier does in fact go ahead, the court closures may be the straw that breaks the camel’s back.

The views expressed do not necessarily reflect those of the firm or its partners.

The Criminal Legal Aid Protocol and a Moral Quandary

It is unlikely to come as a surprise to readers of this blog that there is at present a ‘boycott’, by many firms who do criminal legal aid work, of work done at new legal aid rates. The background to this action, which will be referred to as the protocol in this article, is that on 01/07/15, new rates of pay began for criminal legal aid work. The new rates constitute an 8.75% cut from the previous rates, which themselves were 8.75% lower than the rates before that. Prior to these two cuts, the criminal legal aid payment rates had not increased for twenty years.

Many criminal legal aid firms have made a calculation that they will not or cannot work at the new rates: some feel that it is simply not possible adequately to represent their clients when the payment is so minimal.

It is hard to assess the number of firms participating and the number of firms refusing to participate in the protocol; however, it is clear that many firms are participating whole-heartedly. The magnitude of this participation should not be underestimated. Criminal legal aid firms do not, in general, operate with a significant profit margin or with large reserves of money which might constitute a ‘fighting fund’. Therefore, the financial risks to many firms of this protocol, now 14 days old, is very considerable. It is a reflection of how strongly many firms feel about the new legal aid rates that they are willing to participate in the protocol which may, for some firms, have very severe financial consequences.

The protocol is not without its moral concerns. Some struggle with the idea of leaving clients in the police station to be represented by the duty solicitor, some of whom may be vulnerable or who may have been clients of the firm for many years; many struggle with leaving defendants unrepresented in court.

But on the other side, some firms have in fact seized this protocol as an opportunity to grow their business. There are reports and rumours from many courts across the country: not only are some firms continuing to represent their own clients – which is disappointing to those firms who are participating, but is entirely within the rights of the participating firms – but they are attempting to ‘poach’ unrepresented defendants who would, but for their firm participating in the protocol, be represented by someone else.

Not only is this unethical and morally questionable, it also, in many cases, may be contrary to the SRA Solicitors’ Code of Conduct. In particular, outcome 8.3: ‘you do not make unsolicited approaches in person or by telephone to members of the public in order to publicise your firm or in-house practice or another business’.

While it is easy to understand why a firm would refuse to participate in such an action – as every firm will no doubt feel the financial pain of such a decision, and some may consider that the possible outcome of the action would not justify the financial pain of the protocol itself – it is much more difficult to understand how some firms are actively trying to profit at such a moment, by taking other firms’ clients.

Whatever the outcome of the protocol, however, it has undoubtedly already had positive impacts. It has brought much of the profession closer together, and indeed united much of the criminal Bar with criminal solicitors; and the firms have sent a strong signal to the public and to the Ministry of Justice that the importance of access to justice cannot be ignored. The firms who have participated and who continue to do so should be saluted for that.

The views expressed do not necessarily reflect those of the firm or its partners.