The History of Legal Aid – 1997 to 2005

This blog is the second in my new series.  It traces the history of legal aid through the first two Parliaments of the Blair Government and covers the fourth of the six periods to which I referred in my earlier blog.

I have again drawn heavily on two of the books published by the Legal Action Group to which I paid tribute in that blog: The Justice Gap (12009) and Austerity Justice (2013).  Most of the figures I mention in this blog are cash figures.  It is, of course, much more valuable to understand how expenditure on legal aid rose or fell in real terms (which take account of the incidence of inflation), and this piece begins with the striking statistics which Professor Hazel Genn cited in her first Hamlyn Lecture in 2008.

 

Fourth Period (1997-2005)

Between 1997 and 2005 expenditure on civil legal aid fell by a quarter in real terms, while spending on criminal legal aid increased by 37% in real terms.[1]  This increase in expenditure on criminal cases was mirrored by an increase in the cost of the Crown Prosecution Service by over 46% between 1998-99 and 2004-05, which the Government attributed to its determination to tackle persistent offending and anti-social behaviour, and to increase the number of offenders brought to justice[2].

In cash terms, the Legal Services Commission’s net expenditure on criminal legal aid and civil legal aid (in all its forms) in the last five years of this Fourth Period is shown in the following table:[3]

Criminal Defence Service

Crown Court & higher courts representation

Total

2000-1

£450 million

£422 million

£872 m

2001-2

£508 million

£474 million

£982 m

2002-3

£526 million

£569 million

£1,095 m

2003-4

£523 million

£645 million

£1,178 m

2004-5 £509 million £682 million

£1,191 m

 

Legal Help

Civil Representation

Total

2000-1

£232 million

£560 million

£792 m

2001-2

£258 million

£476 million

£734 m

2002-3

£329 million

£483 million

£812 m

2003-4

£384 million

£514 million

£898 m

2004-5

£356 million

£490 million

£846 m

A graph on page 26 of Sir Ian Magee’s Review of Legal Aid Delivery and Governance (2010) shows the steep decrease in civil non-family legal aid expenditure following the removal of much civil legal aid representation from scope that was effected by Schedule 2 of the Access to Justice Act 1999.  The graph shows a decrease in cash terms from about £400 million in 1996-97 to about £200 million in 2004-05.[4]

Expenditure on all forms of family legal aid, on the other hand, remained fairly steady in cash terms at about £400 million throughout this fourth period.

The period also saw the rise and fall of the first determined attempt to match the provision of advice in social welfare law [SWL] with the identified need for it in different parts of the country.

Throughout this period the Legal Services Research Centre, which was founded by the Legal Aid Board in 1996, was doing valuable work in studying the phenomenon of “problem clusters” and identifying the needs of people for legal advice at grass roots level.

The Legal Services Commission was also running an admirable scheme of sponsoring the training of lawyers in legal aid firms and in some of the law centres, so that there would be a cadre of newly trained  legal aid lawyers to provide continuity of provision in the future.

Both the Research Centre and the training scheme were axed when the Coalition Government came to power in 2010.

The Community Legal Service

New Labour’s manifesto for the 1997 General Election contained a commitment that a new Community Legal Service would provide the public with a comprehensive network of legal support.  This would match local demand with available provision.   Its proposals also included the introduction of better regional planning of services and a wide-ranging review of legal aid provision.  Lord Irvine, who was Lord Chancellor between 1997 and 2003, had a coherent vision for the service.  His ambition was to co-ordinate a raggedly disparate landscape of providers.   He always faced the problem, however, that the Treasury did not regard expenditure on legal aid as a spending priority, so that no new money was allocated towards the achievement of his ambition.   The Blair Government accepted the previous Government’s spending limits in its early years, so that he had to do the best he could within the confines of existing resources.

Immediately after taking office he invited Sir Peter Middleton to advise him on aspects of the way forward, both in relation to legal aid services and also in relation to Lord Woolf’s proposals for the reform of the civil justice system.  In relation to legal aid Sir Peter Middleton’s report contained a proposal that all legal aid money claims should be replaced by Conditional Fee Agreements [CFAs][5].  There would be fixed price contracts for blocks of work in relation to all civil and criminal work, and the means test would be tightened.

Lord Irvine announced these proposals in a speech at the Law Society’s conference in Cardiff in October 1997 which coincided with the publication of this report.  Most civil cases would be taken out of the legal aid scheme. They should be funded through CFAs.  Family cases would stay within the scheme.  Lord Irvine defended this change by saying:

“Excluding claims for money or damages from legal aid will put those on low incomes, middle incomes and high incomes on an equal footing.”

He claimed that the extension of CFAs would result in £69 million being available for social welfare law cases in 1999-00 and £100 million in the following year.

He added that he wanted the new Community Legal Service to facilitate

“the refocusing of the legal aid scheme as a tool to help poor people solve social welfare problems by gaining access to the justice system.”

He said that there were many existing information and advice services – the CABx, the law centres, the advice centres and mediation bodies.

“We intend to co-ordinate these services under a coherent scheme which will provide a service to the whole public which is both easy to access and easy to understand.”

He added:

“The CLS is the first attempt ever by government to deliver legal services in a joined up way.  It will provide a framework for comprehensive local networks of good quality legal advice services supported by co-ordinated funding, and based on the needs of local people”.

The CLS was therefore a strategy to make the local area the focus for delivery of poverty services, delivering it through a partnership of the legal profession, the advice sector, local authorities and the LSC.  The strategy was very ambitious.  Professor Alan Paterson has said that getting the potential partners to come together would involve a huge commitment of staff and resources from the LSC, and it would only work if there was something in it for everyone.  What Steve Orchard was trying to do was to shift resources to Community Legal Services and SWL, and this meant that someone had to give up resources.  In principle redistributing resources made sense once it had been accepted, as most commentators then did, that resources for legal aid were finite.

13 regional committees were established in 1997-98, to co-ordinate local planning of civil law services.  Each had six members (four from outside the LSC). They were asked to draw up plans for discrete geographical areas and bid zones (which usually followed unitary local authority boundaries).  They used statistical data (including figures for means-tested benefits) to draw up plans for the provision of civil law services in their area.  They also prioritised the needs for new services.[6]  There was rational planning for the first time, but this turned out to be a short-lived phenomenon.

In 1998 the total legal aid bill was roughly £1.6 billion net.

In its 1998 White Paper “Modernising Justice” the Government said that the CLS would mean that every community had access to a comprehensive network of legal service providers of consistently good quality, so that people with actual or potential legal problems would be able to find the information and help they needed.  The White Paper gave as the first objective of the new system that it should

“direct the available resources to where they are most needed, to reflect defined priorities”.

The subsequent Access to Justice Bill reflected these ideas.   Under Schedule 2 of what became the Access of Justice Act 1999, personal injury negligence cases (excluding clinical negligence), conveyancing, boundary disputes, the making of wills, matters of trust law, defamation and malicious falsehood, matters of company or partnership law or other matters arising out of business, advocacy in proceedings other than those listed as exceptions in that schedule, and many types of proceedings in magistrates’ courts were no longer in scope.

The CLS was to include a core of specialist quality-marked firms and organisations which overlapped with a much wider group of non-specialist services, also quality-marked as information and advice providers.

Five quality marks were eventually established:

  • Self-help information
  • Assisted information
  • General help
  • General help and caseworks
  • Specialist help

Quality marks were also established for websites, telephone services and mediation services.  A website called “Justask” was established to provide information on legal matters and to signpost members of the public to providers.[7]

The Access to Justice Act 1999 was to be implemented in April 2000.  In a consultation paper published in May 1999[8] the Government said:

“Many people received effective legal help, but if you live in an area with few or no convenient advice centres, or do not know where to go for help, you can end up having to work very hard to find support, travelling a long distance or receiving no support at all.”

The paper described a sprawling advice sector comprising private practice lawyers, independent advice centres, CABx and law centres:

“This effort is on a scale without rival anywhere in the world and a great tribute to the community spirit of our people.  It involves nearly 6,000 professional staff and some 30,000 volunteers working in over 3,000 centres, dealing with over 10 million inquiries each year.  Total public funding is difficult to estimate accurately, but probably £250 million a year.  On the face of it, this provision should be adequate to meet priority need.”[9]

The challenge was presented in these terms:

“Despite the fact that nearly 2,000 separate agencies are involved, a person may be unable to find the right kind of help for his or her particular problem within a reasonable distance of home because

  • Services have grown up in an ad hoc, unplanned and unco-ordinated manner dependent on discretionary funding from local authorities, charities and central government;

  • Need is not assessed coherently, as funding for advice is provided by a range of central bodies without any co-ordination or common systems;

  • As a result funding does not consistently follow need and those running agencies find that far too much of their time is spent dealing with various separate funders who each have their own criteria for funding;

  • There is no common data base of providers on which people can draw, nor any standard quality accreditation system on which they can rely;

  • Cross-referrals and networking does not always occur.”

In this paper the Government floated the idea of CLS partnerships in every bid zone in order to develop better local networks and to plan legal services.

The Government’s plans, therefore, included a determined attempt to engage the third sector[10].  The functions of the new Legal Services Commission included assessing local needs for legal services and, once priorities had been determined in the light of directions given by the Lord Chancellor, to match funding to the identified needs.[11]  The meeting of need would be done by different agencies using different means and methodologies, by the LSC centrally[12], by each of its Regional Committees, and by the new partnerships that would be set up all over the country to bring together funders and providers of legal services at local level[13].  The setting of a predetermined budget meant, by definition, that there had to be rationing to ensure that the budget was not overspent.

Under his new statutory powers the Lord Chancellor[14] started by designating two categories of priority.  In “top priority” cases the CLS had to ensure that all cases were funded.   Initially only certain proceedings under the Children Act and civil proceedings in which the life or liberty of the subject were at stake belonged to this category.

Priority was then given to housing cases and other “social welfare” cases that enabled people to avoid or climb out of social exclusion, domestic violence cases, cases concerning the welfare of children and cases alleging serious wrongdoing, breach of human rights or abuse of position or power by a public body or public servant (such as a police officer).

It was estimated at that time that the Government’s decision to withdraw legal aid from the cases that would no longer be in scope would save about £35 million.[15]

The Government floated the idea of extending legal aid to Employment Tribunals. This was opposed by employers, and in due course dropped.

The Access to Justice Act 1999 imposed a hard cap on overall expenditure on legal aid.[16]  The Treasury was determined not to allow legal aid expenditure to exceed the approved budget.

It would now be compulsory to hold a specialist quality mark in order to apply for a block contract.  The new legal help scheme (which replaced the Green Form scheme) drastically reduced the number of firms offering legal aid.  Block contracts were contracts to carry out fixed amounts of legal aid work.  When the new system came into force, about 5,500 contracts were awarded to firms and organisations which possessed franchises[17], including 50 of the 52 law centres.  CABx mainly received contracts in welfare benefits and debt.   The contracts contained an entitlement to a fixed number of “matter starts”, which could not be exceeded without the explicit approval of the LSC.[18]  In October 1999 legal aid was also extended to representation in immigration appeal tribunals.[19]

By 2002 the whole legal aid system was approaching crisis due to the hard cap on expenditure.

In April and September 2002 there were small increases in eligibility.  In April about 150,000 people (1.7% of the population) were brought into eligibility.  In September the income cap was raised from £2,034 to £2,250 per month for civil and family work (700,000 people).  In reality, the Community Legal Service produced no extra funds for civil legal aid.

In June 2003 Steve Orchard said that the biggest cost driver was criminal legal aid, driven by Government policy[20].

In 2000 the Government Spending Review permitted some modest growth (in cash terms) in the overall legal aid budget:

2001-2

£1.717 billion

2002-3

£1.748 billion

2003-4

£1.819 billion

2004-5

£1.929 billion

In the event, by 2003-04 there was an overspend of about £190 million, with the main increases being attributed to magistrates’ court cases, very high cost criminal cases and immigration cases.  This overspend fuelled the Government’s desire to find some even more dramatic way to contain legal aid expenditure.  A Fundamental Legal Aid Review, initiated by the new Department for Constitutional Affairs in 2004, produced conclusions the following year that were never formally published, althorugh their findings were said to be reflected in the Government paper A Fairer Deal for Legal Aid (2005).

The failure of the CLS Partnerships

The key function of the CLS was the attempt to establish partnerships between local stakeholders and providers charged with (i) assessing local supply; (ii) assessing local need; and (iii) sorting out the mismatch.[21]

The first two aims always made sense, but the CLS would not work because it was too labour-intensive for the LSC and because local authorities were not prepared to cede power over funding.[22]  It was never likely that the better resourced areas of the country would be willing to transfer their resources to poorer areas, or that the funders of one form of over-supply would be willing to fund an under-supply controlled by another agency.

This all soon ran out of steam, not least because of the lack of resources.

A Matrix Research and Consultancy Report (2004) found there had been a number of fundamental weaknesses, not least a lack of clarity about the service’s aims[23].  It was also vulnerable to policy changes within government, and to the increasing cash demands of the Criminal Defence Service.   The report was particularly damning on CLS Partnerships.  It said that their role was unclear and that any initial enthusiasm there had been was petering out due to lack of resources.  A fundamental problem was the very uneven spread of social welfare law services.[24]  There were dramatically variable levels of spending on SWL across the country.  Those councils who spent most would lose most if the expenditure was spread equally.

The report said that there was a leadership vacuum, and an absence of any overall accountability for the CLS, with no clear dedicated leader driving the changes forward.  It was hard to object to the ambition behind the creation of the CLS Partnerships [CLSPs], but it was easy to foresee that a lack of common interest – both between funders and providers and between providers themselves – would mean that the initiative would prove a frustrating endeavour.  Contracts for family, welfare benefits, housing, debt, employment and consumer law were reducing in number, which demonstrated that LSC funding was not being refocused by directing it towards social exclusion.[25]

A research study for the Advice Services Alliance, which was published in 2004, found that the CLSPs were dying on their feet.  Most of the 20 respondents thought that they had done nothing to meet the needs they identified, and that they had failed to make any difference.  As a consequence, although the LSC claimed 99% coverage of the country by 2003, they were being deserted by solicitors in private practice and by community groups.  The only funders were the LSC and local authorities.[26]

In short, CLSPs did not achieve what they had set out to achieve.  There was a lack of cash to develop services[27], and they were an easy target for savings when the financial crisis hit.  The Treasury took the view that expenditure on SWL was discretionary, and that it could be axed to offset the increase in the cost of the CDS.   Soon after Sir Michael Bichard became chairman of the LSC in April 2005, a decision was taken to wind up the regional planning committees on the grounds that they were “of no benefit to providers or clients.”

The Criminal Defence Service

This was mainly a repackaging of existing suppliers into a rebranded service with specialist quality marks.[28]  It was created by the Access to Justice Act 199, which also contained provision for the appointment of salaried public defenders.[29]

In its December 1998 White Paper the Government reported that the cost of criminal legal aid was “rising at an alarming rate”: a 44% increase in the five years between 1992-93 (£507 million) and 1997-98 (£733 million).  Very high cost criminal cases were identified as presenting a particular challenge: in 1996-97 42% of legal aid spending in the Crown Court (almost £16 million) was being spent on 1% of the cases.   A new Criminal Defence Service would be established, provided by private firms under contracts with fixed prices for different categories of work.   Separate contracts would be negotiated on an individual basis for cases where the trial was estimated to last for 25 days or more.

The LSC asked firms if they wanted to become part of the new CDS by applying for advice and assistance contracts, including police station and magistrates’ court work, which were to come into force in April 2001.   Quality marks were now compulsory.   There had previously been 3,500 firms engaged in criminal defence cases, and just over 500 small suppliers dropped out now.

In February 2001 there was the first pay rise for 8 years, and after other concessions had been achieved the Law Society eventually recommended that firms should sign the new contracts.

Crown Court and higher court criminal cases were brought into the legal aid budget with effect from April 2003.  In 2000-01 they cost £422 million.  This had risen to £695.5 million by 2005-06 (almost one third of the total budget)[30].  Very High Cost Cases (VHCC) represented 1% of the total caseload but they swallowed up 50% of the Crown Court budget.  Lord Falconer, who became Lord Chancellor in June 2003, blamed the Bar much later for using every part of the system to get as much money as possible.  He said that fees were still too high and cases were lasting too long.  The Government, however, seemed to some observers to be blind to other pressures on the criminal budget.

This table[31] shows a more detailed breakdown of the way in which expenditure on criminal legal aid (measured in £ millions) increased between 2000-01 and 2006-07:

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Total criminal legal aid

872.4

982.1 1,095.7 1,178 1,192.1 1,196.8

1171.4

Police Station

117.3

140.2 168.8 175.5 172.2 174.3

177.6

Lower Courts

232.9

220.5 337.9 340.2 325 329.8

309.3

Higher Courts

422

474.1 569.3 645 682.4 695.5

647.9

 

[1] Hazel Genn, Judging Civil Justice (2008) p 41.

[2] A Fairer Deal for Legal Aid (DCA, July 2005, Cm 6591), Figure 5.

[3] The figures are derived from the tables that appear in successive Annual Reports of the Legal Services Commission from 2000-01 onwards.

[4] On the other hand, expenditure on legal aid in immigration work is shown to increase from a negligible level in 1996-97 to about £200 million in 2004-05 before starting to fall off again.

[5] In February 1998 Lord Irvine announced that clinical negligence cases would now still remain in scope for legal aid.  This represented a change in his original proposals.

[6] For example, the West Midlands Legal Services Committee found a high level of need for all areas of law in Birmingham, but a low level in rural South Staffordshire.

[7] A CLS Directory also provided information on local solicitors, legal advice and information services in England and Wales.

[8] The Community Legal Service: A Consultation Paper (May 1999).

[9] The authors of the Justice Gap commented at p 63: “As the paper went on to demonstrate, this provision might have been testimony to great commitment but it was a chaotic way to provide a public service.”

[10] The number of nfp organisations holding franchises grew from the initial 42 pilots to over 400 franchises by 2002-03.

[11] See the Consultation Paper on the Community Legal Service, LCD Consultation Paper, May 1999, p 34.

[12] The LSC had started to develop statistical needs assessment models.

[13] Funders included the relevant office of the LSC, local authorities and other bodies, and providers (who might make the necessary provision individually or in partnership with others) included solicitors, CABx, advice agencies, law centres and housing centres.

[14] In an interview he gave in 2008, five years after his retirement, Steve Orchard said that Lord Irvine had really been engaged with legal aid.  Competitive tendering in legal services had been a New Labour innovation.

[15] P.Pleasence, Testing the Code, October 1999, Fig. 53, p 36.  The savings were calculated at £41 million (of which £36 million was ascribed to personal injury cases after taking into account a deduction of £5 million being deducted from this sum on account of retained contributions and receipts from the statutory charge.

[16] It also established a Criminal Defence Service, which included provision for salaried defenders.

[17] Previously about 10,000 firms had been involved in civil and family legal aid cases to a greater or lesser extent.

[18] Most contracted nfp organisations were provided with cash to pay for posts to undertake 1,100 hours of work per full-time caseworker.

[19] Immigration advice was always administered centrally by the LSC.  Because of the great increase in the number of asylum-seekers during this period, immigration advice and assistance cases nearly doubled (from 87,363 to 155,865) between 1997-8 and 2002-03.

[20] By 2003 the legal aid budget was getting out of control in criminal work, and to a lesser extent, in immigration.

[21] By 2002 over 200 Community Legal Services Partnerships were in place, and the LSC was employing more than 100 staff at a cost of £4 million to administer them.

[22] Professor Michel Zander had predicted that this would happen.  See The State of Justice (2000) pp 12-13.

[23] The report referred to an “ideological hole in the centre”.

[24] A table on page 68 of the Justice Gap showed “five top spenders” who had been spending between 235% and 373% of what the LSC had calculated they should be spending on SWL, and “bottom five spenders” who were spending between 23% and 35% of what had been calculated as appropriate.  Four London boroughs (Camden, Hackney & City, Tower Hamlets and Ealing) were in the first category, and two (Kingston and Bexley) were in the second, which also included Surrey and the East Riding of Yorkshire.

[25] In contrast, contracts for public law, community care, actions against the police, education, immigration, clinical negligence and mental health were all increasing.

[26] CAB research found that CABx were active participants in partnerships, but only 16% of respondents felt that their efforts were justified.

[27] No resources were allocated for new expenditure once gaps in provision had been identified, apart from what was available from a £5 million Partnership Innovation Budget, which provided seedcorn funding for innovative ventures.

[28] New Labour’s 1997 manifesto contained no reference to criminal legal aid or to a criminal defence service.

[29] In the event, for a variety of reasons, the public defender service turned out to be more costly at that time than the engagement of solicitors in private practice.

[30] The Blair Government introduced a torrent of new criminal justice legislation during these years.  Indeed, the Judicial Studies Board had to arrange a special training programme for the whole of the criminal judiciary in advance of the Criminal Justice Act 2003 coming into force, and the complexities of this legislation encountered constant criticism in the higher courts.

[31] The figures are taken from the Table on p 147 of “the Justice Gap”.

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