266 Reform of Legal Aid in England and Wales Government Response
Table 2: Schedule of alternative proposals submitted by the Law
Society
Quantified Law Society savings proposals
Law Society proposed saving MoJ comments on figures
1. More efficient prosecutions/
reimbursement of legal aid fund
In 2010, 9.5% of Magistrates’ Court cases
(almost 81,000 cases) and 12.6% of Crown
Court cases (14,745 cases) resulted in a
dropped prosecution or a judge-directed
acquittal. The legal aid fund should not
have to pay for these cases. They should
be much fewer in number, and the CPS
should bear the costs of the defence when
they do arise.
Assuming the cost of these cases is
proportionate to the whole legal aid spend
excluding AGFS, and assuming the
numbers could be halved, there could be a
significant saving to the legal aid fund.
Further assumptions are that all cases in
the Crown Court would have representation
and half of the cases in the Magistrates’
Court.
The cost to the CPS of having to meet the
defence costs in the remaining cases would
be offset from the saved resources in the
non-continuation or earlier discontinuance
of these bad cases.
Mags Court savings: 40,000 cases @ £475
per case (average case cost from LSC
Stats Pack 2009-10): £19 million
Crown Court savings: 14,745 cases @
£4,069 per case (average LGFS claim per
case from LSC Stats Pack 2009-10): £60
million
Total: £79m
This proposal would transfer
costs to another part of the
Government rather than cutting
total spending.
Total costs would only be cut if
dropped prosecutions and
judge-directed acquittals were
the responsibility of the CPS
and if the proposal provided the
CPS with an increased incentive
to avoid these. It is unclear to
what extent this is so.
The costing assumes that this
would be the case in 50% of
Magistrates’ Court and to 100%
of Crown Court dropped
prosecutions and judge-directed
acquittals.
These are very high
assumptions and no evidence is
provided to support them.
The costing also assumes that
all such cases would simply not
be brought in future by the CPS.
Instead the CPS might adopt a
different approach and these
cases might divert into cases
which proceed to a full hearing.
In which cases total legal aid
costs might rise as might costs
to the CPS.
267 Reform of Legal Aid in England and Wales Government Response
Law Society proposed saving MoJ comments on figures
2. Consideration of more cases being
dealt with in the Magistrates’ Courts
rather than the Crown Court provided
that there are safeguards to preserve
right to trial by jury.
A pending amendment to Section 20(3) of
the Magistrates Courts Act 1980, by
Paragraph 6 of Part 1 of Schedule 3 to the
Criminal Justice Act 2003, would allow for
an indication of whether a custodial or noncustodial sentence would be imposed on a
plea of guilty. This could encourage early
guilty pleas in the Magistrates’ Courts.
The number of either way cases heard in
the Crown Court in 2009 was 68,500, a rise
of 20% on 2008. For the purposes of this
calculation, we assume that this figure
could be reduced back down to the 2008
figure of approximately 57,000, and that
these cases would be average costs in
each court.
2009/10 average crime lower bill where
representation order granted: £475
2009/10 average crown court bill: £4,069
11500 cases at £3594 less per case,
rounded
Total: £41m
The costing assumes that 20%
of cases could be moved from
the Crown Court to the
Magistrates’ Court. There is no
evidential backing for this
assumption, which seems very
high.
The MoJ’s legal aid reform
package already includes
reforms which respond to
concerns that the current fee
system does not sufficiently
support the aim of speedy and
efficient justice and may
discourage early resolution of
cases. Non-election either-way
cases involve Magistrates rather
than defendants passing the
case to the Crown Court due to
the nature of the case.
3. Single fee for Crown Court
Over a relatively short time we believe that
the administrative savings for both
practitioners and the LSC from having a
single fee would reduce the cost of
delivering services in a way that would
enable significant financial savings to be
made.
Total: £30m
No derivation for this saving has
been provided.
268 Reform of Legal Aid in England and Wales Government Response
Law Society proposed saving MoJ comments on figures
4. More robust enforcement of merits
test for private law family contact
disputes
Based on anecdotal evidence, we believe
that a more effective application of the
current means test could reduce the volume
of contact cases by between 20 and 30%.
For the purposes of this estimate, we have
assumed a 25% reduction in volumes. The
new fee scheme is designed to be cost
neutral as against 2008-9 fees, so we have
applied the average cost per case from
2008-9 for Children Act only cases.
Published LSC figures do not distinguish
between contact disputes and residence
disputes. We have assumed that contact
disputes account for 85% of the 46,000
private law children certificates (2008-9
figures)
Reduction of 9,775 cases @ £3,002 per
case, rounded.
Total: £29m
It is unclear how deliverable and
enforceable these savings
would be in practice, and what
the enforcement costs might be.
The saving assumes that 85%
of ‘private law children cases’
are contact cases and that 25%
of those could be averted by
applying means test more
strictly. No evidence has been
provided for these assumptions,
which seem high.
5. Capping fees so no individual can
earn a personal income of more than
£250,000 in a year from legal aid
Based on statistics for payment to
advocates published by MoJ in March 2010
Mechanisms for achieving this could
include:
Aligning QCs’ and Leading Juniors’ fees at
the latter rate
Reducing the “event rate” for QCs in family
cases from £2310 per event, and ensuring
that a substantially reduced event fee is
paid for events lasting less than half a day.
Total: £16m
The derivation of this saving is
unclear. A simple cap might just
allocate current spending more
evenly amongst recipients.
There might also be risks
concerning the quality of advice
and service.
The other proposals seem to
relate to fee reductions. There is
potentially some double
counting with the savings
highlighted elsewhere.
The MoJ’s reform package
already includes savings from
fee reductions.
269 Reform of Legal Aid in England and Wales Government Response
Law Society proposed saving MoJ comments on figures
6. Review of approach to prosecutions in
VHCCs
CPS could be more selective about the
number of charges brought, the number of
individual defendants prosecuted and the
volume of evidence produced.
Such an approach could generate a saving
in the cost of VHCCs of 10-20%. For this
calculation, we have assumed savings of
15%.
15% of £95m
Total: £14m
The saving assumes a 15%
reduction in VHCC costs as a
result of the CPS operating in a
more selective manner. This
seems to double count the
savings from item 1.
There is no source or detailed
explanation for the 15% figure or
evidence of CPS inefficiency to
indicate this is plausible.
7. Limit all but essential advocates’
travel to court and hotel expenses and
no longer pay for first class travel.
In 2011 there is likely ample local coverage
by Advocates of almost all Crown Court
centres, thereby reducing the need for
travel & hotel expenses. These expenses
(under code THE), according to MoJ data,
amounted to over £11m in 2009-10.
Allowing for some exceptional travel, £10m
could be saved.
Total: £10m
The saving assumes a 90%
reduction in advocate travel and
subsistence costs based on
cases being allocated on the
basis of geographical proximity
and reductions in the quality of
travel and hotels. This
assumption appears quite
speculative and there might be
costs associated with the
implied different system for
advocate allocation.
270 Reform of Legal Aid in England and Wales Government Response
Law Society proposed saving MoJ comments on figures
8. Reduce waste
Mechanisms will include
Increase efficiency of Court Service by
improving listings systems, case
management and implementing Jackson
proposal for ‘ticketing’ of judges to ensure
that cases are heard by judges with the
appropriate expertise.
Increase use of wasted costs orders. In the
short term, this would cause an increased
cost to other public bodies, but only to the
extent that they were the cause of
inefficiency in the Court system. In the
longer term, the penalty of such orders
should reduce the amount of waste in the
system, generating savings for the public
purse across a number of budgets,
including Courts, prison delivery and CPS
as well as legal aid.
Review use of Associate Prosecutors.
APs are in practice often reluctant to make
decisions on cases leading to costs of
unnecessary delays and adjournments.
For the purposes of this calculation we have
assumed that there is one unnecessary
delay or adjournment caused by failures in
the system other than on the defence side
for every two representation orders, and
that each hearing adds £40 to the costs of
the case on average.
450,000 Representation orders x one half
@ £40 each.
Total: £9m
The saving assumes a 50%
reduction in representation
orders and assumes that each
hearing costs £40 in legal aid.
No evidence for these
assumptions has been provided.
The savings also does not seem
to relate to other aspects of the
proposal.
271 Reform of Legal Aid in England and Wales Government Response
Law Society proposed saving MoJ comments on figures
9. Funding from seized assets of
defendants
The SOCA Annual Report 2009-10 states
that assets denied to criminals totalled £238
million. SOCA spent over £8.5 million on
professional services and fees; and it is
likely that a proportion of staff costs were
also dedicated to asset recovery. For the
purposes of this calculation, and in the
absence of data from the LSC, we have
assumed that a similar sum was spent on
behalf of those whose assets were being
pursued. This may be a significant
underestimate.
Total: £9m
The saving relates to SOCA’s
spending on their own legal
services. There is no particular
basis for assuming that this
would equate to the legal aid
savings of the proposal. The
savings to the legal aid fund
might not be savings for the
Government overall as if the
defendant is found guilty the
funds would be seized by the
Government. In which case the
gain to the legal aid fund would
relate to a loss to other parts of
the Government.
10. Remove hearsay and bad character
provisions
There are no reliable figures for what this
proposal might save. We do not know in
how many cases such applications are
made; in how many they directly cause a
need for an additional hearing; or what
impact that has overall on the fees paid
under the Standard or Graduated Fee
Schemes
For the purposes of this estimate, we have
assumed that an extra hearing is required in
25-40% of prosecutions where a
Representation Order is granted, and that
on average, it increases the costs claimed
on the case by £40.
450,000 Representation orders x 25% x
£40 = £4.5 million
450,000 Representation orders x 40% x
£40 = £7.2 million
Best estimate – mid point, rounded.
Total: £6m
The saving assumes a 32%
reduction in representation
orders. There is no basis or
evidence behind this
assumption.
272 Reform of Legal Aid in England and Wales Government Response
Law Society proposed saving MoJ comments on figures
11. Single fee for family
This could save an estimated 2.5% on the
total spent on advocacy fees for family.
Counsel’s fees total £124 million. We do not
have at this stage an accurate figure for
solicitor advocacy in family cases, so we
have based the calculation just on
Counsel’s fees.
Total: £3m
The saving assumes a 2.5%
reduction in advocacy costs.
This assumption is unexplained.
It is unclear how this relates to
the other single fee saving.
12. Family mediated settlements should
become subject to the legal aid statutory
charge subject to a 50% discount.
In a mediation briefing for the judiciary, the
LSC stated that in 2008-9 they spent £13.8
million on publicly funded mediation. 68% of
cases resulted in an agreement of which an
estimated one half produced a financial
settlement.
50% of half of 68% of £13.8 million,
rounded.
Total: £2m
The saving assumes 50% of
legal aid costs can be recovered
from mediations which produce
a financial settlement. This
seems a very high percentage
with no assessment of time
profile, admin costs, or bad debt
rates. People might also move
away from mediation if a
statutory charge applies,
reducing any savings and
possibly generating increased
costs of this resulted in more
cases going to court instead of
mediation.
13. Reduce need to produce prisoners
on Governor’s warrant
This would reduce the number of interim
hearing and thus produce savings for legal
aid, the Court Service and the Prison
Service. The Crown Court remands
approximately 35,000 prisoners per year,
who spend on average 13 weeks in
custody. Figures do not appear to be
available for the number of hearings that
serve no purpose other than producing the
prisoner. For the purposes of this
calculation, we have assumed that there is
on average two such hearings for every
three remand prisoners, and that each such
hearing increases the legal aid costs by £40
on average, rounded.
Total: £1m
The saving assumes each
Crown Court prisoner on
remand has an interim hearing
and 67% of these serve no
purpose at all. No evidential
basis for these assumptions is
provided.
Total Law Society proposed savings: £249 million
273 Reform of Legal Aid in England and Wales Government Response
Law Society proposals for wider savings
Law Society proposed saving MoJ comments on figures
14. Make the financial sector pay for its
own fraud cases
Total fraud costs, per LSC estimate:
£148m
Assume 50% relates to the financial
services sector – LSC has no accurate
figures:
£74m
Note: some potential overlap with £250,000
cap and with review of approach to VHCCs
Additional saving: £63m
The saving assumes 50% of
fraud cases relate to the
financial services sector. There
is no bass for this assumption.
The derivation of the saving
reduction relating to double
counting is undefined.
15. A levy on the alcohol industry:
Alcohol is a significant factor in offences
and disputes requiring legal aid. Total
alcohol sales are in the region of £40bn
generating some £8.5bn in duty exclusive of
VAT. A 1% increase in duty would generate
additional revenue of £85 million per annum
towards for legal aid.
Total: £85m
The saving assumes a 1%
increase in duty on all alcoholic
products would yield income of
1% of current total duty. This
assumes no behavioural effects
or substitution effects.
16. Simplification of housing law along
the lines proposed by the Law
Commission report ‘Renting Homes’
(2006)
Current legal aid expenditure on housing is
around £50m. Implementing the
simplification proposals would reduce
spending by around 20%.
Total: £10m
The saving assumes a 20%
reduction in legal aid spending
on housing. No evidential basis
for this assumption has been
provided.
17. Increase use of legal expenses
insurance
No significant savings under current limited
scope of LEI. Possible savings if insurers
could be persuaded to increase scope and
if take of LEI could be increased
Not quantifiable
274 Reform of Legal Aid in England and Wales Government Response
275
Law Society proposed saving MoJ comments on figures
18. Compulsory legal insurance for
company directors for offences arising
from their office as director.
This would largely duplicate savings arising
from our proposed levy on the financial
services industry
Not quantifiable
Total Law Society proposed wider savings: £158m 276
Reform of Le
Annex M: Summary of responses to the consultation questions
Question Yes No Neither Total
Scope
1 Do you agree with the proposals to retain the types of case and proceedings listed in paragraphs
4.37 to 4.144 of the consultation document within the scope of the civil and family legal aid scheme –
Please give reasons.
1,584 217 227 2,028
2 Do you agree with the proposal to make changes to court powers in ancillary relief cases to enable
the Court to make interim lump sum orders against a party who has the means to fund the costs of
representation for the other party – Please give reasons.
1,090 265 62 1,417
3 Do you agree with the proposals to exclude the types of case and proceedings listed in paragraphs
4.148 to 4.245 from the scope of the civil and family legal aid scheme – Please give reasons.
103 3,380 266 3,749
4 Do you agree with the Government’s proposals to introduce a new scheme for funding individual
cases excluded from the proposed scope, which will only generally provide funding where the
provision of some level of legal aid is necessary to meet domestic and international legal obligations
(including those under the European Convention on Human Rights) or where there is a significant
wider public interest in funding Legal Representation for inquest cases – Please give reasons.
641 720 145 1,506
5 Do you agree with the Government’s proposal to amend the merits criteria for civil legal aid so that
funding can be refused in any individual civil case which is suitable for an alternative source of
funding, such as a Conditional Fee Arrangement – Please give reasons.
387 764 134 1,285
6 We would welcome views or evidence on the potential impact of the proposed reforms to the scope of
legal aid on litigants-in-person and the conduct of proceedings.
1,665
gal Aid in England and Wales: Government Response Question Yes No Neither Total
Reform of Legal Aid in England and Wales: Government Response
277
The Community Legal Advice Telephone Helpline
7 Do you agree that the Community Legal Advice helpline should be established as the single gateway
to access civil legal aid advice – Please give reasons.
69 1,690 197 1,956
8 Do you agree that specialist advice should be offered through the Community Legal Advice helpline in
all categories of law and that, in some categories, the majority of civil Legal Help clients and cases
can be dealt with through this channel – Please give reasons.
109 1,366 223 1,698
9 What factors should be taken into account when devising the criteria for determining when face-toface advice will be required –
1,365
10 Which organisations should work strategically with Community Legal Advice and what form should
this joint working take –
931
11 Do you agree that the Legal Services Commission should offer access to paid advice services for
ineligible clients through the Community Legal Advice helpline – Please give reasons.
473 848 124 1,445
Financial Eligibility
12 Do you agree with the proposal that applicants for legal aid who are in receipt of passporting benefits
should be subject to the same capital eligibility rules as other applicants – Please give reasons.
327 940 64 1,331
13 Do you agree with the proposal that clients with £1,000 or more disposable capital should be asked to
pay a £100 contribution – Please give reasons.
318 941 103 1,362
14 Do you agree with the proposals to abolish the equity and pensioner capital disregards for cases
other than contested property cases – Please give reasons.
140 803 52 995
15 Do you agree with the proposals to retain the mortgage disregard, to remove the £100,000 limit, and
to have a gross capital limit of £200,000 in cases other than contested property cases (with a
£300,000 limit for pensioners with an assessed disposable income of £315 per month or less) –
Please give reasons.
346 550 68 964 278
Reform of Le
Question Yes No Neither Total
16 Do you agree with the proposal to introduce a discretionary waiver scheme for property capital limits
in certain circumstances – The Government would welcome views in particular on whether the
conditions listed in paragraphs 5.33 to 5.37 are the appropriate circumstances for exercising such a
waiver. Please give reasons.
485 336 84 905
17 Do you agree with the proposals to have conditions in respect of the waiver scheme so that costs are
repayable at the end of the case and, to that end, to place a charge on property similar to the existing
statutory charge scheme – Please give reasons. The Government would welcome views in particular
on the proposed interest rate scheme at paragraph 5.35 in relation to deferred charges.
363 395 125 883
18 Do you agree that the property eligibility waiver should be exercised automatically for Legal Help for
individuals in non-contested property cases with properties worth £200,000 or less (£300,000 in the
case of pensioners with disposable income of £315 per month or less) – Please give reasons.
312 433 118 863
19 Do you agree that we should retain the ‘subject matter of the dispute’ disregard for contested property
cases, capped at £100,000 for all levels of service – Please give reasons.
480 265 86 831
20 Do you agree that the equity and pensioner disregards should be abolished for contested property
cases – Please give reasons.
179 582 23 784
21 Do you agree that, for contested property cases, the mortgage disregard should be retained and
uncapped, and that there should be a gross capital limit of £500,000 for all clients – Please give
reasons.
475 236 60 771
22 Do you agree with the proposal to raise the levels of income-based contributions up to a maximum of
30% of monthly disposable income – Please give reasons.
96 881 88 1,065
Model 1 Model 2 Neither Total
23 Which of the two proposed models described at paragraphs 5.59 to 5.63 would represent the most
equitable means of implementing an increase in income-based contributions – Are there other
alternative models we should consider – Please give reasons.
117 21 530 668
gal Aid in England and Wales: Government Response Question Yes No Neither Total
Reform of Legal Aid in England and Wales: Government Response
279
Criminal Remuneration
24 Do you agree with the proposals to:
i) pay a single fixed fee of £565 for a guilty plea in an either way case which the magistrates’ court
has determined is suitable for summary trial;
136 681 817
ii) enhance the lower standard fee paid for cracked trials and guilty pleas under the magistrates’
courts scheme in either way cases; and
223 530 753
iii) remove the separate fee for committal hearings under the Litigators’ Graduated Fees Scheme to
pay for the enhanced guilty plea fee –
61 707 768
Please give reasons. 699
25 Do you agree with the proposal to harmonise the fee for a cracked trial in indictable only cases, and
either way cases committed by magistrates, and in particular that:
i) the proposal to enhance fees for a guilty plea in the Litigators’ Graduated Fees Scheme and the
Advocates’ Graduated Fees Scheme by 25% provides reasonable remuneration when averaged
across the full range of cases; and
65 558 623
ii) access to special preparation provides reasonable enhancement for the most complex cases – 118 517 635
Please give reasons. 483
26 Do you agree with the Government’s proposal to align fees paid for cases of murder and
manslaughter with those paid for cases of rape and other serious sexual offences – Please give
reasons.
123 592 38 753
27 Do you agree with the Government’s proposal to remove the distinction between cases of dishonesty
based on the value of the dishonest act(s) below £100,000 – Please give reasons.
290 375 49 714
28 Do you agree with the Government’s proposal to:
a) remove the premium paid for magistrates’ courts cases in London; and 156 473 629
b) reduce most ‘bolt on’ fees by 50% – 148 543 691
Please give reasons. 516 280
Reform of Le
Question Yes No Neither Total
29 Do you agree with the proposal to align the criteria for Very High Cost Criminal Cases for litigators so
that they are consistent with those now currently in place for advocates – Please give reasons.
285 250 81 616
30 Do you agree with the proposal to appoint an independent assessor for Very High Cost Criminal
Cases – It would be helpful to have your views on:
232 322 43 597
i) the proposed role of the assessor;
ii) the skills and experience that would be required for the post; and
iii) whether it would offer value for money.
Please give reasons.
31 Do you agree with the proposal to amend one of the criteria for the appointment of two counsel by
increasing the number of pages of prosecution evidence from 1,000 to 1,500 pages – Please give
reasons.
229 437 30 696
Civil Remuneration
32 Do you agree with the proposal to reduce all fees paid in civil and family matters by 10%, rather than
undertake a more radical restructuring of civil and family legal aid fees – Please give reasons.
115 1,525 95 1,735
33 Do you agree with the proposal to cap and set criteria for enhancements to hourly rates payable to
solicitors in civil cases – If so, we would welcome views on the criteria which may be appropriate.
Please give reasons.
317 751 80 1,148
34 Do you agree with the proposal to codify the rates paid to barristers as set out in Table 5, subject to a
further 10% reduction – Please give reasons.
369 638 54 1,061
35 Do you agree with the proposals:
i) to apply ‘risk rates’ to every civil non-family case where costs may be ordered against the opponent;
and
81 585 666
ii) to apply ‘risk rates’ from the end of the investigative stage or once total costs reach £25,000, or
from the beginning of cases with no investigative stage –
84 583 667
Please give reasons.
gal Aid in England and Wales: Government Response Question Yes No Neither Total
Reform of Legal Aid in England and Wales: Government Response
281
36 The Government would also welcome views on whether there are types of civil non-family case (other
than those described in paragraphs 7.22 and 7.23) for which the application of ‘risk rates’ would not
be justifiable, for example, because there is less likelihood of cost recovery or ability to predict the
outcome.
346
37 Do you agree with the proposal to cap and set criteria for enhancements to hourly rates payable to
solicitors in family cases – If so, we would welcome views on the criteria which may be appropriate.
Please give reasons.
382 662 45 1,089
38 Do you agree with the proposals to restrict the use of Queen’s Counsel in family cases to cases
where provisions similar to those in criminal cases apply – Please give reasons.
459 592 65 1,116
Expert Remuneration
39 Do you agree that:
i) there should be a clear structure for the fees to be paid to experts from legal aid; 875 90 965
ii) in the short term, the current benchmark hourly rates, reduced by 10%, should be codified; 494 369 863
iii) in the longer term, the structure of experts’ fees should include both fixed and graduated fees and
a limited number of hourly rates;
639 220 859
iv) the categorisations of fixed and graduated fees shown in Annex J are appropriate; and 430 332 762
v) the proposed provisions for ‘exceptional’ cases set out at paragraph 8.16 are reasonable and
practicable –
478 288 766
Please give reasons. 282
Reform of Le
Question Yes No Neither Total
Alternative Sources of Funding
40 Do you think that there are any barriers to the introduction of a scheme to secure interest on client
accounts – Please give reasons.
578 189 130 897
Model A Model B Neither
41 Which model do you believe would be most effective. Please give reasons. 317 94 306
Model A Model B Model C None
42 Do you think that a scheme to secure interest on client accounts would be most effective if it were
based on:
216 102 47 292
Please give reasons.
43 Do you agree with the proposal to introduce a Supplementary Legal Aid Scheme – Please give
reasons.
176 273 173 622
44 Do you agree that the amount recovered should be set as a percentage of general damages – If so,
what should the percentage be –
259 182 124 565
Governance and Administration
45 The Government would welcome views on where regulators could play a more active role in quality
assurance, balanced against the continuing need to have in place and demonstrate robust central
financial and quality controls.
641
gal Aid in England and Wales: Government Response Reform of Legal Aid in England and Wales: Government Response
283
Question Yes No Neither Total
46 The Government would welcome views on the administration of legal aid, and in particular: 757
i) the application process for civil and criminal legal aid;
ii) applying for amendments, payments on account etc.;
iii) bill submission and final settlement of legal aid claims; and
iv) whether the system of Standard Monthly Payments should be retained or should there be a move
to payment as billed –
47 In light of the current programme of the Legal Services Commission to make greater use of electronic
working, legal aid practitioners are asked to give views on their readiness to work in this way.
840
48 Are there any other factors you think the Government should consider to improve the administration
of legal aid –
683
Impact Assessments
49 Do you agree that we have correctly identified the range of impacts under the proposals set out in this
consultation paper – Please give reasons.
88 1,104 169 1,361
50 Do you agree that we have correctly identified the extent of impacts under these proposals – Please
give reasons.
50 1,036 75 1,161
51 Are there forms of mitigation in relation to client impacts that we have not considered – 636

262 Reform of Legal Aid in England and Wales Government Response
C. Efficiency improvement proposals
(i) Judicial system efficiency
50. A number of respondents argued that a more efficient court system would
bring savings for legal aid. These relate to improving efficiency in the
management and progression of cases, rather than reducing the volume
of cases. Proposals included:
– a full review of civil procedure, especially in low value cases;
– training and encouraging judges to use modern case management
procedures, improving listing systems, and in general having
stronger case management in family cases and improving case
management in clinical negligence cases;
– implementing Lord Justice Jackson’s recommendations for clinical
negligence claims as set out at Chapter 23 of his report;
– ticketing judges so that judges with the appropriate expertise hear
cases;
– the proposals about simplifying legislation could also generate
efficiencies in cases which arise (in addition to reducing the volume
of cases, as mentioned above);
– hearing more cases in magistrates’ courts rather than the Crown
Court;
– considering the comparative costs and efficiency of lay and
professional judges;
– investing in IT within the court system including to reduce physical
attendance and to use more e-communication;
– means testing systems as applied to Crown Court cases should
themselves not be excessively costly to operate;
– introduce twin track private law cases;
– use one joint expert for forensic accounts not multiple experts;
– review the use of associate prosecutors to ensure that any CPS
budget savings are not at the expense of wider court service and
legal aid costs;
– altering committal hearings so that defendants confirm their initial
plea, legislating for Goodyear intentions and otherwise encouraging
early guilty pleas.
The Government response
51. The Government agrees that delays in the court system can contribute to
increased legal aid costs, and we are already working on efficiency
programmes to simplify, streamline and modernise procedures. The
Criminal Justice System (CJS) efficiency programme is being developed
collaboratively with all of the criminal justice agencies and is focused on
263 Reform of Legal Aid in England and Wales Government Response
system-wide inefficiency, to deliver a more efficient and cost-effective
system. The MoJ is also in the process of consulting on a range of civil
justice transformation proposals which are also designed to improve
efficiency in civil courts.
52. The MoJ’s existing spending plans already assume savings in the costs
of the justice system, including through a reduction in capacity and also in
improved efficiency. For example, the Government announced on 14
December 2010 its plans for courts modernisation.
80
The efficiency
proposals outlined above could therefore only represent an alternative to
the legal aid savings if they delivered savings beyond our existing plans.
Our efficiency programme is designed to complement legal aid reform,
rather than as an alternative to it, minimising waste and ensuring users
and the taxpayer secure best value for money.
53. Several of Lord Justice Jackson’s proposals for improvements in the
handling of clinical negligence claims, mentioned in particular by the Bar
Council in their response, have already been implemented. These
include: increase in time for defendants to respond to the protocol letter of
claim; NHLSA now routinely obtains independent expert reports to assess
liability for claims; defendant bodies have nominated a senior officer to
receive complaints about defendant lawyers failing to address the issues.
The judiciary are taking forward a project to harmonise case management
directions in clinical negligence and other types of claim. The Ministry of
Justice is discussing with the judiciary the development of a costs
budgeting pilot for clinical negligence claims. There are already statutory
time limits for health bodies to provide medical records on request. Where
a health body fails to comply with the statutory time limits for providing
medical records on request a complaint should be made to the health
body. If a complaint is not resolved satisfactorily, a complaint can be
made to the Information Commissioner who can investigate and serve a
decision notice, which can include a financial penalty.
54. In addition the Government is currently consulting on whether the
principles of the Road Traffic Accident scheme could be extended to
cover low value clinical negligence claims including claims against nonNHS bodies. This is wider than the scheme proposed by the NHS
Redress Act. The Government will consider responses and publish
proposals in due course.
55. The Law Society, in its proposal for dealing with either way cases in the
magistrates’ courts, did not specify how the change would be achieved.
The Government agrees that there is scope for the magistrates’ courts to
handle more of these cases, and our plans to reform criminal fees reflect
concerns that the current system of fees does not sufficiently support the
aim of speedy and efficient justice and may discourage early resolution of

80
See: http://www.justice.gov.uk/news/newsrelease141210a.htm
264 Reform of Legal Aid in England and Wales Government Response
cases (see Annex G). It is, however, a longstanding and important
principle of criminal justice that the defendant has a right to a trial before
a jury, and we have no plans to restrict this.
(ii) Rationalising legal aid services
56. It has been suggested that the Public Defender Service (PDS) could be
scrapped, that the Criminal Defence Service (CDS) Direct telephone
service could be abolished with the work passed to local solicitors and
that the Defence Solicitor Call Centre (DSCC) which allocates solicitors
could be replaced with alternative local arrangements.
The Government response
57. The Government believes that the PDS provides an important safety net
in areas where the supply of providers is low, and insures against future
disruption to supply in the event that providers decide to leave the market.
58. CDS Direct offers a proven high quality, cost effective service, notably
one that requires a higher level of performance in relation to peer review
than is required of standard crime contract holders. The DSCC performs
a number of key functions for the LSC. As well as providing national
coverage through a single contractor, data provided by the DSCC assists
the LSC in exercising proper financial control over police station
expenditure, and is also best placed to provide the administrative
flexibility required as we move towards competition.
59. For these reasons, we do not agree that PDS, CDS Direct or the DSCC
should be abolished as an alternative saving for the legal aid.
(iii) Reducing fees
60. A number of proposals were made in relation to fees and costs. These
included introducing a single fee for both litigation and advocacy, and also
for family cases, aligning Queen’s Counsel fees at the level of leading
junior fees, other changes affecting Very High Cost Cases (VHCCs) and
Quinn’s Counsel rates, capping fees paid to individual fee earners to
£250,000 per year, and reducing solicitor fees further and introducing
more fee alignment.
The Government response
61. The Government sought views on a series of similar proposals on fees,
including introducing a single fee, the appointment of QCs and for VHCC
cases. The Governments plans are set out in Annexes G (criminal) and H
(civil and family). The question of whether to introduce a single fee in
criminal matters will be considered as part of the consultation on
introducing competition in criminal fees, which will be published later
this year.
62. We have separately considered the proposal to cap fees paid to
individuals to £250,000. We believe that there are some practical
265 Reform of Legal Aid in England and Wales Government Response
difficulties in implementing this proposal. For example, it would be difficult
to stop payments and/or work, if this threshold were met part way through
a case. However, even if the practical difficulties could be overcome, we
do not believe the proposal would save money. It would simply distribute
existing work, and therefore payments, across a wider group of providers
without achieving any greater efficiency or effectiveness.
(iv) Reducing administrative costs
63. Narrower proposals included rationalising hourly rates to make it easier to
identify the relevant fee, streamlining contractual requirements and
streamlining accreditation schemes so that they are pitched at the correct
level to ensure quality and avoid duplication, and being more tolerant
towards unintentional non-compliance. Wider proposals included moving
towards a much more decentralised model of legal fund administration,
with local bodies more involved in fund allocation and with more flexibility
and choice offered to providers in relation to taking on an running cases.
The Government response
64. The consultation sought views on the administration scheme, and the
LSC’s plans to take these forward are set out at paragraphs 273 to 275 of
section 3: the programme of reform.

77
See: http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm101203/debtext/
101203-0003.htm
257 Reform of Legal Aid in England and Wales Government Response
The Government response
17. There would be no additional savings to the Government overall if the
legal aid fund was financed by a different part of the Government, but we
recognise that, in theory, the application of a ‘polluter pays’ approach
might ensure that greater account is taken of the costs to legal aid. On
the other hand, it might generate a much more risk-averse approach,
especially in relation to borderline cases, and have unintended
consequences which could drive additional costs. For example, local
authorities might be reluctant to intervene in cases of suspected abuse,
and prosecutors might be reluctant to pursue criminal prosecutions. Strict
application of the “polluter pays” principle would also call into question the
effective cost protection that the legal aid fund currently receives when
funding litigation. A significant proportion of cases funded by the LSC are
unsuccessful, and any requirement for the LSC to meet the costs of other
parties in unsuccessful cases would be a significant drain on the fund.
18. It is already the case that the courts can award costs in civil cases, and
last year, the legal aid fund recovered £170 million from opponents of
legally aided parties.
78
19. The Government considers that inefficiencies in criminal justice
procedures are best addressed through better decision making, and by
introducing more efficient and streamlined processes. The CJS efficiency
programme aims to do this (see paragraph 16 section 2: the case for
reform). The MoJ is also already working with other government bodies to
help support improved decision making in civil matters, for example along
the lines of the joint work currently being carried out between Her
Majesty’s Courts and Tribunals Service and the DWP.
20. For these reasons, the Government has no plans to extend the polluter
pays principle further.
(v) Enforcement considered more thoroughly by Departments
21. The related proposal was that government consultation papers
introducing new rights or offences should set out the costs of
enforcement, as should explanatory notes to legislation. In addition the
NAO should scrutinise these predictions and require compensation to be
paid to the legal aid fund if appropriate.
The Government response
22. It is already a standard requirement that consultation proposals and
legislation are accompanied by published Impact Assessments (IAs).
These include the Justice Impact Test (JIT). JITs assess the costs on the
justice system, including on legal aid, of new government proposals.

78
LSC data.
258 Reform of Legal Aid in England and Wales Government Response
Where these proposals result in a net cost to MoJ, then appropriate funds
are transferred to meet that cost.
23. The NAO already samples IAs and makes recommendations relating to
their quality.
(vi) Diversion of cases away from court and legal aid
24. It has been suggested that some types of case could be diverted away
from the court and to an Ombudsman service, where resolution of a
dispute might be possible without the involvement of legal services. This
might apply to debt, housing and social welfare cases.
25. It was also suggested that the use of mediation should be considered
carefully, and that mediation should not be applied in such a way as to
increase costs.
The Government response
26. One of the factors that was considered in deciding whether cases should
be removed from scope was the availability of alternative remedies, for
example a complaints procedure or an Ombudsman’s scheme.
27. The Government is already considering other court diversion proposals
as part of the public consultation on civil justice reform, where proposals
are currently subject to public consultation. The Government has also
considered (private law) family court diversion proposals although these
have now been subsumed within the current Family Justice Review
chaired by David Norgrove. This included reviewing the processes which
apply to mediation. The Family Justice Review interim report
79
outlined
the benefits of mediation in supporting parties to resolve their disputes.
The need to make savings in the legal aid budget takes these initiatives
into account.
B. Proposals for alternative sources of funding
28. A number of proposals seek to reduce spending on legal aid by securing
alternative sources of funding. These include:
(i) Proposals for extra taxes and levies
29. Proposals included to place an increased tax on alcohol on the grounds
that much crime is alcohol-related, to place a levy on the financial
services industry to cover the legal aid costs of fraud cases as much
fraud takes place within that sector, and to place a levy on consumer
credit lenders to pay for debt advice.

79
See footnote 6 above.
259 Reform of Legal Aid in England and Wales Government Response
The Government response
30. These proposals would mean creating new forms of tax and the
Government’s policy is to consider these on their own merits. Such
consideration should not give extra weight simply on the grounds that
new taxes could be hypothecated against specific areas of expenditure.
The Treasury’s Consolidated Budgeting Guidance sets out the criteria
used to aid decisions whether to hypothecate taxation against
expenditure. These are based on the general presumption that tax
revenue should not used to offset specific expenditure. They have been
devised in order to support decisions that hypothecated tax revenues are
agreed only on grounds of efficiency. Therefore hypothecation is not
normally agreed if it would: increase spending power; erode the ability of
the Government to raise tax efficiently and in the sectors of its choosing,
and erode its ability to allocate spending according to priorities.
31. In addition the relevant macroeconomic objective is to cut overall public
spending rather than to increase overall levels of taxation and the two are
not simply interchangeable. Tax policy is based on a variety of factors,
including whether the tax base is broad or narrow, how regressive or
progressive the tax might be, taxpayers’ ability to pay, and the
behavioural and other consequences of applying tax. In this instance the
proposals seem to be based on some notion of causality, although there
is no causal connection between alcohol and crime, between fraud and
financial services providers (where regulation already applies), or
between consumer credit providers and debt.
32. The Government is not therefore minded to consider recommendations to
introduce new taxes to offset the costs of legal aid. Instead legal aid
expenditure will continue to be funded primarily through general taxation.
(ii) Increased use of legal expenses insurance
33. It has been suggested that wider use of insurance in civil disputes would
help reduce legal aid costs. One suggestion was that there should be
legislation making legal expenses insurance a compulsory element of
consumer insurance policies (such as car, household or contents).
Compulsory legal insurance for company directors has also been
suggested.
The Government response
34. In developing proposals for the consultation paper, we explored with the
Association of British Insurers the scope for increasing the use of legal
insurance.
35. A number of insurers already provide cover for company directors and
company officials for the risk of prosecution. However, cover is only
provided until guilt has been established and, where that is the case, all
costs incurred have to be repaid. Moreover, the cover is only available
once alternatives, such as the availability of legal aid, have been
explored.
260 Reform of Legal Aid in England and Wales Government Response
36. We not consider that compulsory legal insurance should be explored
further at this stage. Dealing with those who do not take out the insurance
would be costly, and there would also be increased regulatory burdens. If
insurers were required to offer cover to everyone there may be issues of
cross-subsidisation and affordability, and the Government would need to
decide what should happen in relation to those who could not afford to
pay. Under ECHR the Government is obliged to provide legal aid in
certain circumstances and for this reason insurance could not be entirely
universal.
37. If legal services were funded by insurance premiums rather than by
general taxation the total level of spending and volume of activity might
differ. Some policy holders may seek to access legal aid more than now,
given that they have paid an explicit premium for this cover. If premiums
were set according to risk then they might be more regressive than
general taxation, and they might be more discriminatory from an equality
perspective in relation to key groups and also geographical areas. It is
unclear how well premium rates could be set to price risk accurately.
38. The nature and level of service might differ compared to now. It is unclear
whether access would be tighter or less consistent across different
groups. Legislation may be required here to address this. The efficiency
of resource allocation might also differ. The funds would be administered
by insurance companies rather than by the LSC, and administrative
efficiency and costs might differ.
39. More generally, insurers were not in favour of expanding the market in
before the event legal insurance. In their view, the premiums would not be
affordable for those currently eligible for legal aid.
40. For these reasons, the Government does not believe that the there is
scope in the short term to promote greater use of legal insurance.
(iii) Use restrained assets to fund cases
41. The Bar Council and Law Society have both proposed the use of
restrained assets to fund criminal defence. Currently, there is a prohibition
under the Proceeds of Crime Act 2002 that restrained assets should not
be used in a criminal defence, to ensure that assets that are alleged to be
the proceeds of crime are not dissipated.
The Government response
42. Assets recovered from the proceeds of crime are already applied to offset
the overall costs of criminal justice to the public purse. Using restrained
assets to pay for the costs of the legal defence would reduce the value of
assets available for confiscation under any subsequent recovery
proceedings. We therefore believe that they are unlikely to achieve any
significant overall savings to Government.
43. We are however considering a related proposition, under which the value
of restrained assets would be taken into consideration in the Crown Court
261 Reform of Legal Aid in England and Wales Government Response
means test. This would ensure that those assets are used to contribute to
the costs of the legal defence, although for the same reasons as set out
above, it is not expected to achieve significant savings in public spending.
For this reason, we do not consider it to be a realistic alternative to the
Governments plans for legal aid reform.
(iv) Widen and improve application of charges and loans
44. Proposals included applying the statutory charge to mediation (subject to
a 50% discount), better collection of the statutory charge by the LSC,
selling off statutory charge debt to the private sector, and applying the
statutory charge to a wider range of cases and to Legal Help. It was
suggested that defendants who elect trial on indictment should take out a
loan to pay the cost of representation.
The Government response
45. The private sector has displayed little appetite for buying statutory charge
debt at a price which would save the Government money, and there is no
strong body of evidence that the charge could be collected significantly
more successfully or efficiently. In essence, legal aid clients need to
satisfy financial eligibility criteria and as a result they do not tend to have
assets or income which are able to yield funds for the legal aid budget.
The Government’s reform of financial eligibility, to ensure that those who
can afford to pay for, or contribute towards the costs of legal aid are set
out at Annex E.
46. The administrative costs of operating a “student loan” arrangement would
be significant and savings are unlikely to be realised in the short term.
Unlike many students, who expect that their incomes might rise in the
near future upon graduation, the income of many legal aid clients might
remain flatter over time.
47. Similarly, those who elect for trial in the Crown Court are subject to the
Crown Court means test, and may have to pay contributions depending
on their assessed disposable income and capital.
(v) Interest on client accounts
48. The suggestion was that the legal aid fund should secure the interest
earned on solicitors’ client accounts.
The Government response
49. In the consultation paper, the Government sought views on establishing
an Interest on Client Trust Accounts (IOLTA) scheme. However, following
consultation, we have decided not to pursue this. See Annex J for full
details.

75
Renting Homes: the Final Report, Cm 6781,May 2006.

http://www.justice.gov.uk/lawcommission/renting-homes.htm

255 Reform of Legal Aid in England and Wales Government Response
applying the law more quickly and easily. The Government’s response to
the Law Commission’s report was included in its response to the Rugg
review.
76
(ii) Reducing cases generated by government bodies
7. These proposals relate to procedural reforms which aim to reduce
volumes of case. One proposal was that the volume of interim court
hearings could be reduced if prisoners on remand were no longer
produced to the court every 28 days. Savings would arise if the period
was extended.
8. A second proposal from the Judges Council and other senior judiciary
related to reducing the number and cost of judicial reviews, in immigration
in particular. Another suggestion was that the Crown Prosecution Service
(CPS) should be more selective about pursuing individuals and about
laying charges as current practices lead to too many dropped
prosecutions or judge-directed acquittals, which constitute a waste of
resources.
9. In addition Citizens Advice suggested that merging the four different
workforce employment agencies would reduce the need for employment
advice, and that improved decision making and administration in the
Department for Work and Pensions (DWP) and Her Majesty’s Revenue
and Customs (HMRC) could reduce the need for advice on benefit issues.
The Government response
10. The Government is already considering the prisoner production proposal
as part of the MoJ’s efficiency programme for the Criminal Justice
System.
11. The Government agrees with the proposals on judicial reviews and our
plans are set out at Annex A.
12. On criminal prosecutions, there is no strong body of evidence to indicate
that there are disproportionate numbers of prosecutions which are
dropped or result in a judge directed acquittal, particularly where the
circumstances which lead to that outcome are foreseeable. For example,
prosecutions are often withdrawn against defendants in multi-defendant
cases when other defendants plead guilty and take responsibility for the
offending. All prosecutions commenced by the Crown Prosecution
Services (CPS) are undertaken in accordance with the Code for Crown
Prosecutors, meeting the evidential and public interest tests. The latest
CPS data shows a conviction rate of 86% across both the magistrates’

76
The private rented sector: professionalism and quality – the Government response to the
Rugg review consultation, May 2009.

http://www.communities.gov.uk/documents/housing/pdf/1229922.pdf

256 Reform of Legal Aid in England and Wales Government Response
courts and Crown Court. There may be unintended consequences for
victims, witnesses and local communities if prosecutors take a more riskaverse approach towards prosecution.
13. The Government announced on 3 December
77
a review of the
Government’s workplace rights, compliance and enforcement
arrangements to establish what scope there is to streamline them and
make them more effective. Findings will be published later this year.
(iii) Restricting eligibility further via the merits test
14. There were suggestions that the LSC should enforce more strictly its
merits test for granting legal aid in civil and family proceedings. In family
law, respondents put forward the idea of enforcing more strictly the merits
test in private law children cases as an alternative to removing such
cases from scope. The Law Society suggested that such a measure could
reduce the volume of contact cases by 20-30%. Resolution suggested a
list of questions that might be used by the LSC to enforce a stricter merits
test.
The Government response
15. Many of these questions are already taken into account in the current
merits test. Others are similar to the issues that would be raised in
considering child protection issues for the purposes of the domestic
violence exception (see Annex A, paragraph 44). Following the
consultation, we have decided to make one change to the merits test (see
Annex C). The Funding Code has been amended a number of times over
recent years to tighten up the criteria for awarding legal aid. There are
administrative costs in enforcing merits tests, and inherent difficulties in
relying on them for savings. For example, it is very difficult to challenge
the solicitor’s assessment of the prospects of success for a case.
(iv) Application of ‘polluter pays’ for public bodies losing cases
16. One suggestion was that where public bodies (which are party to a case)
cause unnecessary costs then they should bear the cost. In criminal
cases, it was argued that greater use should be made of wasted costs
orders, and that the threshold for making wasted costs orders should be
lowered to enable this. Another suggestion was that where the
administrative decisions of public bodies are overturned these bodies
should pay the legal aid costs involved and also pay a surcharge. In both
instances there would be a financial incentive on the public bodies to
engage in actions which improved their decision making and reduced the
costs to legal aid.

Annex K: Impact Assessments (IA) and Equality Impact
Assessments (EIA)
Introduction
1. The consultation asked:
Question 49: Do you agree that we have correctly identified the range of
impacts under the proposal set out in this consultation paper – Please give
reasons.
Question 50: Do you agree that we have correctly identified the extent of
impacts under these proposals – Please give reasons.
Question 51: Are there forms of mitigation in relation to client impacts that
we have not considered –
2. There were 1,361 responses to question 49. 88 (6%) agreed that we had
correctly identified the range of impacts of the proposals for reform, 1,104
(81%) disagreed, and 169 (12%) neither agreed nor disagreed. There
were 1,161 responses to question 50, of whom 50 (4%) agreed , 1,036
(89%) disagreed, and 75 (6%) neither agreed nor disagreed. 636
respondents offered views on forms of mitigation that had not been
considered in the consultation.
3. A number of respondents also submitted new data or research, or
referred to other existing information which could be used to support the
impact assessment of the proposals and build on the analysis set out in
the initial IAs and EIAs. We have included consideration of this evidence
in the relevant sections of the final IA and EIA that accompany this
response document.
73
Key issues raised in consultation
4. Comments on the IAs and EIAs from individuals, legal practitioners,
representative bodies and most other stakeholders were largely negative,
although some welcomed the level of analysis and detail that had been
provided to assess the impact of the proposals.
5. Many respondents highlighted the impacts and evidence gaps identified
in the IAs and EIAs in their arguments against the reforms with many, in
particular, raising the potential for the proposals to affect women, BAME
people and disabled people.
6. Others criticised the IAs and EIAs for not identifying the full range or
extent of the impacts of the proposals and / or identified additional
potential impacts that the reforms might have. While many respondents

73
See footnotes 3 and 4.
251 Reform of Legal Aid in England and Wales Government Response
considered that the impact assessments did identify the extent of the
impacts on clients sufficiently, others argued that the impacts would be
more severe, stressing the vulnerability of many legal aid clients.
7. Respondents also criticised the lack of mitigations proposed in response
to the impacts identified, although some agreed that the possible forms of
mitigation were limited by the nature of the proposals. Where mitigations
were proposed, mainly in relation to the proposals to expand the role of
the telephone helpline, these have been considered in the relevant
section of this response and the final IA and EIA.
8. Other key issues raised included that:
– the impact assessments had failed to fully take account of the
impacts on other Government departments and public bodies,
including local authorities;
– litigants-in-person would cause increased costs in other parts of the
civil justice system;
– clients are often vulnerable and some important potential impacts on
clients, including the potential for increased ill health as a result of
legal problems going unsolved, had not been taken into account;
– the effect of reforms on children, including in divorce and contact
cases, had not been taken into account;
– because of these additional impacts on clients and other public
bodies the wider costs of the proposals could outweigh any legal aid
savings, and current legal aid expenditure saves money for other
parts of the public sector;
– reducing legal aid fees would deter young people from becoming
solicitors and barristers undertaking legal aid work, and that as only
those with significant resources would be able to do so in future, the
diversity of the professions would suffer.
9. Respondents also raised specific equalities issues and these are set out
in more detail in the relevant sections of the EIA that accompanies this
response to consultation.
The Government response
10. The initial IAs and EIAs, which were published alongside the consultation
Proposals for the Reform of Legal Aid in England and Wales, set out our
assessment of the potential impact of the reforms. Following consultation
we have made changes to the proposals for implementation and have
now published a final IA and EIA, reflecting these changes and
incorporating feedback on the proposals and impact assessments from
respondents to the consultation.
11. This feedback includes additional information on the potential effect of the
changes submitted by respondents including, for example, the report
commissioned by the Law Society on the potential impact of the reforms
252 Reform of Legal Aid in England and Wales Government Response
on legal aid firms. We have also undertaken a review of the research
identified and referred to by respondents on a range of issues related to
the legal problems that people face, including a review of the data
collected by the Civil and Social Justice Survey conducted by the Legal
Services Research Centre (LSRC), to identify relevant additional
information.
12. The results of this exercise are set out in greater detail in the final EIA
that accompanies this response. However, overall, we remain of the view
that our analysis based on Legal Services Commission (LSC) and LSRC
data is the most appropriate and robust way to assess the impact of the
proposals on clients and providers.
13. A comprehensive review of the available evidence on litigants-inperson,
74
which as noted above was a particular issue identified by many
respondents, has now been undertaken and published alongside this
response to consultation. Again, while valuable additional information has
been considered, we believe that our initial assessment of the likely
impact on the wider civil justice system of an increase in the number of
litigants-in-person is robust and consistent with the evidence.
14. While respondents to the consultation suggested a range of possible
impacts on clients based on their personal circumstances, in the initial
EIA we focussed our analysis on the protected characteristics set out in
relevant equalities legislation. Changes to the equalities duties since the
consultation was published mean that the impact on people based on
their age, as well as other protected characteristics including religion and
belief must now be considered by public authorities. We have therefore
now considered these impacts and the relevant sections of the EIA set
out our assessment of the impact that the proposals might have on
children, as argued for by respondents to the consultation.
15. While we remain of the view that the initial IAs and EIAs appropriately
identified the range and extent of the potential impacts of the consultation
proposals, we have therefore addressed the key criticisms of the IAs and
EIAs made by respondents to the consultation. The final impact
assessment documents published alongside this Government response
to consultation set out a comprehensive assessment of the range and
extent of the impacts that the proposals will have, based on the full range
of evidence available

74
See footnote 19 above.
253 Reform of Legal Aid in England and Wales Government Response
16. However, gaps in the evidence inevitably remain, as information which
would be useful in assessing the impact of the proposals is not collected.
For example, data on protected characteristics such as religion and belief
is not routinely collected by organisations working in the justice system. In
some areas this has meant that we are not able to undertake detailed
assessments of the impact of the proposals on particular groups. Our
approach throughout the initial and final IA and EIA has always been to
exercise caution, and take account of how robust the evidence is when
drawing conclusions about the impacts the proposals are likely to have.
Therefore, we have not discounted the potential for the proposals to affect
people because of gaps in the data.
17. Consideration of how the reforms have been amended in light of
feedback, and how the impacts of the reforms for implementation are
justified by the need to achieve the Government’s objectives, is set out
elsewhere in the relevant sections of this response documents. In order to
assess the actual effects that the reforms have had there will be a full
post-implementation review of the changes.
254 Reform of Legal Aid in England and Wales Government Response
Annex L: Alternative Proposals
Introduction
1. The consultation did not seek alternative proposals for making savings.
However, many of the responses, and in particular those from the Law
Society and Bar Council, suggested alternative ways of making savings in
legal aid expenditure, which it was said would reduce or remove any
financial imperative to make the changes proposed in the consultation.
Table 1 below contains a summary of ideas put forward by the Law
Society, together with comments from the Government on the costings
attributed to the Law Society savings.
2. Many of the proposals put forward by the Law Society and Bar Council
were supported by other representative bodies, such as, in the family
sphere, Resolution and the Family Law Bar Association. Other
respondents have put forward additional ideas of their own.
3. There are a number of common themes that can be indentified from the
alternative proposals put forward by respondents.
A. Proposals which reduce the initial volume of cases
4. A number of proposals seek to reduce spending on legal aid by reducing
the volume of cases. These include:
i) Simplification of legislation and of legal provisions
5. Included were proposals to simplify the law on housing tenure in
accordance with a Law Commission report
75
in order to reduce the
incidence of disputes, and to repeal criminal legal provisions in respect of
hearsay and bad character which generate additional arguments. Other
proposals included removing duplicate sentences and simplifying
statutory language. The Immigration Law Practitioners Association
pointed out that the frequency and complexity of immigration legislation
drives costs, including legal aid.
The Government response
6. The Government considers all legal simplification proposals on their
merits, bearing in mind the relation between legal simplification and
clarity, and legal flexibility and adaptability. Wider costs may be
associated with inflexible legislation or with provisions which offer fewer
safeguards, which need to be balanced against any savings from

The Government response
17. The SLAS proposals were intended not only to create an alternative
funding stream to supplement the legal aid fund but also to provide the
opportunity to address the relationship between legal aid and Lord Justice
Jackson’s proposals for reform to the costs of civil litigation, thereby
ensuring that alternative sources of funding, such as conditional fee
agreements (CFAs), remained no less attractive a funding mechanism
than legal aid in cases involving damages.
18. Lord Justice Jackson proposed that the recoverability of CFA success
fees from the losing side should be abolished in all cases, including
personal injury. He also proposed that in personal injury cases the
success fee which lawyers can take should be limited to 25% of
damages, excluding damages awarded for future care and loss. On 29
March 2011, the Government announced
72
that it would implement the
following:
– abolish the recoverability of CFA success fees in all cases;
– limit CFA success fees in personal injury cases to 25% of damages
(excluding damages awarded for future care and loss); and

72
See footnote 8 above.
247 Reform of Legal Aid in England and Wales Government Response
– increase by 10% non-pecuniary general damages such as pain,
suffering and loss of amenity in tort cases.
19. The legal aid consultation paper proposed implementing a Supplementary
Legal Aid Scheme (SLAS) for all areas of civil legal aid cases where
general damages are successfully claimed. In addition, the Government
proposed that the SLAS would also apply to any out-of-scope case which
was funded through the exceptional funding scheme.
20. The Legal Aid consultation paper suggested a number of methods under
which a partially self-funding Supplementary Legal Aid Scheme could
calculate and collect funds. The options which suggested recouping a
percentage of:
– the inter-party costs awarded to the claimant lawyer at the conclusion
of the case paid by the successful claimant lawyer; or
– costs paid to the unsuccessful defendant
received limited support.
21. The third option suggested recouping a percentage of damages paid by
the successful legally aided client. However, this proposal was
(unintentionally) narrower than the proposal set out in the Jackson
consultation to cap success fees in personal injury cases at 25% of all
damages other than damages for future care and loss, as the SLAS
proposal referred only to general damages. Several respondents
highlighted this anomaly. For example, the Bar Council Civil Legal Aid
Committee commented that the SLAS restricted to general damages was
a better option for claimants than a CFA because of the narrower types of
damages to which the SLAS related.
22. The Government recognises that those respondents who argued that a
SLAS restricted to general damages would make legal aid more attractive
than CFAs are correct. The Government did not intend this outcome. The
Government’s view is that legal aid should generally be no more attractive
than CFAs or other forms of funding and that the approach to the SLAS
should be consistent as far as possible with the wider reforms to the costs
and funding of civil litigation.
23. Some respondents argued that the SLAS should be set at 10% (in line
with the increase in general damages for non-pecuniary loss in tort
cases).
The Government’s response
24. The Government acknowledges that the number of respondents
supporting the SLAS was lower than those who opposed the proposal.
Some respondents (both supporters and opponents of the proposal)
indicated that they were not sure how the SLAS would operate,
particularly, in light of the proposed scope changes. It was also notable
that a higher number and proportion of respondents supported the
248 Reform of Legal Aid in England and Wales Government Response
concept of the SLAS recouping a percentage of damages than those who
expressed support for the SLAS itself.
25. The Government recognises that the SLAS proposal represents a new
and unfamiliar way of funding some civil cases in England and Wales, but
is of the view that no compelling argument against the SLAS was
presented. At a time when the public purse is constrained, the partially
self-funding SLAS represents an important innovative measure to enable
legal aid funding for civil cases. The funds raised by the partially selffunding SLAS will supplement the legal aid fund, thereby supporting
members of the public to pursue civil cases. Failure to innovate when
public funding is limited is likely to result in greater pressure on the legal
aid fund. This measure, along with others adopted by the Government, is
intended to put legal aid on a sustainable footing and to ensure that those
most in need receive legal aid funding.
26. Several respondents questioned the viability of the SLAS proposal should
clinical negligence, education damages and housing damages cases be
removed from scope. The Government has decided to proceed to remove
clinical negligence, education damages and housing damages cases from
legal aid scope. While the SLAS would apply to out-of-scope cases
funded through exceptional funding, we recognise that respondents’
concerns are well-founded in the context of a SLAS that is fully selffunding. In addition to the risk that SLAS funds would be easily depleted
and difficult to replenish, a self-funding SLAS has the additional burden of
requiring different percentages of damages to be recouped from different
cases depending on risk and therefore would entail significant
administration.
27. The Government’s view is that this proposal should be consistent with the
wider reforms to the costs and funding of civil litigation and that legal aid
should generally be no more attractive than CFAs or other forms of
funding.
28. Under the Jackson CFA reforms announced on 29 March, the success
fee which a solicitor may claim from a successful client in personal injury
cases (including clinical negligence cases) will be capped at 25% of all
damages, other than those for future care and loss. Solicitors will be able
to charge a success fee which is less than 25%, and the Government
anticipates that market forces will encourage this.
29. The Government has therefore decided to implement a partially selffunding SLAS. The funds recouped will supplement the legal aid fund and
therefore the funding of civil cases. This partially self-funding model is not
only viable in light of the Government’s changes to legal aid scope, it also
ensures that the level of damages recouped to the legal aid fund can be
set at a fixed percentage rather than the variable rates that the selffunding SLAS would entail. The partially self-funding model also facilitates
a consistent approach with the wider reforms to the costs and funding of
civil litigation.
249 Reform of Legal Aid in England and Wales Government Response
30. Consequently, the Government has decided to introduce a SLAS which is
partially self-funding and takes for the legal aid fund a percentage of all
damages other than damages for future care and loss, in a way that is
consistent, so far as possible, with the reforms to civil litigation costs in
personal injury cases.
The percentage of damages
31. Some respondents argued that the SLAS should be set at 10% (in line
with the proposed increase in general damages for non pecuniary loss in
tort cases). However, the Government considers that this would mean
that legal aid would generally be more attractive than CFAs in personal
injury cases (to the limited extent that legal aid is relevant in these cases).
32. The Government recognises that in damages cases other than personal
injury cases, the SLAS may, in some cases, be more attractive than a
CFA because: there will be no cap on the CFA success fee; a legally
aided claimant is protected from having costs awarded against him if he
loses the case; and will not need to take out After the Event (ATE)
insurance (although he may be required to make a contribution to the
costs of his case). However, having considered the points raised by
respondents, the Government has concluded that the recovery level for
the SLAS should be consistent with the Jackson reforms to ensure, in so
far as it is possible to do so, that CFAs are no less attractive than legal
aid. The Government has decided to set the level of recovery at 25% of
all damages successfully claimed, other than any damages for future care
and loss.
Conclusion
33. Having considered the responses to the consultation questions on
alternative sources of funding, the Government has decided to introduce
a Supplementary Legal Aid Scheme, under which 25% of all damages
successfully claimed, other than damages for future care and loss, in
cases funded by legal aid will be recovered by the legal aid fund. This will
include cases funded through the exceptional funding mechanism.
250 Reform of Legal Aid in England and Wales Government Response

243 Reform of Legal Aid in England and Wales Government Response
Annex J: Alternative sources of funding
Introduction
1. The consultation paper set out a series of questions seeking views on two
proposals for offsetting the costs of legal aid: the establishment of a
scheme to secure the Interest on Lawyers’ Trust Accounts, and the
introduction of a Supplementary Legal Aid Scheme.
Interest on Lawyers Trust Accounts (IOLTA)
2. The consultation paper proposed options for securing the Interest on
Lawyers’ Trust Accounts (IOLTAs), based on similar models used in other
international jurisdictions. The consultation asked:
Question 40: Do you think there are any barriers to the introduction of a
scheme to secure interest on client accounts –
Question 41: Which model do you believe would be more effective:
Model A: under which solicitors would retain client monies in their
client accounts, but would remit interest to the Government; or
Model B: under which general client accounts would be pooled into a
Government bank account –
Question 42: Do you think that a scheme to secure interest on client
accounts would be most effective if it were based on:
a) a mandatory model;
b) a voluntary opt-in model; or
c) a voluntary opt-out model.
3. There were 897 responses to question 40. 578 (64%) thought that there
were barriers to the introduction of an IOLTA scheme, 189 (21%) did not
think there were barriers and a further 130 (14%) commented. There
were 717 responses to question 41. Of these, 317 (44%) preferred
Model A, 94 (13%) favoured Model B and 306 (43%) preferred neither
Model A nor Model B. There were 657 responses to question 42.
216 (33%) preferred option (a), 102(16%) option (b), 47 (7%) option (c)
and 292 (44%) favoured none of the options.
Key issues raised in consultation
4. Although there was positive support for the policy principle from a number
of quarters, including some sections of the Bar and the Advice Services
Alliance, in general respondents had concerns around both the general
concept of an IOLTA scheme and the specific approaches proposed, with
no consensus generated around either model.
5. Generally, the concerns about the proposed scheme were largely
reflected in the Law Society’s response. They pointed out that many firms
244 Reform of Legal Aid in England and Wales Government Response
of solicitors already used the interest generated on client accounts in a
variety of different ways:
– some solicitors account for the interest to the client and forego their
entitlement to it;
– others use the money towards the costs of administering the
accounts and the handling of clients’ money generally – research
suggests that those costs might have amounted to over £80 million
which suggests that most firms are currently having to finance their
handling of client money from their general fees;
– some use the money to fund related services – we understand that
many “free conveyancing” offers for remortgages are, in fact,
financed by the interest that solicitors are entitled to retain on the
funds in their client account;
– some explicitly put the money towards pro bono or other charitable
work.
6. They further argued that IOLTA schemes:
– are unlikely to yield amounts of money that are sufficient to justify the
damage that they will cause;
– would not provide a certain income;
– would be relatively easily avoided;
– may reduce the level of pro bono work; and
– may reduce the level of interest, service and competitiveness of the
sector and may cause significant harm to a number of small
businesses
The Government response
7. IOLTA schemes are not a new idea, and other countries, including the
United States of America, Australia and France have similar schemes. It
is evident, however, that the amounts generated by an IOLTA scheme
vary with interest rates and the state of the economy generally. This is
borne out by the experience of other countries, such as the USA, where
income from their IOLTA scheme was as much as $370 million in 2007,
before falling to around $92 million in 2009.
71
8. Following the global economic crisis and the impact this has had on the
financial sector, we were particularly sympathetic to the argument that
having a choice of bank in which to place client monies helped firms to
secure better rates and services for both their clients and themselves.

71
See: http://www.brennancenter.org/content/resource/the_economy_and_civil_legal_services/
245 Reform of Legal Aid in England and Wales Government Response
9. We have listened carefully to the arguments made by those who
responded to the consultation on the wider benefits and disadvantages of
developing an IOLTA scheme. In particular, we have given considerable
weight to the views of the Law Society. The Government commends in
particular those providers that already use the monies generated from
their client accounts to help fund pro bono and charitable work. We would
encourage other providers of legal services to follow the example set by
these firms. We also suggest that the Law Society could look carefully at
this area and consider whether they can play a more active role in helping
firms establish similar practices, perhaps providing strategic input into
how such funding could be best targeted to maximise the benefit it offers.
10. Having considered carefully the arguments put forward on the
consultation, the Government has concluded, on balance, not to pursue
an IOLTA scheme for England and Wales at this time.
Supplementary Legal Aid Scheme
Introduction
11. The legal aid consultation paper proposed implementing a Supplementary
Legal Aid Scheme (SLAS) for all areas of civil legal aid cases where
general damages are successfully claimed. In addition, we proposed that
the SLAS would also apply to any out-of-scope case which was funded
through the exceptional funding scheme. The proposals were consulted
on at the same time as Lord Justice Jackson’s proposals for reform of
civil litigation funding and costs.
12. The legal aid consultation invited views on introducing a Supplementary
Legal Aid Scheme and on how funds should be recouped if a SLAS were
implemented. Two different models of SLAS (self-funding and partially
self-funding) as well as different methods of recovery were put forward for
consideration. For example, possible methods of recovery under a
partially self-funding SLAS included a percentage of damages paid by the
legally aided person or a percentage of the interparty costs awarded to
the claimant lawyer at the conclusion of the case.
13. The consultation asked:
Question 43: Do you agree with the proposal to introduce a
Supplementary legal Aid Scheme –
Question 44: Do you agree that the amount recovered should be set as a
percentage of general damages – If so, what should the percentage be –
14. There were 622 responses to question 43. 176 (28%) agreed with the
proposal, 273 (44%) disagreed, and 173 (28%) neither agreed nor
disagreed. There were 565 responses to question 44. 259 (46%) agreed
with the proposal, 182 (32%) disagreed, and 124 (22%) neither agreed
nor disagreed.
246 Reform of Legal Aid in England and Wales Government Response
Key issues raised in consultation
15. Some respondents saw merit in introducing a Supplementary Legal Aid
Scheme, if Lord Justice Jackson’s proposals on conditional fee
arrangements and a percentage uplift in damages were implemented.
However, the view that a SLAS may be a positive development was
subject to broader uncertainty as to how such a scheme would work and
its viability particularly in light of the proposed scope changes. Several
respondents highlighted that they found it difficult to understand what was
actually being proposed in light of the consultation paper’s proposals to
remove clinical negligence, education damages and housing damages
cases from scope.
16. Many respondents, particularly representative bodies, questioned
whether the SLAS would be likely to generate much money. The source
of initial set up costs of the self-funding scheme was also questioned.
Some respondents highlighted that any scheme of this type relies on a
sufficient number of strong cases to ensure its viability. It was also argued
in some responses that, if implemented, the SLAS proposals would be
less favourable compared to current CFAs. Consequently, some
respondents suggested that the SLAS would only attract the riskiest and
most difficult cases should it be implemented in isolation (with the current
CFA system remaining unchanged).

70
See footnote 4 above.
240 Reform of Legal Aid in England and Wales Government Response
13. During the course of implementation, the MoJ will work with the LSC to
ensure that a proportionate but effective monitoring mechanism is put in
place to enable a better understanding of the effect of the introduction of
the reduced, codified rates on all affected groups.
14. Further work and consultation with affected groups will be undertaken on
the back of this as part of the ongoing development of a more detailed
scheme based on fixed fees, graduated fees (where specific totals are set
for particular activities), and a limited number of hourly rates.
(iii) In the longer term, the structure of experts’ fees should include both
fixed and graduated fees and a limited number of hourly rates.
Key issues raised by respondents
15. The majority of respondents agreed with the longer term proposal to
conduct further work to implement a fixed and graduated fee scheme and
a limited number of hourly rates for experts, but stressed that it would be
important to ensure the categories and banding in any future scheme
should be appropriate and transparent, although no further detail was
supplied.
16. Alternatively, a small number of respondents suggested that a fixed and
graduated fee scheme with a limited number of hourly rates would be too
complicated and costly to administer, and so a competitive tendering
process should be considered instead. A number of solicitors and
barristers commented on payment delays for expert witnesses and
considered that the LSC should contract with, or pay, experts directly.
The Government response
17. It would be difficult to devise or initiate a competitive tendering process at
this stage. It has already been acknowledged that insufficient data exists
on expenditure to inform a very detailed scheme, and therefore defining
the activities for which bids would be made, and comparing bids with
current prices for those activities, would be difficult. By introducing the
proposed schemes and improving the monitoring of expenditure, the
Government hopes to be in a position in the future to work towards a
more tailored payment scheme where a move towards a competitive
scheme could then also be considered. The Government thinks that the
LSC contracting with or paying experts directly for legal aid work would
lead to a reduction in savings given the increased costs to the LSC that
administering such contracting would entail.
18. The Government therefore intends to proceed with longer term plans to
work towards putting in place a more detailed and prescriptive scheme of
fixed and graduated fees (where specific totals are set for particular
activities) and a limited number of hourly rates. This will, however, be in
the context of any changes that, for example, come out of the Family
Justice Review.
241 Reform of Legal Aid in England and Wales Government Response
(iv) The categorisations of fixed and graduated fees (shown in Annex J
of the consultation paper) are appropriate.
Key issues raised
19. Many respondents commented that the proposed fees either did not
equate to existing specialist representative body (or other professionally
recognised) fee levels; or were not flexible enough and needed further
clarification or refining. In contrast, others felt that experts should be paid
the same fee, whatever their field of expertise.
The Government response
20. Given the lack of consensus and contrasting views expressed by
respondents, the Government is satisfied that the categorisations and
graduated fees are a reasonable starting point, but acknowledges that
further data collection and work with the profession will need to be
undertaken to evidence any future fixed and graduated fee scheme.
(v) The proposed provisions for ‘exceptional’ cases set out at paragraph
8.16 are reasonable and practicable.
Key Issues raised
21. The outline definition of an ‘exceptional’ case was generally accepted by
the majority of respondents, as a starting point. Some respondents
commented in particular that further clarification was needed on how the
proposed provisions for ‘exceptional’ cases would operate; who would
make the decision on what constituted an ‘exceptional’ case; and how
exactly this would be defined.
22. Whilst some respondents commented that the Judiciary should have
discretion to authorise ‘exceptional’ cases, others felt that this should fall
to the LSC.
The Government response
23. As ‘exceptional’ cases are likely to be more expensive, it is important that
the LSC are able to retain the ability to assess that value for money is
being achieved – even where exceptional expense can be justified.
24. ‘Exceptional’ circumstances are currently defined as those where: the
experts’ evidence is key to the client’s case; and either the complexity of
the material is such that an expert with a high level of seniority is required
or the material is of such a specialised and unusual nature that only very
few experts are available to provide the necessary evidence.
25. It is the Government’s view that the provisions for ‘exceptional’ cases
remain as set out in the consultation paper, for the present. This will be
considered further during the development of a more complex fixed and
graduated fee scheme in the longer term.
242 Reform of Legal Aid in England and Wales Government Response
Conclusion
26. Having considered the responses to the consultation, the Government
has decided to:
– codify the benchmark rates for experts, reduced by 10%, with
provision for exceptional cases; and
– continue to develop the longer term framework for expert fees as set
out in the consultation.
27. Details of the new fees we intend to pay to experts have been published
separately and can be found at: http://www.justice.gov.uk/consultations/
legal-aid-reform.htm. We will bring forward a Funding Order, giving effect
to these reforms, later in the year.

237 Reform of Legal Aid in England and Wales Government Response
Annex I: Expert fees
Introduction
1. The consultation sought views on proposed reforms to expert fees.
The consultation asked:
Question 39: Do you agree that:
i) there should be a clear structure for the fees to be paid to experts
from legal aid;
ii) in the short term, the current benchmark hourly rates, reduced by
10%, should be codified;
iii) in the longer term, the structure of experts’ fees should include both
fixed and graduated fees and a limited number of hourly rates;
iv) the categorisations of fixed and graduated fees (shown in Annex J
of the consultation paper) are appropriate; and
v) the proposed provisions for ‘exceptional’ cases set out at paragraph
8.16 are reasonable and practicable.
2. There were:
– 965 responses to question (i), of which 875 (91%) agreed and 90
(9%) disagreed;
– 863 responses to question (ii), of which 494 (57%) agreed and 369
(43%) disagreed;
– 859 responses to question (iii), of which 639 (74%) agreed and 220
(26%) disagreed;
– 762 responses to question (iv), of which 430 (56%) agreed and 332
(44%) disagreed;
– 766 responses to question (v) of which 478 (62%) agreed and 288
(38%) disagreed.
(i) Clear structure for the fees to be paid to experts from legal aid.
Key issues raised by respondents
3. There was strong support for the need to control and provide a clear
structure for fees paid to expert witnesses. Many respondents also
commented that other changes should be made to improve the system,
such as reducing the number of experts used in a case; increasing the
use of single joint experts; better case management/court timetabling;
and reducing excessively long expert witness reports.
238 Reform of Legal Aid in England and Wales Government Response
The Government response
4. Separate work, along the lines suggested by many respondents, is
already being undertaken by the Government to examine and challenge
the use of experts in the justice system. The Family Justice Review (FJR)
recently recommended in its interim report (published on 31 March
2011)
69
that the family justice system should reduce reliance on expert
reports overall and make the criteria for their appointment more explicit
and strict. The FJR also recommended the use of multi-disciplinary teams
to provide expert services to the courts. The use of multi-disciplinary
expert teams to provide jointly instructed health expert witness services to
family courts in public law child care proceedings was explored in the
recent Alternative Commissioning of Experts (ACE) pilot. A draft
evaluation of the pilot is expected to be delivered to the LSC in late
summer this year.
5. As most respondents strongly agreed with the need for a recognised fee
structure, it is the Government’s view that, in the short term, the
introduction of codified rates is a reasonable first step towards providing a
clear structure for the fees to be paid to experts from legal aid. The
separate workstreams to examine and challenge the use of experts in the
justice system – along the lines suggested by respondents – will continue
and are likely inform the development of the more detailed experts
payment scheme in future
(ii) In the short term the current benchmark hourly rates, reduced by
10%, should be codified.
Key issues raised by respondents
6. While a small majority of respondents agreed with the proposal, most
expert witnesses who responded to the consultation commented that the
proposed codified hourly rates were too low to ensure continued access
to experienced, quality advisers in the future, particularly in child
protection cases, other family cases and in London overall. A number of
respondents, including expert witnesses, the judiciary and legal providers,
also commented on the current difficulty of appointing expert witnesses
elsewhere in England & Wales. The Welsh Assembly Government
commented that it was particularly difficult to appoint child psychologists
in some parts of Wales, with experts having to be instructed from a
distance. This comment was echoed by the Wales Committee for the
Community Legal Service (CLS).
7. Conversely, many legal aid providers, including solicitors and barristers
considered that experts were currently paid too much, particularly in
comparison to their own fees for legal aid work, and felt that experts’ fees
should more closely mirror other publicly funded professional fees.

69
See footnote 6 above.
239 Reform of Legal Aid in England and Wales Government Response
A number of individual solicitors, barristers and legal representative
bodies (including the Law Society) raised ‘equality of arms’ issues, with
concerns that claimants may not be able to get the same level or quality
of expert as the defendant, and suggested that the proposed rates should
apply to all experts in a case. Some respondents commented that
equivalent rates should apply to other experts instructed by public bodies,
such as local authorities, the Police and the Crown Prosecution Service.
8. The Law Society strongly agreed with a move to control expert witness
fees, but the Bar Council was less supportive and commented that there
was no evidence of diversity and equality consideration.
9. Concerns about a lack of data underpinning the proposals were
expressed by the Bar Council, the British Psychological Society (BPS),
The Academy of Experts (TAE) and the Consortium of Expert Witnesses.
There were also concerns about the adequacy and accuracy of data
gathered from both previous file reviews on experts’ legal aid costs
carried out by the LSC.
The Government response
10. The Government acknowledges that the data captured by the LSC’s
earlier file reviews are not exhaustive and has limitations. The LSC does
not hold or separately collect information on the number of experts paid
from legal aid, the value of payments to them and the work that these
payments bought. Neither is there sufficient equalities information
available to enable a detailed assessment of the potential for this
proposal to have a disproportionate impact on people based on the
groups having the characteristics protected by the Equality Act 2010.
Further details are set out in the Equalities Impact Assessment published
alongside this Government response.
70
11. This position has not significantly changed following consultation as no
additional data was provided via the consultation exercise. However, the
benchmark rates (in their current form) have been applied by the LSC for
some time and there are only limited anecdotal reports of problems with
access to experts. In London, in particular, the LSC has been able to
apply lower rates than in the regions due to the level of competition for
the work.
12. Given the clear need to make savings, the Government has therefore
decided to proceed with codifying and reducing the current LSC guidance
rates by 10%. There will however be a ‘safety valve’ in the system, in that
the LSC will be able to authorise increased rates in exceptional cases
where required – see paragraph 23 below.

The Government response
29. The consultation paper set out the Government’s view that the system of
risk rates discourages lawyers from proceeding with cases which have
little chance of success. The purpose of the consultation was to explore
whether they could be applied at a much earlier stage in the process
before costs had reached such a high level. In light of the consultation
responses and further modelling, the Government has concluded that the
majority of cases that could realistically be affected by any extension of
risk rates would be public law cases, most of which would be Judicial
Reviews. In these cases, risk rates would only apply after the initial
application for permission has been considered and therefore after
weaker cases have been filtered out. As a result, the Government has
concluded that any extension would be unlikely to have a particular
impact on the number of cases being issued.
30. The consultation paper also set out the Government’s view that the
current system of risk rates resulted in a higher success rate at a lower
cost to the legal aid fund, resulting in improved results for clients and
greater value for money for the fund. However, the system of risk rates is
dependent upon successful parties being able to recover their costs at full
inter-partes rates. Many respondents argued that public law cases, in
particular, were often settled on the basis that the defendant/appellant
does not seek an order for costs, and even where the case is resolved in
court it will often result in no order for costs. While it is essentially a
matter for the judiciary, it would be reasonable to expect that any
extension of risk rates would therefore result in the courts coming under
increasing pressure to make more costs orders. If granted, these would
result in potentially significantly higher costs for public authorities
defending these cases.
31. The extent of any additional costs that could be faced by public
authorities would, to a large degree, depend upon the reaction of the
judiciary. Currently, when deciding on the question of costs, the courts
follow the general guidance set down in the case of Boxall v Mayor and
Burgess of the London Borough of Waltham Forest. This sets out that the
overriding objective of the court is to do justice without incurring
unnecessary court time and consequently additional cost to either side.
As a result, the courts generally will not award costs against a public
233 Reform of Legal Aid in England and Wales Government Response
authority where the case has been settled after the permission stage
without the need for a hearing.
32. The Government believes that a large proportion of public law cases are
settled at a relatively early stage in proceedings and wants to avoid
changes that could unnecessarily prolong litigation as defendants sought
to avoid costs being awarded against them.
33. Although it is difficult to assess precisely how the judiciary are likely to
respond to the proposed extension of risk rates, the Government takes
the view that there is a high risk that significant additional costs could be
imposed on defendants. Given that any costs orders would be payable at
private client rates, which are nearly double the rates paid under legal aid,
it is likely that any savings to the legal aid fund from the introduction of
risk rates would be exceeded by the additional costs imposed on
defendants.
34. For the reasons set out above the Government has decided not to
proceed with the risk rates proposals
Use of Queens’s Counsel in family cases
35. The consultation asked:
Question 38: Do you agree with the proposal to restrict the use of
Queen’s Counsel (QC) in family cases to cases where provisions similar
to those in criminal cases apply –
36. There were 1,116 responses to this question. 459 (41%) agreed with the
proposal, 592 (53%) disagreed and 65 (6%) neither agreed nor
disagreed.
Key issues raised in consultation
37. A sizeable minority of respondents including the Law Society, and
solicitor respondents generally, fully supported the proposal, taking the
view that there were only a minority of cases where very experienced
counsel is needed. By contrast, the Bar Council was firmly against any
proposals to restrict the use of QCs by aligning the criteria more closely
with criminal cases, in particular that the use of a QC by the public
authority should be a relevant consideration. They argued that there are
already strict criteria in place and that the use of a QC by a local authority
was not a condition that should be relevant to parents facing serious
allegations. Their general position was that given the different implications
for the two sides, any link or comparison to a local authority’s position
would be a false one.
The Government response
38. Given the urgent need to address the fiscal deficit the Government view is
that it is crucial to review every area of expenditure to ensure that this
duty is being met and that the amount that it pays for any service
represents maximum value for money. In this context the Government
234 Reform of Legal Aid in England and Wales Government Response
considers that it needs to ensure that it only pays the level of fees that are
absolutely necessary to secure the correct level of services that are
required.
39. QCs are a very specialised resource. The Government believes that this
should only be provided at public expense where it is truly necessary.
However, LSC analysis and the general consensus amongst respondents
suggest that they are used by parents in public law family cases
regardless of the level of counsel employed by the public authority. While
the Bar Council have argued that use of a QC by a local authority should
not be relevant to parents facing serious allegations, it is not clear that a
QC is necessarily needed in all the cases where they are currently
employed.
40. In their response the Law Society and many solicitor respondents took
the view that there were only a minority of cases where the use of an
extremely experienced counsel was necessary and that, in any event, this
input was often only needed at a particular stage, not through the whole
duration of a case. For example, there could be instances where there
was a very complex interim hearing requiring the use of a QC, but
afterwards the issues simplify. Therefore, while their input may be needed
initially, there is no absolute need for any ongoing involvement. The
proposed revised criteria contain the flexibility to permit the use of a QC
regardless of the approach taken by a local authority where there are
exceptional features to a case and the Government is satisfied that this
should provide an appropriate safeguard to ensure that QCs can be used
where and when their expertise is necessary.
41. The Government is satisfied that the proposed criteria will provide
sufficient flexibility to permit the use of a QC where the expert input
provided by a QC is necessary. It therefore intends to tighten the
guidance covering the engagement of a QC in a family case (whether the
case is above or below the VHCC threshold) to make clear that they
should only be approved by the LSC if they meet provisions equivalent to
those applying in criminal cases, as proposed in the consultation.
42. As set out in paragraph 13 of this Annex, payments made to QCs in these
cases will also be reduced by 10% in line with the general reduction to all
fees paid under the civil and family legal aid scheme.
Remuneration for excluded cases
43. Although no specific question was asked, paragraphs 7.32 – 7.34 of the
consultation paper proposed that individual cases that were excluded
from the scope of the new civil legal aid scheme, but are funded through
the new exceptional funding scheme for excluded cases, should be paid
at the current fixed fee or hourly rate in the relevant Category, subject to
the proposed reduction of 10%.
235 Reform of Legal Aid in England and Wales Government Response
Key issues raised in consultation
44. The Government has not identified any specific concerns raised by
respondents in respect of the proposal on remuneration for excluded
cases.
The Government response
45. Given the urgent need to address the fiscal deficit the Government view is
that it is crucial to review every area of expenditure to ensure that this
duty is being met and that the amount that it pays for any service
represents maximum value for money. It considers that it needs to ensure
that it only pays the level of fees that are absolutely necessary to secure
the correct level of services that are required.
46. In this context, it is essential that the Government takes steps to ensure
that there are appropriate controls and safeguards in place to manage
future spend. The Government therefore believes it is desirable to retain
existing current fixed fee or hourly rates in the relevant Category, subject
to the proposed reduction of 10%, for excluded cases, as differential rates
could have the undesired effect of incentivising the taking of exceptional
funding cases as opposed to those remaining in scope.
47. The Government has decided that cases funded in future through the new
scheme for excluded cases, should be paid at the current fixed fee or hourly
rates in the relevant Category, subject to the proposed reduction of 10%.
Conclusion
48. Having considered, and given due weight to the responses to the
consultation, the Government has decided to introduce the following
reforms to remuneration in civil and family proceedings:
i) to reduce all fees paid in civil and family matters by 10%, as
proposed in the consultation;
ii) to cap enhancements to hourly rates payable to solicitors in civil
cases generally as proposed in the consultation but to apply the
100% cap on enhancements to civil (non-family) cases in the Upper
Tribunal;
iii) to codify the rates paid to barristers, and reduce them by 10%,
modified as set out in the consultation;
iv) to cap enhancements to hourly rates paid to solicitors in family
cases, as set out in the consultation;
v) to restrict the use of Queen’s Counsel in family cases to cases where
provisions similar to those in criminal cases apply, as set out in the
consultation;
vi) to pay cases funded, in future, through the new scheme for excluded
cases, at the current fixed fee or hourly rate in the relevant Category,
subject to the proposed reduction of 10%.
236 Reform of Legal Aid in England and Wales Government Response
49. The 10% reduction will apply to all fees and hourly rates paid under the
civil and family legal aid scheme, except those where the service has
been procured following competition on price, regardless of whether the
service provided is subject to fixed rates, general assessment or an
individually negotiated contract. This includes Very High Costs Cases
which are paid under hourly rates or “events rates” models, but not those
paid under risk rates.
50. Details of the new fees we intend to introduce for civil and family matters,
taking into account the correction to the fees paid to junior counsel in the
county court, have been published separately and can be found at:

http://www.justice.gov.uk/consultations/legal-aid-reform.htm.

51. We will bring forward the necessary secondary legislation, giving effect to
these reforms, for civil fees, generally, with effect from October 2011. In
the case of housing work covered by the Unified Contract we intend that
they will be given effect in February 2012, together with the reforms in
respect of family fees. We wish to give effect to these reforms for housing
work not covered by the Unified Contract in October 2011 at the same
time as the other civil fee changes, but are still considering whether this is
feasible.