Martin Partington: Spotlight on the Justice System

After the initial flurry of activity at the beginning of 2012, when the first round of ABS licences were granted by the Solicitors Regulatory Authority (see blog entry in March 2012) and the Co-op announced its plans for the development of its legal services offer (see blog entry May 2012), there has been sure and steady progress on the ABS front.

Russell Jones and Walker, together with an Australian Firm, Slater and Gordon have a licence to develop ABS, based on their merged business.

Irwin Mitchell, a large UK based law firm, have acquired 3 ABS licences to develop their practice – they have been widely reported as intending to raise private capital by a flotation on the Stock Exchange.

The current list of firms granted ABS licences is available at http://www.sra.org.uk/absregister/

The Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) has after a long passage through Parliament finally received the Royal Assent and is now an Act of Parliament.

This means that changes to the scope, eligibility and other aspects of the legal aid scheme – many of which have been outlined in earlier comments in this blog – are now law. The Legal Services Commission’s website notes that these reforms are due to be implemented on 1 April 2013.

The Act also means that a new Agency will be created. The LSC will be replaced by the Legal Aid Agency, which will be an Executive Agency of the Ministry of Justice. The Legal Aid Agency will also start to operate formally on 1 April 2013.

Independence of legal decision-making is to be preserved with the creation of a Director of Legal Aid Casework. The Director of Legal Aid Casework will have independence from the Lord Chancellor in applying directions and guidance to individual funding decisions. This is protected under the new statutory framework.

As Chief Executive Designate of the new Agency, it is expected that Matthew Coats will also be appointed the Director of Legal Aid Casework.

According to the Ministry of Justice Press release:

“The Act:

• Ensures that legal aid is available for those who require formal legal advice and assistance and provides access to a range of alternative sources of dispute resolution in appropriate cases

• Increases mediation funding to £25 million a year and provide an additional £20 million a year for the next three years for third sector advice and assistance organisations

• Reforms civil litigation procedures by dealing with disproportionate legal costs, and by capping the amount that lawyers can take in success fees

• Makes referral fees illegal in personal injury cases.

It remains to be seen whether the outcomes indicated above are achieved in practice. Certainly there is widespread concern throughout the legal world that great damage will be done to the provision of legal advice and assistance to the poor.

Further news will be noted in these columns over the coming months.

Well, after the long wait, the Solicitors Regulatory Authority has finally given the green light to the first three ABS offering legal services. They are listed at http://www.sra.org.uk/solicitors/freedom-in-practice/alt-bs/licensed-body-register.page which will be updated as new ABS come on-stream.

Further details about the best known of the three, Co-op Legal Service, is at http://www.co-operative.coop/legalservices/press-releases/Making-Legal-History/. Co-op Legal Services have made a clear statement of how they want to deliver legal services alongside the other professional services they offer, such as banking, pharmacy, and funeralcare. My hunch is that we will see a lot more from them over the coming months.

The other two authorised firms do not yet reveal the extent of their ambitions as ABS. At present they look more like traditional high street practices. LawBridge is a firm based in Sidcup, Kent. Details about them can be found at http://www.lawbridgesolicitors.com/AboutUs.aspx. Their website states that they want to use new technologies to cut down overheads, while continuing to offer a good service to clients. The third company is John Welch and Stammers, a firm of solicitors based in Witney Oxon. They have a website at http://www.johnwelchandstammers.co.uk/default.asp. At present this gives little clue as to how being an ABS will change the way they work.

The Department for Business, Innovation and Skills is seeking views from UK stakeholders on recent proposals from the European Commission on consumer alternative dispute resolution. In summary, the Commission argue that all EU consumers should be able to solve their problems without going to court, regardless of the kind of product or service that the contractual dispute is about and regardless of where they bought it in the European Single Market.

In addition, for consumers shopping online and from another EU country, the Commission want to create an EU-wide single online platform which will allow contractual disputes to be solved entirely online and within 30 days.

As the proposals are likely to impact UK consumers, businesses and organisations that currently provide alternative dispute resolution services, the Department is particularly anxious to receive views on the likely scale of these impacts. Views received will help form the UK’s negotiating position.

The consultation has been running since November 2011, and closes at the end of January 2012.

The full consultation can be found at http://www.bis.gov.uk/Consultations/call-for-evidence-eu-proposals-dispute-resolution?cat=open

Just before Christmas 2011, the Government published a Consultation Paper proposing that those wanting to use the Employment Tribunal should be required to pay a fee to do so; at present access is free.

The Government argues that it has to reduce the £84 million cost currently borne by the taxpayer. Fees are an obvious way to do this. At the same time, it is suggested that fees may deter some people from using Employment Tribunals, thereby reducing the case load, which has expanded rapidly in recent years.

The consultation  puts forward two options for consideration:

• Option 1: an initial fee of between £150-£250 for a claimant to begin a claim, with an additional fee of between £250-£1250 if the claim goes to a hearing, with no limit to the maximum award; or
• Option 2: a single fee of between £200-£600 – but this would limit the maximum award to £30,000 – with the option of an additional fee of £1,750 for those who seek awards above this amount.

In both options the tribunal would be given the power to order the unsuccessful party to reimburse fees paid by the successful party.

The Government, consistently with its policy in the civil justice arena of encouraging out of court settlement, states that it will continue to fund the cost of  the Conciliation Service ACAS, which helps people in employment disputes reach agreement without the need for legal proceedings, and is free to users.

The Government also argues that introducing fees will bring employment tribunals into line with civil courts where claimants already pay a fee to use the service. The paper states that, just like in civil courts, the Government will also continue to fund a system of fee waivers for those who cannot afford to pay.

Although many may think that these proposals are sensible, they mark another step in the development of the tribunal system, which until recently has been more or less free to users. There have been recent moves to introduce fees in immigration and asylum hearings. The development in relation to employment tribunals could lead to similar moves in other contexts as well, for example land and property disputes or tax disputes that are dealt with by tribunals.

My view is that, while politically it may make sense for each of these initiatives to occur individually, there should be a much more open discussion about the implications of a general policy to make tribunals more like courts through the incremental imposition of fees. A discussion of this broad principle should not be allowed to go by default.

The present consultation runs until March 2012; the Government has announced that no change is likely before 2013/14.

To read the Consultation, go to http://www.justice.gov.uk/consultations/et-fee-charging-regime-cp22-2011.htm

In the book I discuss how the more serious criminal cases, all of which start in the magistrates’ courts, get to the Crown Court. it used to be the case that cases would only be transferred after a committal hearing. Committals in indictable-only cases were abolished and replaced by a process known as ‘sending’ under section 51 of the Crime and Disorder Act 1998. This enables cases to be sent straight to the Crown court after the defendant’s first appearance in the magistrates’ court.

The Criminal Justice Act 2003 made provision for the same procedure to be adopted in cases that could be tried either way, where it was decided that they would be tried on indictment. The relevant provision has not to date been implemented, but the Secretary of State for Justice has now decided to bring this provision into effect from April 2012. It is estimated that this will reduce the number of committal hearings by around 60,000.

Defence lawyers are furious that, in anticipation of the change they will no longer be paid for committal hearings; this decision is currently the subject of a judicial review.

From 1 October 2011, the National Mediation Helpline has been replaced by a new on-line directory of accredited mediators, who provide mediation services for people in dispute on a civil law matter. Mediation is provided for a fixed fee, which varies according to the amount of money in dispute. The fees are set out on the first page of the website. It makes the process of finding a mediator very easy and is clearly designed to encourage use of mediation in the dispute resolution process.

For details see http://www.civilmediation.justice.gov.uk/

The Legal Aid, Sentencing and punishment of offenders Bill 2011 is the big one, certainly so far as the legal system is concerned. It is a complex measure, attempting to achieve three quite distinct policy objectives. Underpinning much of it is the Government’s desire to cut public expenditure.

This is seen most clearly in Part 1 which deals with legal aid. The long awaited abolition of the Legal Services Commission is contained in the Bill, together with provision of the appointment of a Director of Legal Aid who will head up a new agency within the Ministry of Justice. In practical terms, it is the changes (i.e. cuts) to civil legal aid that are likely to have the most significant impact on the ground. The Bill gives legislative effect to the Government’s proposals to make fundamental changes to legal aid – which will take a lot of issues currently in scope of the legal aid scheme out of the scope of legal aid, will increase the charges paid by members of the public for getting legal aid assistance and reduce the sums paid to lawyers who provide legal aid services.

Arguments that have been made by many – not just lawyers – about the impact these changes will have on access to justice have been met by the Government’s counter argument that the UK spends too much on legal aid – far more than most other countries. It has to be said, however, that by comparison with the proposals for reform of sentencing (see below) these changes have not actually received much attention in the mass media.

Details of the proposals for change can be found at http://www.official-documents.gov.uk/document/cm80/8072/8072.pdf.

Part 2 of the Bill deals with recommendations of Lord Justice Jackson about making changes to the current system of ‘no-win-no-fee’ Conditional Fee Agreement cases, to limit the amounts that lawyers can charge by way of success fees.

The Government argues: [CFAs] have played an important role in extending access to justice but they also enable claims to be pursued with no real risk to claimants and the threat of excessive costs to defendants. It cannot be right that, regardless of the extreme weakness of a claim, the sensible thing for the defendant to do is to settle, and get out before the legal costs start running up. This is precisely what has happened and it is one of the worst instances of this country’s compensation culture…

[T]he Government believes that the right way forward is to abolish the recoverability of CFA success fees and ATE insurance premiums.

The Bill provides for these changes: for more detail see also http://www.official-documents.gov.uk/document/cm80/8041/8041.pdf.

The final part of the Bill deals with proposals for reforming sentencing. These issues were debated heavily in the press, with the Justice Secretary facing a lot of criticism that he was being ‘soft on crime’ – wanting to keep people out of prison to save money. The quite respectable argument – which at the least demands a careful hearing – that more might be done to turn people away from crime if they were not in prison was a subtlety that got lost in much of the mass media.

In the light of the decision not to proceed with the idea for giving those pleading guilty to charges a higher discount from their sentence than they can currently get, the Bill’s proposals are more modest than were originally envisaged by the Government when it published its Consultation Paper on the reform of Sentencing in November 2010.

The Bill is currently in the Committee stage, which will end in mid-October 2011. I estimate that the Bill will pass into law early in 2012.

Details on all three components of the Bill will be considered further here and in the book in due course.