The London Criminal Courts Solicitors Association and the Criminal Law Solicitors Association and Nelson Guest and Partners (1st Claimant) v The Lord Chancellor
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Burnett,Lord Justice Laws,Mr Justice Cranston |
| Judgment Date | 18 February 2015 |
| Neutral Citation | [2014] EWHC 3020 (Admin),[2015] EWHC 295 (Admin) |
| Docket Number | Case No: CO/2426/2014,Case No: CO/5941/2014 & CO/5699/2014 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 18 February 2015 |
[2014] EWHC 3020 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Burnett
Case No: CO/2426/2014
Jason Coppel QC and Joanne Clement (instructed by Kingsley Napley) for the Claimants
James Eadie QC, Richard O'BrienandFraser Campbell (instructed by the Treasury Solicitor) for the Defendant
Hearing dates: 8 & 9 September 2014
Introduction
The issue in this claim is whether procedural fairness associated with a consultation process on new criminal legal aid arrangements required the Lord Chancellor to disclose for comment the contents of two independent expert reports. They provided the foundation for the assumptions made in deciding how many contracts for advisory work in police stations and associated work, known as Duty Provider Work contracts, would be available to solicitors. There are currently about 1,600 firms of solicitors undertaking duty solicitor work in police stations and Magistrates' Courts in England and Wales. As part of a series of decisions relating to criminal legal aid issued on 27 February 2014 the Lord Chancellor announced that under the new arrangements there would be 525 contracts available for such work. They would cover all criminal legal aid advice, litigation and magistrates' court advocacy services provided to clients who choose the Duty Provider at the first point of request. An average immediate reduction of 8.75% in criminal legal aid fees was also announced. That was implemented by The Criminal Legal Aid (Remuneration)(Amendment) Regulations 2014 (SI 2014 No. 415) laid before Parliament on the same day. They came into force on 20 March 2014. The reduction applies to new cases from that date. The Lord Chancellor had proposed a further cut of 8.75% from the spring of 2015. The possibility of that reduction of 8.75% remains hanging over the profession. The position now is that it would not be implemented before the summer of 2015 and would depend upon the impact of the other changes being made as a result of these decisions, and reviews being conducted to find alternative savings.
In arriving at the figure of 525 Duty Provider Work contracts the Lord Chancellor made a number of assumptions relating to the likely behaviour of firms of solicitors when adapting to the proposed new world of legal aid. Those assumptions were developed by the Ministry of Justice following receipt by them of a report from Otterburn Legal Consulting LLP ["Otterburn"] in discussion with officials of the Law Society and KPMG LLP ["KPMG"]. KPMG had been engaged to undertake financial modelling based on those assumptions to inform the question of how many Duty Provider Work contracts should be made available. KPMG also produced a report. The series of assumptions they applied is controversial. They identified various factors which they had left out of account on which there was little information. It is common ground that if the assumptions underlying KPMG's modelling had been different the numerical range of contracts they identified as appropriate would also have been different. Reduced to basics, the position is that if the criticisms of the assumptions made by the claimants were reflected in appropriate adjustments, a larger number of contracts would have been likely to be made available.
The claimants' case is that in the context of a long-running consultation exercise, the outcome of which would transform the criminal legal aid landscape and have an impact on access to justice, it was incumbent upon the Lord Chancellor to consult on the assumptions underlying the financial modelling undertaken by KPMG. The reality, they suggest, is that many firms of solicitors will go out of business thus depriving individuals of their current livelihoods. In practical terms the claimants say that the Lord Chancellor should have disclosed the Otterburn and KPMG reports before he made his decisions and consulted on their content. His failure to do so was procedurally unfair. They have a discrete argument that the Lord Chancellor in terms promised "to follow the recommendations" of Otterburn, but failed to do so. Mr Coppel Q.C., on behalf of the claimants, submits that promise gave rise to a procedural legitimate expectation at least that he should consult if he were contemplating changing his mind.
There is no alternative challenge advanced on the merits of either the decision relating to the number of contracts or the reduction in fees. The claimants wish to have the opportunity to persuade the Lord Chancellor to increase the number of Duty Provider Work contracts by making good their contention that the assumptions underlying the consultation are flawed and by providing further information to fill the gaps identified by KPMG.
The claimants seek an order quashing the decision on the number of Duty Provider Work contracts, to enable consultation on the two reports to take place. They also seek an order quashing the reduction in rates of remuneration introduced by the 2014 rules on the ground that the two decisions were inextricably linked.
For the Lord Chancellor, Mr Eadie Q.C. submits that the claimants and their individual members had every opportunity to place before the Ministry of Justice any material and comments they wished, to inform the decision on the number of Duty Provider Work contracts. Furthermore, every firm of solicitors in England and Wales was invited to provide information to Otterburn for the purposes of the research. In the result there was no procedural unfairness. Any argument based upon legitimate expectation and the Otterburn report fails because there was no unequivocal promise of the sort the claimants suggest.
The Underlying Facts
A very large volume of material was placed before the court, both in witness statements and exhibits, tracing the evolution of the Lord Chancellor's proposals for reforming criminal legal aid. There was an initial consultation paper with proposals some of which were, in the event, abandoned. A second consultation paper followed before the decisions under challenge were made. For the purposes of the argument relating to consultation that evolution can be traced relatively briefly.
Following the financial difficulties that engulfed the world towards the end of the last decade the legal aid budget was not protected from scrutiny and the need to find savings. The cost and efficiency of the delivery of criminal legal aid services had been under consideration even before, in particular in the review conducted by Lord Carter of legal aid procurement in 2006. On 9 April 2013 the Lord Chancellor issued the first consultation paper entitled "Transforming legal aid: delivering a more credible and efficient system". Its scope was wider than criminal legal aid. It encompassed proposed reforms to civil and family legal aid in addition, although its focus was criminal legal aid.
In his ministerial foreword, the Lord Chancellor summarised the proposals. The Government proposed that the provision of criminal legal aid should be subject to price competitive tendering ["PCT"] between firms of solicitors. There was a need for more efficiency in the system. The result would be that successful firms would grow and that mergers would be required to achieve economies of scale. The consultation paper later explained that there would be a consolidation of the market
"with fewer and more efficient providers accessing greater volumes of work, whether delivered directly by providers accessing greater volumes of work, whether delivered directly by providers or through some other business structure, for example a joint venture."
Contracts would be available in a series of procurement areas. In deciding on the number of contracts that would be available, the consultation paper identified four broad factors which would be taken into account:
i) Sufficient supply within each procurement area to deal with potential conflicts of interest in multi-handed cases;
ii) Sufficient volume of work to enable the fixed fee scheme to work. This was a feature of the proposals which assumed that some cases would be profitable and some not. A sufficient number of cases should be available to each successful bidder so that the risk of loss on some cases could be managed;
iii) Market agility, a shorthand term to reflect the ability of providers in each procurement area to deal with the additional volumes of work, including by growing or developing new business structures;
iv) Sustainable procurement, a shorthand term for ensuring that there would be competition in future tendering rounds. The proposal was for three year contracts with the possibility of extension for a further two years. The expectation underlying the proposal was that "most successful applicants will be joint ventures or a legal entity using agents".
This consultation paper envisaged a total number of about 400 contracts. The consequence recognised in the consultation paper would be that to secure a contract existing providers would on average need to grow by 250% or join other providers to bid.
One of the consequences of the Lord Chancellor's proposals was that "clients would generally have no choice in the representation allocated to them at the outset": consultation question 17.
Immediate savings of 17.5% in criminal legal aid spending through fee cuts formed part of the proposals....
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