A judicial review challenge to the lawfulness of the government consultation on reforms to criminal legal aid was successful this week, as the Administrative Court held that failures in the consultation process were ‘so unfair as to result in illegality’. The case was brought jointly by the London Criminal Courts Solicitors Association (LCCSA) and the Criminal Law Solicitors Association (CLSA) against the Lord Chancellor, Chris Grayling.
The Lord Chancellor decided, following the two-stage Transforming Legal Aid consultation in 2013, to reduce the number of duty provider work contracts from about 1,600 to 525 and also to impose a reduction in criminal legal aid fees of 17.5%. Half of that fee cut – 8.75% – came into force in March 2014, although the Ministry of Justice has agreed that the remaining 8.75% reduction will not be implemented before the summer of 2015.
Duty contracts cover advisory work by solicitors in police stations and associated work for those clients, and are the primary means by which criminal firms encounter new clients. The Lord Chancellor decided to enforce a dual contract arrangement comprised of 525 duty provider work contracts and unlimited own client work contracts. The view of criminal solicitors is that firms would not be able to survive if forced to rely only on clients who specifically chose their firm to become ‘own clients’.
During the consultation process, the Lord Chancellor commissioned two independent reports (by Otterburn and KPMG) to provide the basis of the decision regarding how many duty provider contracts would be available. However, despite a specific request from the CLSA to delay the consultation until the independent research was available for comment by consultees, the Lord Chancellor refused to publish the reports until the final decision was made, in February 2014.
The claimants alleged that, because they were unaware of the assumptions underpinning the financial modelling research conducted by KPMG, many of which were provided by the Ministry of Justice, they were unable to challenge what they considered to be significant flaws in these assumptions. The court stated that ‘the Lord Chancellor was involved personally in discussions with KPMG concerning the approach they prepared to take and the assumptions on which they would base their calculations’.
It was argued that the consequence of the Lord Chancellor’s decision would be that many firms would go out of business and individuals would therefore lose their livelihoods. This impact was effectively accepted by the Ministry of Justice, which spoke of restructuring of firms and market consolidation.
A small group of officials from the Law Society were ‘deeply engaged in discussions relating to the assumptions’, but had concerns about some of the assumptions eventually adopted. The officials involved, however, were ‘not acting in a representative capacity’ and indeed were ‘subject to duties of confidence which precluded them from discussing the research’ with anyone not included in the discussions, including elected officers of the Law Society and its specialist committees.
It is also pertinent that criminal solicitors generally and the claimant groups in particular became dissatisfied with the approach taken by the Law Society to negotiations with the Lord Chancellor, resulting in a vote of no confidence by Law Society members with its president and chief executive in December 2013.
In reaching his decision, Mr Justice Burnett reviewed the law relating to consultations, which requires that consultees are provided ‘sufficient information to enable an intelligent response’. The accepted test for whether a consultation has been conducted lawfully is ‘whether the process was so unfair as to be unlawful’.
In the context of this case, the court recognised that the ‘potential impact on the livelihoods of solicitors and access to justice’ meant that a ‘high degree of fairness was required’. If the assumptions underlying the financial modelling were incorrect, then the impact on criminal firms which are already vulnerable due to ‘wafer-thin’ profit margins – identified by the independent research – would be serious. Indeed, the ‘continued existence of firms of solicitors’ depended upon the decision on duty contract numbers.
The Lord Chancellor argued that it was ‘not necessary’ to consult on the independent research. However, the court disagreed: it was ‘unfair to refuse to allow those engaged in the consultation process to comment upon the two reports’. This failure was ‘so unfair as to result in illegality’ and the decision to limit the number of duty provider contracts to 525 was quashed. The court found that the reduction to criminal legal aid fees was not sufficiently connected to the failure to disclose the reports, so this aspect of the Lord Chancellor’s decision was not overturned.
The Ministry of Justice announced that it will continue to implement reform of criminal legal aid, while accepting that the judgment ‘raised some technical issues about the consultation process, which we are carefully considering’. The technical issue, presumably, being that the Lord Chancellor has been found by the courts of which he is custodian to have acted unlawfully in restricting legal aid for the second time in recent months.