Cut out and sell

An article appeared in the prison newspaper Inside News last year written by a QC. The author reminded the portion of the readership on remand awaiting trial that they were entitled to ask their solicitor about being represented by a barrister. The response from solicitors was vituperative. How dare a barrister suggest members of his profession were better qualified to undertake the work? How dare he challenge solicitors in this way? In fact all he was doing was reminding those accused of serious crime that they have a right to make an informed choice about their representation.

The letter and the reaction to it are instructive in the current uncomfortable climate for legal aid practitioners. The Bar is often told 'you have nothing to fear from competition'. The problem is that the times have put us in competition with those who have supplied us with work for generations. If solicitors want to undertake advocacy in the Crown Court or are being forced to do it by commercial necessity, how is the Bar to go about 'competing' for the work? It is not a comfortable and perhaps not a survivable place for a referral profession to be.

Before the recent round of tendering for criminal contracts began, the LSC and the MoJ made overtures to the Bar, encouraging 'adventurous' sets of chambers to bid for the work. They were confident, they said, the Bar would be able to compete on price. Leave aside for a minute the reaction from solicitors to finding that a set of chambers they have instructed for many years was now bidding against them for a criminal contract (commercial suicide is one description of such a business strategy I have heard). When the Bar Council explored further, they discovered that the LSC was only prepared to entertain bids from sets of chambers that reconstituted themselves to conform with the contract tender model.

In short, they had to become something akin to firms of solicitors. It is not my place to argue against genuine and honest competition but is there not a certain irony in solicitors being told they should chase the Crown Court work they have historically left alone while the Bar is invited to challenge for the police station work and direct client access which solicitors understand much better? Are we seeing the imposition of fusion by competitive tendering and financial control?

Commoditising the client

The practice of paying referral fees provides a really graphic example of the predicament the Bar faces. Can anyone explain the moral justification for the payment and acceptance of referral fees in publicly funded criminal cases? Consider this situation: a solicitor holding a criminal contract has a case going for trial in the Crown Court. The solicitor either cannot or does not want to do the case and chooses to 'refer' (or more simply sell) the trial to another advocate in return for a fee representing as much as 20 or 25 per cent of the fixed fee payable under the graduated fee scheme. The objections to treating the defence of an accused person as a commodity in this way are legion.

First, even if the advocate paying the referral fee happens to be one of the best trial advocates in the country, the clear impression is given that he is being chosen because of his payment. Does the client know that his case is being sold on in this way? If not, why is the client not told that he is entitled to choose any qualified advocate at the appropriate level, subject to availability?

Barristers are forbidden by paragraph 307 (d) and (e) of their code of conduct from entering into referral fee arrangements (see box below).

The prohibition is designed to enable the barrister to act with absolute independence and integrity and free of external pressures or financial imperatives. Breaches of the rule will be investigated by the Bar Standards Board (BSB). By contrast, the Solicitors Regulation Authority (SRA), having discovered how widespread these referral fees have become, has decided against attempting any sort of ban.

It may be argued by those who support referral fees that in other fields and businesses referral fees are permissible. But one crucial difference in the market for legal services is that an important part of the solicitor's duty is to advise the client on selection of counsel. The client who has instructed the solicitor is unlikely to be knowledgeable in choice of counsel and will rely on the solicitor to give the benefit of his or her expertise in making a recommendation. The client is entitled to the benefit of the solicitor's professional judgment in making that decision. It cannot be in the public interest that such advice to the client, and particularly consumers who are not sophisticated users of legal services, is not objective and impartial but tempered by the personal interests of the solicitor in preferring to recommend counsel willing to make payments to the solicitor for the recommendation. The client does not in any circumstances gain from this referral fee. What suffers is the interest of the client in receiving objective advice disassociated from the personal benefit to the solicitor.

I have a final word for anyone unpersuaded by the evidence and my arguments. We can see the LSC observing current developments with interest. Do those currently pocketing referral fees really think they have found a guaranteed income stream? How long will it take the LSC to work out that if there is a supply of advocates prepared to undertake Crown Court work at AGFS minus 20 per cent for a referral fee, then they may be paying above the market rate? I predict that within a short time the prevalence of referral fees will be used as justification for driving down AGFS still further. Enjoy it while you can'¦

Restructuring the system

Where are we all going from here? The latest redrawing of the criminal legal aid system ('Restructuring the Delivery of Criminal Defence Services') unveiled by the Ministry of Justice in March this year envisages the criminal legal aid market being restructured 'so that there are a smaller number of large contracts contracted across a criminal justice area.

It would also allow for contracts to include Crown Court work so that firms have access to the higher-value work.' They claim to have been listening to solicitors but presumably not to the 'large number' of small and medium-sized firms that will be adversely affected by the changes if they happen. That seems an unfortunate omission; it is often precisely those modestly sized but efficient and conscientious firms who are prepared to go the extra mile and ensure the client feels that everything possible is being done for his defence.

As for barristers, the MoJ does not even claim to have talked to the Bar about its plans for the future. The Bar Council and the BSB are seeking to relax the Bar's rules to enable barristers to adopt alternative business structures that may be better suited to the new environment than the traditional chambers model. However, that road will lead either to competition or merger with firms of solicitors.

The Jack Straw vision for the delivery of criminal legal aid in the future will see the creation of 'mega firms' across England and Wales. Many smaller outfits will face the choice of merging to compete, being absorbed or giving up publicly funded work. What guarantees of quality will there be? The new legal behemoths may choose to hire sufficient advocates to service all the work they have contracted to undertake. They may seek to sub-contract out work at rates of their choosing (there being very little competition once the contracts have been awarded). Will they also have the final say over whether it is necessary to instruct an expert witness, for example? Who will ensure that sort of decision is taken in the best interests of the client when for the first time the lawyers' financial bottom line may be affected?

We will have to wait and see how the picture emerges after the post-election uncertainty is resolved. A new government may be interested in a wider discussion about the future delivery of criminal legal aid funding and the possibility of investigating other sources of funding.

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