Moses LJ's warning over family contracts

Lord Justice Moses issued a solemn warning to legal aid lawyers at the end of a ruling which consigned the new family contracts to history.

Sitting in the High Court with Mr Justice Beatson, he ruled that the tender process used by the Legal Services Commission to award the contracts was unlawful because it failed to publish the criteria until it was too late for solicitors to take action.

As a result, the offers of new contracts in family, family and housing, children and child abduction will be quashed as soon as the court finalises the precise terms of the order.

However, before family lawyers could run out of the Royal Courts and celebrate, he added: 'I don't know how relevant this will be at the end of the month. For all we know there won't be any legal aid by 20 October.'

Moses LJ said that if the government public spending review, published on that day, included a 40 per cent cut in the legal aid budget, the LSC would have to do its work all over again.

Addressing the LSC's QC, Clive Lewis, he said that handling a mass of separate judicial reviews on legal aid contracts for social welfare, immigration and other areas must be an 'absolute nightmare', quite apart from the expense.

Earlier Lord Justice Moses exposed in great detail how the LSC failed to clarify the selection criteria for the award of family contracts.

He said the LSC's consultation document, published in 2008, 'made no reference at all' to the need for each firm to have a case-worker on both the Law Society and Resolution panels.

He said subsequent responses by the LSC 'did not clarify rather they obscured' how the criteria could be met and could have misled providers.

'The LSC's decision not to announce the criteria in advance emphasises the irrationality of its decision,' he said.

Moses LJ said there was 'no rational basis' for denying caseworkers the opportunity to join the panels and an 'absence of any rational purpose' in the timing of the announcement, in February this year.

He said the LSC had deprived itself of the opportunity to identify the best qualified firms in a way that impeded its own objectives and 'arbitrarily' reduced the number of people able to achieve maximum points.

Moses LJ said the LSC's own statistics showed that panel membership had declined after 2006, and, had the LSC been more aware of the decline, it would have been more guarded on its predictions about the tender round.

He said the LSC's attitude 'smacks of a somewhat cynical though commercial approach' and it was 'irrational and contrary to the LSC's avowed interests' to keep quiet about the criteria.

'The process adopted could not rationally achieve the aim for which it was designed. The LSC defeated its own ends.'

Moses LJ said this conclusion removed the need to decide whether the criteria were themselves irrational or whether the tender complied with the principles of transparency and proportionality.

He said it was unnecessary for the court to resolve the 'difficult issues' of whether the result of the tender left inadequate provision of services in some areas of the country.

He accepted that for the LSC to rerun the exercise would be 'expensive and time-consuming' and damaging to those who won.

Moses LJ said that if the Law Society had launched its challenge before the results of the tender were announced, as the LSC suggested it should have done, the court might have regarded it as premature.

He said that failures in the tender process affected not only solicitors, but the wider public and those most in need.

'It is unacceptable to impose on clients an arbitrary restriction on the people on whose help and advice they should be able to draw.'

He noted that only one firm of solicitors supported the LSC's stance.

Moses LJ granted the Law Society's application for judicial review. In a later hearing on remedies, he said the effect of this would be that the new contracts could not be issued and the old ones could go on.

Though the precise terms of the order had not been drawn up when Solicitors Journal went to press, he said the court would issue a declaration that the tender was unlawful and quash the contract offers made in the four categories of family, family and housing, children only services and child abduction.

The Law Society was awarded costs and the LSC granted permission to appeal.

Carol Storer, director of LAPG, said: 'Even firms that were successful in obtaining contracts supported the challenge, and the court took this into account.

'It was extremely helpful for the judge to summarise the history of consultations, questions and answers, responses to consultations and letters from the LSC.

'With great clarity he showed that there was no clear message about panel membership. The result was that people did not realise it was so important and hence lots of good firms did not get a contract.'

Storer said she was already getting emails from successful firms about compensation claims.

'A lot of people are feeling battered and bruised that all the work they've put in has come to nothing.'