The market

  1. The Terms of Reference (para 7) distinguishes the ‘market’ (defined as the body of private actors who provide Criminal legal aid services including both individuals and firms), and the ‘Criminal Legal Aid System’ which refers to ‘the Market the Government processes and organisations use to procure, administer and remunerate those providers in the public interest’, and places both within the context of two ultimate objectives to provide legal advice and representation to those who most need it and to uphold and ensure the constitutional right to access to justice.
  • Further, in a section on transparency, the question is posed of how the LAA could make ‘informed purchasing decisions’, 14.b, and at 15.6, the review will consider the number and mix of firms (size, specialisation and geographical distribution), which would provide the highest standard service provision and whether there is anything the Government can do to encourage this mix.
  • And further whether the uptake by providers of alternative business models might improve Market resilience. Other public service markets are also frequently mentioned as offering comparisons re average profit margins, hourly rates of pay and their mechanisms for introducing competition.
  • There is a sop to consumer choice conflating defendants and Government (in its capacity as purchaser) being empowered to make more informed choices. The review seeks also to distinguish its own scope and terms from previous Reviews (para 6), characterising Carter (2006) as relating to the reform of the approach to procuring Legal Aid Services and the Jeffrey Review (2014) to advocacy. Boldly, going where no Review has gone before , it is declared that this Review is more ambitious in scope, aiming to assess the entire Criminal Legal Aid System.

Is this approach to the ‘Market’ misconceived?

  • The starting point appears to be a determination to ignore the strength and resilience of the market that actually exists. The ‘Market’ in the first sense of the body of actors, individuals and firms who provide Legal Aid has proved amazingly adaptable and resilient. Legal Aid is a sector which has defied the gravity of 25 years fee erosion by both inflation and actual intentional cuts, and it is worth pausing to ask how has it been possible in these circumstances to continue to provide legal advice and representation to those who need it and ensure the constitutional right to access to justice?
  • The answer lies in understanding how this sector of the Market evolved and despite significant external constraints, works. In the beginning all that a firm of Solicitors needed to provide and be paid for legally aided work was an account number with The Law Society who administered the Fund and acted as the cashier. Several thousand firms in what was then (1960s) chose to provide legally aided services as a small addition to commercial, private practice.
  • The expansion of funding and scope in the undifferentiated Legal Aid Market led to pressures on its administration sufficient to bring into its existence the Legal Aid Board which saw it remit as one extending beyond the cashier role into policy making and ultimately the imposition of contracting.
  • However, the market was relatively ‘free’ and its dominant characteristics have remained unchanged, namely it is self-capitalising and ‘success’ depends on reputation which in turn drives quality. This is worth reflecting upon. Entrepreneurial Solicitors have a far better knowledge of the market than any other actor. This is because they know areas intimately ,  its ‘pockets’ of deprivation, the services/firms that already exist and therefore work out where a new office can fill a gap and be attractive to those who need Legal Aid.
  • Those Solicitors then provide their own capital to fund premises, overheads and staff costs. This is the critical way in which a free market operates. Some firms thrive other do not. This very much depends on the talent of the individuals as well as having selected the right market opportunity/location. Everything depends on reputation and that drives the service level as well as the commitment and willingness to work long hours in building a business. The market effectively establishes through these mechanisms the appropriate ‘mix’ of firms to meet need.
  1. The elements of market failure which have been widely recognised and impelled the Review, the aging profile of defence lawyers, problems of recruitment and advice deserts in civil work have been driven entirely by the funding failure combined with the rigidity of the market. The latter has been caused by a contracting mechanism which allows new entrants only at a new start point in the contracting cycle, about 5 years ,    while simultaneously leaving an axe poised over the heads of successful contractors in the form of fixed term contracts. Ever decreasing hourly rates that were long ago divorced from the private sector and uncertain career prospects have propelled talent, young and old, away from both the Solicitors profession and the Bar.


  1. Covid has been a disaster in terms of cash flow in criminal cases, with both a fall in volume as arrests/ charge rates have fallen and an extreme bottleneck restricting cases coming to trial on the back of what was already an underfunded Court service .Nevertheless, with Government support in furlough, bounce back loans and part time working, and temporary VAT relief for one quarter, most have weathered the storm. How many will actually survive once VAT and debt becomes repayable and support withdrawn is an open question. The endless succession of cuts to rates having left the sector vulnerable to financial shock.

The purchasing market

  1. This ‘Market’ is not a market at all, but an entirely artificial contracting process run by a monopoly purchaser. There is no offer and acceptance in any real sense. It is a take it or leave it proposition and for providers each round of contracting an existential moment of life or death for their business.
  1. It is not equivalent to any other public sector market. There are no multiple opportunities to contract. It has no similarity to the external providers to the NHS or for providers who are contracting with multiple authorities in multiple locations.
  1. The price for Legal Aid work is set by the MOJ/Treasury relationship. Attempts at ‘competition’ or arranging bidding for work were a disaster. The existential nature of the bid means that everyone bids the ‘floor’ or lowest price.

What can be learned from past ‘reform’?

Payment structure

  1. Traditionally, Solicitors have been paid for the time spent ‘reasonably, actually and necessarily’ on the matter. Private firm rates can be calculated by a formula which contains an assumption about salaries and divides total overheads/expenses attributable to a Solicitor by a number of chargeable hours per year, usually 1,200. The answer is an hourly rate.
  1. Private and Legal Aid rates bore some resemblance in the 1970/80s when firms were commonly engaged in both Legal Aid and commercial work. Using the justification of certainty of payment as an excuse there was an erosion of rates particularly in the era of high interest rates and inflation but there continued to be inflation linked rises until the mid-1990s.
  1. Thereafter is a tale of woe. The budget of the MOJ increased as expenditure was driven by increasing volume of cases. Outrageously, the Government adopted a false narrative that Legal Aid expenditure was ‘out of control’ with an insidious commentary that this was in some way the fault of suppliers. The upshot was the Carter Review. This was an attempt at market intervention based on a notion of economy of scale. That lower rates could be justified by an increase in volume for smaller numbers of firms. It was a failure, and its only achievement was to provide cover for a huge cut in fees while alienating the supplier base who correctly understood the attempt to cull the vast majority of firms.
  1. There is a lack of institutional memory which underlies repeated attempts to fix the mix of firms in back of the envelope schemes that come tagged with labels like ‘better value’, ‘efficiency’, ‘innovation or ‘competition’. What never appears is any recognition of the strengths of the open market or indeed any justification for the necessity of reform which recognises the reality that Legal Aid is a demand led system but also, profoundly under-funded. In the midst of the billions spent during COVID it is worth noting that nothing has been directed towards the CJS or the constitutional right to access to justice.


  1. The Legal Aid market, independent actors and firms, has been a remarkable success in becoming easily the most diverse sector of the legal profession. This has not been as a result of any Government policy but as a consequence of an open market. Entrepreneurial Solicitors who are not white could with relatively small capital establish businesses often in communities of similar historical ethnic heritage, not only creating diversity in the Solicitor’s profession but also helping access to justice. It is also a feature of firms in major conurbations that the workforce is also often highly diverse.


  • There was another unintended consequence also of great importance, the creation of a numerous independent legal profession (Solicitor’s firms committed to Legal Aid work and their mirror image in Barrister’s chambers) with an orientation to access to justice rather than an ambition to be an adjunct to commercial activity. There in lies the enormous value of Legal Aid expenditure in relation to justice as a cultural and actual good.


  • A great deal is written about social exclusion and poverty. At its heart Legal Aid is the practical process which supports a meaningful relationship between a person and the Legal System and provides substance to the otherwise vague notion a person has of what is meant by justice. It could be characterised as a cultural glue, or in the current political jargon a contributor to ‘levelling up’ as it produces a fundamental sense of fairness in legal process and of equality before the law no matter that there are other very obvious inequalities.
  • As ever, what is not addressed is the vast amount of unmet need, cuts in civil Legal Aid have enormously diminished the fundamental notion that every citizen can have access to justice. Lack of access has become invisible as millions of cases involving crucial matters in the lives of individuals and their families (the other actors in the civil and criminal market) are not addressed at all; disrepair, problems accessing welfare benefits, debt, loss of employment and discrimination and often access to one’s own children fall by the wayside due to cuts in provision.
  • The economic benefits when Legal Aid is available are obvious but unaccounted for. Successful appeals of benefits improve the material circumstances and health of a family. Preventing a school exclusion has profound consequences as does a successful immigration application. Keeping contact between a father and his child may be of inestimable value to mental health, future relationships and better life outcomes. There is a hard economic case for Legal Aid which is rarely mentioned as well as the enduring effect of people feeling that they are not excluded or abandoned but have received justice. In criminal defence, it is ensuring that the defendant’s narrative is heard, the prosecution evidence is tested in a fair trial and people acquitted. Others may receive rehabilitative sentences that help keep families together as a result of the efforts of defence lawyers. It is important that the vast majority of defendants do emerge from court believing that they have been dealt with fairly.
  • It is always announced, as here, that civil Legal Aid is beyond the scope of the Review. The continued divorce of civil and crime renders all Reviews partial, lopsided, and diminished. It is the same community that produces cases across all overlapping dimensions,  welfare benefits, criminal allegations, housing problems, family law, immigration, mental health and so on. Integrated services provided by incentivised Legal Aid firms and Counsel who are properly remunerated should be the object of policy.

Funding & the future

  • Legal Aid is a flea bite of total Government expenditure. In the pie charts and analysis by commentators post-Budgets, Legal Aid does not figure as it is too small and insignificant. Some estimate that with COVID total government expenditure may be approaching may be approaching one trillion pounds, legal aid in essence needs one billion pounds extra to double its Budget and restore a proper scale of service.
  • The answer to having a mix of firms that meets need is to fund the Legal Aid System properly, an extra one billion pounds should be the starting point for a plan of what could be achieved in levelling up justice with all its consequent economic benefits. A simple first step towards a better system would be to abolish fixed term contracts and make then open ended and to allow firms to enter at any time through a Quality Mark Assessment process. The Budget needs protection from inflation and recognition that electronic evidence is a cost driver demanding a commitment to extend funding to all parties as a cost of the proliferation of electronic services .Given the vast profits of the providers of those services the solution of a tax or levy to fund the issues created in the CJS ought to be obvious .
  • A stimulated market with career and entrepreneurial prospects will attract talent, be diverse and competition will drive quality. It needs the political will to put the funding in place. Other solutions that aim to fix the mix or engineer solutions will go the way of their predecessors (price competitive tendering, VHCC bidding, best value tendering, ideas to eliminate client choice, fixing historical quotas of cases, determining case allocation alphabetically or my date of birth, preferred partner status and so much more) into the black hole of reform, so much flotsam and jetsam, heat and darkness generated to cloak 25 years of austerity.

Will CLAR do any better?

One fears that given the terms of reference it will not.

Greg Powell