Law: What price justice?

How much does it cost to have a justice system? According to the figures published by the Lord Chancellor's Department in its White Paper on modernising justice, there are 80,000 lawyers in private practice, with a total annual fee income of about pounds 8bn. The work of all the courts and tribunals in the system is supported by 25,000 staff, and costs pounds 900m a year to run. When the provision of legal services is presented as mere debit and credit figures, it inevitably gives rise to the accusation that the law reformers, like accountants, know the price of everything but the value of nothing - including a system of justice.

Lord Irvine of Lairg published the Access to Justice Bill last week, and both lawyers and consumer bodies have been digesting the proposals, and warning of the implications for the legal system and its users.

Vicki Chapman, head of policy at the Legal Action Group, says: "The Bill has the potential to be very good - it tackles the problem that the current system is too fragmented, and needs to be more integrated. The proposal to prioritise social welfare law and pull together the types of funding is also to be welcomed - but we need more detail."

The twin aims of the proposals are "to bring about a significant increase in access to justice, and obtain the best value for the taxpayers' money spent on legal services and the courts".

As Geoff Hoon, the minister of state in the Lord Chancellor's Department has commented: "It is no secret that lawyers are not terribly popular - most people would prefer taxpayers' money to be spent on hospitals. The twin criticisms of the Bill, from lawyers and the more outspoken MPs such as Austin Mitchell, is that the reforms are driven by cost-cutting, and are more likely to restrict access to justice.

A new body is to be set up, the Legal Services Commission, which will be responsible for establishing a Community Legal Service, and will co- ordinate the provision of legal services in every community, and match services to needs. The commission will also manage the Community Legal Service Fund, which will replace legal aid in civil and family cases. The commission will buy services for the public under contracts with lawyers and other providers, such as Citizens Advice Bureaux. Eligibility for getting help from the fund and for advice and assistance will be decided under a new funding assessment which will replace the existing merits test.

For those who do not qualify for help from the fund, the Government is developing more extensive legal insurance products, and is also proposing to extend and improve the existing conditional fees arrangements. Under a conditional fee agreement, the lawyer will be paid only if the case is won - a no-win, no-fee basis. An insurance policy will be taken out to cover the costs if the client loses, and this is currently funded by a one-off premium for cover up to pounds 100,000. But, according to Michael Napier, senior partner at the law firm Irwin Mitchell, and chairman of the Law Society's civil litigation committee: "Conditional fees are not the complete answer to every case - for example for the client who cannot pay the premium, or for the smaller firms that cannot afford the risk of running a case on that basis."

The cases currently being heard in the High Court, brought by almost 50 plaintiffs against a number of tobacco companies, are being run on a basis of conditional fees. Geraldine McCool, a partner at Leigh Day - the firm which is acting in those cases - comments: "Under these proposals, the question would have to be how many of these cases you could run on that basis. It is for the lawyers to assess the risk of running the case, and because such cases take a long time, with the lawyers being responsible for disbursements during the case - which will normally be what the client opts for - it means that the risk must be accurately assessed.

"As the lawyer is taking a risk in taking on such a case, they are also entitled to claim a success fee, usually 25 per cent of the costs," Ms McCool explains.

"The White Paper has brought in a provision that the success fee be recoverable from the losing side, which will give them the right to query the level of the success fees agreed between the lawyer and the winning party, that could lead to problems."

She adds that the other concern in this area is that such agreements are still relatively recent, and everyone is "still on a steep learning curve in this area. Clients have to be taken through the whole process, and also have to be told what their obligations are under the insurance policy, and to read the fine print. That is vital as there are a number of excluded categories of case where no insurance is available, such as where proceedings have already been issued, and that can mean that they cannot proceed with the case because they have no public funds, and no insurance cover."

And that restriction of options in going to law is also the argument put forward in relation to the Government's proposals to bring legal aid costs under control by having fixed-price contracts, under which lawyers will have to estimate the cost of taking a case under a set budget. It is estimated that the number of contracts likely to be awarded will be to between 25 per cent and 50 per cent of the existing 10,000 law firms providing such advice. With the Commission in the process of developing contracts for both civil and criminal legal service providers, lawyers and consumer bodies have expressed concern about restricting choice and the issue of quality.

Irwin Mitchell's Mr Napier says: "The criterion for the providers to be awarded a contract does focus on quality, which has to be a priority, but it must be quality of advice and service as well as systems. But limiting the numbers of providers cannot be right if consumers can't get access to quality legal services. Quality without access is not quality, and access without quality is not access."

From the consumers' point of view, Marlene Winfield, senior policy officer at the National Consumer Council says: "Contracting gives the consumer both an indication of quality and of who can provide a quality service, and who can do that in a particular field - consumers do not always have that guidance. And the person who does your conveyancing is not necessarily the best person to deal with your personal injury case. It offers more guidance on who to go to, and the more quality controls there are, particularly coupled with the Lord Chancellor's proposals on kite-marking for the Community Legal Service, the more that will help the process.

"But our concern is that the changes should ensure that there is adequate access to legal services - the number of contracted solicitors will be smaller than at present. There has to be a proper strategy to ensure that the necessary services are available everywhere, geographically and in all areas of law.

"In theory, the proposals sound fine. In practice, there is a lot of work which needs to be done. A careful balance needs to be struck between controlling the costs of legal aid (which is what is on the Government's agenda) and providing real access to justice."