Ministry of Justice - The Award of Costs from Central Funds in Criminal Cases
THOMPSONS SOLICITORS’ RESPONSE - February 2009
Thompsons Solicitors is the UK’s most experienced trade union law firm. It operates a specialist criminal law unit from six regional centres providing national coverage for union members accused of work-related crimes.
The Thompsons criminal law unit achieves enormous success, with 95% of referrals either dealt with as “no further action” or our clients are acquitted.
Thompsons supports government initiatives that have as their objective, as in this consultation document, “fairness in the justice system” and the “journey towards fairness and equality”. Further, the firm agrees with the comments of Lord Bach that Legal Aid expenditure must both focus on the people and issues “where Legal Aid adds most value in terms of outcomes” and “ensure a fair return for providers” so that “Legal Aid continues to be sustainable over the longer term”.
However, Thompsons cannot support the proposals contained in this or the related Crown Court Means Testing consultation paper. Unfortunately the consultation paper is very vague with regard to the level of contribution while any case is in progress and the implication (see Question 6 of Crown Court Means Testing) is that all defendant costs may be recoverable after conviction.
If the two papers’ proposals become the new schemes then they will be incredibly draconian. For Thompsons clients it means hard-working families whose members have been accused of committing a work-related crime and whose livelihood and careers are therefore at stake, being put into the insidious position, depending on where levels are set, of having to consider whether to fight to clear their name or plead guilty so as not to have to pay the potentially ruinous costs of their legal defence.
This seriously undermines fairness in the justice system.
When the state prosecutes, there is no voluntary element to the defendant’s engagement with the criminal justice system. It is fundamental to fairness and justice that defendants are able to choose their solicitor.
Thompsons’ clients come to us as referrals through their trade union. They are typically public servants such as teachers, nurses, firefighters, ambulance drivers and paramedics – professional people normally suspended on full pay, without prior experience of criminal accusations, of good character and in the majority of cases, determined to “clear their names”.
Fifty per cent of our clients fail the means test in the magistrates court. These acquitted defendants in the magistrates’ court recover their costs from central funds. We defend them privately and most of them succeed (in 2007 the Thompsons success rate with 1433 cases was 95%).
This goes to the heart of what sort of society the government wants to create and what that society is prepared to accept in terms of the treatment of people in jobs that it holds in high regard and considers useful.
We are sure that neither the government or society wants an emulation of the US system, where even those acquitted of committing crime cannot recover their costs. Forcing people to seek private representation because of the means test and then not reimbursing their costs is an affront to access to justice.
People in positions of trust run a higher risk of being falsely accused. We see allegations by pupils and parents over the use of force in schools, sexual abuse allegations against teachers and care workers and charges against the emergency services of causing death by dangerous driving.
Teachers, for example, may face gross negligence manslaughter allegations after tragic deaths on school trips. Nurses too where patients have died. On average there are around 180 allegations a year against NASUWT members. Very few of these result in a conviction, even in those cases that do go to court. In 2007 there were 192 allegations. No further action was taken in 171 of these, 10 cases went to court and just 5 resulted in conviction.
Defending professional people accused of work-related crimes is highly specialised work. It is not work that the average legal aid practice, one used to dealing with people who may be more accustomed to facing criminal proceedings, will have expertise in.
The crossover relationship between the criminal prosecution and employment disciplinary processes and subsequent Criminal Record Bureau issues is also highly complex.
A common assault allegation against a teacher, for example, will require a great deal of detailed investigation. There is the need to look into the background and family background of the accuser, to get disclosure of social work records, to carry out site visits and carry out other investigations.
Any one of these actions could provide the key evidence on which a charge will be withdrawn or the defendant acquitted. But this type of work demands resources and is expensive. Appropriate central funds rates are currently paid for this level of expertise.
Across the population of Legal Aid suppliers, we have noted a decline in firms supplying legally aided services, and we believe this is particularly true for firms who have significant private market funded work.
Finding a private dentist prepared to take on NHS clients is increasingly difficult. Limiting the pool of NHS dentists has caused something of an outrage in society. Perhaps because few people imagine that they will be accused of a crime, there appears to be less concern over limiting the pool of solicitors.
But legal aid rates will act as a deterrent to firms committed to this level of service and, inevitably, many innocent people will be found guilty.
We cannot agree with the suggestion contained in the consultation paper that paying for a specialist service – a “gold plated service” – will not provide an individual with a better service. A professional person’s job and future rests on the quality and thoroughness of our work so it is imperative that we get the right result.
Faced with the perversity of a Crown Court fee system which has no relationship to the amount or cost of time, both solicitor and client may well come to a perfectly reasonable judgement that a private Defence with the solicitor deploying the level of skill, experience and resources that the case requires, is a proper course.
In the event of acquittal, that “time” is currently and should in the future, be paid for by the state that has responsibility for the decision to prosecute. This is not about a “gold plated” legal service. It is about choice, expertise and justice for innocent defendants.
Graduated litigator scheme and fixed fees
The impact of the Graduated Litigator Scheme in the Crown Court introduced from 14 January 2008 is based on an averaging of cost claims nationally and has the same properties as a fixed fee scheme because the fees for any case are related only to a formula and not to the effort or skill of the litigator.
Thompsons is concerned in all litigation by trends towards fixed fee systems. It is our view that fixed fees, without exception, replace the risk involved in payment by time (which can be properly controlled by ex-post facto taxation) with a greater risk that public funds do not secure value because suppliers cut their inputs of time and resources in order to ensure their profit. Therefore quality for the recipient of the legal service is lowered simultaneously.
The Graduated Litigator Scheme is a scheme that rewards indolence. It is in practice over-dependent on pages of prosecution evidence and especially on the numbers of days of trial. The cases are, for a supplier, a lottery as their value has no real relationship to the work that should properly be done. As a system of reward, it is perverse.
The scheme is so new that no effective review of it could be made until at least mid-2009. To limit innocent defendants’ cost recovery to Legal Aid rates in the Crown Court is we believe unacceptable but is especially inappropriate prior to such an evaluation.
An award of costs from Central Funds is not automatic and the threshold for obtaining such an order is high. Before making the order the Court has to be satisfied that not only has the defendant been acquitted or the case withdrawn but the defendant must have done nothing to contribute to his own misfortune or bring suspicion upon himself.
Thompsons’ central funds work cross subsidises our other criminal law work. We choose to cross-subsidise in order to ensure all our clients get the service their case requires. It enables Thompsons to recruit and retain skilled and committed staff with particular experience in work-related criminal matters.
In October 2006 Legal Aid practitioners were told that the introduction of means testing was on the basis that additional revenue would be generated from clients who failed the legal aid means test and would pay for work on a private basis allowing firms to cross subside.
At the same time assurance was given that additional funds would be allocated to the central funds budget precisely for this purpose.
It is imperative that a full analysis of the impact of the loss of this income to legal aid practitioners be undertaken and we suggest that the proposal be postponed until such data is available.
In our view we would be unable to sustain a proper service under the consultation’s proposals, even if our work as a firm were to continue, because we would have to cut quality and downskill or reduce pay. We could not rely on the goodwill and commitment of our solicitors. To downgrade the skill levels will inevitably lead to poorer quality work.
Thompsons is a unionised firm with a collective bargaining system, transparent pay grades and employment practices which conform to government objectives on such things as equal pay, flexible working and paternity and maternity rights.
Any drive to lower legal payment rates risks not only creating a fragile economic base among Legal Aid suppliers, but also adversely impacting on employment practices. The drive to “efficiency” and lower costs is most likely to be accomplished by lower pay and greater use of “freelance” employment with fewer employment rights.
The impact of all this would be to reduce access to justice for all defendants.
Legal aid expenditure
We do not understand the logic of trying to shift everyone onto legal aid. People who defend themselves and are convicted and pay their own costs are not a burden to the legal aid fund. It is fundamental however that innocent people should be able to recover properly incurred costs.
The Supreme Court taxing office exercises responsibility for setting the rates that can be claimed from the central fund and with the centralisation of the taxation / determining of claims by the national taxing team, there is no opportunity for abuse of the fund by over-claiming.
Indeed, whilst Legal Aid expenditure has risen to around £2 billion in total, it has done so in the context of restrictions in scope and is a tiny fraction of overall total government managed expenditure and has declined as a percentage of both total expenditure and gross domestic product.
The legal aid rates set by the Legal Services Commission are considerably less than the rates published by the Senior Costs Judge. The rates paid to CPS lawyers and barristers are higher than legal aid rates.
Total government expenditure in 2008-9 is projected to be £623b. Criminal legal aid at £1b is 0.16% of that and latest figures in relation to lower crime show spend to have declined by 8% between 2006 and 2008.
In our view the legal aid spend is well within the 2008-9 budget.
We do not understand why it is said that the central fund budget is overspent because it appears to be remarkably stable at £60 million. It seems that an arbitrary and artificial figure of £40 million has been allocated as the “budget” figure to give the appearance that the fund is overspent.
A more effective way to reduce the awards from central funds would be to examine the decisions to prosecute individuals in the first place. The prosecution must be held responsible for any flawed decision and the costs consequences which follow. To suggest those who have been unfortunate enough to be placed in this position should be further penalised is perverse and unjust. Prosecutors must ultimately have responsibility for their decisions.
Interests of Justice
It is important that there is clarity about the relationship between Legal Aid expenditure and rates and costs recovered from Central Funds, when it is proposed that the ability to recover costs should be removed from Defendants appearing in the Magistrates Court who are acquitted in cases which would not pass the interest of justice test (IOJ).
The consultation argues that in “the straight-forward cases Defence representation is not a requirement for an individual” because Magistrates Courts are “traditionally set up to deal with litigants in person with qualified legal advisers who can, and do, assist”.
We do not agree. The prosecution of all matters proceeds by representation. There is fundamentally no equality of arms. The Duty Solicitor service is restricted and was only recently more restricted in scope removing a valuable source of advice and representation in non-imprisonable matters.
The impact of adverse findings of guilt and punishments, for example regarding new driver provisions and new disqualification proposals for speeding, have both immediate and long term consequences for individuals, including employment, insurance costs and social mobility.
Whilst we are pleased that the recovery of Central Funds costs in cases that would have passed the IOJ test, but failed the means test is to be preserved, these are good reasons to allow the recovery of costs of privately paying Defendants in other cases who are acquitted.
Response to the questions:
1. Do you agree that Central Funds payments should be reformed to ensure that the taxpayer does not subsidise disproportionately high private rates for legal representation in criminal cases?
Thompsons objects to the implication and tone of this question. The Supreme Court Taxing Office rates system properly reflects the cost of doing business. The calculation of the costs incurred in providing services underpins current Central Funds rates.
Those rates are composite rates based on the actual overhead costs of providing services and fairly reflect therefore the real costs of running legal practices. They are appropriate and reasonable and cannot be easily exploited.
These hourly rates are similar to the rates paid by the government when contracting its own legal services.
We are well aware that there is widespread concern regarding the fragility of many Legal Aid suppliers abandoning all or part of Civil Legal Aid where comparable Legal Aid rates apply to those in crime.
It is therefore inappropriate to suggest that the taxpayer is in danger of having to subsidise disproportionate high private rates under the current central funds system.
As said above, this goes to the heart of what sort of society is desirable and what that society is prepared to pay for justice. If a prosecution is wrong and the defendant is acquitted then it is right that the taxpayer has to pay for that mistake. The polluter – the prosecutor – should pay.
The individual should not find themselves in a worse financial position they were in prior to the prosecution.
When considering what is proportionate, it is necessary to consider “to what”. Legal aid rates are insufficient. They have been so seriously eroded that the survival of firms completely dependent on these rates is based on a comparable erosion of employment rights and quality of service.
Lawyers who represent people who have been excluded from the system because of the way it operates need to be paid at central fund rates.
Our own “mixed economy” only works to the extent that it is significantly cross-subsidised by central funds recovery.
2. Do you agree that it is right that individuals who are eligible for legal aid in Crown Court cases, but choose instead to pay privately their legal representation, should not be able to reclaim their costs from Central Funds in future? Please provide supporting reasons for your answer.
All our clients are on legal aid in the Crown Court and should continue to be so. However, we are concerned about the level of the means testing criteria proposed for the Crown Court in the separate consultation paper. If means testing is introduced in the Crown Court and at a level that will exclude ordinary hardworking people then they will have no choice but to go privately or to plead guilty. This cannot be right for the many reasons outlined in our introduction.
The examples below of real Thompsons cases illustrate this very serious threat to the fairness of the justice system.
Case study 1. Our client, a pool attendant, was arrested as he walked to a petrol station after running out of petrol on his way home from work. Police officers were attending a 999 call for criminal damage to a motor vehicle. Although our client did not match the description of the suspect, he was arrested with considerable force.
Despite evidence from six police officers, our client was acquitted at trial and an order for costs from central funds was made.
Preparing his defence required careful preparation including :
- Site inspection
- Application to adjourn proceedings for failure of the CPS to provide documentation
- Requesting further statement from police officer
- Obtaining 999 call
- Having 999 call transcribed
- Viewing custody CCTV tape
- Gathering character evidence.
Case study 2. A caseworker was charged with an offence of common assault against a service user, during the course of his employment as a care worker. The defendant is a man of good character who had worked in the care sector for some fifteen years. He was a Principal Carer with an exemplary work record. The impact of the allegations was devastating to the defendant and his family. Whilst the criminal proceedings were ongoing, he had the pressure of an employment disciplinary hanging over him.
The defendant applied for legal aid but due to the re-introduction of the means test in magistrates’ court proceedings, was unsuccessful.
The case went to trial at the magistrates’ court. Three prosecution witnesses gave evidence against him and the defence case turned upon the evidence of a colleague of the defendant who witnessed the entire alleged incident. The court accepted the evidence of the defendant and his colleague and following a three day trial, he was duly acquitted. The court ordered that a defence costs order be paid out of central funds.
3. Do you agree that individuals who have failed the Interests of Justice test in the magistrates’ court or on appeal to the Crown Court should no longer be able to claim any legal costs they have incurred back from Central Funds? Please provide supporting reasons for your answer.
We refer to our comments above about the unreality of the consultation’s assertion that only the “most straightforward of cases…do not pass the IOJ test”. There is no historic link between the IOJ test and being able to recover costs. An individual should be entitled to recover their costs if they have been acquitted, whether or not they have failed the IOJ test.
An individual would usually fail the IOJ test if they are not going to prison and their job is unlikely to be affected.
But in the majority of Thompsons cases the individual’s job will be affected. In only a minority of cases will someone’s job not be affected. Even if the impact is not so great that they lose their employment altogether, they will often find themselves re-deployed to another position.
This is particularly the case with driving jobs. For example, Thompsons represented a driver who drove through a red light while delivering emergency blood supplies. The prosecution argued that the delivery was not an emergency. The defendant faced the likelihood of being moved to non-driving duties if found guilty.
This case “failed” on both means and the IOJ test.
Following legal argument the prosecution did not proceed and a defence costs order was made to allow our client to recover his costs.
4. Do you agree that it is appropriate to cap payments from Central Funds to the relevant legal aid rates for individuals who have failed the means test in the magistrates’ court or on appeal to the Crown Court? Please provide supporting reasons for your answer.
It is not appropriate to cap the hourly rate. We refer to our comments above about our choice to cross-subsidise other criminal work from our central funds payments.
Thompsons did not oppose the move to centralise taxation which took effect 1 Oct 08 which shifted taxation from the magistrates’ court to the National Taxing Team. As said above, we supported this move and believe it provides a more substantial safeguard against abuse or local eccentricity.
Effectively central fund rates are “capped” but at “cost of business” levels which reflect both the gravity of a case and the appropriate level of fee earner. This is an appropriate system that protects the taxpayer but ensures that the work required is actually done.
5. Do you agree that it is appropriate to cap payments from Central Funds to the relevant legal aid rates for companies in either the magistrates’ or the Crown Court? Please provide supporting reasons for your answer.
Thompsons has no comment to make on this proposal.
6. What amendments, if any, would you make to any of the options outlines should we decide to progress with the reform of Central Funds payments? Please provide supporting reasons for your answer.
We propose one amendment. Cases involving accusations evolving from work should be excluded, for the reasons detailed in our introduction. This could be done by introducing a new “good character” test.