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“THE IMPACT UPON SOLICITORS.” ALBION CHAMBERS RESPOND TO THE MINISTRY OF JUSTICE

A remarkable feature of the reaction from the Legal Profession to the Ministry of Justice’s attempts to destroy the Criminal Justice system, has been the unity it had engendered throughout almost all parts of both sides of our profession.

Right from the start, when Oliver Kirk wrote a Guest Blog for us, describing in graphic detail, the future of High Street Solicitors, on which so many people embroiled in the court system, depend, the Bar and Solicitors at the grass roots have recognised that this attack is aimed at us all. We have one common enemy, those at Petty France who seek to destroy us.

Beyond this, there were those who suggested in the early stages, that the campaign was really concentrated on London and the South East, that we did not listen to, or take account of lawyers who practised on circuit, particularly the more rural ones. That again is a myth that has been dispelled, very largely as a result of the huge efforts made particularly by solicitors in those areas.

We do not forget either that the threat of QASA, although now rapidly diminishing, will be felt first in the Midlands and the West of England.

With all that in mind, we are delighted that Michael Fitton QC, of Albion Chambers in Bristol, has kindly agreed to our posting, as a guest blog, that part of his Chambers’ latest response to the MoJ’s “consultation” dealing specifically with the problems now faced by solicitors, and the great lengths that the Bar has gone to in his part of the world and beyond, to work with, and support them.

If the MoJ were under any illusions as to the strength of the opposition, and our united, single minded determination to oppose them, they should be deluded no longer.

So here it is:

ALBION CHAMBERS, BRISTOL
EXTRACT FROM OUR RESPONSE TO THE MoJ PAPER
THE NEXT STEPS
THE IMPACT UPON SOLICITORS
1. Members of Albion Chambers are instructed in cases at all levels of seriousness by firms of solicitors and CPS across the Western Circuit. We have had a close working relationship with them for many years. Their junior staff are often with us at court. We know the solicitors and partners well, and meet with them to discuss their cases, or issues that affect the profession, on a regular basis. We are well placed to foresee and understand the likely effect of the proposed changes on solicitors and on the way they work. Our understanding and insight has been enhanced by close liaison, meetings and discussions conducted with solicitors on our circuit in the course of 2013, regarding the MoJ’s proposals to reform Legal Aid.

2. It should be recognised that the majority of firms who do publicly-funded work in crime and family law, are small firms of five partners or fewer. This is not through choice, but economic reality. Many of them used to be part of larger firms, but in the 1980’s and 1990’s the partners in family and criminal work were abandoned or forced out of the larger firms by colleagues who wanted to obtain a better return than public funds would ever bring, on their investment of capital resources. So, the partners earning high fees in commercial work refused to subsidise their lower earning colleagues in family and crime. The profession became divided into two parts; the commercial firms, and the small cut-rate firms who relied on publicly funded work.

3. These latter are now the small High Street firms who have been, for two decades, still committed to serve the public, for ever diminishing returns. They have been squeezed harder and harder ever since, in a variety of ways. They are over-regulated; they are over-worked; they are expected to do more and more work unpaid, to keep the courts running their cases more quickly, more efficiently, at lower costs. They have been forced to depend on the promised flow of public funds to come through on time, in order to pay their bills and staff, and to survive. They have no spare cash-flow; no savings; no capital resources to fall back upon. When government chooses to cut their fees, or to delay their payments, they are forced ever nearer to closure. They have nothing left to give; no more profit to make; no incentive left to keep going, or to make do. They are at breaking point. The system depends upon their goodwill and commitment. Their loyalty to the Courts and to their clients has been assumed to be eternal; it has now all but expired. That is the background against which the latest proposals are being made.

4. There is widespread disgust in relation to the proposal that the payment for most ‘Not Guilty’ trials in the Magistrates’ Court will be fixed at the same rate as a guilty plea in the same case. The obvious incentive offered by the MoJ is for a lawyer to persuade his client to plead guilty, regardless of a potential defence. The pressure on firms and on individual advocates to compromise their professional obligations by allowing financial incentives to influence advice to clients is obvious. The proposal is a disingenuous disgrace.

5. The majority of the solicitors that we spoke to were of the view that their firms would be unlikely to be able to survive for very long if they had to rely on ‘Own Client’ work alone – i.e. without securing a contract for Duty Scheme work. Currently, the ratio of Own Client to Duty Scheme work varies between firms. Nonetheless, the dominant view is that if any firm fails to obtain Duty Scheme work, then the ‘Own client’ work would inevitably shrink, regardless of the current level.

6. One of the likely consequences is an increase in aggressive poaching of clients. Such a consequence should not be interpreted in any way as a healthy form of market based competition; rather, such activity would be a manifestation of a decline in standards of professional conduct occasioned by forcing firms into desperation. It has happened locally before, in the 1980’s, when a firm of solicitors in Cheltenham, Gloucester and Bristol operated such techniques. Their junior staff were pressured into illicit abuse of the Legal Aid scheme.

7. The ‘headline’ rate cuts, (described as being at the notional rate of 17.5%) will imperil, or extinguish many firms on our circuit. That notional rate is in fact recognised as a significant and misleading underestimate. For reasons which become apparent when the changes are properly scrutinised, the reality is that firms are likely to experience cuts of more than 20% in the short term. In the longer terms, the real effect of the cuts is likely to be in the region of 30%. When the real level of cuts is understood the number of firms affected will be higher and the effect felt sooner. Publicly funded solicitors have been working very hard on a modest income for many years, trying to keep their firms afloat and paying the staff wage bills whilst nonetheless losing money at current rates. The strong feeling is that these proposals, if implemented, will trigger the point of exit for many experienced and respected practitioners from amongst their number.

8. Solicitors are still unclear what the terms of the new Duty Provider contract will require of them. For most firms it seems that some form of merger would be a necessity before any bid for a contract might succeed. There is a fear that large cut-price national providers, such as G4S or Serco, will win contracts and force others out.

9. Despite Government assertions to the contrary, the view is that many small firms will not in reality have the option of merging. The business model of a large firm is likely to be such that maintaining a number of offices in local communities will be prohibitively expensive. Many practitioners consider that it is the relationship they have with their locality, which underpins what they have to offer.

10. There is a conviction amongst many that these proposals spell the end for all small firms. Firms that consist of only one, two or three solicitors will not win contracts. Many parts of our circuit (and not only the rural areas) are served by small firms. The MOJ fails to understand the geographical diversity of the country. There can be few places where this is more significant than the West Country. The reality is that beyond the very biggest urban conurbations in the west, plurality of supply depends on the existence of small firms. Plurality of supply is not only essential to guard against the diminution of quality associated with an oligopolistic market, it is a practical necessity in rural and sparsely populated areas in order to deal with multi-defendant cases, and situations where a particular supplier or suppliers are unable to act in a case due to a conflict of interest.

11. In Bristol, there are a few small firms whose clients come principally from the BME community. These firms offer a service to a relatively small geographical area. The partners and staff are from the same community. They understand the local social problems; the race issues; the religious and ethnic issues that affect the locality. They have developed and provided a service against considerable personal and financial odds.

12. They have grown and established themselves in a typically white and protestant profession, working in a City that has a complex historical relationship with their community. It is only 30 years since there were riots in St Pauls, arising out of social and racial tensions. The lawyers who have served the areas nearby since then, have been motivated not by profit, but have been driven by personal commitment. They are probably the smallest firms, in the cheapest offices, with less available capital than any others. They are the most vulnerable to additional pressure to merge. They are the least likely to be regarded as a good prospect for a merger. They are now the most likely to be forced to close their doors.

13. The BME communities are mostly located in the poorer districts of Bristol such as Easton, St. Pauls and St. George. These neighbourhoods are served by less than a handful of small, but highly dedicated firms of solicitors with offices located in “frontline” streets. Should these firms go out of business the effect not only on the BME community, but also on the rest of Bristol, would be disastrous. Earlier this year a senior, well-informed and experienced police officer wrote a letter warning of the civil unrest likely to ensue from the local BME community finding itself deprived of the solicitors they had come to know, respect, and rely upon. The loss to the BME community will never be made good.The loss of diversity in the legal profession in Bristol will be a shameful example of how little this Government understands or cares about equality of opportunity, or what makes a mixed society function successfully. The BME lawyers in the UK have provided a role model for young aspiring men and women to take on the challenge and debts associated with working their way out of poverty through University into the legal profession. The opportunities lost now will not come again.

14. The MoJ has proposed blandly that firms should ‘merge or form new associations with each other’. The reality of life is much harder. A firm that looks to merge has to look to economise by closing offices, paying off rental sums due; make and pay for staff redundancies. We have heard of a number of potential mergers collapsing because of the costs of closing a firm’s Professional Indemnity Insurance scheme. The insurers demand a premium for the period of six to seven years ‘run off’ of potential liability. These costs are crippling. They will wipe out any remaining capital. They are preventing mergers from occurring. Small firms that cannot meet those liabilities are going bankrupt. The Law Society is aware of the problem; the MoJ needs to be aware that its merger proposals are unrealistic.
15. So, the effect of the proposed cuts will not simply be the exit of practitioners from the profession. Rather, a trail of professional destruction and personal ruin characterised by insolvency and an inability to honour professional and financial obligations is likely. It is widely felt that the MOJ has no understanding of this fact.

MICHAEL FITTON QC
ALBION CHAMBERS
BRISTOL
30th OCTOBER 2013.

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