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Reengineering the Market for Criminal Legal Aid

Reengineering the Market for Criminal Legal Aid

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Published by Alex Marsh
The Ministry of Justice proposes to overhaul the way in which the criminal legal aid system is structured. This paper reflects on the economics of the issue. It forms the substantive part of my response to the MoJ's formal consultation.
The Ministry of Justice proposes to overhaul the way in which the criminal legal aid system is structured. This paper reflects on the economics of the issue. It forms the substantive part of my response to the MoJ's formal consultation.

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Published by: Alex Marsh on Jun 04, 2013
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June 2013
Reengineering the marketfor criminal legal aid
Alex MarshSchool for Policy StudiesUniversity of Bristol
Reengineering the market for criminal legal aid1. Introduction
1.1 The Coalition
Government’s broad agenda is
underpinned by the goal of fiscalconsolidation. The Ministry of Justice is expected to contribute to this overarchingobjective through a review of its activities in order to ensure service delivery isefficient. The consultation paper
Transforming Legal Aid: Delivering a more credible andefficient system
(henceforth “TLA”)
outlines a major overhaul of the criminal legal aidsystem, among other changes. The associated Impact Assessment indicates that thepackage of changes is forecast to save the Ministry of Justice £120m per annum.1.2 The proposed changes to the legal aid system inevitably raise significant questionsregarding access to justice. The consultation on the proposals is closing just as theUN Special Rapporteur on the independence of judges and lawyers drew the strongconclusion that:
is of paramount importance that legal aid schemes be autonomous,independent, effective, sustainable and easily available in order to ensure thatthey serve the interests of those who need financial support to have access to justice on an equal basis with
 However, I will leave it to those better qualified in such matters to comment on theseaspects of the proposals. I want to respond to the way in which the proposals seek toreshape the legal aid market
2. The nature of reform
2.1 In some respects the proposals in TLA are an extension of themes pursued by LordCarter in his review of Legal Aid Procurement.
Yet, the two sets of proposals differin important details: for example, the role that
the citizens’
choice of supplier plays inthe system. And these detailed differences fundamentally shape the way in whichthe legal aid market will work.2.2 The TLA proposals are unusual. For the last thirty years public service reform acrossmany policy sectors in many countries has tended to focus
in rhetoric if not reality -upon disaggregating provision, increasing competition through the creation ofalternative providers, and empowering consumer choice as a key mechanism fordriving quality. And in areas such as social care there has been something of a moveaway from provision based on block contracts towards the use of spot purchasing.On all points the TLA proposals work in the opposite direction: increasing the scale
2of providers, reducing the number of alternative suppliers, moving to larger blockcontracts, and removing consumer choice.2.3 The case for reengineering the market in the manner proposed rests on the premisethat there are unexploited economies of scale and scope in the provision of legalservices. Yet, this foundational matter goes unexplored. The existence of sucheconomies is asserted as a matter of belief, rather than documented. Such economiesare, indeed, by no means self-evident. The argument relies on the implicit claim thatthere are significant impediments in the existing legal aid system to prevent sucheconomies of scale and scope manifesting themselves organically.2.4 In fact, TLA suggests that a viable model of service provision under the new marketstructure could be the use of local agents (para 4.74). If this were a sustainable modelof service delivery then
 prima facie
this would raise questions about the existence ofsignificant scale economies. The magnitude of the economies to be achieved simply by access to shared back office services needs to be treated sceptically.
3. Assessing cost
3.1 Any sensible appraisal of the costs and cost savings from reform cannot beconducted at the level of a single budget heading. It is important to assess the reformholistically. In this case, it is important not only to take account of the reductions inheadline costs associated with legal-aid funded service delivery but also to recognisethe countervailing costs associated with regulating quality. And it is important torecognise the knock
on costs to the courts associated with, for example, thoseunable to access appropriate legal aid-funded assistance seeking to take on the role ofinexpert litigant in person. Any claim to savings based on only one part of thepicture has no credibility.3.2 The MoJ acknowledge the need for holistic cost assessment when it is argued in theImpact Assessment that the package of reforms delivers overall savings of £120m perannum, but the Department do not offer details of savings from the variouscomponents of the reforms. It is stated that this total savings figure includesprojected savings resulting from the reduction in administration costs as a result of areduction in the number of providers. I was unable to identify whether this figurealso included additional costs incurred under the other relevant headings. Thedocumentation therefore appears to offer no defence against the criticism that thereforms will lead to additional costs elsewhere in the system that will neutralise anysavings to the legal aid bill itself.

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