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Published On: February 13, 2017 | Blog | 0 comments

Price war will fail vulnerable

The Ministry of Justice wants views on its competitive tender model for court-based housing possession duty contracts. The consultation closes on 17 March.

There are 112 providers of the national court duty scheme funded through legal aid to cover vital emergency provision of advice and legal representation to litigants at court facing possession proceedings. There are also about eight other courts that run an independent scheme which is not publicly funded. Such is the recognition of the impact and importance of these duty schemes.

The consultation is based on price-competitive tendering (PCT) which the government expects will increase sustainability for those delivering the service. This is to be achieved by consolidating the current number of schemes, where allocation is by one provider for each local court, to a system of allocation based on groupings determined largely on price. Quality is essentially expected by complying with the Legal Aid Agency’s stipulated standards for contract providers.

The new departure in the way contracts are to be offered to practitioners is merely a revival of the idea of PCT for legal aid contracts which was heavily criticised when the government sought to apply it to criminal law contracts. In April 2013, following fierce opposition from criminal lawyers and the Law Society, Chris Grayling abandoned plans to introduce PCT for criminal legal aid work. I do not consider therefore that the lord chancellor could have an ideological commitment to PCT. It is but a blunt instrument to save money which the Treasury demands.

A price war will not improve services nor help the vulnerable. PCT only really works where it is applied to basic products and services costed to operate at a minimum price. For example, research from the Joseph Rowntree Foundation found that competitive tendering militates against the development of a quality product.

Enforced competition brings far-reaching changes to management and organisational cultures. The legal sector is not an area where the government should be proposing competitions and markets because the work has to be delivered professionally. As was once told to me, a true professional does the work to a high standard, more often the benchmark being: do you continue to do that work to reach the standard expected when you least wish to do it, and regardless of remuneration?

Market-driven forces create situations where, even if a lawyer wanted to act in a client’s best interest and carry out the job to a high standard, they would be prevented from doing so where a job has to be done for a price. It becomes, as Law Society president Robert Bourns said recently, ‘a race to the bottom which may impact on professional standards’.

Notwithstanding the urge to save money, the government has a duty to continue to meet the needs of the most vulnerable and all who attend court and face the prospect of losing their home. The departure to a scheme based on price will cause irretrievable damage to an already fragile supply base. Even now, most duty court schemes are operated by not-for-profit agencies and small to medium-sized law firms. While the proposal is predicated on the basis that lawyers may take a price cut if they were guaranteed a greater volume of work, there is no commercial advantage to bid on the basis of price. The new scheme of tendering will undermine the quality aspect underpinning the Legal Aid Agency’s stipulated standards fo r contract providers.

I cannot see what economies of scale can be gained by simply grouping courts together as proposed. This proposal represents de facto price competition in a landscape which has already endured drastic cuts to the scope of civil legal aid, along with no increase to fees for over 15 years. I urge practitioners to respond in the only way we can which is to oppose any notion of PCT being applied to housing cases.

This article was taken from the Law Gazette.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

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