Legal Aid – have the barristers reached the edge?

We mentioned a while ago the battle between the immovable object and the irresistible force – otherwise known as the UK government's struggle to reduce fees paid to barristers for legal aid. Now cases are collapsing. Recently a major fraud trial was halted because the judge felt the defendants could not get appropriate representation – barristers would not take on the case.

In most markets, setting the price is done by a competitive process. But that doesn’t happen here. So in a situation like this where a monopoly buyer faces an oligopoly supply situation, what happens? It is a power struggle, but in the end, the buyer is likely to reduce the price they are prepared to pay - until the motivation for the oligopoly providers to uniformly refuse the price offered becomes high enough for that to happen. And the government is certainly testing that hypothesis by cutting the fees for these ‘very high cost cases’, like the recent example, by 30%.

The war of words continues, as public sympathy here is critical. So the government says that barristers can still earn £100K from these cases. However, the barristers point out that this may relate to more than one year’s work, and does not take any of their costs into account. They are self employed, so have to find the cost of premises, IT, travel, not to mention pension and other personal costs.

Now you may think £300 a day, which is approximately the fee,  is a huge amount of money. Or not. But if you look at job adverts, for finance people, IT folk, project managers, even procurement specialists, then you will see that you don't get a top class experienced professional for that sort of rate.  And for many aspects of legal aid, the fees are nowhere near this much. The fees for a barrister in Magistrates Courts are around £150 per day. That does not include travel, preparation time, or all those other costs of being self employed.

The other sad point is that, without a doubt, the fee reductions mean that ‘barrister’ is becoming another job where you probably need a rich parent, lover or significant other to allow you to go through the training and learning stage – like journalism and politics, maybe even music these days. If you can't afford to do what is, in effect, an almost unpaid internship for several years, then you will struggle to break into the trade. So no more ‘working class’ barristers, I’m afraid.

But the public in the main see Legal Aid as something that goes to criminals, to dodgy asylum seekers and prisoners who are going to court because they aren’t allowed to watch their favourite TV programmes. Few people think about how grateful they might be one day to receive it, if a crooked policeman or mistaken identity means they end up in court facing a prison sentence. So politicians see it as an easy target for spending cuts – unlike health, pensions or overseas aid, for instance.  Legal Aid was created as one of the original pillars of the welfare state, along with free healthcare and social security benefits. It doesn’t seem to have the same standing now.

Back to what is happening currently in the courts. As we said, there is a point at which the supplier to a monopoly will say 'no further', as it becomes economically inappropriate for them to do that work anymore. They will put their capital and effort into something else – another customer, or, if that isn’t possible, another job or business altogether.  And that may be what is happening now with barristers.

So will the barristers hold firm? Many of them do have options to do private work. Others may decide they can make more, and more easily, in other professions. My personal view is that the Legal Aid Agency and Ministers have probably and finally pushed barristers to the edge now. If that is the case, expect more cases to collapse and this to become a serious political issue.

(Peter Smith was a Commissioner for the Legal Services Commission from 2006-2010, where he signally failed to help the LSC find a genuine market route to set fees for legal aid work).  

Voices (6)

  1. b+t:

    And another thing: surely legal aid to a defendant is only a fraction of the total cost of an investigation+prosecution. Pennywise.

  2. Trevor Black:

    It is a matter of public record that Asil Nadir was granted £5 million legal aid while living in a mansion during the trial that cost £23k a month to rent. Not bad for someone who claimed he was bankrupt. Meanwhile innocent people like Nigel Evans are totally destroyed by the system. Where is the justice and common sense in this?

  3. dan2:

    The bitter irony of this situation is summed up here: http://www.lawgazette.co.uk/law/nigel-evans-rues-backing-for-legal-aid-cuts/5040864.article (MP votes to end legal aid for the rich, unjustly accused and is innocent, has to fund own defence at own cost!)

  4. b+t:

    There 1000s of unemployed law students.
    Can’t we just make some more barristers?

    1. RJ:

      I’m hoping this is flippant sarcasm! There are indeed 1000s of unemployed law graduates and this situation is set to continue with the number of students already enrolled on law courses set to significantly outstrip potential vacancies for the next 3-5 years. However, the cases that are failing at present are highly complex fraud trials for which the pool of potential barristers is relatively limited (although the story I read did say that the solicitors had contacted over 40 separate chambers trying to find barristers to take on the case). In any case, how would you feel about being defended by a fresh-faced grad taking on multiple cases just to earn a post-expenses equivalent of less than £30k a year up against the police and CPS in the instances quoted by Peter?

  5. Paul Wright:

    Legal aid does have the same standing as the other pillars of the welfare state- it is just bring dismantled slightly faster than the others. The public doesn’t care as much and so it can be closed quicker, but the game is the same for all of them: no state support for people who cannot afford it themselves, or make insurance provision to cover the expense.

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