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Legal Aid Fund: Consultation on payments to third parties


Purpose of the consultation:

This consultation exercise was intended to inform options for the future treatment of payment of outlays. In identifying, developing and appraising options for change, we took into account the experience of other jurisdictions, our own data on current supply and the views of the profession and others in the justice system with an interest in the sustainable provision of publicly funded legal services including the provision of necessary outlays.

Contents:

Background

Legal aid provides a range of help for people in Scotland, many of them vulnerable. It enables people, who would otherwise not be able to do so, to resolve disputes with legal assistance, pursue or defend their rights or fund their criminal defence. 

This help is often required at difficult times in people’s lives. Every year in Scotland, legal assistance helps those who need protection from domestic abuse to seek court orders to protect them; people to challenge repossession of their homes; parents to challenge a spouse or partner attempting to take children out of the country; and people to seek compensation for medical negligence.  

There is no doubt that services funded by legal aid can also reduce cost to other public services and facilitate the smooth operation of some essential processes in the provision of public service, for example, the smooth operation of the criminal justice system, the provision of legal help to Adults with Incapacity which helps Health and Social Work services to implement appropriate care packages, and generally avoid problems turning into crises which are more difficult for people and services to deal with.  

The Legal Aid Fund is different from many other public services because it is demand led and is not cash limited. Although there is no cash limit, the Scottish Government does allocate a budget for legal aid expenditure. If actual expenditure exceeds the allocation, Scottish Government funds have to be found from other budgets to meet the costs of cases that meet the statutory tests. 

The legal aid system in Scotland, unlike those in some jurisdictions, enables solicitors to recover a wide range of costs payable to third parties whose services are required for the effective progress of their clients’ cases. These costs are a significant component of legal aid expenditure and are therefore a factor in the affordability of the current system to government.  

It is therefore appropriate as part of our work to ensure the sustainability of that system that we carefully examine the cost of sums paid to third parties from the Legal Aid Fund and ensure they are provided at a reasonable cost. 

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Current expenditure

The Legal Aid Fund makes funding available in civil, criminal and children’s cases for legal assistance (advice and representation) required to progress a case, all subject to the statutory tests being met.  

Although the majority of Legal Aid Fund expenditure is on legal fees, sizeable payments are made via solicitors to third parties to pay for outlays which are reasonably required to progress a case. Outlays account for 12% of our gross costs (this percentage has been largely static from some years).  

Some outlays are largely unavoidable and at a rate set by another public body, e.g. payment to Register of Births for copy certificates, fees charged for police reports, etc. These payments are essentially money transfers from one publicly funded organisation to another.  

Other outlays are incurred for reports which are required but for which the cost varies according to the supplier and the circumstances. 

Our overriding aim is to ensure value for money is achieved when solicitors are commissioning other services for assisted persons and that such services are provided at a reasonable cost to the public purse. By doing this we can more easily sustain spending on essential legal services.

We have conducted a review of outlays expenditure. During the course of that review we have made a number of changes to payment for outlays to safeguard the legal aid fund against further increases in specific areas of expenditure (these have led to some small savings being made in these areas).

These include:

Additional savings measures must be capable of being introduced without causing systematic access to justice issues.

In order to inform options for savings we would now like to consult with the legal profession and others about their experience of the supply, use of and payment for these reports and explore options for standardised payments, supply of reports and alternatives to the current system of payment and supply.

This consultation was to inform options for change which maintain access to justice but achieve savings and thus contribute to the future sustainability of legal aid.  

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Methodology

Data analysis
 

SLAB has two systems from which we can obtain information about the use of outlays in cases; information from our applications system holds data on outlays where prior approval is sought and the extent of that approval, and our accounts system holds information on the net cost of outlays to the fund, whether they require prior approval or not.

We have reviewed data from our applications system in both civil and criminal legal aid for 2012-13 and 2013-14. We also examined a sample of accounts which included the payment of an outlay and were paid in 2012-13. 

Data in the accounts system is recorded on paper or in our online system. Data in the online system is more easily capable of collation, but in order not to distort the sample, data was also collated manually from paper accounts.  At a less detailed level, data in our annual reports records outlay expenditure at the aid-type level.

The accounts system holds information at a slightly more detailed level by broad headings such as expert, reporters and travel depending on how the outlay is coded by the solicitor or law accountant preparing the account.  The more detailed analysis on the sample collated from accounts paid in 2012-13 provides a more detailed analysis on the category of expert used.   

The current system: process and problems

We have also reviewed our current processes. Across all aid types, payment of outlays to third parties is the responsibility of the instructing solicitor. The solicitor engages the third party, whether that is a Sheriff Officer, shorthand writer or an expert. The contract for services is entered into by solicitors. In doing so they must take into account the requirement that they have due regard to economy.  

There is only one area in which SLAB maintains a register of those prepared to carry out legal aid funded work at a suggested rate. SLAB maintains a register of interpreters who accept the suggested rate of up to £30 per hour for interpreters. 
 
Access to the register is open to anyone who will accept work at those rates; those on the register have not been quality assessed nor have they been required to obtain disclosure to work with vulnerable groups.
 
Any solicitor contracting with an interpreter or any professional/expert witness has a responsibility to satisfy themselves as to the quality and suitability of the professional/expert.

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Advice & Assistance (including Civil ABWOR)
 

Any expenditure above the initial limits of £95 and £180 requires authorisation regardless of whether it is expenditure on an outlay or fees.

Any request will be considered against a test of necessity and reasonableness. A request for an increase to cover obtaining a report, for example a specialist medical report required to assess either quantum or merits of a claim, will likely include an increase to cover the solicitor’s costs of instructing and reviewing the report with the client. 
 
Some increases can be obtained by using a template increase for specific types of expenditure in specified cases.  For example in dampness and housing disrepair cases there is a template to cover an increase of instructing an architect to prepare a report (£400).
 
In Civil ABWOR for mental health law, SLAB suggest that a CTO (Compulsory Treatment Order) report for the tribunal should be £350 if the doctor does not need to travel, to a maximum of £450 if travel is required (excluding VAT).
 
If there are any special circumstances that make that rate unreasonable, SLAB will consider paying a higher rate in more complex cases, for example CORO cases (Compulsion Orders, Restriction Orders).  The full list of templates is in our handbook.

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Civil Legal Aid
 

In Civil Legal Aid the solicitor requires SLAB’s prior approval for the employment of any expert witness. There are templates for using certain experts and also to cover the costs of mediation. There are 57 types of templated sanctions. Otherwise an application for sanction is required.

 
In making the application, the solicitor must supply a copy of the pleadings in the case, details of the particular expert to be instructed including their name and location, a detailed breakdown of the fees to be charged by the expert including their hourly rate, and where the cost of that report (and not the estimate of the cost of the psychologists involvement throughout the case) is likely to exceed £1750, details of a competitive quote from another expert. 
 
Since cases are likely to be well advanced when a sanction is required under legal aid, an expert may already have a prior involvement in the case by the time they seek sanction.
 
This could be because the initial work under legal advice & assistance paid for earlier involvement (either by way of a templated increase or not) or that preparatory work may have been undertaken without advice & assistance but because of the risks or shifts in eligibility, the action has been raised with the assistance of legal aid.
 
Where an expert is already involved in the case, the options open to SLAB to control hourly rates has to be balanced against increasing costs and/or reducing prospects of success with a refusal to sanction a particular expert because of their hourly rate. This is more likely to occur in medical negligence cases.
 
Over 70% of sanctions granted are granted after consideration of a sanction application by applications staff; over 80% of the value of sanctions granted are granted after consideration.
 
 
Civil legal aid sanctions
2012-13
2013-14
Nos of sanctions granted
2371
2528
Nos granted by template
696
713
Nos granted by consideration
1675
1815
Value of sanctions granted
£2,275,306
£2,582,119
Value granted by template
£425,800
£427,000
Value granted by consideration
£1,849,506
£2,155,119
 

In 2012-13 sanctions were requested in 1395 cases and in 2013-14 in 1423 cases. Some cases will request sanctions in both years. Across both years there were 2563 cases, of these 49 cases accounted for 10 or more sanctions each, accounting for around 20% of all sanctions in each year. These 49 cases accounted for authorised expenditure of £1.1 million across both years.

Not all authorised expenditure will result in a charge on the fund; a report may not be instructed, and particularly in reparation cases, the costs may be recovered from the defender in successful cases.

There was no evidence of migration between template and more detailed non-templated requests i.e. there was no evidence that applicants started out using the templates and then started to use tailored requests.. Some of the sanctions for experts never amount to a charge on the Fund, where the applicant wins their case and obtains expenses.

There are areas of civil work where sanction is not currently required. These include the reports required to support an application in Adults with Incapacity cases (including reporting on medical position and where financial guardianship is at issue, a report on the estate).

Sanctions are also not currently required where a Child Welfare Report is ordered by the court and the cost (ex VAT) is less than £3,000.

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Criminal legal aid

In a picture remarkably similar to civil, over 70% of sanctions granted are granted after consideration of an application by applications staff; over 80% of the value of sanctions granted are granted after consideration.

 
Criminal Legal Aid
2012-13
2013-14
No of sanctions granted
4582
4555
No granted by template
1236
1207
No granted by consideration
3346
3348
Value of sanctions granted
£2,525,321
£2,503,003
Value granted by template
£410,300
£414,000
Value granted by consideration
£2,115,021
£2,089,003
 

In 2012-13 sanctions were requested in 3,471 cases, and in 2013-14 in 3,458 cases. Some cases do seek sanctions in both years. Across both years there were 6688 cases and far fewer were granted multiple sanctions, of these 14 cases accounted for 10 or more sanctions each, accounting for £142,000 authorised expenditure.

There was some migration between templates and non-templated requests, which supports information from application staff that reports may be commissioned using a template and then further expenditure is required to complete the report.

This then reduces our ability to ask that competitive quotes are obtained as an investment of some sort has already been made in that expert. Generally however, competitive quotes are required for expenditure over £800.

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Accounts analysis

Drawing on our basic data, around 70% of expenditure on outlays is incurred in civil legal assistance, with civil legal aid for actions in the Sheriff Court or Court of Session accounting for 50% of all expenditure on outlays.   

Solemn Criminal Legal Aid is the next biggest category, accounting for 17% of all expenditure on outlays, followed by civil legal advice and assistance at 12% (some of which will be fees for counsel’s opinion).

Within outlays we are particularly looking at the expenditure under the broad headings of experts and others. This accounts for around £12 million expenditure per annum.

Looking more closely at that sample, across all aid types, five outlay types account for more than 48% of all expenditure. Those top five outlays are:

 
Type of outlay
Estimated spend in 2012/13
£m’s
% of expenditure
expert/other outlay
Expert fees: Psychologists
1.4
11%
Sheriff Officers’ Fees
1.2
10%
Expert Fees: Forensics and related areas
1.2
10%
Expert fees: Psychiatrists
1.2
9%
Interpretation/Translation
0.9
8%
 

Sheriff Officer fees are incurred when service of documents such as court papers, witness citations and enforcement of court orders is required. Sheriff Officer services are required in both civil and criminal cases and are generally required in order to keep the court process or an enforcement process running smoothly.

Sanction is not required for most Sheriff Officer outlays although sanction is required for some steps in an enforcement process.

Psychiatric reports and associated witness expenses are incurred in both civil and criminal cases but are more closely associated with Civil Advice & Assistance and ABWOR which accounts for around 50% of expenditure.

This will primarily relate to ABWOR for Mental Health Tribunals and the production of reports for those hearings. Sanction is not required for these reports unless the solicitor intends to depart from the suggested rate of £350/£450.  

Psychiatric reports are also a feature of actions to appoint a welfare or financial guardian for an adult with incapacity. Each application must be supported by two medical reports (AW1 reports). These are an assessment of the capacity of the adult in relation to the decision-making powers which the court is considering granting.

No sanction is required from SLAB. There is a trend of considerable growth in the number of applications and grants of civil legal aid in cases relating to Adults with Incapacity orders.

Psychological reports are used to a similar extent in civil and criminal cases: 56% of expenditure is in civil (mostly legal aid rather than A&A, ABWOR) and 44% in criminal cases – the bulk of which, as might be expected is incurred in solemn criminal cases. In civil cases, psychology reports are more frequently used in cases concerning children than in any other type of civil case.  

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Options Development

Short to medium term options are likely to focus on refinements to the current system. Longer term options such as fee tables for experts or procurement of services may require changes to the current statutory framework, but those may be options which protect the longer term sustainability of the legal aid fund.

Short to Medium term Options which may be developed include:

  1. Production of registers with experts commonly used per type of case.
  2. Suggest hourly rates for types of work, which reduce incrementally in inverse proportion to the hours required, or are subject to a cap of hours required.
  3. Set rates for specific types of reports e.g. AWI reports, and explore the ability of the market to bear a reduction to the current costs for some reports e.g. CTO reports. 
  4. Require solicitors to obtain three quotes for all discretionary expenditure to one recipient (rather than per report) for an agreed total expenditure; evidence of the quotes to be available for inspection as part of an audit or accounts payment process to evidence value for money.

Longer term options may include:

  1. Development of procurement type exercise for experts to be admitted to an agreement to work for the benefit of assisted persons.
  2. Fees tables for experts and other expenditure paid as an outlay.

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Consultation

Having completed an analysis of the information SLAB invited a sample of solicitors, experts and representative bodies and other public bodies (such as local Health Boards, The Office of the Public Guardian, the Mental Welfare Commission, the Mental Health Tribunals and groups representing service users ) to a range of meetings ( either in focus groups or interviews).

The purpose of these discussions was to draw on experience of a range of professionals and service users.

Although we were particularly interested in the views of the solicitor profession, who form a contract with those providing reports etc and expert groupings, we also spoke to the Faculty of Advocates, other Justice Agencies and interest groups.

Contact

E: consultations@slab.org.uk


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