The government has today announced it is scrapping a controversial new contracting scheme for criminal legal aid.

In a written ministerial statement this afternoon, justice secretary Michael Gove (pictured) said he had decided 'not to go ahead with the introduction of the dual contracting system'.

He will also suspend, for a period of 12 months from 1 April, a second 8.75% fee cut which was introduced in July last year.

Law Society president Jonathan Smithers said Chancery Lane was pleased the lord chancellor had listened and recognised that the current situation was ‘untenable’.

Smithers said: ‘It is clear that a competitive approach to the provision of criminal legal aid services is not appropriate. The assurance that there will be no competitive tendering in the future gives practitioners greater certainty for the future.’

Smithers said suspending the second fee cut for litigators for a further 12 months ‘will provide some assurance to solicitors and will help support the viability of criminal legal aid services across England and Wales’.

Gove said today that there had been two 'significant' developments since July last year.

Firstly, as a result of economies Gove made elsewhere in his department, HM Treasury had given him a settlement 'which allows me greater flexibility in the allocation of funds for legal aid'.

Secondly, following challenges mounted against the government's procurement process, Gove said it 'has become clear' that 'there are real problems in pressing ahead as initially proposed'.

A judicial review, sought by the Fair Crime Contracts Alliance, of the government's procurement process was due to open on 7 April, and last seven days. A hearing into more than 100 individual procurement law challenges, sought in accordance with part 7 of the Civil Procedure Rules, was to begin on 3 May and was expected to finish on 16 May.

Gove said today: 'My decision is driven in part by the recognition that the litigation will be time consuming and costly for all parties, whatever the outcome. I do not want my department and the legal aid market to face months if not years of continuing uncertainty, and expensive litigation, while it is heard.'

The Legal Aid Agency will now liaise with the claimants to seek to agree orders disposing of the proceedings.

Service under the new duty provider contracts was originally due to commence on 11 January. The start date was postponed to 1 April when unsuccessful bidders' legal challenges caused the tender process to be suspended in 69 of the 85 procurement areas.

Gove said the Legal Aid Agency will extend current contracts 'to ensure continuing service' until replacement contracts come into force later this year.

Gove will 'review progress on joint work with the profession to improve efficiency and quality at the beginning of 2017, before returning to any decisions on the second fee reduction and market consolidation before April 2017'.

Gove also announced that he intends to appoint an advisory council of solicitors and barristers 'to help me explore how we can reduce unnecessary bureaucratic costs, eliminate waste and end continuing abuses within the current legal aid system'. More details will follow 'in due course'.

The London Criminal Courts Solicitors' Association said it applauded Gove's 'brave but sensible' decision to 'put this half-baked scheme out of its misery'.

LCCSA president Greg Foxsmith said: 'We sincerely hope the MoJ learn lessons from this sorry affair, and we are ready and willing to work constructively with Mr Gove to replace "two-tier justice" with sustainable legal aid provision that provides justice for all.'

Zoe Gascoyne, chair of the Criminal Law Solicitors' Association, said she was pleased representations the association made on behalf of the profession had been taken on board.

'The written statement is an acknowledgment of the fact that the lord chancellor is willing to work with the representative bodies to maintain access to justice. We commend the decisions made and look forward to the constructive engagement continuing,' she added.

Mark Fenhalls QC, chair of the Criminal Bar Association, said 'it takes courage to make such decisions'.

Fenhalls said the CBA was 'wholly committed' to working with the ministry and the solicitors' profession 'to build reforms to make sure the public is once more served by an efficient and world-class criminal justice system'.

The Big Firms Group called on the ministry to implement a 'further, short "freeze"' of the duty solicitor rotas pending a 'swift consultation' in relation to the structure of duty solicitor scheme rules that should stand alongside the new own-client contracts.

The BFG, whose 37 members carry out around 25% of criminal legal aid work, invited own-client contract holders to 'come together to create a group that wishes to build a consensus regarding a duty solicitor scheme which bases allocation of duty slots on criteria which are either entirely objective and/or which are easily verifiable and enforceable by the Legal Aid Agency'.

The BFG said the 'joint goal' of the ministry and own-client contract holders 'must be to build a system of allocation which promotes quality at the heart of criminal defence services and which is not open to manipulation to the detriment of achieving that quality goal'.

Shadow justice secretary Lord Falconer said the government 'must now come clean' about how much public money 'has been wasted on this doomed endeavour' so that ministers 'can be held fully accountable for this fiasco'.

 

A timeline of events:

February 2014: Ministry of Justice unveils final package of criminal legal aid reforms. The then justice secretary Chris Grayling presses ahead with plans to cut criminal solicitors’ and barristers’ fees, and introduce a two-tier contracting arrangement that will reduce the number of firms by two-thirds.

May 2014: The London Criminal Courts Solicitors’ Association and the Criminal Law Solicitors’ Association issue judicial review proceedings. The practitioner groups claim the consultation that preceded the cuts was conducted unlawfully.

September 2014: The High Court rules that the lord chancellor acted ‘unlawfully’ in the way he consulted on plans to shake up criminal legal aid. Mr Justice Burnett said the ministry’s failure to disclose the findings of two key reports on plans to introduce new dual criminal legal aid contracts was ‘so unfair as to result in illegality’. Quashing the lord chancellor’s decision to limit the number of duty provider contracts to 525, he advises a ‘relatively short’ reconsultation of the profession.

November 2014: Ministry of Justice decides to press ahead with two-tier contracts for criminal legal aid and implement a second fee reduction of up to 8.75% in the summer of 2015. In its response to the Transforming Legal Aid consultation, the MoJ says it will increase the proposed number of tender contracts from 525 to 527.

December 2014: The Law Society, LCCSA and CLSA seek judicial review of the tender process. JR hearings set for 15 and 16 January 2015. The tender process is suspended.

January 2015: Lord Justice Laws and Mr Justice Cranston reserve judgment following a three-day JR hearing in the High Court.

February 2015: The High Court dismisses the Law Society and practitioner groups’ JR challenge. Lord Justice Laws says the reform scheme is ‘proportionate’.

February 2015: The Court of Appeal grants the Law Society and practitioner groups permission to appeal the High Court’s decision.

March 2015: The Court of Appeal reserves judgment following two-day hearing. Injunction to the tender process is extended until judgment is given.

March 2015: The Legal Aid Agency sets new deadlines for crime duty tender contracts following the Court of Appeal’s decision to dismiss the Law Society and practitioner groups’ challenge.

May 2015: Criminal barristers vote overwhelmingly in favour of direct action – ‘no returns’ and ‘days of action’ – should the government decided to proceed with the duty provider scheme and reducing the number of legal aid solicitor firms by two-thirds.

June 2015: Justice minister Shailesh Vara confirms in a written ministerial statement that the government will press ahead with legal aid reforms. These include further fee cuts from 1 July of 8.75% for solicitors representing those accused; and a reduction from 1,600 to 527 in the number of contracts for solicitors providing 24-hour cover at police stations. The ministry decides not to reduce advocacy fees. And independent review will commence in July 2016 to assess the impact of the fee cuts and dual contracting model.

July 2015: Practitioner groups commence a nationwide boycott of legal aid work under what they describe as ‘derisory’ new rates.

August 2015: After 52 days of protest, the LCCSA and CLSA suspend the nationwide action ‘as a gesture of goodwill’ following talks with the lord chancellor and MoJ officials.

September 2015: Practitioner groups consider Michael Gove’s offer to suspend the government’s latest cut to legal aid fees. The suspension would apply to all work on cases that begin in the three months from 11 January 2016, even if a case concludes after 10 April.

October 2015: Freddie Hurlston, who worked as a bid assessor at the Legal Aid Agency between July and September, claims the procurement process was botched. The agency denied the claims.

October 2015: D-day for criminal legal aid as firms find out whether they were successful in their bids for new legal aid contracts.

November 2015: The government postpones the start date for new crime duty contracts by postponing the start date until April, with a ‘backstop’ date of 10 January 2017 should a further delay be required.

November 2015: Around 90 firms issue part 7 claims in accordance with the Civil Procedure Rules. The Fair Crime Contracts Alliance issues proceedings for a judicial review.

November 2015: The High Court hears the lord chancellor’s application for a possible group litigation order.

December 2015: The High Court grants the Fair Crime Contracts Alliance permission for judicial review subject to providing £40,000 security of costs.

January 2016: The government’s intention to commence new contracts on 1 April is thwarted by the timetable for litigation. A judicial review hearing will open on 7 April and is expected to last seven days. A hearing into more than 100 individual procurement challenges will begin on 3 May and is expected to finish on 16 May.

January 2016: London criminal law firm Edward Fail Bradshaw & Waterson, one of the firms challenging the LAA’s tender process, files an application for a summary judgment. The firm says it lost out on a contract in Hackney as a result of a ‘basic transcription error’ in the marking of one of its bids.

January 2016: Law Society president Jonathan Smithers and shadow justice secretary Lord Falconer make two separate calls for Michael Gove to address speculation that he is about to abandon the new two-tier contracting regime with a public statement.

January 2016: Michael Gove is asked in the House of Commons whether he is about to abandon the new contracting regime. He neither confirms nor rebuts the speculation.