The lord chancellor’s decision to start a tender process for legal aid crime duty contracts is unlawful because it is ‘irrational’, ’disproportionate’ and based on a ’manifest error’, the Law Society will argue in the High Court tomorrow.

The Society’s challenge to the tender process will be heard on the second day of a three-day judicial review hearing.

‘The lord chancellor has failed to conduct a reasonable or adequate investigation, and has misunderstood and/or misapplied the evidence on which he relies in a way which is material (and indeed central) to the viability of the scheme he has decided to implement,’ the Law Society states in its skeleton argument.

Law Society president Andrew Caplen today said the Society had to protect the right to an effective, publicly funded defence system to prevent the risk of a sharp increase in miscarriages of justice.

The Society claims the justice secretary failed to take into account or misunderstood the impact of the availability of investment and financing needed by solicitor firms and the speed of market consolidation required to meet the timetable set out by the government.

’In their arguments, the government does not deny that underlying their plan is a massive fee cut,’ Caplen said. ‘These challenges, brought by the Society and also put forward by the Criminal Law Solicitors’ Association and London Criminal Courts’ Solicitors Association, are about introducing a system that has fee cuts as its primary goal.’

Earlier today Lord Justice Laws and Mr Justice Cranston heard Jason Coppel QC, of 11KBW, set out the practitioner groups’ case.

Key arguments from this morning:

  • 527 contracts were based on a model where, ‘all things considered, firms will make a loss’.
  • 8.75% fee cut introduced in March 2014 and a further 8.75% cut expected in July. Although the average fee reduction will be 17.5%, the total will be considerably greater for some – in some cases, over 30%.
  • MoJ should have conducted a proper investigation into whether investment finance would be available. Had it done so, it could not have concluded there was sufficient finance available to expect firms to do what the duty tender contracts required them to do.
  • There were material matters not made clear to the lord chancellor, such as the fact that most firms will be operating at a loss as a result of a 0.1% profit assumption as well as investment and delivery partner costs.

Among today’s attendees were CLSA chair Bill Waddington (pictured, far left) and vice-chair Robin Murray, and LCCSA president Jonathan Black.