A coup for Chancery Lane – but what happens now? | News

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Last week’s High Court judgment that the Legal Services Commission’s family tender process was unlawful railroaded a process which would have reduced the number of family providers from 2,400 to 1,300 and led to the demise of many experienced firms.The ruling is undoubtedly a notable victory for the Law Society, but the big question for legal aid firms is: What happens now?

The first thing to consider is whether the LSC will appeal.

It would seem inconceivable that that the commission would seek to waste more public money. It has already squandered an undisclosed sum running an ‘unlawful’ tender exercise, then shelled out hundreds of thousands of pounds unsuccessfully contesting the Law Society’s challenge.

But might the prospect of having to pay compensation to those which were awarded contracts – and who may now suffer financial detriment through their withdrawal – make it more likely that the LSC will appeal?

If the LSC appeals and wins, that may not be the end of the matter, as those firms that have discontinued judicial review actions on discrete points in light of the Divisional Court’s ruling may re-issue those proceedings.

If the LSC does not seek to appeal, there will need to be a fresh tendering exercise, presumably preceded by a fresh consultation and impact assessment, all of which will take time.

All this uncertainty is set against a background of the spectre of deep legal aid cuts following the government’s spending review – with cuts likely to be made in the funding of private law family work.

As Lord Justice Moses pointed out after giving judgment, the LSC’s best course of action would be sort the new contracts once the scale of the legal aid cuts and new fee regimes are known; rather than re-tender, only for those contracts to be terminated early to implement the changes.

The Law Society’s view is similar – the LSC should extend the existing family contracts until April 2012, await the outcome of the spending review and re-tender on the basis of where legal aid funding stands at that time.

Looking ahead though, one has to ask whether this challenge and re-tendering is worth the hassle, when the end result could be the same outcome achieved by the flawed tender process – ie a massive reduction in the number of family suppliers.

Despite repeated assurances from the LSC that the family tender was not designed to reduce the number of providers, is that really the direction of travel in which it and the government is seeking to go?

One only has to look at the plans for the delivery of criminal legal aid services to see it is probably not.

Before the election, the then legal aid minister Lord Bach announced proposals to reduce the number of criminal providers by 75%. The coalition government has not dissented from this proposal.

Would it not therefore seem likely that the government and the LSC seek to run both the criminal defence service and the community legal service in the same way?

If the government believes that it can save money in the provision of criminal legal aid by contracting with fewer larger firms, it must surely have come to the same conclusion in relation to the delivery of other services.