The chairman of the Legal Services Commission has indicated that it is ‘very possible’ that the Ministry of Justice will introduce price competition in the tendering process for criminal legal aid contracts, and predicted greater competition for criminal contracts when barristers bid for work through ProcureCos.

Speaking at the Criminal Law Solicitors Association conference last week, Bill Callaghan (pictured) said he had been pleased to note a ‘healthy demand’ for crime contracts in the last contract round, which saw 100 new firms among the 1,700 awarded contracts in May.

Referring to the criminal bar’s intention to negotiate directly with the LSC through the ProcureCo model, he said: ‘It seems that in the future there will be more actors on the scene for us to negotiate contracts with.’

Callaghan said the bar’s plans to offer an end-to-end service from the police station to the Crown court were a recognition of the new financial climate, and the MoJ’s desire to contract with fewer suppliers.

‘It has also been very clear that the bar sees that price-based competition could return in the future,’ said Callaghan. ‘I believe it is sensible to recognise that this is very possible.’

CLSA director Rodney Warren said: ‘Many people in the MoJ are wedded to the concept that price competition is the only way forward, however strong our arguments against it are.

‘We see a huge danger to the quality of justice, and in turn to public confidence in the criminal justice system, if price competition is introduced.’

On the prospect of barristers competing with solicitors for LSC contracts, Warren added: ‘In an open competition, it is right that new entrants should be able to come into the market.’

But he warned that any barristers seeking to enter the market would require a deep understanding of the administrative burden of operating a contract, and of the commercial reality of being in competition with every other provider.

‘Once it becomes known that a chambers is planning to set up a ProcureCo, the commercial reality is that firms will stop instructing it,’ said Warren.

A ProcureCo is a company set up as an adjunct to a set of chambers to procure, but not deliver, legal services. It will enable barristers to remain self-employed in chambers and instruct solicitors, in a reversal of the current referral arrangements.