Fat-cat lawyers in dock for soaring costs of legal aid

Barristers and solicitors working on just six criminal trials cost the taxpayer a quarter of the legal aid budget for the Crown Court last year, a committee of MPs reported yesterday. They warned ministers that unless the Government took action against these high-cost cases, the legal aid budget, now standing at £1bn, would spiral out of control.

No cases were identified by the Commons Constitutional Affairs Committee but they are believed to involve complex frauds and drug-trafficking. In oral and written evidence to the committee, the Law Society and the Bar agreed very high-cost criminal cases were the cause of most concern.

The MPs said: "In particular, the professions admitted that 0.01 per cent of criminal cases (or anecdotally 'half a dozen a year') were responsible for 25 per cent of expenditure in the Crown Court."

They added: "A number of reasons were ventured for this, including the complexity of fraud and multi-party conspiracy actions and the fact that prosecutors did not conduct a proper cost-benefit analysis when proffering charges."

The Law Society was particularly critical of the use of QCs in very high-cost cases. They said: "Fees claimed by QCs make up a significant proportion of the costs of these cases. This figure has increased significantly over the past three years and must be brought under control through a system of contracting. Whereas the maximum rate for solicitors acting in very high cost [criminal] cases as set out in regulation is significantly below private charging rates, there have been no such controls on the fees paid to QCs."

The Law Society said the Government should set fees for QCs, so the earnings for those working full time on legal aid are broadly the same (after practice expenses) as a "top hospital consultant".

The committee also warned that the Government's plans to curb legal-aid spending by reintroducing means-testing were "unworkable" and could breach the Human Rights Act. Plans by the Department of Constitutional Affairs (DCA) for means-testing legal aid were targeting the cheapest cases in the system when they should be looking at the most expensive, the committee said.

"The department should focus more of its efforts in other areas, such as reducing expenditure on the most expensive criminal cases, which consume a disproportionate amount of the Criminal Defence Service budget."

Alan Beith, the committee chairman, said that although the MPs agreed defendants who could afford their legal costs should pay, the DCA's proposals for means tests were likely to be counter-productive.

"Two of the proposed means-testing models would be unworkable in practice and the other may lead to successful challenges under the Human Rights Act," said Mr Beith, the Liberal Democrat MP for Berwick-upon-Tweed. "This will inevitably lead to delay and more costs, the exact opposite of what the Government wants to achieve."

The MPs said the DCA had not produced "convincing evidence" that reintroducing means-testing would lead to substantial cost savings. MPs believe that delays and further costs would arise while evidence of income is being obtained and considered.

They also say the problem could be made worse if the number of unrepresented defendants increased because legal aid was restricted. The report says this would run counter to other initiatives designed to improve the efficiency of the criminal justice process.

Although the committee agreed with the Government that criminal legal-aid spending - up 37 per cent, or £500m, since 1997 - is unsustainable and must be controlled, the MPs said there were better ways of limiting spending on criminal legal aid.

A spokesman for the DCA said: "The process by which people can be assessed for legal aid exists for civil cases. We are merely extending that principle to criminal cases and do not believe it will lead to unnecessary delays. The reintroduction of the means test alongside the transfer of grant of public funds to the Legal Services Commission will save up to £70m for the taxpayer each year."

Ministers had set up a "far-reaching study" on how best to provide legal help to those who need it most, he added. "The Fundamental Legal Aid Review is looking at cutting expenditure and giving value for money in legal-aid spending.