Speaking at the Law Society's national conference in Birmingham, Lord Mackay repeated warnings that the cost of legal aid could not be allowed to rise unchecked and proposed ways to control the budget. He said costs had escalated by 33 per cent to pounds 900m last year and would be pounds 2bn by the middle of the decade.
'Legal aid cannot continue to take an ever-increasing share of public expenditure,' he said. 'I do not regard any aspect of the present scheme as sacrosanct.'
His solutions will alarm those receiving legal aid as well as the law firms providing it. The changes are likely to leave fewer people eligible for financial assistance and will require those who still get legal aid to pay a greater share of their bills.
Lord Mackay said the amount paid by clients towards legal aid costs in civil cases should be increased and 'the low level of contributions in criminal cases' was worrying.
He also raised the prospect of swingeing cutbacks in eligibility for legal aid, principally in the civil field, but possibly for some defendants in criminal cases.
The means test used to determine whether a defendant receives assistance should be brought more closely into line with that used for other benefits, he said. Observers said this could hit families particularly hard. However Lord Mackay was not available to explain this statement further after his speech.
The Government's long-term strategy seems likely to involve an even more wide-ranging overhaul of the system in an attempt to curb rising costs. Lord Mackay suggested that law practices could compete for annual contracts to undertake 'blocks' of legal aid cases. Law Society officials said this could remove many firms from the legal aid scheme, restricting clients' choice. They were particularly worried by Lord Mackay's suggestion that smaller firms were generally less efficient and cost-effective. The society's officials expressed fears that the Government might intend to commit only large practices to carry out legal aid work.
Tony Blair, the Labour spokesman for home affairs, said: 'Any attempt to slash the legal aid budget would be disastrous for the legal system and for the many ordinary citizens for whom access to the courts would be denied.'
In divorce law, Lord Mackay highlighted the benefits of conciliation for couples intending to split up, saying that there 'should be incentives to reach agreement'.
Lawyers said afterwards this might pave the way for a system that forces couples to go to mediation before they could receive financial help for a court case.
Standard fees for solicitors doing criminal legal aid work in magistrates' courts - the source of a huge row with the Law Society this year - would be introduced within the next three months, Lord Mackay said.
He also suggested the extension of a standard fee scheme to civil work - another proposal that will alarm lawyers.Reuse content