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08 September 2015

Can Michael Gove save our legal system?

8 mins

Unlike his predecessor, our new Lord Chancellor is already signalling a principled approach to the need to repair our failing judicial system. In his speech on 23 June to the Legatum Institute he spoke eloquently in praise of the rule of law 

the most precious asset of any civilised society … which protects the weak from the assault of the strong; …which makes sure that when those who hold power abuse it, they can be checked; …and which guarantees the essential liberty which allows us all as individuals to flourish.

He went on to remind his audience of our good fortune in the reputation of our independent judiciary, the quality of our barristers and solicitors, respect for due process and the absence of corruption in our courts and tribunals which “have all made England and Wales the best place in the world when it comes to resolving matters by law”

 As a result of the latter, he points out: 

we as a nation earn over £20 billion a year from the provision of legal services.

Yet he recognises:

a dangerous inequality at the heart of our system… While those with money can secure the finest legal provision in the world the reality for many of our citizens is that the justice system is failing them badly.

He blames this situation on antiquated working methods and “grotesque inefficiencies”, ignoring the adverse impact of the savage cuts imposed by his government and its predecessors. 

Recently I wrote about the proposals published earlier this year by a working party of Justice (of which I was a member) under the title “Delivering Justice in an Age of Austerity”. The context is the very crisis to which Michael Gove refers, in particular cuts to legal aid, to the staffing and resources of the administration of courts and tribunals, and to the imposition of heavy fees on litigants. But the Justice report is positive. While in no way condoning the cuts, it concentrates on procedural changes which can improve the system of civil justice and make it more accessible.

The main proposal of Justice is to appoint dispute resolution officers, to be called  registrars, who will take a proactive role in every case where a defence is lodged, identifying the issues, the applicable law, and the appropriate procedure and evidence necessary to resolve the case. Of course these new functionaries will cost money, but the savings they will achieve in judicial time and the number and length of hearings and trials are likely in the longer term to outweigh the cost of employing them. The most important point is that, coupled with improved online and telephone advice services (which will also cost money), citizens will be far better able to navigate by themselves a system that is now impenetrable by the great majority.

Yet it remains to be seen how far Michael Gove can translate rhetoric into reality. At best procedural reforms and technology can only reduce, not eliminate, the need for personally delivered legal services.  In his speech Mr. Gove acknowledged that legal aid remains a vital element in a fair justice system. Let us hope he means to restore it. Procedural reform may produce long term savings but in the short term it cannot be reconciled with the draconian austerity programme of the government.

So where is the money needed to repair the system going to come from? The most interesting Gove idea is to enhance the contribution of the more affluent members of the legal profession. As he says “a one nation approach to justice cannot be blind to the fact that while resources are rationed at one end of our justice system rewards are growing at the other end.”

He talks about wanting “to work with the leaders of the profession to examine which the fairest way forward might be.”

He needs to be aware that efforts to persuade prosperous lawyers to make a major contribution to the funding of legal services have a long history without significant result. In 1995 I was a member of the Law Society’s working party on pro bono. My proposal for a levy on the profits of law firms and barristers (above a generous levy-free allowance) was not accepted by my colleagues but we did recommend a voluntary Legal Services Trust Fund. The Law Society commissioned a feasibility study but the big City firms did not support the idea and it was not pursued. Before the general election of 1997 the Labour party supported a levy but it was dropped by the new government. 

Of course, many lawyers work pro bono and the pro bono programmes of some large city firms are highly commendable. But we need to recognise their considerable limitations. Such firms lack the skills and the access to meet many of the needs of the disadvantaged. Their main contribution must be financial. The Law Society Gazette reported on 29 June that Mr. Gove is considering both mandatory pro bono and “a financial levy on City lawyers.”  A partner in DLA Piper, Nicholas Patrick, told the Gazette that it was unfortunate that Gove conflated pro bono with legal aid cuts. “No amount of pro bono work will fill the massive gap left behind by legal aid.” 

And massive charitable efforts by dedicated lawyers to raise funds for legal services have not filled the gap. According to their latest accounts filed with the Charity Commission, the combined annual income of the three main legal services charities – the Access to Justice Foundation, the London Legal Support Trust, and Law Works –  is just over £1.6 million, about 0.1% of the legal aid budget (which is itself less than 1% of the National Health Service budget).

A modest proportion of the £20 billion earned for legal services if diverted to legal aid and judicial administration could make all the difference. And it would cause little hardship to those bearing the cost. The Gazette on 13 July 2015 reported “healthy average profits highlight City’s revival”. Equity partners in Clifford Chance earned on average £1.12 million each. The figure for Freshfields Bruckhaus Deringer was
£1.37 million.

These amounts were less than in the previous year but the Gazette claimed that on average partners in leading City firms increased their profits by 15%. A levy of, say,10% on incomes over, say, £150,000, would barely be noticed by these moguls. It might even be tax deductible if paid through a charity. Yet it could fund a new body of registrars or go far to restore the legal aid budget.

Is it reasonable or fair to impose such a levy? Do lawyers deserve to be treated like bankers or gamblers? For a long time lawyers, including myself, argued that contributing to legal aid would be futile because the government would promptly seize the opportunity to reduce its own commitment. That now seems no longer valid. Governments do not need encouragement to cut funding.

The reaction of the City to Gove’s threat of a levy has initially been hostile, as one would expect. One City lawyer said, according to the Gazette, that a levy would be “just as insane as having doctors funding the National Health Service or train drivers financing the train service.” The comparison is invalid. The earnings of most doctors and train drivers are already determined by those who control their respective services. They do not sell their professional skills in the market, as the City lawyers do so successfully.

But there is a downside to their prosperity for those outside the commercial world who need legal services. It feeds the popular belief, encouraged by the media and exploited by politicians, that all lawyers are rich and therefore complaints by legal aid lawyers about cuts can be ignored. Politicians dare not starve the NHS but they can cut legal aid with impunity. The polarisation between the commercial lawyers and those who serve the disadvantaged argues for the former to act to redress the balance.     

The main reason why prosperous lawyers should contribute substantially to access to justice is that their prosperity derives from their membership of their profession. Their ability to charge high fees and the demand for their services comes in large part from the honourable traditions and ethics which their status gives them, not only from their own efforts. “Every man is a debtor to his profession”, said Francis Bacon. The best traditions of the profession include equal access to justice and lawyers should contribute to its achievement according to their means. If, as we have seen they will not make a sufficient contribution voluntarily, it is not unreasonable that they should be required to do so, by a tax if need be.

If Michael Gove is serious, and he can carry his colleagues with him, there are interesting times ahead.

This article was first published in the New Law Journal.

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