Exposed: Northern Ireland's £400m legal aid gravy train
Taxpayers' money was thrown around like confetti, says MLA
Published 23/11/2011 | 02:30
The legal aid system in Northern Ireland has been exploited by people who were guilty of “playing fast and loose” with taxpayers’ money, a powerful Assembly committee has concluded.
In a damning report, Stormont’s Public Accounts Committee found expenditure spiralled out of control in the last decade — despite no comparable increase in the number of cases being dealt with.
Last night, calls were made for a police investigation after the report flagged up concerns over the effectiveness of anti-fraud procedures within the Legal Services Commission (LSC), which oversees legal aid in Northern Ireland.
Over £50m was spent on criminal legal aid here last year — part of a near £400m bill during the past 10 years.
The PAC report has urged Stormont’s justice department to act to bring costs under control and to restore public confidence.
It details a series of hard-hitting criticisms of the system, including:
- Poor financial and management systems, with the LSC overspending its budget every year and requiring £150m in extra funding;
- An additional £10.5m paid to lawyers who appealed their fees for Crown Court cases;
- Almost £23m spent on complex cases, known as Very High Cost Cases, which never actually went to trial or lasted more than 25 days in court;
- A lack of accountability which may have led to “spurious claims” in the past;
- Claims that the LSC “is not well placed to manage the risk of fraud.”
Last night the chairman of the Stormont Justice Committee called for a PSNI investigation to determine if fraud has taken place.
Paul Givan said it was evident that taxpayers had not received value for money.
“Everyone knew the costs of legal aid were spiralling out of control but the utter lack of controls and accountability in the management of legal aid which led to a cavalier culture of throwing taxpayers’ money around like confetti is astonishing,” he said.
The report highlighted how the legal profession had exploited loopholes in the system, and recommended the LSC takes urgent action to identify risks to fraud.
“That the commission’s accounts have been qualified every year because it cannot provide evidence to prove that legal aid has not been claimed fraudulently by either applicants or practitioners is alarming and must be taken very seriously,” added Mr Givan.
“I have written to the Chief Constable bringing his attention to this issue and asking that the police consider carrying out an investigation to establish if fraud has taken place.”
The criminal legal aid bill for Northern Ireland escalated from £22m in 2000/01 to £60m in 2009/10, before falling back to £51m last year.
During a meeting of the PAC committee, Nick Perry, an accounting officer with the Department of Justice, admitted there had been lax controls over how taxpayers’ money was used.
“I would, certainly, describe it as, perhaps, playing pretty fast and loose with public money and, where there has been a loophole, exploiting it,” he said.
Paul Maskey, who chairs the committee, said access to justice is paramount in a fair society, but it must be at a reasonable cost.
“Criminal legal aid has cost the taxpayer £400m over the past 10 years and the legal profession has taken advantage of loopholes in the system,” he said.
Mr Maskey also expressed doubt that proposed changes by the justice department to address legal aid expenditure would make a significant difference.
The Law Society, which represents the solicitors' profession here, said last night it “remains committed to accountability and transparency in the expenditure of public funds”.
Law Society president Brian Speers said: “The Society points out that the payment system for high cost criminal defence cases was in fact implemented by Government at that time and was the only system available to solicitors to use in those cases.
“Solicitors have shown great commitment to providing criminal legal aid services to those brought before the courts and to maintaining access to a solicitor of choice for the most vulnerable and disadvantaged within the community.”
In a statement, the Bar Council said it was clear the criminal justice system has lessons to learn, and it would continue to play its part in ensuring reforms deliver value for money for the taxpayer.
“It should be acknowledged that the issues identified within the report are historical and relate to a system which has since been abolished,” it said.
Justice Minister David Ford said new measures he had introduced have helped to cut legal aid expenditure but stressed that more will be done.
“Changes have already been made to Crown Court legal aid earlier this year, which will cut expenditure by over 50% and deliver annual savings of £18.3m.
“Further significant changes to legal aid will also flow from the Access to Justice Review,” he added.
Shocking, amazing, unacceptable... five examples of public cash wasted
1 No control over hikes in rates of payment
Up until 2009, members of the legal profession could apply to have their fees uplifted in exceptional cases. The cost of uplifted payments was around three times the standard fee.
The committee found that a lack of proper controls led to the system being exploited, and rather than being the exception, uplifted payments became the norm.
The report adds: “The committee was shocked to learn that these rules were so deficient and that payments had not been subject to even basic control. While some progress has been made to remedy this, it is completely unacceptable that public funds should have been spent in such an unaccountable fashion.”
2 Fee appeals that led to extra payouts of £10.5m
If a legal representative is not satisfied with the fees awarded, they can appeal, free of charge, to the Legal Services Commission for a further increase.
Between 2003/04 and 2009/10, two-thirds of all appeals in Crown Court cases were successful, resulting in an additional £10.5m being paid to the legal profession.
The commission could not provide corresponding figures for magistrates courts as the information was never recorded – angering the committee.
The report states: “The commission’s failure to monitor this area of expenditure is but one example of its poor management and data capture.”
3 Two counsel instead of one in too many cases
Some £1.5m could be saved every year by reducing the number of defendants represented by two counsel, the report stated.
Defendants are represented by two barristers in over half of the cases in Northern Ireland compared to just 5% in England and Wales, leading to increased costs.
While the committee accepted there are some differences between the court systems in the two jurisdictions, it concluded that two counsel representation has simply become the culture in Northern Ireland.
“There is no justification for such a huge differential,” the report stated.
4 The flawed system of Very High Costs Cases
The committee was highly critical of the Very High Cost Cases (VHCC) regime – those cases likely to last more than 25 days – that existed between 2005 and April 2011. These cases were paid at a significantly higher rate than normal. The Department of Justice said 25 days was too low a threshold. If it had been the same as in England and Wales (40 days) there would have been no VHCCs here. The committee was “amazed” to hear that only one in 10 of VHCCs ever made it to trial and lasted in excess of 25 days. “The fact that an additional £23m was paid between 2005 and 2010 on cases that did not ultimately reach the threshold is an incredible waste of public money.”
5 No accountability over large payouts in VHCCs
The committee also questioned the system in place for approving the amount to be paid in VHCCs.
The Legal Services Commission confirmed it has no formal role in scrutinising or approving payment in such cases. Instead, the Taxing Master, described as a “specialist costs judge”, provided a certificate which the commission treated as an authority to pay.
Up until 2009, barristers could submit claims for their costs without providing any supporting documentation. The committee referred to one case where a barrister had claimed over twice the amount the Taxing Master subsequently assessed as reasonable.