The Carter Report was the result of a year's detailed analysis and extensive consultations concerning the extent of the current regional supplier market for public funded services. The report proposed a new procurement system of fixed fees with the aim of saving money on public funding in the future. However, Lord Chancellor Falconer has now admitted that the introduction to fix fees may be pushed back to 2008, in the Government’s revision of the system after acknowledging significant problems due to the workability of the figures that the report had proposed. He also stated that a graduated fixed fee scheme is required and also emphasised that there would be no new money for public funding. Richard Miller, director of the Legal Aid Practitioners Group, has suggested that the Home Office, as opposed to the Treasury, should contribute from its budget to the rising spend on public funding, as without new money there would have to be cuts in scope and eligibility.
The Carter Report made what it called a "market based outcome", which was supposed to deliver lower cost without any affect upon quality and service. The report stated that “a healthy legal services market should be driven by best value competition based on quality, capacity and price" and also recognised that for some more complex work, pricing should be graduated so that cases genuinely requiring more expertise and effort are priced fairly. The report also dealt heavily with significant changes to the procurement system as a whole and introduced a process of reviewing and assessing individual suppliers.
Lord Chancellor Falconer expressed some sympathy with the legal profession in admitting that the new system will put considerable pressure on businesses before benefits become visible. However he disagreed with claims that profitability would be so low that the system would drive hundreds of law firms out of business, a worry that is on the minds of many solicitors and law costs draftsman alike.
A survey conducted by family lawyers group Resolution showed that 90% of firms envisaged they will enviably reduce or drop the amount of legally aided family work performed if the proposals of the system were put into practice. Members of this group estimated income losses of 35% or more, and whilst two-thirds said that the fees were unrealistic, more than half of respondents said they could only continue by giving work to more junior staff or being more selective in the work they took on. Resolution stated that it isn't against fixed fees but that the Carter proposals were simply unworkable.
It will be interesting to see what developments occur now that the introduction to fixed fees has been put back, but for now the concept of fixed fees remains of great concern to those practicing in the public funded sector whilst the battle of fixed fees is still to be won.
