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STRATEGIC REVIEW ON THE DELIVERY OF LEGAL AID, ADVICE AND INFORMATION - REPORT TO MINISTERS AND THE SCOTTISH LEGAL AID BOARD

Chapter 5 - Publicly Funded Legal Advice and Help on Matters of Civil Law

Discussion with stakeholders

5.1 Our discussions with stakeholders from the legal profession were dominated by the issue of remuneration for legal aid work - remuneration was said to be too low, and taking on legal aid cases was reported not to be economically viable for many practices. This will be examined more closely in Chapter 8.

5.2 Amongst the stakeholders the providers of advice in the not-for-profit sector do not speak with a consistent voice. Although they all share concerns over stability of funding (especially those in the voluntary sector), there are differences of opinion over for example; the role of solicitors, the role of local authority in-house provision and the role and capacity of volunteers as advisers. There were also different views as to which method of quality assurance to use.

5.3 There was however consensus amongst the not-for-profit sector providers on priorities for action: a national strategy and framework for legal advice provision and the development of an overarching system for quality assurance were considered to be the most urgent priorities to address.

Strategic issues

5.4 Through discussions with stakeholders, research and pilot activity and from an assessment of current arrangements against our analysis of the fundamentals of publicly funded legal assistance (PFLA), we have distilled a number of key strategic issues. These are the issues that need to be addressed in order for the 'complex mixed system' in Scotland not only to deliver better, but to be sustainable in the long term:

• A lack of strategic vision and direction centrally for the provision of legal advice, information and representation
• The absence of consistent planning and coordination (nationally and locally): current provision is not based on a (consistent) assessment of need, and there is no mechanism for matching supply to demand for services provided by solicitors under civil legal assistance ('legal aid')
• Variable quality of advice: no transparent means for consumers and funding bodies to assure themselves that quality is good and imperfect systems of referrals between providers
• The need to ensure and maintain a supply base: adequate numbers of solicitors for legal aid work, and sustainable not-for-profit provision
• The restrictive and inconsistent financial eligibility tests for civil legal assistance (A&A, ABWOR and civil legal aid)
• The need to reconsider the scope of civil legal assistance, and other forms of publicly funded legal assistance
• Several issues in Advice and Assistance: disproportionate administrative burden for practitioners, limited control on expenditure, limited clarity of purpose
• Problems in identifying and accessing specialists and experts in specific subjects
• Use of information technology not maximised throughout provision
• Importance of not seeing legal advice provision as the only means of ensuring access to justice
• The complexity of regulation and legislation for civil legal assistance (A&A, ABWOR, civil legal aid)
• Absence of one single place in the Executive where activity and strategy on advice provision are coordinated

5.5 Of these issues, some are discussed in detail elsewhere in this report: Chapter 8 discusses the issues surrounding supply and Chapter 13 discusses the complexities of the legislative framework. The other issues, and possible ways of addressing them, will be discussed in turn below.

5A STRATEGIC VISION AND DIRECTION

5.6 The lack of clear strategic vision and direction for publicly funded legal assistance in Scotland is seen as a barrier to development and improvement. This has earlier been identified in the context of the work done by the 'CLS Working Group' ¹. Without a clear statement of vision and direction, it is more difficult for the many stakeholders to work together, as this requires the identification of shared goals.

5.7 We believe that this Strategic Review, and the commitment on the part of the Scottish Executive and the Scottish Legal Aid Board to the review process, starts to address this issue. The discussion of the fundamentals of publicly funded legal assistance earlier in this report and the conclusions and recommendations set out there can, if adopted as statements of purpose, set out a clear vision and shape a direction for the future, as can the more specific recommendations in this report.

5.8 The discussion below on Planning and Coordination sets out in some detail the roles that the respective public bodies play at present. It also identifies their roles in the formulation of future strategy, both nationally and locally.

5B PLANNING AND COORDINATION

5.9 From the research available, from the ROLIAPS report drawn up by the 'CLS Working Group' and from discussions with stakeholders, it is clear that current provision of publicly funded legal assistance on civil matters is not based on a (consistent) assessment of need. Current provision is either demand led (solicitor provision funded through legal aid) or has mainly grown up organically, over decades, and may reflect historical priorities more than current ones. This situation results in varying levels of provision of legal advice services across Scotland. Although this variation may be appropriate, and may reflect local circumstances, there is concern over inequality of access, and over the lack of a framework in which planning for services can take place.

5.10 Additionally there is the difficulty that, under the current system of funding legal advice provided by solicitors (the judicare model) there is neither the responsibility nor the expectation on the funding body (SLAB) to ensure a match between need and supply of services, nor the mechanism in place to do so. The system is demand led, yet there is good reason to believe that expressed demand for legal advice is an imperfect measure of need. ²

5.11 A very wide variety of providers of publicly funded legal advice currently exist in Scotland ³. We have described this model of delivery in paragraphs 3.20 to 3.24 as a 'complex mixed model' which encompasses a variety of delivery methods and indeed delivery settings. Our conclusion in that section of the Review was that a planned 'complex mixed model' for the provision of publicly funded legal assistance on civil matters is the only model capable of delivering against the complementary range of purposes we have identified for publicly funded legal assistance on civil matters.

5.12 However, there are three important weaknesses in the current functioning of the 'complex mixed model' in Scotland:

• it is not consistently planned
• there is little coordination of funding and planning (where it happens) either nationally or locally
• the potential for different providers and services to complement each other (the great strength of a complex mixed model) is not maximised

5.13 To address these weaknesses we believe two parallel strategies need to be adopted:

• development and implementation of a framework for planning and co-ordination
• development and implementation of overarching quality systems
• Both of these issues are tackled below.

A framework for planning and coordination

5.14 Planning and co-ordination of service provision are crucial to improving the delivery and availability of publicly funded legal assistance. Clarity needs to be given on:

• who should plan and coordinate
• how the various players should interact with each other
• how planning should be organised and what it should be based on.

5.15 We have identified four players, or sets of players, that could and should contribute to the planning of the delivery of publicly funded legal assistance:

• at national level, the Scottish Executive and a national co-ordinating body
• at local level: local authorities and partnerships of advice providers and funding bodies.

5.16 Of the four bodies identified, the interaction between a national co-ordinating body and local authorities and their respective roles are the most crucial. It is there that we believe the most significant strategic change is needed.

5.17 We have developed our views on planning and the respective roles of the players on the basis of the principle that those who plan must also be able to give effect to the plan. By the same token planning should not only be in the hands of the funding bodies and implementers, but should be viewed as a responsibility by them. Planning for the expenditure of public funds is necessary to address need appropriately and to meet public expectation.

The role of the Scottish Executive

5.18 The Scottish Executive has two overall roles to play in the planning and coordination of publicly funded legal assistance (PFLA):

• setting and articulating strategic policy direction on principles and priorities for delivery of PFLA (including assessment of any financial and legislative implications of policy change)
• active coordination of various strands of activity and policy initiatives involving (legal) advice provision but originating from different policy portfolios within the Executive and from different UK Government departments

5.19 To perform the first of these roles, close working is necessary with those bodies who will be responsible for giving practical effect to the overall policy direction. We propose that these should be the national co-ordinating body for PFLA, and the local authorities. Joint working is necessary to develop and maintain a national policy direction that is based on evidence and expertise.

5.20 Such a role for the Scottish Executive is not new, but needs to be redefined in the context of different roles and functions for the other players. As has already been stated, this Strategic Review process itself is a significant step towards articulating strategic direction on principles and priorities. This should be continued and maintained. We therefore conclude that the Executive needs to more actively develop and communicate strategic direction for PFLA in Scotland, based on transparent principles and clear priorities.

5.21 The second role, active coordination of Scottish Executive activity and policy initiatives involving legal advice provision but originating from different policy portfolios and departments, is essential in the context of setting and maintaining a clear and consistent strategic direction.

5.22 In recent years stakeholders, in particular in the not-for-profit sector, have witnessed a number of apparently unconnected initiatives from the Scottish Executive related to the provision of (legal) advice, for example:

• the creation of a new category of lay adviser, the 'approved' money adviser, in the context of the Debt Arrangement and Attachment (Scotland) Act 2002
• the substantial investment in money advice provision to support the implementation of Debt Arrangement and Attachment (Scotland) Act 2002,
• the formulation, in s.2(1) of the Housing (Scotland) Act 2001, of a requirement on local authorities to secure that advice and information about homelessness, the prevention of homelessness and any relevant services are available free of charge in their area
• significant investment in training and secondary advice provision for money advice and housing advice

5.23 In addition, there have been initiatives from UK Government departments (relevant to advice on subject matters that are reserved) that providers of and funding bodies for legal advice are directly affected by, for example:

• the regulation of immigration advice through the Office of the Immigration Services Commissioner (OISC)
• the establishment of Consumer Support Networks (CSNs) for providers of quality assured consumer advice, and the establishment of Consumer Direct

5.24 The links between such initiatives, how these contribute towards an overall goal, and how stakeholders may best respond to them is often not clear, resulting in uncertainty, as well as confusion and frustration on their part. Additionally there is a risk of duplication of work within the Executive, and of different initiatives requiring engagement from the same stakeholders, sometimes resulting in conflicting messages.

5.25 There is scope and need for different parts of the Executive to work more closely together, and for activity and policy on legal advice provision to be coordinated in one place. Alongside this there exists a responsibility for maintaining an overview of, and coordinating responses to, relevant initiatives from UK Government departments. We recommend that this coordination role is brought together in one Division within the Scottish Executive.

The role and powers of a national coordinating body

5.26 Consistent calls have been made in our recent round of discussions with stakeholders, as well as in earlier work for the Review of Legal Information and Advice Provision in Scotland (ROLIAPS), for a national co-ordinating body to carry out a range of functions to support the better delivery and development of PFLA on civil matters in Scotland.

5.27 We agree that there is a need for a national body with a responsibility to plan, coordinate, support and develop civil PFLA in Scotland as

• there is a lack of planning and coordination at national level
• there is no body currently responsible for national planning, coordination, needs assessment, or providing planning tools to local planners
• there is no body clearly responsible for giving practical effect to the Scottish Executive's policy on legal advice
• there is no body with a national development function for legal advice provision

5.28 The exact range of functions and powers envisaged for a national coordinating body varies across those stakeholders consulted. However, the CLS Working Group, which was made up of a broad range of stakeholders, agreed its views on the possible roles a national coordinating body could perform and set these out in the ROLIAPS Report (in summary):

• facilitating national partnership
• identifying best practice in terms of delivery and referral and making models available to local partnerships
• supporting local partnerships
• preparing and distributing promotional and educational material
• establishing and maintaining a website for 'community legal services', and a directory of providers
• maintaining a referral network
• operating a quality assurance system
• administering 'community legal services' funding

5.29 We do not propose that a national coordination body should adopt all of these functions, nor that it should adopt them as described in the ROLIAPS Report, as some are not compatible with recommendations on other matters in this report. However, we do support a number of them, and this will be reflected in our proposals below.

5.30 Having concluded that a national coordinating body is required, three questions remain: firstly, should this be a new body or can an existing body take these functions on, and if so, which body; and thirdly, what , more precisely, should the functions be?

5.31 First of all, we do not believe that it is desirable to create a new organisation to take on the functions of a national coordinating body for publicly funded legal advice because:

• the creation of a new organisation is costly, complicated and time-consuming
• a new organisation would have no existing expertise, credibility or relationships with other organisations
• any impact in the short and medium term would therefore be limited
• a new organisation would 'clutter up the landscape' and further complicate the number of relationships to be managed between key players.

Adapting the Role of the Scottish Legal Aid Board

5.32 The most appropriate existing organisation to take on the national coordinating role in our view is the Scottish Legal Aid Board and we recommend that the role and powers of the Scottish Legal Aid Board should change to encompass this new responsibility, for the following reasons:

• The Justice 1 Committee, in reporting on its Legal Aid Inquiry in 2001, recommended that the Executive 'bring forward proposals to give SLAB a greater strategic role, with enhanced powers and a greater degree of flexibility in operation'.
• it has existing expertise in the delivery of publicly funded legal assistance and has developed further expertise and credibility in developing new policy in this area.
• it already has an existing, if narrower role which complements the envisaged new one
• as set out in paragraph 9.13, it has established itself as a credible and effective organisation, able to deliver on its existing functions and with good working relationships with key stakeholders, including other justice system agencies and Scottish Executive policy teams.
• in particular, it has strong relationships with, and knowledge of, the legal profession: ensuring that their contribution to publicly funded legal assistance has the greatest opportunity of being fully integrated with other provision
• it creates a structural link between provision of PFLA by solicitors and provision by non-solicitors
• it can build on its recent development and policy work in relation to PFLA ⁴ and take various aspects of this forward immediately
• it uses existing organisational infrastructure and minimises additional cost
• it is an existing organisation which is independent of government, yet as a Non Departmental Public Body needs to operate in pursuit of the general policy objectives of the Executive, ensuring consistency between national policy direction and its implementation

5.33 We therefore believe that the role of the Scottish Legal Aid Board should change from that of a largely reactive, administrative body to one which is proactive and creative. In order to achieve this, its function in administering the Legal Aid Fund by paying solicitors retrospectively for work undertaken under the Legal Aid (Scotland) Act 1986, should expand to include responsibility for promoting the resolution of justiciable problems in Scotland through supporting, developing and coordinating the delivery of publicly funded legal assistance on a national level.

5.34 We envisage a 'new' Scottish Legal Aid Board, under a new name, (hereafter referred to as (N)SLAB) which will be the primary body through which the Scottish Executive's policy on the provision of publicly funded legal assistance is implemented.

5.35 We will consider the changing role of the SLAB as a result of these proposals under the following headings:

• Provision
• National Planning and co-ordination
• National development and research function
• New powers

Provision

5.36 First of all, we envisage a continued responsibility for the administration of the Legal Aid Fund and associated forms of legal assistance. This should continue to be a core function of the (new) Scottish Legal Aid Board. In addition to that, and in order to give practical application to its planning responsibility, we believe that (N)SLAB should be able to actively ensure provision of legal advice (particularly in relation to specialist services) where this is considered necessary and where other routes of ensuring provision are not available or require support.

5.37 This proactive rather than reactive role in ensuring provision of legal advice can be fulfilled in a number of ways, each of which can be appropriate depending on the situation that needs to be addressed and the service that needs to be provided, for example:

• the direct employment of solicitors
• contracting with private practice firms
• grant funding not-for-profit providers (preferably through match or joint funding arrangements) .

5.38 A greater degree of flexibility of operation than that which is possible under the constraints of the existing legislation would therefore be necessary. Such greater flexibility and the development of a proactive role are equally relevant in the context of maintaining and ensuring a continued supply of publicly funded legal advice providers. Strategies for maintaining this supply are discussed at paragraphs 8.31 to 8.38

5.39 (N)SLAB's funding role should not be restricted to 'pump priming' or providing grants for piloting of innovative services. Where a need for additional services is identified on the basis of national planning and needs assessment (see below) and it is considered appropriate for these services to be funded by (N)SLAB, this funding should be provided on a continuing basis and should include the core costs of provision. In this respect, (N)SLAB funding would be expected to adhere to the principles set out in the Scottish Compact Good Practice Guidance on Funding Voluntary Organisations ⁵.

National planning and co-ordination

5.40 We propose that (N)SLAB should develop an overview of the adequacy or otherwise of legal advice provision across Scotland on the basis of an (ongoing) assessment of need for legal advice services and knowledge of availability of such services. It should also consider, in light of the policy direction set by the Executive. what action may be necessary to ensure appropriate provision.

5.41 This national planning and coordination role should be informed by and carried out alongside local planning, which we envisage to be the responsibility of local authorities (see below). The particular responsibility of (N)SLAB will be for the planning and coordination of the provision which it is responsible for funding. As the majority of this funding will continue to relate to services provided by solicitors, this role is clearly linked to (N)SLAB's existing as well as additional functions. We also envisage a particular role for (N)SLAB in assessing and addressing the need for specialist provision, as discussed further below at paragraphs 5.208 to 5.215.

5.42 A role is also envisaged for (N)SLAB in relation to local planning that extends beyond its own funding responsibilities. This role, to be carried out in conjunction with others, including the Executive, Audit Scotland and CoSLA, relates to the development of guidance for local authorities on the discharge of their planning responsibilities and the use of tools to facilitate this process.

National development and research function

5.43 The Scottish Legal Aid Board already undertakes research and development work. Its research work has been mainly concerned with the operation and impact of the existing legal aid schemes. However, in recent years SLAB has been particularly active in working closely with the Scottish Executive on developing innovative projects and commissioning and overseeing new research.

5.44 We believe that this existing role should be built upon and that an enhanced research and development function should be developed in (N)SLAB. This is necessary in three contexts:

• to inform SLAB's own planning and policy development in relation to civil PFLA
• to support the partnership work throughout Scotland (see paragraphs 5.65 to 5.70).
• to support a quality system for PFLA.

5.45 In the context of the need for an overarching quality system for PFLA, as discussed in section 5D at paragraphs 5.76 to 5.86 of this Review, there is a corresponding need for an organisation to take the lead in the development of such a system and a role in overseeing its later operation. This function would appropriately sit with a 'new' Scottish Legal Aid Board, and complement its other functions. We do not at this stage propose a particular role for (N)SLAB in the eventual operation of such a quality system, as such decisions would result from the development of work which is still to be undertaken.

New powers

5.46 The new role and functions envisaged for the Scottish Legal Aid Board as the national coordinating body for PFLA cannot all be taken forward within the regime of the Legal Aid (Scotland) Act 1986. To give effect to the envisaged new role and functions, (N)SLAB will need to be given more flexible (and possibly new) powers, in particular in relation to policy formulation, providing funding for legal advice services and providing legal advice services itself.

The role of local authorities

5.47 The role of local authorities in the provision of publicly funded legal assistance is significant, although that role relates almost entirely to advice provided by non-solicitors. Local authorities supply substantial funds for provision in the voluntary sector and they themselves are important providers of services such as welfare rights advice, debt and money advice, consumer advice and housing advice.

5.48 It has not been possible in the course of this Review (nor, previously, in work done for the ROLIAPS report) to quantify the amount of funding from local government for advice provision, nor the extent of direct provision. This is due primarily to the fact that local authorities themselves, with some recent exceptions, do not appear to have a complete overview of their own activity and funding for advice provision, and are therefore not able to provide this information.

5.49 Nevertheless, on the basis of our discussions with authorities that have taken an overview of their funding and provision, we believe that the scale (nationally) of local authority contribution to publicly funded legal assistance could be of the same order as that of spending from the Legal Aid Fund on civil legal assistance. In relation to advice on social welfare law (including issues such housing, employment, debt, benefits, mental health), the total contribution of local authorities is likely to be considerably higher than that of legal aid.

5.50 As existing providers and funders of advice services, local authorities are better placed than any other organisation or body to take on the function of planning and ensuring appropriate advice provision in their local area. This is because:

they are closest to, and have the greatest knowledge of, local circumstances and priorities

they have the funding and provision infrastructure in place

they have the locus and the powers to give effect to any plan or strategy.

5.51 We therefore believe that local authorities (and not a national body) should plan and coordinate (legal) advice provision locally and give effect to such planning. Wherever possible, they should take publicly funded legal advice services provided by solicitors into account as part of the planning process,

5.52 We recognise that at present local authorities adopt very different approaches to how they see their role in the planning, co-ordination and provision of advice services, and show varying levels of commitment. As noted above, we therefore believe that there is a crucial role for a national body, which we propose should be (N)SLAB, in supporting local authorities in their local planning and co-ordination with a view to promoting greater consistency in respect of (legal) advice

Central v. local planning

5.53 It has been suggested to us that local planning of (legal) advice provision should be undertaken centrally and not by local authorities, on the basis that local political priorities and different methods for planning may result in inconsistencies in provision across the country. It has further been suggested that there are potential conflicts of interest for local authorities as providers and funders of advice services that may challenge their practices and decision making. As the corollary of such central planning it is has been suggested that all local authority monies currently being spent on funding or directly providing advice services should be brought under central control, in order that the centrally drawn up plans are implemented as intended.

5.54 We do not believe that such an approach can be recommended, as there are significant practical problems as well as fundamental objections:

• we do not know the scale of local investment by local authorities, making it difficult to decide how much needs to be brought under central control
• significant resistance from local government to such an approach can be expected
• detailed central planning for local circumstances is not appropriate in most circumstances
• systems needed for the control and monitoring of planned spending on and provision of local services on that scale would be considerable
• finally, we do not believe that advice provision by local authorities (or funded by local authorities) is fundamentally compromised by potential conflicts of interest. Where a conflict of interest may arise due to the specific nature of the client's problem, quality systems and codes of practice for advice providers ensure that the advice given to the individual is accurate and impartial.

A statutory duty

5.55 It has also been suggested to us that a statutory duty should be placed on local authorities to ensure the planning and provision of appropriate advice services in their area. This duty would be imposed with a view to addressing the varying levels of commitment to planning and providing advice services and further to address the vulnerability of advice provision in the absence of such a duty.

5.56 There currently is no requirement for a local authority specifically to provide advice services on the full range of justiciable problems ⁶. Local authorities provide and fund such services in fulfilment of other duties placed upon them, and in response to perceived needs and public expectation. In doing so, local authorities currently, and without a duty being placed upon them, invest significantly in the provision of advice. We believe that to maintain this current investment by local authorities must be the priority.

5.57 We do not believe that the imposition on local authorities of a duty to ensure appropriate advice provision is the best way of maintaining their current level of investment and activity in this area, nor of increasing commitment to the importance of providing advice services, because:

• the imposition of a duty can be expected to be unwelcome for local authorities
• if imposed, local government will make demands for (additional) funds to be made available to enable them to deliver this
• it may result in a net withdrawal of investment and increased cost to the Scottish Executive to maintain provision at appropriate levels
• a duty is difficult to define and prescribe and implementation would also be difficult to monitor.
• a duty would appear to be contrary to the current preference for local control and discretion and the principle of subsidiarity of government

5.58 While we are of the opinion that the imposition of a statutory duty would be undesirable at this time, we nonetheless believe that a change is required in the way that advice services are viewed by local authorities, in the context of the range of services they provide for the benefit of citizens. The provision of advice should be assessed and approached across the range of services in the local authority, as it links, both in its purposes and its practical delivery, across many areas of service provision. Therefore we believe that a corporate rather than a service based, 'silo' approach would be most useful.

5.59 Imposing a specific duty on local government may not be the most effective way of bringing about such a change in approach. We propose a consensual approach to improving and developing publicly funded legal assistance based on close co-operation between local government, the Scottish Executive and (N)SLAB in pursuit of the shared purpose of promoting the resolution of justiciable problems, and the secondary purposes for PFLA set out in paragraph 2.17. Such an approach would be consistent with the other policy developments in relation to local authorities such as Best Value ⁷ and Community Planning.

5.60 We believe that progress on the basis of this approach should be assessed over a medium term period. Should it appear that little or no progress has been made in working with local authorities towards a better planned approach to advice provision, consideration could be given anew to the possibility of placing a duty on local authorities in this respect.

5.61 The Scottish Executive should explore the avenues through which the planning, co-ordination and provision of advice by local authorities may be supported through the development of a robust planning and performance management system and consolidated in already existing, or emerging, processes in local government, for example:

• through the Local Government Improvement Service, which we understand will soon be up and running
• through working with Audit Scotland, who could advise on the scrutiny of the discharge of these responsibilities by local authorities
• through working with CoSLA, individual authorities and other parts of the Executive towards incorporating advice provision as an element of the Community Planning process

5.62 (N)SLAB, in fulfilment of its new responsibilities for planning and for development of advice provision, should assist local authorities in developing their planning and co-ordination of advice provision in accordance with the principles of Best Value. This could be achieved through, for example:

• providing Guidance for needs assessment, supply mapping and planning (with a view to this Guidance being the Common Standard to which local authorities will require to have regard, and to which Audit Scotland would refer were legal advice provision to be considered either in their rolling programme of Best Value audits or as the subject of a specific Best Value study)
• short-term 'consultancy' on starting a review or planning process
• assistance in developing advice partnerships
• sharing best practice
• developing methods for benchmarking of provision, cost assessment of provision and impact indicators
• working with the Executive and/or the Local Government Improvement Service to facilitate joint working, networking and knowledge exchange through training and seminars

5.63 We recognise that some planning and implementation problems in advice provision may require solutions that cannot be provided practically or economically within the boundaries of one local authority area. This may apply for example to the provision of specialist services or the establishment of non-geographic delivery methods, such as telephone or web-based services.

5.64 It may therefore be appropriate in some instances for advice service planning and delivery to be undertaken for areas bigger than a single local authority. Consideration should be given, in the support provided by (N)SLAB and the Executive to how 'cross border' planning and delivery can best be developed.

The role of partnerships

5.65 Our work with four pilot partnerships over the relatively short period of one year has shown that partnership working can start to make a positive contribution to the provision of advice in a specific area. The particular strengths of partnership working between different providers and funding bodies appear to be the ability to promote networks, increased joint working, better signposting and referrals and the fostering of increased trust and understanding amongst providers and between providers and funding bodies. In combination, these strengths may result, over a period of time, in better services for individuals.

5.66 It is however more difficult to give such partnerships between providers and funding bodies the task of assessing and planning provision. The role of providers can be particularly problematic, as they would be expected to think beyond the scope and experience of their own service, and may also be required to make recommendations affecting the future of the service they provide.

5.67 As indicated earlier, we believe that responsibility for planning should lie with those that have the ability to give effect to the plan, and therefore in most instances with those that control any funding. As a result, the status and role of partnerships in local planning is closely connected to the ability of the partnership to access or control any funding. ⁸ Given the difficulties with involving providers directly in planning decisions, we do not propose to give partnerships responsibility for planning, nor to bolster the role of partnerships by recommending a direct means of accessing or administrating funds. We do believe however that partnerships, and in particular the providers within them, can inform a local planning and strategy process of which the local authority takes leadership, and that partnerships can facilitate implementation of an agreed plan.

5.68 We recommend therefore that local authorities establish partnerships between local advice providers and funding bodies, including both solicitors and non-solicitors, to inform the formulation of a local plan. These partnerships would contribute to the implementation of that plan and to the improvement of local delivery of advice services through for example closer joint working, referral, and the sharing of information and training. This may best be done in the context of existing partnerships, for example the Community Planning Partnerships.

5.69 We also recommend that (N)SLAB supports the establishment of such local partnerships through for example offering short term practical assistance and expertise (consultancy support), as well as by providing tools for partnership working and sharing best practice by facilitating the engagement of solicitors in the partnerships or otherwise ensure that the work (N)SLAB funds is represented.

5.70 For reasons set out in paragraph 5.64 advice partnerships based on local authority areas may not always be the optimum size. Consideration should be given, in the support work done by (N)SLAB, to the establishment of 'cross border' partnerships, for example between city areas and their surrounding local authorities, or between smaller local authorities.

National planning and local planning - a framework

5.71 National and local planning and coordination need to be complementary, so that local needs and circumstances can be taken into account whilst a national overview is maintained.

5.72 To give strength to the planning infrastructure proposed, we believe that an element of coordination of funding needs to be introduced. In accordance with the nature of the framework for planning we propose, greater coordination would best be achieved by introducing an element of strategic (match) funding capacity centrally, with (N)SLAB.

5.73 The planning framework through which we propose to promote greater consistency in planning of provision at both national and local levels can be summarised as follows:

• strategic vision and statement of national priorities to be developed by the Scottish Executive, informed by national assessment of need and supply by (N)SLAB
• co-ordination of provision in pursuance of these national priorities to be responsibility of (N)SLAB
• local plans to be drawn up by local authorities (or clusters of local authorities) with input from partnerships of providers and funding bodies and with support from (N)SLAB, including in relation to solicitor provision as appropriate
• no duty on local authorities to produce plans, but the investment of any centrally held funds (either from the Executive or from (N)SLAB under its new power to proactively fund provision where necessary) to be dependent on evidence of an agreed planning process having been followed
• such match funding only to be available (in due course) to providers following the overarching quality system developed for publicly funded legal assistance
• finally, in demonstrating achievement of Best Value, local authorities will be expected to have regard to guidance, developed by (N)SLAB in consultation with Audit Scotland, the Executive and CoSLA

5.74 To ensure a degree of consistency in the planning processes on a local and national level, similar tools should be used for planning by (N)SLAB and local authorities.

5.75 We therefore propose that (N)SLAB, in the context of its development and research function is responsible for developing planning tools and making these available to local authorities. Such planning tools would be, for example:

• tools for needs assessment (model surveys, proxy models)
• models for analysis of results
• tools for provision mapping
• best practice examples in planning and consultation

5C QUALITY SYSTEMS ⁹

5.76 As stated before, a number of quality related issues came through strongly. The development of an overarching quality system which can encompass all forms of publicly funded legal assistance can assist in addressing a number of strategic as well as operational issues identified earlier at paragraph 5.4:

• It underpins planning by providing the necessary information base as a result of asking providers to identify the nature and level of service they provide, thereby making consistent mapping of provision possible.
• It assists co-ordination, joint working and referral by establishing shared standards for services and so creating recognition and trust, by providing an information basis for referral and by including publicly funded providers in a recognised scheme.
• It forms the basis for a quality improvement strategy as it makes it possible to see what additional training, information and other support is needed. In so doing it forms the basis for bringing existing second tier advice provision ¹⁰ and infrastructure support closer together (e.g. on money and housing advice), and possibly extending this to other areas.
• It will improve quality of provision by setting standards (at various levels, for various subjects) and requiring providers to operate within the level and area of expertise for which they are quality assured.
• It can underpin public awareness campaigns and the promotion of greater access, by directing people to assured providers and making it possible to list assured providers.

5.77 It must be acknowledged that in recent years, and in some cases much earlier than that, significant progress has been made in the development and adoption of quality assurance schemes by providers of publicly funded legal assistance. Rather than not having any quality systems in place, the reality is that most providers work under the umbrella of a specific scheme, if not more than one.

5.78 Notable recent developments in relation to quality systems for (legal) advice provision in Scotland have been:

• The introduction of quality assurance as part of civil legal aid reform. This includes registration of all solicitors providing civil legal assistance; and peer review-based quality assurance.
• The development by Communities Scotland, and it predecessor Scottish Homes, of National Standards for Housing Information and Advice, which now form part of the statutory guidance for local authorities in respect of their duty to ensure the provision of advice on homelessness (etc.) and are a requirement of the Communities Scotland single regulatory framework.
• The development of a quality assurance model for money advice provision, needed to underpin the 'approval' of money advisers who can draw up debt arrangement schemes under the Debt Arrangement and Attachment (Scotland) Act 2002. This work has not yet concluded.

5.79 Apart from these initiatives from the Scottish Executive or other public bodies, many other advice specific quality systems exist and are in use by advice providers. The research report on 'Legal information and advice services in Scotland : a review of evidence' ¹¹ included an examination of the relevant existing quality systems which gives an indication of the range of schemes in existence, and of their similarities as well as differences. An updated version of this examination is attached at Annex 3.

5.80 An initial analysis of the information in Annex 3 shows that:

• agency competence is part of most quality systems (further analysis also shows that specific requirements for agency competence are very similar)
• the area of measuring the competence of the individual appears to be least developed across the systems. There are few requirements for specific qualifications to be held
• peer review of the quality of advice is undertaken in several of the systems and is becoming more prevalent

5.81 In relation to quality systems therefore, the issue is not the complete lack of quality systems, but rather the lack of consistency within those systems which creates difficulties for clients, funding bodies and providers alike.

5.82 We therefore believe that the development of an overarching quality system for publicly funded legal assistance on civil matters is a matter of urgency as much further development and improvement work will depend on it. Accordingly, we recommend that the initial development work is commenced as soon as possible as a joint project between the Scottish Legal Aid Board, the Scottish Executive and Communities Scotland.

5.83 We also recognise that additional functions will need to be carried out to continuously improve the quality of legal advice provision in Scotland, for example the co-ordination of central support services for legal advice provision such as training, secondary advice and the availability of technical information. We recommend that such functions should also be carried out by (N)SLAB.

Essential features

5.84 It is outwith the scope of this review to set out in detail what the features of a future overarching quality system should be. Regard should be given in its development to earlier work done by the CLS Working Group, as recorded in the ROLIAPS report and to the existing National Standards for Housing Information and Advice. Ongoing work by the Scottish Executive in the context of money advice should also be considered, along with the ongoing development of quality assurance in civil legal assistance currently being implemented by the Scottish Legal Aid Board and the Law Society.

5.85 The research report on 'Legal information and advice services in Scotland : a review of evidence' concluded that:

'In reflecting on the areas covered by existing assurance schemes, it appears that for a fully comprehensive quality assurance system the following are required:

• Standards by which to measure agency competence;
• Standards by which to measure individual competence (with a sense that greater formal accreditation may be needed in this area);
• An independent audit to assess agency competence and the process and outcomes of the advice provision itself.'

5.86 We endorse this conclusion. In addition, we believe that at this stage a number of further key features can be recommended:

• as far as possible is should take account of, and build upon, systems already in use by providers and funding bodies
• it should apply to all publicly funded providers, from generalists and volunteers to specialists, solicitors and, where appropriate, advocates
• it should be flexible enough to be appropriate for different styles, methods and levels of delivery
• it should encompass basic recording and monitoring of activity
• it should not impose a disproportionate administrative burden, and should focus on outcomes rather than process
• compliance should be a prerequisite for accessing funds administered centrally.
• the objective should be for the system to become established over time as the 'standard', thereby overcoming the present difficulties of different funding sources imposing different systems and uncertainty for clients
• monitoring of compliance and accreditation of providers needs to be independent and transparent, and there should be effective sanctions for non-compliance.

5D CIVIL advice and ASSISTANCE

5.87 Significant changes have recently been made to the operation of civil legal aid as a result of successful partnership working between The Law Society of Scotland, the Scottish Executive and the Scottish Legal Aid Board. These reforms are consistent with principles we have and will set out for legal aid more generally: they provide for fair remuneration for work that is necessary to progress a case; through the staged reporting of progress on cases, they provide a degree of control over costs that was previously lacking and should help ensure that cases are run both effectively and with ongoing reference to the merits considerations and they introduce quality assurance for all civil legal assistance. Given this recent reform we do not intend to make recommendations on the operational structure of civil legal aid.

5.88 Unlike civil legal aid, there has been no strategic reform of Advice and Assistance for many years; indeed the scheme looks broadly as it did when first introduced over 30 years ago. However, the usage of Advice and Assistance since that time has transformed. It is no longer simply a scheme to provide quick and easy access to a lawyer for a limited amount of advice.

Current use of Advice and Assistance

5.89 Around 20% (just over 24,000 in 2002/03) of civil Advice and Assistance grants result in a claim for the minimum fee of 25. At current rates, this represents around 30 minutes' work. However, the average civil Advice and Assistance case costs 148, or 159 if one includes ABWOR, with the average in some substantial categories exceeding 200.

5.90 It is possible for work under a single grant of Advice and Assistance to be carried out over several months or even years and for the cost to run into many hundreds of pounds, and even thousands in a smaller number of cases. This can mean that substantial casework can be carried out under Advice and Assistance, including in- depth investigation of a case, or negotiation with opponents with a view to settlement. In a significant number of cases, Advice and Assistance is a precursor to an application for civil legal aid and in other cases, an application for civil legal aid may result if a remedy is not obtained under Advice and Assistance. In other cases, work carried out under Advice and Assistance leads to a settlement, thus avoiding litigation altogether.

Issues in civil A&A

5.91 This brief description highlights the diversity of work carried out under the umbrella of Advice and Assistance. All of this work is subject to the same arrangements for payment, with the same eligibility tests (although there are different arrangements for some ABWOR work). On both counts, there are substantial differences between Advice and Assistance (whether for one off advice or a protracted series of negotiations) and civil legal aid. If legal advice can be seen as a continuum, a significant proportion of that which falls within the scope of Advice and Assistance will be closer in nature to work carried out under civil legal aid than to work currently charged as a minimum fee. This suggests that the structure and conditions related to Advice and Assistance need to be reconsidered from a strategic standpoint.

5.92 In addition, concerns have been expressed that the current scheme is very broad in scope and offers little opportunity either to target or to control expenditure. Particular concerns have been expressed in relation to the cost-effectiveness and cost control of the system of minimum fees. These concerns are particularly acute where an individual client has several problems and so receives several separate grants of Advice and Assistance, all of which are made by the solicitor without any merits test.

Current proposals for reform of Advice and Assistance

5.93 The Tripartite Group of the Scottish Executive, the Scottish Legal Aid Board and the Law Society of Scotland is discussing proposals developed by SLAB for the reform of civil Advice and Assistance. The key aspects of the proposals are outlined below.

It is proposed that a new diagnostic stage should be introduced, for which the initial authorised expenditure would be lower than the current 85. This stage would allow the solicitor to assess the client's problem and whether further advice is required. This change would be accompanied by the removal of the current minimum fee arrangement ¹² and a reduction on the solicitor's ability to make separate grants of Advice and Assistance in relation to different problems presented by the same client. The proposals further suggest the introduction of a 'lighter touch' approach to financial eligibility for this diagnostic stage.

5.94 It is suggested that a list should be drawn up of categories of legal problem on which it would be assumed that advice from a solicitor would be appropriate. It is proposed that if the solicitor assesses, in the diagnostic stage, that further assistance from them is required to deal with the problem, and the work falls within one of the listed categories, prior approval of SLAB to provide further Advice and Assistance would not be required. The existing limit of 85 would apply, with further increases available upon application to the Board as at present.

5.95 If further work is required but the case does not fall within the categories on the list, the solicitor would have to seek authorisation from SLAB to proceed beyond the diagnostic stage and any further increases, largely as at present. Should further work from a solicitor not be required then referral to an alternative source of assistance may be appropriate.

5.96 The proposals also suggest an extension of the templating approach developed by SLAB in recent years. This approach reduces the bureaucracy of multiple increases inherent in the current system by providing for a single increase in authorised expenditure to cover all of the steps normally considered appropriate in a particular type of case. In the proposed system, if the solicitor determines that a template would cover any further assistance required by a client, the level of authorised expenditure for the relevant template would apply. Where a template applies but work needs to be undertaken beyond the templated level of expenditure, application would need to be made to the Board, again as at present.

5.97 Underpinning the progression beyond the diagnostic stage the proposals suggest a form of merits testing ¹³.

5.98 A related aspect of the proposals is that the Advice and Assistance system itself should in some way extend to services provided by non-lawyers. We discuss this issue in more detail below in paragraphs 5.109-5.121.

5.99 The proposals envisage that there will be in time a tiered remuneration system:

• the diagnostic stage to be paid at the basic rate (essentially the existing rate of pay)
• a higher rate to be paid for all further A&A (templated or otherwise)
• a further enhanced rate is envisaged for work requiring the skills of accredited specialists.

5.100 A related proposal is that a higher level of fees (above the enhanced A&A rates) may be charged to the successful party where the solicitor can recover their fee from any property recovered or preserved, where the level of recovery is sufficiently high. A full discussion of this aspect of the proposals which is linked to other issues surrounding ability to pay, can be found at paragraphs 5.177 to 5.185.

5.101 Finally, the proposals also seek to address some of the inconsistencies between Advice and Assistance and civil legal aid in respect of financial eligibility. They do so by suggesting changes to the assessment of eligibility, including the computation period and scale of contributions, ensuring that similar conditions apply where work of a similar nature or value is being undertaken. Financial eligibility is considered in detail in paragraphs 5.123 to 5.193 and the proposals will be referred to there.

Assessment of the reform proposals

5.102 The proposals mark a separation of civil and criminal Advice and Assistance. As a point of principle, we see this as an important and positive step. We believe it is appropriate for different structures to apply to Advice and Assistance on civil and criminal matters. Making this distinction is crucial in enabling the development of consistent, coherent and co-ordinated systems for civil legal assistance on the one hand and criminal legal assistance on the other.

5.103 We believe that the proposals are broadly consistent with the approach we have set out in earlier chapters. In essence the proposals would mean that Advice and Assistance ceases to be regarded as a single scheme in which the same arrangements can apply to substantially different activities. By distinguishing the different activities currently carried out under Advice and Assistance, the proposals recognise the similarity noted above between at least some of this work and that carried out in other circumstances under civil legal aid. In this way, the proposals form a natural progression from the reform of civil legal aid seek to move towards a more unified system of civil legal assistance that reflects the continuum of advice.

5.104 We believe that the removal of the minimum fee and the creation of the diagnostic stage provide a firmer basis for value for money while also continuing to secure wide access to advice at an early stage. In addition, by grouping all aspects of a client's problems together under a single grant, a cost-effective yet holistic approach is supported. In keeping with our principle that problems should be resolved as early as possible, the proposals give explicit cognisance to the important role of much of the work currently carried out under Advice and Assistance in negotiating settlement, thus supporting the resolution of disputes without recourse to the courts.

5.105 While retaining sufficient control over expenditure, the extended use of templating envisaged allows for a more efficient use of administrative resources both by the Board and the solicitor and makes it more proportionate to the value of work being done.

5.106 The proposed tiered system of remuneration would reward experienced and specialist solicitors encouraging them to continue to provide an Advice and Assistance service and securing high quality services for clients. Clearly, this ties in closely with and requires the development of the kind of quality systems set out in paragraphs 5.76 to 5.86 and we believe successful introduction of this element of the remuneration system would be dependent upon the functioning of such quality systems.

5.107 This aspect of the proposals also adheres to the 'appropriate adviser' principle set out at paragraph 3.26 and fits with the framework for remuneration set out in Chapter 7 It is important in this context to emphasise that it is envisaged that enhanced rates should only be paid to those with specialist skills when the work they are performing actually requires the exercise of these skills: specialists should not be paid enhanced rates for undertaking routine work.

5.108 As this brief discussion suggests, we see considerable advantages in reforming the civil Advice and Assistance system in the manner set out in the proposals. However, there is one aspect of the reform proposals that we feel merits a more in depth analysis: the use of non-lawyers for Advice and Assistance-type work .

Role of non-lawyers in Advice and Assistance-type work

5.109 We believe in principle that where public funding is available to ensure that people receive the advice they need to resolve their legal problems that this advice should be provided by the adviser with the most appropriate skills, knowledge and experience: the 'most appropriate adviser principle'.

5.110 Therefore, we support in principle a removal of the current distinction in Advice and Assistance between legally qualified and non-legally qualified advisers. Further, we think it sensible that Advice and Assistance beyond a diagnostic stage should continue to be provided by the initial adviser only where they are best placed to do so. We recognise that some of the work done by solicitors under Advice and Assistance is very similar in nature to work done by many non-legally qualified advisers who are currently excluded from the scheme.

5.111 However, we do not believe that it would at this point in time be appropriate to restrict the ability of solicitors to provide Advice and Assistance (in cases in relation to which they may not be the best placed adviser) on the assumption that another non-lawyer agency will be available to advise the client. Such restrictions could only operate on the basis of the kind of 'joined-up' approach to the planning and delivery of advice services outlined in paragraphs 5.9 to 5.75. It is for these reasons that the Tri-Partite Working Group progressing the reform proposals has chosen to concentrate at this stage on other aspects of the proposals outlined above.

Financial support

5.112 Over the years, many voluntary sector, non-lawyer agencies have called for access to Advice and Assistance to be extended to them. There appear to be two principle reasons for this enthusiasm. First, Advice and Assistance is demand-led, thus providing an opportunity for an agency to fund additional services to meet excess demand, where this cannot be done within the fixed resources inherent in a grant-funded structure.

5.113 Second, and related to the previous point, Advice and Assistance also provides access to funding for outlays such as medical reports, or housing surveys. Few voluntary sector agencies (or indeed local authority provided services) have budgetary provision for such expenses. This leads to some cases being referred to a solicitor simply because they can commission the necessary reports. Clearly, this is an inefficient and perverse use of resources, particularly where the initial adviser has greater expertise than the solicitor in the matter in question.

5.114 To address the latter point, we recommend that non-solicitor agencies should in future have access to a central demand-led 'outlays fund' controlled by (N)SLAB to meet the cost of the type of outlays outlined above. Any such fund should be restricted to specific and substantial case related costs and not run of the mill expenses, which should be provided for in any reasonable grant funding package. Access to this fund would have to be controlled in some way to ensure that costs were only being met in appropriate cases e.g. through an adapted 'increase in authorised expenditure' approach, or the templated system described above. As with casework services provided by solicitors under a reformed system, any adviser seeking funds for outlays would also be required to demonstrate that they were the most appropriate adviser to act in the case.

5.115 A more difficult issue is that of non-lawyers having access to the same case-by-case funding regime as solicitors. At first instance, there appears to be no strong reason of principle why the current structure of Advice and Assistance should not be extended to such agencies. After a more detailed analysis however, we conclude that this course of action cannot be recommended.

5.116 Our primary reason for reaching this conclusion relates to our recommendation above at paragraph 5.54 that local authorities should retain primary responsibility for the planning, funding and/or provision of local non-lawyer services. It appears to us that the grant funding mechanisms in place in this regard are the most appropriate way of funding generalist advice provision. Nor do we see any strong argument for replacing this funding with funding from another public source.

5.117 However, we do see stronger arguments in relation to the provision of specialist services. As noted above, a specialist non-lawyer may be the best-placed adviser in any given subject area. We discuss the issues involved in securing adequate specialist provision - both lawyer and non-lawyer - in paragraphs 5.209 to 5.216 below. We conclude there that there should be a role for (N)SLAB in this regard.

5.118 We recommend that specialist services provided by non-solicitors should not in general be funded on a case-by-case basis, but should be either grant-funded, be based on contracts or delivered by specialist advisers employed directly by (N)SLAB. We therefore recommend that (N)SLAB be given powers to secure the supply of specialist services in these ways. A specific fund should be established for this purpose, which would be fixed, with allocation of resources from it to be determined by (N)SLAB in accordance with the principles for planning and needs assessment described above. To mitigate the risk that the availability of funding from (N)SLAB might precipitate a withdrawal of funding of specialist services where this currently is provided by local authorities or others, we recommend that, as far as is practicable, (N)SLAB funding for non-lawyer agencies should be based on the principles of match or joint funding, conditional on continued investment by the local authority.

5.119 However, we do see limited scope for (N)SLAB to fund services in their entirety where there is no alternative source of funding, or it is impracticable for services to be provided or funded by local authorities. We do not see this being an extensive role for (N)SLAB, but one that could perhaps result from its own assessment of need for particular services.

5.120 We also see limited scope for some specialist services to be funded on a case-by-case basis, particularly where, for example, demand is unlikely to be sufficient to make specific grant funding feasible. Such an extension would have to be accompanied by the development of the kind of quality systems described in paragraphs 5.76 to 5.86, to ensure that the organisation, or an individual within it, has the specialist skills necessary for the types of case they take on. In addition, where cases are funded on an individual basis, the same criteria as are currently applied by solicitors would have to be put into place, including financial eligibility. In accordance with our recommendations in paragraphs 4.72 to 4.75 on the prioritisation of fixed resource services, this would not necessarily be the case where (N)SLAB provided grant funding.

5.121 We would observe at this stage that most non-lawyer agencies are not used to working on a case-by-case funding basis and that to do so would require a major change in practice, as well as policy for some (particularly in relation to means testing).

5E Ability to Pay AND FINANCIAL ELIGIBILITY IN CIVIL LEGAL ASSISTANCE

5.122 As set out at paragraphs 4.55 to 4.59, we propose that access to publicly funded, demand led civil legal assistance should remain subject to the principle of ability to pay, to the extent that this is compatible with the meeting of the overall purposes set out for PFLA in Chapter 2. A range of inter-related issues has emerged from our review. These focus on:

• The restrictive nature of eligibility criteria for civil legal aid - tapering?
• Contributions
• Inconsistencies in financial eligibility between civil legal aid and Advice and Assistance
• Recovering costs at the end of the case
• Recovery of enhanced fees
• Modification and the position of the opponent of a legally aided party.

Restrictive eligibility criteria - 'Tapering'?

5.123 The Justice 1 Committee recommended in its report ¹⁴ that the Executive give consideration to the introduction of tapering eligibility for civil legal aid. This was to meet a concern that access to justice was only available to those either poor enough to qualify for legal aid or rich enough to fund their own actions. Accordingly, the Executive asked SLAB to explore the feasibility and cost of significantly extending eligibility up the income scale: SLAB's analysis of the options is currently being considered by the Executive.

5.124 We have seen SLAB's analysis and have considered the arguments for such a scheme. We recommend that eligibility for civil legal aid should be extended, on the basis of a scheme of 'tapered' and progressive contributions.

5.125 The current structure of eligibility for civil legal aid features two bands. For those with disposable income below the lower income limit, there is no contribution to pay. For those between the upper and lower limits, a contribution is payable. This is calculated as one third of the disposable income between the limits. Thus the higher the disposable income, the higher the contribution. However, where disposable income exceeds the upper limit, the applicant is entirely out of scope of legal aid. If they wish to proceed with their action, they will have to do so on a privately financed basis (although they may be able to proceed on a conditional fee basis in certain types of case).

5.126 The relatively low level of the upper limit has led to the concern that those on moderate incomes will often be deterred from pursuing meritorious cases through fear of the cost of doing so, particularly given the potentially open-ended commitment for their own costs and those of their opponent. To this extent, the legal aid system could be seen to fail in our stated purpose of promoting effective access to formal mechanisms of dispute resolution.

5.127 However, to extend the existing system of eligibility to include at least some of those currently excluded could be very costly. For this reason, we believe that the upper eligibility limit should be increased, perhaps substantially, but that this should be accompanied by an extension of the contributory principle. The maximum income-based contribution at present is not dissimilar to the average cost of a civil case. Thus one might expect many of those brought in by an extension of eligibility to eventually meet all or most of their own costs: the legal aid fund thus becomes the funder of last resort, only meeting those costs the individual applicant is unable to meet themselves. Of course, there will still be cases that exceed the value of even very substantial contributions. However, the funding of such cases promotes effective access to the courts where this would otherwise be impossible, even for those on relatively comfortable incomes, in accordance with the purpose we have set out.

5.128 In this way, legal aid can come to be viewed as facilitating wider access, rather than financing access in a narrow range of cases. Rather than meeting the cost of every case, the Legal Aid Fund would effectively underwrite cases by bearing the risk that would otherwise be borne by individual litigants. The level of cost to be faced by the applicant is clear from the outset and the assisted person can pay their contributions according to the interest free instalment arrangements operated by the Board. The applicant may also be protected to some extent against the risk of having to meet their opponent's costs if they are unsuccessful (although we have further proposals in this regard at paragraphs 5.186 to 5.192).

Contributions under 'tapered' eligibility

5.129 At the same time as extending eligibility in this way, we recommend that contributions should be lowered for those at the lower end of the current income scale, whilst introducing a 'progressive' system of contributions as income increases.

5.130 Those facing higher contributions have higher assessed disposable income and, in theory at least, more budgetary flexibility as a result. The same cannot necessarily be said for those on lower incomes, even though the contributions they are expected to finance are proportionately the same as those on higher incomes. Just as the general taxation system - through progressive banding - recognises the harsher impact of a proportionate system on those at the lower end of the income scale, so should the legal aid contribution system.

5.131 This would also be of benefit to those currently eligible, as it would have the effect of reducing their overall contributions. However, this benefit would diminish as income levels increase. For those who would be newly brought into eligibility under a tapered scheme, we think that sharply increasing contributions should be applied to minimise additional expenditure to the legal aid fund, especially on cases of above average cost.

5.132 In this way, the link between the cost of a case and the contribution becomes more apparent than is currently the case for many applicants. At present, if the contribution paid is greater than the eventual cost of the case, the excess is repaid to the assisted person. However, as the average case costs around three times more than the average contribution, this is a purely theoretical consideration for most. As the maximum contribution payable increases however, the scope for contributions to exceed case cost increases.

5.133 In this way, a degree of 'private client realism' enters into the equation: clients on a high level of contribution in particular will have a real and direct interest in the efficient conduct of their case, as they will be bearing the cost of both inefficiencies on their solicitors' parts and their own choices as the case progresses, such as whether to accept or reject an offer in settlement. This is likely to be of benefit to the Legal Aid Fund, non-legally aided opponents and the justice system more widely. At the same time, the benefits to the person receiving assistance with such high contributions are significant, namely minimum risk and uncertainty.

5.134 To summarise, we feel that an extended and tapered eligibility system would provide broader access to dispute resolution than at present, by making legal aid more accessible to those on lower incomes and making it accessible for the first time to those on middle-incomes. It would also be able to do so at a relatively low additional cost.

Contributions

5.135 There are a number of additional issues which we feel should be addressed in relation to contributions. The first relate to capital contributions.

Contributions and capital

5.136 We note that, unlike in eligibility on the basis of income, a form of tapered eligibility already exists in relation to capital: the Board is able to make legal aid available even where capital exceeds the current upper capital limit. This extends the protection of legal aid to those with perhaps moderate levels of savings but who would nevertheless be unable to meet the full cost of a case that was expected to be particularly costly.

5.137 However, the Board does not, in general, offer an instalment option for contributions assessed against an applicant's disposable capital. This means that they may be asked for substantial sums of money, potentially many thousands of pounds, in a single lump sum. We recommend that, subject to safeguards to minimise possible increases in bad debt, the Board should introduce an instalment system for such contributions. This need not follow the structure for income contributions, as the basis for the contribution assessment is different. It could perhaps be done by basing initial contributions on an estimate of the cost of the case. An ability to split the up-front cost would, we feel, ease the burden on the small number of people assessed with capital contributions.

Instalment period for contributions

5.138 A second contributions issue relates to the instalment period. The SLAB report assessing the impact of extending the relaying periods to 20 months for all cases ¹⁵ clearly shows that more people are now able to proceed under legal aid, even with fairly substantial contributions. Further, there is no evidence that the extended periods are resulting in increased bad debt for SLAB. For these reasons, we support a recommendation already made by SLAB that consideration should be given to further extension of the repayment periods, perhaps by allowing greater flexibility in individual cases. This would be particularly pertinent in a tapered scheme, where substantial contributions would be expected. In developing repayment proposals, the Board could, for example, have regard to the kinds of repayment periods offered by commercial loan companies for advances of equivalent value.

5.139 One particular issue identified by the Board in relation to extended contribution repayment periods is that a 20-month instalment period runs on after the 12-month computation period. 'Computation period' is the period, starting at the date of the application for legal aid, over which eligibility (and liability for contributions) is assessed and during which changes in circumstances must be reported to the Board. This means that changes in circumstances beyond the 12-month period will not be reflected in reduced contribution instalments, which must continue to be paid for the remainder of the 20-month period. Conversely, a positive change in circumstances beyond the 12-month computation period will have no impact on the level of any remaining instalments.

5.140 The practical solution to the problem is for the Board to reach agreement in individual cases as to the repayment of remaining instalments. This approach is consistent with our recommendation on further flexibility as to the repayment period. The latter problem however, is not one which can be resolved administratively: wider changes to the computation period would be required. We discuss such changes in detail in paragraphs 5.153 to 5.165

Inconsistencies in financial eligibility between civil legal aid and Advice and Assistance

Assessment of eligibility

5.141 There are different financial eligibility tests for civil legal aid on the one hand and Advice and Assistance on the other. Particularly where Advice and Assistance is used as a precursor to civil legal aid, this can lead to some anomalous situations. For example, if the majority of a person's income comes from state benefits, they may be eligible for Advice and Assistance, as benefits are disregarded in the calculation of eligibility. However, they may be ineligible for civil legal aid, for which benefits are counted as income. Conversely, where someone has capital that sits between the Advice and Assistance limit (1370) and the lower limit for civil legal aid (6,271), they will be automatically disqualified from Advice and Assistance, yet might qualify for civil legal aid without a contribution.

5.142 There is some historical rationale for the differing means tests. The Advice and Assistance test was intended to be a quick and easy calculation to be applied by solicitors on the spot to enable instant access to what was originally envisaged to be a small amount of advice. In this light, a low capital limit appears more appropriate: if an individual is to receive advice worth up to 80, one might conclude that capital of 1300 would be sufficient to cover the cost. A grant of civil legal aid, by contrast, involved a somewhat higher financial commitment by the state and therefore required to be more rigorously controlled on the one hand, but more widely available in capital terms on the other.

5.143 However, this logic does not really extend fully to the income tests. The weekly income limits for Advice and Assistance are slightly higher than the annualised limits for civil legal aid, but this is more than compensated for by the wider range of allowances that might be made by the Board in determining civil eligibility.

5.144 Further, the evolution of Advice and Assistance suggests that the original distinction is no longer entirely appropriate. Advice and Assistance is now used for far more than introductory or diagnostic advice. The trend towards negotiated settlement rather than judicial determination in many cases, and family cases in particular, has resulted in far more work being carried out under Advice and Assistance. Indeed, a full case might be run under Advice and Assistance, potentially costing many hundreds of pounds particularly when ABWOR is also considered.

5.145 On the face of it, there seems little reason for access to the different aid types to be determined according to different levels of income and capital and the differential treatment of income from benefits. The Executive has already indicated that it intends to consider moving towards a system of disregards for benefits within civil legal aid, equivalent to the system operating in Advice and Assistance since April 2003. This would remove some of the inconsistencies and should be taken forward at the earliest opportunity.

5.146 We are not suggesting however that the means of determining eligibility need be identical for all aid types: we recognise for example that it would not be practicable for individual lawyers to apply a complex and detailed means test of the kind applied by the Board for civil legal aid. To bring all assessments 'in-house' would undoubtedly create a barrier to immediate advice where this was needed. This could in turn be seen to discourage early resolution of problems, where immediate access to short and sharp advice may be all that is needed. The bureaucracy and inevitable delay of a full means test, requiring as it does substantial evidence of income, capital and outgoings could become a real and disproportionate barrier to access.

5.147 We recommend, therefore, that eligibility for early stages of advice, including a suggested new diagnostic stage, should be broader and less formally assessed than that for more substantial forms of assistance. This is in line with the proposals for the reform of civil Advice and Assistance considered above. Where work done under Advice and Assistance is broadly equivalent to that which could be done under civil legal aid were court proceedings necessary e.g. ongoing casework, involving extended negotiation on the client's behalf etc, we recommend that eligibility become far more closely aligned with that for civil legal aid.

Levels of contribution

5.148 In addition, there seems to be no reason of principle for the level of contributions for Advice and Assistance to be so different from those for civil legal aid: a realignment of eligibility criteria should also be accompanied by a realignment of levels of contribution.

5.149 Our main concern is equity as between applicants with essentially similar needs and abilities to pay, receiving an essentially similar service being assessed in substantially different ways and paying substantially different amounts. For this reason, we think that the contribution structure for Advice and Assistance should recognise the very wide range in the cost of cases: it would itself be inequitable for the person receiving a very limited amount of assistance to pay the same as the person benefiting from the sustained input of an adviser, paid for at public expense.

5.150 We are conscious that the imposition of substantial contributions for initial diagnostic advice might prevent people from seeking advice when it is most needed. We therefore recommend that access to limited diagnostic advice should remain subject to a more basic and, perhaps, more generous means test, with smaller contributions. Where further assistance is required, a more stringent means test, with 'realistic' contributions could be established. The individual can then decide whether to proceed on the basis of the advice already received: fear of initial cost should not, therefore, act as a barrier to seeking early advice.

5.151 In civil legal aid, the average case cost 2257 in 2002/03 (this figure includes the cost of a relatively small number of more expensive Court of Session cases). The range in possible costs is considerable, but few cases cost less than a few hundred pounds. By contrast the average cost of an Advice and Assistance case is 159. This average includes ABWOR cases, which cost over 500 on average. However, around 20% of Advice and Assistance cases are billed at the minimum fee rate of 25. The average contribution for civil legal aid (where payable), at 849 in 2003/03 could, therefore, be expected to meet the entire cost of the great majority of Advice and Assistance cases, yet covers not much more than a third of the cost of the average civil case.

5.152 These figures lead us to recommend that a contribution structure should be developed for Advice and Assistance that is related to both the disposable income (and capital) of the individual and the likely cost of the case. We believe that this solution strikes a balance between equity, ability to pay and encouragement of early resolution.

Computation period and changes of circumstances

5.153 A further key aspect of the realignment of civil legal aid and Advice and Assistance relates to the computation periods of the two aid types. The test for Advice and Assistance focuses on income and capital during the seven days prior to the grant of Advice and Assistance. The test for civil legal aid, by contrast, looks at the year ahead.

5.154 This means that Advice and Assistance might be available to someone who (very) temporarily has no source of income, but who soon after moves off benefit, or otherwise comes into money. If proceeding under civil legal aid, the same person would be required to declare a change in circumstances at any point during the 12 months following the initial application. This might have no effect on their receipt of legal aid, but it might move them into a contributory band, increase an existing contribution or move them out of scope altogether, leading to suspension and eventual termination of legal aid. (The opposite may also be true if a legal aid recipient's financial circumstances change for the worse).

5.155 Even under civil legal aid, however, similar iniquities can arise. If a person's circumstances change one year and one day after the original application, there can be no further change to their assisted status. This is regardless of the stage their case has reached. To place this in context, approximately one in five cases featured a re-determination of means after the grant of civil legal aid in 2002/03. While this had no impact on the level of contribution payable in almost a half of cases, in 40% it resulted in either a contribution becoming payable for the first time, a higher contribution being required or the individual moving out of scope of legal aid provision.

5.156 Clearly, the longer a case runs, the greater the chance of a relevant change in circumstances. These statistics also suggest that, were the computation period for Advice and Assistance to be extended and re-determinations on changes in circumstances introduced, a significant number of people might be reassessed as able to contribute towards the cost of their cases. Although most Advice and Assistance cases are relatively short-lived, they have potential to be lengthy, especially if they involve protracted negotiations.

5.157 One particular area that highlights the inequitable nature of the different computation periods concerns employment cases. Quite often an individual who considers himself or herself unfairly dismissed will seek advice very soon after the event. It is likely in this period that they will have no source of income, even if they were previously in relatively well paid employment. A grant of Advice and Assistance in this early period will subsist until the final resolution of the case. Such cases will not result in an application for civil legal aid (other than in exceptional circumstances), but may end up with ABWOR for an employment tribunal. However, even if the individual is back in well paid employment by the time the case concludes, they will not be expected to contribute towards their case any further than on initial assessment (and even then to a maximum of 114, compared to up to 2191 under civil legal aid). This is despite the fact that a case can last for months, if not years, and cost hundreds, or possibly thousands of pounds.

5.158 This kind of anomaly leads us to the recommendation that the computation periods for casework, whether under Advice and Assistance or civil legal aid, should be aligned and that those assisted under either scheme should be required to inform their solicitor or the Board of material changes in circumstance, as in civil legal aid.

5.159 We also recommend that confirmation of continuing financial eligibility should be required at various stages of a case. For example, the solicitor could be required to seek assurance from the applicant that there has been no material change in financial circumstances when a case moves from one 'stage' of a future reformed advice and assistance scheme to another, such as when additional work beyond an existing template is required. The same could apply at the key reporting stages under the civil legal aid scheme. As SLAB will at these points in the process be considering whether a case continues to pass the merits tests, it makes sense also to confirm that the client remains financially eligible.

5.160 Having recommended consistency in computation periods, we also have to consider what the appropriate period should be and whether this should coincide with the period during which changes in circumstances should be reported. There are two slightly different questions here.

• Period for assessment of income
• Period for reporting changes of circumstance

5.161 The first point relates to the period to which the assessment of income applies. As noted above, for civil legal aid, this involves a prospective assessment of the income the applicant can reasonably expect to receive in the year ahead. For many applications, this introduces considerable uncertainty, with the Board basing its assessment on the previous year's income in the absence of other information. However, where circumstances have changed in the preceding year, it becomes harder to assess likely income in the following year. This problem may be less acute if a shorter period were introduced.

5.162 The seven day period for Advice and Assistance however, appears far too short to provide any sort of representative assessment of a person's likely income. For this reason we recommend that the computation period for all casework services, be aligned at a period somewhere between the two current extremes of civil legal aid and Advice and Assistance.

5.163 The second point relates to the period during which changes in circumstances should be reported. For civil legal aid, this is currently the same 12 month computation period. Instead, we recommend the introduction of a rolling computation period that persists for the life of the case. Thus a reassessment of means, carried out in accordance with whatever computation period is agreed e.g. six months' income, might take place following a change in circumstances 18 months into a case. We recognise that careful consideration would have to be given to the practicalities of such a system and particularly how it might interact with contribution instalment periods. Nevertheless, we think that a change of this nature would remove the kind of iniquities described above and ensure proper targeting of resources on those unable to meet the costs of their own cases.

5.164 A further variation on this theme is to consider whether a reassessment of means should be carried out at the end of the case or, indeed, whether the rolling computation period should persist for some specified time beyond the end of the case. Either measure would extend the 'funder of last resort' principle described above at paragraph 5.128. The latter would effectively make legal aid funding in all cases an interest free loan, repayable if and when personal circumstances allow. Of course, this is already how legal aid operates for those who currently pay substantial contributions that might cover the entire cost of a case. As noted above, it would also apply to many of those brought into eligibility under a tapered system. Accordingly, we recommend that further consideration be given to extending to the end of the case, or beyond, the period during which reassessment of means may be undertaken.

5.165 By being able to target resources more effectively and recoup the cost of cases from those whose circumstances improve either during the course of, or after, the case, it becomes possible to extend the scope of legal aid to a wider section of the population. As suggested in the discussion of 'tapering' above at paragraphs 5.123 to 5.134, legal aid would then be able to facilitate access for a wider range of cases, while fully funding access in only a proportion of these.

Recovering costs at the end of the case

5.166 The concept of requiring some applicants to pay at the end of their case is not new in Scottish legal aid. In addition to requiring applicants to contribute towards the cost of their case from disposable income or capital, civil legal assistance may also require applicants to meet all or part of any remaining case costs from property recovered or preserved by them at the conclusion of the case. These provisions apply to both Advice and Assistance and civil legal aid, and are often referred to as 'clawback' ¹⁶. In the case of Advice and Assistance, the property has to be used to meet the solicitor's bill in priority to any claim for payment being made out of the Fund. In civil legal aid, it is used by SLAB to offset sums paid out of the Fund to the solicitor.

5.167 It is important to note that these provisions are not exclusive to legal aid. They mirror charging arrangements for privately paying clients whereby a solicitor can obtain a charging order to secure his fees and outlays from property recovered or preserved. This ensures the solicitor is paid where the client's claim has been vindicated.

5.168 This parallel is important for another reason: the operation of clawback, as well as contributions, provides some incentive for the client to approach the case in a reasonable fashion i.e. to seriously consider offers in settlement and to keep an eye on the cost of the case as it progresses. Thus the client with a contribution or seeking property (including cash) through their action is encouraged to exercise a degree of 'private client realism'.

5.169 In a sense, the clawback provisions extend the principle of ability to pay to the client's position at the end of the case. As for those paying contributions that meet the entire cost of their case, legal aid operates in such cases as an interest free loan: it allows those who were financially eligible at the outset of the case to receive help to vindicate their claim, and repay the sums expended on the provision of that help.

5.170 The clawback provisions are not however the equivalent of an after-the-event means test and nor do we think they should be. A set amount of the applicant's income and capital is protected in the initial means assessment for civil legal aid. This is to help ensure that the applicant of limited resources is not inappropriately deterred from proceeding under legal aid because of the impact this would have on those resources. In terms of capital, the existence of an exempt band is consistent with broader government policy on encouraging saving and making adequate financial provision for the future. The same principles cannot be said to apply in the same way to property recovered or preserved as a result of a publicly funded action.

Inconsistencies between civil legal aid and Advice and Assistance in respect of property recovered and preserved

5.171 The legal aid legislation provides a list of exemptions from clawback. These exemptions vary as between civil legal aid and Advice and Assistance, at least in part in reflection of the different types of cases that may proceed under the two schemes. However, there does not appear to be a consistent rationale for the exemptions: in some cases, there is particular advantage to settling under Advice and Assistance as opposed to civil legal aid. While differentiating in this manner may be consistent with the aim of encouraging early resolution, it is not clear that this is the reason for the current variation.

5.172 Similarly, a number of other exemptions appear to recognise the social purpose of both legal aid and Advice and Assistance: some of the exempted categories relate to income (such as some welfare benefits), which the applicant should have been receiving but required legal intervention to obtain. It might be argued that the social benefit obtained by vindicating the claim would be lost if the money had to be applied to meeting or offsetting a solicitor's bill. However, even in these cases, there are inconsistencies between Advice and Assistance and civil legal aid. Further, it is not clear that the operation of these exemptions is consistent with the treatment of different sources of income in the assessment of eligibility for legal assistance carried out at the beginning of the case.

5.173 A further inconsistency stems from the ability of the Advice and Assistance client to seek a complete exemption from clawback, where it can be demonstrated that applying the general rule would cause grave hardship or distress. The solicitor can also apply for the rules to be disapplied if the solicitor would experience unreasonable difficulty or delay in obtaining payment from the property. This contrasts with civil legal aid, where SLAB has no discretion to waive payment from property recovered or preserved.

5.174 All in all, this suggests that the clawback provisions do not follow our general principle of consistency as between forms of legal assistance where essentially similar work is being undertaken. There may also be some question as to whether such exemptions, as do, exist place the legally assisted applicant in an overly favourable position when compared to the privately paying client.

5.175 The private client provisions on which clawback is based are designed to ensure that the solicitor is able to recover their costs from a successful client: recovering a sum means that funds exist out of which to pay the solicitor's fees. However, where the sum recovered is insufficient to cover these costs, the private client will have to look to pre-existing resources to make up the shortfall.

5.176 The above considerations lead us to recommend a review of the range of exemptions available with a view to establishing a rationale for these exemptions and encouraging greater consistency as between Advice and Assistance and civil legal aid. This review should also consider the test of grave hardship and the fact that it only applies to Advice and Assistance.

Recovery of enhanced fees

5.177 The proposals above go some way to ensuring that those whose circumstances change, so that they may be judged able to contribute towards (or meet in full) the cost of their case, make an appropriate contribution. As noted above, even where the client ends up meeting the entire cost of the case, they have nevertheless benefited in a number of ways from the support of legal aid. Legal aid contributions are interest free and personal responsibility to meet the costs of the applicant's own solicitor is limited to either the level of contribution assessed or the sum recovered. Similarly, responsibility for meeting the opponent's costs is also limited to some degree thanks to the modification provisions described at paragraphs 5.186 to 5.192.

5.178 However, there is one further advantage: the cost of the case will be restricted to the level chargeable under the legal aid feeing arrangements. Were the client ineligible for legal aid, they would have to reach an agreement with their solicitor at start of the case as to the basis of fees to be charged. These rates may be higher than legal aid rates. Thus a client whose income or capital takes them out of scope for legal aid may end up paying more than another applicant who qualifies on the basis of a contribution that meets the entire cost of the case at legal aid rates; in spite of the fact that they are involved in similar cases in which a similar amount of work is done. Indeed, the assessed contribution may be high enough to meet the cost of the case at private rates, especially if capital comes into play.

5.179 Looking to property recovered and preserved, the legally assisted party will only ever be asked to meet the cost of the case at legal aid rates, even if the sum recovered is substantial. In some cases, the applicant qualified financially in the first place by virtue of the property they were seeking to recover, (the subject matter of the dispute) being excluded from the calculation of eligibility. There are various highly technical issues around what constitutes the subject matter of dispute (and so should be excluded from the financial assessment) and what is property recovered or preserved (and so should be available for clawback). As a matter of principle, where a substantial asset exists at the end of the action, it should be taken into account in meeting the costs of the case.

5.180 While this is a satisfactory outcome for the Legal Aid Fund, it may not be satisfactory for the solicitor, as they will only be paid at legal aid rates for work done for a client who, on the basis of the amount either won or retained, would appear able to pay for the case at private rates. At one level, this is not really a matter of legal aid policy: the taxpayer ultimately in such a situation is not meeting the cost of the case, meaning that resources can still be targeted on those in greater need. At another level however there is a question of equity as between those who qualify for advice and assistance and those who do not but who are ultimately in a very similar financial position.

5.181 The other primary driver for this proposal is the argument that legal aid rates are less profitable than private rates and so the ability to recover at legal aid rates only is a disincentive for solicitors to provide a legal aid service. To the extent that this position might ultimately lead to a reduction in solicitors offering a legal aid service, it may be of legitimate concern from a strategic point of view. A full discussion of supply issues takes place in Chapter 8.

5.182 This concern has led to proposals that solicitors should be able to claim an enhanced fee from clients who recover substantial sums under Advice and Assistance. This proposal sits in the context of the reform proposals for Advice and Assistance being taken forward through the Tri-Partite Group and discussed at paragraphs 5.102 to 5.108 above. If this proposal were to be introduced for Advice and Assistance, it would appear inconsistent not to apply the principle to civil legal aid also. It should be noted however, that in successful civil legal aid cases where the opponent pays the applicant's costs, the solicitor may judge the amount of expenses paid to the Board to be higher than would be chargeable to the Fund at legal aid rates. Regulations allow the solicitor to elect to accept these expenses rather than the legal aid fees.

5.183 As explored in detail in Chapter 8, on the basis of the evidence available to us we have been unable to form any firm conclusions about the risk of under-supply of civil legal aid and Advice and Assistance services by solicitors. We have similarly been unable to establish the extent to which such risk relates to levels of remuneration derived from this work. Accordingly, we are not able to say what, if any, increase in legal aid remuneration would remove such risk of under-supply as may exist. The anecdotal evidence however, that remuneration levels make civil legal assistance work commercially unattractive, is strong enough for us to consider what measures might be needed to address any supply problems that do emerge.

5.184 On that basis, we are unable at this stage to say whether allowing solicitors working under civil legal assistance to charge higher fees where the client's circumstances at the end of the case allow, (whether through property recovered or preserved or otherwise,) would contribute towards any particular policy goals. Were evidence to emerge however that levels of remuneration were a key determinant in any supply problems, we believe that a solution along the lines of that put forward by SLAB (in their A&A proposals) may be workable.

5.185 In this regard, the development of a tapered scheme for eligibility is perhaps relevant, as the result of such a system may be that a number of clients previously ineligible for legal aid might proceed under legal aid instead of instructing a solicitor privately. A system based on sliding scales of enhanced fees (set and controlled by SLAB) could then be developed to ensure fairness and a degree of certainty for clients at the start of a case.

Modification and the position of the opponent of a legally aided party

5.186 As noted above, one of the key advantages of proceeding under legal aid is that, at the end of the case, the court decides whether and to what extent the legally aided party's liability for their opponent's expenses should be modified. There is little evidence available as to how these provisions are applied. However, anecdotal evidence suggests that, in practice, this liability is often modified to nil, meaning that the successful opponent will not be able to recover their own costs from the unsuccessful legally aided party.

5.187 The result is a clear disadvantage to the non-legally aided opponent, who will be left having to meet their own costs, despite being successful in the case. It also places the legally aided client in a different position to the privately funded client. While the court does have discretion to require the legally aided party to pay some or all of the opponent's costs, it appears that they will only usually do so where their conduct is regarded as somehow unreasonable and the court considers them able to pay.

5.188 The successful opponent is able to recover their costs from the Legal Aid Fund in a limited range of circumstances, set out in section 19 of the Legal Aid (Scotland) Act 1986. This facility is available to those defending an action raised by a legally assisted party, presumably on the basis that they have no choice but to be involved in the action. Section 19 requires the opponent to demonstrate severe hardship and that it would be just and equitable for their costs to be met ¹⁷.

5.189 On the face of it, these provisions seem unduly harsh. However, for costs to be recoverable in every case would place the opponent of a legally aided party at an advantage compared to the opponent of another privately funded individual, from whom recovery cannot be guaranteed. Accordingly, we recommend that the terms of section 19 should be revisited to determine whether the current balance - containing as it does a strong presumption against the recovery of costs - is appropriate.

5.190 This argument becomes even more pertinent in the context of a tapered eligibility system under which a wider range of parties might be expected to be legally aided. Not only would a wider range of opponents be placed in the position of being unable to recover their costs (due to the interaction of the current modification and section 19 provisions), but many of the 'new' legally aided parties will actually have the means to pay not only their own costs but those of the opponent too.

5.191 This suggests that not only should section 19 be reviewed but also the legally aided party's liability for expenses. In essence, this means that the current practice in relation to modification should be reviewed. The sheriff's role in deciding whether to modify is to assess whether the client is able to meet their opponent's costs. Although the evidence available to us is limited, it appears that the very fact of being legally aided is enough to persuade many sheriffs that no costs can be met. We have already suggested that (possibly substantial) improvements in circumstances can mean that some parties will be in a financial position to meet their own costs, and possibly those of an opponent, by the time a case concludes. The likelihood of such a situation arising would again be increased by the introduction of a tapered system of eligibility.

5.192 We therefore recommend that the modification provisions be reviewed, perhaps with the introduction of a sliding scale, based on a rational assessment of ability to pay. Were eligibility for legal aid to be reassessed at the end of a case, this assessment could serve both purposes.

5F Merits testing and scope

5.193 The principle of merits testing is considered in detail in Chapter 4, where we conclude at paragraph 4.51 that a case by case assessment of merits is appropriate in a demand led system such as legal aid. The current tests for civil legal aid appear to us to distinguish between cases that should and should not receive public funding in a sensible way.

5.194 There is however some question as to whether or not it is worth retaining a separate 'probable cause' test. It has been argued that the test helps focus the minds of both applicants and solicitors though it does not appear to be universally well understood by solicitors and is likely to be confusing for applicants, or potential applicants. As noted in at paragraph 4.26 it is a fairly low hurdle. It is also hard to conceive of any case in which it would be reasonable to grant legal aid if probable cause were absent. In this sense, probable cause can be seen alongside prospects of success and prospects of recovery as a factor to be weighed in determining the question of reasonableness.

5.195 Our only other observations on merits testing stem from our proposals, detailed above at paragraph 4.63 that consideration be given to bringing a wider range of proceedings within the scope of civil legal aid or ABWOR. We believe that considerations of reasonableness should apply equally to applications in relation to any additional proceedings.

Scope

5.196 On the scope of publicly funded representation, we recommend in paragraph 4.61 an expansion to encompass proceedings in which representation may be required in at least some cases. Thus we do not assume that representation will be required in all cases in relation to any new proceedings brought within scope. It follows that a new test will require to be developed to assess whether representation is required in any particular case.

5.197 The current civil legal aid merits tests determine whether the case itself is deserving of public funding, but there is no consideration of the client's ability to understand the proceedings or the complexity of the case. Both of these are however statutory factors to be weighed by the Board in determining the merits of summary criminal cases and in considering requests for ABWOR for employment tribunals. We recommend that these factors should be considered on a case-by-case basis for any additional proceedings brought within the scope of publicly funded representation.

5.198 This raises the question of whether these additional factors should also be considered in relation to the proceedings already within scope. The Board's application of the current reasonableness test assumes that all proceedings in the sheriff court for which legal aid is available are inherently complex enough to require the assistance of a lawyer, simply by virtue of being heard in the sheriff court. It may be the case that some applicants would be able to represent themselves in some cases that currently pass the merits test.

5.199 However, we note that the sheriff court rules state that representation in ordinary cause matters and summary cause proofs can only be provided by a lawyer. This might be taken to imply that these proceedings would be beyond the ability of a non-legally qualified representative, although it does remain open to the litigant to represent themselves. Quite apart from any question as to whether self-representation is consistent with effective access to justice, our discussions with stakeholders suggest that party-litigants are often problematic from the court's point of view. This suggests that any limitation on access to representation in meritorious cases would have to be carefully weighed against the impact on both litigants and the court system more widely.

5.200 A final point on the tests for representation is that bringing a particular proceeding within the scope of publicly funded legal assistance does not mean that a legally-qualified representative will necessarily be appropriate. When any decision on extending the scope of PFLA to additional proceedings were made, access to PFLA could be restricted to particular classes of representative for particular classes of case. Our preferred option however is that access to PFLA for particular proceedings should not be exclusive to particular classes of representative but rather, should be based on the circumstances of the case and the particular skills and expertise of the proposed representative. This is in line with the 'most appropriate adviser' principle discussed at paragraph 3.26.

5G USE OF SPECIALISTS

5.201 In the context of publicly funded legal assistance on civil matters there are reported difficulties in identifying and accessing specialists in specific subject areas, for example specialist employment advisers and tribunal representatives. Such difficulties have been reported by solicitors seeking other solicitors or specialist advisers to refer clients on to, as well as by advice providers in the not-for-profit sector seeking solicitors with expertise in particular areas, or seeking expert assistance with complex or unusual cases. The problems experienced in this area form a significant operational issue. It is important to recognise that in this context specialists are not necessarily solicitors and further, that specialist, non-legally qualified advisers can have greater expertise and knowledge of a specific area of law than generalist solicitors may have.

5.202 Research undertaken by SLAB in 2002 ¹⁸ looked into the distribution of supply of legal aid services around the country and on specific subjects concluded that

"this apparent stability [in overall provision] may conceal vulnerability to low provision or gaps in provision…in specialist areas of law".

5.203 This finding echoed that of two earlier reports prepared for the Board ¹⁹ which focused on the provision of civil legal assistance in general and, more specifically, on social welfare advice by solicitors. In the absence of mechanisms to quantify the need for advice and compare this to supply however, neither study was able to draw conclusions on whether provision was inadequate in any particular areas, either geographic or subject matter.

5.204 The difficulties in the identification and accessing of specialist providers must be addressed, as specialist provision is essential in improving and maintaining the quality of advice. Specialist legal advice provision also plays a significant role in the effective functioning of a complex mixed model of provision. Without an appropriate mix of provision, i.e. if there is lack of specialist provision, it will not be possible to address the wide variety of needs for advice.

5.205 There are two separate issues in respect of specialist legal advice:

• difficulties identifying specialists
• lack of specialist provision, which is more relevant to some subject areas than others, and resulting difficulties in access, especially outwith the main urban centres

Identifying specialists

5.206 The difficulties in identifying specialists can be addressed through the development and implementation of an overarching quality system, requiring providers to identify the type of service they provide, including their level and area of expertise. This, coupled with a directory of quality assured providers, will facilitate the identification of specialists that advice providers may refer to, or advice seekers can contact directly. We therefore recommend, as we did in paragraphs 5.76 to 5.86, that the development of such a policy system is 'commenced as soon as possible'.

5.207 The Law Society of Scotland operates a system of accreditation of specialist solicitors. In the short term, consideration could be given to making this system more immediately relevant for the provision of publicly funded legal assistance. This could be done, for example by including whether the accredited specialists would undertake legal aid work, or including more areas of law most relevant in publicly funded work (for example housing (tenant) law, or immigration and asylum law). The current scheme appears to be fairly under-used by solicitors however, and so provides only a very partial picture of those who may be de facto, if not accredited, specialists.

Ensuring specialist provision

5.208 There is a need for a central overview to be taken, based on an assessment of need, of the requirement for and development of, specialist provision in civil PFLA. This, we believe, should be a key element of the envisaged new responsibility for (N)SLAB in relation to assessing appropriate provision of advice services. In the absence of such an overview it is not appropriate to make specific recommendations on specialist provision in this Report.

5.209 It must be recognised however that specialist provision can be difficult to sustain in rural areas or in small urban centres as the call on specialist services may not be sufficient to make provision in such locations economical. Specialist provision may therefore require to be planned and provided for areas which span more than one local authority area. This naturally calls for co-ordination and co-operation in planning and provision. We identify a clear role for the proposed central co-ordinating body, (N)SLAB, in supporting local authorities in developing 'cross border' planning and delivery to address specialist provision.

5.210 We further recommend that, while primary responsibility for service delivery at a local level should rest with local authorities, (N)SLAB's remit should extend to a responsibility for addressing shortcomings in specialist provision where considered necessary and where other routes are not available or need to be supported (e.g. through match funding). To allow (N)SLAB to do so in the most effective way possible, it should be given flexible powers in this regard which might enable it to directly employ solicitors or other specialist advisers ²⁰ or to contract with solicitors or specialist advice services to provide a service in a particular geographical locations, say one day a week, or to fund organisations to employ lawyers or non lawyers to provide legal assistance.

5.211 Although no significant difficulties in the availability of advocates to undertake legal aid work have been identified, consideration should also be given to whether it would be appropriate and possible for (N)SLAB to secure the services of advocates (in civil as well as criminal matters) other than on a case by case basis.

Second tier advice

5.212 An effective means of ensuring access to specialist advice can be through 'second tier advice', whereby the first tier adviser, who has been contacted by the client and who will retain the case, is assisted by a specialist in dealing with a complicated or unusual problem. The benefit of 'second tier advice' is not only that it creates numerous access points to specialist advice where these would otherwise not exist, but also that it enhances the skill level of the first tier advisers.

5.213 A model of delivery for specialist advice is currently being piloted by SLAB using its powers under Part V of the Legal Aid (Scotland) Act 1986, in conjunction with Citizens Advice Scotland. Two further significant second-tier projects are currently funded or part-funded by the Scottish Executive: SHAS (Scottish Homelessness Advisory Service) deals with housing advice, and MATRICS (Money Advice Training, Resources, Information and Consultancy Services) deals with money and debt advice.

5.214 We recommend that the two strands of Scottish Executive funded second-tier advice provision should be better co-ordinated. These are currently funded, developed and monitored separately, as resulting from separate policy streams.

5.215 There is scope however for greater sharing of information and experience between the projects and the funding divisions. Consideration should be given to extending the delivery of second tier advice provision to other subject areas where a particular need has been identified. We believe that the co-ordination of centrally funded second tier advice provision could appropriately be located with the (N)SLAB as the central co-ordinating body.

5H USE OF TECHNOLOGY IN DELIVERY

5.216 The research report on 'Legal information and advice services in Scotland: A Review of Evidence' ²¹ examined the existing use of information technology in advice provision in the form of, for example; telephone helplines, email, websites, on-line work and PC/camera links in the provision of legal advice and information. Prior to this research the Microcosm Study ²², undertaken for the CLS Working Group and reported in the ROLIAPS report also looked into the use of the telephone by advice seekers.

5.217 From this previous work, and from our discussion with stakeholders it appears that the use of technology in the provision of legal advice and information is not maximized. Opportunities for greater efficiencies, better sharing of information, and greater access for advice seekers may so be missed.

Telephone

5.218 The telephone is much used for making initial contact with advice providers and for making appointments, as well as for providing more factual advice and answering straightforward queries. It is also used for follow up work where face to face contact has taken place earlier. The available research concludes that provision of advice by telephone, whether by individual providers or through 'helplines' cannot entirely replace face to face work. However, positive findings have recently emerged from a pilot system being run in England and Wales ²³. These mixed findings lead us to conclude that the use of the telephone and helplines can certainly make access to advice easier and could usefully be explored further

5.219 Greater consideration needs to be given to the possible sharing of initial contact centres and 'referral hubs'. We believe there is a central role for either the Scottish Executive or (N)SLAB in facilitating closer cooperation between existing telephone advice lines (Consumer Direct, National Debtline, Shelterline, CAS Advice Direct), as well as better, joint promotion. Thought could also be given to a central telephone service being provided by (N)SLAB, if a clear complementary role can be identified to the already existing advice lines.

IT

5.220 Recent research informs us that information technology is used by advice providers for:

• retrieving information to inform their own practice
• case management
• recording statistical information
• receiving specialist assistance
• referral (although there are only few examples of this).

5.221 From the recent research we also know that providers observe that where resources are limited, the positive impact on advice provision from IT would be greatest if the focus were on improving the use of IT by advisers rather than by the general public. One of the main perceived advantages of IT for advisers is that it can enable them to obtain support from specialists in an effective way (through second tier assistance), making best use of the specialist's time and allowing the adviser to work to the highest possible level.

Information sources

5.222 In relation to using IT in the provision of services to the general public, the most effective use appears to be at the 'information end' of the spectrum, rather than web-based technology, or even e-mail, being an ideal medium for providing detailed advice on complex problems where an accurate diagnosis of the problem as well as the full facts are necessary.

5.223 The development of computer based information sources for use by advisers is therefore a useful investment. With the assistance of public funds or charitable donations a number of organisations have developed such systems, for example:

• Citizens Advice Scotland have, with their sister organisation in England, developed a substantial CD-Rom based system which covers a very wide range of advice topics. This is intended for use by generalist advisers, many of whom are volunteers.
• Shelter/Shelter Scotland have developed the Shelter Information System, an on-line information system for use by specialist housing advisers, which contains in-depth legal information and references to case law
• The Equal Opportunities Commission run a website for legal advisers on sex discrimination and equal pay.

5.224 There is scope for greater cooperation between the various organisations that have undertaken such work, in particular to avoid duplicating work that is being supported from public funds. It may, for example, be possible to include links from one information source to another, where more in-depth information is available. This requires of course that both relevant information sources are widely available.

5.225 Good quality, accessible and up to date information underpins good quality advice, and making such information available to advisers needs to be part of any strategy to improve the quality of advice provided. We believe there is a role for the central coordinating body, (N)SLAB, in working with organisations that have developed (part) publicly funded electronic information sources to assess how these can be made more widely accessible and how these can be better integrated.

Case management and statistical systems

5.226 A variety of systems is currently in use by advice providers for purposes such as case management, gathering statistical data and in some cases making and receiving referrals. Although there is no difficulty, in principle, with different organisations using different systems, this can create problems where statistical information is used comparatively or needs to be aggregated from different sources, especially if this is done in the context of reporting back to the funding body on activity and the impact of activity.

5.227 Within the context of developing an overarching quality system, we recommend that consideration should be given not only to standardising the basic statistical information that will require to be collected, but also to standardising the systems which will facilitate this.

5I OTHER METHODS OF PROMOTING ACCESS

5.228 As indicated in the discussion of fundamentals of publicly funded legal assistance in Chapters 1 to 4 of this report ensuring effective access to justice is an issue for the civil justice system as a whole. Individual elements of the system, such as the provision of legal advice, can only ever promote effective access.

5.229 In the course of this Review we have been pressed by many stakeholders not to see legal advice provision as the only means of promoting access to justice and to also consider other methods of achieving this aim. These might include a further simplification of court procedures, or the greater use of alternative methods of dispute resolution. We have considered these to be issues of civil justice policy, and a detailed analysis of such issues to be outside the remit of this Review. However, there are links to policy on legal advice provision, which will be discussed briefly.

Simplification of court process

5.230 Although simplification of process and procedures may reduce the need for legal advice and help, making some problems easier and quicker to resolve will not render advice redundant: some problems remain complicated, some individuals remain vulnerable and some consequences remain too serious to face without advice. Any review of procedure should, if the objective is to promote effective access to justice, encourage the early resolution of justiciable problems, and should take account of the contribution advice can make to this objective.

Alternative methods of dispute resolution

5.231 Alternative methods of dispute resolution, and mediation in particular, featured prominently in our discussions with stakeholders as means of promoting effective access to justice. We agree that methods such as arbitration, mediation and conciliation can contribute to better access and to the specific purpose of promoting early resolution of justiciable problems. We view these mechanisms however as alternative or complementary to the court or tribunal based processes of dispute resolution, and not as means of advice provision as such.

5.232 Legal advice in general can encourage a greater use of mediation and other forms of alternative dispute resolution by making advice seekers aware of these alternatives, directing people towards them if appropriate and assisting people in the process should this be necessary. This however requires a level of knowledge and awareness amongst advisers themselves, and that dispute resolution services (e.g. mediation, arbitration) are available to be referred to.

5.233 More specifically, there may be scope for encouraging the use of mediation and other alternative forms of dispute resolution as part of the legal aid structure. This might be possible for example through ensuring that financially, for the advising solicitor, this is not an unattractive course of action to recommend, or through requiring applicants to have used or considered alternative methods before financial support for court action is provided.

5.234 We recommend that, in pursuit of promoting the early resolution of legal problems, the Scottish Executive and the Scottish Legal Aid Board should actively seek ways in which the provision of advice can encourage the greater use of alternative means of dispute resolution, for example through the use of mediation coordinators, changes to legal aid payments, or a programme of training on alternative means of dispute resolution for advice providers. In tandem with such activity the availability of, for example, arbitrators and mediators would require consideration.

Footnotes

1 The Community Legal Service Working Group was established in October 2000 and produced the 'Review of Legal Information and Advice Provision in Scotland' (ROLIAPS Report) in November 2001

2 Evidence for this can be found in various research reports: Studies such as the 'Paths to Justice', 'Paths to Justice Scotland', the Needs Assessment studies undertaken on behalf of the Scottish Executive in the context of the Pilot Partnerships, and the LSRC study published in 'Causes of Action: Civil Law and Social Justice' all point to patterns of problems experienced by individuals which are different from the types of issues that individuals get assistance for which is funded through legal aid.

3 The 'Paths to Justice Scotland' report by Hazel Genn and Alan Paterson, Hart Publishing, Oxford 2001 provides information on the range of sources used.

4 Carried out as part of the ROLIAPS report.

5 Available on Scottish Executive website www.scotland.gov.uk

6 An exception to this is contained in the Homeless Persons Advice and Assistance (Scotland) Regulations 2002 which prescribe the types of advice and assistance that local authorities must now provide under sections 31(3)(b) and 32(3) of the Housing (Scotland) Act 1987 to homeless applicants and applicants threatened with homelessness who are either not in priority need or have become homeless or threatened with homelessness intentionally. As set out in paragraph 5.22 above, s2(1) of the Act places a further requirement on local authorities to plan for the provision of advice in this area: this is a corporate duty.

7 The responsibility to meet the requirements of Best Value extends to Local Authorities, the Scottish Executive and 'Accountable Officers'. Details of these responsibilities can be found in the Public Finance and Accountability (Scotland) Act 2002 and Section 1 Part 1 of the Local Government in Scotland Act 2003.

8 A similar conclusion was reached in the independent review of the Community Legal Service in England and Wales (Matrix Research and Consultancy, on behalf of the DCA), April 2004.

9 We use the term 'quality system' to encompass both quality standards and the mechanisms by which to assure adherence to the standards set

10 'Second tier' advice is advice not provided directly to the person with the justiciable problem, but to their 'first tier' advisers, who may not have sufficient knowledge or experience to deal with this particular problem

11 'Legal Information and advice services: a review of evidence'. Blake Stevenson Ltd and Office for Public Management,. Scottish Executive Social Research 2003

12 Under current arrangements, a solicitor can submit a claim for the minimum fee of 25 (plus VAT) without having to set out what work was carried out for the client, or how long it took.

13 At present, cases can proceed under Advice and Assistance for a considerable time and at significant cost without any clear view being taken of the type of factors set out in Chapter 5 (cost/benefit, prospects of success etc).

14 Justice 1 Committee (2001) Report on Legal Aid Inquiry, Scottish Parliament

15 Scottish Legal Aid Board, 'Report on Effect of Extension of Periods For Payment of Civil Legal Aid Contributions', Submitted to Justice 1 Committee, July 2003. The contribution or instalment period begins after the close of the 12 month 'computation period' during which SLAB assesses eligibility and any liability for contributions.

16 The concept of 'clawback' is described at paragraph 4.43

17 Section 19 also allows recovery of costs by any non-legally aided party to an appeal, without the need to establish hardship.

18 Scottish Legal Aid Board, 'Distribution of the Supply of Legal Aid in Scotland' 2002

19 Paterson, A., and Turner-Kerr, M., 'Research report on the Distribution of Supply of Legal Aid in Scotland', SLAB, 1993 and Paterson, A. and Montgomery, P., 'Access to and Demand for Welfare Legal Services in Rural Scotland', SLAB, 1996.

20 There are of course existing powers under Part I of the Legal Aid Scotland Act 1986 which allow The Board to employ solicitors directly. We envisage a more flexible, streamlined regime, extending to non-legally qualified specialist advisers.

21 Research undertaken by Blake Stevenson Ltd with Office for Public Management for the Scottish Executive in 2002/03.

22 The Public Perspective on accessing Legal Advice and Information : A Microcosm Study; Scottish Executive 2001

23 Draft report available at http://www.legalservices.gov.uk/cls_developments/index.htm

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