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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 7 - Expenditure In Legal Aid

7A FORECASTING LEGAL AID EXPENDITURE

Current forecasting activity

7.1 The Legal Aid Fund is demand led. This means that unanticipated expenditure requirements have to be met from within the Justice Department budget. While this is in one sense unproblematic from a legal aid perspective, it clearly poses a challenge to the Executive: effective budgeting and management of public finances makes some degree of certainty as to likely legal aid expenditure essential. The demand led nature of legal aid does however complicate the task of predicting expenditure.

7.2 The Review Team has explored, with the Scottish Legal Aid Board, a model which SLAB is currently developing to predict expenditure based on current and expected future demand. The length of time for a case to progress from a grant of legal aid to the submission of a solicitor's account for payment varies greatly, from a few weeks to many years. The Board's model accounts for these different time lags, to estimate when each active case will be presented for payment. The model then calculates the total cost of cases expected to be paid in any given period. It is inherent in any forecasting model, however, that accuracy will reduce the further in advance the model is applied. The Board's model is no exception. While the value of cases likely to be received in the near future may be predicted with some degree of accuracy, existing cases only make up part of the picture: new cases and possible changes in business volumes also have to be accounted for. In addition the cost of cases may change in future, meaning that a forecast based on current average costs may be inaccurate.

Understanding drivers of legal aid expenditure

7.3 Legal aid expenditure is the result of case volume on the one hand and case cost on the other. To understand what drives legal aid expenditure one has to consider both of these elements. Over the last few years, the Board has developed its analysis of trends in an attempt to explain recent changes in both the volume and cost of cases. In part, this analysis is designed to contribute towards the forecasting of future trends. However, in seeking explanations for recent patterns and changes, it becomes clear that the influences on both costs and volumes are many and varied.

7.4 In short, internal and external expenditure drivers have an impact on the operation of the legal aid system. Internal drivers can include changes in legal aid policy which might ultimately have an impact on the volume or cost of cases while external drivers such as crime clear up rates and prosecution policy can have a similar impact.

Internal expenditure drivers

7.5 A number of changes in policy might have the effect of increasing case volumes and thus also have an impact on cost: the extension of assistance by way of representation (ABWOR) to employment tribunals, changes to financial eligibility/contributions for example. Changes to fee rates or structures (such as the move from time and line payment to fixed payments for summary criminal work) will clearly have an impact on the cost of all cases to which the change applies.

7.6 All significant legal aid policy changes are likely to be preceded by a costing exercise, the results of which can be fed into any forecasting system. However, not all changes in demand or cost stem from within the legal aid system itself. The sections below consider changes affecting civil legal assistance and criminal legal assistance in turn.

Expenditure drivers in civil legal assistance

Volume

7.7 The Board has published research into the long term reduction in applications for civil legal aid ¹. This found that changes in eligibility and the level of contributions required of some applicants had had some impact. However, the main reasons for the decline in applications were demand related: societal changes such as a reduction in divorce, changes in family law and changes in the approach of family lawyers, had reduced demand for court-based dispute resolution and therefore for civil legal aid.

7.8 More recently, one of the most striking changes in civil expenditure has occurred not in civil legal aid but in Advice and Assistance and ABWOR. This relates to a large increase in the volume and cost of cases concerning immigration and asylum. Clearly, this stems directly from the well-publicised policy of dispersal of asylum seekers around the UK.

7.9 These two contrasting examples evidence the fact that legal aid does not exist in a vacuum: changes in demand for legal aid can and often do stem from changes elsewhere. One of the challenges in forecasting demand and expenditure lies in identifying these changes in advance. On the civil side this task is complicated by the variety of subject matters and procedures for which civil legal aid, Advice and Assistance and ABWOR are available.

7.10 There is scope for identifying specific changes in policy and legislation that may be expected to have some impact on civil legal aid expenditure. Where a planned legislative change is expected to have specific consequences for legal aid, relevant cost estimates are included in the financial memorandum. Where they are specific enough, account can be taken of these estimates when forecasting legal aid expenditure: the Legal Aid Policy Team within the Executive's Access to Justice Division seeks to ensure that all such likely demands are identified.

7.11 Operational policy changes in the area of civil law that may have an impact on legal aid expenditure can be harder to identify in advance. A good example might be a change by one or more local authorities to their rent arrears policy, resulting in an increase in demand for civil legal assistance.

Cost drivers

7.12 It is also important to identify factors that might influence the cost of cases. Again, the nature of civil legal assistance is such that there is a very wide range of potential costs, from a few hundred pounds for a short undefended action, to many thousands for a contested case that proceeds to proof. These variations are, as far possible, accounted for in the Board's forecasting model, which breaks civil legal aid down into particular courts and case types.

7.13 The cost of a case is influenced by many interrelated factors, from the complexity of the subject matter and the approach of the parties, to the cost of experts and the length of the case. Recent changes resulting from civil legal aid reform require solicitors to give an advance estimate of the likely cost of each case. This should give the Board some indication as to likely future costs although many of the factors that might change the cost of a case as it progresses remain inherently difficult to predict. A further discussion of influences on and control of costs in individual cases can be found in section 7C below.

7.14 In estimating future changes in the cost of cases, more mileage is likely to be gained from focusing on system related case cost drivers. Changes to court procedure for example, such as the introduction of child welfare hearings in family cases (and the associated costs as a result of child welfare reports), can clearly be expected to have an impact on the cost of cases. Similarly, the move to exempt those in receipt of legal aid from court fees would impact across all civil cases and would be expected to have a downward impact on costs.

Options to improve forecasting of civil legal assistance

7.15 Changes in demand for civil legal assistance can be seen to stem from a wide range of drivers. The prediction of future expenditure on civil legal assistance appears therefore likely to remain broadly based, relying on early communication of specific future demands, whether as a result of new legislation or otherwise. With this aim, awareness of potential impacts on legal aid expenditure of policy and legislative changes should be improved throughout the Scottish Executive. Additionally, the Executive, working with the Scottish Legal Aid Board, should build on the current work done by the Board to forecast expenditure trends by factoring in more accurate assessment of the impact of policy changes (whether Scottish Executive or UK Government led) on civil legal aid. This information should be used to shape policies at an early stage to ensure that the legal aid implications are consistent with legal aid policy and that they are affordable.

Expenditure drivers in criminal legal assistance

Volume drivers

7.16 While the experience and resolution of civil problems is varied, the drivers of demand for criminal legal assistance tend to be fewer and are more readily identifiable e.g. reported crime, clear up rates and prosecution policy, including the use of diversion from prosecution schemes. Similarly, in forecasting criminal legal aid volumes, changes in these drivers might be expected to provide useful early indicators of changes in expenditure.

7.17 Looking more closely, work to date suggests that the flow of business through the criminal justice system is not straightforward or fixed. For example, the Board's trends analysis suggests significant changes in the balance between cases it funds which proceed in the Sheriff Court, District Court and the District Courts in Glasgow not all of which are presided over by stipendiary magistrates. This overall change may be influenced by both national and local policies: for example, the increased use of the stipendiary magistrates is a Glasgow-specific change.

7.18 Specific police initiatives can also be seen to impact on legal aid spending: operations targeting, for example on drugs and the carrying of offensive weapons, appears to have impacted on legal aid demands in recent months.

Cost drivers

7.19 Decisions as to the forum of prosecution, and decisions within individual cases as the case proceeds, affect the overall cost of a criminal case. Also, the current lack of disclosure of evidence has an impact on the cost of solemn cases, where solicitors are paid for obtaining their own precognitions from Crown witnesses. It has been estimated that 30% of costs paid to solicitors in solemn cases are attributable to the taking of statements from witnesses. Disclosure of evidence by the Crown could therefore result in significant cost savings.

7.20 In criminal cases, as in civil ones, changes in court procedures may also have an impact on case costs. For example, the introduction of intermediate diets meant an additional hearing for which solicitors would be paid (although the overall intention was to enable cases to conclude earlier, thereby saving court time and, by extension, legal aid costs).

7.21 With a fixed payment system, there are relatively few ways in which costs can be influenced. However, were there to be changes to, for example, the approach of the courts or individual Sheriffs, to the adjournment of trials, this could be expected to increase the cost of cases in affected courts. Another example stems again from the recent increased use of prosecution in the District Court in Glasgow presided over by stipendiary magistrates: under the fixed payment regime, these cases attract a higher payment than District Court cases. A further discussion of influences on and control of costs can be found in paragraphs 7.37 to 7.54 below.

Options to improve forecasting of criminal legal assistance

7.22 The Review Team has explored how the other criminal justice agencies (primarily the police, Crown Office and Scottish Courts Service) forecast their own business levels and whether this could contribute towards more effective forecasting of legal aid expenditure. Early indications are that there is no 'holy grail' waiting to be found. Nevertheless, we believe that the forecasting of legal aid expenditure on criminal legal assistance can be improved through the greater sharing of information between the various criminal justice agencies. This could cover both current and expected levels of business and also provide advance warning of significant changes in operational, procedural or substantive policy that might be expected to have an impact on the other agencies within the system.

7.23 We therefore recommend that the agencies working in the criminal justice system make use of the Board's current work on forecasting and share information on business volume and type to allow for better forecasting and to ensure a higher level of awareness of the impact on legal aid expenditure of policy change in the criminal justice system.

7B REMUNERATION ISSUES

7.24 Although some fees have recently been reviewed and the structure improved (most notably solicitors' fees for Sheriff Court work), taking the fee structure as a whole there are a number of issues which remain. These are connected to the failure to uprate some fees for several years, uncertainty over fee levels (for both the Board and practitioners) and a lack of consistent rationale underpinning the approach to payment structures and fee setting.

7.25 As we have seen, the Board has a statutory obligation to pay the properly incurred fees and outlays of solicitors and counsel who have provided legal aid in one of its many forms. There are three key components to questions of remuneration :

• the test for deciding what work can be paid for
• the payment structure
• the levels of payment.

The test for payment

7.26 It is important to understand the underlying rationale for payment out of the Legal Aid Fund to solicitors and counsel. As the Board is a 'third party funder' of litigation, the payment test that determines what should be paid in such a situation is that of 'solicitor and client, third party paying'. 19 ^th century textbooks and case-law described this test as the 'prudent man of business' test: appropriate expenditure is that which would only be necessarily incurred by a prudent solicitor. This level of expenditure is similar to what would be paid by an unsuccessful opponent to the successful party, but is much more restrictive than the sums which could be charged to a privately paying client. Levels of remuneration must be seen within this context, because what can be charged to the Fund will so usually be less than what may be charged to the private client.

Payment structures

7.27 Current payment structures are set out in subordinate legislation and provide a complex mix of remuneration methods ². Three methods are used in the payment of solicitors, and are employed across the various aid types :

• Detailed or 'time and line' fees remunerate the solicitor for time spent on work (e.g. time in court or in a meeting with the client) as well as individual items of work (e.g. letters or telephone calls). This approach potentially remunerates the inefficient solicitor more than his/her efficient counterpart and as a system does not actively encourage the efficient conduct of cases. This type of charging is relevant to all aid types.
• Block fees remunerate the solicitor for defined stages of completed work. They aim to encourage efficient conduct of cases by only paying for completed stages. There is no reward for unnecessary meetings or correspondence as the payment is capped for all work within that stage. This is the model which has been adopted for most Sheriff Court cases as a result of civil legal aid reform. Block fees create a simpler and more efficient method of accounting, assessment and administration.
• Fixed payments are based on a core standard payment for a case, with additional block payments where necessary. Payments of this type are used in most summary criminal cases. Fixed payments provide the Board with greater certainty of case costs. However, they can be criticised for lack of flexibility because they remunerate for the whole case, as opposed to paying on a stage-by-stage basis.

7.28 The methods for remunerating counsel are equally complex, and appear less planned than those applied to solicitors. Three methods of remuneration are apparent:

• Commercial rates are allowable in Advice and Assistance and ABWOR, essentially by default. This is because no fees have been prescribed by regulation, and counsels' fees therefore have to be assessed based on whether or not they constitute a reasonable outlay by the solicitor. Legal aid rates, even for comparable work, are irrelevant. This method of charging exposes the Fund to the full cost of commercial charging, and thus gives little cost control provided the fee was incurred within the maximum level of authorised expenditure available to the solicitor.
• Prescribed fees are the fees Parliament has considered appropriate for pieces of work undertaken by counsel in civil cases in the Court of Session and all criminal cases ³. However, the prescribed fees are subject to increase by the Auditor, leading to uncertainty and an inflationary tendency. The Auditor also has a power to create fees for work which has not been prescribed.
• Where there are no prescribed fees, the fees for counsel are linked to 90% of what would be chargeable on the 'prudent man of business' test (described above) if the work were not paid through legal aid. Regulations do not define this further, creating great uncertainty over levels of payment. This has led to the issue being resolved by the Auditors of Court, with the accompanying inconsistency and inflationary tendency. This is the method for charging for civil legal aid in the Sheriff Court, House of Lords, Judicial Committee of the Privy Council, Employment Appeal Tribunal, Social Security Commissioners, Lands Tribunal, Land Court and Lands Valuation Appeal Court.

Levels of payment

7.29 Subordinate legislation sets out the rates payable for certain pieces or blocks of work. These are the rates which must be used for billing purposes by solicitors and counsel. These rates are substantially lower than those which can be charged for work undertaken on behalf of privately paying clients, but can be argued to allow greater certainty of payment for the solicitor, as the Board can be relied upon to pay. Other than the introduction of fixed payments (in 1999) and the reformed block fee rates for civil legal aid (in 2003) these rates have remained static for a considerable time, some since 1993.

7.30 The failure to uprate some fees for a number of years has contributed to negative perceptions of legal aid work within the legal profession, and may be a contributing factor to the reported withdrawal of practitioners from legal aid work or to the lack of new entrants to legal aid work We discuss this issue further in paragraphs 8.4 to 8.24.

Outlays

7.31 Although not strictly an issue of remuneration for legal practitioners, it is important to note in this context that 'outlays' form a significantly growing area of expenditure from the Legal Aid Fund. 'Outlays' is the collective term given to the money that is paid to legal aid practitioners which in turn allows them to pay someone else for work done in the course of the case. This money requires to be reimbursed by the Fund and covers such expenses as the cost of medical reports, fees for expert witnesses and fees for reports made by curators.

7.32 It is difficult for the Scottish Legal Aid Board to control the cost of outlays. The solicitor may require prior sanction by SLAB before (some of) such cost can be incurred, but SLAB has only limited control over the actual cost of outlays. For this reason it will be necessary for mechanisms to be developed which offer greater certainty and control over the cost of outlays. Work is already underway in this respect, for example SLAB is in discussion with the British Medical Association and the Institute of Chartered Accountants over the possibility of standardising the basis upon which these experts are paid.

Conclusions and recommendations

7.33 Remuneration structure and levels are powerful and very immediate tools for the implementation of legal aid policy. They are also effective in reinforcing the priorities within that policy. It is therefore important that consideration is given to the extent to which payment structures and payment levels are appropriate expressions of current and future policy for the delivery of legal aid and other forms of publicly funded legal assistance.

7.34 In this context we believe that the following should adopted as general principles for remuneration structures and levels:

• Fair reward: efficiency in the conduct of cases should be encouraged and rewarded. Pay rates should be set at levels which will attract and maintain a sufficient supply of practitioners.
• Regular review of pay levels and structures: a fair reward system needs to be regularly reviewed to ensure that it maintains payment at the level intended and continues to reward the work it intended to reward
• Maximum certainty: certainty of cost for the Board and certainty of fees for the practitioner. The introduction of a block fee system for solemn criminal legal aid should be considered. Tables of fees should apply to all work by both solicitors and counsel. Existing tables of fees should be modernised, including the introduction of graduated fees for counsel, and tables of fees should be introduced where they do not exist. In addition, mechanisms should be established which provide for greater certainty of costs for outlays, particularly those relating to expert witnesses/reports.
• Best possible value for public money invested: inefficiencies in payment systems and structures as well as in administration should be continuously identified and tackled.
• Quality assurance: it is recognised that cost and efficiency alone do not determine value for money. Quality needs to be maintained and assured by introducing quality assurance throughout the delivery of legal aid.
• Alignment with policy objectives: payment structures and levels should, where possible, be used to encourage the behaviours and prioritisation that policy objectives, within legal aid or the wider justice system, require. This opens the possibility of rewarding out-of-court work in civil cases at the same level as, or better than, court work which would have the effect of encouraging early resolution - a change from the current situation.

7.35 The last principle is particularly relevant in the context of recent developments in the criminal justice system, which seek to create greater efficiency and effectiveness throughout the system, and the corresponding objective expressed for publicly funded criminal legal assistance of promoting systemic efficiency. Here, the payment structure and payment levels could clearly be used to encourage the early disposal of cases by, for example the 'front loading' of fees, and by remunerating out-of-court work to assist a guilty plea on a comparable basis for work undertaken to defend a not-guilty plea.

7.36 It is worth noting that a substantial body of work is already being undertaken by the Scottish Executive and the Scottish Legal Aid Board in the context of remuneration. This work has identified inefficiencies in particular in relation to payment structures in criminal legal assistance, which are now being addressed. Similarly, the introduction of a quality assurance scheme for criminal legal assistance has been agreed in principle between the Board, the Executive and the Law Society for Scotland. Discussions have also started with the Faculty of Advocates regarding the development of a graduated fees regime in criminal cases allied with the development of a quality assurance mechanism.

7C CONTROL OF EXPENDITURE

The role of the Board

7.37 As previously stated, legal aid is demand driven and expenditure cannot, therefore, be controlled by budget. There are, however, a number of ways in which expenditure is controlled. The Legal Aid (Scotland) Act 1986 provides for the circumstances under which each type of assistance can be granted and no application can be granted unless it meets each statutory test. The Board considers and determines applications for summary criminal and civil legal aid and has set in place various measures to ensure applications are considered accurately and consistently. These are not strictly expenditure control measures; improving the quality of decision making is as much about ensuring that applications meeting the statutory criteria are granted as ensuring that applications not meeting the criteria are refused.

7.38 In addition to the above SLAB, through its Audit Department, investigates cases of alleged fraud or lack of full disclosure in applications. To further reduce the scope for people to receive legal aid fraudulently or wrongly, SLAB has increased the volume of checks of information supplied by applicants. SLAB's Compliance Department carries out investigations into the conduct of solicitors and has the duty to audit certain matters under criminal and civil legal assistance. In 2002/03 savings of 1 million resulted from investigations into applicants, assisted persons and solicitors.

7.39 We note however, that while SLAB can investigate the means of applicants for Advice and Assistance, there is no power to terminate a grant of Advice and Assistance, even where it was found to have been made in error by the solicitor or was based on a false declaration of income. The Board can, however, recover the costs from the applicant of Advice and Assistance so provided.

7.40 There are a number of safeguards built into the system so that once legal aid is granted costs cannot simply escalate without any further control. These include for example provisions that, although solicitors can grant advice and assistance "on the spot" to persons who qualify financially, they must work within initial expenditure limits of 85 or, in some cases, 160. If they consider that the work will exceed this limit, they must apply to the Board for an increase in the limit of authorised expenditure. Another example is where civil or criminal legal aid has been granted and the solicitor wishes to employ counsel, employ expert witnesses or undertake work which is of an unusual nature or is likely to involve unusually large expenditure. In all such circumstances the solicitor must apply to the Board for sanction to do so.

7.41 Control of expenditure is also exercised when solicitors and counsel submit accounts for the work undertaken. The Board must make payments to solicitors and counsel in respect of fees, outlays and payments properly incurred in connection with legal aid or Advice and Assistance, but SLAB scrutinizes accounts submitted to check whether or not the payments being claimed were properly incurred.

7.42 The ability of the Board to control legal aid expenditure is however limited by:

• the role of the Courts
• the role of the Auditor of Court.

Role of the Court

7.43 The court grants legal aid in respect of solemn criminal matters and also (but these numbers are much less significant) in summary criminal matters where a term of imprisonment is being considered for someone not previously sentenced to a term of imprisonment, in contempt of court cases and for children's' proceedings before a Sheriff. Of these, solemn legal aid is by far the most significant in terms of expenditure, accounting for total expenditure of 31 million in 2002/03.

7.44 It is difficult to ascertain how the courts apply the relevant statutory tests. Therefore it cannot be stated with any certainty that grants are made on a consistent basis, or whether the tests are applied in a similar manner as by the Board. Furthermore, the power of the court to grant legal aid also has the unfortunate side effect of providing inadequate fraud control. The court has no investigative powers in relation to legal aid, yet may withdraw it from an assisted person in some circumstances. The Board has not however been given the power to withdraw legal aid which has been granted by the court even if, after investigation, it is aware of undisclosed income or capital., nor can the Board recover its outlay from the assisted person.

7.45 The role of the court in granting legal aid can therefore be said to curtail the scope of the Board in maintaining appropriate control over legal aid expenditure. This issue is discussed in full at paragraphs 6.26 to 6.35. It is recommended there that, for the purposes of consistency and appropriate cost control, the assessment and granting function in relation to solemn criminal legal should be transferred to SLAB.

7.46 The Court of Session and Sheriff Court also have a role in granting 'additional fees' to solicitors in civil cases. These fees can substantially increase the cost of a legally aided case. As part of the civil legal aid reform package, greater cost control has been introduced in this respect as of 1 October 2003. A cap has been placed on additional fees in the Court of Session. In Sheriff Court cases remunerated under the new block fee structure, it is now the Board which decides whether the solicitor should receive an additional fee. However, an issue still remains in respect of those Sheriff Court cases paid under the 'old' time-and-line fee structure, where the Sheriff continues to have the power to increase the solicitor's fee. We propose that a transfer of the court's assessment and granting functions to the Board as recommended above, should extend in full to the granting of additional fees.

Role of the Auditor of Court - Taxation

7.47 The Auditor of Court is the independent official who assesses various Accounts of Expenses in court proceedings. Although the primary function of the Auditor is to deal with disputes over the expenses claimed by successful parties in civil cases, their functions also include disputes between the Scottish Legal Aid Board and solicitors or counsel concerning legal aid accounts in both criminal and civil proceedings. The process of assessment and decision is known as 'taxation'.

7.48 In the Sheriff Court, the Auditor is very often the Sheriff Clerk. The Auditor of the Court of Session, and a small number of Sheriff Court Auditors (who are not also Sheriff Clerks), are not employees of the Scottish Court Service. Auditors of Court do not necessarily have any experience of legal aid work or legal aid legislation. Very few Auditors are, or have been, solicitors.

7.49 Sheriff Court Auditors have the task of resolving disputes between the Board (or the client, in respect of Advice and Assistance) and solicitors or counsel ,which relate to the level of expenses incurred in respect of Sheriff Court proceedings and in all Advice and Assistance and ABWOR cases. Depending on the circumstances this can extend to a case before the High Court or even the European Court of Justice.

7.50 The Auditor of the Court of Session deals primarily with disputes in relation to proceedings in criminal cases in the High Court and civil cases in the Court of Session. In addition, the Auditor of the Court of Session also deals with disputes in relation to civil legal aid for proceedings in the House of Lords.

7.51 By contrast to the above, no taxation mechanism has been created for disputes relating to proceedings before the Judicial Committee of the Privy Council, the Proscribed Organisations Appeal Commission or the Social Security or Child Support Commissioners. Accordingly, no method exists in these situations to resolve disputes over fees or outlays, bringing the potential for 'stalemate' if the solicitor or counsel refuses to accept the Board's assessment.

7.52 The most significant issue in relation to Sheriff Court Auditors is a lack of consistency - in the amounts decided upon as well as in the application of the legislative payment test:

• decisions in one Sheriff Court area are not binding in another (for example, fees ranging between 600-1500 have been allowed to counsel in different courts)
• there is lack of binding guidance as to the application of the legal aid taxation scale
• there can be changes of charging behaviour (for example, decision of Auditor to allow travel time for Edinburgh solicitors between their offices and the Court of Session)

7.53 In addition there are a number of further issues concerning the operation of taxation in relation to legal aid :

• the process can cause delays - in obtaining a hearing date, in obtaining an Auditor's decision and in making payment
• it causes additional expense for the Scottish Legal Aid Board- in meeting the Auditor's fee ( which is a percentage of the disputed bill) and travelling to remote courts
• experience - some Auditors may have little or no experience of legal aid disputes, or the legal aid taxation scale
• taxation causes a significant lack of certainty in, and control over, the price ultimately paid from the Legal Aid Fund
• solicitors or counsel may ask Auditors to determine disputes relating to legal aid but concerning matters outwith their function (for example, where a solicitor failed to obtain appropriate authority from the Board for work of an unusual nature)
• lack of transparency in decision-making, particularly where the Auditor has the power to create or increase a fee for counsel. The High Court issued guidance in the criminal case of Mackay v HM Advocate⁴, describing the need to ensure a 'reasonable relationship' between the fee prescribed by Parliament and the increased fee allowed by the Auditor. However, it remains unclear how decisions to allow fees in the region of 1250 per day for senior counsel are in a 'reasonable relationship' with the prescribed fee of 315
• a resulting inflationary effect of decisions in relation to counsel's fees.

Conclusion and recommendations

7.54 The current system of taxation with local differences, inconsistency and resulting uncertainty, creates significant difficulties for legal aid, especially in relation to cost control. The national, uniform legal aid system, administered by one national, public body in a strict legislative context, can find itself in a situation where different payment regimes apply in different areas. The ability of the Board to control and forecast cost is compromised by insufficient certainty over decision outcomes, a lack of consistency across the courts and insufficient transparency. To address this we see four possible solutions:

• Maintain the current roles of Sheriff Court Auditors and the Auditor of the Court of Session in relation to legal aid disputes but develop significantly clearer and tighter guidance as well as a requirement for the Auditors to adhere to such guidance.
• Retain the role of Auditors for work done in the courts they are attached to, and whose work they will be familiar with, and issue guidance as above. Transfer the taxation function for other courts to a new central service.
• Transfer all responsibility for resolving payment disputes in relation to legal aid, to one central taxation service.
• Reduce the scope for dispute over fees as far as possible by extending the use of block fees and ensuring that table of fees apply to all work by both solicitors and counsel (maximum certainty principle)

We recommend that the Scottish Executive explores these options, with a view to arriving at a taxation system for legal aid disputes which is swift, transparent, fair and consistent.

Footnotes

1 'Legal aid in a changing world : research into the reduction in civil legal aid applications in Scotland between 1992 and 2001', Scottish Legal Aid Board, October 2001

2 This point is illustrated in the table at Annex 5

3 Prescribed fees are set down in Regulations and have not changed for a considerable number of years. The same Regulations also provide the power of Auditor to increase those fees

4 (1999) SCCR 679

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