THE Lord Chancellor is facing the threat of a legal challenge over plans to make solicitors enter a low-price bidding war to secure legal aid contracts.

Solicitors told the Times-sponsored Minority Lawyers’ Conference in London on Saturday that they believe the plans proposed by the Legal Services Commission are potentially in breach of the Race Relations Act because they fail to recognise the impact on ethnic-minority lawyers.

The Law Society of England and Wales endorsed a resolution last week cautioning solicitors against entering the bidding process, although it said that the ultimate decision was for law firms. The solicitors’ body has stopped short of recommending a boycott of the bidding process: the Office of Fair Trading has indicated in a letter that any such move might be anti-competitive.

Ethnic-minority law firms say that the proposals for criminal legal aid work will drive many of their smaller practices out of business, depriving black clients of their choice of lawyer.

Yvonne Brown, chairwoman of the Black Solicitors Network, said that a letter “before action”, a first step towards a legal challenge, had been sent to the Legal Services Commission, which runs the legal aid scheme. She told the conference that the proposals could hit many black law firms.

“Before the commission proceeds we want to ensure it has addressed a series of issues, not least its duty under the Race Relations Act to consider the acknowledged adverse impact on such firms,” she said.

The profession says that the big firms will have the economies of scale to secure the contracts at a low price, driving hundreds of smaller practices out of business.

The bidding war was scheduled to start in August but the Legal Services Commission has delayed the consultation period. The scheme would be set initially in London but if successful would become national.

Last week the Lord Chancellor, Lord Falconer of Thoroton, confirmed his support for the scheme as part of a drive to secure better value from the £1.2 billion legal aid scheme.

He said that there was a disproportionate sum spent on criminal legal aid which now accounted for the vast majority of the legal aid budget. The cost of criminal legal aid had soared, while the civil legal aid bill — money spent on disputes over housing, rent, children or benefits — had dropped.

Richard Collins, the head of policy at the Legal Services Commission, said: “The most worrying thing will be if firms don’t engage with us — then things will go wrong,” he said. “We are keen to get a workable scheme and to keep lines of communication open.”

He did not know when the bidding process would start.

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