HUNDREDS of small law firms throughout the country will face closure under proposals for the biggest reform of the legal aid scheme in 50 years.

Critics fear that the Government’s overhaul of the £2 billion system, to be announced this week, will leave the public with fewer firms of solicitors to approach for help. There are also concerns that plans to introduce price-competitive tendering for legal aid could result in corner-cutting and a fall in standards.

Under the proposals, solicitors will be expected to compete to win block contracts for the legal aid work to help people facing criminal charges. They would then be paid a fixed fee for the work they do on a trial, rather than payment by the hour.

The reforms will be announced by Lord Carter of Coles in the first of three reports of a long-awaited fundamental review of the legal aid scheme.

They are expected to sound the death knell for many specialist and small law firms which rely mainly on legal aid work to survive. In future, legal aid work is likely to be concentrated in about half the number of firms currently providing the service to the public.

Ministers are determined to curb the spiralling cost of the £2 billion scheme which has soared in recent years because of the rising costs of criminal cases. The legal aid bill for defendants in crown court cases rose by 125 per cent between 1995-1996 and 2003-2004.

Final negotations between Lord Carter and the profession will continue this week.

One lawyer said: “We don’t yet know the final proposals. But solicitors would be very anxious about price-competitive tendering. No one is going to be concerned about whether solicitors will be paid less money. But they will be concerned about lack of choice, and quality of work.”

Even if opposed by the rank and file, Lord Carter’s report is likely to win the backing of the profession’s leadership. He is anxious to build in safeguards to ensure that the market model should not reduce standards and that law firms that do legal aid work will benefit from economies of scale with a bigger load. “It is not just crude cost-cutting,” one observer said. “It is a more subtle look at how to stucture publicly funded services; how they should be bought more efficiently.”

This week’s report will outline general principles on the procurement of criminal legal aid, with further reports on civil, family and public law, and on the financial costings of the whole scheme.

Much legal aid work is still done on the basis that solicitors are paid after the event, according to the work they do, with extra payment if the work becomes takes longer than expected. The report is expected to recommend instead an extension or standard fees.

On barristers, the report is likely to accept Bar leaders’ proposals for a redistribution of fees from the top-earning cases to the majority of trials of up to ten days, where fees have been pegged for ten years.

Action by individual barristers refusing to take legal aid briefs last autumn was put on hold pending the outcome of the Carter review.

The report is also expected to recommend cuts in the bureaucracy of the Legal Services Commission, the body which runs the legal aid scheme.

The idea of a market-driven model for the procurement of legal services had its origins under the Thatcher Government. It was the then Lord Chancellor, Lord Mackay of Clashfern, who first proposed a breakdown of lawyers’ monopolies.

CRIMINAL AID RESES AS CIVIL AID FALLS

Criminal legal aid rose by 37 per cent in real terms in seven years, but civil and family legal aid fell by 24 per cent

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• The playboy and the Tory party leader
• Bin Laden's family tree is impenetrable jungle
• Paul McCartney