Grieve calls for new methods of funding legal aid and criticises LSC

Dominic Grieve QC, shadow justice secretary, has championed alternative methods of funding legal aid, while saying that the LSC was 'not fit for purpose'.

He said the Conservatives were studying a French system of funding legal aid, under which all client funds are held in a single, national account.

Grieve said he had been examining the French 'Caisse des Reglements Pecunaires des Avocats' (CARPA). Under the system, all client funds held by lawyers go into a single account, which is underwritten by the government.

'Because of the buying power of the pooled client monies, a better rate of interest is achieved,' he said.

'The client can thus get exactly the rate of interest that he would receive from a local client account but the differential interest is used to help fund the French equivalent of legal aid. In France this brings in approximately £300m annually.'

Grieve said that introducing CARPA into the UK would require primary legislation.

'It has also been suggested by a number of leading criminal solicitors that convicted defendants on legal aid should be required to pay a fixed fee towards their cost of representation,' he said. 'A figure of £200 has been suggested.

'While there would clearly be problems in recovering this sum in some cases, there is no reason in principle not to do it.'

Speaking in Northern Ireland last week, Grieve said he was also interested in more traditional alternatives for the funding of legal aid, such as the contigent legal aid fund (CLAF) supported by the Bar Council and Lord Justice Jackson.

Grieve said he detected, following publication of the Jackson review, 'a growing consensus in favour of limits on costs, and in particular on the success fees that can be claimed by the winner's lawyers '“ although the government has only so far moved on the media-friendly issue of libel law.

'As someone who has long been concerned about the impact of success fees on the cost of litigation, I welcome this. I think we may well need to go further in barring costs that are manifestly excessive when compared to the sum at stake.

'For instance, in Germany costs are limited to the final value of the claim. This means greater certainty for clients, lawyers and insurers, and it reduces the incentives to string out legislation. It also sustains a higher volume of litigation than we have here.'

Grieve said that reports from the public accounts committee made it clear that the LSC was 'not fit for purpose'.

'I think there are serious questions to be asked of the Legal Services Commission itself,' he said. 'When legal aid was set up, it was administered through each nation's Law Society.'

'It didn't require a quango with 13 offices and an administration budget of £125m in England and Wales.'

Grieve described as 'arbitrary' the government's decision to cap the costs recoverable by acquitted defendants at rates 'well below' the amount privately funded defendants would have to pay.

'We have opposed this move which is unjust and inequitable '“ and which I am far from convinced will generate the savings intended in any event. It is also going to be subject to legal challenge by the Law Society.

'The fact, however, that the government was willing to countenance such an unjust measure shows, I think, that we may have reached the limits of salami-slicing. It also confirms to me that the present government is incapable of providing positive change and has run out of ideas.'