Public funding

With the ink barely dry on Lord Carter's final recommendations on the future of legal aid procurement, of more immediate concern for criminal lawyers has been the re-introduction of means testing in criminal cases. The effect of the change is that, since 2 October 2006, as a result of reforms introduced under the Criminal Defence Service Act 2006, a client must satisfy both the means and the merits tests to qualify for a representation order in summary proceedings.

New application procedure

All applicants applying for a representation order are now required to complete the new CDS Form 14. The form is submitted to the magistrates' court at which the defendant is to make his first appearance within two working days of the applicant being charged, or five days if remanded in custody. Decisions about the applicant's eligibility for a representation order will no longer be made informally 'over the counter'. The granting of a representation order is now an administrative function, as opposed to a judicial exercise, undertaken by specially trained court staff under the direction of the Legal Services Commission. In most cases, the court undertakes to inform the applicant of its decision within two working days of receiving the application.

The 11-page CDS14 requires the applicant to provide details of his personal circumstances and those of his partner if living together as a couple, as well as providing a detailed articulation of the interests of justice grounds applied to the facts of the case. The applicant's 'partner' is defined as the person to whom the applicant is married or the person with whom the applicant normally lives as a couple, including same-sex couples. The applicant's partner is also required to sign Form CDS14. A 'partner' will not have their means aggregated, where he or she is the victim of the offence or a prosecution witness or is jointly charged and there is a conflict of interest.

Automatic qualification in terms of means

An applicant under the age of 16 or under the age of 18 and in full time education or in receipt of income support; income-based jobseeker's allowance or guarantee state pension credit automatically qualifies under the means test. A 'passported' applicant is required to provide his national insurance number or supporting evidence of his financial status, which may be confirmed by the court through a direct computer link to the Benefits Agency.

All other applicants (and partners where appropriate) are means-tested from a detailed record of their financial affairs provided on Form CDS15 which is processed by the court.

Initial means test

Under the revised application procedure, the means test is conducted in two parts: the initial means test; and the full means test. The initial means test acts as a filter to decide which of three annual weighted income categories the applicant comes within.

The initial means test takes into account the applicant's gross annual income from all sources, including income from employment, benefits in kind, non-exempted state benefits, maintenance payments and income from savings and investments. Capital is not taken into account, except where the applicant receives income from the capital sum. Where the applicant lives in the same household with his married spouse or non-married partner, the partner's income will also be taken into account under the same formula. An employed applicant must provide evidence of his income through the production of the most recent wage slip or up-to-date accounts or tax return for the self-employed. Where a defendant is in custody and cannot provide evidence of his income, his application should be accompanied by a statement of truth which is contained on Form CDS17. This replaces the evidential requirement to adduce proof of income.

The gross income figure will then be 'equivalised' or 'weighted' to calculate the applicant's actual gross income. Under the formula, specified allowances take into account the cost of supporting dependant family members. An applicant whose weighted income falls below £11,590 qualifies automatically under the initial means test. An applicant whose weighted income exceeds £20,740 is ineligible for a representation order on the basis of his means; an applicant whose income falls between £11,590-£20,740 will be subject to the full means test. The LSC has provided an online calculator to assist legal advisers in determining whether a client is likely to pass the means test.

Full means test

Where the applicant's gross equivalised income falls between the lower and higher thresholds, the full means test must be applied to establish the applicant's annual disposable income. Unlike the initial means test, the full means test calculates the applicant's actual income (and his partner's if appropriate) after deducting income tax, national insurance, housing and child care costs, maintenance payments and an annual living allowance (calculated by reference to a formula that adjusts to the applicant's individual circumstances). If, after deducting the allowances, the applicant's disposable income threshold exceeds £3,156, he fails the full means test and will be required to pay his own defence costs in the magistrates' court. Where the applicant's actual disposable income falls below £3,156, the applicant will qualify in terms of his means. The court will then decide whether a representation order should be granted in the 'interests of justice'.

Under pressure from practitioners, the government has agreed that firms should be paid for assisting their clients to complete Form 15. Providing a representation order is granted, 30 minutes worth of assistance may be included in the claim.

Early Cover Scheme

An inevitable consequence of the reintroduction of means testing is that applications for a representation order are taking longer to process. Will a solicitor be paid for representing a client at his first court hearing when the decision on the representation order has not been made? The Early Cover Scheme has been introduced to pay a solicitor who provides representation at an initial court hearing when the defendant's application for funding has not been determined. In the event of the applicant failing the means test, the solicitor is allowed to claim the not over-generous sum of £75+ VAT for the work done subject to the following requirements:

• a properly completed application for a representation order has been submitted within two working days of the client being charged or five days if the applicant is remanded in custody;
• no decision has been made about the application before 9am on the date of the first hearing;
• the first hearing advances the case and any adjournment is justified; and
• the application for the representation order passes the merits test, but fails the means test.

Where a representation order is granted, the existing arrangements under the General Criminal Contract apply so that any work carried out in preparation for the applicant's first appearance can be claimed under the representation order. Where a representation order is refused on the merits ground, the solicitor can claim under the pre-order cover scheme.

In practice, many solicitors see the two-day application time-limit as wholly unrealistic. By their nature, many criminal clients are not the most reliable or organised and if a client arrives at the office three days after charge even with complete proof of his financial means, the early cover scheme would seem to be inapplicable!

Appeal, review and the hardship fund

There is no right to appeal against a determination that an applicant is not financially eligible unless there is a change in financial circumstances. Therefore, an applicant who cannot afford to pay for representation before a magistrates' court may submit an application for hardship review on another new form CDS Form 16. This will be applicable if the costs of the case might be unusually high (in which case the defence practitioner will have to provide an estimate of the likely costs and disbursements) or the applicant has excessively high outgoings. A hardship review application can be submitted alongside the full application or in the event of failing the means test.

Evaluating the new procedure

The government makes ambitious claims about the revised procedure for applying for a representation order. According to government minister Vera Baird, the new scheme has been introduced in part to prevent wealthy defendants from receiving publicly funded representation when they can comfortably afford to pay their own legal costs. Apart from the bad publicity that attached to only a handful of high profile cases, more significantly, under the revised scheme, applicants with relatively low incomes may be excluded from legal aid. The scandal of wealthy celebrities qualifying for legal aid could easily have been overcome by extending RDCOs to summary hearings which would have been less bureaucratic and easier to enforce.

Means testing will also inevitably lead to an increase in unrepresented defendants who, on failing the means tests, will be unwilling or too impecunious to pay for a solicitor. This will inevitably lead to longer court hearings as magistrates' legal advisers guide the defendant through the intricacies of court procedure. A two-tier system of legal representation has been created, as means testing is not currently a qualifying criterion in the crown court. There is a real prospect that there will be rise in the number of defendants seeking trial in the Crown Court to avoid the means tests. The stark choice facing the defendant is between funding his own representation in summary proceedings or electing trial with the possibility of a RDCO being made against him. Alternatively, some defendants might plead guilty at the earliest opportunity to avoid being landed with a large bill for legal costs they cannot afford.

The early experience of means testing is not encouraging and already the system is under pressure, with hundreds of criminal defence solicitors signing protocols pledging to refuse to represent clients until the granting of the representation order has been confirmed. In many parts of the country the system is in danger of descending into a bureaucratic log jam. The sceptics might suggest that the reintroduction of means testing is part of a wider strategy to further diminish the work of criminal defence practitioners and to replace effective legal representation with a system of summary justice based on on-the-spot fixed penalty fines. Is this a realistic vision of the future of criminal practice?

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