Price competition proposed in new housing duty tenders
Plans for the new tender process for civil and family legal aid contracts have been announced by the Legal Aid Agency (LAA). For most legal aid firms and not for profit organisations the contracts, which are due to commence in April 2018, will stay much the same. But proposals to introduce price competition for Housing Possession Court Duty Schemes (HPCDS) have attracted wide spread criticism.
Vicky Ling, co-author of LAG’s Legal Aid Handbook, said that she “cannot understand where the LAA are coming from with this.” She believes there is “simply no money” in undertaking the duty work in the County Court as the rate of pay is so low. The president of the Law society, Robert Bourns, said that he feared a price war which “will not improve services and could negatively impact on clients.”
Simon Marciniak, chair of the Housing Law Practitioners Association, believes that “even under the current contracts, firms appear to run them as a loss leader to generate certificated work and they are not viable or profitable on their own.” According to Ling if a HPCDS case is transferred to legal aid the duty scheme fee is lost. Marciniak, who is a partner and the leading housing specialist at the firm Miles and Partners, told LAG that it is “unrealistic when the rates are already so low” for firms to be expected to compete on price for the tenders.
LAG understands that many of the HPCDS are run by not for profit (nfp) organisations such as Law Centres. Ling fears that “income from a housing duty scheme can make a real difference to an nfp and some might risk going under if they lose it.”
The LAA is running a consultation on the proposals for the housing duty schemes until 17th March. In addition to price competition they are suggesting that the current schemes should be consolidated by “joining courts allowing for larger and more sustainable contracts for providers.” According to the LAA the results of the consultation are expected 28th April.