What's happened?
Thousands of criminal barristers boycotted the courts of England and Wales on Monday morning in an unprecedented walkout which the lawyers insisted, for legal reasons, was not a strike'.
The barristers are angry at the government's extra £220m of cuts to the £2bn legal aid budget: tightening the means test for claiming it, withdrawing aid from prisoners, encouraging cheaper justice via mediation, and crucially cutting lawyer's fees by up to 30%.
Barristers reckon the cuts will make it uneconomical for them to work in criminal law, putting the whole justice system at risk. According to Max Hill QC, the earliest record of the barrister's role in English law was at Lincoln's Inn in 1466 and this week's walkout was "the first and only time such action has been taken" in five and a half centuries.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
But then some barristers believe the stakes could not be higher: Nigel Lithman, chairman of the Criminal Bar Association (CBA), reckons "the cuts pose the most serious threat to the British legal system in more than 400 years".
How much are barristers paid?
Commercial lawyers charge whatever they can negotiate with clients. Incomes (ie, taxable incomes after expenses) in excess of £100,000, are far from uncommon. For criminal lawyers the ones at the heart of the legal-aid dispute it's a very different story.
According to the Ministry of Justice, the mean fee income' for criminal barristers was £72,000 last year. But that is skewed upwards by a small proportion of exceptionally well-remunerated barristers; the median fee income' was £56,000. Moreover, what the government calls fee income' is not remotely the same as what barristers actually earn.
Why not?
Because they're self-employed independents who have to pay all kinds of unavoidable outgoings before they are left with taxable income. For example, the government says 1,275 barristers were paid £100,000 or more in the financial year ending April 2013.
But that headline turnover' figure includes VAT at 20%, and all the expenses of running the business', including the rental and administrative costs of being attached to a chambers, and in many cases travelling thousands of miles a year to different courts.
In addition, as the government itself concedes, barristers often receive fees in one year that reflect work done over much longer periods.
So how much do they really earn?
The average taxable income is about £36,000, according to the CBA, and only £27,000 according to the Bar Council far less than many other highly-qualified professionals, and much less than what a reasonably successful commercial barrister might expect to earn only a year or two into her career.
Junior criminal barristers, by contrast, can expect to make well under £25,000 and in some cases less than £10,000. Already, criminal barristers have seen fee reductions of 40% since the first Blair government started to try to rein in legal-aid costs in 1997.
The fear now is that if the ever-tighter squeeze means that increasing numbers of able advocates decide the criminal route is simply not worth bothering with, then there will inevitably be more miscarriages of justice (in both directions; criminal barristers both prosecute and defend) and an increasingly mediocre two-tier system, under which legal-aid defendants get less experienced lawyers devoting less time to their cases (see below).
How do other countries compare?
It's a murky picture, since legal systems differ so widely. The Ministry of Justice states that £39 is spent per person on legal aid in England and Wales, against only £5 in France, Germany and Spain a claim that skates over the differences between the adversarial, lawyer-intensive tradition of England and the inquisitorial, magistrate-driven model prevalent on the continent.
The coalition based much of its thinking on the need for reform on a study commissioned from academics at York University (Roger Bowles and Amanda Perry) in 2009, which compared publicly funded legal systems internationally.
It found that the system in England and Wales was "significantly more costly" than in other western European countries, due to the high volume of cases, the high expenditure per case, the high income ceiling on eligibility, the wide coverage of areas of law, and our adversarial legal tradition.
But it also found that while legal aid costs were unusually high, spending on courts and public prosecution were comparatively low. This, the authors conclude, implies that "looking at legal aid expenditure in isolation risked missing important structural differences between justice systems".
Will cuts deliver rough justice?
According to the CBA's Nigel Lithman, the existing legal-aid cuts recently led to a complex fraud trial being placed in jeopardy because a representative for four of the eight defendants approached 17 sets of chambers all of which declined the case due to the extensive unpaid preparatory work involved. If experienced lawyers no longer do criminal work, he says, "you are going to see cases collapsing".
The counter-argument, made by the Ministry of Justice, is that Britain has "one of the most expensive legal-aid systems in the world". In order to protect the criminal justice system, argues Justice Secretary Chris Grayling, legal aid has to made sustainable for the long term by cutting costs now.
(Additional research by Sophie Lewisohn.)
