Official Report (Hansard)

Session: 2008/2009

Date: Tuesday, 03 February 2009

Members present for all or part of the proceedings:

Mr Jimmy Spratt (Chairperson)
Mr Raymond McCartney (Deputy Chairperson)
Mr Alex Attwood
Mr Simon Hamilton
Mrs Carmel Hanna
Mr Nelson McCausland
Mr Alan McFarland
Mr John O’Dowd
Mr Ian Paisley Jnr

Witnesses:

Mr Paul Andrews )
Mrs Jacqui Durkin ) Northern Ireland Court Service
Mr David Lavery )
Mr David Thompson )

The Chairperson (Mr Spratt):

I welcome the representatives from the Northern Ireland Court Service, and I thank them for coming here today to help us with our inquiry into the devolution of policing and justice powers, and, in particular, to answer questions on financial issues.

I welcome David Lavery, the director of the Court Service; Jacqui Durkin, its head of court operations; David Thompson, its finance director; and Paul Andrews, its head of publicly funded legal services, which deal with legal aid. I anticipate that the session will last for up to an hour and will mostly involve questions from members. I invite you to make a brief statement, and then I will ask you to leave yourselves open to questions.

Mr David Lavery ( Northern Ireland Court Service):

The Court Service welcomes the opportunity to assist the Committee with its deliberations. As the Committee will be aware, we wrote to the Committee Clerk on 9 February 2009, providing an overview of the Court Service’s financial position. Together with colleagues in the Northern Ireland Legal Services Commission, we submitted a joint memorandum, dated 26 February, which provided an overview of the legal-aid system in Northern Ireland and the financial pressures to which that system has been subject.

Other aspects of the Court Service’s financial position — apart from legal aid — are dealt with in the letter of 9 February, which we sent to the Committee Clerk. We shall draw particular attention to what we said in that letter about the court-building programme in Northern Ireland, inquests and, perhaps, judicial costs.

Apart from those brief introductory remarks, Chairperson, I do not propose to make any other formal statement. We are pleased to assist the Committee in any way.

The Chairperson:

Before I begin, I declare an interest as a member of the Northern Ireland Policing Board. I invite Committee members to do the same.

Mr Paisley Jnr:

I am a member of the Policing Board.

The Chairperson:

There is no one else present who is required to declare an interest.

Can you outline some of those costs, Mr Lavery, particularly the court-building costs?

Mr Lavery:

The Committee has invited us to provide an overview of the budgetary pressures to which the Court Service will be subject for the remainder of the comprehensive spending review (CSR) period and beyond. We have identified a number of such pressures, of which the most significant by size and challenge is, of course, the immediate legal-aid pressure that has preoccupied the Committee today. We estimate that it will cost £60 million over the next two years.

We have also brought to the Committee’s attention the fact that there is a build-up of demand for improvements to the court estate in Northern Ireland. We have projected a total capital cost of the order of £100 million of work that lies ahead of us but for which we have not been funded in the current CSR round. We thought it appropriate to draw to the Committee’s attention some other pressures that will arise over the next couple of years.

The only one that might be described as explicitly devolution-facing is assimilation costs for staff who will join the Northern Ireland Civil Service. The Northern Ireland Court Service is technically a separate civil service, and there are some slight differences in our terms and conditions around salary scales and grading structures. Clearly, if we become part of the Northern Ireland Civil Service on devolution of justice powers, our staff will cease to be Northern Ireland Court Service civil servants and become members of the wider Northern Ireland Civil Service instead. Should that happen, there would be a need to assimilate our grading structure and our salary structure. We have projected a cost of approximately £400,000 over the next two years in order to achieve that. There are some slight differences in some of our pay scales that would have to be addressed. We can examine that in greater detail if it would assist the Committee.

In my letter, I also identified a pressure of £7·5 million for judicial costs, even though those have not been created by the proposed devolution of powers. I tried to explain that there is a constitutional principle that judicial salaries should be paid out of the Consolidated Fund. In other words, it should not be in the gift of an Assembly or a Parliament to vote money to judicial salaries. For largely historical reasons, the amount of money in the Consolidated Fund for judicial salaries in Northern Ireland has been capped, or has marked time, at a particular level that is no longer sufficient to cover the totality of judicial salaries and other costs. In practice, we are making up the shortfall from our departmental budget. That situation must be addressed under devolution in order to place all the money for judicial salaries into the Northern Ireland Consolidated Fund. It is simply a means of underscoring the principle of judicial independence.

However, we have also identified some judiciary ancillary costs. For example, in the past couple of years, some concessions were made on the taxation treatment of judicial pensions, which were funded at the time but have not been funded for new judicial posts. Therefore, as new judges are appointed, the costs associated with the adjustment to the taxation of judicial pensions fall to the Court Service. That amount is building up over time, and we have identified it as part of the £7·5 million judicial costs.

We have also identified the need to take up some additional responsibility for judicial transport. As the Committee is aware, during the Troubles, and up until now, many judges who have dealt with criminal cases in Northern Ireland have received police protection and have been driven around in police cars. However, part of that infrastructure is likely to change this year. There will be a consequential impact on the Court Service’s budget as we take up the slack and provide travel allowances. In some cases, if a judge were travelling a very long distance over many days to preside over a trial, we might have to provide a car-pool facility, in the same way as — dare one say it — Ministers and senior public officials have such a facility. Therefore, we have also factored in that cost.

We have also identified an estimated figure of £2 million for inquests. There are around 20 so-called “legacy inquests” going back a number of years, and those will now come before the Coroner’s Court in Northern Ireland. Those cases gave rise to issues concerning the European Convention on Human Rights and were the subject of litigation that has been before the courts for many years. A backlog of cases in which the European Convention on Human Rights is relevant has built up. With some recent decisions made by the Appellate Committee of the House of Lords, those legacy inquests are now in a position to proceed, and they will be expensive cases to administer.

The complex nature of the cases is such that the coroners will almost certainly require additional legal support, by way of appointment of counsel, to assist them in the preparation of their cases, and in the presentation of the cases at the inquest. Therefore, we have included an estimate of up to £2 million, which includes a figure for the appointment of an additional coroner. We have temporarily appointed one additional coroner to build up the capacity of the coroner system to deal with cases that are, by their nature, complex, and are likely to last many weeks or months.

We have also declared a very small amount in our pressures for tribunal reform. As the Committee may be aware, the Northern Ireland Executive agreed in principle that the Court Service would assume responsibility for running Northern Ireland’s tribunals, and one of the steps that we propose to take is to bring together administrative staff. There is a multiplicity of small tribunals in Northern Ireland, and we think that we could achieve efficiencies by bringing some of the staff together into a common back office, but accommodation and staffing costs are associated with that.

We have declared total resource pressures of around £70 million, and a capital pressure, primarily for building new courthouses, of £100 million.

To conclude, the legal-aid pressure, which has preoccupied the Committee today, is an inescapable pressure. Those liabilities exist, and they are in the system. Bills will have to be paid, but funding has not been provided in the legal-aid baseline to do that. The only other inescapable pressure is the devolution assimilation costs for staff, which amount to roughly £400,000. All the other elements are matters that the Court Service will want to do, or will be obliged to do, in the next few years. Therefore, it would be remiss of us, at least, not to declare those to the Committee so that members are aware of the level of pent-up demand for expenditure in some areas.

The Chairperson:

The £100 million figure for new courts is out to consultation at present. Does that amount include expenses for high-tech IT equipment and other specifications?

You were present to hear the Northern Ireland Legal Services Commission’s evidence to the Committee. Have you any comment to make about the fact that legal-aid costs in Northern Ireland appear to be higher than those in other parts of the United Kingdom? It appears that high costs here are down to legal costs and payments to legal professionals. It seems that our pay scales and billing scales differ from those operating in other parts of the United Kingdom. Have you considered reforming that policy, or has any work been done to bring our costs into kilter with the rest of the United Kingdom?

Mr Lavery:

You said that the court-building programme was the subject of a public consultation. At present, we are consulting about a proposal to change the way in which we operate a number of the smaller courthouses. We are suggesting that five courthouses become hearing centres. Rather than open from Monday to Friday to provide office facilities but have court hearings on only one or two days a week, we are suggesting that they become limited-opening courthouses, which we call hearing centres. Therefore, the courthouse would open only on days on which a court hearing was taking place. The office would be open for normal business on court sitting days, but the office facilities would be provided from other larger courthouses in the same locality on the other days of the week.

Our proposal applies to the five smallest courthouses. We have published a consultation paper on that type of rearrangement at Bangor, Limavady, Larne, Strabane and Magherafelt courthouses.

The Chairperson:

Would that create efficiencies?

Mr Lavery:

It would, but they would be fairly modest. It would not be necessary to heat and light the building on the days on which it was closed, nor would security and the associated paraphernalia be required. The staff would continue to work, but they would be relocated on non-court sitting days to another court office, from where they would perform their duties.

The £100 million, about which we have notified the Committee, is to improve the court estate, which is an estate of variable quality. Recently, we opened some modern courthouses in Belfast and in Dungannon, and they are among the best in Europe. However, we have some old buildings as well, some of which date back to the nineteenth century. They are difficult to adapt to modern expectations. For instance, it is difficult to provide disability access to those buildings.

We also must face such issues as population and business growth in some areas, so that figure comprehends a range of expenditure, the most pressing of which is Ballymena courthouse. It will need to be closed for major refurbishment, because it needs a roof replaced and a great deal of remodelling work.

We have also identified the need to replace courthouses in Lisburn, Newtownards and Bangor. Lisburn has outgrown the capacity of its existing building. We hope to develop a new and better courthouse for Lisburn. The Court Service believes that Newtownards and Bangor courthouses could probably be replaced by a new and better courthouse serving north Down. There is also considerable pressure on Londonderry courthouse. Derry has a very busy court, and we have plans to redevelop the administrative block in order to provide additional court capacity there.

Our projection, including for courtroom technology, is a total capital spend of the order of £100 million. That simply is not in the budget. As I explained to the Committee, our budget is about £21 million in capital spend over 2008-09, 2009-2010 and 2010-11. That is something of which the Committee should be aware. It is something about which we will return to the proposed Department of justice and the Department of Finance and Personnel.

The Chairperson invited me to comment on the issue of legal aid, and we heard the observations of colleagues in the Legal Services Commission. The legal-aid system in Northern Ireland was established in 1965, and it provides access to justice for many people. We must not lose sight of that. More than 70,000 received support in dealing with legal problems last year; therefore, legal aid provides an opportunity for people to address legal grievances or to have representation in court proceedings that they might not otherwise be able to afford. Legal aid is an important service that provides people with a great deal of assistance.

However, in some areas, expenditure is unquestionably higher than it is in comparable regions of the United Kingdom or Ireland. There is a number of reasons for that. First, there is a relatively high degree of social deprivation in Northern Ireland. The Committee knows, and Mr Daniell from the Legal Services Commission explained, that entitlement to legal aid — civil or criminal — begins with an assessment of the person’s ability to pay for his or her legal representation. In order to obtain legal aid, a person must satisfy the appropriate authority that he or she does not have the means to pay for the case.

Serious criminal-legal-aid cases that end up in Crown Court, such as those discussed earlier, begin in the Magistrate’s Court, where 80% of defendants charged with indictable offences qualify for legal aid. Thus, a substantial proportion of people who appear before criminal courts, particularly on serious criminal charges rather than for minor offences, such as motoring offences, is eligible for legal aid under the current scheme.

The criminal-legal-aid scheme is a free scheme, not a contributory one. Once someone qualifies for criminal legal aid in Northern Ireland, legal representation is paid for by the taxpayer. Unlike civil legal aid, which may require a contribution, if a person qualifies for criminal legal aid, he or she is provided with solicitor and barristers free of charge.

A third factor that has a bearing on all of this is the volume of cases. Although the number of civil cases going before the Northern Ireland courts has declined, there has been a steady growth in the number of criminal cases. In the period for which we have provided statistics to the Committee, there has been a 29% increase in the number of Crown Court cases, which are the most serious and tend to require the greatest amount of work and legal representation. Hence, the volume of cases before the courts acts as a driver for legal-aid applications.

I must also concede that there has also been a growth in the average cost of cases. It is not just a case of more cases costing more money — the average cost of criminal cases has been growing. A particular growth area that the Committee has already discussed with our colleagues from the Legal Services Commission is that of very-high-cost criminal cases, which are the most expensive Crown Court cases. We have been surprised at the number of those qualifying as very-high-cost criminal cases. That is something at which we may need to look.

We thought that the threshold would be such that we would have one third of the number of cases that has been coming through the system. There is clearly something there for which we have not planned. We are getting a higher volume of very-high-cost criminal cases, and once a case is certified as being a very-high-cost criminal case, it is not subject to a system of prescribed standard fees. The remuneration for the lawyers who work on those cases is assessed by a judicial official known as a taxing master after the case is concluded.

No one knows how much those cases will cost, or how much the Legal Services Commission will have to pay, until the case is concluded and an assessment of costs has been made. That has been the cost driver that has confronted the legal-aid system in the past year or so.

The additional £24 million that had to be provided for legal aid in the financial year that is just ending, 2008-09, is almost entirely attributable to that greater incidence of very-high-cost criminal cases. We have had more of them, and they have cost us more in legal fees than we would have expected.

The Chairperson:

You say that you may need to look into those cases. Should not you be looking into them?

Mr Lavery:

We will certainly address your further question as to whether any planning has been done in order to address that.

If I can refer members briefly to the memorandum that we submitted, it states that there is a very substantial disparity between the average cost of criminal legal-aid cases in the Northern Ireland Crown Court in comparison with that in England and Wales. The Chairperson earlier drew attention to the fact that we have projected an average Crown Court case cost of more than £13,000 — almost £14,000 — compared with £6,300 in England and Wales.

I do not believe that the Scottish figures would enable us to compare like with like. The figures for what are known as solemn proceedings there, which are the more serious criminal cases, are much higher.

In sticking to the figures that we can stand over, it costs almost £14,000 for a Crown Court case in Northern Ireland and £6,300 in England and Wales. In his evidence, Mr Daniell stated that £13,887 is on the high side. He explained the way in which that figure had been calculated, which was to take the average cost of a Crown Court bill and multiply it by three. That was done on the assumption that every Crown Court case involves a solicitor, a barrister and a senior barrister, or QC. That average has been calculated by taking into account the fees that QCs, ordinary barristers and solicitors charge. If we could calculate more exactly the average cost of each case — rather than the average cost of each bill — it would be somewhat lower than that, but it would certainly not be £6,300.

The Chairperson:

I am sorry to interrupt, but you say that the cost of the bill is multiplied by three to represent the fees of a solicitor, a junior barrister and a QC. Do court cases in other parts of the United Kingdom involve a solicitor, junior barrister and QC? Is that the norm, or does Northern Ireland have, because of the Troubles, and so on, a culture of dealing with cases differently from England and Wales or from Scotland? Is it possible that their court culture does not require a solicitor, junior barrister and QC in every case? Are we paying through the nose?

Mr Lavery:

I was trying to reach that point. The level of legal representation in cases is one of the cost drivers in Northern Ireland. In criminal cases, the norm is to have both senior and junior counsel, as well as a solicitor. By comparison, in Crown Court cases in England and Wales, many more cases are dealt with adequately by a solicitor and one counsel, rather than by a solicitor and two barristers. We intend to address that, because it is clearly a cost driver. If the average bill had simply to be multiplied by two rather than by three, the result would be a lot closer to the English figure — it would be perhaps £8,000, rather than £13,800. Clearly, the level of representation is a cost driver and something to which we have regard.

At present in Northern Ireland, the level of representation that there will be in a Crown Court case is a judicial decision. The defendant appears for the first time before a Magistrate’s Court on the preliminary charges before the case is eventually transferred to the Crown Court for trial. As I explained in my introductory remarks, 80% of defendants qualify for legal aid at that point and receive it free of charge. The magistrate decides then whether to grant a certificate for one or two counsel. Therefore, right at the very beginning of a case, when it is starting on its way along the production line as it were, a judicial figure decides to allocate a QC to a case; however, that may change later.

I think that you are looking for ideas or suggestions about that this morning. There may be a case for deferring the decision to bring in senior counsel to a much later stage, when the Crown Court judge who will try the case has read the papers and has had an opportunity to decide the case’s level of complexity and, indeed, whether it is going to trial. Although every case starts with the intention of going to trial, many are resolved by way of a guilty plea and do not proceed to a fully contested trial. Therefore, there may be a case for deferring that decision.

The Chairperson:

I have to say that I am becoming more and more worried about what you are saying.

Mr Lavery:

I mean to reassure you.

The Chairperson:

You tell me that a judicial figure decides the level of representation at a particular stage of the production line. To me, that smacks of jobs for the boys the girls, and it therefore needs to be examined. You said that the commission and Court Service intend to address that.

The situation has become very worrying. We will have to consider this matter seriously in relation to devolution. There is now a need to examine it, because spiralling costs and the growing cost of legal aid, which seems to be a year-on-year pressure, have obliged you to go to the Treasury annually. The time for addressing it has passed: to be blunt, it is now time for action.

Nelson McCausland has joined us. Do you have any interests to declare, Mr McCausland?

Mr McCausland:

I am a member of the Belfast District Policing Partnership.

The Chairperson:

Thank you, Nelson.

I am sorry to have interrupted you, Mr Lavery, but some of the things that you said worried me.

Mr Lavery:

I am trying to reassure you somewhat. You invited us to address what can be done about this, as you did Mr Daniell. Some of the areas that we are addressing involve changing to having a more robust system of standard fees for cases, for example. Any system that leaves assessment of the cost of the case to the end of proceedings brings with it an element of unpredictability.

We have started a process of introducing a regime of standardised fees for criminal cases. Many Crown Court cases are subject to standard fees already, where the fee is set through legislation — by the Lord Chancellor at the moment and, in the future, by the Northern Ireland Minister for justice — so it is clear at the outset how much a case will cost, irrespective of how long it lasts. We think that that is a clear way of introducing cost control and efficiency. It seems safe to assume that if lawyers know that the case will attract a particular set fee and that that fee will not get any bigger, regardless of whether the case lasts longer, that will act as an incentive toward efficiency.

However, in the past year or so we have had a problem in that we have not, as yet, introduced standard fees. The very-high-cost cases are, by their nature, assessed ex post facto by a judicial figure, and there is no sufficient predictability in the way in which those fees will turn out. We have been in consultation with the legal profession regarding immediate reforms, and we plan to introduce a new system of fees for very-high-cost cases. That will be based on the corresponding rates of remuneration in England and Wales. That will require solicitors and barristers to account for the amount of work that they do and the time that they spend doing it, rather than the traditional way, whereby counsel marks their fees. That is based on what is called a brief fee, which is a composite fee that includes all the preparatory work done, as well as up to and perhaps including, the first day of the case.

Early in the new financial year, we plan to introduce a new fee regime for the very-high-cost criminal cases, and that will be based on the level and structure of remuneration for England and Wales. That will be an immediate way of introducing a greater degree of cost control and budgetary predictability.

However, I cannot pretend that it will have any impact on the cases that are in the system already, because I cannot change retrospectively the basis on which those cases have been taken on. Some of them have been completed already, and the bills are waiting to be paid. However, it is intended that from April onwards, cases for which criminal legal aid has been awarded, which become very-high-costs cases, will be remunerated at the same rates as in England and Wales. That seems to us to be an immediate way to address cost control.

More generally, I would offer standardised fees as a response. Standard, predetermined fees, where one knows in advance what one will get, and prompt payment of those fees to give people predictability and cash flow, is the right road to go down. That will gradually close off those other avenues where the assessment of the fee is at large and is an ex post facto assessment. The fewer of those situations that there are, the better. Our overall objective is to achieve cost control and budgetary predictability, as well as value for money.

I am sorry that I am monopolising the discussion, but I should say that the Committee should be encouraged not to look solely at criminal legal aid. Civil legal aid has also seen quite a lot of growth, particularly in the area of matrimonial and children’s cases. Again, it seems to us that the single biggest cost driver is the level of representation; the number of lawyers that are used in each case has gone up significantly. In children’s cases, it is quite common for many of the parties — not only the child, but the parents and, perhaps, grandparents — to have their own separate legal representation. That is one of the explanations for the significant growth in that area of civil legal aid. Again, we intend to address that.

I am sorry if I have monopolised the discussion on that point, but I wanted to give the Committee some sense of what we are looking at.

The Chairperson:

Just before I invite members to speak, for the record, will you clarify that you said that, over the entire CSR period, you have £20 million of capital available, and that the annual amount is £4·8 million for next year, £8·8 million for the following year, and the capital spend of £100 million is completely uncovered at present? Is that correct?

Mr Lavery:

Yes. Our capital allocation for 2008-09, 2009-2010 and 2010-11 was, I think, £21·8 million. That allows us to maintain our court estate and begin the repairs to the Ballymena courthouse, which was referred to earlier. However, as far as building a new courthouse anywhere is concerned, that sum would not look at it. We thought that it was appropriate to at least alert the Committee to the fact that there is a bit of a pent-up demand for that type of remedial work.

Mr Paisley Jnr:

Thank you for your very helpful presentation and for the letter that you forwarded to us on 9 February. First, I would like some clarification on a figure that is listed on page 5 of that letter. A summary of the budgetary pressures is provided, and a figure of £60 million is identified for legal aid. Is that the same £60 million legal aid pressure that the Legal Services Commission talked about?

Mr Lavery:

Yes.

Mr Paisley Jnr:

Does that mean that it is not a separate figure?

Mr Lavery:

Fortunately, yes.

Mr Paisley Jnr:

You are reassuring us with that answer.

The second issue concerns your comments about trying to drive costs down. What will be the practical outcome of your suggestions on how to do that? Will the legal profession accept that radical change? Would there be any impact? I suggested to the previous witnesses that there may be a strike. What are the real, nitty-gritty, down-to-earth repercussions of pursuing what you suggested to us?

Mr Lavery:

You are encouraging me to speculate. However, a recent example is the disruption to the work of the Crown Court towards the end of last year and at the beginning of this, when counsel refused to appear in cases. Their complaint — which was shared by solicitors — was about the length of time that it was taking to pay for very-high-cost criminal cases.

Mr Paisley Jnr:

You cannot argue with money.

Mr Lavery:

Part of our difficulty was that we were not funded to pay those cases; we had to secure additional funding to pay the bills that were in the system. However, the Bar Council passed a resolution stating that counsel need not accept or retain instructions on any matter about which they were not satisfied that they would be paid a reasonable amount within a reasonable period of time.

One might view that as a bit of a shot across our bows. However, I think that the authorities in the legal profession — the Bar and the Law Society — realise that we are moving into a different world where they are negotiating for fees, ultimately, with the Northern Ireland devolved Administration rather than with the Treasury in London. They realise that they will be just one of the many sectors of our community competing for finite resources. We have had those conversations with those organisations. In future, there will be no blank cheques, which was a term that somebody used earlier this morning. If we want an increase in the legal aid budget in Northern Ireland post-devolution, anything that is allocated will be money that cannot be spent on schools, healthcare, housing or social welfare.

Mr Paisley Jnr:

We want to ensure that we know the consequences of seeking this money. You are telling me that what is desirable is possible, but that there may be a few bumps in the road.

Mr Lavery:

I do not think that any practitioner would embrace any Government initiative that would restrict either the number of opportunities to undertake publicly funded work or the rate of remuneration that is paid for it. However, we have been very clear with both professional bodies — the Bar and the Law Society — that there will inevitably be a need to reduce the cost of publicly funded legal services in Northern Ireland.

The Chairperson invited me to explain what we were doing. One thing that we need to do — and that we are considering — is having what one might call smarter procurement. We are one of the bulk purchasers of legal services in Northern Ireland, as is the Public Prosecution Service and perhaps the Central Services Agency (CSA) and one or two others. It ought to be possible for the bulk purchasers to co-ordinate activities somewhat better than has been done in the past so that the cost of legal aid does not drive, say the PPS, to increase the fees that are paid to prosecutors or vice versa — that the fees paid to prosecutors do not drive the cost for defence lawyers.

I think that we need to work in a more joined-up way. Personally, I believe that the devolution of justice to Northern Ireland will not only provide the opportunity, but it will present the necessity to do that. As you speculated, there will be bumps along the way.

In case I do not get the chance to say this, I should point out that one has to acknowledge that there has been an element of historic underfunding of the legal aid budget in Northern Ireland. It is an incomplete picture to simply ask how the Court Service let the situation get out of control. At the minute, and as Mr Daniell explained, the legal aid system is designed to be demand led; it helped 70,000 people to access justice in 2008. Given how it is now structured, it probably costs about £80 million a year, rather than the £65 million that is in the system. It will ultimately be for those in the devolved Administration to decide how much they want to spend on publicly funded legal services. The system is there to help people — not to help lawyers.

Mr Paisley Jnr:

Make no mistake about it — my personal objective is to achieve an outcome where devolution delivers a system that is better, not for the lawyers or the courts, but for the people. We are, ultimately, the people’s servants, and we must ensure that what we get out of this process is better.

I want to ask about judicial salaries expenditure. You said that that amounts to £7·7 million per annum, the lion’s share of which comes from the Consolidated Fund. The Court Service has to fund almost one third of that total, and by next year, the figure will be almost 40%. Is that a strike at judicial independence? It seems to me that it is a real blow to judicial independence, bearing in mind the saying “he who pays the piper”.

Mr Lavery:

It is wrong in principle, and the Northern Ireland Act 1998 more or less obliges us to reposition judicial salaries into the Consolidated Fund. It states that for that reason, the control of judicial salaries is reserved or excluded from the devolved Administration. It is a constitutional principle in the South of Ireland, Scotland, England and Wales that judges do not have to wait for the Parliament to vote on their salaries each year.

I pay a substantial sum of money annually from my departmental budget —

Mr Paisley Jnr:

You should not be paying that.

Mr Lavery:

I should not be paying it. However, I have to, because the Treasury froze the amount of money that is available for judicial salaries.

Mr Paisley Jnr:

We need to examine that matter at the point of devolution.

Mr Lavery:

The Treasury will look at the matter by moving the money from the Court Service budget into the Consolidated Fund, with the result that I will be £2 million worse off.

Mr Paisley Jnr:

I understand your point. You also mentioned that the sum for transport arrangements will amount to £800,000 in 2009-2010. I understand that, historically, when a judge was under threat — which all of them were, wrongly, for a considerable period of time in our country’s history — they received a threat assessment and were given a police escort. If such a threat has been removed, which I understand has happened for a considerable number of judges, that would mean that they would no longer need police protection. Therefore, that would mean that in addition to their pay, they would receive the perk of a driver and vehicle. I have no difficulty if that aspect of the job is outlined upfront. However, there appears to have been some sort of sleight of hand whereby one day the Police Service is paying for the transport because of the threat, but when that threat is removed, the Court Service pays for it because the police can no longer afford to. How did that state of affairs arise? Does every judge or magistrate in England and Wales have a driver?

Mr Lavery:

No. Those costs are modelled on comparable jurisdictions. We have looked at the situation in England, Wales, Scotland and the South of Ireland, and we have developed proposals that we are discussing with judges. If judges no longer require police protection, we expect them to make their way to court under their own steam, as is the case in other jurisdictions.

However, as you will appreciate, a judge may have to be assigned on a peripatetic basis in some cases, which means that instead of being assigned to Laganside Courts in Belfast, for example, from Monday to Friday, some judges are a floating resource that can be deployed all over the place. Indeed, on appointment, all judges at County Court and Magistrate’s Court level operate on that basis for years.

Just as in any other walk of life, although someone cannot claim motor mileage or travel and subsistence for journeys between their home and their base, they are entitled to claim mileage for business travel. Part of that figure is a reflection on a calculation of how much we think judges would be entitled to claim for motor mileage at Civil Service rates. If, for example, a peripatetic judge who is based in Belfast is sent to Antrim courthouse, he would be able to claim mileage for the distance between Belfast and Antrim. Otherwise, he would bear that at his own personal expense. That is considered to be business travel.

You referred to a “perk”, although I would not describe it as such. We have also factored in that it may be reasonable, on hardship grounds, to have a car-pool arrangement; for example, when a coroner has to go to Enniskillen for three days to carry out an inquest, he could be driven there and could work on his papers in the car on the way there and on the way back.

Mr Paisley Jnr:

Would access to that car-pool arrangement be standard for all judges? Would it be cheaper to have that arrangement?

Mr Lavery:

It would be controlled. The proposals on which we are consulting require the Lord Chief Justice, as head of the judiciary, to effectively act as gatekeeper. Our current suggestion is that a judge who routinely travels a round trip of more than, for example, 130 miles on two or more consecutive days may be able to apply for a pool car and a driver. That is, ultimately, at the Lord Chief Justice’s control. However, you can see that it is a way to address wear-and-tear issues. I am not sure that I would describe it as a perk. It is not unlike other aspects of public service where similar facilities are available.

Mr McFarland:

Would a peripatetic judge who travels back and forth regularly from home in north Down to work in Belfast, but who is considered to be able to work anywhere, get any mileage?

Mr Lavery:

No. That is a matter for Revenue and Customs. Its advice is that that travel is regarded as normal commuting, for which people are not entitled to business expenses.

Mr McFarland:

Can you bring me up to date with the situation as regards the reorganisation of the Court Service? My understanding is that it is due to become an agency. The Committee discussed previously the possibility of the service becoming some form of board that is run by the Chief Constable. Can you indicate the sort of costs that are involved in that? The other area that we are curious about is the cost to the DPP and where it might fit into the system as regards how it will be looked after.

Mr Lavery:

I am not an expert on the latter point. I believe that the Committee will take evidence from the Public Prosecution Service. Without wanting to dodge the question, the matter is probably best raised at that meeting.

When the Committee was kind enough to invite us to give evidence in September 2007, we explained that on devolution, the Northern Ireland Court Service would cease to be a separate public service in its own right and that it would initially be an agency of the new justice Department, like the Prison Service, the Probation Service and other associated parts of the justice system. However, during that session, the Committee took evidence from the Lord Chief Justice — and, I must say, I hope that it will be the Lord Chief Justice and not the Chief Constable who heads the Court Service. I believe that that was a slight slip of the tongue.

Mr McFarland:

It was; I am sorry.

Mr Lavery:

That is unless you have something planned for me that I have not anticipated.

Mr McCartney:

Back to the old days, Alan.

Mr Lavery:

When the Lord Chief Justice gave evidence to the Committee, he said that there would be merit in looking at how the courts in the South of Ireland are run, and at what is planned for Scotland, where the Scottish Court Service will be put more at arm’s length from the Scottish Government’s justice directorate. As is the case with the Courts Service in the South of Ireland, the Scottish Court Service will be a non-ministerial Department — a civil service Department that will be run as a board, rather than as an agency of the Scottish Justice Department. That board would be chaired by the chief justice in Scotland and would comprise public representatives and executive members.

It is interesting that the issue of where the courts and the judiciary fit into the justice system in Northern Ireland is being examined alongside a similar process in Scotland. The Scottish Court Service began as an agency of what became the Scottish Justice Department, but it was decided that that was not the best arrangement, and they looked consciously at the system in the Irish Republic, where the Courts Service is run by a board that is chaired by the Chief Justice of Ireland and that comprises judicial, legal and lay and business representatives. It is thought that the benefit of that arrangement is that it puts the courts and the judiciary at arm’s length from the Irish Department of Justice, Equality and Law Reform and that it is more compatible with the principle of judicial independence. It is also felt that that is a better space in which to place that aspect of the delivery of a public service.

The Committee’s reports have indicated that it intends to return to that issue at some point. On day one of devolution, however, we in the Court Service will have to be an agency, because primary legislation will be required to reposition us in the way that I am talking about.

Mr McFarland:

Are there more costs attached to the Court Service becoming an agency under devolution than there would be if it were moved over in its current state?

Mr Lavery:

Not that I have identified. The costs that I referred to, such as those attached to the assimilation of our staff into Civil Service grades, would be the same either way. In a previous evidence session, I suggested to the Committee that it would be of real benefit to our staff to become employees of the Northern Ireland Civil Service, because they are a small and isolated mini-service at present. Joining the wider Civil Service would have many benefits for them, such as broader career opportunities.

Mr Attwood:

I apologise to the Committee and to the witnesses; I have had business to attend to on the Floor of the Assembly, and I have been in and out of the Committee meeting. As you know, Mr Lavery, the reason for these evidence sessions is to create certainty about the financial issues on the subject. Therefore, I have a couple of questions to ask in that regard, and then I will ask a broader one.

First, I wish to create certainty about what you consider to be the inescapable resource pressures. In the paper that you submitted to the Committee, you highlighted four or five matters, and you emphasised two as being inescapable pressures. Although you say that all the matters that you referred to were inescapable pressures, you repeated that assertion for two particular issues. Yet, in the evidence that you gave today, you said that the inescapable pressures were staff costs and legal aid. In order for us to have certainty, given that this process has a wide audience, including the representatives of at least two or three Governments, and in order to inform negotiations that are going on elsewhere and to inform our report, can you tell us what you believe will be the inescapable pressures over the next two years? Are they legal aid and staff costs only, or are there more from the other menu of issues that you identified in your submission?

Mr Lavery:

I will deal with that first. To avoid any possible misunderstanding, the two inescapable devolution-specific costs are legal aid, which will cost £60 million, and staff devolution costs, which we have projected will cost £400,000. All the other matters will have to be attended to whether devolution happens or not — they are not, in that sense, devolution-dependent. For example, I identified £2 million that I project to be the cost of dealing with some of those inquests. If devolution were not to happen, I would still have to find £2 million to pay for those inquests, because they are not devolution-specific.

Mr Attwood is absolutely right to invite me to summarise the two inescapable financial pressures of devolution, which are legal-aid costs at £60 million and staff-assimilation costs on devolution at £400,000. The judicial costs, which is in the grey area closest to devolution, become an issue on devolution simply because, as I tried to explain, it is inappropriate for judicial salaries to be paid out of a departmental budget. Therefore, at the very least, the money that I will use from my budget to pay judicial salaries this year needs to be repositioned within the Consolidated Fund. I would much prefer it if new money were put in — a proposal that Mr Paisley encouraged me to agree with — because the payment of judicial salaries out of the Court Service budget is a disadvantage to me. The two inescapable financial pressures of devolution are legal-aid costs and staff-assimilation costs.

Mr Attwood:

Can you confirm that you are not making a case to the Committee, or to others, for some flexibility around the £10 million of pressures that you identified for 2009-2011, the final two years of the current CSR period, to address those pressures?

Mr Lavery:

We certainly identified those pressures, and every department in the justice system will do exactly the same. We must draw the line somewhere; it cannot turn into a Dutch auction at which everybody produces everything that they want to do.

I hope that I have not misled the Committee. What I have tried to do is to encourage you to carry out a bit of due diligence before you take this on, so that you know that there are some inescapable costs — legal-aid costs and staff costs — and, so that you aware that there is a build-up of demand in the system. Whether devolution happens or not, the courthouse in Bangor needs replacing, because it is not fit for purpose. Therefore, the process is more akin to due diligence. I have reflected those pressures in some of the pre-devolution discussions that have taken place. I draw a line under legal-aid costs and staffing costs as the points at which those pressures become inescapable.

However, if policing and justice powers are devolved, I will ask the justice Department for £2 million for those inquests and £100 million for court buildings, just as I would in the normal bidding environment in government.

Mr Attwood:

One of the useful benefits of this evidence session and the previous one is that people will be able to move forward with their eyes wide open to what some of the cost consequences of the devolution of policing and justice powers will be, whether they be for the Court Service, the Prison Service or elsewhere in the system.

I have a passing familiarity with the legacy inquests, and I am a wee bit surprised at the fact that the pressure point for those may be as little as £2 million. Given the complexity of the issues raised by those inquiries, I would have thought that the sum might have been higher. You can hold that answer for a second.

It seems that, unless the legal profession demonstrates some flexibility with ongoing very-high-cost cases, we are where we are in respect of legal-aid costs. This Committee cannot run from the consequences of that. We might not like where we are and how we got here, and we may like the new regime that the Court Service and the Legal Services Commission will introduce from April. However, it seems that we cannot escape the consequences of the matters that have been outlined today.

Nonetheless, it would be helpful if you could indicate what you think the average cost of criminal legal aid in Northern Ireland will be once the new regime starts in April. Will it be somewhat higher than £6,300, which is the average cost of legal aid in England and Wales, or will be closer to £13,887, which is the average cost in Northern Ireland at present? Answer those two questions, and I will return to my final point in a minute.

The Chairperson:

Do you have another question?

Mr Attwood:

I will wait until I hear David’s answer.

Mr Lavery:

On the first point about inquests, I also acknowledge that that is a projection, which may prove to be right or wrong. Of the £2 million attributed to the inquests, I am confident about £400,000 of that, which I know to be the cost of the additional coroner and coroner’s staff that I have put in place to build capacity in the Coroners Service. I know that there will be an influx of new cases, and that there are at least 20 legacy cases. I know that those will take up a great deal of the senior coroner’s time, so I have backfilled the system by asking the Judicial Appointments Commission to appoint an additional coroner.

The balance of £1·6 million is a projection of how much I think that I will need in the remainder of the current CSR period to pay towards those cases. However, I am not overly confident, given the pace at which they are being dealt with, that those cases will not spill into the following CSR period. Those cases may have a longer tail, and, if so, further funding will be required from 2011-12 onwards.

I can offer a fair degree of certainty about the £2 million for 2009-2010 and 2010-11, but I am not sure whether the job will be done by then, or whether a proportion of those cases will extend into future years, for which funding will be required. I can see in front of me only the first two years of the cases.

On very-high-cost criminal cases, it is transparent from the figures we have provided to the Committee that the problem is not just the £60 million for 2009-2010 and 2010-11 but the £45 million to £50 million in the next three years. As Mr Daniell explained, and he used the analogy of the oil tanker, until those legacy cases are out of the system, there is an accumulated liability in the legal-aid system. Even if all the reforms that I have mentioned are introduced from this April, they will not have an impact until much later. I believe that it will be the third year of the next CSR cycle before costs come down.

Mr Attwood:

Five years’ time?

Mr Lavery:

At the current rate of reform, and given the cumulative liabilities, it could be the fifth or sixth year.

You asked me how much the cost could be decreased. I do not think that it can be decreased to £65 million, which is the legal-aid system’s baseline as it currently operates. There is an irreducible value or around £80 million at present.

To reduce that to £65 million would require some radical surgery. One would either have to stop certain types of legal aid or go much further than we suggest is currently possible, and redesign the system. It may simply have to be decided that nobody gets senior counsel in certain categories of work, or that, in children’s cases, not every member of the family needs a solicitor and a barrister, and perhaps a senior barrister. The system would have to be radically redesigned.

That is why I also have an appetite for Mr Daniell’s view, whose contribution I watched on a monitor in the Great Hall, having left the Senate Chamber. He spoke of the need for a fundamental re-examination of how legal aid should be supplied in this country. Whether almost £7 million should be spent on a non-departmental public body (NDPB) to run the legal-aid system is a legitimate question, as is whether legal aid should be delivered in the way in which it is at present. That is why, at the end of the paper that the Court Service submitted jointly with the commission, it is stated that we want to develop some strategic options for the incoming Minister to consider.

Mr Attwood:

As you see it at the moment, in five or six years’ time, on current costings, the budget line would be at least £80 million. Is that correct?

Mr Lavery:

Yes, I believe so.

Mr Attwood:

Thank you very much.

The Chairperson:

It is not just the inescapable pressures resulting from devolution of policing and justice powers in which we are interested but the inescapable pressures for which we do not yet have money to meet, regardless of whether devolution happens.

Mr McCartney:

Thank you for your presentation. I shall ask questions similar to those that I asked the Legal Services Commission representatives about the process of resolving budgetary pressures. What process do you currently use to deal with those pressures when they have been identified? What are the strengths and weaknesses of that process, and what do you envisage as being the ideal process for the future? Furthermore, what impact will the transfer of policing and justice powers to the Assembly have on that process?

Mr Lavery:

Those are important questions. I want the future process to be somewhat different from the present one.

The 2009-2010 financial year begins in April, and, although I have already been allocated £65 million for legal aid for that year, I know — we all know now — that that will not be sufficient. Therefore, Mr Daniell, the chairperson of the Legal Services Commission, and I will begin the year in the knowledge that there is not enough money in the system to discharge all liabilities. We must, therefore, begin a dialogue with the Treasury in London, with which we currently deal directly for funding.

In conjunction with the Legal Services Commission, we will begin the financial year by telling the Treasury that there are insufficient funds in the legal-aid baseline to discharge the accumulated liabilities and that we will require an injection of additional funding. Unfortunately, such discussions tend to drag on throughout the year, in the course of which they are elevated to ministerial level. My Minister is the Lord Chancellor and Secretary of State for Justice, Jack Straw, who, in the past year, wrote to the Chief Secretary to the Treasury to seek additional funding for legal aid. Last year, correspondence began in the middle of the year, and the matter was only resolved in the fourth quarter.

I do not mind whether Hansard reports that I believe that beginning the year knowing that there is insufficient funding, and having to wait until the fourth quarter to resolve the problem, is no way in which to run a business. Furthermore, the system generated some of the problems that we encountered at the turn of the year, when the Bar, in effect, went on strike — it knew that there was not enough money in the system to pay the bills. The arrangement created a great deal of disruption for the courts as well.

I hope that, under devolution, we might have a much more transparent process, whereby setting the legal-aid budget would be based on more appropriate dialogue with the Department of Finance and Personnel, the Department of justice and the Legal Services Commission. Using that process, we could agree a realistic budget for the next three years, ensuring cost-control budgetary predictability and value for money, thus allowing the Legal Services Commission to plan for the year ahead, rather than have it know that by the third of fourth quarter it will run out of cash. Consequently, all the energy that must be devoted each year to to-ing and fro-ing with the Treasury in order to get more money would not be wasted under the new arrangements. We would be better served devoting our energy to reducing costs or to redesigning the system.

That may be a rather anecdotal approach to answering your question. Nevertheless, as Mr Daniell and I said, the system basically involves a protracted discussion throughout the year in order to get top-up funding. The best outcome would be to have a proper, proportionate and sustainable budget at the beginning of the financial year, based on which everyone could plan their business, instead of constantly having to go back throughout the year with what Mr Hamilton called the begging bowl.

Mr McCausland:

I apologise for not being here earlier, but I was attending another Committee. You said that, in many cases, people here are represented by a solicitor, a junior barrister and a senior barrister, and that that would not be the case across the water. What is the difference in the size, per head of population, of the legal profession in Northern Ireland compared with that in Great Britain? Do we have a much greater proportion of barristers?

Mr Lavery:

I shall hand that hospital pass to my colleague. We have the figures, and, given that I do not wish to mislead the Committee, whoever finds them first can answer.

The Chairperson:

I ask everyone to check his or her mobile phone, as I can clearly hear that one is switched on.

Mr Paul Andrews ( Northern Ireland Court Service):

England and Wales and Northern Ireland are two very different marketplaces. Anything that I say will already be in the public domain, because it formed part of my evidence to Sir George Bain’s review. My analysis is, therefore, a matter of public record.

In Northern Ireland, 30% of solicitors work in firms with five or more partners. In 1986, there were 276 qualified barristers in Northern Ireland, but, by 2006, that number had risen to 560. The Law Society of Northern Ireland said that a relatively high percentage of its members were undertaking low-margin publicly funded legal services, together with a range of pro bono work. It was suggesting that there was a high level of dependence on legal aid, and that there was wide coverage of that in towns and villages throughout the jurisdiction where legal aid was available to individuals.

The preponderance of significant commercial multi-partner firms in London means that there is a significant number of solicitors there. Therefore, the same read-across to a commercial base in Northern Ireland does not exist. Although certain information is available, that is distorted by the commercial ventures of solicitors’ firms in England and Wales, which perhaps do not do legal-aid work as we know it. A good majority of firms in this jurisdiction does at least some legal-aid work.

Mr Lavery:

We have hesitated to introduce some of the changes that have been introduced in England, such as contracting for legal services. In England, the Legal Services Commission awards contracts to firms of solicitors to do a certain amount of legal-aid work in a particular geographical area.

The structure of the legal profession in Northern Ireland is that there tend to be smaller firms in country towns that are dependent on a mix of work. Those firms provide a community legal service, and even people in rural areas can access a choice of legal representatives, which we think is important. Now is not the time to do something too radical on that, because small firms depend on conveyancing, probate and a bit of legal-aid work. There is currently no conveyancing work, and some of those firms are much more dependent on the throughput of their legal-aid cheques to sustain their viability.

In answer to Mr McCausland’s original question, I am not sure whether there are too many lawyers here, but I undertake to write to the Committee if we can extract any empirical information on that. The structure of the Bar is different; it operates not from chambers but from a library system, and it has comparatively lower overheads. I have a hunch that the growth in the Bar in Northern Ireland has been so great over the past 20 years that we are top of the league for lawyers per capita. As I said, if I can provide any empirical evidence to the Committee, I undertake to do so.

The Chairperson:

As with the Northern Ireland Legal Services Commission, there are a number of areas on which we will want to come back to you, and we will want to raise a number of questions with you in writing in the not-too-distant future.

For clarification, are you currently able to reclaim VAT?

Mr Lavery:

At present, the Legal Services Commission pays legal-aid bills. VAT is paid on top of the fee as a dispersement and is not reclaimed. One would want to address that, and devolution might provide the opportunity to do so. VAT is a significant additional cost. If one looks at a typical block bill for a case, it comprises the fees for a solicitor plus VAT, the fees for a barrister plus VAT, the fees for a QC plus VAT and, possibly, the fees for an expert witness or two.

Many people get paid in a case, and VAT is a significant additional dispersement that we cannot at present recoup.

The Chairperson:

Finally, is anything hurtling down the track about which you have not told the Committee? For instance, if devolution of policing and justice powers takes place in the not-too-distant future, is there anything that might lead to your coming along, cap in hand, to the Committee, to the Department of Finance and Personnel or to the justice Minister to say that, although you appeared before the Committee, there is a requirement for £10 million or £20 million that was not mentioned but the Court Service should have foreseen?

Mr Lavery:

That is a bit like encouraging the defendant to have other offences taken into consideration before sentencing.

In its letter of 9 February, the Court Service tried to avoid surprises emerging under devolution. That is why we had the debate about what is or is not an inescapable pressure. Certain things are driven by devolution about which the Committee must know. There are also things that the service must do, and about which the Committee must be aware, if, as we hope, a devolved environment is achieved. That is what I call the due-diligence element of the exercise.

Nothing has occurred to us that has not been disclosed to the Committee. It is clearly not in anyone’s interest not to disclose something.

The Chairperson:

David, I thank you and your colleagues for coming along, for being frank and open with the Committee, and for your presentation and the papers that you have supplied to Committee members. The Committee appreciates that, and we will probably come back to you.

Mr Lavery:

Thank you very much for your time.

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