Official Report: Minutes of Evidence

The Chairperson (Mr Ross): I welcome Mark McGuckin, the other Mark McGuicken, Deirdre McDaid and Kim Elliott. As always, we are being recorded and the report will be published in due course. I remind members to make sure that their phones are turned off, because they are interfering with the recording equipment. I have been asked to do that. In glancing around, I see quite a few mobile devices being used at present, so just cease to do that for a little bit.

When you are ready, you can go ahead, and then we will open it up for questions.

Mr Mark McGuckin (Department of Justice): Thank you very much, Chairman, for your introduction. I am grateful to the Committee for the opportunity to address any questions about the progress on and plans for the introduction of a statutory registration scheme. The Committee has the post-consultation report, and we will be happy to take any questions on it. Before doing so, it might be useful to reflect on why we are introducing a registration scheme for legal professionals who are engaged in delivering legal aid work.

The legal aid fund pays for solicitors and barristers in private practice and in the voluntary sector to provide legal advice and representation for citizens, subject to certain criteria. Best practice and experience in other jurisdictions suggests that arrangements should be put in place to provide assurance about the quality of the service and the propriety and regularity of the use of public funds. A number of external reviewers have commented on the need for improved levels of assurance. For example, the Public Accounts Committee recommended the introduction of a compulsory registration scheme and a comprehensive quality assurance system for all individuals wishing to provide publicly funded legal services. The registration scheme set out in the papers will contribute to the delivery of that recommendation.

It is important to be clear that the focus of the scheme is about obtaining assurance about the quality of service provision. You will have noted from the papers that, where an audit identifies issues of non-compliance, the intention is to work with the provider to address any shortcomings. It is not about reducing the number of potential providers or restricting the choice of the individual client. It is about giving a level of assurance to the client.

You will have noted that we plan to take this work forward in several phases, though those phases will overlap. The first phase is to get the scheme in place, as well as the registration and codes of conduct to allow self-certification of compliance with the requisite policies and procedures. As that is being done, we will also be progressing the detailed proposals for audit and assurance with a view to bringing those forward at an early stage.

Finally, it is worth pointing out that the registration process will form part of the new digital case management system that is being introduced by the Legal Services Agency. That will be of significant operational utility to the legal profession, as well as enhancing the processing capacity in the new agency.

In bringing forward these proposals, we have consulted extensively with the legal profession and engaged with the respective representative bodies. We have adjusted the proposals in response to the representations made to us. There are still some issues that need to be finalised, which will be delivered in the subsequent phases. Each of those issues will be subject to further consultation with the legal profession.

With that brief introduction, I am happy to take any questions that the Committee might have.

The Chairperson (Mr Ross): OK. I have a couple of questions. You mention in the papers the level of engagement with the Bar Council on this and say that you want to have similar engagement with the solicitors' representatives. Is there a reason why the Law Society has not been as engaged? Does it have any particular issues with the proposals?

Mr McGuckin: It is fair to say that the Law Society was engaged at an early stage and, in fact, worked along with the Legal Services Commission in the development and running of a pilot. As part of that pilot, the draft code of practice was drawn up in consultation with it. It did not engage quite as closely as we would have liked, and we would have welcomed a couple more discussions with it on the final outworkings, but I think it is quite committed to taking the process forward. The Bar Council, on the other hand, had not been involved in the initial pilot and so was working from a different premise. It was very keen to engage, and did engage, very effectively over the process and in the development of the code of practice as it would apply to barristers.

The Chairperson (Mr Ross): What is the timescale for the implementation of the registration scheme?

Mr McGuckin: We need to take it through a draft affirmative procedure, so our aim is to pull together the draft regulations and have them ready for consultation by June/July time and consult with the profession on the specific detail. They are all aware of the principles and everything else. After that, we will bring them through the Assembly processes.

We want to try and tie this up as much as possible with the Bar Council and Law Society certification processes. The Law Society certifications are in February each year; the Bar Council's are slightly later. We plan to try to have the initial registration in place for next February. At the same time as we are working through that, we will be working through the details of audit and so on, and those proposals will be coming forward and will be rolled out subsequently.

Mr McCartney: The paper presented says that they are subject to sanctions for non-compliance.

Mr McGuckin: They are subject to sanctions in terms of their own codes of practice within the regulatory bodies. Certainly, the code of practice as set out in these documents does not apply yet, so they cannot comply with it. If there are issues that need to be addressed that come to the attention of the Legal Services Agency, the chief executive will draw them to the attention of the Bar Council or the Law Society, and it is a matter for them as to how those are progressed. It would be within the internal regulatory mechanisms of those two bodies and not specifically related to the resources in relation to legal aid.

Mr McCartney: So the registration scheme is not going to be an external code of practice; it is the code of practice that pertains to the two professions.

Mr McGuckin: No, the draft codes of practice which relate to organisations that will be engaged in delivering legal aid at work are attached to the post-consultation document. Those are the two codes of practice that we aim to introduce. They are certainly consistent, as you would expect, with the existing codes of practice of the two bodies.

Mr McCartney: I must not be making myself clear. If the registration scheme is up and running and it is found — I do not want to be prejudging anybody — that there is non-compliance, who deals with that: the profession or the registration scheme at the Department?

Mr McGuckin: It will be the registration scheme in the Department. As I said in the opening comments, our aim is to ensure that people provide the necessary level of service and the appropriate regularity and propriety around the expenditure from the legal aid fund. This is not about excluding people from the provision of legal aid or from providing those services. Initially, we will seek, if we identify issues of non-compliance, to work with the solicitors or the barrister involved to address the reasons for the non-compliance so that they are compliant. It will only be if you get through a quite elongated process, which is explained in the post-consultation report, and the individual or the firm is continuing not to comply that you consider excluding them from providing legal aid work. It is about trying to improve that situation and getting people into compliance.

Mr McCartney: I asked that because the Law Centre and the Citizens Advice Bureaux will be involved in the scheme.

Mr McGuckin: They will indeed, yes.

Mr McCartney: That is why I am saying that. If there was non-compliance and if the two professions — I am not saying they would — said that it is not outside their code of practice, though it might be outside your —

Mr McGuckin: We have worked very closely with them on this, and the two things are consistent.

Mr T Elliott: Thanks for the presentation. I have a couple of queries. Is it possible for a solicitor within a firm to be non-compliant but for the firm to be compliant?

Mr McGuckin: That is a level of detail that we need to work through. If you were getting to that stage, you could find yourself in a position where a solicitor would be non-compliant but other members of the firm would be compliant and could continue to work. We are suggesting that in situations where there is a firm or a number of people in a practice or a limited company, or however they are structured, there would be a compliance partner who would be the key person whom the Legal Services Agency would engage with. That person would have responsibility for ensuring the compliance of the firm and of each of the individuals. If the firm and its other members are compliant, you would like to think that they would work with the individual to help that person to come into compliance.

Mr T Elliott: Will it be possible for an individual or a firm to be non-compliant for legal aid purposes but compliant to continue practising as a solicitor or a barrister?

Mr McGuckin: It is a matter for the two regulatory bodies as to whether they certify such individuals for other activities. You would need to put that question to them. Currently, for each of those two bodies, as I understand it, there are circumstances in which they can give a certificate in certain limited areas. An individual might be certified to provide certain types of legal advice but not others. That sort of situation currently arises.

Ms Kim Elliott (Department of Justice): The potential is there for an individual to be deregistered from the registration scheme but to still have a practising certificate, so they could still carry out private work.

Mr T Elliott: OK. Is it possible for a client to engage a solicitor or barrister who has got part of the way through a case, or has maybe even completed the case, and then find that that solicitor or barrister was non-compliant and not be awarded legal aid?

Mr McGuckin: The legal aid payments go to the solicitor. No, I do not think that that will be possible. We are lining the registration scheme up as the front end of the new digitalised case management system, so the two things will work seamlessly together. Once solicitors are registered, that will be apparent. If they are applying for legal aid — they have to apply for legal aid before they do the work for their client — it will become quite clear that a certificate will not be awarded if they have not been compliant or if they are currently not registered and have been deregistered because they have not been compliant.

Mr T Elliott: So, nothing can happen in between. They do not have any other applications to make in between.

Mr McGuckin: There is the potential, of course, that somebody could go through the process of being audited and the Legal Services Agency will be working with that individual or that firm to help them become compliant and they will have carriage of a number of cases at that time. One of the details that we need to work out as we go through this is what will happen to the carriage of those cases if they subsequently become deregistered because they have not been compliant. We are talking here about the extreme end of the process. The purpose of this is to drive up standards and ensure that people achieve the appropriate standards. It would only be in very extreme circumstances that you would be talking about deregistering somebody from the provision of legal aid, in the same way as it would only be in extreme circumstances currently that they would lose their practising certificate.

Mr Mark McGuicken (Department of Justice): We said in the consultation document that, if that did apply, it would be the solicitor's responsibility to ensure that the carriage of the case is passed to someone else. It is highlighted here, and it would be their responsibility to pass the case on.

Mr McGuckin: This would be an issue that the Law Society would take a close interest in as well with regard to its responsibilities.

Mr A Maginness: It is great to have peace and amity between the lawyers and the Department. [Laughter.]

Good. Congratulations on your good work, Mark. I think that it is an important initiative to try and introduce perhaps greater quality assurance to the consumer, who is ultimately you and me, seeking legal services through legal aid. I am just slightly concerned that you might impose too great a degree of bureaucracy and regulation on small firms of solicitors that a larger firm would regard as inconsequential. Could you reassure practitioners that that would not be the case?

Mr McGuckin: What is being set out in the code of practice is what an individual firm or an individual who is part of a firm would expect to see now. As regards policies going through, clearly, there would be slightly different application of those in a large firm with many partners and support staff, and you would expect a further degree of formality around that. You will still want to see the policies in place. Certainly, support will be given on draft policies, which can be applied and adopted and/or adapted by the smaller firms. There will be a lot of support in there.

Mr A Maginness: So you are cognisant of the smaller firms and the burdens that might be imposed upon them.

Mr McGuckin: Absolutely.

Mr A Maginness: Will the fee that is prescribed to the scheme be a notional fee or something more substantive?

Mr McGuckin: Can you define "notional" for me? [Laughter.]

Mr McCartney: It will be 15% of their earnings. [Laughter.]

Mr A Maginness: That is what I was thinking. [Laughter.]

Mr McGuckin: We are working through the proposals for a fee. What we want to try to achieve is to make the running of this cost neutral. We are currently setting up systems. We are setting up the IT system and so on, which will allow this to happen. That will be integrated into the case management system. We are not proposing to cover any of those costs. In effect, what we are looking at is the ongoing costs of carrying out audits on each of the solicitors. The fee will be dependent ultimately on the number of firms and individuals who actually register and what the audit process is. We are currently working though a number of different options on how you would carry out this audit; whether you audit every firm every three years or apply an approach that is based on the level of funds that are being drawn from the legal aid fund, so that you are auditing those who are pulling down the most funds more regularly than others and perhaps others would get audited only on an ad hoc basis. What you want to do is an audit which is proportionate. It might be slightly higher at the start until we see how all of this works out and how compliance works through. Those are the sorts of factors that we are working through at the moment in order to determine the overall fee. I would not necessarily use your word, but I would hope that the fee would be modest. It is about only recovering the cost of those audits going forward.

Mr A Maginness: I will accept "modest".

Mr McGlone: Excuse me for having to go out to take a phone call earlier. One thing that has been raised with me with regard to this — and it may well have been raised before, so my apologies for that — is the cost issue; any attributable costs that may be associated with this, for example, around code of practice, adherence to standards, facilitating audit compliance and the likes of that. Have you picked up on that or assessed what it might be?

Mr McGuckin: The cost to the practice?

Mr McGlone: Yes, the cost to practices.

Mr McGuckin: We do not envisage that applying the code of practice would attract any additional cost. The code of practice sets out best practice and what we would expect people to be doing already with their own regulation, the financial checks and so on that they should be conducting and the records that they should be keeping for their own purposes. So, we do not envisage any additional costs.

Mr Maginness asked about the impact on smaller firms of developing policies and so on. Our intention is to provide some standard, basic policies that people could adapt for their own purposes. That would reduce any particular overheads.

You mentioned the costs of audits, and that is one of the areas that we would like to recover through the fee system. We are currently working through what the audit process might look like, and the fees will clearly be dependent on the number of firms and individual solicitors and barristers that register and the frequency of the audits. We are currently working through that process.

Mr McGlone: So, you just do not know on that one yet.

Mr McGuckin: The best that I am prepared to say on that at the moment is that the fees should be modest and will be limited to recovering the cost of undertaking the audit.

Mr McGlone: When are you likely to know what those proposed fees will be?

Mr McGuckin: We are working through the initial stages to get the rules drafted and brought before the Assembly under the draft affirmative procedure. While we do that, we are working through the process of finalising our proposals in respect of how the audit would be conducted, its frequency and how it would be targeted. We will go back and talk to the profession about that, and that will help to drive the fees. We will then have an indication of the order of the fees. It will vary at the margins depending on the frequency of audit and the number of firms and individuals that come forward to be registered.

The Chairperson (Mr Ross): Nobody else has indicated that they want to ask a question. Thank you very much. We appreciate that.