The angry stand-off over new legal aid contracts — which threatens the running of heavyweight criminal trials including terrorism, murder and rape — comes to a head this week.

The Legal Services Commission, which runs the legal aid scheme, has given barristers a final chance to sign up to the panel to do very high-cost cases — the most serious, complex and lengthy trials, which account for nearly 10 per cent of the criminal legal aid budget. Only 130 of 2,300 barristers who indicated interest in the scheme have signed up. The deadline has been extended to this Friday.

For Lord Hunt of Kings Heath, the minister in charge of legal aid, it’s crunch time. “In general we’ve made a lot of progress with legal aid: going back to the original Carter report, he thought that we had the most generous legal aid scheme in the world, £38 per head in England compared with some £3 a head elsewhere and only £8 a head in Ireland and New Zealand, where the justice systems are similar to ours. Our generous system is something we should be proud of — it makes an important contribution to the administration of justice. Nevertheless, the money is not being spent in the most effective way.”

It is down to Lord Hunt to ensure that it is. But he is up against it. “After six years’ hard labour dealing with doctors and radical reforms in the health service [he was health minister before this job], I am beginning to look back fondly at that time,” he says. “It is a tough time but I am confident we can get through this.”

He has to steer a tricky middle course — neither too threatening nor conceding too much. “I’m confident that the reforms are the way to go but I want lawyers who practise legal aid to feel confident about the future and that what they do is recognised by society and by the Government, which is a part of that.” He suspects the Bar of “some kind of concerted activity”, resulting in the mass boycott of the scheme. That, he says, was a “bit surprising”. But ultimately he wants barristers to sign up. “Obviously we want to persuade the Bar Council and have asked them to use their good offices to do what they can. We are only talking about a cut of £5 million from £100 million.”

He appears conciliatory. Barristers are being given more time but, failing that, solicitors will be granted authority to instruct barristers outside the panel. Will it threaten the quality of those instructed for the most important trials? “There’s no reason why solicitors won’t be able to get barristers of sufficient quality and experience. But we shall have to see. Firms I’ve talked to say they will have no difficulty. But,” he adds honestly, “I am not complacent.”

Nor should he be. Barristers insist that the rates are insufficient: preparation rates for a QC range from £91 to £145 an hour; for a leading junior, from £79 to £127 an hour. For a day in court, a QC will get £476, a leading junior £390. But, Lord Hunt insists, there is no more money on the table. One prosecutor poured scorn on the idea that QCs would turn their back on top trials. They might, though, take them on free pending the dispute — which would acutely embarrass ministers.

The reforms stems from a report by Lord Carter recommending a scheme for the Bar of graduated (fixed) fees for most criminal cases. That is agreed: it meant £29 million for junior barristers. Now, ministers argue, the other half of the deal is the scheme for the top cases. The aim, Lord Hunt says, is for “value for money and efficiencies” — incentives to be efficient rather than the opposite.

On high-cost trials, the Bar is pushing for fixed rates — not hourly ones as proposed. Lord Hunt sings the praises of hourly rates in small cases. But in complex ones, costs cannot be estimated. “Our advice from the Legal Services Commission \ is that it’s not possible to guarantee costs and therefore set a fee. Payments by the hour have not been the way to get efficiency from the legal aid scheme. But in this one area, it is proving very, very difficult.”

He also quickly disengages from the Bar’s claim for equal rates for prosecution and defence lawyers — the former is a matter, he says, for the Attorney-General.

Meanwhile, he is optimistic on the other battle front. For solicitors, reforms mean competitive tendering for legal aid contracts — widely opposed across the profession. The Law Society has successfully challenged the LSC over its proposed contracts for solicitors. “We don’t want to be in a situation where we are at war,” Lord Hunt says. “We are in discussion with the society and I want to find a way through. I’m cautiously optimistic.”

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