PLANS to replace the £2 billion legal aid scheme with a competitive marketplace in which lawyers bid to win work have won ministers’ approval.

A report due next week from Lord Carter of Coles will pave the way for a radical redistribution of legal aid work, with top-earning QCs paid less and rank-and-file barristers earning more. It is also likely to mean that hundreds of small legal aid firms will either go out of business or merge to form bigger practices. As many as half of the 2,500 legal aid firms in England and Wales could cease to operate as separate practices.

Under the new market-based model, criminal legal aid lawyers will move to a system of fixed fees rather than being paid for time spent on a case and compete for contracts for work in police stations and courts.

The clearest indication yet that ministers back the Carter reforms comes today from Vera Baird, QC, the Minister for Legal Aid. She says in an article in the Times Law section that the Carter report has been drawn up “in lockstep” with ministers.

She also says that consultation as to how the reforms will be implemented will begin immediately. But, crucially, she gives no timetable for implementation — just for a fresh round of discussions.

Many of the proposals could be enacted swiftly, as they will not need legislation, although a competitive marketplace would have to be introduced over time. Legal aid costs have risen from £1.5 billion in 1997 to £2.1 billion today.

The present system, Ms Baird says, is “not sustainable”. “Lord Carter’s interim report foresaw fewer, larger suppliers,” she said. “That need not mean fewer solicitors, but the restructuring of firms looks inevitable. We have to get fair justice at a fair price. Lord Carter will show us a positive way forward.”

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