England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		13/12/2010

Mr Justice Cranston:

INTRODUCTION

1. These are claims challenging decisions of the Legal Services Commission in respect of the award of contracts in November 2010 for the provision of publicly-funded legal services in public law and mental health (both generic and for the high security hospitals of Ashworth, Broadmoor and Rampton). Three grounds are now pursued. They are what in this judgment are described as ground 1 (verification of quality standards), ground 2 (the general disability equality duty) and ground 3 (access to justice). The failure to verify the quality standards of those contracting to provide services, ground 1, is said to be a breach of the equality standard demanded by the Public Sector Directive 2004/18/EC, given force in the United Kingdom in the Public Contracts Regulations 2006. With the mental health (high security hospitals) contracts the ground of challenge pursued, ground 2, is of a failure to comply with the general disability equality duty in section 49A of the Disability Discrimination Act 1995. The access to justice ground is advanced as a breach of section 4 of the Access to Justice Act 1999 in relation to the impact of contracting on specialist public law firms.

BACKGROUND

The parties

2. The first claimant is a relatively small firm of lawyers with a high reputation for the cases they have brought in public law. Their high profile cases have often had an international flavour. They were backed in this litigation by other well known public law firms such as the solicitors they have instructed to bring the action. RMNJ Solicitors, the second claimant, is a firm which has as part of its practice mental health law. It has taken cases raising issues on mental health law on appeal to the Court of Appeal and beyond.
3. The Legal Services Commission, the defendant, was established under the Access to Justice Act 1999. It replaced the Legal Aid Board. Section 1(2) of the Act confers powers and imposes duties on it in relation to the Community Legal Service and the Criminal Defence Service. In particular section 4 requires the Legal Services Commission to establish, maintain and develop the Community Legal Service so individuals have access to legal services that effectively meet their needs. This is done through contracting with lawyers, law firms and other bodies as providers of these services.

Contracting and the 2008 consultation

4. Among the main proposals in the government White Paper, Legal Aid Reform: the Way Ahead, Cm 6993, 2006, was an alteration to the payment structure for providers of publicly funded legal services. That was from a system based on hourly rates to one based on fixed and graduated fees. Publicly funded work was to be restricted to firms contracting to undertake more than a minimum amount of work. Quality standards were to be imposed on providers, to be achieved by peer review.
5. The Legal Services Commission issued a Unified Contract in 2007 for a period of three years, incorporating many of these proposals. It was due to expire on 1 March 2010, although it was extended on several occasions. In the event, it expired on 15 November 2010 for all categories of law other than family. The exception for family law is attributable to the judicial review which led to the Divisional Court's judgment in R (Law Society for England and Wales) v Legal Services Commission [2010] EWHC 2550 (Admin).
6. In October 2008 the Legal Services Commission issued a consultation document, Civil Bid Round for 2010 Contracts: A Consultation ("the Consultation Document"), inviting responses by late January 2009. The consultation related to the terms upon which the Legal Services Commission proposed to tender for contracts for legal services after the expiry of the Unified Contract in March 2010. The areas of law to be covered were family; family mediation; social welfare law (i.e. community care, debt, employment, housing and welfare benefits); mental health; immigration and asylum; and so-called low volume categories (i.e. actions against the police, clinical negligence, consumer, education, personal injury and public law).
7. The Consultation Document began with the opportunity which the new civil contracts provided "to procure more client-focused services through securing easier access to face-to-face advice" (para 1). It set out, amongst other things, the aims to ensure the delivery of services close to where clients were located and to encourage firms to provide the full range of legal services, from initial advice through to representation in litigation: paras 1.3, 2.12, 3.2. The need for easier access to face-to-face legal help came from a concern about so-called "advice deserts", areas where there were no publicly funded legal services. The need for more integrated services arose from research demonstrating that for those most in need of legal aid services, the socially excluded, legal issues arose in 'clusters', but that they were not being served by existing providers, who could not offer advice across the range of issues upon which their clients needed help: paras 3.4, 3.6.
8. The Consultation Document set out at para 3.14 the key policy objectives for the 2010 contract bid round:

• To deliver more integrated services to clients by increasing the proportion of providers offering the full range (i.e. from Legal Help through to Legal Representation) and breadth (e.g. both public and private family work) of civil legal aid services

• To ensure clients are able to reach an appropriate service either locally or through reasonable travel

• To award contracts only to providers meeting quality thresholds to help safeguard the quality of advice clients receive

• To ensure that providers are able to bid for sufficient volumes of work to enable delivery of a full breadth of services that are regularly available and accessible to clients

• To ensure that Community Legal Service funding is distributed within the budget available and appropriate access is achieved, focused on procurement areas and categories of law where client priorities are identified

• To manage the bid process in a proportionate way, balancing the need to allow competition with the need to maintain services and a sustainable provider base

• To ensure that the contract provisions do not impose bureaucratic requirements on providers beyond those consistent with good standards of public service management.

9. The Consultation Document then noted that the experience of justiciable problems was disproportionately felt by the most vulnerable of groups: old people, disabled people, members of ethnic minorities and women (para 3.23). Proposals had to take into account these factors, bearing in mind the statutory equality duties. Paragraph 3.24 set out how the proposals would achieve this:

• Aiming to deliver services where clients are based, taking into account the needs of vulnerable groups such as mental health clients and immigration and asylum legal aid clients who need to access services close to hospitals and removal centres

• Prioritising key areas such as domestic abuse, public law children and mental health

• Increasing the proportion of providers who offer the full range and breadth of service to ensure clients are able to access integrated and seamless services where possible

• Acting flexibly and working with providers and other stakeholders where there is a disproportionate impact on certain providers. For example, we will look to set a prospective minimum new matter start size that ensures smaller providers have the opportunity to increase capacity

• Aiming to ensure that equality and diversity is promoted within the provider base

• Ensuring providers are able to understand and meet the diverse advice needs of clients

• Ensuring clients are able to reach an appropriate service either locally or through reasonable travel.

10. To meet these objectives a number of steps were set out: the creation of procurement (geographical) areas and requiring that suppliers have a presence in those areas, or giving preference to those that did; requiring that suppliers provide a combination of services or additional services, particularly in social welfare law, or giving preference to those that could; a requirement of a minimum number of new cases ("new matter starts") to ensure a level of access that would be meaningful and available regularly to clients; and basing projections of work on where clients were rather than where services have been provided in the past. The need for the process to be competitive, and to provide value for money, also lay at the heart of the proposals.
11. The Consultation Document explained that those obtaining contracts would be contracted to open a specified number of new new matter starts. It set out two ways in which contracts might be awarded across all areas of law. One way entailed the award of a contract to every provider who satisfied certain minimum criteria, referred to as essential criteria. Using this approach there was no competition between bidders. All who satisfied the essential criteria would receive a contract. The other way required every bidder to satisfy the essential criteria, but then applied a further set of criteria, called the selection criteria, which would be used to rank bids in order based on the bidders' scores. Contracts would be awarded first to those ranked highest and then move down the rankings. In the competitive approach those ranked highest would do best and, depending on the bids received, some providers who did satisfy the essential criteria might not be awarded a contract. Ultimately the public law and generic mental health contracts were to be awarded to every bidder who satisfied the essential criteria, i.e. on a non-competitive basis. The tender for work in high security hospitals was awarded on the basis of the application of selection criteria and was therefore a competitive process.
12. In the event that the total number of new matter starts for which bids were received did not exceed the maximum available, every bidder who satisfied the essential criteria would be awarded a contract for the number of new matter starts for which it bid. In the event that the total number of new matter starts for which bids were received exceeded those available, there would be a difference of approach depending whether the award system was competitive or non-competitive. Where the award system was competitive, the Legal Services Commission would award to the provider ranked top all the new matter starts for which it had bid. It would then move down the rankings, awarding to each successive bidder the number of new matter starts for which it had bid until the available new matter starts had been exhausted. When the method of awarding contracts was not competitive, the Legal Services Commission would award new matter starts from the available total pro rata to the number for which providers had bid. That was to be subject to the cap on new matter starts any bidder could be awarded, related to the number of fee earners employed.
13. With the low volume categories such as actions against the police, education and public law the Legal Services Commission said that it faced particular challenges in order to deliver accessible services to clients throughout England and Wales. The contracts that existed were also unevenly distributed across England and Wales with only the London, the south west and the Yorkshire and Humberside regions having three or more contracts in all categories, and some regions having no contracts at all. For example, there were no public law contracts in the south east region or Wales. Even where contracts did exist the volume of work carried out under those contracts was often low: para. 4.15.
14. As to mental health, the focus was said to be to ensure clients detained under the Mental Health Act 1983 had access to advice and representation before the Mental Health Review Tribunal.

"The [Community Legal Service] Strategy referred to "the absolute priority of providing face-to-face advice and representation to those detained in special hospitals". This is also a statutory duty and means that the focus of the category is very different to some other categories. Failure to provide access would have significant consequences for clients": para. 3.10.

15. Later the Consultation Document proposed that the high security hospitals of Ashworth, Broadmoor and Rampton be treated as separate procurement areas. Whilst it was not intended to use competitive assessment of bids in Strategic Health Authorities due to the overriding priority of maintaining access, the nature of the high security hospitals can accommodate such an approach.

"They are discrete locations where we can be more certain of a stable number of beds and therefore cases. There are also a large number of providers who carry out small volumes of work in the hospitals that may be interested in expanding their caseload in these locations. This means that we can be more certain that there will be oversupply for a defined volume of work, and hence we can institute competition without putting access at risk": para 5.14.

At paragraph 5.48 it was proposed that those with generic mental health contracts would be able to deliver an agreed volume of their cases at high security hospitals with prior agreement of their Legal Services Commission manager.

16. The Consultation Document emphasised the Legal Services Commission experience that since the first introduction of quality assurance standards for legal aid in the 1990s "effective individual supervision is the single most important guarantee of quality services for clients": para 4.38. Chapter 6, "How we will procure services", proposed under the heading of "selection criteria", that supervisors would be those who met a specified standard. For mental health the proposed selection criteria focused on the ratio of Law Society mental health panel members to fee earners (high security hospitals only): "Preference will be given to organisations able to demonstrate a higher Panel member to fee earner ratio." The reasoning was that panel membership was a widely accepted indicator of high quality fee earners. The greater the number of panel members compared with non-panel member fee earners, the greater the confidence the Legal Services Commission could have that a provider was providing high quality advice.
17. The Consultation Document also proposed changes allowing providers to undertake an element of tolerance work in a number of civil categories. Tolerance was an explicit allowance within a contract whereby a provider could carry out work in certain categories other than that in which they held a contract. The rationale for this change was explained in paragraphs 7.2-7.4. There was a concern that clients who accessed advice via tolerance work did not always receive as high a quality service as those who accessed advice via contracted work, since tolerance providers were unlikely to hold a specialist quality mark in relevant categories. That needed to be balanced with the fact that tolerance could provide access in areas where there were no specialists. There had been a review of the proportion of work historically done as tolerance. Successful outcomes carried out under tolerance was significantly lower than when carried out under contract. Thus it was proposed that public law work be removed from the scope of tolerance work. However, it would remain possible for providers to conduct judicial reviews and other public law matters that fall within an area of specialism, for example, where a housing provider judicially reviewed a decision of the local authority's housing department.
18. Accompanying the Consultation Document was an initial impact assessment. There was reference to establishing consultation and engagement through groups such as the Mental Health Stakeholder Group, comprising representatives of bodies such as the Mental Health Lawyers' Association and the Royal College of Psychiatrists. (The group met on 9 January 2009 and 18 May 2009). In summarising the general impact for clients, the initial impact assessment suggested that, because criteria had been developed with the aim of increasing access to civil legal aid for legal aid clients, it was anticipated that the proposals would have a positive impact on clients' ability to access the services they needed. A question the initial impact assessment asked was: "Do you have any comments on any prospective impacts of these proposals on clients or providers?" In relation to the initial impact assessment, both the Law Society and Advice Services Alliance said that they could not estimate the impact of the proposals on providers or clients.
19. Part of the initial impact assessment was an equalities impact assessment, by reference to the statutory duties imposed on public authorities such as the Legal Services Commission to promote race and disability equality and to eliminate unlawful discrimination. The assessment used tables to provide a broad overview of the impact on clients with disabilities. It noted that there was great variation between the experience of having a disability and the subsequent impact on access to legal services, so the data did not illustrate a more detailed analysis of the experience of having different types of disability. Thus it specifically invited representative groups of people with disabilities to respond to the consultation paper in addition to proposing a consultation with a proposed "client diversity group", so as to gain a better understanding of the potential impacts on clients with disabilities, arising from the proposed policies. The assessment continued: "The policy proposals also aim to deliver services where clients are based, taking into account the needs of Mental Health clients who need to access services close to hospitals."

The Consultation Response

20. The Consultation Document produced a number of responses. The Legal Services Commission summarised the responses. Question 14 had asked, "Given the limitations on competition for mental health services, was it right to treat high security hospitals as separate procurement areas?" 63% said yes, 37% said no. The Legal Services Commission noted that this question had generated a considerable strength of feeling. Some respondents, including the Mental Health Lawyers' Association, thought that there should be no distinction with other procurement areas, with the same number of responses, including the Law Society and Legal Aid Practitioners' Group, expressing concern that ring-fencing the work during the contract term would remove the quality benefits of competition between providers for client recommendations. A further point was that, for the sake of continuity of advice, providers without this type of contract should be allowed to continue to advise their clients if they were transferred into a high security hospital.
21. With regard to mental health generally, the Consultation Document had posed the question whether mental health providers should be restricted to undertaking most of their work for clients from within the procurement area bid for. 42% said yes, 58% said no. The largest group of comments related to concerns that the restriction on carrying out work outside the procurement area would reduce client choice. This was the major concern in mental health. Mental health comments suggested this was a particular problem for clients moving between areas, such moves often not chosen by the client, and that there needed to be continuity of advisor. Many comments also suggested ways in which such a restriction should be more flexible to ensure continued access to services.
22. Having received comments from interested parties, the Legal Services Commission published its Consultation Response in June 2009. It contained the essential criteria for all bids. As foreshadowed in the Consultation Document, there were to be a minimum number of new matter starts under each contract. The number was to differ depending upon the area of law and, in some cases, the procurement area. The rationale for this requirement was to ensure a level of access that was meaningful and available regularly to clients: paras. 3.63-3.65. In mental health the minimum number was to be 30; in public law, 15. This minimum was not to be imposed as a condition of contract to allow providers to build up their caseload: para 3.78. In addition, a minimum number of new matter starts had to be delivered. In most cases that was 85 percent of the new matter starts an applicant was contracted to provide: para 5.17.
23. Quality standards were to be ensured, in part, by the minimum quality standards necessary to obtain a contract, the Legal Services Commission's own specialist quality mark or its equivalent, the Lexcel certificate, awarded by the Law Society: para. 3.81. Importantly for this case the Consultation Responses contained criteria as to supervision quality standards within successful bidders. It said this under the heading "minimum ratio of supervisors to caseworkers":

"A large number of respondents to question 7 of the consultation supported the introduction of a minimum supervisor to caseworker ratio in principle, and many felt that a ratio of 1:4 was appropriate. However, there were some calls for greater flexibility to take into account the experience of caseworkers being supervised. To accommodate more experienced caseworkers and to ensure that in setting the minimum ratio as an essential requirement to obtain a civil contract it is not too harsh a measure, we intend to revise the minimum supervisor to caseworker ratio across all civil categories to 1:6": para. 3.84.

The Consultation Response confirmed that, for the purposes of calculating the ratio, a supervisor must be someone who met the supervisor standard for the category of work bid for and actively supervised staff.

24. In recalling the disagreement among respondents about high security mental health hospital work, the Consultation Response said that the approach of procuring it separately would be adopted. The work had often been viewed in the past as a closed shop. Since a high volume of bids for a defined volume of work in these hospitals was anticipated they "also provide the opportunity to institute and test competition, driving up the quality of advice, without putting access at risk": para. 4.9. Since the volume of work available in each of the three high security hospitals was comparatively much smaller than that in the strategic health authorities, it would therefore be unfair if providers awarded work in the latter were able to use their outside of area allowance to deliver up to 30 percent of their contract allocation in the high security hospitals, where other providers had competed for contracts. Respondents were very concerned that ring-fencing high security hospital work would severely damage client choice. However, if restrictions were completely removed there would be no benefit to providers that competed for high security hospital work. For that reason restrictions on high security hospital work would be adopted. However, the Legal Service Commission recognised that where an existing client was transferred in to a high security hospital, it might be beneficial for them to continue to see the same adviser: para 4.68.
25. Although the Consultation Document had laid stress on the need for provision of services local to clients, it did not suggest that providers would be obliged to provide any proportion of their services in the procurement area to which their application related. The Consultation Response recorded that there was a general feeling that the Legal Services Commission should be promoting a more local service in the low volume categories where that was possible. It concluded:

"Whilst we expect providers to deliver services in those regions in which they have bid to deliver matters, we recognise that due to the nature of some of the work and the geographical spread of providers in these categories, it may sometimes be necessary to undertake work for clients outside the designated regions. As such we will set out in the contract an allowance to undertake up to 40% of the total matter starts allocated outside of the region where they have been awarded": para 4.77.

26. The "evidence base" appended to the Consultation Response noted that panel membership for advocates at Mental Health Tribunals would improve the quality of advocacy provided for clients seeking discharge from hospital. Anecdotal evidence from representative bodies and from tribunal chairs suggested that there was currently some poor practice in advocacy. The requirement of experience of work on restricted cases would increase the quality of services provided to clients in high security hospitals by ensuring that providers have appropriately experienced staff: para 5.16. Experience of work on restricted cases with mental health high security hospitals as a requirement was said not to have a significant impact on current providers. "We are therefore confident that a wide range of current providers, both those working in high security hospitals and elsewhere, will meet this requirement and be able to bid for work at high security hospitals": para. 5.40.
27. As with the Consultation Document there was an equalities impact assessment attached to the Consultation Response. There was mention of the disability equality duty but the only reference to high security hospital mental health provision was the panel membership requirement and its anticipated positive impact on the quality of service.

Invitations to tender and the contract

28. The next step following the Consultation Response was for the Legal Services Commission to issue its "Invitations to Tender" in the various areas of law, accompanied by the "Information for Applicants". For example, the Legal Services Commission invited tenders for low volume categories (including public law) in February 2010. The tender process opened on 12 March 2010 and closed on 30 April 2010. Information for Applicants was published in April 2010, together with the 2010 Standard Civil Contract Specification. The mental health Information for Applicants was published in February 2010.
29. Each bidder was required to submit a tender to provide a stated number of new matter starts. Each new matter start would permit the provider holding a contract to give legal advice to a client in return for a fixed fee, the amount of which varied depending upon the subject area (for example, in public law the fee was £288). Fixed in each area of law was the maximum number of new matter starts for which a provider could bid. A provider awarded a number of new matter starts would be able to open a file and provide advice in a case without the prior consent of the Legal Services Commission. In each area of law, there was a cap on the total number of new matter starts to be awarded to all providers. The number of matter starts for each full-time equivalent case-worker within an applicant organisation was limited as a safeguard to discount unrealistic bids that would not have sufficient capacity to deliver. In mental health the maximum was 150; in public law was 180.
30. One change by the time of the invitation to tender was in the assessment of the scale of likely demand in two of the low volume categories, the areas of education and actions against the police. They were to be determined by way of competitive bids by reference to additional selection criteria, because it was anticipated that there would be significantly greater demand to deliver services. For the other low volume categories, including public law, the Legal Services Commission maintained its view that a non-competitive tender was appropriate.
31. The Information for Applicants highlighted that supervisor standards were to be part of the contract. Applicants had to be able to commence delivery of services from the contract start date of 14 October 2010. Verification about matters such as recruitment of a supervisor would be sought in the 8 weeks prior to the (para 7.16). Two of the five "key contract terms (essential criteria)" set out in paragraph 7.19 were the employment of a supervisor meeting the supervisor standard and the employment of at least one full time equivalent supervisor for every 6 employed full time equivalent caseworkers.
32. In an annex, the selection criteria for high security hospitals spelt out that preference would be given to those who since 10 February 2009 had undertaken cases under Part III of the Mental Health Act 1983 for clients detained in hospitals. Points from 0-8 were to be awarded depending on the number of existing clients, although this passage followed:

"NB Applicants may select an "Exceptional Circumstances" option for use where Applicants consider that none of the other options provided apply to their Applicant Organisation. Applicants to whom this is relevant should be scored on how well they meet our criteria and may be awarded scores from 0-8."

33. In April 2010 the Legal Services Commission published a document "Frequently asked questions". Question 4 explained that successful bidders would be contacted shortly after being notified of their success to undertake the pre-contract verification check. Once that was completed contract documentation would be issued. Question 10 underlined that explanation.
34. The contract specification contained supervisor standards. A supervisor is a person employed, who is accepted as meeting the supervisors standards (para. 1.14). Unless otherwise specified, there must not be use of an agent or counsel as evidence of satisfying any of the service standards. In order to receive or maintain a schedule authorisation in any category a supervisor in that category must be employed unless category specific rules provide otherwise. Ceasing to employ a supervisor generally terminates the right to undertake work in that category and a sanction may be applicable: para. 2.20.
35. Apart from the legal competence standard, there is a case involvement standard for supervisors. That is that all supervisors must meet in the relevant category of law a minimum of 350 hours in each of the last three years. The contract contains minimum and maximum allowances by which supervisors can meet the requirement: paras. 2.23, 2.26. The supervision standard is as follows:

"2.28 All supervisors must meet one of the following supervisory skills standards:

(a) has supervised in the relevant Category of Law and/or Class of Work at least one full-time Caseworker (or equivalent) for at least one year in the five year period prior to such a person undertaking Contract Work as a supervisor; or

(b) completed such training covering key supervisory skills that we approve from time to time no earlier than 12 months prior to the Contract Start Date; or

(c) completed the Level 3 or higher National Vocational Qualification (NVQ) standard (or any replacement from time to time) in supervising no earlier than five years prior to the Contract Start Date."

36. To actively supervise a case-worker the supervisor must conduct file reviews and ensure face-to-face supervision at least once a month (clauses 2.31-32). Thus a supervisor must be employed for one hour for every six hours that each case-worker supervised is employed, so to supervise the maximum of 6 full-time equivalent case-workers, each working 35 hours per week, a supervisor must be employed full-time i.e. for 35 hours. Clause 2.35 contains the minimum supervision ratio:

"In each category in which you have been allocated Matter Starts you must maintain a ratio of employing at least one employed full-time equivalent supervisor for every six full-time equivalent case-workers."

Employment in the context of supervisors was defined in the tender documents as meaning that the organisation had to hold an employment contract with that staff member or they had to be a partner, member or director of the organisation.

Bids and outcome

37. Bids followed and parties were notified of the outcome on 17 August in respect of the public law and 25 August in respect of the high security hospital tenders. In public law demand for the available new matter starts outstripped supply by a significant margin. The following table sets out the number of new matter starts tendered for, the number of bids and the final allocation in public law.

Procurement Area	NMS Available	NMS Bid For (Capped)	NMS Awarded
South East	120	435	135
East Midlands	340	695	340
Eastern	180	630	178
London	830	5341	871
Merseyside	140	655	141
North East	90	91	90
North West	120	250	120
South	150	250	149
South West	170	728	170
Wales	60	140	60
West Midlands	200	916	200
Yorkshire and Humberside	330	620	330
TOTAL	2730	10751	2784

38. In some areas, including London, demand outstripped supply by more than six to one and there were insufficient new matter starts for successful applicants to be awarded any more than the guaranteed minimum of 15. This had particularly adverse implications for specialist public law firms in London and elsewhere. Public Interest Lawyers, the first claimant and based in Birmingham, completed 83 new matter starts in 2009/10, bid for 120 and received 25. Pierce Glynn, Solicitors, had 145 new matter starts in public law in 2009/10 and bid for 300; Bhatt Murphy used 47 in 2009/10 and bid for 60; John Ford Solicitors used 29 in 2009/10 and bid for 50. All of them bid in the London area and each received only 15 new matter starts.
39. In response to the tender for mental health work in high security hospitals, of the 98 existing providers, 43 did not bid. Of those who did bid six firms were successful at Ashworth, and five at each of Broadmoor and Rampton.

Verification

40. The verification process was due to begin on 16 August 2010 and a "Frequently Asked Questions" document, dated 24 August 2010, was issued explaining the process, together with forms including the "Supervisor Standard and Self-Declaration Form". It was made clear that the verification process was to be completed before the contracts began on 14 October 2010. However, the process was put on hold during the family law judicial review. On 13 October 2010 the Legal Services Commission confirmed that contracts in all areas other than family would commence on 15 November 2010. Successful bidders were contacted to confirm that they were ready to start to deliver the services awarded from that start date. (Bidders who appealed were in some cases not notified until early October of the outcome.)
41. The "Supervision Standard and Self Declaration Form" contained 3 sections. The first asked for details of the organisation's name, the name of the supervisor in post and the offices supervised. The second related to legal competence for supervisors and contained six parts covering areas of knowledge and examples from the past 12 months regarding skills, procedure and knowledge. The third part covered case involvement, to demonstrate that the requisite number of hours in the previous years were met.
42. In late October the president of the Law Society of England and Wales wrote to the Chief Executive of the Legal Services Commission about concerns with the self-verification process for successful bidders "which risk the possibility that firms that do not meet the tender criteria may be awarded contracts at the expense of firms that do meet the criteria". In particular he highlighted that the self-certification forms did not require supervisors to demonstrate that they met the supervision criteria (clause 2.28 of the contract) or that supervisors were employed for at least an hour for each six hours of a full time equivalent case-worker (clause 2.35 of the contract).
43. The chief executive of the Legal Services Commission replied that the supervisor standards, as with other contract requirements, were enforceable throughout the contract term. The Information for Applicants required applicants to confirm that they would abide by the terms of the contract. Supervision standards had not changed since 2001, although had been incorporated into the contract. She explained that the supervision self-declaration forms were the same as in the previous bid rounds. Verification would continue after the contracts started and particular concerns addressed. If additional information was to come to light after contracts had come into force the Legal Services Commission would be entitled to terminate contracts under the contract. Further guidance would be given.
44. Further guidance as regards completion of the supervision self-declaration forms was issued on 5 November 2010. The guidance reminded successful applicants of those matters they were required to verify, including the matters relating to supervisor standards. It did not advise applicants who had already completed a supervisor self-declaration that they should submit a fresh form in the event that they did not meet the criteria. Supervisor self-declaration forms had to be submitted by 24 September in public law and 25 October in mental health. The verification procedure was not completed prior to the contracts taking effect.
45. The Legal Services Commission entered into the Standard Civil Contract 2010 with successful providers on 15 November. The contracts of existing providers came to an end on the previous day. Their term had been extended by a month in October 2010 in order to enable the hearing to take place of a challenge by the Law Society to the award of contracts in respect of family law.
46. As of 17 November 2010 the Legal Services Commission had taken action against some bidders, including the withdrawal of offers to 17 bidders and further verification checks against 34. There had been additional checks as part of the verification exercise against some firms, including targeted phone calls and visits.

Ramifications of the 2010 contracting exercise

47. Firms specializing in areas of public law, supporting this legal challenge, are concerned that the outcome of the tender round has left them insufficient new matter starts to provide a service to their clients who will go unrepresented and thereby be deprived of access to justice. The firms will also need to make redundancies to their staff as a consequence. These specialist firms contend that there is a clear link between their expertise and the outcomes for their clients. That link is said to be supported by the removal of firms' ability to provide public law services under tolerances because of the lower rate of positive outcomes for cases performed by non-specialists.
48. Those who have not been awarded contracts have the right to undertake 'remainder work', that is to say, to continue to act in cases in which they were involved prior to the cessation of their contract. In addition, in the area of mental health, consistent with the Consultation Response, the Standard Civil Contract 2010 enables those who have been awarded a general mental health contract, but not a contract for high security hospitals, to use a new matter start for an existing client who is transferred into a high security hospital, notwithstanding that they would not otherwise be able to act for patients in such hospitals.
49. Under its Funding Code the Legal Services Commission can provide funding for "investigative help" in the absence of an organisation of a new matter starts to cover a client. Investigative help covers only the cost of investigating a potential claim. It is often a preparatory step before the grant of full representation. Investigative help covers reasonable work necessary to investigate the strength of a proposed claim. Usually it does not cover the issue and conduct of proceedings. The disadvantage of investigative help in plugging the gap of new matter starts, as explained by Saimo Chahal of Bindmans LLP, is that it is not available as a right but requires completion of a 14 page application and then a positive decision of the Legal Services Commission to award it.
50. As well as new matter starts which it can open, a provider awarded a contract may also undertake "certified work". Certified work is publicly funded litigation, although presentations before Ombudsmen and tribunals is not covered. To undertake certified work an application must be made to the Legal Services Commission. Applications are assessed on the basis of the eligibility of both the case and the client. The case must be one which falls within the scope of types of cases for which legal aid is available. The client's means must be such that he or she qualifies for public funding. In addition, the case must satisfy a legal merits test. Subject to the satisfaction of eligibility and merits criteria, a provider can apply to undertake any volume of certificated work.
51. Legal Services Commission figures show that in the past the preponderance of public law work has been litigation for which a certificate is issued. In 2009-10, providers opened 2218 new matter starts in public law. Sixty-two percent of providers with an allocation of matter starts in public law undertook less than 30 matter starts. (Indeed sixty-nine percent of organisations holding a public law contract did not use all their new matter starts). As for certificated work, 2354 applications for certificates were made, of which 1724 were granted. The high proportion of work under certificate differentiates public law work from other areas of work. In most other areas of law, far more work is carried out by means of the opening of a new matter start.
52. Prior to the issue of the contract specification the Mental Health Lawyers' Association says that it raised its concerns with the Legal Services Commission on a number of occasions. It never supported the selection of high secure hospitals for competitive tendering. It was concerned that many highly vulnerable clients would be deprived of their longstanding existing representation. Its reasoning was that clients in high secure hospitals often have a complex mental health history, frequently complicated by an index offence of some seriousness. Representatives had frequently worked for these clients for a number of years and therefore already knew their history, and perhaps differing diagnoses, together with the history of previous key incidents. Such knowledge avoided both distress for the client of new inquiries as well as the cost of additional work in uncovering it.
53. During the hearing the experience of MH Legal, one of the unsuccessful bidders for a high security hospital contract, was advanced to illustrate the impact of the tendering outcome on patients in that area. MH Legal had represented 60-80 patients at Rampton. Pam White of MH Legal, who is herself deaf, represented all but two of the deaf patients who are detained at Rampton Hospital, which houses the National High Secure Deaf Service. Margaret Houdmont of MH Legal opines that 'the loss to these particularly vulnerable patients would be particularly significant as it would be far more difficult for them to engage with a new legal representative and build up trust and confidence in them than it would be for a person without hearing impairment.'
54. Ms Houdmont's position is supported by a number of professionals at Rampton, including Dr Manjit Gahir, the lead clinician for the national high secure deaf service for mental health services. He has written about patients in that service:

"The majority of them have been discriminated against and mistreated throughout their lives and I am sorry to say that to simply remove the legal representative who has know them well for many years, has understanding of their hearing impairment and a good working knowledge of the difficulties in dealing with deafness and mental disorder, is to simply compound the abuse and discrimination they have already suffered."

Clients of existing firms have also written to express their disquiet at no longer being able to instruct the solicitor of their choice, and with whom they may have long-standing relationships.

55. The Clinical Director of Broadmoor, Dr. Kevin Murray has written in a letter dated 23 November 2010 that there were some 40 firms representing clients at the hospital in 2010. Of the five successful firms, only two were among the five most active providers in 2010, and only one was among the most active providers of both 2009 and 2010. Dr. Murray is concerned about a decline in standards and by the 'possible distress some vulnerable patients will suffer when long established relationships are severed: the befriending and advocacy support which some of the more well regarded solicitors provide will be lost to our patients'.
56. The evidence of the Mental Health Lawyer's Association is that none of its members who have been awarded one of the sixteen new high secure hospital contracts have approached it arguing that the new contract provisions should be retained. On the contrary, a number of the winners of such contracts have indicated that they do not consider it will be in the interests of other patients to be forcibly deprived of their previous longstanding representation.

GROUND 1: VERIFICATION OF QUALITY STANDARDS

57. The first ground of challenge contends that the Legal Services Commission has acted unfairly and unlawfully, and in breach of the duties of equal treatment and transparency, by failing to take adequate steps to verify that those who have been awarded contracts satisfy all criteria laid down in the tender for public law and mental health. In particular it has not verified that successful bidders comply with two terms of the contract they were required to sign, one term concerning the experience which a supervisor must have, the other relating to the ratio of supervisors to caseworkers. Given that the verification process was not completed before the contracts came into effect on 15 November 2010 also constitutes a breach of these duties.

The law

58. The tender process is governed by the Public Contracts Regulations 2006, SI 2006, No 5. They govern the award of public contracts by public bodies and implement and the so-called Public Sector Directive 2004/18/EC: [2004] OJ L134/114. The contracts in question, concerning as they do legal services, are what is known as 'part B' contracts for the purposes of these Regulations. Thus only a limited number of the regulations apply (reg. 5(2)). The principal aim of the Regulations is to ensure equal treatment of bidders. Regulation 4(3) reads:

"(3) A contracting authority shall (in accordance with Article 2 of the Public Sector Directive) –

(a) treat economic operators equally in a non-discriminatory way; and

(b) act in a transparent way."

Regulation 4(3) mirrors article 2 of the Directive. Its rationale has been expressed in various ways. In R (Law Society) v Legal Services Commission [2007] EWCA Civ 1264; [2008] QB 737, [43] Lord Phillips CJ said that it promotes a level playing field "by enabling all tenderers to know in advance on what criteria their tenders will be judged and those criteria are assessed."

59. The Court of Justice of the European Communities held in Case C-448/01, EVN v Austria [2003] ECR I-14527; [2004] 1 CMLR 22, that a public authority was not entitled to use a criterion, for the purpose of deciding which bid was most economically advantageous, where tenderers could not verify their bids by reference to that criterion. An unsuccessful tenderer in relation to a public contract for the supply of electricity to administrative offices challenged the tendering process. A tenderer had to undertake to supply the offices with electricity produced from renewable energy sources. Contract documents stated that tenders would be eliminated if they did not contain proof that in the past two years or in the next two years, the tenderer had obtained and supplied or would obtain and supply at least 45 percent of electricity per annum from renewable energy sources. However, the public authority admitted that it did not have the technical ability to verify whether electricity supplied to it had been generated from renewable energy sources. Further, it did not require the tenderers to supply proof of their actual supply obligations or existing electricity supply contracts.
60. The court recalled that the principle of equal treatment of tenderers, which underlies the directive on procedures for the award of public contracts implies, first of all, that tenderers must be in a position of equality both when they formulate their tenders and when those tenders are being assessed by the contracting authority: [47]. More specifically, that means that when tenders are being assessed the award criteria must be applied objectively and uniformly to all tenderers: [48]. Secondly, the principle of equal treatment implies an obligation of transparency in order to enable verification that a criterion has been complied with, which consists in ensuring, inter alia, review of the impartiality of procurement procedures: [49]. Objective and transparent evaluation of the various tenders depends on the public authority, relying on the information and proof provided by the tenderers, being able to verify effectively whether the tenders submitted meet the award criteria: [50]. It was thus apparent that where a contracting authority lay down an award criterion indicating that it neither intended, nor was able, to verify the accuracy of the information supplied by tenderers, it infringed the principle of equal treatment because the criterion did not ensure the transparency and objectivity of the tender procedure: [51].

Breach of equal treatment?

61. For the Legal Services Commission Mr Nicholls submits that it has taken sufficient steps to verify compliance of tenderers with the terms of this contracting exercise for the provision of publicly funded legal services. Successful providers who enter a contract are obliged to comply with the terms. Bidders have been required to self-certify that they comply with these terms. Providers have been contacted by letter and required to confirm that they met the requirements of the contract. Supervisors have had to complete a self-declaration form which, amongst other matters, addresses the issues raised by the claimant. The forms required the providers to give evidence or examples under various headings. The supervisor had to be "in post", which implied that the supervisor had to be employed. The forms had to be read with other information such as the details of case-workers given in the tender documents. That is not an end to the process, Mr Nicholls continued. The requirements in question are obligations which apply throughout the contract and already the Legal Services Commission has in a number of cases withdrawn offers or required further verification. Since the Legal Services Commission has sought verification, and since all providers are subject to the same requirements, there is no breach of any obligation under the Public Contract Regulations 2006.
62. It seems to me self-evident that robust verification of quality standards was demanded by the circumstances of this contracting exercise. There were substantial numbers of new entrants to provide publicly funded legal services in public law. Because a non-competitive process was adopted, there was no further quality assessment by reference, for example, to competitive selection criteria. As one aspect of quality supervision standards are of crucial importance, as was acknowledged in paragraph 4.38 of the Consultation Document. Moreover, the lower success rate of public law cases conducted by firms under tolerances, which did not have public law contracts, and therefore no public law supervisor, led to the decision to remove such work from tolerance. That underlines the need to ensure compliance with the quality criteria.
63. Mr Nicholls submitted that the EVN case has no application to the present. In that case, the criterion could not be verified but no one has suggested that the criteria used by the Legal Services Commission cannot be verified. The challenge instead criticises the manner in which it is proposed to verify compliance with the criteria. In my view, however, it is obvious that although the court in EVN was concerned with the problem of a non-verifiable criterion, the principle behind its decision was the need to ensure the equal treatment of tenderers through the objective and uniform application of the criteria in their assessment. The principle applies whether or not the public authority is able to verify the criteria. If it is able but omits to do so, that is as much a breach of the duty as if it sets criteria which cannot be verified. That is because the outcome may be an inequality of treatment of tenderers through the equal treatment of unequals, i.e. the equal treatment of those meeting and those failing to meet the tender requirements. After all, it is trite law that equality of treatment means not only treating like cases alike but unlike cases differently: Matadeen v Pointu [1999] AC 98, 109C-D(PC).
64. No objection is taken, nor could it be, to self-certification. The Legal Services Commission is entitled to take the view that it is legitimate in the first instance to rely on statements made by professional persons who are bound by obligations of integrity. In the case of the overwhelming bulk of providers, as the Legal Services Commission contends, there is no reason to doubt that they will not supply accurate information. The Legal Services Commission is entitled to take the view that at least initially it would not be a sensible use of resources for it to seek independently to verify compliance by providers.
65. In my judgment, however, verification has fallen short. In general terms that is because it was not completed at the time the contracts were entered. In particular the self-certification supervisor form did not require supervisors to confirm specifically the nature of the employment arrangement between them and the organisation or whether they had complied with the supervision standards now set out in clauses 2.28 and 2.35 of the contract. As indicated, clause 2.28 requires that supervisors have supervised one full-time equivalent case-worker for at least one year in the last five, or have completed the equivalent training course. Although the form does require supervisors to demonstrate case involvement in accordance with clause 2.24 of the contract, to satisfy that requirement it is not necessary to have directly supervised a case-worker. Accordingly, the forms may verify supervisors as meeting the necessary standards without ensuring that they satisfy the requirements of clause 2.28. As for clause 2.35, that sets the 1:6 employed supervisor to case-worker ratio. In my judgment being asked on the supervisor standard form, or in a letter, to declare in general terms that the quality standards are met is an insufficient assurance of compliance. The guidance which was issued on 5 November 2010, which came following the correspondence between the president of the Law Society and chief executive of the Legal Services Commission, came too late, since the supervisor self-declaration form had to be submitted before them.
66. Because the verification process has fallen short, there may be a number of organisations with contracts which did not, or do not meet, the supervision criteria. That could have a consequent impact upon the quality of publicly funded legal services. For example, they may have an arrangement with an individual from another firm of solicitors to act as supervisor, but whom they do not employ. They may employ a part-time supervisor who is not employed for sufficient hours to supervise the firm's caseworkers for the requisite number of hours per month. Alternatively, the person who will act as supervisor may have met the case involvement standards but may not meet other supervision standards in the contract. In each case an applicant may have been awarded a contract despite not meeting the necessary standards. There is a breach of the equality standard in the Public Contract Regulations 2006.

GROUND 2: THE DISABILITY EQUALITY DUTY AND MENTAL HEALTH HIGH SECURITY HOSPITAL PATIENTS

67. The challenge here is that there was a failure to assess the impact of the competitive tender for mental health high secure hospital legal services upon those most affected by it, the patients at the hospitals, who might no longer be able to instruct their existing solicitors. In particular, it is said that the Legal Services Commission did not consult the high secure hospitals and did not carry out an equality impact assessment into the impact that the process would have upon those patients. Moreover, the Legal Services Commission did not apply the new scheme in a sufficiently flexible manner to allow due regard to be given to the needs of disabled patients. Given that patients in high secure hospitals are, by definition, disabled for the purposes of the legislation, this amounted to a breach of the duty under section 49A of the Disability Discrimination Act 1995.

The law

68. As amended by the Equality Act 2010, section 49A of the Disability Discrimination Act 1995 provides, in part:

"49A General Duty

(1) Every public authority shall in carrying out its functions have due regard to –

(a) the need to eliminate unlawful discrimination and victimisation;

…

(d) the need to take steps to take account of disabled persons' disabilities, even where that involves treating disabled persons more favourably than other persons."

69. Aikens LJ explored the nature of this duty in R (Brown) v Secretary of State for Work and Pensions [2008] EWHC 3158. The public authority must assess the impact of its policy at an early stage by, first, gathering relevant information; secondly, consulting with interested stakeholders on the likely effects of the policy; and thirdly, in the light of that information and the views of consultees considering whether any changes are necessary better to promote these statutory objects in section 49A or to minimise any prejudice to the statutory objects. Although the challenge in R (Domb) v Hammersmith and Fulham LBC [2009] EWCA Civ 941 failed, the duty to give active consideration, and to consult those affected, was underlined in the Court of Appeal. Rix LJ (with whom Lord Clarke MR and Sedley LJ agreed) added:

"I am far from saying, however, that in another case, it might not be necessary for a local authority to be able to demonstrate, as a matter of its duty to have due regard to the need to promote disability equality that it had considered, in substance and with the necessary vigour, whether it could by any means avoid a decision which was plainly going to have a negative impact on the users of existing services."

70. "Due regard" in section 49A comprises two linked elements, relevance and proportionality: Pieretti v Enfield LBC [2010] EWCA Civ 1104, [9]. The Code of Practice, The Duty to Promote Disability Equality, 2006, referred to in Pieretti for these propositions, suggests that a full impact assessment is likely to be necessary where a policy, albeit minor, is likely to have a major impact on disabled people: para 2.37. Although there is no statutory duty to carry out an equality impact assessment, it is one way in which the general equality duties may be discharged: Wyn Williams J in R (Equality and Human Rights Commission) v Secretary of State for Justice [2010] EWHC 147 (Admin): [49]. Any such assessment must be fit for the purpose for which it is conducted. Guidance produced by the Disability Rights Commission, Disability equality impact assessment and the Disability Equality Duty, recommends that an equality impact assessment follow a six stage process of assembling the evidence, judging the impact, planning action, implementing of an action plan, monitoring and review, and publication.

Delay

71. Given the manner in which Ground 2 was, in part, formulated, the Legal Services Commission raised the obvious objection of delay in pursuing it. One aspect of the ground as advanced is that the principle of competition in the tender was not specifically consulted upon so that it was not clear that so many of the existing suppliers in the high security hospitals would lose contracts. But the competitive selection criteria, which did not give preference to high security hospital experience, were published when the tender was announced in February 2010. In the consultation it was clear that there would be a reduction in the number of providers, albeit that it was not anticipated that there would only be a handful of firms chosen at the end of the process. The Mental Health Lawyers' Association were opposed to the introduction of competition and made representations to that effect. So it was clearly open to bring judicial review well before October.
72. Another aspect of this ground as advanced was that the Consultation Document proposed a flexible system that would have allowed unsuccessful bidders to continue to represent clients in high security hospitals in exceptional circumstances. Consultees would have been left with the impression that there was sufficient flexibility to allow an unsuccessful firm to continue to represent its own clients. But the Consultation Response made clear that the proposal had changed to one where unsuccessful providers would be permitted to undertake work in high security hospitals only on behalf of existing clients who were transferred there. That became part of the tender proposals in February 2010. So objections to this could have been raised at that point.
73. In as much as this is a challenge to the consultation, and the formulation of tender proposals, it cannot succeed given that the judicial review was not launched until over eight months after the tender proposals were available: per Burnett J in R (Alan Rutherford LLP) v Legal Services Commission [2010] EWHC 3068 (Admin), [40]. However, during the hearing, Mr Bowen for the second claimant changed tack and reformulated ground 2 as a challenge to the outcome of the tender exercise, one aspect of which are the concerns raised about its impact on patients with existing relationships with solicitors. That formulation was strengthened, in his submission, because it is only now that it has become obvious that the high security hospitals themselves have concerns (the evidence of Dr Kevin Murray at Broadmoor and Dr Manjit Gahir at Rampton). In my view, focusing on the outcome of the process overcomes any objection about delay to bringing this judicial review: see R (Law Society of England and Wales) v Legal Services Commission [2010] EWHC 2550 (Admin), [120], [123].

Due regard to outcome?

74. The issue, then, is the outcome of the contracting process, in which a considerable number of the patients in high security mental hospitals will need to change solicitors. For the Legal Services Commission Mr Nicholls submitted that the outcome was a product of a balance struck between the continuity of advice and the quality of advice, bearing in mind that successful bidders would provide services not only to existing clients but also to new clients. It was for the Legal Services Commission to decide how to strike that balance. In recognition of the interest which patients in secure hospitals have in maintaining advice, however, existing providers, even if they have lost contracts, will be able to carry out remainder work, that is to say, to continue to work on their existing cases for existing clients. It will only be new cases that will be dealt with by a new provider. Further, when a client is transferred into a secure hospital, the person providing legal services to that client will be able to continue to do so even if that lawyer does not have a contract to work in a high security hospital.
75. Moreover, continued Mr Nicholls, it is not realistic to suggest that continuity of provision can always be maintained, a point Dr Murray acknowledges in his letter. If a current provider did not bid the client would, subject to the provider undertaking remainder work, lose a representative. If an existing provider bid but scored poorly, it is difficult to see why that provider should be permitted to continue to provide services at the expense of a better rated provider. By both the bidding process, which gave marks for those providers with existing relationships with clients, and by the steps it has taken to ensure that existing provision can continue even when an existing provider has not been awarded a contract, the Legal Services Commission has had due regard to the needs of this group of clients and has made reasonable adjustments to meet those needs as required by section 49A of the Disability Discrimination Act 1995.
76. In my view the Legal Services Commission is entitled to say that it had due regard to the position of patients in the high security hospitals in striking the balance in favour of improving the quality of legal advice provided to them. After all, there were real concerns with the quality, in a few cases the integrity, of some of the many organisations offering legal advice in these hospitals under the 2007 contract. There was consultation, not least through the Mental Health Stakeholders Group, and with the Mental Health Lawyers' Association. Although the desirability of operating a competitive bid was questioned, the impact on patients of changing their legal advisers was not specifically raised, although it could have been. Some provisions for continuity were incorporated in the tender. Once a considerable number of existing providers decided not to bid, it was clear that many patients would have to change solicitors.
77. However, the issue of the impact on patients in high security hospitals of the need for many of them to change long established legal advisers is now on the agenda. It is only recently that it became known that the high security hospitals were not consulted. Now Dr Murray, the clinical director of Broadmoor, has written of the possible distress which patients will suffer from the severing of existing befriending and advocacy support. Dr Gahir, the lead clinician for the national secure deaf service at Rampton, has suggested that removal of an existing legal representative will compound the abuse and discrimination deaf patients in high security hospitals will suffer. In my view Mr Bowen is correct in his contention that this outcome of the tendering triggers the duty on the Legal Services Commission under section 49A to have due regard to the issue. To comply with its duty it must take the steps summarised early in the judgment. It is not for me to prejudge whether it will need to take steps to ameliorate what Dr Murray describes as the possible distress, or what Dr Gahir characterises in stronger terms for those who are deaf. Nor is it my function, despite transitional and other proposals canvassed by Mr Bowen, to consider what those steps might be. It suffices for the purposes of this litigation for me to conclude that the outcome of the tendering for publicly funded legal services in high security hospitals has engaged the section 49A duty.

GROUND 3: ACCESS TO JUSTICE

78. It is said under this head that the Legal Services Commission has acted in breach of its duty under section 4 of the Access to Justice Act 1999 because the outcome of the tender process has been that clients' access to the most experienced public law firms has been drastically reduced because of the substantial reduction of new matter starts awarded to them. In particular it is said that the duty is breached because the Legal Services Commission acted unlawfully by failing to anticipate the volume of bids that would be received in public law and the consequent allocation of relatively few matter starts to each bidder.

The law

79. In requiring the Legal Services Commission to establish the Community Legal Service, section 4(1) of the Access to Justice Act 1999 identifies its particular purpose as securing, within the resources available, and priorities set "that individuals have access to services that effectively meet their needs". Section 4(4) provides that any person exercising any function relating to the Community Legal Service

"shall have regard to the desirability of exercising it, so far as reasonably practicable, so as to

(a) promote improvement in the range and quality of services provided as part of the Community Legal Service and in the ways in which they are made accessible to those who need them."

Section 4(5) requires the Legal Services Commission to fund the specified services. Under section 5(7), in funding services as part of the Community Legal Service, the Legal Services Commission "shall aim to obtain the best possible value for money". Funding priorities are set in accordance with directions given by the Lord Chancellor and taking into account the need for the specified services. Section 6(3)(a) of the Act empowers the Legal Services Commission to fund services by "entering into contracts with persons or bodies for the provision of services by them".

80. It is immediately apparent that the duty of the Legal Services Commission, in particular under section 4(4)(a), is expressed in broad terms. Coupled with the limited basis on which this court can interfere, the open textured language of section 4 means that those challenging the Legal Services Commission will need to demonstrate public law flaws in what it has done. Parliament has allocated responsibility for making the decisions in this area to the Legal Services Commission, not the court, and however strong the judicial preference for a different outcome might be, there is no basis for intervention unless a decision falls short under an established head of judicial review.

No breach of the access to justice duty

81. As described the public law tender was a non-competitive process in which every applicant who met the essential criteria received a contract, there being no additional selection criteria to distinguish between applicants. From the table set out earlier in the judgment it is obvious that the tender was considerably over-subscribed, particularly in London. As a consequence a number of specialist public law firms, including the first claimant, have received a fraction of the new matter starts for which they bid. The first claimant's submission is that this seriously compromises their ability to represent clients under the new contracts. Clients' access to the most experienced public law firms has been drastically reduced, both in terms of the number of new matter starts and the clients who may be served, limited to a degree to those in the procurement area. The latter restricts firms whose practices are national and international from representing those who instruct them. Overall, the stated objective of the procurement exercise is thereby threatened and the duty under section 4 of the Access to Justice Act 1999 to secure access to quality legal services breached.
82. The oversubscription was, on the Legal Services Commission admission, unforeseen, although the first claimant submits that it was perfectly foreseeable, indeed, predictable. The first claimant submits that the failure to anticipate the oversubscription, or to make appropriate allowances in the event of an oversubscription, so as to avoid this outcome, was unlawful. Mr Bowen invokes the duty of a public body to ask the right question and to take reasonable steps to acquaint itself with the relevant information to be able to answer it correctly: Secretary of State for Education and Science v Tameside MBC [1977] AC 1014, 1065B, per Lord Diplock. Given the number of firms which have now been awarded contracts, it was self-evident that many firms which did not previously have a public law contract would be able to meet the essential criteria for a new contract. That information would have been available. Given firms could become experienced in public law related areas such as housing and immigration, it was predictable that firms carrying out that work would apply for public law contracts as an insurance policy against losing a contract in another area, not least because of the option adopted of putting all the categories of civil law up for tender at the same time. There was also an incentive for firms to apply because public law claims could no longer be conducted under tolerances. To do any kind of public law work, including certificated work, firms need a contract, which meant in turn they would have to apply for a share of the available new matter starts.
83. Mr Bowen submits that the Legal Services Commission failed to make reasonable enquiries, under its Tameside duty, which would have established the likely level of interest and which would have enabled it to construct the tender accordingly. It could have ascertained the likely scale of bids if it had made simple enquiries of firms already conducting public law work, but without a contract, since many such firms had bid for public law matters starts as an insurance. It was not made clear in the consultation that the assumption of a low level of interest was untested and there was a failure to seek the views of the consultees in the event that the assumption proved to be incorrect. If the reason given for adopting a non-competitive procedure had been because the Legal Services Commission wanted to redistribute existing new matter starts to other firms and to other geographical areas, there would have been any number of ways to do so without compromising the ability of specialist providers to provide public law services. It could have adopted different approaches in different procurement areas: where there was undersupply a non-competitive approach may have been appropriate, but in those areas, particularly London, where there was likely to be considerable oversubscription, a competitive process would have been more appropriate.
84. In response to this ground the Legal Services Commission begins by questioning the premise. In its submission the outcome of this process has been to increase access to justice. There are now more providers holding public law contracts. They are spread over a wider geographical area with the consequence that some regions where there was formerly no public law provision now have providers. There is therefore a larger number of providers in a wider range of areas. The effect of that is to increase access to justice by giving effect to improvements in the way in which services are made accessible to people. Moreover, experienced firms will still be able to carry out the high profile litigation under certificate. Therefore even if one considered access to justice only in the sense of access to the claimant and other similar firms, those firms will continue to be able to conduct the same volume of litigation which they have previously conducted.
85. Moreover, the Legal Services Commission contends that access to experienced public law firms like the claimant is not synonymous with access to justice. That particular firms like the claimant have a smaller number of matter starts when the overall number of providers has increased and their geographical spread improved does not necessarily mean that access to justice is reduced. Access to justice in public law is not about high profile cases. It is concerned with ordinary people with ordinary cases who need access to legal advice to assist with their problems. Arguably, the effect of the public law tender is that more clients are now likely to be able to receive such advice.
86. Whether access to justice has been reduced or increased, in my view there is no legal flaw under this head in how the Legal Services Commission conducted the public law tender. It conducted an extensive consultation exercise. When it inquired in the initial impact assessment about the potential impact on clients of the proposed tender, neither the Advice Services Alliance nor the Law Society were able to proffer definite views. It reviewed its approach to other low category areas, education and actions against the police, but nothing had emerged in relation to public law to change its mind about public law. A non-competitive process was, in its judgment, most likely to achieve its aims, including the aim of securing services in a wider range of areas, including the so-called advice deserts. The Legal Services Commission concedes that it did not anticipate that there would be large numbers of bids in public law. But there were only 45 providers in the year 2009-10 and in some areas, no providers at all. It could not predict with certainty how many bidders would participate. Overall, I cannot conclude that it failed sufficiently to inquire or that its judgment as to how to approach the public law tender was otherwise flawed. In my view it put in place the system for bidding which met its legal obligations under section 4 of the Access to Justice Act 1999.

CONCLUSION

87. Thus my conclusion is that the verification of quality standards was flawed. In particular, the process has not allowed the Legal Services Commission to verify that firms meet these criteria in relation to the employment of appropriate supervisors set out in the 2010 Standard Civil contract. That offends against the principle of equal treatment, contrary to European Union law, as implemented through the Public Contracts Regulations 2006. Realistically, Mr Bowen for the claimant did not seek to quash the tender processes as a whole. Realistically, he also conceded in argument that it would be impractical to determine whether a firm complied on 15 November 2010 when the contracts commenced. To ensure that unfairness caused to successful tenderers who do meet the relevant criteria is remedied, it seems to me appropriate that the Legal Services Commission must ensure, within a limited period, that all firms holding contracts in public law and mental health comply with the supervision standards. Those found not to comply must have their contract removed. Any new matter starts need to be redistributed pro rata to those firms who do meet the verification requirements.
88. For the reasons given my conclusion is also that, while there can be no challenge under the general disability equality duty to the process of awarding the contracts for legal advice for mental health patients in the high security hospitals, that duty is now engaged because of the outcome of the process. The outcome is that all those patients are now assured a high quality service. However, many of them will need to switch advisers. That may have an adverse impact on those already vulnerable. Under section 49A of the Disability Discrimination Act 1995 the Legal Services Commission must have due regard to whether they need to take steps to ameliorate that result of the contracting exercise.
89. The outcome of the public law tender is that specialist public law firms, with leading reputations, are no longer in a position to open the advice cases they did under the 2007 Standard Civil contract. That does not preclude them from undertaking under certificate publicly funded litigation, which they have in the past, and which has been such a notable feature of the work of this court. Whatever view is taken of this outcome, in my view there is no legal flaw in the way the Legal Services Commission conducted the tendering exercise for the award of public law contracts. There has been no breach of its duty under section 4 of the Access to Justice Act 1999.