The Purchaser-Supplier Approach in Legal Aid

3. The Features Of A Purchaser-Supplier Approach To Funding

The next question asks, what are the features of a purchaser-supplier approach to funding legal aid? [7] There is no model or ideal-type of such an approach. In Australia, for instance, the application of the purchaser-supplier model ("PSM") to legal aid remains "in an early stage of development" (Bourke 2001: 10). Moreover different systems of government and administration will highlight particular PSM options. In England, for instance, centralisation of responsibility for funding and providing legal aid has favoured the use of performance-oriented contracts between the Legal Services Commission and solicitors and NFP agencies supplying legal services. The variety of legal aid work has meant that different types of service delivery contracts have evolved (Orchard 2001: 206). In any event the PSM is "not a single neat concept at all, but a complex mix of professional, managerial, and political concepts that have become intertwined" (Browning n.d.; see also Hanlon 1999: 000 & 1999; Campbell & Vincent-Jones 1996).

However the public policy literature, the Legal Services Commission experience and the Australian experience so far allows us to describe the features of a PS approach to funding legal aid. Essentially the PSM is "about the delineation and often separation of the planning and service control functions of government, from the role of provider or deliverer of services" (Aulich et. al. 2000:2; see also Boston 1996: 109). The enormous variety of functions performed by government and the services demanded by its administrative agencies means that delineating and separating the roles of purchaser and provider can often generate a "complex network of arrangements and agreements" (Aulich et. al. 2000: 3). Instances include performance 'contracts' for policy-responsible administrators, outputs/inputs, quality standards, cost, and reporting agreements between funding/policy agencies and other state or NGO and private service providers, and comparable agreements between such providers and third-party suppliers, if service delivery functions are sub-contracted. Specific PSM models have emerged in public sector areas such as health and aged care, education, training, and employment services (Browning n.d.; Hanlon 1997; Rowlands 1999: see also Senate Finance and Public Administration References Committee 1998).

Nevertheless, the PSM in practice has two general characteristics. The first is its resort to contract as a source of norms and techniques for managing public policy projects, both to supervise expenditure, and ensure value-for-money and accountability, and to manage relationships between a funding/policy agency and the suppliers of the services required to maximise its policy objectives. The second general characteristic of the PSM in practice is that delineation and separation of public policy functions makes new demands on funding/policy agencies.

Applying contract in managing the cost and quality of service delivery produces highly comparable outcomes in public policy projects. The form or content of contractual agreements used in PS approaches to funding legal aid have few, if any, unique features. This is especially true of the agreements made by agencies such as the Legal Services Commission, the plans in the Canadian provinces and the legal aid commissions in Australia which must contract directly with non-agency, independent suppliers such as solicitors' firms and NFPs to acquire the services that are necessary if the objectives of a legal aid system are too be achieved. Such contractual arrangements will feature provisions detailing issues such as the volume and type of services, specify unit or total costs, accountability and reporting requirements, impose quality standards and performance measures and other cost containment, management and efficiency provisions, as we would also expect to see in PS approaches to funding health, transport or other public sector services.

We can illustrate the features of a PS approach to legal aid funding by reference to current practice in England. Since 1999 the Legal Services Commission has used four types of service contracts with solicitors' firms and NFP to fund the delivery of legal aid services. In civil out-oflitigation cases not requiring representation in courts (advice and assistance, negotiation, court appearances in mitigation, and legal representation before immigration and mental health review tribunals) it uses Legal Help and Controlled Legal Representation contracts. These contracts specify the categories of law, e.g., family, immigration, debt, welfare benefits or housing law in which solicitor and NFP contractees can provide legal aid services. Contractees can also provide legal aid in a limited number of out-of-category cases (Moorhead 2002). In the contract the Legal Services Commission specifies the total number of case starts, i.e., number of services to be provided, over a 3-year period, and the maximum total amount that it will pay to the solicitors' firm or NFP in a 12-month period. This amount is "based on estimates of length of case and average cost" (Orchard 2001: 206). Flexibility exists to the extent that the number of case starts and maximum payments to contractees are adjustable depending on affordability and work patterns (subject to contractual safeguards) (see Orchard 2001: 206-8).

The Legal Services Commission also uses PS-approaches in funding civil and criminal cases. In civil "in litigation" matters solicitors' firms are contracted to provide legal representation. [8] These contracts "are, in effect, licence contracts based on quality standards" (Orchard 2001: 209). In 2000 some categories of law, e.g., family, immigration, clinical negligence and personal injuries, were made exclusive to contracting firms. Since April 2001 the provision of legal representation in all civil cases is exclusive to such firms. Solicitors operating under contracts also provide criminal defence services. The contracts incorporate quality regimes such as lawyer and staff competence standards that the Legal Services Commission hopes to ultimately extend to the civil legal aid contracts. Whilst the provision of defence services is demand-led compliance audits of claims under legal aid contracts are conducted annually. The civil in-litigation and criminal defence legal aid contracts do not limit either the total number of permissible case starts or the maximum amount that can be paid over the life of the contract (see Orchard 2001: 209). The Legal Services Commission also deploys PS approaches to manage expenditure in high cost civil (25000+) and criminal (150000+) cases and serious fraud cases (see Orchard 2001: 209-10).

In Australia legal aid commissions have also used PS approaches in contracts funding legal aid provided by solicitors' firms. In 1999, for example, Legal Aid Queensland adapted former English Legal Aid Board franchise agreements to local market need to introduce a Preferred Supplier scheme (Hodgson 1999; see also Australian Law Reform Commission 2000). Other legal aid commissions are likely to follow the Queensland lead. It is also not unlikely that PS values such as quest for improved cost-effectiveness, outputs and quality have permeated informally into cost setting and payment processes, and the performance expected of lawyers supplying legal aid services.

However the Australian experience also demonstrates the application of the PSM to intergovernmental funding arrangements. In 1997 the Federal government required PS mechanisms to be incorporated into new Commonwealth-State legal aid agreements (see 7.0 below). In those agreements the Commonwealth purchases legal services, up to a maximum annual value, with indicative expectations of annual service outputs, from the major legal aid providers in the States and Territories (Senate Legal and Constitutional References Committee 1998: 216-7 & 222). In return the States and Territories agreed that legal aid commissions would only spend federal funds on providing legal aid in Commonwealth matters. The agreements define "Commonwealth matters" as matters arising under Commonwealth law, laws for which the Commonwealth accepts special responsibility, being matters of priority to the Commonwealth, and other defined services, such as child support legal services and Commonwealth matter arising from duty lawyer, legal advice and community legal education services (Senate Legal and Constitutional References Committee 1998: 216 & 222).

The 1997 and subsequent Commonwealth-State legal aid agreements contain other PS-type features. Detailed appendices of Commonwealth service priorities and guidelines for expenditure, including means and merits tests, seek to transmit macro-level federal policy, costcontrol and efficiency requirements by controlling the allocation of federal legal aid funds at the State and Territory level (Senate Legal and Constitutional References Committee 1998: 225-8 & 229-44). The agreements also oblige State and Territory legal aid commissions to ensure that services in federally funded legal aid matters are provided in the most efficient and cost effective manner (having regard to the types of services a self-funding party would be likely to obtain), and for service delivery practices to be effective and efficient (Senate Legal and Constitutional References Committee 1998: 217-8). The agreements also impose new reporting and accountability requirements. State and Territory legal aid providers are required to install and use a specific computer software package, collect management information as determined by governments, and report on performance against Commonwealth Data and Performance Monitoring Requirements (Senate Legal and Constitutional References Committee 1998: 218). For instance the Australian agreements requires services to be provided in the most efficient and cost effective manner, having regard the types of services a self-funding party would be likely to obtain. The agreements also require service delivery practices to be effective and efficient (Senate Legal and Constitutional References Committee 1998: 217-8). In short, the PS-approach to funding in the post-1997 inter-governmental agreements in Australia the Commonwealth has created mechanisms to enable it to enforce its right to control the expenditure of federal legal aid funds.

The second general characteristic of the PSM in practice was that delineation and separation of public policy functions makes new demands on funding/policy agencies. The PSM allows such agencies to concentrate on the mix and standard of services to meet community needs (see Boyd & Cronin 1994; Aulich et. al. 2000: 3). In doing so it creates a fresh emphasis on policy-making and development, and the need for officials with policy-making skills in funding/policy agencies. The use of contract norms and techniques in PS-mechanism also demands staff with the sociolegal skills of contract-making, such as high-level communication, negotiation and bargaining skills, as it requires staff with legal, auditing and financial management skills for the on-going contract administration.

Applying the PSM model also generates new information needs. In part to enable funding/policy bodies to administer and monitor performance and outcomes in contracts for services. The Legal Services Commission contracts referred to above, for instance, build upon a sophisticated knowledge of costs and processes in solicitors' firms, other aspects of lawyers' work, and markets for legal services, including by NFPs and non-lawyer service providers (see Sherr 2001). As importantly PS-approaches to funding generate new needs for information to enable funding/policy agencies to effectively exercise their newly delineated policy-making functions.

The result is that in the application of a PS-approach to funding we would expect the purchasing funding/policy agency to increase its investment in applied, policy-oriented research. Since 1988 in England, for example, a well-funded legal services research unit has been a feature of planning legal aid policy, developing contract specifications and monitoring contract performance. This unit has created a staff with well-developed research skills, and also contracted out a significant amount of research. On a much lesser scale the Australian experience has been similar. Since 1997 the Federal government has re-engaged with policy-oriented research, commissioning research into legal aid needs, provision of legal services in family law, and similar research (see Hunter 1999 & Hunter 2000; see also Fleming 2000 & 2002).

Another feature of a PS-approach to legal aid funding is that it opens up possibilities. Focusing on policy development means that funding/policy bodies are likely to develop wider visions. For instance, in England the CEO of the Legal Services Commission refers to the fact that "we can also make grants, subject to different forms of contracts, to support the overall objectives of the Community Legal Service and fund different methods of delivery" (Orchard 2001: 208). This is part of the culture of contracting, and it means that funders will look beyond traditional service providers. This is also the case in Australia.


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