Over the past few years, high numbers of criminal barristers have been leaving the profession due to being overworked and underpaid. This has greatly impacted the criminal justice system, which is already struggling due to the thousands of cases in the current backlog.
The median income for a junior barrister during their first 3 years of practice is £12,200. Not only is this below minimum wage, but barristers will also often have already incurred thousands of pounds of debt after completing their legal studies. Arguably, this fails to fairly remunerate criminal barristers for the challenging and complex work they often undertake.
Due to inflation hitting a record high, the Criminal Bar Association (CBA) argued that the government’s proposal for a 15% increase in barristers’ fees would be “more than extinguished” by the time they received it.’ Furthermore, it was made clear that the proposal would not make up for the decrease in earnings which have fallen by 28% over the past two decades.
On 5th September 2022, indefinite strike action began, voted for by 80% of criminal barristers. The overwhelming vote in favour of escalation was due to the ongoing dispute with the government regarding legal aid fees, which had not been resolved following days and weeks of action.
The uninterrupted action is still ongoing.
As a result of the strikes, there have been thousands of court hearings disrupted or delayed. However, this is only in addition to the crisis already present before the CBA’s action started, with nearly 60,000 cases stuck in the backlog.
Continuation of the strikes will result in victims waiting a long time for their case to go to court and may result in dangerous defendants getting released into the public due to the expiry of statutory time limits. For instance, the CBA highlighted in an announcement on the 9th of September 2022 that “a number of senior judges have refused to extend custody time limits” and that “their judgements spell out that the government has had ample time to resolve the legal aid dispute and ongoing crisis in the criminal justice system”.
Despite the impact the action is having on access to justice, and the legal system as a whole, Law Society President Stephanie Boyce said that “the short-term impact of direct action will pale in significance against the permanent departure of even more criminal defence solicitors, barristers and law firms if this demanding work in the public interest is not properly rewarded”.
Arguably, the long-term impacts of criminal barristers being underpaid thus leaving the profession will outweigh the impact of the strike action.
Since the death of Her Majesty, the Crown Office advised that the title of Queen’s Counsel (QC) to King’s Counsel (KC) would be changed with immediate effect.
In response to the Queen’s passing, Kirsty Brimelow KC, Chair of the CBA, said, “The Criminal Bar Association joins with legal professions across the Commonwealth in mourning the passing of Queen Elizabeth II. We pay tribute to the Queen’s steadfast and true public service and offer our deep condolences to His Majesty the King and the Royal Family. We mark with sorrow and dedication to justice the change of Queen’s Counsel to King’s Counsel.”
The CBA confirmed in their announcement on the 9th of September 2022 that out of respect, any planned demonstrations/public gatherings would not take place during the mourning period. However, they stated that due to there being no movement from the government, their action would continue.
On 20th September 2022, a meeting took place between the CBA and the new Lord Chancellor and Secretary of State for Justice to discuss the ongoing action. Following the meeting, the Bar Council tweeted, “all are committed to finding a resolution acceptable to all and for the future of the criminal justice system”.
The CBA also tweeted that the demonstrations planned for Thursday 22nd September 2022 would be paused until the following week “in light of the Secretary of State for Justice opening detailed discussions of the issues underpinning the ongoing action”.
The CBA later announced that on 21st September 2022, they “began talks with the Ministry of Justice on the causes of the action taken by Criminal Barristers, and the requirements necessary to secure the present and future of a vibrant, diverse Criminal Bar, without which there can be no functioning Criminal Justice System”. The CBA confirmed that the gatherings outside courts paused the previous week would resume.
The continuing action begs the question of whether and how quickly the government will act on the CBA calling for a 25% uplift in fees. If no agreement is reached, cases will continue to build up in the existing backlog, and the criminal justice system is likely to collapse. In the farewell words of Jo Sidhu KC, former Chair of the CBA, “the Criminal Bar stands together today like never before”.
One can only hope that in the coming weeks, there is a resolution for what many would argue is already a tired and broken justice system.
The UK is in a current state of inflation as a consequence of Russia’s conflict with Ukraine, which has caused reduced gas supplies to Europe. These circumstances have led to an alarming increase in gas prices, with energy suppliers struggling to keep up as customers are protected by fixed-term contracts.
The increased prices particularly raise concern for small businesses that will struggle to meet the new energy bill requirements. This will be relevant to businesses such as those in the food industries, including bakeries, which will combat the energy bill crisis alongside food inflation. Businesses fear that they may have to choose between paying rent and bills or paying wages to their employees.
Initially, Prime Minister Liz Truss introduced an energy cap of £2,500 to domestic households to respond to the energy crisis. Following this, the government has also introduced a scheme worth £250bn for businesses that will run from October to the end of March. The scheme consists of reducing the wholesale price of energy by more than half to prevent businesses from going bust and public organisations such as schools from collapsing.
Considering that businesses deal with longer energy contracts in comparison to domestic households, it is inevitable that they would require additional support. Whilst this may provide some relief to businesses, the scheme’s short-term duration questions its effectiveness. For example, as the scheme only runs for six months, it still leaves business owners with uncertainty regarding how they will settle the increased bills after the end of the scheme.
Nonetheless, small businesses play a vital role in upholding the UK economy and providing employment. As energy bills continue to rise, businesses will find themselves in positions where they must choose between paying bills and wages, which could lead to hundreds facing unemployment.
Thus, the government must prioritise creating sustainable plans for businesses to tackle the crisis. Liz Truss has argued that there should be a stronger focus on expanding Britain’s renewable and homegrown energy supplies to provide long-lasting results that achieve energy security. It is arguable how reassuring this may sound to businesses who may prefer longer-term support packages to achieve business stability.
It is now likely that some businesses may begin to consider restructuring to ensure precautions are in place for when the government’s scheme ends in six months. On the other hand, some companies may already face insolvency as the bills have been increasing gradually throughout the year. Alternatively, firms that have practice areas in the energy sector may see fewer clients as some energy companies have been unable to cope with the increased demand for gas.
In addition to changes in legal work, law firms are businesses themselves and may face hardships in that the heating and electricity costs in both firms and courts across the UK will continue to rise; for example, the Magistrates and Crown courts have had their energy bills increase by approximately £6.5 million in the past five years despite efforts to reduce energy consumption.
With rising living costs, firms may struggle to match demands for high wages from employers.
On Friday, 23rd September 2022, UK Chancellor Kwasi Kwarteng unveiled a set of measures to ‘improve Britain’s economy’. The announcement of his mini-budget has caused a stir and generated a range of market responses. But what are the policies he plans to enforce, and how will they impact the economy and the legal sector?
Energy: Kwarteng confirmed that energy bills would be capped for a two-year period at £2,500.
Income tax: Kwarteng stated that the 45% additional income tax rate for those earning more than £150,000 would be removed. The basic income tax rate will reduce from 20% to 19% in April 2023. The 1.25 percentage point national insurance rise will be cancelled from 6th November.
Business tax: The planned increase in corporate tax from 19% to 25% will be cancelled.
Stamp duty: There will be a permanent cut on stamp duty for property buyers. The tax-free threshold is raised from £125,000 to £250,000. First-time buyers will not pay stamp duty on a house valued at £425,000.
Bankers’ bonuses: The bankers’ bonus cap will be scrapped.
Infrastructure: The chancellor plans to streamline the process for approving new infrastructure projects and remove EU-derived laws.
Investment zones: 40 investment zones will be created with tax breaks for businesses.
Universal credit: More checks to be introduced for people working part-time and claiming universal credit.
Strikes: The government will legislate to tackle militant trade unions.
Following the announcement, the yield on UK government bonds rose sharply, and the pound fell against the dollar and euro. Local and foreign investors lose confidence in the pound as they begin to pull money out of the UK currency. The current weakness of the pound compared to the dollar will make imports more expensive. This could lead to a higher rate of inflation, which will raise interest rates.
The Bank of England may also have to increase interest rates to make the pound more attractive. UK lenders such as Halifax, Virgin Money and Skipton Building Society have suspended new mortgages due to the market turbulence brought on by the announcement of the mini-budget.
Regarding the income tax cuts, on the one hand, the additional money in taxpayers’ pockets will be spent or invested. This may lead to further economic growth, which will cause more taxes to be paid as businesses become more profitable. The government may use this money to pay back the debt.
On the other hand, people spending more due to additional income could lead to an increase in the current rate of inflation over the coming months. The International Monetary Fund warned that the untargeted fiscal package threatens to stoke soaring inflation.
Setting the corporate tax rate at 19% will help businesses save revenue. This money can be used to grow the company, create jobs, raise wages or pay dividends which will, in turn, increase the amount the government receives from tax. However, many economists and commentators are sceptical of this theory. The two-year energy price cap will greatly benefit households. However, this will not end the energy crisis faced by the UK. If a solution is not found, energy prices will skyrocket once the two-year price cap is lifted.
The biggest fear amongst economists and market participants is the billions of pounds the government will borrow to fund the energy cap and tax cuts. The government may have to increase tax rates at some point in the future to pay back the debt. As markets continue to react to the mini-budget, it will be interesting to see how this will play out in the coming months.
The permanent cut on the stamp duty may likely encourage more property purchases. Such transactions will increase the demand for legal services provided by conveyancing or real estate practices.
Creating the new investment zones will also require the help of property lawyers to negotiate and draft contracts for the sale of land and buildings.
Construction lawyers will be required to negotiate and draft contracts for the parties involved in developing the investment zones. Due to the creation of jobs in the new investment zones, employment lawyers will be required to draft employment contracts.
Furthermore, the money saved by companies due to the low corporate tax rate may encourage businesses to use the savings to increase the production of goods and services. This increase in production will lead to more commercial contracts with suppliers and, thus, an increase in the demand for commercial contract lawyers. Clients may also seek legal advice from lawyers regarding certain investments they may make with the additional revenue.