Wirral Council reconsiders secrecy over hourly rates for solicitors and barristers and decides to keep them secret

                              

Last year I blogged about how Wirral Council had entered into a contract with solicitors and barristers chambers to keep the hourly rates it was being charged “confidential” (and therefore redacted on the invoices and contract I requested to inspect), when I exercised my right under s.15 of the Audit Commission Act 1998 c.18 as part of last year’s audit to inspect various legal invoices Wirral Council had received and the hourly rates included as part of the North West Legal Consortium Collaboration Agreement.

There’s a Management Board for the North West Legal Consortium Collaboration Agreement and a Consortium Contract Manager and last year I asked for their views on the redaction and pointed out that the contract does allow the hourly rates for legal services to be disclosed with the consent of the companies involved. The response I got is detailed in excerpts from two emails below.

Interestingly the contract also specifies in pages 15 and page 16 that if there are any FOI requests relating to these matters that the Consortium Contract Manager must be notified of any FOI requests relating to it (which is probably why Cllr Ian Lewis’ recent FOI request about the fee Wirral Council paid to the barrister Sarah O’Brien took four weeks to answer.

I thought the answer to the question about supplying the legal rates that I received last year from Wirral Council would be interesting to publish here as it runs completely counter to what politicians say in public about the Labour administration being “open and transparent”.

I’ve not included the person who sent these two emails as he’s merely passing on a response he’s received and I don’t want anyone to “shoot the messenger”.

from: @wirral.gov.uk
to: john.brace [at] gmail.com
cc: Financial Services Coordination
date: 30 August 2013 17:04
subject: RE: legal invoices

Hello Mr Brace,

Thank you for your e-mail

…….

Redaction of Evershed’s and Weightman’s invoices

Your request has been forwarded to the Management Board of the NW Legal Consortium which meets next week. We will get back to you once a response is received from the NWLC Management Board on this matter. Depending upon the outcome of this we can then take a view on your subsequent questions.

I am on leave for the next two weeks. If you have any further need to contact us could you please send it to the financial Services coordination e-mail address and copy in my email address. Matters can then be picked up in my absence.

——————————————————————————————————-

from: @wirral.gov.uk
to: john.brace [at] gmail.com
date: 19 September 2013 16:02
subject: RE: legal invoices
mailed-by: wirral.gov.uk

Redaction of Evershed’s and Weightman’s invoices

Your points have been put to the consortium as requested. The response received is contained below.

There was expectation from the bidders that the hourly rates were provided in confidence. The expectation of bidders whilst submitting the hour rates the information would be used only for the purposes of the tenders only.
We believe that disclosure of the hourly rates would be likely to prejudice the commercial interests of the law firms that tendered for the contract. As this exemption relates to the legal firms, the Council sought the views of the firms. In response, the Council was provided with the responses below:

(a) The rates on which our legal services are provided to clients are highly sensitive and often pivotal in whether we win or loose work from a client;
(b) There is a real and significant risk that disclosure of the Rates would enable our competitors to undercut us when the Council puts its legal services out to tender again, and also where we are bidding for other public sector work;
(c) The rates were provided in a highly competitive environment and they remain current. The market in which we operate is highly competitive and – more than ever during the recession – clients have been willing to ‘shop around’ for legal services with hourly rates being a key determining factor as to where to place work. Given the Rates are highly competitive (significantly below even our standard local government rates), it is a real risk that this could lead to clients on less competitive rates taking their work elsewhere or not placing work with us. It is also probable that, if the Rates were disclosed and became more widely known, some of our existing Clients will seek to re-negotiate rates to the level of or close to the Rates which again could lead to a significant financial impact on the law firms. Law firms have not gone unscathed in the recession and many firms have been forced to make redundancies and some have even gone out of business. Disclosure of the Rates could therefore lead to not-only a direct and significant impact on our revenue but also damage to our reputation and to the confidence that our clients have in us;
(d) For the reasons described above, disclosure of rates information for legal services could deter legal services providers who may think twice about whether working for public sector clients in the future. This could lead to a market in which the public sector has a diminished pool of legal services providers to choose from (driving quality down and rates up).

If you wish to pursue this latter matter further you would probably need to take your own legal advice regarding the contract confidentiality versus the Audit Commission Act. The Council has erred on the side of contract confidentiality.

The guidance issued by the Audit Commission regarding inspection rights does state that ‘Your right to inspect the accounts is personal which means the external auditor can not get involved.’ My reading of this would mean that neither Grant Thornton nor the Audit Commission would be able to provide a view on this issue.

I hope that this answers your queries.

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