In a written Ministerial Statement made by the Lord Chancellor and Secretary of State for Justice, Michael Gove on 28 January 2016 he announced that,
'I have decided not to go ahead with the introduction of the dual contracting system. I have also decided to suspend, for a period of 12 months from 1 April 2016, the second fee cut which was introduced in July last year. As a consequence of these decisions the new fee structure linked to the new contracts will not be introduced. My decision is driven in part by the recognition that the litigation will be time consuming and costly for all parties, whatever the outcome. I do not want my department and the legal aid market to face months if not years of continuing uncertainty, and expensive litigation, while it is heard.
The Legal Aid Agency will extend current contracts so as to ensure continuing service until replacement contracts come into force later this year. I will review progress on joint work with the profession to improve efficiency and quality at the beginning of 2017, before returning to any decisions on the second fee reduction and market consolidation before April 2017.'
In the full statement the Lord Chancellor makes reference to his department's commitment to retaining a vibrant independent bar and also makes reference to, 'barristers feared that the commercial model being designed by some solicitors’ firms would lead to a diminution in choice and potentially quality' as a reason to re-think the contracting arrangements and to suspend the second fee cut.
Read the full statement here.