A month ago, the government announced plans to wipe £350m off the legal aid budget and if carried through, over 500,000 of the most vulnerable members of our society will no longer have access to justice. That's 25% of those currently able to do so, denied the democratic right first outlined in Magna Carta eight hundred years ago: 'we will not deny or defer to any man either justice or right'.
By any measure this will be an extraordinary challenge to a legal aid system that has successfully protected the rights of tens of millions of people over the past 60 years. Yet, as against the projected impact of the increases in university fees, the response of the legal profession so far has been somewhat muted. This may prove short sighted. There is a growing consensus that the reductions in legal aid will force non legal aid practices to take on a much increased pro-bono workload.1 The point has also been made that effective legal aid was the price for the continuing independence of the legal (unlike the medical) profession when the post – war welfare reforms were implemented.
Legal Aid is not currently considered a vote winner but a recent report found that 84% of the population are in favour (in fact, in favour of extending legal aid to all of those on less than the average national income).2 Although such a suggestion sounds unrealistic today, it should be borne in mind that when the system was introduced 80% of the population qualified for assistance. That suggests that public opinion will force the provision of access to justice of some sort for those unable to meet from their own pocket the costs of representation, once the impact of the proposed changes has been felt. One of our partners has experience of working in France, where every partnership was allocated cases every year in which they are obliged to offer their services to the impecunious at 'legal aid rates'; it is not impossible to imagine a similar burden being placed upon our profession as a whole.
Many aspects of the current proposals certainly necessitate serious challenge through the consultation process. For example, the removal of ancillary relief in divorce proceedings used by tens of thousands of women, for the sake of saving £19m is clearly without merit. It may have provided a convenient sound bite but the truth is that this is a sum that could have been covered by improved efficiencies in the administration of legal aid. Instead it is apparently preferable to compel these clients to the improbable panacea of three hours of mediation to resolve their matrimonial affairs.
Likewise the entire removal of welfare benefits from scope will undoubtedly bring hardship to many individuals for example who would otherwise have been able to pursue legitimate cases for vital Disability Living Allowance. We have acted for a number involving children with severe disabilities who would now be denied the legal aid support required to pursue their rightful and successful claims. Similarly in the area of immigration, the removal of all cases that do not involve a detention challenge or an asylum aspect because the individuals concerned have 'usually made a free and personal choice to come and remain the United Kingdom' demonstrates a lack of understanding of the complex issues involved and the real dangers of denying such individuals the necessary legal protection.
But if the approach to reform in the Green Paper is based on the Minister's perception of a need to 'discourage a culture of litigation', it is no wonder that the impact of such 'green' ideas has so far been ill-considered. Some of the proposals go way beyond this somewhat sneering slash and burn approach to signal a revolution in the way legal aid services as a whole might be accessed in the future.3 However, the Law Society's recent successful judicial review of the Legal Service Commissions' (LSC) family law bid tender process (which heralded an overnight reduction from approximately 2,400 to 1,200 family law aid legal firms) shows that this needs to be managed without the risk of decimating the provision of legal aid.
To many this would seem to offer those firms that remain a financial bonanza but it could turn out to be a financial nightmare. Obtaining the working capital to fund the recruitment of new staff is not a given in an environment where bank funding is still scarce. Even my firm, Britain's biggest provider of legal aid services, is not immune to these challenges. We have long accepted the need to pursue greater efficiency and value for money in the delivery of legal aid services. Our implementation of the Carter Model using solicitors and paralegals enables us to provide services to over 20,000 clients a year. However, our ability to expand our services in this environment is still severely constrained. And for many smaller firms faced with the proposal of an immediate 10% cut in civil legal aid fees and a future of competitive tendering, it is clear that large numbers of them will sadly be driven out of business.
For those of us who can survive, what options are available to safeguard our ability to provide legal aid services? My firm is examining two options: obtaining our own sources of alternative funding and the forthcoming alternative business structures. Both offer opportunities for protecting the supply of legal aid services but have different implications.
Let's return to the government's proposal of taking ancillary relief out of scope. There are private lenders who would be prepared to finance the legal fees involved. These lenders are certainly more experienced than the state at taking an informed view as to the security of their loan vis a vis the client's assets. And in return for an improved and more secure payment facility, saving them time and money, the law firms involved might well be prepared to reduce their fees or even work for fixed tariffs.
The net result would be the continuation of the supply of work for these clients without an increase in the costs to them. Of course, funding of this nature won't remove all clients from the need for publicly funded legal aid support: cases with assets below a certain level won't provide an adequate revenue model for the private lenders and private law cases involving children in contact and residence disputes are of particular concern, but it could support a large number of clients who otherwise will now be left without legal representation.
The Legal Services Act 2007 reformed the way in which legal services are regulated in England and Wales, allowing for the creation of alternative business structures (ABS) from October 2011. These will enable law firms to explore new ways of organising their businesses to be more cost-effective, permit different kinds of lawyers and non-lawyers to work together, and allow for external investment. Undoubtedly this will bring a revolution to the legal sector but does it offer potential for legal aid firms to adapt to the challenges ahead?
Even with a legal aid budget still in the billions, firms operating in this sector are not usually spoken of in the same profitable tones as our brethren in private law firms. The potential to deliver returns on investment through mergers in the legal aid sector is certainly not out of the question though. It will require investors who understand the nature of legal aid work and the need to maintain quality in its provision. Equally those legal aid firms that do take up such opportunities will have to experience some cultural changes.
Footnotes
1. See e.g. the article by Alex Aldridge, editor of Legal Week in The Guardian 19 November.
2. 'Social welfare law: what is fair?' Report produced by the Legal Action Group – see table 5 and the accompanying text
3. Consider the proposal for the development of the Community Legal Advice (CLA) helpline (Section 4.272):'The CLA Helpline will be established as the single gateway to civil legal aid services'. From the government's perspective, this is a neat way of controlling the total expenditure on legal aid services: create a filter that can decide how much face-to-face advice (i.e. at legal aid firms) is actually made available to those who might need it.
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