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Government proceeds with civil legal aid cuts

Impact assessment does not anticipate any shortfall in family law barristers arising from changes

The Secretary of State for Justice, Chris Grayling, has announced that the government proposes to proceed with planned cuts to civil legal aid.

As part of a package of reforms, the government will introduce a residency test so that only those with a strong connection to the UK are able to receive civil legal aid. However, children under 12 months old will be exempted from the test.

There will be a fixed representation fee paid to solicitors in family cases covered by the Care Proceedings Graduated Fee Scheme, and fees paid to self-employed barristers will be "harmonised" with those paid to other advocates appearing in civil (non-family) proceedings.

The government will also make it harder for claimants to use civil legal aid to bring speculative cases by ensuring all cases must have at least a 50% chance of success to be funded.

Changes to civil and experts' fees will also be introduced "to ensure that they are fair, represent value for money, and reflect fees paid for similar services elsewhere." This will involve a reduction in fees of 20%. However, there will be retained the rates payable to experts in those areas where recent increases have been made to address market supply issues.

There will be a further consultation on a revised proposal to tighten up the payment mechanism in judicial review cases.

The impact assessment, published by the Ministry of Justice, says:

"Although the results from the recently published survey "A Time of Change: Solicitors' Firms in England and Wales" suggests that approximately 31% of those firms involved in legal aid were planning to remove themselves from the market in the next 3 years, this conflicts with the results from the latest legal aid tender process for contracts (post the most recent legal aid changes) which suggests that more firms are willing to undertake legal aid work than previous tenders. The outcome of the 2013 civil tender process that invited tenders for contracts that reflected the LASPO scope reforms in the Family, Housing and Debt and Immigration categories of law, showed that overall there were over three times as many bids as available civil cases, with new entrants in each category – despite significant reductions in the amount of work available compared to the previous tender process. This suggests that there is currently competition for work within the family and immigration civil categories and therefore scope in the short term for at least some providers to withdraw from the market while still potentially maintaining a sustainable market supply.

"Other factors, such as future demand and supply, also impact upon the number of providers willing to undertake legally aided work. It is possible that rising volumes of public family law cases are likely to increase the risk that there will be an insufficient number of providers to meet the demand for work. However, the reduction in the scope of legal aid funded work implemented through the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 is likely to decrease that risk.

"The impact of harmonising the remuneration rates paid to barristers with those of other advocates, does present a risk to the supply of self-employed barristers carrying out legal-aid work. However, the impact of the scope changes introduced by LASPO is likely to reduce the demand for legal aid work, potentially having the opposite effect and leading to an over supply. While it is possible that some self-employed barristers may leave the market, this is dependent on a number of unknown factors including their cost base, reservation wage, private client work and ability to adapt/diversify to the reforms. In addition, even if a shortfall did occur it is expected that this could be made up through a combination of contracted legal aid solicitors using in-house barristers, solicitors who already have higher rights of audience undertaking extra work themselves or other solicitors seeking to qualify to exercise higher rights of audience in order to mitigate the loss of income from the wide reductions in civil work generally under LASPO.

"In addition, while barristers will receive a lower minimum standard fee, this can be enhanced (increased) at the discretion of the assessing authority. This should mean that for self-employed barristers focusing on complex cases in specialised areas of law where they add real value to the resolution of the case, there should be no reason why they should not satisfy the criteria for substantive enhancements to be paid in those cases in which they appear. 
 
"There is a risk that a number of experts may elect to leave the market as a result of the fee reductions, potentially also impacting on provider choice. However, reforms following from the Family Justice Review are seeking to significantly reduce the number of, and therefore the demand for, experts involved in public law family cases. This should mean providers are less likely to face a shortfall of experts going forward.

"The rising volume of public family law cases also puts pressure on the demand for experts, as well as on solicitors (as mentioned above). However, the planned reforms to reduce the number of experts as well as the reduction in the scope of legal aid funded work implemented through LASPO should mitigate the risk that there will be an insufficient number of experts to meet the demand for work."

The response to the consultation is here. The impact assessment can be accessed from the same page.