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Change to legal aid rule aids home owners on low incomes and domestic violence survivors

Civil Legal Aid (Financial Resources and Payment for Services) (Amendment) Regulations 2020

Changes to the legal aid rules have been laid in Parliament that will allow more homeowners on low incomes to access legal aid. The rule change, brought about by the Civil Legal Aid (Financial Resources and Payment for Services) (Amendment) Regulations 2020 (the Amendment Regulations), will particularly benefit survivors of domestic violence, with many more able to have legal representation in family proceedings, reducing the risk of being cross-examined by their abusers in court.

The Government agreed to change the rules on 'imaginary capital' in response to the judgment in R (on the application of GR) v Director of Legal Aid Casework & Anor [2020] EWHC 3140 (Admin), a challenge brought by Public Law Project on behalf of a domestic violence survivor and working mother of two who was denied legal aid for family proceedings. 'Rebecca' [not her real name] was told she was not eligible for legal aid because she owns her own home, even though there is almost no equity in the property.

Regulation 37 of the Civil Legal Aid (Financial Resources and Payment for Services) Regulations 2013 provides that for the purposes of calculating an individual's disposable capital, any interest in land must be taken to be the amount for which that interest could be sold after any secured debt over the land is deducted.

The amendments to regulation 37 made by regulation 2(4) of the Amendment Regulations remove the limit on the amount of mortgage or other secured charge which must be deducted when calculating an individual's financial interest in land for the purposes of capital. This deduction was previously limited to a maximum of £100,000. Regulation 2(5) inserts into Regulation 38 of the 2013 Regulations a provision enabling the Director to determine an individual's main dwelling for the purposes of regulation 38 and 39 of the 2013 Regulations. This provision was previously in regulation 37 but will no longer have any application to regulation 37 following removal of the mortgage cap but will continue to apply to regulation 38 and 39 of the 2013 Regulations.

Rebecca's solicitor Daniel Rourke, PLP, said:

"Our justice system works best when everyone can use it on equal terms, with dignity and respect. A decision about whether someone can afford to pay for legal representation should not ignore the realities of their situation. It is plainly unfair to pretend someone has capital that simply does not exist.

"For victims of domestic violence, that has not been the case. The regulations laid ... in Parliament will mean that many more vulnerable women on low incomes will be able to take part in family proceedings with the support of a lawyer, in a fairer and more equal way.

"Our client is earning a low wage, looks after two children and receives Universal Credit, yet she was denied legal aid because the rules on home ownership have not been updated in decades. They are completely out of touch with reality. This irrational rule ignored the fact that my client's home was heavily mortgaged, and pretended that my client had capital which simply does not exist. The 'imaginary capital' prevented her from effectively participating in proceedings concerning her children.

"We are extremely grateful to the Law Society for protecting our client against costs in this case. Without their financial support and backing, it would not have been possible to bring this challenge, which has resulted in an important change in the rules.

"Our client has an upcoming hearing. We are keeping our fingers crossed that our client can obtain legal aid before the hearing takes place. If not, she may have to attend court without legal representation, where she would be expected to cross-examine her abusive ex-partner and make complicated legal arguments on her own."

Law Society president David Greene said:

"The issue of mortgage debt is just one of many flaws in the means test that we have been highlighting to ministers. Our research has shown the means test is preventing even families living below the poverty line from accessing legal aid. This must be dealt with in the present government's review of the means test."

For the Amendment Rules, click here. For the judgment in R (on the application of GR) v Director of Legal Aid Casework & Anor [2020] EWHC 3140 (Admin), click here. For coverage of the rule change by PLP, click here.