The unintended costs and consequences of legal aid cuts

Inevitably when policy-makers design cuts packages they look at the short-term – savings achievable in particular department budgets within the spending review period. More holistic assessments, looking at where other public services ‘pick up the tab’ for another budget’s austerity measures, and the ‘displaced demand’ or ‘knock on costs’ that arise, are left for another day. This has been brought home with the Government’s legal aid reforms now before Parliament; an Independent report from a Kings College economist suggests the contribution of these cuts towards “deficit reduction” will be negligible, owing to the public costs of unresolved legal problems.

The report analyses large scale datasets from the Civil and Social Justice survey which samples the public’s legal problems, their effect and how they are addressed. It’s not rocket science as the survey data shows up the “adverse consequences” of being unable to access legal services or obtain civil law redress; an avoidable eviction costing the state over £1000 in homelessness/re-housing costs, a stress related visit (typical for those reporting money/debt problems) to a GP costing over £100 or hospital costing over £500, a job lost unnecessarily where employers flout employment law resulting in benefit claims and lost output and tax, the costs to the courts of dealing with “litigants in person” in family cases, and the cost to the NHS of recovered insurance premiums in funding clinical negligence cases through no-win no fee deals rather than legal aid.

If anything the report uses an overly cautious approach and methodology in identifying obvious, direct “knock on” costs to other budgets, including the costs of alternative sources of advice. A year ago, I analysed known/recorded outcomes of legal aid advice on social welfare law issues (housing, debt, benefits and employment law problems) and mapped the positive outcomes against the known adverse consequence costs of unresolved problems – this analysis suggested that for every £1 in early “legal help” advice under the civil legal aid scheme, the saving to the state, economy and society ranged from £2-8 depending on the type of problem.

Legal aid cuts have been a tricky issue politically for lib dems in Government; in the past our frontbench and numerous conference motions have always supported civil legal aid services, but now a Government Bill is abolishing most of the “civil” side of legal aid. However, this is not a policy “owned” by lib dem Ministers and the pressure to support Ken Clark, ordered by the Treasury to make substantial cuts to the legal aid budget, has been intense. Despite much lobbying from our MPs (very conscious of the risks of losing advice providers in their constituencies), there has been no ‘give and take’ or account taken of consultation, and lib dem amendments were guillotined from debate, so in the final Commons stages of the Bill, a sizeable number rebelled by supporting Labour amendment.

The Bill is now in the Lords and many of our Peers are unhappy with the Bill; Lords and Baronesses Phillips, Thomas, Shipley, Carlile, Lester, Clement-Jones, Doocey and Dormer amongst others. Lib Dem peers are especially excised about clinical negligence cases, which leave victims with life-long costs and disabilities, being ditched from legal aid, and there is a clear line of rebellion on this. However, it’s unclear how far our peers are prepared to go in seeking amendments on family breakdown and social welfare legal help.

The Government’s defence is that people need “practical, general advice” to resolve problems rather than legal aid and publicly funded litigation. It’s an attractive argument, except that this is precisely the level of service provided by not for profit agencies, such as Citizens Advice Bureaux and Law Centres that is being stripped out of the legal aid scheme. The Kings College report is just one more piece of evidence underscoring the false economy of abolishing community legal advice provision.

James Sandbach is Policy Officer for Citizens Advice, a former Parliamentary Candidate, a non-practicing barrister, and one of the founders of Justice4All www.justice4all.org.uk

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3 Comments

  • the survey data shows up the “adverse consequences” of being unable to access legal services or obtain civil law redress

    That is what contingency fees and legal insurance are for.

  • James Sandbach 16th Jan '12 - 12:55pm

    re above comment – legal insurance and ‘conditional fee’ services (contingency % fees don’t exist in UK civil legal system..) don’t apply at all for dealing with social welfare law problems (benefits, debt, housing etc) as there’s no viable market model for them in these fields as an alternative to free advice provision..where are the legal insurance products for social tenants and benefit claimants etc? They don’t exist and the limited attempts to create a market and product opportunities in these areas haven’t worked as the client base is so poor that even the most basic upfront fees and premiums will be unaffordable (and these aren’t the kind of problems where these costs are easily recoverable either).

    Conditional fees do work for other areas of civil law where you can recover costs in courts or setttlements such as personal injury compensation or professional negligence cases…it can be a bit of a shady market though – no win no fee never really means no win no fee in practice, and can often incentivise higher costs, especially transactional costs. However, another aspect is of the Legal Aid Bill is to limit recoverability of these costs – ie the wrongdoers liability to pay them so they have to come out of claimants damages and settlements and in many cases the costs will actually exceed the compensation obtained.

    Again I’d emphasise what we’re talking about with social welfare legal aid is something different – it is not litigation culture or costs, but rather access to basic free advice from CABx and neighbourhood law centres – under the current legal aid mechanism this is delivered on a “fixed fee” system paid for by contracts with the legal aid authority (LSC) to deliver legal aid advice..and the level of fee is around £200 per case..now the point of the Kings College research and other analysis is that it shows that this £200 is a lot less than letting the problem exacerbate to the point where housing, health or social services have to pick up the client’s problem instead.

  • I agree with Jeremy on all of this. Even if you put on one side the importance of access to justice, the financial arguments for retaining free legal advice on issues around welfare benefits, employment, housing and debt are enormous. Put simply, it will cost tax and council tax payers more. As more money cannot be raised, other services will suffer.
    Too many of our legislators seem to think the argument is about well paid lawyers gettiing more money. They do not understand that, for instance, welfare rights workers employed by such as CABs are having to be axed. These are workers not earning much money, working extremely hard, and only dealing with cases that are not possible for volunteer front line CAB workers to do. they are not dealing with cases where somebody just feels like appealing a decision they do not like.

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