Civil legal aid work is loss-making for the majority of providers, according to new research by the Law Society of England and Wales.
A study commissioned by the Law Society from Frontier Economics has worked with providers of housing and family legal aid, who are a mix of not-for-profit organisations and private solicitor practices, to understand in-depth their operating model and financial situation.
A final report analysing data from providers reveals:
- Civil legal aid work is loss-making for the majority of housing and family legal aid providers sampled (82%)
- All housing legal aid providers in the sample were loss-making from their civil legal aid work, including all private sector solicitors offering housing legal aid
- 47% of providers sampled working in family legal aid were also loss making
- All not-for-profit providers sampled in both areas of law were making a loss
Law Society president Nick Emmerson said:
“This research reveals an untenable situation where reductions in fee levels by successive governments mean fee-earning staff cannot even recover the costs of providing legal aid, let alone generate a profit to make the organisation sustainable.
“Those who remain in the market are only able to do so by cross-subsidising from other areas and relying on the goodwill of staff to regularly work overtime, leading to real difficulties with recruitment and retention – especially at senior levels of the profession.
“Others are taking the decision that legal aid work is simply no longer viable and exiting the market, leaving areas of the country with no legal aid provision at all.
‘’This is just not sustainable and is resulting in massive market exit, with advice deserts growing across the country. It is a significant concern when a city the size of Liverpool struggles to sustain housing provision and the family courts are flooded with litigants in person. These figures provide clear evidence of the reasons why.”
Emmerson concluded:
“This vital research cannot be ignored if the UK government is serious about meeting its obligations to provide legal aid services. With the Civil Legal Aid Review now in its final stages, this research provides a model for future analysis and setting of fee rates at a realistic and sustainable level that is fair to both providers and taxpayers.
“Moving money around within the existing fee structures or between areas of law will not work and will only make other parts of the system even less sustainable.
“The Law Society’s work with Frontier has created a framework that government can use going forward to analyse the costs of providing a civil legal aid contract and the associated profits (or losses) from this work.
“Without a recommendation for a significant fee increase in all areas, the Review will not have been fit for purpose.”
