Wednesday, 16 June 2010
Refugee charity faces closure
Accountants BDO have taken over as administrators of the charity Refugee and Migrant Justice (RMJ). LAG understands that BDO took over from 4 pm today. RMJ is appealing to the government to make £1.8 million in payments for legal aid work or the charity will be forced to close.
RMJ is in cash flow difficulties due to the change over to fixed fees for legal aid work. Prior to October 2007, not for profit agencies were paid fixed contractual payments for undertaking the work. From April 2009 the government ended the transitional arrangements which had been in place and this has led to the cash crisis at RMJ.
The charity represents clients in around 10,000 cases a year. It estimates that it will cost at least £2m to close the charity, as the government will have to reallocate most of its ongoing cases. RMJ has been running a high-profile campaign to persuade the government to change the rules on payment for legal aid cases. So far, though, the government has stuck to the line that it cannot make an exception for the charity. The government is in a difficult position as legal aid firms might cry foul if the charity receives special treatment.
LAG believes the system needs to be changed so that organisations like RMJ, which represents clients in complex cases, do not lose out. Over half of RMJ's cases are undertaken on behalf of asylum-seekers and these cases can take two or more years to resolve. Legal aid providers do not get paid until the end of the cases. Those providers which run complex cases are penalised under the fixed fee system, while those undertaking many short cases, which they can advise on and close quickly, benefit. LAG suggests that complex cases need staged payments or payments on account. A balance needs to be struck or clients in desperate need of help will lose out.