Cable's dodgy statistics

Last week, Vince Cable, Secretary of State for Business, Innovation and Skills, announced a consultation on changes in employment law to reduce the number of cases being brought. The measures proposed include raising the qualifying period to bring a claim of unfair dismissal and the introduction of a deposit scheme to discourage spurious cases. Cable points to the increase in the number of claims to employment tribunals (ETs) last year as evidence of the need to change the law, but LAG believes that he is guilty of misinterpreting the figures to strengthen his case for change.

Yes, the headline figure of a 56 per cent increase in the number of cases in 2009/10 looks like a compelling reason to press ahead with the reforms. Hidden in the detail of the annual statistics from the Tribunals Service, though, is an explanation which has nothing to do with vexatious former employees rushing to bring cases (despite what the employers' lobby would have us believe). The Tribunals Service says that 86 per cent of the increase is due to multiple claims brought by trade union and other employee representatives for equal pay and cases concerning the Working Time Directive.

In a procedural manoeuvre, many thousands of these cases are resubmitted every three months so they are not time-barred. This artificially inflates the figures for new claims. Most of the cases involve large numbers of employees working in the public sector or for big, private companies, not the small and medium-sized businesses which Cable and his government claim are unfairly penalised by the existing system. Moreover, the changes suggested would do nothing to discourage such multiple claims.

There was a 14 per cent rise in the number of single cases in 2009/10. LAG argues that this is a much more reliable indicator of the underlying trend in ET claims. While this increase is high, it is in line with the figures from previous recessions. As times get harder, some employers tend to try and cut corners by dismissing employees without using fair procedures. This results in an increase in claims.

Interestingly, the latest figures from the Tribunals Service on the number of ET claims show a 19 per cent decrease in single claims for the quarter to September 2010. These figures were released before Vince Cable made his announcement. Surprisingly, the government failed to highlight this piece of good news, which could reasonably be interpreted as a sign that the country is coming out of recession. Perhaps this was a case of the government ignoring inconvenient facts?

LAG believes that adequate procedures are already in place which penalise employees who bring spurious claims. Costs can also be awarded against both employees and employers which conduct their cases frivolously or vexatiously. Increasing the qualifying period would risk unfairly penalising many employees. It could also be illegal as it might have a greater impact on women than men, as was decided by the European Court of Justice when the time limit was last set at two years (see R v Secretary of State for Employment ex p Seymour-Smith and Perez C-167/97, 9 February 1999).

Image: Department for Business, Innovation and Skills

Financial Inclusion Fund cuts confirmed

LAG has learnt that the Financial Inclusion Fund (FIF) will end in March. FIF pays for just under 500 debt advisers based in Citizens Advice Bureaux and other not for profit (NFP) advice centres. LAG believes this will be a devastating blow to many of the centres as they are also facing cuts in legal aid and local government grants.

The FIF was established in 2004 by the last government. A total of £45m was allocated from the fund to pay for face-to-face advice services in the NFP advice sector to help people facing debt problems. Around 100,000 people a year were assisted by the money advisers paid for by the fund. Most of these advisers now face redundancy. News that the fund was to be discontinued was given by Mark Hoban MP, Financial Secretary to the Treasury, in response to a written question in the House of Commons. Advice agencies, though, are still waiting for official confirmation that the scheme will end from the Department for Business, Innovation and Skills which administers the cash.

It is difficult to exaggerate the impact of the abolition of the FIF grants. Many in the NFP sector had feared that the fund would discontinue due to public spending cuts. Prior to the election, Labour was making no promises over whether the FIF would continue, but the coalition government is now also planning to discontinue funding for debt advice under the legal aid scheme, except if people are in immediate danger of losing their homes.

LAG believes that the decision to cut the FIF and the government’s threat to end legal aid funding for debt advice is remarkably short sighted. Early intervention in debt cases ensures people deal with their money problems before they spiral out of control. Often, when mortgage and rent possession proceedings are imminent, it is too late to keep families in their homes. Aside from the damage this causes to people’s lives, the loss of a family home brings an enormous cost to the state. Shelter, the housing charity, recently calculated that each family forced out of their home costs the state £50,000.

Anyone can face money problems caused by the loss of a job or when something else goes wrong in their lives. LAG is calling on the government to establish a commission or review of the services and funding in place to help people with debt and other civil law problems. The FIF decision shows a lack of strategic thinking on civil legal problems by the coalition government. We believe this has to be addressed as a matter of urgency, before more of the services people rely on when they are hit by common legal problems disappear for good.

Andy Murray of Unite, the trade union which represents many of the advisers now due to be made redundant, told LAG: 'It is absolutely staggering at a time when City bankers are receiving massive bonuses after being bailed out by the taxpayer that the government decides to withdraw this key support to members of our society in distress. The claim that "We are all in this together" is increasingly hollow.'

Update today (24th January). LAG has contacted Phil Jew at Advice UK, the national organisation for independent advice centres. Jew is asking for clarification from the government about the future of funding for debt advice, "Mark Hoban's statement caused alarm by seeming to signal an end to the Government funded face to face debt advice scheme. Such a cut would be a huge blow and would not make economic sense. If there's a possibility of an alternative scheme, we need to know - now!"


The Treasury announcement in full

Image: South Manchester Law Centre

Justice for All campaign launched

Justice for All, the new campaign established by charities and others concerned about the cuts to legal and advice services, held a successful launch event in the House of Commons yesterday. Organisers were overwhelmed by the numbers attending the event and were forced to run two sessions so that MPs could hear from the speakers.

Sir Alan Beith, chairperson of the Justice Select Committee spoke at the meeting, along with clients who had used legal aid services. Sir Alan said: 'We have to ensure there is support available for people going to tribunals', and called for organisations to put in submissions to the Justice Select Committee’s inquiry on the impact of the proposed changes to legal aid. Sir Alan, who is a Liberal Democrat MP, told the meeting that, 'while the government is not going to sign a blank cheque for legal aid in the future, support must be given to people most in need'.

The meeting heard from a former legal aid client, Deborah. In an emotional speech she told the meeting that she and her daughter had been victims of domestic violence. They had been living in a women’s refuge for a year, but after receiving advice from the housing charity Shelter they were rehoused. They used Shelter’s legal service again when they experienced harassment from their neighbours. Deborah told the meeting that 'without Shelter and legal aid both my daughter and I would not be where we are today, in a good home'.

Many of the solicitors and advice services representatives attending the event took the opportunity to meet their MPs and raise their concerns about the impact of the proposed cuts to legal aid and in other funding for advice services. Throughout yesterday afternoon LAG observed a steady stream of representatives from solicitors' firms, Law Centres, Citizens Advice Bureaux and other advice centres making their way to the central lobby in Westminster to meet their MPs.

Yvonne Fovargue MP hosted the launch meeting. She is the incoming chairperson of the All Party Parliamentary Group on Legal Aid and a former Citizens Advice Bureau manager. The meeting also heard impromptu speeches from shadow Justice Secretary Sadiq Khan MP and shadow justice minister Andrew Slaughter MP. Sadiq Khan said that 'a justice system which is accessible to all is one of the pillars of a civilised society'. He told the meeting that if Labour had been re-elected to government it would have been forced to make cuts to legal aid but it would not have made them to social welfare law as early advice in such cases 'saves money in the long term'.

Members of the Justice for All campaign include LAG, Citizens Advice, the Legal Aid Practitioners Group, the trade union Unite, Advice UK and Young Legal Aid Lawyers.
Written submissions to the Justice Committee inquiry have to be submitted by 24 January. The committee will be hearing evidence in February and is particularly interested to hear about the impact of the proposed changes on the number and quality of practitioners in all areas of law, who offer services funded by legal aid. More details are available on the committee's website.

Image (Legal Action Group): Sir Alan Beith speaking at the Justice for All launch with former legal aid client Deborah

Legal aid cuts discriminate

A substantial stack of impact assessments were released with the consultation paper on legal aid in November 2010. The papers starkly set out the full horror of how the government’s proposals for the legal aid system will affect clients. As detailed in the equality impact assessments, women, people with disabilities and black, Asian and minority ethnic (BAME) groups will be especially badly hit if the planned changes to the scope of legal aid go ahead.

A total of £350m of the current legal aid budget has been earmarked for cuts, the bulk of which fall on civil legal aid. Family legal aid bears the brunt of these. Divorce, custody disputes over children and financial matters to do with relationship breakdown are all planned to be cut from the scope of legal aid. A large majority, 65 per cent, of family legal aid clients are women and the government admits in its impact assessment that this means they will be disproportionately hit by the planned cuts. BAME clients will also be disproportionately affected, though due to problems with the data the result of the impact assessment on this group is less reliable.

Women also form over 70 per cent of the client group for education law, which is set to be taken out of the scheme. The high proportion could be partly explained by the solicitor recording the sex of the parent instructing him/her to represent a child - perhaps men are less likely to attend appointments with solicitors to discuss their children’s education? The figure could also reflect a higher number of women single parents seeking advice on education matters. Thirty-one per cent of people who obtained advice on education law are BAME clients as opposed to eight per cent in the general population, indicating that the withdrawal of legal aid for education law would have a disproportionately greater impact on this group as well.

People suffering from an illness or disability will be hit hardest by the proposed cuts to advice on debt and benefits. Currently, 30 per cent of clients who have received advice on debt and a staggering 63 per cent of those needing advice on benefits have an illness or disability. Again, there is also a disproportionate impact on women and BAME clients. The proposal to withdraw legal aid from clinical negligence cases also has a disproportionate impact on sick and disabled clients with 30 per cent of cases currently being brought by people from this group.

Overall the government acknowledges that high proportions of the population seeking help from the legal aid system are women, from BAME groups or suffer from an illness or disability. Further impact assessments are promised with the final proposals, but LAG believes the government will struggle to justify the very high difference in impacts on the groups described above. The inescapable conclusion is that if these cuts go ahead they will discriminate against the most disadvantaged and the government will be to blame.

The impact assessment documents are available on the Ministry of Justice website. The consultation on the proposals ends on 14 February.