In its report, Access to justice: balancing the risks, the Adam Smith Institute last week called for legal aid to be abolished for most civil compensation claims and no win, no fee agreements to be expanded to cover those cases currently funded by legal aid. The paper is deeply flawed as it seems to be mainly informed by biased opinions on the balance of risk in civil cases (the author believes that the system is loaded in favour of claimants) and little understanding of the civil legal aid system.
Most of the civil legal aid budget, well over half, pays for family cases and a large proportion of these are related to child protection and custody disputes - impossible to fund through no win, no fee arrangements. Admittedly, the financial aspects of divorce cases could be funded in this way, but legal aid currently works as a state loan to fund such cases. The costs are covered by loans secured against property and include interest charges above the Bank of England base rate. A healthy £50 million a year currently comes back into the fund through this route.
Much of the rest of the civil litigation covered by the legal aid system includes areas of law such as housing and community care. Disputes with landlords or elderly people trying to secure help with care needs really do not lend themselves to no win, no fee arrangements. These are the sorts of cases which cannot be measured in terms of hard cash, but LAG would argue they are of a greater value as they involve the necessities of life such as keeping a family in a home. Is the Adam Smith Institute seriously suggesting that these people can reply on the 'free market' for legal redress?
This is a path which has been trodden before. Ten years ago, under the last government, a substantial part of the legal aid system was privatised. Encouraged by the Adam Smith Institute, the government abolished legal aid for most personal injury cases and replaced it with no win, no fee. This led to the scandal of parasitic claims management companies exploiting claimants by charging extortionate fees for what amounted to a referral service - so much for the free market. Fortunately, after the government was forced to intervene, regulation of these companies has now largely controlled the problem.
What remained in the legal aid system for personal injury work were medical negligence cases. These were left in because of the difficulties of funding these claims through no win, no fee - due to the costs of gathering medical evidence. LAG appreciates that this is an emotive issue as the main defendant in such cases is the NHS. Unfortunately, mistakes are made in the NHS, as they are in health systems across the world. However, taking such cases out of scope of legal aid would have a negligible impact on the overall budget (such cases take up less than one per cent of legal aid's £2 billion budget), but would have a profound effect on the few hundred people a year who rely on legal aid so that they can seek redress when things go wrong.
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It strikes me that much of the opposition to what will inevitably be swingeing cuts in the legal aid system are largely counterproductive. Most of the noise generated seems to be about either restricting social justice or how solicitors who are already badly paid may simply be incapable of continuing legal aid work if it becomes loss making. What few comments however seem to address is the fact that, like it or not, we have a massive budget deficit and legal aid, like almost every other government department, is going to be the target of massive cuts. There's no point just complaining -- what we need to do is to come up with some realistic alternatives -- i.e. identifying how, in practical ways, the legal aid budget can be cut to preserve the most essential services and to allow some form of legal aid system to continue. Let's be realistic. Simply moaning about legal aid cuts is about as effective as King Canute trying to keep the waves back.
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