Civil legal aid providers at breaking point

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.”

Nick 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.”

Notes to editors

* This statement relates to the detailed financial data information gathered from 45 providers across two areas of civil legal aid – allowing a full understanding of the provision of civil legal aid and the multitude of issues impacting profitability.

** For the purposes of this analysis, we have excluded revenues and costs from work which achieves inter-partes rates, as these are not paid at civil legal aid rates. However, even without this adjustment the majority of housing legal aid providers were still found to be loss making from their civil legal aid work.

*** Find out about the Law Society’s civil legal aid desert maps.

Read the Law Society and Frontier Economics’ report on Research on the sustainability of legal aid.

Frontier Economics’ interviews with housing and family legal aid providers:

“It’s really hard to recruit and retain people, and a lot of skills have been lost over the last 10 years.”

“If I hadn’t been the partner here, and been here for so long, I don’t know whether my partner would have continued to do housing anyway.”

“It’s an exercise in withering on the vine. We’re all quite old. I look at it and think, in 10 years’ time there won’t be any legal aid work.”

“We made the difficult decision to stop offering private law legal aid (having made the decision to stop doing Legal Help work already last year).”

“We simply can’t afford to do private family legal aid.”

Civil legal aid fees have not increased since the 1990s and were cut in 2011 by 10%. This means, when accounting for inflation, that fees have reduced in real terms by 90% since 1996.

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