Catherine Lee
Director, Access to Justice
Justice Policy Group
4.31 4th Floor
102 Petty France
London
SW1H 9AJ
Response as requested to: [email protected]
10 August 2011
Dear Ms Lee
THE COMMUNITY LEGAL SERVICE (FUNDING) (AMENDMENT No2) ORDER
2011
Thank you for your invitation to respond on the above consultation. We regret
that, given the very short period allowed, which falls during the main summer
holiday period, we are unable to respond in detail. However, we feel that it is
extremely important to ensure that the Ministry is aware of the impact of the
Funding Order on Resolution members and their clients.
Resolution’s 6,000 family lawyers and associate members are committed to the
non-adversarial resolution of family disputes. Resolution solicitors abide by a
Code of Practice which emphasises a constructive approach to family problems
and encourages solutions that take into account the needs of the whole family,
and the best interests of any children in particular.
Resolution as an organisation is committed to developing and promoting best
standards in the practice of family law amongst its members and amongst family
lawyers in general. Resolution explores and promotes other means of resolving
family disputes, such as mediation and collaborative law, so that couples can
negotiate solutions without using the courts. Many Resolution members also
practice as mediators and collaborative lawyers and many are accredited by the
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organisation as specialists in particular aspects of family law, such as contact
cases or financial aspects of separation.
Around two thirds of Resolution members conduct legal aid work. Resolution’s
members work in around 1500 firms who form the bulk of family legal aid contract
holders.
We understand that the fee reductions are part of the Government’s radical
reform program for legal aid. As you will be aware, Resolution has responded in
full to these proposals. Our concerns are that these are unworkable, will not
solve individual’s family problems and will have an adverse effect upon children
and women in particular. The impact of fee cuts on Family lawyers will reduce
the availability of skilled legal advice in this complex and sensitive area of law
and reduce access to justice.
Legal aid lawyers have suffered a cut in fee levels on an annual basis for some
21 years, not least due to inflationary pressures and also the fact that expenses
relating to running a legal practice have increased markedly above general
inflation figures. There have been only four limited rate increases in legal aid in
the last 17 years which makes legal aid lawyers one of the most poorly
recognised and remunerated public servants.
Solicitors' practices are very different from, for example, the Bar. Although
payment regimes can be similar the two branches of the profession operate in
very different ways. Solicitors’ practices have significantly greater overheads as a
result of their commitment to accessible offices in areas of need.
10% seems to be an arbitrary figure and the proposals simply assume that the
market can sustain a 10% cut in hourly rates and fees across the board. In fact
the cut will represent more than 10% reduction in current remuneration for family
providers with the introduction of new fixed fees (those savings have not been
factored into the government’s figures) and other changes for example, on
enhancements. The proposed reduction will inevitably cut margins tighter in an
already difficult environment and require providers to assess their future business
plans. Our members report to us that most family legal aid practice profit margins
are too tight to tolerate the fee cut and may simply tip some legal aid firms into
unprofitability.
We know the Minister, Mr. Djanogly, is aware of the Otterburn Report for the Law
Society ‘Impact of the MOJ Green Paper proposals on legal aid firms’ (February
2011). We believe that some of the findings of the report may be misinterpreted
by the Ministry of Justice, so that it fails to understand the significant impact a
10% fee cut will have on firms, and subsequently, potential clients.
The Otterburn report shows that the profit margin across all firms is currently
10%, based on fees of £290m and profits of £28m in aggregate. Chart 6.2
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indicates that a quarter of firms will start incurring losses if a 10% cut is imposed.
This will inevitably mean that they stop doing legal aid work, and may leave the
market altogether.
However, it would be a mistake to conclude that 75% of firms would be
unaffected by fee cuts and therefore there would be no adverse impact on the
supplier base.
The Otterburn report cautions that as there was no publicly available data on the
supplier base by size or location, it was not possible to say that the respondents
to its survey were a representative sample of LSC suppliers. Therefore, it is quite
possible that the 25% of firms which cease to provide legal aid services may be
in particular locations or serve particularly vulnerable client groups. This would
mean that there could be significant gaps in the supplier base, which would
emerge as the impact of fee cuts became felt. This means that clients would not
be able to access even those services deemed by the government to be a priority
for continued legal aid funding, for example protecting children in both private
and public law cases, and people generally in domestic abuse cases.
We are very concerned that such a significant step is being taken without robust
research. We consider that 10% fee cuts are likely to have severe unintended
consequences for access to justice and would therefore urge you to re-think the
strategy even at this late stage.
Yours sincerely,
David Emmerson
Chair – Resolution’s Legal Aid Committee
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