Legal aid plans 'could deny help to most vulnerable', says Citizens Advice

11th January 2007

National charity Citizens Advice says reforms to the legal aid system could deny thousands of vulnerable people the vital help they need. The future of legal aid is the subject of a Westminster debate being held today (11th January 2007).

Citizens Advice bureaux helped people deal with over 5.5 million problems last year, with nearly 3 million problems concerning debt and welfare benefits. Under the proposed system, many local bureaux will find it very difficult to continue providing advice under the legal aid system, leaving thousands of people without help. To prevent this from happening, the charity is lobbying MP’s to back their call for higher fixed fees that will rise in line with increases in costs.

Advisers in many Citizens Advice bureaux are currently funded to provide legal aid on welfare benefits, debt and housing problems through contracts with the Legal Services Commission (LSC). New proposals include funding advisers a fixed amount for each case they handle, without sufficiently taking account of the complexity and time-consuming nature of many cases that bureaux deal with. The fixed rates proposed by the LSC are not enough to cover the cost of many of the cases the bureau handle. In addition, plans to pay agencies in arrears would mean charities subsidising publicly funded services.

Teresa Perchard, Director of Policy for Citizens Advice said:

"Legal aid is essential to enable people on limited means to get access to justice. However, the Government's proposed system, with limited exceptions, will pay the same per case whether it requires one hour or eight to resolve. There will therefore be pressure on all legal aid suppliers to cherry-pick simple cases. Many of the people that bureaux help are vulnerable and have very complicated cases that take a lot of assistance. If those people cannot come to us for help, there may be nowhere else for them to go."

"We are particularly disappointed that London weighting has not been included in the proposals, despite the evidence that services cost more to deliver in the capital. Any fixed fee system will only work if the amounts set are sufficient, and rise in line with increases in costs."

"We pride ourselves on our legal aid system, but there will be nothing to be proud of if the reforms mean vulnerable people are not helped simply because their problems are too complex."

The proposed changes will have a significant impact on the whole CAB service with the result of the new contract likely to be that some bureaux can no longer offer legal aid. 252 bureaux Citizens Advice Bureaux across England and Wales currently have LSC contracts and employ nearly 590 specialist advisers to work on those contracts.

CASE STUDIES

1. A CAB in the South East dealt with a housing case that took 13 hours. The client had learning disabilities, and lived with his wife and children in social housing. There was a history of possession orders and warrants, due to variable employment, and the client found it difficult to manage income and benefits when circumstances changed. After finding work, he failed to contact relevant agencies, benefits stopped, and a court order was breached.

To convince the court and housing association that further breaches would not occur, and ensure future stability for family, the caseworker liaised closely with local specialist tenancy support for people with learning disabilities to ensure ongoing future support. The caseworker also challenged the housing association because they had failed to keep to the vulnerable tenant protocol. Extensive work also took place to ensure correct benefits were put into payment, bank standing orders were in place, and the clients' budget was sustainable.

The parties agreed terms and the clients remained in their home. This would have been unlikely without the support arrangements, in view of the client’s past history. Future support was also put in place for this vulnerable client, which meant that similar problems would be unlikely to recur.

2. A CAB in the North West dealt with a debt case that took 10 hours. The client was a 26-year-old woman with a young daughter living on a low wage supplemented by tax credits. She had become over-indebted and had used credit to pay off other credit, which had made her debt problems worse.

The caseworker established the nature of the client’s debt. The client had two priority debts: rent and council tax arrears. Arrangements for repayment were already in place, which the client could afford if her non-priority debts were dealt with. The client had non-priority debts (loans, credit cards, catalogue debts and store cards) which amounted to £6,104.00.

The caseworker explained that the client could come to an informal arrangement with her creditors or she could go bankrupt, and the advantages and disadvantages of each. The client decided to pursue an informal arrangement, given the relatively low level of her unsecured debt, the fact that she was young and hoped that her circumstances would improve in future.

The caseworker negotiated on her behalf, offering token payments to the unsecured creditors, as this was all the client could afford. 5 creditors accepted token payments and 3 other creditors ceased contact with the bureau or the client. The caseworker successfully challenged a catalogue debt, since the creditor had not complied with the provisions of the Consumer Credit Act 1974. The client and her daughter remained in their home, she was able to make affordable repayments to her creditors and her overall indebtedness was reduced.

Background on the legal aid proposals

Fixed fees: As it stands, the proposed new system will pay a fixed fee per case without sufficiently taking into account the complexity of the case or of client needs. Local Citizens Advice bureaux will either be forced to reduce case times by refusing to take on cases that may take too long, or will have to subsidise our legal help services from other funds. Although the level of case fees proposed has been adjusted following a consultation, the flat rate fee will still have this effect. The argument that the existing system provides incentives to expand time on cases ignores the fact that the LSC can cut the time per case, and the need to process cases as quickly as possible in order to meet demand. A recent compromise has conceded extra provision for extremely complex cases, but the fear is that the majority of cases will fall short of this threshold.

Fee levels and long-term decline in funding: If fixed fees are here to stay they should be higher to reflect the high proportion of complex cases that bureaux deal with. In addition, there has not been any increase in funding for not-for-profit agencies since 2001 to reflect increases in the cost of living. Advice providers are being asked to do more for less. In addition, the fixed fees do not take account of the higher costs of operating services in London. The current system does recognise these costs.

Outreach services: Outreach services provide advice to some of the most vulnerable and hard to reach. Under the proposed system travel costs will have to be covered by the fixed fee. Similarly, the extra time taken to deliver the services is not taken into account. Successful outreach services may have to be closed. This will be especially difficult for people in rural areas with poor public transport.

Payments in arrears: The introduction of payment in arrears will have a significant impact on bureaux, the majority of which do not have the cashflow to deal with the change. By covering their costs upfront bureaux would effectively be subsidising a public service. The recent compromise from the LSC to provide a six month transition period with fees being paid monthly in advance rather than quarterly will do little to prepare bureaux for the introduction of payment in arrears in October 2007. Increased transitional protection is needed, and Citizens Advice awaits the outcome of further discussions with the LSC.

Last updated: February 22, 2007