Sara Stephens, Solicitor
Journal of Housing Law - July 2011
email Sara
In November 2010, the Government published a consultation paper on proposals for reform of the legal aid system in England and Wales.1 The paper argues that the legal aid system has expanded too far, becoming one of the most expensive systems in the world and encouraging people to bring problems before the Courts too readily meaning that taxpayers were funding unnecessary litigation. The paper insists that fundamental reform to the system is required.
Further, amid the Government’s aim of cutting the financial deficit, it wished to achieve substantial savings (some £350 million). In his Ministerial foreword to the paper, the Lord Chancellor states that the Government must:
“… make tough choices to ensure access to public funding in those cases that really require it, the protection of the most vulnerable in our society and the efficient performance of our justice system.”2
The main recommendations are for a reduction in the scope of cases covered by legal aid, changes to the eligibility rules, the introduction of a single telephone gateway to advice and changes to the fees paid to lawyers and experts. This article will address these proposals in turn.
Scope
The paper states that the resources must be focused on those areas of utmost importance and, therefore, cases where the client is at risk of becoming homeless should remain in scope. The paper proposes that the following areas will remain in scope: homelessness; defending possession proceedings, including bringing a counterclaim for disrepair; anti-social behaviour proceedings; and housing disrepair cases where the life or health of the client or their family may be at serious risk. Legal aid will further be available for judicial review public law challenges.
All other areas will be removed from scope including actions to set aside a legal charge (for example, a mortgage), actions for re-housing, actions for breach of the covenant of quiet enjoyment and housing disrepair cases where the life or health of the client or their family is not at serious risk.3
The paper accepts that the people bringing these cases are more likely to be ill or disabled compared with the civil legal aid client base as a whole but concludes that many of the cases removed from scope are about money or property and are not of high importance when compared with issues such as homelessness.4 The paper points to alternative sources of advice, including local authority in-house services and voluntary sector organisations.5 It also highlights the availability of the Local Government Ombudsman and Conditional Fee Agreements (CFAs) in certain cases.6
There are many problems with these proposals.7 The paper states that cases involving a risk of homelessness should be kept in scope but is proposing to remove claims for breach of the covenant of quiet enjoyment. These actions are often brought because the client has been forced out of their home for a variety of reasons and need to take action to avoid losing their home and becoming homeless. Similarly, if funding is only available for defending possession proceedings and not bringing them, this will prevent clients whose home has been occupied in their absence without their permission from taking action to evict the occupiers. This will result in them becoming homeless.
Removal of re-housing from scope will mean that people living in accommodation that is extremely unsuitable for them and have been incorrectly assessed under the allocation scheme will be without recourse to help. Many housing disrepair claims are not life threatening and would therefore fall out of scope but involve situations where people have lived in appalling conditions for many years and have been unable to get their landlord to take action. Further, if funding is available for disrepair counterclaims and not free-standing claims, this may act as a disincentive for tenants to pay their rent.
The suggested alternative sources of advice can be criticised. How can an in-house local authority advisor give impartial advice to someone seeking to challenge the authority’s allocation scheme? Voluntary sector organisations currently rely partly on legal aid and their funding from other sources is currently being cut. Many of these organisations will not be able to continue to operate or will not have the resources to take on all the additional work that these reforms will produce. Local Authority Ombudsmen will similarly not have the resources to take on the increased number of cases. The Ombudsman is also a long process and decisions are difficult to enforce. Other proposals to amend CFAs will mean that many people will be unable to obtain any legal assistance.8 These changes are also likely to lead to an increase in litigants in person. This means that cases where a specialist provider would have advised that a client should not pursue a claim would proceed to Court, which could result in an increase in claims at Court costing the Court valuable time and money.
Eligibility
The proposals will mean a massive reduction in applicants being financially eligible for legal aid. The paper suggests removing the current system of "passported benefits” so that all applicants will be subject to an assessment of capital.9 Anyone with more than £8,000 disposable capital will be ineligible for legal aid. Applicants with a disposable income of £1,000 or more will have to pay a one-off contribution of £100, which will be collected by the legal aid provider. Then, £1 will be contributed for every pound over £3,100. The current system of capital disregards will be abolished.10
The current eligibility limits are already low and ensure that only those on the lowest incomes qualify for legal aid. Increased contributions from capital will simply mean that many people cannot “afford” legal aid. The existing system of capital disregards is designed to take into account particular vulnerabilities of certain groups, such as the elderly, as well as to ensure that people do not have to re-mortgage their homes to obtain legal assistance. The increased administration in removing passported benefits and asking providers to collect the one off £100 contribution will lead to increased work for lawyers who already deal with a large amount of bureaucracy.
Telephone gateway
The paper argues that legal aid services can be inaccessible. For example, solicitors’ opening hours are inconvenient for those in employment and people with mobility problems or who are in remote locations cannot easily access a solicitor.
The suggested solution to these problems is the introduction of a single telephone gateway service to access legal aid.11 In most cases, the client will be advised only by telephone but can be referred for face-to-face advice if needed. The paper also suggests that a paid-for telephone advice service be set up for those financially ineligible for legal aid.12
This is one of the most controversial proposals in the paper. Housing solicitors develop local knowledge and expertise through regularly dealing with issues specific to their locality. They become familiar with the local councils and housing associations and that expertise is extremely valuable. Provision of advice over the phone through a centralised system will mean that this local expertise will be lost. Further, this will remove the element of choice for clients who often want to instruct a particular firm or lawyer because they have assisted them in the past or have been recommended by another client. Further still, firms will no longer be able to select their own cases as they will only be able to take cases that are referred on to them.
The argument that this will increase access to advice is flawed. Many clients are extremely vulnerable. Approaching a solicitor is difficult enough. This system puts up further hurdles to getting advice and could mean that a client would have to speak to several different people on the telephone before even getting an appointment with an advisor. This could work to deter people from seeking advice at all. Solicitors are also experienced at dealing with clients with particular needs and will, wherever possible, try and accommodate clients’ needs.
The provision of a paid-for telephone advice line for those ineligible for legal aid goes against what the system is designed for; to provide access to justice for the most vulnerable in our society.
Fees
The paper seeks to reduce all civil fees for solicitors by 10 per cent. Enhancements will be capped at 100 per cent for High Court, Court of Appeal and Supreme Court cases and at 50 per cent in all other cases. Barristers fees are to be codified and reduced by 10 per cent.13
At present, in cases costing more than £25,000 (Very High Cost Cases) lawyers are paid at “risk rates”, which are £70 for solicitors, £50 for junior barristers and £90 for senior barristers, without enhancements. These rates are paid if costs are not recovered from the other side in the case. These rates are increased in “borderline” cases to encourage providers to take them on. The paper proposes that risk rates be applied to all cases where costs would normally be recoverable from the other side. It will apply from the point after the initial investigative stage of a case is completed or once the costs reach £25,000, whichever is sooner. The investigative stage will be considered completed once a case moves from Investigative Help to Full Representation or from the date of issue of the Certificate if straight to Full Representation.14
This could mean that risk rates would apply to possession cases (acknowledged by the paper as an important area) where costs are rarely awarded in favour of the tenant even where a possession order is resisted. This could deter practitioners from undertaking these cases and barristers will be unlikely to accept work at the rate of £50 per hour.
Experts’ fees are also to be codified and reduced by 10 per cent.15 The guideline hourly rate for surveyors will be £50 and they are usually to work at a fixed fee of £225 per property. This is much lower than the current fees charged by surveyors. Will surveyors continue to accept instructions from legal aid practitioners if they will receive only £225 for the survey? Will there be a two-tier service where surveyors will produce limited “legal aid” reports? This would surely lead to inequality of arms where a landlord is instructing a surveyor to undertake a full inspection and willing to pay a higher fee.
Conclusion
The Justice Select Committee has published a response to the paper.16 It concludes that the reduction in fees will result in many practitioners discontinuing legal aid work. It states that there will be a reduction of 38,000 (36 per cent) Legal Help cases and 2,400 (22 per cent) Certificated cases and that the reforms will have a disproportionate effect on certain groups. The Committee says that the proposals sit uneasily with the Government’s stated commitment to protecting the most vulnerable in society. With regard to housing, the Committee acknowledges that there is evidence that if issues are dealt with at an early stage then this can stop problems from escalating and therefore save money in the long run. The Committee accepted the evidence from the not-for-profit sector that it will be unable to meet the increased demand these proposals will lead to and that these reforms could lead to advice deserts in some areas.
The House of Lords has now debated the proposals and has also raised many concerns.17 The Government’s response to the consultation and their Bill are expected in June. Whether the Government takes account of the concerns raised by all the groups and individuals that responded to the consultation, the findings of the Justice Select Committee and the issues raised in the House of Lords debate is yet to be seen.
1Proposals for the Reform of Legal Aid, Consultation Paper CP10/12, Ministry of Justice, November 2010, Cm.7969.
2Proposals for the Reform of Legal Aid, p.3.
3See further Proposals for the Reform of Legal Aid, paras 4.74–4.81.
4Proposals for the Reform of Legal Aid, para.4.75.
5Proposals for the Reform of Legal Aid, para.4.26.
6Proposals for the Reform of Legal Aid, paras 4.25 and 4.27.
7See also the editorial by A. Arden “Public Funding Consultation — Fight early, fight often, fight on!” [2011] J.H.L. 23.
8See D. Marshall’s article “Conditional Fee Agreements in housing disrepair cases”, p.78 of this issue.
9Proposals for the Reform of Legal Aid, para.5.9.
10Proposals for the Reform of Legal Aid, paras 5.14–5.21.
11Proposals for the Reform of Legal Aid, para.4.272.
12Proposals for the Reform of Legal Aid, para.4.273.
13Proposals for the Reform of Legal Aid, Ch.7.
14Proposals for the Reform of Legal Aid, paras 7.15–7.23.
15Proposals for the Reform of Legal Aid, para.8.14.
16Government’s Proposed Reform of Legal Aid, Justice Committee, 3rd Report, March 2011.
17Hansard, HL, col.1536 (May 19, 2011).
Sara Stephens is a solicitor in Anthony Gold's Housing & Public Law department. For further information email Sara or call 020 7940 4000.
