Lawyers are losing money doing housing legal aid work but feel morally obliged to keep going, according to independent analysis commissioned by the Law Society to inform the government’s major civil legal aid review.
Frontier Economics was commissioned by Chancery Lane to identify the costs of applying for and maintaining a civil legal aid contract, and the associated profits or losses from doing the work.
According to an interim report published today, general costs in the economy are over 90% higher today than they were in 1996, when legal aid fees were last increased.
Lawyers are not paid for several tasks required to provide legal aid, such as eligibility checks and managing contract requirements. While the precise magnitude of loss varies, a typical fee-earner is only able to recover around half of the full costs or providing housing legal aid from legal aid funding.
‘Those continuing to provide housing legal aid typically do so based on a sense of social conscience and moral responsibility. Not-for-profit organisations in particular noted that they felt obliged to do this work as part of their charitable objectives, and in some cases this was complementary to other support that they provided to individuals in need,’ the report says.
Frontier Economics found the gap between legal aid and private fees has widened: housing legal aid work is paid at hourly rates of £46-£72 depending on work type and location, whereas guideline hourly rates published by the Civil Justice Council range from £134-£546 based on solicitor experience and location.
Smaller providers with housing loss prevention advice service contracts said the minimum guaranteed fee may not be enough to cover time, travel and administration costs.
Firms have no trouble recruiting trainees – but trainees leave after a couple of years for higher-paid jobs and better work-life balance. High levels of staff turnover have also contributed to a scarcity of supervisors, who are required for legal aid contracts.
Society president Nick Emmerson said: ‘This vital research reveals the lengths providers have to go to keep housing legal aid afloat in the current environment – routinely working grossly excessive hours and cross-subsidising from other parts of their businesses. It’s therefore no surprise that we’re seeing providers exit the market because they can no longer sustain this approach. Those who remain struggle to attract younger people to legal aid work.
‘At a time when the cost-of-living crisis is driving rising numbers of evictions and repossessions, the government needs to use its civil legal aid review to invest in legal aid now before it collapses completely.’
The final report will form part of the Society’s submission to the government’s civil legal aid review call for evidence.
