William Flack Blog

The decision by Law for All to close down as of 28 July shows the grave difficulties faced by suppliers trying to provide legal services funded through Civil Legal Aid. In the past it was always possible to assume that the organisations who were giving up Legal Aid work were the ones who were not efficiently run or who had failed to modernise in line with the requirements of the Legal Services Commission. As far as I am aware this could not be said of Law for All. Please correct me if you think that I am wrong but I understood that they were very well run and had skills input from Clifford Chance, one of the country’s leading law firms.  If we can rule out defective management then it seems to me that we are left with objective factors which apply to the rest of us too. I would suggest that they confronted the following hard facts and realised that there was no future for their business model:

1. It is only possible to fund specialist services on fixed fees of around £174.00 per case if you can take on very large numbers of cases. The smaller cases which only involve say £50.00 worth of work can then be used to balance out the larger cases on which the supplier loses money; BUT following the 2010 Legal Aid Civil Contract bid round suppliers such as Law for All bidding for social welfare contracts found that the number of matter starts they had been allocated after their bids were “successful” would not enable them to start enough small cases to subsidise the larger ones.

2. The decision by the new government which came to power in 2010 to end of  funding for much of social welfare law meant that even if they could have survived on the low payments per case and on the low number of matter starts available they could not possibly survive once the income from benefits, debt, employment and much of housing work was cut altogether and a 10% reduction in the rates  payable for what was left was imposed.

If I am right about this (as these comments from Law For All suggest)  it means that the question is not whether or when a number of other suppliers will go out of business. The question is how anyone else can possibly survive.

Hopefully a number of Nof For Profit suppliers will be able to fall back on their historical revenue streams built up before they had Legal Aid input. I am not sure about the private sector though. The only solution seems to be a complete re-think of the service delivery model. This should be reflected in new reduced expectations from the Ministry of Justice as to what the service to be provided is.  At the moment suppliers still have to jump through a large number of hoops set up by the government in 1994 when Legal Aid Board introducted the Legal Aid Franchise.  The demands placed on suppliers have only increased since then whilst the amount money provided to enable suppliers to meet them has been heavily reduced. It is pointless for suppliers to call for more money. There clearly isn’t going to be any. What I would call for though is a re-think by the Ministry of Justice as to what it can realistically expect suppliers to provide for the limited money it wishes to pay them.  This is not just about allowing suppliers to cut standards. It is about the Ministry of Justice thinking of new ways in which surviving legal aid suppliers can function and co-exist with other agencies such as the Court Service, Local Goverment and the Department of Work and Pensions to ensure that citizens still have access to justice. I will try and come up with some suggestions in future blog posts. I would welcome suggestions from anyone reading this as to how suppliers can still provide a service without finding like  Law for All  that it not generating enough money to fund it. It would also be good to hear from anyone with information about what went wrong at Law For All and whether I am right or wrong about that.