Legal aid payment regime blamed for RMJ collapse

first_img See Comment and Letters Legal aid lawyers should brace themselves following chancellor George Osborne’s emergency budget, as the Ministry of Justice confirmed it is looking at cuts in legal aid eligibility and fees. A spokesman said the department will be taking a ‘fundamental’ look at the legal aid system ‘to innovate and provide value for money’. The Law Society has hit back at government claims that inefficiencies at legal advice charity Refugee and Migrant Justice (RMJ) led to its collapse – while third sector groups have warned that all legal aid suppliers are facing funding difficulties. The charity, which was one of the largest providers of immigration and asylum advice, went into administration last week. It blamed cashflow problems caused by the Legal Services Commission’s payment regime, under which firms are not paid until a case closes. Law Society chief executive Desmond Hudson said the payment structure was ‘at its lowest a major contributing factor in the collapse of RMJ’. He described as ‘inaccurate’ the government’s claim that all other organisations had coped with the payment regime, saying cashflow problems had contributed to the closure of Gateshead and Cambridge law centres and that private practice firms were also ‘suffering’. Hudson said the LSC and former legal aid minister Lord Bach last year accepted that billing arrangements for immigration work were inadequate. AdviceUK, a support network for advice centres, wrote to justice secretary Kenneth Clarke this week, warning that RMJ is ‘far from alone in experiencing cashflow problems’ as a result of the legal aid payment structure. Chief executive Steve Johnson wrote: ‘Every legal aid supplier I know of has a cashflow problem because they cannot now collect payment for legal aid work until the case is closed.’ He said the problems were down to the ‘serial maladministration’ of civil legal aid by the LSC, which had pressed ahead with ‘poorly conceived reforms’ that have increased bureaucracy and costs, and driven down quality. Julie Bishop, director of the Law Centres Federation, said law centres struggled for three years to cope with the fee regime introduced in 2007, and were now on an even keel. But she said that stability had come at a price, with centres on average using 70% of their reserves to survive.‘Were they to face another financial hit there would be meltdown,’ said Bishop. last_img