With the number of matters which are now eligible for public funding Legal Aid decreasing exponentially and more and more people therefore having to fund their own legal actions, many legal issues remain unresolved.
The main areas of law which are still eligible for public funding are Criminal law, the Tenant part of Landlord & Tenant law and Family/Matrimonial law.
Some criminal matters may be means tested and may require a contribution towards the legal costs but legal aid is available for most people facing criminal prosecution.
Legal Aid and Benefit Claiments
The situation with family/matrimonial matters is somewhat different and the rules are beyond the scope of this article. Broadly speaking if a litigant is on benefits then they won’t have to make a contribution toward their legal costs and it will all be funded by Legal Aid.
If they are not on benefits and earning a wage they may have to make a contribution towards the cost of their legal work. It happens that very few people who are not on benefits fall in to the category where all their legal costs would be publicly funded.
It has always been the case that anyone who has the benefit would go running to their solicitor at the first sign of any problem. They did this on the basis that they weren’t paying for any legal work so they would have as much as possible! Sometimes however this shot them in the foot.
Very often, aid funding is not a free lunch. If, (in a divorce for example) the parties are arguing over money or a house then some of the value of their house or their money may be at risk. There is an exemption which (the last time I looked) was £5000 but other than that any monies or property in dispute were at risk.
In a nutshell, if the public fund paid for someone to fight over the old matrimonial home then in the event that the matrimonial home was awarded to the person with the benefit of Legal Aid then the Legal Aid Board would want the costs they had paid, repaying from the value of the home. Similarly, if part of the argument was over a bank account, Legal Aid will want repaying if there is a successful outcome with a value over £5,000.
Legal Aid Exemptions and Repayments
Let me give you a scenario. A couple are getting divorced and they are arguing over who owns the £50,000 in a bank account. The Legal Aided party claims that 50% of the money is theirs and the non-Legal Aided party is claiming that all the money belongs to them.
The matter goes to court and the court decides that the money should be split 50/50 and awards £25,000 to the Legal Aided person. The bill for arguing litigation was £10,000. The legal aid board would want £10,000 of the £25,000.00 that was awarded leaving the legal aided person with only £15,000 out of the £25,000. Ouch!
With regards to the exemption, if the amount that was being argued over was £10,000 and the award was 50/50 then half of £10,000.00 being argued over (assuming 50/50) is £5,000.00.
There is a £5,000.00 exemption ring fenced and therefore the Legal Aid board would get nothing.
- Awarded £5,000. Legal costs £10,000. Exemption £5,000.
Legal Aid get £0. You get £5,000
- Awarded £7,000. Legal costs £10,000. Exemption £5,000.
Legal Aid get £2,000. You get £5,000
- Awarded £10,000. Legal costs £10,000. Exemption £5,000.
Legal Aid get £5,000 You get £5,000
- Awarded £15,000. Legal costs £10,000. Exemption £5,000.
Legal Aid get £10,000. You get £5,000
- Awarded £20,000. Legal costs £10,000. Exemption £5,000.
Legal Aid get £10,000. You get £10,000
The situation is a bit different if what is in dispute is a house. Obviously, the house can not usually just be sold to repay a Legal Aid bill (it may be home to children) so what happens therefore is that the Legal Aid board will attach what is known as a “Statutory Charge” to the house in respect of monies owing.
This means that when the house is sold or re-mortgaged then the Legal Aid Board will get their money. It is not a free loan however. Interest attaches to the charge and continues to accrue. It is rare for the board to agree to postpone their charge in the event that the house is eventually sold or is perhaps re mortgaged in the interim but they will consider it.
As I stated earlier, there is no “free lunch”.
Effects of Legal Aid Cuts in the UK
The Social impact of the current and proposed (2010 onwards) UK Government spending cuts is going to be significant. The groups of people typically disadvantaged by those will be ethnic minorities, women, disabled, single parents and those on lower incomes: all people who tend to have complicated debt, housing and welfare issues.
The effects of the benefit cuts totalling £7billion announced in the recent Comprehensive Spending Review, on top of the £11 billion already announced as part of the Emergency Budget last year, will be far reaching. Inevitable cuts to public services, along with the cuts in welfare and tax credits spending, will have an adverse impact on many benefit claimants. Those on the lowest incomes, women and families will be hardest hit by the combined effect of these changes.
The Law Centres Federation has calculated that law centres will lose £5m or 55% of their Legal Aid funding under the government’s green paper proposals. Some law centres will be forced to close. They will be hit by a 30% cut in local authority funding and a 50% cut in central government grants. This will result in a reduction in the number of clients they can deal with from 120,000 to only 50,000. These cuts will reduce further access to free legal advice.
The network of Citizens Advice Bureaux (CABs) will see a dramatic cut in their funding, potentially reducing the number of matters they can deal with and questions they can answer: they addressed 7.1 million problems in 2009/10. The impact of the cuts can only be guessed at, but conservatively some CAB’s could see a 50% decrease in their budgets, leaving 3.5 million problems unresolved. In the last year CAB showed a 4% rise in enquiries, with Housing showing an increase of 14%. These groups typically are most likely not able to afford to pay for high street prices for legal advice.
The Government is also proposing an overhaul of the way in which Legal Aid is funded. This will see Legal Aid cut for divorce cases, welfare benefits issues, school exclusion appeals, employment issues and clinical negligence compensation claims.
The Government is to cut the Legal Aid bill by £350million in 2012. Society’s most vulnerable people will be unfairly affected and thousands of people will be unable to pursue legitimate cases. In some CAB offices, Legal Aid fees make up a high proportion of income, meaning some CAB offices may even have to shut if the changes to legal aid go ahead.
The eligibility rules for Legal Aid are set to change, which will negatively impact 1 in 10 Legal Aid clients. Under the new scheme, people will be expected to contribute 30% of their weekly income, up from 20%. This means that many people won’t be able to pursue their case through the courts. Thousands of people will no longer be eligible at all.
According to the Citizens Advice Bureau, these changes “…would take whole areas of law ‘out of scope’ – including welfare benefits and employment. Advice on housing and debt would be restricted to cases with an ‘immediate risk’ of homelessness and help with many family law issues would only be available in cases of domestic violence.”
15% of all CAB income comes from Legal Aid and there are many other not-for-profit organisations which will also be affected by the proposed changes.
The social, economic and political aspects of the provision of Legal Aid in the UK means that there is an ever increasing need for affordable, accessible, accurate and timely legal advice.
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