Why lawyers are taking on the government

The narrative of fat cat lawyers riding a legal aid gravy train hides an assault on access to justice



A crisis is looming in the criminal justice system as lawyers take direct action in protest at government cuts to legal aid, which they say jeopardise their ability to provide an adequate service to their clients. Criminal lawyers across the country are refusing to take on cases in the Crown Court – where the most serious offences are tried – under the reduced rates for criminal legal aid which came into effect on 1 July 2015.

Solicitors have been boycotting new cases since 1 July and barristers formally joined the action on 27 July.

The fees paid to solicitors acting in criminal cases funded by legal aid have been reduced by 17.5 per cent in the last 18 months, a cut which was implemented in two equal 8.75 per cent stages in March 2014 and July 2015.

In the face of widespread opposition and despite successive legal challenges, the government has also reduced the number of legal aid contracts available to law firms for ‘duty’ work in police stations from over 1,600 to 527, meaning many firms are at risk of going out of business.

The effect of the direct action is that defendants facing trial for serious criminal offences are appearing in court without legal representation and judges are ordering adjournments as a result. The ensuing delays and disruption are likely to create a logjam in the criminal courts.

Criminal lawyers do not take this action lightly, but they have concluded that they are unable to properly represent their clients and comply with their professional obligations under the reduced rates.

A review conducted for the government by KPMG in November 2014 found that criminal firms had an average profit level of 5 per cent, with a significant number already operating at a loss. It should be clear then that many firms are unlikely to survive the second half of the cut without finding significant savings in their operating costs.

In the last five years, the overall legal aid budget has been cut from £2.2bn to £1.6bn, and the rates paid to legal aid lawyers have not been increased – even to keep up with inflation – for almost 20 years, equating to a real terms reduction of 34 per cent before rates for civil legal aid were cut by 10 per cent and for criminal legal aid by 17.5 per cent.

Alongside reductions in fees, legal aid has been almost completely removed for whole areas of civil law including housing, employment, immigration and debt advice.

Furthermore, the purported ‘safety net’ scheme of exceptional funding, introduced to provide legal aid for civil cases where a failure to do so would breach the European Convention on Human Rights, was recently found by the High Court to be failing to operate as intended. During the last parliament, the Ministry of Justice lost a succession of judicial reviews challenging the lawfulness of its restrictions on legal aid, including – perhaps inevitably – a challenge to regulations limiting legal aid for judicial review.

The cuts to legal aid have also attracted criticism from several parliamentary bodies. A report by the Justice Select Committee, published shortly before the general election, concluded that the reforms had “harmed access to justice for some litigants” and that the Ministry of Justice had failed to carry out adequate research before implementing the cuts. In November 2014, the National Audit Office found that legal aid cuts had the potential to create additional knock-on costs, partly as a result of an increase in unrepresented litigants.

Finally, the Public Accounts Committee published a report in February 2015, which was heavily critical of cuts to legal aid. Margaret Hodge, the chair of the Committee, said the Justice Ministry had “shown little interest” in the knock-on costs of its reforms, caused by the inability to access advice to resolve legal problems.

The Ministry has repeatedly insisted that England and Wales has “one of the most expensive legal aid systems in the world”, frequently supporting this claim using a misleading comparison with countries which have inquisitorial rather than adversarial legal systems and similar overall per capita expenditure on justice.

This focus on the size of the legal aid budget ignores the benefit to society of an effective and fair justice system as well as the knock-on costs of legal aid cuts (it has been estimated, for example, that each £1 spent on early advice for social welfare law ultimately saves the state up to £8.80).

The narrative of ‘fat cat’ lawyers riding a legal aid ‘gravy train’ serves to sustain this assault on access to justice – but it is a myth. Lawyers who choose to practise in areas of law which are traditionally funded by legal aid, often acting for some of the most vulnerable people in society, are motivated by a sense of vocation and a commitment to social justice.

A career as a legal aid lawyer is becoming increasingly unviable for anyone not from a wealthy background due to the inescapable combination of low pay and high student debt. A survey we conducted in 2013 revealed that 63 per cent of respondents were earning £25,000 or less per annum. Legal aid lawyers, particularly at the outset of their careers, typically earn less than teachers, doctors, nurses, police officers and social workers.

However, the present dispute is not simply about pay. Many lawyers and campaigners believe the real cost of cuts to legal aid will be wrongful convictions and miscarriages of justice as people are forced to represent themselves in court. In a poll conducted by YouGov before the general election, 84 per cent of respondents rated access to justice as ‘a fundamental right’, compared to 82 per cent for healthcare free at the point of use.

The cuts are already inflicting significant damage on our justice system. In many ways, the functioning of the courts depends on the goodwill of lawyers, often conducting cases for derisory levels of remuneration; this boycott demonstrates that the government has exhausted that goodwill.

The direct action being taken by criminal lawyers in response to the latest cut could cause the already overstretched and creaking criminal justice system to grind to a halt. Michael Gove will know it is imperative that an agreement is reached to end this action. The new justice secretary’s ability to find a solution will be tested when representatives of criminal lawyers meet again with the Ministry of Justice on Monday 3 August, after a ‘potentially constructive’ meeting on 23 July.

Oliver Carter is co-chair of Young Legal Aid Lawyers. Follow him on Twitter

13 Responses to “Why lawyers are taking on the government”

  1. Bosun Higgs

    As I recall, it was the Otterburn Report that came up with the 5% net profit margin, rather than KPMG, i.e. it was lawyers themselves rather than independent consultants. KPMG may have repeated it. That 5% figure is, presumably, after deducting proprietorial salaries and profit shares, which would leave some room for cuts.

  2. /O43 |_|K19!!

    This article proves what many of us have suspected all along – the left are against all cuts, not just those affecting the poor. They just don’t understand economics, and so they think that taking money by force from someone who did something useful to earn it, and then giving it to somebody else do do something unproductive makes everybody richer. It might look that way for a while, but eventually everyone realises no wealth is coming back from these “investments” and we’re all just getting poorer.

  3. I'm very cross about this.

    So it’s OK that a barrister with around 10 years experience earns up £1m a year? Get real, the costs of access to justice need to be cut.

  4. Oliver Carter

    Thanks, you’re right – it was originally in the Otterburn Report and repeated by KPMG (see para 16 of the second JR judgment here: http://www.bailii.org/ew/cases/EWHC/Admin/2015/295.html). I’m not quite sure how firms with an average profit level of 5% are intended to sustain a cut of 8.75% to the rates they are paid, particularly given the context of no increase in those rates for almost 20 years and an 8.75% cut in March 2014.

  5. Oliver Carter

    If you think cuts to legal aid (which funds advice and representation for people who cannot afford to pay a lawyer themselves) does not affect the poor, you are absolutely mistaken. On the wider economic argument about the need for cuts in public spending, I’d just point out that there are alternative economic views to that of the Conservative Party – see, for example, this article by a Nobel prize-winning economist: http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion

  6. Oliver Carter

    I think you’re misinformed – barristers acting for privately paying clients such as large companies and high net worth individuals may well earn huge sums of money, but legal aid lawyers certainly do not. There are precisely zero barristers earning £1m a year from legal aid. See this FullFact article for some information: https://fullfact.org/factchecks/legal_aid_barristers_income_fees-29311

    As the article points out, even where a barrister is recorded to have earned hundreds of thousands of pounds in any given year from legal aid, “payments made to barristers under certain government-funded schemes might be for work on a case (or cases) that stretches over several years”. In fact, legal aid is often paid at fixed fees which mean lawyers end up earning less than the minimum wage or even effectively working for free after travel expenses are deducted.

  7. Philip Michael Hunt

    Of course, if you quote a left wing mouthpiece then you will always prove your point but the fact remains that lawyers, private or working for Legal Aid make FAR more than the average earner,…FAAAAR more. They can also use Legal AId as a fall back option while they try to geenrate private client work and the experience gained through any Legal AId work can be very beneficiual to many. The fact there are so many solicitors and barristers working for Legal Aid shows how lucrative it can be, especially when contrasted to Dentists for example.

  8. Oliver Carter

    FullFact is “a left wing mouthpiece”? You might want to tell the Conservative peer and Conservative donor on its board of trustees: https://fullfact.org/trustees/

    Legal aid lawyers certainly do not earn far more than the average earner. Starting salaries for trainee solicitors in London range from about £18,00 to £25,000 and don’t increase significantly after qualification. The criminal lawyers taking direct action are doing so because their firms and livelihoods are at risk, as is the service they provide to their clients, due to successive government cuts.

  9. /O43 |_|K19!!

    Paul Krugman is a politinomist – he spouts left-wing political ides disguised as economics. Stimulus is a crock because money goes into poor investments – this looks like growth (and provides tax revenues) right up until the investments are discovered not to be paying off. Then things go to shit. Krugman won’t tell you that.

  10. ultraviolet_uk

    Oliver, more importantly, that 5% profit margin – which was based on firms’ actual accounts provided to Otterburn – was before the first of the two cuts. It was a 5% average margin before cuts of 17.5%.

    The MoJ commissioned research from PA Consulting, which they sat on until the Government was judicially reviewed on this issue. That report said that the effect of the fee cuts would be that 75% of firms working in this area would become loss-making, and that the 25% that would not would be either those with extensive other sources of income than criminal legal aid (who would therefore no doubt drop the criminal legal aid work as it was dragging their profits down) or those micro-firms with virtually no overheads, who do not have the infrastructure needed to provide a nationwide service.

    It’s very simple. If the rates paid are too low to make a viable business out of it, firms cannot do this work. And this protest is about firms saying that this is the point we have reached.

  11. ultraviolet_uk

    Otterburn came up with a way of calculating notional salaries for partners in making his calculations. He took the salary of the highest paid employee of the firm as his benchmark. The median highest salary was about £45,000.

    In other words, the salary a criminal lawyer could aspire to at the peak of his or her career is in the median firm £45,000.

    That is about what a trainee on his first day out of University will be on in commercial firms, which is why young lawyers can’t see a career for themselves in criminal defence work.

    He allowed an additional 15% to account for the risk the partner is taking, so the profit levels are based on the assumption that partners’ incomes are a median of £51,750.

    Now you may well have your own views on what should be paid to a highly skilled professional who attends police stations in the middle of the night, court all day, and the office most of the evening. You may feel that £45-50,000 is way too much as a peak salary for those at the top of this profession, with most of the rest on significantly less. Fine. But let us have that discussion on the basis of a proper understanding of the real figures, not the sort of distortions that so often enter these debates.

  12. Bosun Higgs

    Let’s not forget that those are unaudited figures from a self-selected sample of firms. (Their financial statements as a whole may be audited but the detailed trading account won’t be). Perhaps the problem is one of an oversupply of lawyers.

  13. Oliver Carter

    Thanks for the additional information and clarification. As you’ll appreciate, I couldn’t include this level of detail in the article!

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