From today's LSG -
Planned cuts to legal aid in private family
work, social welfare law and clinical negligence will save less than half
the sum predicted by the government, according to an independent economic
study published today. The Law Society’s chief executive, Desmond Hudson,
said the report’s findings ‘fatally undermine’ Ministry of Justice claims
about savings to be achieved by measures in the Legal Aid, Sentencing and
Punishment of Offenders bill, which resumes Lords scrutiny tomorrow.
In the report, Unintended Consequences: the costs of the
government's legal aid reforms, Dr Graham Cookson from King’s College
London’s department of management, suggests that the legal aid cuts will
have significant knock-on costs and are ‘unlikely to make a significant
contribution to reducing the fiscal deficit'.
Cookson’s economic
analysis examined the likely impact of the cuts in three areas - private
family law, social welfare law and clinical negligence, which the
government claims will save £239m a year. He found that these elements of
the proposals could cause unintended extra costs of at least £139m,
realising a net saving to the public purse of £100m, less than half (42%)
of the government’s predicted figure.
Cookson added: ‘Numerous
costs could not be estimated, and this figure is therefore likely to be a
substantial underestimate of the true costs.’
He said: ‘At
approximately 42% of the predicted savings, this level of saving would make
an insignificant contribution to the total spending cuts of £81 billion per
year that the government seeks to implement by 2014/15. The report
concludes: ‘This undermines the government’s economic justification for the
changes, especially given the numerous costs that could not be
estimated.’
It finds that removing legal aid for clinical
negligence will cost the NHS £28.5m a year, almost three times more than
the predicted £10.5m saving.
Knock-on expenses include the cost
of the telephone triage service, the after-the-event premium for expert
fees and reports, and the 10% damages premium paid in all successful cases,
which will largely be borne by the NHS through the NHS Litigation
Authority.
The report estimates knock-on costs of £100m per year
for removing legal aid for private family law cases, set against a proposed
budget saving of £170m, resulting in a saving of roughly 40% of the
government’s forecast. Mediation will be the single largest area of
expenditure, with a knock-on cost of £42m per year. Other costs include £2m
towards the telephone gateway, £22m for the increased use of alternative
advice services, £8m for exceptional funding of cases and £3m due to
problems caused by stress for those who give up trying to solve legal
problems.
The report suggests that the increase in the number of
litigants in person will generate a knock-on cost of £273.50 per person,
which will cost over £7m in private family law matters. Cuts to social
welfare law, which the government expects to save £58m a year, will have
knock-on costs amounting to £35.2m, generating a saving of 39% of those
predicted by the government.
The MoJ’s own impact assessment
identified a number of potential knock-on costs, including reduced social
cohesion, increased criminality, reduced business and economic efficiency,
and increased costs to other departments. But, as the King’s College report
notes, the MoJ has identified neither their magnitude nor likelihood.
The report says that the ‘far-reaching’ unintended consequences of
the cuts will in part be borne by the MoJ, principally through increased
costs to the court service, costs of
mediation and the implementation of the
telephone gateway. Costs will also be faced by other government
departments, led by the Department of Health.
Another key
finding of the report was the lack of robust data on numerous elements of
the civil justice system, for example on the costs and productivity of the
family courts. It points to ‘significant gaps’ in the evidence
base justifying the reforms.
The author calls on the
government to estimate the impacts fully before implementing any reform,
and to carry out an appraisal of knock-on costs before changes are enacted.
The report adds: ‘Given the largely negative response to the consultation
exercise, the government should re-evaluate the justification for the legal
aid scope changes.’
The Law Society commissioned the report in
June 2011 in response to the government’s failure to assess the costs to
public spending of its proposals to withdraw legal aid from two thirds of
the civil and family cases that currently qualify.
The report is
being given to members of the House of Lords who resume their consideration
of the Legal Aid Sentencing and Punishment of Offenders bill tomorrow.
Among other amendments, peers are expected to debate a delay to the
legal aid reforms in the Bill until the government publishes an assessment
of the wider costs they will cause for taxpayers.
Hudson said:
‘The MoJ has defended swingeing cuts to legal aid in civil cases, which
will deny justice to thousands, on its need to contribute savings to the
government’s deficit reduction programme. The Law Society accepts the need
to achieve savings, but this report fatally undermines the MoJ’s savings
claims, and shows they are being achieved at the expense of other parts of
government.’
Hudson said: ‘This is kamikaze accounting and will
do little to tackle the deficit while sacrificing access to justice.’
link -
Legal Aid Cuts are False Economy 
Forum 
Scotland 
